SEC Registration Nos.
2-69565 and 811-3101
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
Post-Effective Amendment No. 46 XX
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 46 XX
Calvert Tax-Free Reserves
Money Market Portfolio
This filing relates to the addition of a new Class T only
(Exact Name of Registrant as Specified in Charter)
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Address of Principal Executive Offices)
Registrant's Telephone Number: (301) 951-4881
William M. Tartikoff, Esq.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
__ Immediately upon filing __ on (date)
pursuant to paragraph (b) pursuant to paragraph (b)
__ 60 days after filing XX on February 26, 1999
pursuant to paragraph (a) pursuant to paragraph (a)
of Rule 485.
<PAGE>
FRONT COVER PAGE
PROSPECTUS
February 28, 1999
First Variable Rate Fund for Government Income
Calvert First Government Money Market Fund
Class T
Calvert Tax-Free Reserves
Money Market Fund
Class T
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE FEDERAL OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Table of Contents Page
About the Funds
Investment goal _
Investment strategies and risks _
Performance chart _
Fees and expenses _
About the Advisor
Management _
Year 2000 _
Shareholder Guide:
How to Buy Shares _
Other Calvert Group Features _
Dividends, Capital Gains and Taxes _
How to Sell Shares _
Financial Highlights _
<PAGE>
Fundamental Goals - Investment Objectives
Calvert First Government Money Market Fund
Calvert First Government Money Market Fund ("CFGMMF") is a U.S.
Government-only money market fund that seeks to earn the highest possible
yield consistent with safety, liquidity, and preservation of capital. In
pursuing its objective, CFGMMF invests only in U.S. Government-backed
obligations, including such obligations subject to repurchase agreements with
recognized securities dealers and banks. CFGMMF seeks to maintain a constant
net asset value of $1.00 per share.
CFGMMF offers five classes: O, B, C and I, which are offered in separate
prospectuses, and Class T, offered in this prospectus to investors with
brokerage accounts at The Advisors Group, Ltd. ("TAG").
Calvert Tax-Free Reserves Money Market Fund
Calvert Tax-Free Reserves Money Market Portfolio ("CTFR MM") 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 CTFR MM. CTFR MM seeks to maintain a constant net
asset value of $1.00 per share.
CTFR MM offers three classes: O and I, which are each offered in separate
prospectuses, and Class T, offered in this prospectus to investors with
brokerage accounts at TAG.
Principal Investment Strategies
CFGMMF assets are invested primarily in Top-Tier Securities, such as:
obligations issued by the U.S. Treasury, such as U.S. Treasury bills,
notes and bonds, supported by the full faith and credit of the U.S.
Government;
Securities issued by the U.S. Government, its agencies and
instrumentalities;
repurchase agreements; and
variable-rate demand notes.
CTFR MM assets are invested primarily in a diversified portfolio of municipal
obligations whose interest is exempt from federal income tax. At least 80% of
CTFR MM's annual income will be tax-exempt from federal taxes. CTFR MM invests
in:
high quality variable and floating rate demand notes and/or municipal
obligations;
municipal bonds and notes and tax-exempt commercial paper;
short-term fixed-rate obligations with remaining maturities of one year
or less;
CFGMMF and CTFR MM (the "Funds"): Rule 2a-7 under the Investment Company Act
of 1940 applies to every money market fund to ensure that a money market fund
invests only in high quality obligations, takes minimal credit risks, and has
a stable price per share. The Funds invests in accordance with Rule 2a-7 under
the Investment Company Act of 1940, as amended.
Risks of investing
The yield of each Fund will vary daily, depending on market interest rates,
and tends to follow the same direction as the rates.
All fixed income instruments are subject to interest-rate risk; that is, if
the market interest rates rise, the current price or value of a bond and the
yield of CTFR MM will decline.
Dividends paid by each Fund will fluctuate as interest rates and net
investment income fluctuate.
Investments in obligations not guaranteed by the full faith and credit of the
U.S. Government are subject to the ability of the issuer to make payment at
maturity.
Purchasing obligations for future delivery or on a "when-issued" basis may
increase a Fund's overall investment exposure and involves a risk of loss if
the value of the securities declines prior to the settlement date. The
transactions are fully secured at all times.
There is no limitation on the percentage of CTFR MM's assets that may be
invested in unrated obligations; such obligations may be less liquid than
rated obligations of comparable quality.
The sudden credit deterioration of a holding could cause the yield or overall
value of a Fund to decrease. The Fund limits the amount it invests in any one
issuer to lessen exposure.
Variable rate obligations lessen the capital fluctuations usually inherent in
fixed income investments. This diminishes the risk of capital depreciation of
investment securities and, consequently, of CTFR MM shares.
For liquidity purposes or pending the investment of the proceeds of the sale
of its shares, CTFR MM 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 as ordinary income unless you are
otherwise exempt from taxation.
An investment in the Funds is not a deposit of any bank and is neither insured
nor guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Funds seek to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the Funds.
Bar Charts and Performance Tables
The bar charts and tables below show the annual returns and its long-term
performance by calendar year for Class O of each of the Funds. The charts
shows how the performance has varied from year to year. The tables compare
Class O returns over time to the Lipper U.S. Government Money Market Funds
Index for CFGMMF, and the Lipper Tax-Exempt Money Market Funds Index for
CTFRMM. Each index is a composite index of the annual return of mutual funds
that have similar investment goals. Each Fund's past performance does not
necessarily indicate how it will perform in the future. Please note that
performance for Class T is not shown since it was not available for either
Fund during the time periods shown.
Bar Chart - CFGMMF
1989 _.__% 1994 _.__%
1990 _.__% 1995 _.__%
1991 _.__% 1996 _.__%
1992 _.__% 1997 _.__%
1993 _.__% 1998 _.__%
Best Quarter (of periods shown) Q_ '__ _.__%
Worst Quarter (of periods shown) Q_ '__ _.__%
Bar Chart - CTFR MM
1989 _.__% 1994 _.__%
1990 _.__% 1995 _.__%
1991 _.__% 1996 _.__%
1992 _.__% 1997 _.__%
1993 _.__% 1998 _.__%
Best Quarter (of periods shown) Q_ '__ _.__%
Worst Quarter (of periods shown) Q_ '__ _.__%
Average annual total returns for the periods ended December 31, 1998
1 year 5 years 10 years
Calvert First Government Class O __% __% __%
Lipper U.S. Government Money
Market Funds Index __% __% __%
1 year 5 years 10 years
CTFR Money Market Class O __% __% __%
Lipper Tax-Exempt Money
Market Funds Index __% __% __%
For current yield information, call 1-800-368-2745, or visit Calvert's website
at: www.calvertgroup.com.
Fees and Expenses of the Funds
These tables describe the fees and expenses you may pay if you buy and hold
shares of Class T of each Fund.
A. Shareholder Fees
(fees paid directly from your investment)
CFGMMF CTFR MM
Maximum Sales Load on Purchases None None
Maximum Deferred Sales Load None None
Maximum Sales Load on Reinvested Dividends None None
Redemption Fees None None
Exchange Fee None None
B. Estimated Annual Fund Operating Expenses
(expenses that are deducted from Fund assets)
CFGMMF CTFR MM
Management Fees 0.50% 0.46%
Rule 12b-1 and/or Service Fees 0.25% 0.25%
Other Expenses 0.19% 0.14%
Total Fund Operating Expenses 0.94% 0.85%
C. Example:
This example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds. The example assumes that:
You invest $10,000 in Class T of a Fund for the time periods
indicated;
You redeem all shares at the end of the periods;
Your investment has a 5% return each year; and
The Fund's operating expenses remain the same.
Although your actual costs may be higher or lower, under these
assumptions your costs would be:
1 Year 3 Years 5 Years 10 Years
CFGMMF $87 $271 $471 $1,049
CTFR MM $96 $300 $520 $1,155
Management and Advisory Fees
Calvert Asset Management Company, Inc. ("CAMCO") is the investment advisor for
each Fund. CAMCO has been managing mutual funds since 1976, and is a
subsidiary of Calvert Group, Ltd. CAMCO currently advises 25 Calvert funds,
including the first and largest family of socially screened funds. CAMCO is
located at 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814. As
of December 31, 1998, it had over $6 billion in assets under management.
CAMCO provides the Funds with investment supervision and management;
administrative services and office space; and furnishes executive and other
personnel to the Funds. CAMCO also pays the salaries and fees of all Trustees
who are affiliated persons. CAMCO may pay certain advertising and promotional
expenses of the Funds. Pursuant to the Investment Advisory Agreement, CAMCO is
entitled to an annual advisory fee of 0.25% of the average daily net assets of
CFGMMF. The CTFR MM Investment Advisory Agreement entitles CAMCO to receive an
annual advisory fee of 0.25% of the first $500 million of average daily net
assets, 0.20% of the next $500 million, and 0.15% on assets of $1 billion or
more. CAMCO may voluntarily waive a portion of its advisory fee.
A Word About the Year 2000 (Y2K) and Our Computer Systems
Like other mutual funds, Calvert and its service providers use computer
systems for all aspects of our business -- processing shareholder and fund
transactions, fund accounting, executing trades, and pricing securities, just
to name a few. Many current software programs cannot distinguish between the
year 2000 and the year 1900. This can cause problems with retirement plan
distributions, dividend payment software, transaction software, and numerous
other areas that could impact the Funds. Calvert has been reviewing all of its
computer systems for Y2K compliance. CAMCO, the underwriter, transfer agent,
and custodians have advised the Funds that they have been actively working on
any necessary changes to their computer systems to prepare for Y2K. Each of
the entities named expects that their systems and those of their outside
service providers will be Y2K compliant, and the Funds do not anticipate a
negative impact. For more information, please visit our website at
www.calvertgroup.com.
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SHAREHOLDER GUIDE
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HOW TO BUY SHARES
Please contact your local office of The Advisors Group, Ltd. ("TAG") to open
your money market account. All transactions will be processed electronically
through the National Financial Proprietary Money Market Sweep Program on
behalf of TAG.
There is no minimum for initial investments and no minimum for subsequent
investments, provided you have a TAG brokerage account.
Because you are purchasing shares through a program of services offered by
TAG, a registered broker/dealer and investment advisor, you should read the
TAG program materials together with this Prospectus. Certain account features
have been modified for this program, and TAG may impose charges for their
services.
Important - How Shares are Priced
The price of shares is based on each Fund's net asset value ("NAV"). NAV is
computed per class by adding the value of a Fund's holdings plus other assets,
subtracting liabilities, and then dividing the result by the number of shares
outstanding.
Each Fund is valued according to the "amortized cost" method, which is
intended to stabilize the NAV at $1 per share. If market quotations are not
readily available, securities are valued by a method that the Fund's Board of
Trustees/Directors believes accurately reflects fair value.
The NAV is calculated as of the close of each business day, which coincides
with the closing of the regular session of the New York Stock Exchange
("NYSE") (normally 4 p.m. ET). Each Fund is open for business each day the
NYSE is open. Please note that there are some federal holidays, such as
Columbus Day and Veterans Day, when the NYSE is open and each Fund is open,
but no purchases may be made due to the closure of the banking system.
When Your Account Will Be Credited
Your purchase will be processed at the NAV calculated after your order is
received and accepted. Electronic sweeps into an account begin earning
dividends the next business day.
Each Fund reserves the right to suspend the offering of shares for a period of
time or to reject any specific purchase order.
DIVIDENDS, CAPITAL GAINS AND TAXES
Each Fund accrues dividends daily from its net investment income, and pays the
dividends monthly. Net investment income consists of interest income, net
short-term capital gains, if any, and dividends declared and paid on
investments, less expenses. Distributions of net short-term capital gains
(treated as dividends for tax purposes) and net long-term capital gains, if
any, are normally paid once a year; however, the Funds do not anticipate
making any such distributions unless available capital loss carryovers have
been used or have expired.
Dividend payment options
Dividends and any distributions are automatically reinvested in the same Fund
at NAV (without sales charge), unless you elect to have amounts of $10 or more
paid in cash (by check).
Federal Taxes
In January, TAG will mail Form 1099-DIV, indicating taxable dividends and any
capital gain distributions paid to you during the past year. Generally,
dividends and distributions are taxable in the year they are paid. However,
any dividends and distributions paid in January but declared during the prior
three months are taxable in the year declared. Dividends and distributions are
taxable to you regardless of whether they are taken in cash or reinvested.
Dividends, including short-term capital gains, are taxable as ordinary income.
Distributions from long-term capital gains are taxable as long-term capital
gains, regardless of how long you have owned shares.
Other Tax Information
In addition to federal taxes for Calvert First Government Money Market Fund,
you may be subject to state or local taxes on your investment, depending on
the laws in your area. You will be notified to the extent, if any, that
dividends reflect interest received from US government securities. Such
dividends may be exempt from certain state income taxes.
Taxpayer Identification Number
If we do not have your correct Social Security or Taxpayer Identification
Number ("TIN") and a signed certified application or Form W-9, Federal law
requires us to withhold 31% of your reportable dividends, and possibly 31% of
certain redemptions. In addition, you may be subject to a fine by the Internal
Revenue Service.
HOW TO SELL SHARES
You may redeem all or a portion of your shares on any day the Funds are open
for business, provided the amount requested is not on hold. Your shares will
be redeemed at the next NAV calculated after your redemption request is
received and accepted. You will receive dividends through the date the request
is received and processed. The proceeds will normally be sent to you on the
next business day, but if making immediate payment could adversely affect your
Fund, it may take up to seven (7) days to make payment. The Funds have the
right to redeem shares in assets other than cash for redemption amounts
exceeding, in any 90-day period, $250,000 or 1% of the net asset value of the
Fund, whichever is less. When the NYSE is closed (or when trading is
restricted) for any reason other than its customary weekend or holiday
closings, or under any emergency circumstances as determined by the Securities
and Exchange Commission, redemptions may be suspended or payment dates
postponed. Please note that there are some federal holidays such as Columbus
Day and Veterans Day, when the NYSE is open and each Fund is open, but
redemptions cannot be made due to the closure of the banking system.
BY TELEPHONE
You may redeem shares from your account by telephone and have your money sent
by check, electronically transferred, or wired to a bank you have previously
authorized by contacting your local office of TAG.
CHECKWRITING
Checkwriting will be offered through TAG. The checkwriting features vary,
depending on what you choose when you open the money market sweep account with
TAG. Please see the TAG program materials for information.
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To Open an Account:
800-777-1500
Performance and Prices:
800-777-1500
Service for Existing Accounts:
800-777-1500
Registered, Certified or
Overnight Mail:
The Advisors Group, Ltd.
7315 Wisconsin Avenue
Bethesda, Maryland 20814
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
<PAGE>
Outside Back Cover Page
Statements of Additional Information ("SAIs") (dated February 28, 1999) for
the Funds have been filed with the Securities and Exchange Commission and is
incorporated by reference. Additional information about each Fund's
investments is available in each Fund's annual and semi-annual reports to
shareholders. The SAIs and each Fund's annual and semi-annual reports are
available, without charge and upon request, from the Funds at 800-368-2750.
Information about the Funds (including the SAIs) can be reviewed at the
Commission's Public Reference Room in Washington, D.C. Information on the
operation of the public reference room may be obtained by calling the
Commission at 1-800-SEC-0330. Reports and other information about the Funds
are available on the Commission's internet site at http://www.sec.gov. Copies
of this information may be obtained, by payment of a duplicating fee, by
writing the Public Reference Section of the Commission, Washington, D.C.
20549-6009.
811-2633 First Variable Rate Fund
811-3101 Calvert Tax-Free Reserves
<PAGE>
Calvert Tax-Free Reserves
Money Market Portfolio
Limited-Term Portfolio
Statement of Additional Information
February 28, 1999
INVESTMENT ADVISOR
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
SHAREHOLDER SERVICE
Calvert Shareholder Services, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
TRANSFER AGENT
National Financial Data Services, Inc.
1004 Baltimore
6th Floor
Kansas City, Missouri 64105
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers
250 West Pratt Street
Baltimore, Maryland 21201
TABLE OF CONTENTS
Investment Objective 1
Investment Policies 1
Investment Restrictions 2
Purchases and Redemptions of Shares 3
Reduced Sales Charges 4
Dividends and Distributions 4
Tax Matters 4
Valuation of Shares 5
Calculation of Yield and Total Return 6
Advertising 7
Trustees and Officers 8
Investment Advisor 10
Administrative Services 10
Transfer and Shareholder Servicing Agents 11
Independent Accountants and Custodians 11
Method of Distribution 11
Portfolio Transactions 11
General Information 12
Control Persons and Principal Holders of Securities 12
Appendix 13
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION-February 28, 1999
CALVERT TAX-FREE RESERVES
Money Market Portfolio
Limited-Term Portfolio
4550 Montgomery Avenue, Bethesda, Maryland 20814
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New Account Information
(800) 368-2748
(301) 951-4820
Shareholder Services
(800) 368-2745
Broker Services
(800) 368-2746
(301) 951-4850
TDD for the Hearing- Impaired
(800) 541-1524
This Statement of Additional Information is not a prospectus.
Investors should read the Statement of Additional Information in conjunction
with the Calvert Tax-Free Reserves Prospectus, dated April 30, 1998 for Class
O and I, and February 28, 1999 for Class T, which may be obtained free of
charge by writing the Fund at the above address or calling the telephone
numbers listed above.
The audited financial statements in the Portfolios' Annual Report to
Shareholders dated December 31, 1998, are expressly incorporated by reference
and made a part of this Statement of Additional Information. A copy of the
Annual Report may be obtained free of charge by writing or calling the
Portfolios.
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INVESTMENT OBJECTIVE
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The Money Market and Limited-Term Portfolios (the "Portfolios") are
series of Calvert Tax-Free Reserves (the "Fund"), and are designed to provide
individual and institutional investors in higher tax brackets with the highest
level of interest income exempt from federal income taxes as is consistent
with prudent investment management, preservation of capital, and the quality
and maturity characteristics prescribed for each Portfolio. The Money Market
Portfolio further seeks to maintain a constant net asset value of $1.00 per
share. There is, of course, no assurance that the Portfolios will be
successful in meeting their investment objectives or maintaining the Money
Market Portfolio's net asset value constant at $1.00 per share because there
are inherent risks in the ownership of any investment.
Dividends paid by the Portfolios will fluctuate with income earned on
investments. In addition, the dividends and distributions paid and the value
of each share will vary by class of shares; the value of the Limited-Term
Portfolio's shares will fluctuate to reflect changes in the market value of
the Portfolio's investments. The Portfolios will attempt, through careful
management and diversification, to reduce these risks and enhance the
opportunities for higher income and greater price stability.
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INVESTMENT POLICIES
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The Money Market Portfolio and Limited-Term Portfolio each invest
primarily in a diversified portfolio of municipal obligations whose interest
is exempt from federal income tax. The Portfolios differ in their anticipated
income yields, quality, length of average weighted maturity, and capital value
volatility. A complete explanation of municipal obligations and municipal bond
and note ratings is set forth in the Appendix.
The credit rating of each Portfolio's assets as of its most recent
fiscal year-end appears in the Annual Report to Shareholders, incorporated by
reference herein.
Variable Rate Demand Notes
The Board of Trustees has approved investments in floating and
variable rate demand notes upon the following conditions: the Fund has right
of demand, upon notice not to exceed thirty days, against the issuer to
receive payment; the issuer will be able to make payment upon such demand,
either from its own resources or through an unqualified commitment from a
third party; and the rate of interest payable is calculated to ensure that the
market value of such notes will approximate par value on the adjustment dates.
The remaining maturity of such demand notes is deemed the period remaining
until such time as the Fund has the right to dispose of the notes at a price
which approximates par and market value.
Municipal Leases
The Portfolio may invest in municipal leases, or structured
instruments where the underlying security is a municipal lease. A municipal
lease is an obligation of a government or governmental authority, not subject
to voter approval, used to finance capital projects or equipment acquisitions
and payable through periodic rental payments. The Portfolio may purchase
unrated leases. The Fund's Advisor, under the supervision of the Board of
Trustees/Directors, is responsible for determining the credit quality of such
leases on an ongoing basis, including an assessment of the likelihood that the
lease will not be canceled. Certain municipal leases may be considered
illiquid and subject to the Portfolio's limit on illiquid securities. The
Board of Trustees/Directors has directed the Advisor to treat a municipal
lease as a liquid security if it satisfies the following conditions: (A) such
treatment must be consistent with the Portfolio's investment restrictions; (B)
the Advisor should be able to conclude that the obligation will maintain its
liquidity throughout the time it is held by the Portfolio, based on the
following factors: (1) whether the lease may be terminated by the lessee; (2)
the potential recovery, if any, from a sale of the leased property upon
termination of the lease; (3) the lessee's general credit strength (e.g., its
debt, administrative, economic and financial characteristics and prospects);
(4) the likelihood that the lessee will discontinue appropriating funding for
the leased property because the property is no longer deemed essential to its
operations (e.g., the potential for an "event of nonappropriation"), and (5)
any credit enhancement or legal recourse provided upon an event of
nonappropriation or other termination of the lease; (C) the Advisor should
determine whether the obligation can be disposed of within seven days in the
ordinary course of business at approximately the amount at which the Portfolio
has valued it for purposes of calculating the Portfolio's net asset value,
taking into account the following factors: (1) the frequency of trades and
quotes; (2) the volatility of quotations and trade prices; (3) the number of
dealers willing to purchase or sell the security and the number of potential
purchasers; (4) dealer undertakings to make a market in the security; (5) the
nature of the security and the nature of the marketplace trades (e.g., the
time needed to dispose of the security, the method of soliciting offers, and
the mechanics of the transfer); (6) the rating of the security and the
financial condition and prospects of the issuer; and (7) other factors
relevant to the Portfolio's ability to dispose of the security; and (D) the
Advisor should have reasonable expectations that the municipal lease
obligation will maintain its liquidity throughout the time the instrument is
held by the Portfolio.
Obligations with Puts Attached
The Fund has authority to purchase securities at a price which would
result in a yield to maturity lower than that generally offered by the seller
at the time of purchase when it can acquire at the same time the right to sell
the securities back to the seller at an agreed upon price at any time during a
stated period or on a certain date. Such a right is generally denoted as a
"put." A Portfolio may not acquire obligations subject to puts if immediately
thereafter, with respect to 75% of the total amortized cost value of its
assets, that Portfolio would have more than 5% of its assets invested in
securities underlying puts from the same institution. A Portfolio may,
however, invest up to 10% of its assets in securities underlying unconditional
puts from the same institution. Unconditional puts are readily exercisable in
the event of a default in payment of principal or interest on the underlying
securities. The Money Market Portfolio must limit its portfolio investments,
including puts, to instruments of high quality as determined by a nationally
recognized statistical rating organization.
Temporary Investments
Short-term money market type investments consist of: obligations of
the U.S. Government, its agencies and instrumentalities; certificates of
deposit of banks with assets of one billion dollars or more; commercial paper
or other corporate notes of investment grade quality; and any of such items
subject to short-term repurchase agreements.
The Fund intends to minimize taxable income through investment, when
possible, in short-term tax-exempt securities. To minimize taxable income, the
Fund may also hold cash which is not earning income. It is a fundamental
policy of the Fund that during normal market conditions the Fund's assets be
invested so that at least 80% of the Fund's annual income will be tax-exempt.
When-Issued Purchases
Securities purchased on a when-issued basis and the securities held
in the Fund's Portfolios are subject to changes in market value based upon the
public's perception of the creditworthiness of the issuer and changes in the
level of interest rates (which will generally result in both changing in value
in the same way, i.e., both experiencing appreciation when interest rates
decline and depreciation when interest rates rise). Therefore, if in order to
achieve higher interest income, the Fund remains substantially fully invested
at the same time that it has purchased securities on a when-issued basis,
there will be a greater possibility that the market value of the Fund's assets
may vary. No new when-issued commitments will be made by a Portfolio if more
than 50% of that Portfolio's net assets would become so committed.
When the time comes to pay for when-issued securities, the Fund will
meet its obligations from then available cash flow, sale of securities or,
although it would not normally expect to do so, from sale of the when-issued
securities themselves (which may have a market value greater or less than the
Fund's payment obligation). Sale of securities to meet such obligations
carries with it a greater potential for the realization of capital losses and
capital gains which are not exempt from federal income tax.
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INVESTMENT RESTRICTIONS
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Fundamental Investment Restrictions
The Portfolios have adopted the following fundamental investment
restrictions. These restrictions cannot be changed without the approval of the
holders of a majority of the outstanding shares of the Portfolios.
(1) Each Portfolio may not make any investment inconsistent
with its classification as a diversified investment company
under the 1940 Act.
(2) Each Portfolio may not concentrate its investments in
the securities of issuers primarily engaged in any
particular industry (other than securities issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities and repurchase agreements secured
thereby), or domestic bank money market instruments.
(3) Each Portfolio 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 the
affected Portfolio'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, each
Portfolio may pledge, mortgage or hypothecate its assets.
(4) Each Portfolio may not underwrite the securities of
other issuers, except as allowed by law or to the extent
that the purchase of municipal obligations in accordance
with a Portfolio's investment objective and policies, either
directly from the issuer, or from an underwriter for an
issuer, may be deemed an underwriting.
(5) Each Portfolio may not invest directly in commodities or
real estate, although a Portfolio may invest in securities
which are secured by real estate or real estate mortgages
and securities of issuers which invest or deal in
commodities, commodity futures, real estate or real estate
mortgages.
(6) Each Portfolio may not make loans, other than through
the purchase of money market instruments and repurchase
agreements or by the purchase of bonds, debentures or other
debt securities, or as permitted by law. The purchase of all
or a portion of an issue of publicly or privately
distributed debt obligations in accordance with each
Portfolio's investment objective, policies and restrictions,
shall not constitute the making of a loan.
Nonfundamental Investment Restrictions
The Board of Trustees has adopted the following nonfundamental
investment restrictions. A nonfundamental investment restriction can be
changed by the Board at any time without a shareholder vote.
(1) Each Portfolio may not purchase common stocks, preferred stocks,
warrants, or other equity securities.
(2) Each Portfolio does not intend to make any purchases of
securities if borrowing exceeds 5% of the affected Portfolio's
total assets.
(3) Each Portfolio 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.
(4) Each Portfolio may not write or purchase put or call options.
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PURCHASES AND REDEMPTIONS OF SHARES
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Share certificates will not be issued unless requested in writing by
the investor. No charge will be made for share certificate requests. No
certificates will be issued for fractional shares.
Draft writing is available for the Money Market Portfolio.
Shareholders wishing to use the draft writing service should complete the
signature card enclosed with the Investment Application. This service will be
subject to the customary rules and regulations governing checking accounts,
and the Portfolio reserves the right to change or suspend the service.
Generally, there is no charge to you for the maintenance of this service or
the clearance of drafts, but the Portfolio reserves the right to charge a
service fee for drafts returned for insufficient funds. As a service to
shareholders, the Portfolio may automatically transfer the dollar amount
necessary to cover drafts you have written on the Portfolio to your account
from any other of your identically registered accounts in Calvert money market
funds or Calvert Insured Plus. The Portfolio may charge a fee for this
service.
Drafts presented to the Custodian for payment which would require the
redemption of shares purchased by check or electronic funds transfer within
the previous 10 business days will not be honored.
When a payable through draft ("check") is presented for payment, a
sufficient number of full and fractional shares from the shareholder's account
to cover the amount of the draft will be redeemed at the net asset value next
determined. If there are insufficient shares in the shareholder's account, the
draft will be returned.
To change redemption instructions already given, shareholders must
send a written notice to Calvert Group, c/o NFDS, 6th Floor, 1004 Baltimore,
Kansas City, MO 64105, with a voided copy of a check for the bank wiring
instructions to be added. If a voided check does not accompany the request,
then the request must be signature guaranteed by a commercial bank, savings
and loan association, trust company, member firm of any national securities
exchange, or credit union. Further documentation may be required from
corporations, fiduciaries, and institutional investors.
The right of redemption may be suspended or the date of payment
postponed for any period during which the New York Stock Exchange is closed
(other than customary weekend and holiday closings), when trading on the New
York Stock Exchange is restricted, or an emergency exists, as determined by
the SEC, or if the Commission has ordered such a suspension for the protection
of shareholders. Redemption proceeds are normally mailed or wired the next
business day after a proper redemption request has been received, unless
redemptions have been suspended or postponed as described above.
Redemption proceeds are normally paid in cash. However, the Portfolio
has the right to redeem shares in assets other than cash for redemption
amounts exceeding, in any 90-day period, $250,000 or 1% of the net asset value
of the Portfolio, whichever is less.
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REDUCED SALES CHARGES
- --------------------------------------------------------------------------------
The Limited-Term Portfolio imposes reduced sales charges for shares
in certain situations in which the Principal Underwriter (which offers the
Portfolio's shares continuously and on a "best efforts" basis) and the dealers
selling Limited-Term Portfolio shares may expect to realize significant
economies of scale with respect to such sales. Generally, sales costs do not
increase in proportion to the dollar amount of the shares sold; the per-dollar
transaction cost for a sale to an investor of shares worth, say, $5,000 is
generally much higher than the per-dollar cost for a sale of shares worth
$1,000,000. Thus, the applicable sales charge declines as a percentage of the
dollar amount of shares sold as the dollar amount increases.
When a shareholder agrees to make purchases of shares over a period
of time totaling a certain dollar amount pursuant to a Letter of Intent, the
Underwriter and selling dealers can expect to realize the economies of scale
applicable to that stated goal amount. Thus the Portfolio imposes the sales
charge applicable to the goal amount. Similarly, the Underwriter and selling
dealers also experience cost savings when dealing with existing Portfolio
shareholders, enabling the Portfolio to afford existing shareholders the Right
of Accumulation. The Underwriter and selling dealers can also expect to
realize economies of scale when making sales to the members of certain
qualified groups which agree to facilitate distribution of Portfolio shares to
their members. See "Exhibit A - Reduced Sales Charges" in the Limited-Term
Prospectus.
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DIVIDENDS AND DISTRIBUTIONS
- --------------------------------------------------------------------------------
The Money Market Portfolio declares daily and pays monthly dividends
of its daily net income to shareholders of record as of the close of business
each business day, thus allowing daily compounding of dividends. The
Limited-Term Portfolio declares and pays monthly dividends of its net income
to shareholders of record as of the close of business on each designated
monthly record date. Dividends and distributions paid by each Portfolio may
differ among the classes. Net investment income consists of the interest
income earned on investments (adjusted for amortization of original issue
discounts or premiums or market premiums), less estimated expenses. Capital
gains, if any, are normally paid once a year and will be automatically
reinvested at net asset value in additional shares. Dividends and any
distributions are automatically reinvested in additional shares of the Fund,
unless you elect to have the dividends of $10 or more paid in cash (by check
or by Calvert Money Controller). You may also request to have your dividends
and distributions from the Portfolio invested in shares of any other Calvert
Group Fund, subject to the applicable sales charge for that Fund or Portfolio.
If you elect to have dividends and/or distributions paid in cash, and the U.S.
Postal Service returns the check as undeliverable, it, as well as future
dividends and distributions, will be reinvested in additional shares.
Purchasers of shares of the Money Market Portfolio will begin
receiving dividends upon the date federal funds are received by the Fund.
Shareholders redeeming shares by telephone electronic funds transfer or
written request will receive dividends through the date that the redemption
request is received; Money Market Portfolio shareholders redeeming shares by
draft will receive dividends up to the date such draft is presented to the
Portfolio for payment.
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TAX MATTERS
- --------------------------------------------------------------------------------
In 1998, the Portfolios did qualify and in 1999, the Portfolios
intend to qualify as a "regulated investment company" under Subchapter M of
the Internal Revenue Code as amended (the "Code"). By so qualifying, the Fund
will not be subject to federal income tax, nor to the federal excise tax
imposed by the Tax Reform Act of 1986 (the "Act"), to the extent that it
distributes its net investment income and realized capital gains.
The Portfolio's dividends of net investment income constitute
exempt-interest dividends on which shareholders are not generally subject to
federal income tax; however under the Act, dividends attributable to interest
on certain private activity bonds must be included in federal alternative
minimum taxable income for the purpose of determining liability (if any) for
individuals and for corporations. Each Portfolio's dividends derived from
taxable interest and distributions of net short-term capital gains, whether
taken in cash or reinvested in additional shares, are taxable to shareholders
as ordinary income and do not qualify for the dividends received deduction for
corporations.
A shareholder may also be subject to state and local taxes on
dividends and distributions from the Fund. The Fund will notify shareholders
annually about the federal tax status of dividends and distributions paid by
the Fund and the amount of dividends withheld, if any, during the previous
year.
The Code provides that interest on indebtedness incurred or continued
in order to purchase or carry shares of a regulated investment company which
distributes exempt-interest dividends during the year is not deductible.
Furthermore, entities or persons who are "substantial users" (or persons
related to "substantial users") of facilities financed by private activity
bonds should consult their tax advisors before purchasing shares of the Fund.
"Substantial user" is generally defined as including a "non-exempt person" who
regularly uses in trade or business a part of a facility financed from the
proceeds of private activity bonds.
Investors should note that the Code may require investors to exclude
the initial sales charge, if any, paid on the purchase of Limited-Term
Portfolio shares from the tax basis of those shares if the shares are
exchanged for shares of another Calvert Group Fund within 90 days of purchase.
This requirement applies only to the extent that the payment of the original
sales charge on the shares of the Portfolio causes a reduction in the sales
charge otherwise payable on the shares of the Calvert Group Fund acquired in
the exchange, and investors may treat sales charges excluded from the basis of
the original sales as incurred to acquire the new shares.
The Fund is required to withhold 31% of any long-term capital gain
dividends and 31% of each redemption transaction occurring in the Limited-Term
Portfolio if: (a) the shareholder's social security number or other taxpayer
identification number ("TIN") is not provided or an obviously incorrect TIN is
provided; (b) the shareholder does not certify under penalties of perjury that
the TIN provided is the shareholder's correct TIN and that the shareholder is
not subject to backup withholding under section 3406(a)(1)(C) of the Code
because of underreporting (however, failure to provide certification as to the
application of section 3406(a)(1)(C) will result only in backup withholding on
capital gain dividends, not on redemptions); or (c) the Fund is notified by
the Internal Revenue Service that the TIN provided by the shareholder is
incorrect or that there has been underreporting of interest or dividends by
the shareholder. Affected shareholders will receive statements at least
annually specifying the amount withheld.
In addition, the Limited-Term Portfolio is required to report to the
Internal Revenue Service the following information with respect to redemption
transactions in the Portfolio: (a) the shareholder's name, address, account
number and taxpayer identification number; (b) the dollar value of the
redemptions; and (c) the Portfolio's identifying CUSIP number.
Certain shareholders are, however, exempt from the backup withholding
and broker reporting requirements. Exempt shareholders include: corporations;
financial institutions; tax-exempt organizations; individual retirement plans;
the U.S., a State, the District of Columbia, a U.S. possession, a foreign
government, an international organization, or any political subdivision,
agency, or instrumentality of any of the foregoing; U.S. registered
commodities or securities dealers; real estate investment trusts; registered
investment companies; bank common trust funds; certain charitable trusts; and
foreign central banks of issue. Non-resident aliens also are generally not
subject to either requirement but, along with certain foreign partnerships and
foreign corporations, may instead be subject to withholding under section 1441
of the Code. Shareholders claiming exemption from backup withholding and
broker reporting should call or write the Fund for further information.
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VALUATION OF SHARES
- --------------------------------------------------------------------------------
Money Market Portfolio
The Money Market Portfolio's assets, including commitments to
purchase securities on a when-issued basis, are normally valued at their
amortized cost, which does not take into account unrealized capital gains or
losses. This involves valuing an instrument at its cost and thereafter
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value of
the instrument. While this method provides certainty in valuation, it may
result in periods during which value, as determined by amortized cost, is
higher or lower than the price that would be received upon sale of the
instrument. During periods of declining interest rates, the daily yield on
shares of the Money Market Portfolio may tend to be higher than a like
computation made by a fund with identical investments utilizing a method of
valuation based upon market prices and estimates of market prices for all of
its portfolio instruments. Thus, if the use of amortized cost by the Money
Market Portfolio resulted in a lower aggregate portfolio value on a particular
day, a prospective investor in the Portfolio would be able to obtain a
somewhat higher yield than would result from investment in a fund utilizing
solely market values, and existing investors in the Portfolio would receive
less investment income. The converse would apply in a period of rising
interest rates.
Rule 2a-7 under the Investment Company Act of 1940 permits the Fund
to value the assets of the Money Market Portfolio at amortized cost if the
Money Market Portfolio maintains a dollar-weighted average maturity of 90 days
or less and only purchases obligations having remaining maturities of one year
or less. Rule 2a-7 requires, as a condition of its use, that the Money Market
Portfolio invest only in obligations determined by the Trustees to be of high
quality with minimal credit risks and further requires the Trustees to
establish procedures designed to stabilize, to the extent reasonably possible,
the Portfolio's price per share as computed for the purpose of sales and
redemptions at $1.00. Such procedures include review of the Portfolio's
investment holdings by the Trustees, at such intervals as they may deem
appropriate, to determine whether the Portfolio's net asset value calculated
by using available market quotations or equivalents deviates from $1.00 per
share based on amortized cost. If such deviation exceeds 0.50%, the Trustees
will promptly consider what action, if any, will be initiated. In the event
the Trustees determine that a deviation exists which may result in material
dilution or other unfair results to investors or existing shareholders, the
Trustees will take such corrective action as they regard as necessary and
appropriate, including: the sale of portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity; the
withholding of dividends or payment of distributions from capital or capital
gains; redemptions of shares in kind; or the establishment of a net asset
value per share based on available market quotations.
Limited-Term Portfolio
The Limited-Term Portfolio's assets are valued, utilizing the average
bid dealer market quotation as furnished by an independent pricing service.
Securities and other assets for which market quotations are not readily
available are valued based on the current market for similar securities or
assets, as determined in good faith by the Fund's Advisor under the
supervision of the Board of Trustees.
Valuations, market quotations and market equivalents are provided the
Portfolio by Kenny S&P Evaluation Services, a subsidiary of McGraw-Hill. The
use of Kenny as a pricing service by the Portfolio has been approved by the
Board of Trustees. Valuations provided by Kenny are determined without
exclusive reliance on quoted prices and take into consideration appropriate
factors such as institution-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, trading characteristics,
and other market data.
Each Portfolio determines the net asset value of its shares every
business day at the close of the regular session of the New York Stock
Exchange (generally, 4:00 p.m. Eastern time), and at such other times as may
be necessary or appropriate. The Portfolios do not determine net asset value
on certain national holidays or other days on which the New York Stock
Exchange is closed: New Year's Day, Martin Luther King Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day.
Net Asset Value and Offering Price Per Share, 12/31/98
Money Market Portfolio
Class O ($______/_____ shares) $1.00
Institutional Class ($______/_____ shares) $1.00
Class T not available on 12/31/98
Limited-Term Portfolio
Net asset value per share
($______/_____ shares) $__.__
Maximum sales charge
(1.00% of offering price) __.__
Offering price per share $__.__
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CALCULATION OF YIELD AND TOTAL RETURN
- --------------------------------------------------------------------------------
Money Market Portfolio
From time to time the Money Market Portfolio advertises its "yield"
and "effective yield." Both yield figures are based on historical earnings and
are not intended to indicate future performance. Yield is calculated
separately by class. The "yield" of the Money Market Portfolio refers to the
income generated by an investment in the Portfolio over a particular base
period of time. The length and closing date of the base period will be stated
in the advertisement. If the base period is less than one year, the yield is
then "annualized." That is, the net change, exclusive of capital changes, in
the value of a share during the base period is divided by the net asset value
per share at the beginning of the period, and the result is multiplied by 365
and divided by the number of days in the base period. Capital changes excluded
from the calculation of yield are: (1) realized gains and losses from the sale
of securities, and (2) unrealized appreciation and depreciation. The Money
Market Portfolio's "effective yield" for a seven-day period is its annualized
compounded yield during the period calculated according to the following
formula:
Effective yield = (base period return + 1)365/7 - 1
For the seven-day period ended December 31, 1998, the Money Market Portfolio's
yield for Class O shares was _.__% and its effective yield was _.__%. For the
seven-day period ended December 31, 1998, the Money Market Portfolio's yield
for the Institutional Class of shares was _.__% and its effective yield was
_.__%. Class T was not available on December 31, 1998; therefore, no yield is
presented.
The Money Market Portfolio also may advertise, from time to time, its
"tax equivalent yield." The tax equivalent yield is the yield an investor
would be required to obtain from taxable investments to equal the Portfolio's
yield, all or a portion of which may be exempt from federal income taxes. The
tax equivalent yield is computed by taking the portion of the Portfolio's
effective yield exempt from regular federal income tax and multiplying the
exempt yield by a factor based upon a stated income tax rate, then adding the
portion of the yield that is not exempt from regular federal income tax. The
factor which is used to calculate the tax equivalent yield is the reciprocal
of the difference between 1 and the applicable income tax rate, which will be
stated in the advertisement. For the seven-day period ended December 31, 1998,
the Money Market Portfolio's Class O tax equivalent yield, for an investor in
the 36% federal income tax bracket was _.__% and, for the 39.6% federal income
tax bracket, _.__%. For the seven-day period ended December 31, 1998, the
Money Market Portfolio Institutional Class' tax equivalent yield, for an
investor in the 36% federal income tax bracket was _.__% and, for the 39.6%
federal income tax bracket, _.__%. Class T was not available on December 31,
1998.
Limited-Term Portfolio
From time to time, the Limited-Term Portfolio advertises its "total
return." Total return is calculated separately for each class. Total return is
historical in nature and is not intended to indicate future performance. Total
return will be quoted for the most recent one-year period, five-year period,
and period from inception of the Portfolio's offering of shares. Total return
quotations for periods in excess of one year represent the average annual
total return for the period included in the particular quotation. Total return
is a computation of the Portfolio's dividend yield, plus or minus realized or
unrealized capital appreciation or depreciation, less fees and expenses. All
total return quotations reflect the deduction of the Portfolio's maximum sales
charge, except quotations of "return without maximum load" which do not deduct
the sales charge and "actual return," which reflect deduction of the sales
charge only for those periods when a sales charge was actually imposed. Thus,
in the formula below, for return without maximum load, P = the entire $1,000
hypothetical initial investment and does not reflect the deduction of any
sales charge; for actual return, P = a hypothetical initial payment of $1,000.
Note: "Total Return" as quoted in the Financial Highlights section of the
Fund's Prospectus and Annual Report to Shareholders, per SEC instructions, does
not reflect deduction of the sales charge, and corresponds to "return without
maximum load" as referred to herein. Return without maximum load should be
considered only by investors, such as participants in certain pension plans,
to whom the sales charge does not apply, or for purposes of comparison only
with comparable figures which also do not reflect sales charges, such as
Lipper averages. Total return is computed according to the following formula:
P(1 + T)n = ERV
where P = a hypothetical initial payment of $1,000; T = total return; n =
number of years; and ERV = the ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the 1, 5 or 10 year periods at the end
of such periods (or portions thereof, if applicable).
Returns for the periods indicated are as follows:
With Max. Load W/O Max. Load
One Year _.__% _.__%
Five Years _.__% _.__%
Ten Years _.__% _.__%
The Limited-Term Portfolio also advertises, from time to time, its
"yield" and "tax equivalent yield." As with total return, both yield figures
are historical and are not intended to indicate future performance.
Unlike the yield quotations for the Money Market Portfolio, "yield"
quotations for the Limited-Term Portfolio refer to the aggregate imputed
yield-to-maturity of each of the Portfolio's investments based on the market
value as of the last day of a given thirty-day or one-month period less
accrued expenses (net of reimbursement), divided by the average daily number
of outstanding shares entitled to receive dividends times the maximum offering
price on the last day of the period (so that the effect of the sales charge is
included in the calculation), compounded on a "bond equivalent," or
semi-annual, basis. The Limited-Term Portfolio's yield is computed according
to the following formula:
Yield = 2[(a-b/cd)+1)6 - 1]
where a = dividends and interest earned during the period; b = expenses
accrued for the period (net of reimbursement); c = the average daily number of
shares outstanding during the period that were entitled to receive dividends;
and d = the maximum offering price per share on the last day of the period.
Using this calculation, the Limited-Term Portfolio's yield for the month ended
December 31, 1998 was _.__%.
The tax equivalent yield is the yield an investor would be required
to obtain from taxable investments to equal the Limited-Term Portfolio's
yield, all or a portion of which may be exempt from federal income taxes. The
tax equivalent yield is computed for each class by taking the portion of the
yield exempt from regular federal income tax and multiplying the exempt yield
by a factor based upon a stated income tax rate, then adding the portion of
the yield that is not exempt from regular federal income tax. The factor which
is used to calculate the tax equivalent yield is the reciprocal of the
difference between 1 and the applicable income tax rate, which will be stated
in the advertisement. For the thirty-day period ended December 31, 1998, the
Portfolio's tax equivalent yield was _.__% for an investor in the 36% federal
income tax bracket, and _.__% for an investor in the 39.6% federal income tax
bracket.
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ADVERTISING
- --------------------------------------------------------------------------------
The Fund or its affiliates may provide information such as, but not
limited to, the economy, investment climate, investment principles,
sociological conditions and political ambiance. Discussion may include
hypothetical scenarios or lists of relevant factors designed to aid the
investor in determining whether the Fund is compatible with the investor's
goals. The Fund may list portfolio holdings or give examples or securities
that may have been considered for inclusion in the Portfolio, whether held or
not.
The Fund or its affiliates may supply comparative performance data
and rankings from independent sources such as Donoghue's Money Fund Report,
Bank Rate Monitor, Money, Forbes, Lipper Analytical Services, Inc., CDA
Investment Technologies, Inc., Wiesenberger Investment Companies Service,
Russell 2000/Small Stock Index, Mutual Fund Values Morningstar Ratings, Mutual
Fund Forecaster, Barron's, The Wall Street Journal, and Schabacker Investment
Management, Inc. Such averages generally do not reflect any front- or back-end
sales charges that may be charged by Funds in that grouping. The Fund may also
cite to any source, whether in print or on-line, such as Bloomberg, in order
to acknowledge origin of information. The Fund may compare itself or its
portfolio holdings to other investments, whether or not issued or regulated by
the securities industry, including, but not limited to, certificates of
deposit and Treasury notes. The Fund, its Advisor, and its affiliates reserve
the right to update performance rankings as new rankings become available.
Calvert Group is the nation's leading family of socially responsible
mutual funds, both in terms of socially responsible mutual fund assets under
management, and number of socially responsible mutual fund portfolios offered
(source: Social Investment Forum, December 31, 1998). Calvert Group was also
the first to offer a family of socially responsible mutual fund portfolios.
- --------------------------------------------------------------------------------
TRUSTEES AND OFFICERS
- --------------------------------------------------------------------------------
RICHARD L. BAIRD, JR., Trustee. Mr. Baird is Executive Vice President
for the Family Health Council, Inc. in Pittsburgh, Pennsylvania, a non-profit
corporation which provides family planning services, nutrition, maternal/child
health care, and various health screening services. Mr. Baird is a
trustee/director of each of the investment companies in the Calvert Group of
Funds, except for Calvert Variable Series, Inc., Calvert New World Fund, Inc.
and Calvert World Values Fund, Inc. DOB: 05/09/48. Address: 211 Overlook
Drive, Pittsburgh, Pennsylvania 15216.
FRANK H. BLATZ, JR., Esq., Trustee. Mr. Blatz is a partner in the law
firm of Snevily, Ely, Williams & Blatz. He was formerly a partner with Abrams,
Blatz, Gran, Hendricks & Reina, P.A. He is also a director of Calvert Variable
Series, Inc. DOB: 10/29/35. Address: 308 East Broad Street, Westfield, New
Jersey 07091.
FREDERICK T. BORTS, M.D., Trustee. Dr. Borts is a radiologist with
Kaiser Permanente. Prior to that, he was a radiologist at Bethlehem Medical
Imaging in Allentown, Pennsylvania. DOB: 07/23/49. Address: 16 Iliahi Street,
Honolulu, Hawaii, 96817.
CHARLES E. DIEHL, Trustee. Mr. Diehl is a self-employed consultant
and is Vice President and Treasurer Emeritus of the George Washington
University. He has retired from University Support Services, Inc. of Herndon,
Virginia. Formerly, he was a Director of Acacia Mutual Life Insurance Company,
and is currently a Director of Servus Financial Corporation. DOB: 10/13/22.
Address: 1658 Quail Hollow Court, McLean, Virginia 22101.
DOUGLAS E. FELDMAN, M.D., Trustee. Dr. Feldman is managing partner of
Feldman Otolaryngology, Head and Neck Surgery in Washington, D.C. A graduate
of Harvard Medical School, he is Associate Professor of Otolaryngology, Head
and Neck Surgery at Georgetown University and George Washington University
Medical School, and past Chairman of the Department of Otolaryngology, Head
and Neck Surgery at the Washington Hospital Center. He is included in The Best
Doctors in America. DOB: 05/23/48. Address: 7536 Pepperell Drive, Bethesda,
Maryland 20817.
PETER W. GAVIAN, CFA, Trustee. Mr. Gavian is President of Corporate
Finance of Washington, Inc. Formerly, he was a principal of Gavian De Vaux
Associates, an investment banking firm. He is also a Chartered Financial
Analyst and an accredited senior business appraiser. DOB: 12/08/32. Address:
3005 Franklin Road North, Arlington, Virginia 22201.
JOHN G. GUFFEY, JR., Trustee. Mr. Guffey is chairman of the Calvert
Social Investment Foundation, organizing director of the Community Capital
Bank in Brooklyn, New York, and a financial consultant to various
organizations. In addition, he is a director of the Community Bankers Mutual
Fund of Denver, Colorado, a director of Ariel Funds, and the Treasurer and
Director of Silby, Guffey, and Co., Inc., a venture capital firm. Mr. Guffey
is a trustee/director of each of the other investment companies in the Calvert
Group of Funds, except for Calvert Variable Series, Inc. and Calvert New World
Fund, Inc.
Mr. Guffey has been advised that the Securities and Exchange
Commission ("SEC") has entered an order against him relating to his former
service as a director of Community Bankers Mutual Fund, Inc. This fund is not
connected with any Calvert Fund or the Calvert Group and ceased operations in
September, 1994. Mr. Guffey consented to the entry of the order without
admitting or denying the findings in the order. The order contains findings
(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. The order directed Mr. Guffey to
cease and desist from committing or causing future violations and to pay a
civil penalty of $5,000. The SEC placed no restrictions on Mr. Guffey's
continuing to serve as a Trustee or Director of mutual funds. DOB: 05/15/48.
Address: 7205 Pomander Lane, Chevy Chase, Maryland 20815.
*BARBARA J. KRUMSIEK, President and Trustee. Ms. Krumsiek serves as
President, Chief Executive Officer and Vice Chairman of Calvert Group, Ltd.
and as an officer and director of each of its affiliated companies. She is a
director of Calvert-Sloan Advisers, L.L.C., and a trustee/director of each of
the investment companies in the Calvert Group of Funds. Ms. Krumsiek is the
President of each of the investment companies, except for Calvert Social
Investment Fund, of which she is the Senior Vice President. Prior to joining
Calvert Group, Ms. Krumsiek served as a Managing Director of Alliance Fund
Distributors, Inc. DOB: 08/09/52.
M. CHARITO KRUVANT, Trustee. Ms. Kruvant is President and CEO of
Creative Associates International, Inc., a firm that specializes in human
resources development, information management, public affairs and private
enterprise development. She is also a director of Acacia Federal Savings Bank.
DOB: 12/08/45. Address: 5301 Wisconsin Avenue, N.W., Washington, D.C. 20015.
ARTHUR J. PUGH, Trustee. Mr. Pugh is a Director of Calvert Variable
Series, Inc., and serves as a director of Acacia Federal Savings Bank. DOB:
09/24/37. Address: 4823 Prestwick Drive, Fairfax, Virginia 22030.
*DAVID R. ROCHAT, Senior Vice President and Trustee. Mr. Rochat is
Executive Vice President of Calvert Asset Management Company, Inc., Director
and Secretary of Grady, Berwald and Co., Inc., and Director and President of
Chelsea Securities, Inc. He is the Senior Vice President of First Variable
Rate Fund, Calvert Tax-Free Reserves, Calvert Municipal Fund, Inc., Calvert
Cash Reserves, and The Calvert Fund. DOB: 10/07/37. Address: Box 93, Chelsea,
Vermont 05038.
*D. WAYNE SILBY, Esq., Trustee. Mr. Silby is a trustee/director of
each of the investment companies in the Calvert Group of Funds, except for
Calvert Variable Series, Inc. and Calvert New World Fund. Mr. Silby is
Executive Chairman of Group Serve, Inc., an internet company focused on
community building collaborative tools, and an officer, director and
shareholder of Silby, Guffey & Company, Inc., which serves as general partner
of Calvert Social Venture Partners ("CSVP"). CSVP is a venture capital firm
investing in socially responsible small companies. He is also a Director of
Acacia Mutual Life Insurance Company. DOB: 07/20/48. Address: 1715 18th
Street, N.W., Washington, D.C. 20009.
RENO J. MARTINI, Senior Vice President. Mr. Martini is a director and
Senior Vice President of Calvert Group, Ltd., and Senior Vice President and
Chief Investment Officer of Calvert Asset Management Company, Inc. Mr. Martini
is also a director and President of Calvert-Sloan Advisers, L.L.C., and a
director and officer of Calvert New World Fund, Inc. DOB: 1/13/50.
RONALD M. WOLFSHEIMER, CPA, Treasurer. Mr. Wolfsheimer is Senior Vice
President and Chief Financial Officer of Calvert Group, Ltd. and its
subsidiaries and an officer of each of the other investment companies in the
Calvert Group of Funds. Mr. Wolfsheimer is Vice President and Treasurer of
Calvert-Sloan Advisers, L.L.C., and a director of Calvert Distributors, Inc.
DOB: 07/24/47.
WILLIAM M. TARTIKOFF, Esq., Vice President and Secretary. Mr.
Tartikoff is an officer of each of the investment companies in the Calvert
Group of Funds, and is Senior Vice President, Secretary, and General Counsel
of Calvert Group, Ltd., and each of its subsidiaries. Mr. Tartikoff is also
Vice President and Secretary of Calvert-Sloan Advisers, L.L.C., a director of
Calvert Distributors, Inc., and is an officer of Acacia National Life
Insurance Company. DOB: 08/12/47.
DANIEL K. HAYES, Vice President. Mr. Hayes is Vice President of
Calvert Asset Management Company, Inc., and is an officer of each of the other
investment companies in the Calvert Group of Funds, except for Calvert New
World Fund, Inc. DOB: 09/09/50.
SUSAN WALKER BENDER, Esq., Assistant Secretary. Ms. Bender is
Associate General Counsel of Calvert Group, Ltd. and an officer of each of its
subsidiaries and Calvert-Sloan Advisers, L.L.C. She is also an officer of each
of the other investment companies in the Calvert Group of Funds. DOB: 01/29/59.
KATHERINE STONER, Esq., Assistant Secretary. Ms. Stoner is Associate
General Counsel of Calvert Group and an officer of each of its subsidiaries
and Calvert-Sloan Advisers, L.L.C. She is also an officer of each of the other
investment companies in the Calvert Group of Funds. DOB: 10/21/56.
IVY WAFFORD DUKE, Esq., Assistant Secretary. Ms. Duke is Assistant
Counsel of Calvert Group and an officer of each of its subsidiaries and
Calvert-Sloan Advisers, L.L.C. She is also an officer of each of the other
investment companies in the Calvert Group of Funds. Prior to working at
Calvert Group, Ms. Duke was an Associate in the Investment Management Group of
the Business and Finance Department at Drinker Biddle & Reath. DOB: 09/07/68.
The address of directors and officers, unless otherwise noted, is
4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814. Trustees and
officers of the Fund as a group own less than 1% of the Fund's outstanding
shares. Trustees marked with an *, above, are "interested persons" of the
Fund, under the Investment Company Act of 1940.
Each of the above directors/trustees and officers is a
director/trustee or officer of each of the investment companies in the Calvert
Group of Funds with the exception of Calvert Social Investment Fund, of which
only Messrs. Baird, Guffey and Silby and Ms. Krumsiek are among the trustees,
Calvert Variable Series, Inc., of which only Messrs. Blatz, Diehl and Pugh and
Ms. Krumsiek are among the directors, Calvert World Values Fund, Inc., of
which only Messrs. Guffey and Silby and Ms. Krumsiek are among the directors,
and Calvert New World Fund, Inc., of which only Ms. Krumsiek and Mr. Martini
are among the directors.
The 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.
During 1998, Trustees of the Fund not affiliated with the Fund's
Advisor were paid $_______ and $________ by the Money Market and Limited-Term
Portfolios, respectively. Trustees of the Fund not affiliated with the Advisor
currently receive an annual fee of $20,500 for service as a member of the
Board of Trustees of the Calvert Group of Funds plus a fee of $750 to $1500
for each Board and Committee meeting attended; such fees are allocated among
the Funds on the basis of their net assets.
Trustees of the Fund not affiliated with the Fund's Advisor may elect
to defer receipt of all or a percentage of their fees and invest them in any
fund in the Calvert Family of Funds through the Trustees Deferred Compensation
Plan (shown as "Pension or Retirement Benefits Accrued as part of Fund
Expenses," below). Deferral of the fees is designed to maintain the parties in
the same position as if the fees were paid on a current basis.
Trustee Compensation Table
Fiscal Year 1998 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. $_____ $0 $_____
Frank H. Blatz, Jr. $_____ $0 $_____
Frederick T. Borts $_____ $0 $_____
Charles E. Diehl $_____ $_____ $_____
Douglas E. Feldman $_____ $0 $_____
Peter W. Gavian $_____ $_____ $_____
John G. Guffey, Jr. $_____ $0 $_____
M. Charito Kruvant $_____ $_____ $_____
Arthur J. Pugh $_____ $_____ $_____
D. Wayne Silby $_____ $0 $_____
*Messrs. Blatz, Diehl, Gavian and Pugh have chosen to defer a portion of their
compensation. As of December 31, 1998, total deferred compensation, including
dividends and capital appreciation, was $_________,$_________, $_________ and
$_________, for each trustee, respectively.
**As of December 31, 1998. The Fund Complex consists of nine (9) registered
investment companies.
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INVESTMENT ADVISOR
- --------------------------------------------------------------------------------
The Fund's Investment Advisor is Calvert Asset Management Company,
Inc., 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814, a
subsidiary of Calvert Group, Ltd., which is a subsidiary of Acacia Mutual Life
Insurance Company of Washington, D.C. ("Acacia Mutual").
The Advisory Contract between the Fund and the Advisor will remain in
effect indefinitely, provided continuance is approved at least annually by the
vote of the holders of a majority of the outstanding shares of the Fund, or by
the Trustees of the Fund; and further provided that such continuance is also
approved annually by the vote of a majority of the Trustees of the Fund who
are not parties to the Contract or interested persons of such parties, cast in
person at a meeting called for the purpose of voting on such approval. The
Contract may be terminated without penalty by either party on 60 days' prior
written notice; it automatically terminates in the event of its assignment.
Under the Contract, the Advisor manages the investment and
reinvestment of the Fund's assets, subject to the direction and control of the
Fund's Board of Trustees. For its services, the Advisor receives an annual fee
of:
i) with respect to the Money Market Portfolio, prior to August 1,
1997, the fees were 0.50% of the first $500 million of such Portfolio's
average daily net assets, 0.45% of the next $500 million of such assets, and
0.40% of all such assets over $1 billion. Effective August 1, 1997, the fees
changed to 0.25% of the first $500 million of such Portfolio's average daily
net assets, 0.20% of the next $500 million of such assets, and 0.15% of all
such assets over $1 billion; and
ii) with respect to the Limited-Term Portfolio, 0.60% of the first
$500 million of the Portfolio's average daily net assets, 0.50% of the next
$500 million of such assets, and 0.40% of all such assets over $1 billion.
The advisory fee is payable monthly. The Advisor reserves the right
(i) to waive all or a part of its fee and (ii) to compensate, at its expense,
broker-dealers in consideration of their promotional and administrative
services.
The Advisor provides the Fund with investment advice and research,
pays the salaries and fees of all Trustees and executive officers of the Fund
who are principals of the Advisor, and pays certain Fund advertising and
promotional expenses. The Fund pays all other administrative and operating
expenses, including: custodial fees; shareholder servicing, dividend
disbursing and transfer agency fees; administrative service fees; federal and
state securities registration fees; insurance premiums; trade association
dues; interest, taxes and other business fees; legal and audit fees; and
brokerage commissions and other costs associated with the purchase and sale of
portfolio securities.
The Advisor may voluntarily reimburse the Money Market and
Limited-Term Portfolios for expenses. The advisory fees paid by the Money
Market Portfolio to Calvert Asset Management Company were $7,776,716,
$5,409,090, and $_________ for years 1996, 1997, and 1998, respectively. The
advisory fees paid by the Limited-Term Portfolio to Calvert Asset Management
Company were $3,110,764, $3,164,772, and $__________ for years 1996, 1997, and
1998, respectively.
- --------------------------------------------------------------------------------
ADMINISTRATIVE SERVICES
- --------------------------------------------------------------------------------
Calvert Administrative Services Company ("CASC"), a wholly-owned
subsidiary of Calvert Group, Ltd., has been retained by the Fund to provide
certain administrative services necessary to the conduct of the Fund's
affairs. Such services include the preparation of corporate and regulatory
reports and filings, portfolio accounting, and the daily determination of net
investment income and net asset value per share. Prior to August 1, 1997, CASC
received a fee of $200,000 per year for providing such services, allocated
among Portfolios based on assets. Effective August 1, 1997, the Money Market
Class O, Institutional Class, and Class T pay annual rates of 0.26%, 0.05%,
and ___% respectively, based on average daily net assets. Limited-Term and
other portfolios of CTFR pay an annual fee of $80,000, allocated among the
portfolios based on average daily net assets. The service fees paid by the
Money Market Portfolio to Calvert Administrative Services Company were
$128,255 for fiscal year 1996. The 1997 administrative services fees paid by
CTFR Money Market were $1,682,754 and $24,010 for Class O and the
Institutional Class, respectively. The 1998 administrative services fees paid
by CTFR Money Market were $1,682,754 and $24,010 for Class O and the
Institutional Class, respectively. Class T was not available during fiscal
year 1998. The service fees paid by the Limited-Term Portfolio to CASC were
$38,242, $43,210, and $_________, for years 1996, 1997, and 1998, respectively.
- --------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER SERVICING AGENTS
- --------------------------------------------------------------------------------
National Financial Data Services, Inc. ("NFDS"), a subsidiary of
State Street Bank & Trust, has been retained by the Fund to act as transfer
agent and dividend disbursing agent. These responsibilities include:
responding to certain shareholder inquiries and instructions, crediting and
debiting shareholder accounts for purchases and redemptions of Fund shares and
confirming such transactions, and daily updating of shareholder accounts to
reflect declaration and payment of dividends.
Calvert Shareholder Services, Inc., a subsidiary of Calvert Group,
Ltd., and Acacia Mutual, has been retained by the Fund to act as shareholder
servicing agent. Shareholder servicing responsibilities include responding to
shareholder inquiries and instructions concerning their accounts, entering any
telephoned purchases or redemptions into the NFDS system, maintenance of
broker-dealer data, and preparing and distributing statements to shareholders
regarding their accounts. Calvert Shareholder Services, Inc. was the sole
transfer agent prior to January 1, 1998.
For these services, NFDS and Calvert Shareholder Services, Inc.
receive a fee based on the number of shareholder accounts and shareholder
transactions, per Portfolio.
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
- --------------------------------------------------------------------------------
PricewaterhouseCoopers, L.L.P. has been selected by the Board of
Trustees to serve as independent accountants for fiscal year 1999. State
Street Bank & Trust Company, N.A., 225 Franklin Street, Boston, MA 02110,
currently serves as custodian of the Portfolio's investments. First National
Bank of Maryland, 25 South Charles Street, Baltimore, Maryland 21203 also
serves as custodian of certain of the Portfolio's cash assets. Neither
custodian has any part in deciding the Portfolio's investment policies or the
choice of securities that are to be purchased or sold for the Portfolio.
- --------------------------------------------------------------------------------
METHOD OF DISTRIBUTION
- --------------------------------------------------------------------------------
The Portfolios have entered into a principal underwriting agreement
with Calvert Distributors Inc. ("CDI"). Pursuant to the agreement, CDI serves
as distributor and principal underwriter for the Portfolios. Under the terms
of the agreement, CDI is entitled to receive a service fee and distribution
fee from the Money Market Portfolio, paid through the Distribution Plan of
Class T.
Pursuant to Rule 12b-1 under the 1940 Act, Class T of the Money
Market Portfolio has adopted a Distribution Plan (the "Plan") which permits it
to pay certain expenses associated with the distribution and servicing of its
shares. Such expenses may not exceed, on an annual basis, 0.25% of the average
daily net assets of Class T.
The Distribution Plan was approved by the Board of Trustees,
including the Trustees who are not "interested persons" of the Fund (as that
term is defined in the 1940 Act) and who have no direct or indirect financial
interest in the operation of the Plan or in any agreements related to the
Plan. The selection and nomination of the Trustees who are not interested
persons is committed to the discretion of such disinterested Trustees. In
establishing the Plan, the Trustees considered various factors including the
amount of the distribution expenses. The Trustees determined that there is a
reasonable likelihood that the Plan will benefit Class T and its shareholders.
The Plan may be terminated by vote of a majority of the
non-interested Trustees who have no direct or indirect financial interest in
the Plan, or by vote of a majority of the outstanding shares of the affected
class or Portfolio. Any change in the Plan that would materially increase the
cost to the affected Class of Portfolio requires approval of the shareholders
of that class; otherwise, the Plan may be amended by the Trustees, including a
majority of the non-interested Trustees as described above. The Plan will
continue in effect for successive one-year terms provided that such
continuance is specifically approved by (i) the vote of a majority of the
Trustees who are not parties to the Plan or interested persons of any such
party and who have no direct or indirect financial interest in the Plan, and
(ii) the vote of a majority of the entire Board of Trustees.
Apart from the Plan, the Advisor and CDI, at their own expense, may
incur costs and pay expenses associated with the distribution of shares of the
Money Market Portfolio.
Prior to the termination of Class C shares for the Limited Term
Portfolio, CDI was entitled to receive a service fee and a distribution fee,
payable monthly pursuant to the Limited-Term Portfolio's Distribution Plan, of
0.25%, respectively, of the Portfolio's average daily net assets. CDI also
receives all sales charges imposed on Limited-Term Portfolio Class A shares
and compensates broker-dealer firms for sales of shares at a maximum
commission rate of 1.50%, as specified in the table of applicable sales
charges (see "Alternative Sales Options" in the Prospectus).
For the fiscal years ended December 31, 1996, 1997, and 1998, CDI
received sales charges in excess of the dealer reallowance of $0, $0, and
$_______, respectively. CDI paid $48,520, $101,072, and $______, in addition
to commissions charged on sales of Limited-Term Portfolio during fiscal years
1996, 1997, and 1998, respectively.
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PORTFOLIO TRANSACTIONS
- --------------------------------------------------------------------------------
Portfolio transactions are undertaken on the basis of their
desirability from an investment standpoint. Investment decisions and the
choice of brokers and dealers are made by the Fund's Advisor under the
direction and supervision of the Fund's Board of Trustees.
For the fiscal years ended December 31, 1997 and 1998, the portfolio
turnover rates of the Limited-Term Portfolio were 52% and __%, respectively.
Broker-dealers who execute portfolio transactions on behalf of Limited-Term
are selected on the basis of their professional capability and the value and
quality of their services. The Advisor reserves the right to place orders for
the purchase or sale of portfolio securities with broker-dealers who have sold
shares of Limited-Term or who provide Limited-Term with statistical, research,
or other information and services. Although any statistical research or other
information and services provided by broker-dealers may be useful to the
Advisor, the dollar value of such information and services is generally
indeterminable, and its availability or receipt does not serve to materially
reduce the Advisor's normal research activities or expenses. In fiscal years
1996, 1997, and 1998, no commissions were paid to any officer, trustee or
Advisory Council member of the Fund or any of their affiliates. For the
Limited-Term Portfolio, 1996, 1997, and 1998, aggregate brokerage commissions
paid to broker-dealers were $48,520, $0, and $_____, respectively.
The Advisor may also execute portfolio transactions with or through
broker-dealers who have sold shares of Limited-Term. However, such sales will
not be a qualifying or disqualifying factor in a broker-dealer's selection nor
will the selection of any broker-dealer be based on the volume of Limited-Term
shares sold. The Advisor may compensate, at its expense, such broker-dealers
in consideration of their promotional and administrative services.
- --------------------------------------------------------------------------------
GENERAL INFORMATION
- --------------------------------------------------------------------------------
The Fund was organized as a Massachusetts business trust on October
20, 1980. The other series of the Fund include the Long-Term Portfolio,
California Money Market Portfolio, and the Vermont Municipal Portfolio. The
Fund's Declaration of Trust contains an express disclaimer of shareholder
liability for acts or obligations of the Fund. The shareholders of a
Massachusetts business trust might, however, under certain circumstances, be
held personally liable as partners for its obligations. The Declaration of
Trust provides for indemnification and reimbursement of expenses out of Fund
assets for any shareholder held personally liable for obligations of the Fund.
The Declaration of Trust provides that the Fund shall, upon request, assume
the defense of any claim made against any shareholder for any act or
obligation of the Fund and satisfy any judgment thereon. The Declaration of
Trust further provides that the Fund may maintain appropriate insurance (for
example, fidelity bonding and errors and omissions insurance) for the
protection of the Fund, its shareholders, Trustees, officers, employees, and
agents to cover possible tort and other liabilities. Thus, the risk of a
shareholder incurring financial loss on account of shareholder liability is
limited to circumstances in which both inadequate insurance exists and the
Fund itself is unable to meet its obligations.
Each share of each series represents an equal proportionate interest
in that series with each other share and is entitled to such dividends and
distributions out of the income belonging to such series as declared by the
Board. The Money Market Portfolio offers Class O (offered in the Calvert
Tax-Free Reserves Money Market Prospectus), the Institutional Class (offered
in a separate prospectus), and Class T (offered in a separate prospectus). The
three classes represent interests in the same portfolio of investments and are
identical in all respects, except: (a) the classes may have different transfer
agency fees; (b) postage and delivery, printing and stationery expenses will
be separately allocated; and (c) the classes will have different dividend
rates due solely to the effects of (a) and (b) above. Each class represents
interests in the same portfolio of investments. Upon any liquidation of the
Funds, shareholders of each class are entitled to share pro rata in the net
assets belonging to that series available for distribution.
General costs, expenses, and liabilities of the Fund attributable to
a particular Portfolio are borne by that Portfolio; costs, expenses, and
liabilities not attributable to a particular Portfolio are allocated between
the Fund's Portfolios on the basis of the respective net assets of each
Portfolio.
The Portfolios will send their shareholders unaudited semi-annual and
audited annual reports that will include the Portfolios' net asset value per
share, portfolio securities, income and expenses, and other financial
information.
This Statement of Additional Information does not contain all the
information in the Fund's registration statement. The registration statement
is on file with the Securities and Exchange Commission and is available to the
public.
- --------------------------------------------------------------------------------
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- --------------------------------------------------------------------------------
As of January 15, 1999, the following shareholders owned of record 5%
or more of the Class or Portfolio shown:
Name and Address % of Ownership
(insert info) __.__%
- --------------------------------------------------------------------------------
APPENDIX
- --------------------------------------------------------------------------------
Municipal Obligations
Municipal obligations are debt obligations issued by states, cities,
municipalities, and their agencies to obtain funds for various public
purposes. Such purposes include the construction of a wide range of public
facilities, the refunding of outstanding obligations, the obtaining of funds
for general operating expenses, and the lending of funds to other public
institutions and facilities. In addition, certain types of industrial
development bonds are issued by or on behalf of public authorities to obtain
funds for many types of local, privately operated facilities. Such debt
instruments are considered municipal obligations if the interest paid on them
is exempt from federal income tax in the opinion of bond counsel to the
issuer. Although the interest paid on the proceeds from private activity bonds
used for the construction, equipment, repair or improvement of privately
operated industrial or commercial facilities may be exempt from federal income
tax, current federal tax law places substantial limitations on the size of
such issues.
Municipal obligations are generally classified as either "general
obligation" or "revenue'' bonds. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable from the revenues derived
from a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise tax or other specific revenue source, but not
from the general taxing power. Tax-exempt industrial development bonds are in
most cases revenue bonds and do not generally carry the pledge of the credit
of the issuing municipality. There are, of course, variations in the security
of municipal obligations, both within a particular classification and among
classifications.
Municipal obligations are generally traded on the basis of a quoted
yield to maturity, and the price of the security is adjusted so that relative
to the stated rate of interest it will return the quoted rate to the purchaser.
Short-term and limited-term municipal obligations include Tax
Anticipation Notes, Revenue Anticipation Notes, Bond Anticipation Notes,
Construction Loan Notes, and Discount Notes. The maturities of these
instruments at the time of issue generally will range between three months and
one year. Pre-Refunded Bonds with longer nominal maturities that are due to be
retired with the proceeds of an escrowed subsequent issue at a date within one
year and three years of the time of acquisition are also considered short-term
and limited-term municipal obligations.
Municipal Bond and Note Ratings
Description of Moody's Investors Service, Inc.'s ratings of state and
municipal notes:
Moody's ratings for state and municipal notes and other short-term
obligations are designated Moody's Investment Grade ("MIG"). This distinction
is in recognition of the differences between short-term credit risk and
long-term risk.
MIG 1: Notes bearing this designation are of the best quality,
enjoying strong protection from established cash flows of funds for their
servicing or from established and broad-based access to the market for
refinancing, or both.
MIG2: Notes bearing this designation are of high quality, with
margins of protection ample although not so large as in the preceding group.
MIG3: Notes bearing this designation are of favorable quality, with
all security elements accounted for but lacking the undeniable strength of the
preceding grades. Market access for refinancing, in particular, is likely to
be less well established.
MIG4: Notes bearing this designation are of adequate quality,
carrying specific risk but having protection commonly regarded as required of
an investment security and not distinctly or predominantly speculative.
Description of Moody's Investors Service Inc.'s/Standard & Poor's municipal
bond ratings:
Aaa/AAA: Best quality. These bonds carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. This rating indicates an extremely strong capacity to pay
principal and interest.
Aa/AA: Bonds rated AA also qualify as high-quality debt obligations.
Capacity to pay principal and interest is very strong, and in the majority of
instances they differ from AAA issues only in small degree. They are rated
lower than the best bonds because margins of protection may not be as large as
in Aaa securities, fluctuation of protective elements may be of greater
amplitude, or there may be other elements present which make long-term risks
appear somewhat larger than in Aaa securities.
A/A: Upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which make the bond somewhat more susceptible to the adverse effects of
circumstances and economic conditions.
Baa/BBB: Medium grade obligations; adequate capacity to pay principal
and interest. Whereas they normally exhibit adequate protection parameters,
adverse economic conditions or changing circumstances are more likely to lead
to a weakened capacity to pay principal and interest for bonds in this
category than for bonds in the A category.
Ba/BB, B/B, Caa/CCC, Ca/CC: Debt rated in these categories is
regarded as predominantly speculative with respect to capacity to pay interest
and repay principal. There may be some large uncertainties and major risk
exposure to adverse conditions. The higher the degree of speculation, the
lower the rating.
C/C: This rating is only for no-interest income bonds.
D: Debt in default; payment of interest and/or principal is in
arrears.
<PAGE>
LETTER OF INTENT
Date
Calvert Distributors, Inc.
4550 Montgomery Avenue
Bethesda, MD 20814
Ladies and Gentlemen:
By signing this Letter of Intent, or affirmatively marking the Letter
of Intent option on my Fund Account Application Form, I agree to be bound by
the terms and conditions applicable to Letters of Intent appearing in the
Prospectus and the Statement of Additional Information for the Fund and the
provisions described below as they may be amended from time to time by the
Fund. Such amendments will apply automatically to existing Letters of Intent.
I intend to invest in the shares of:____________________________
(Fund or Portfolio name) during the thirteen (13) month period from the date
of my first purchase pursuant to this Letter (which cannot be more than ninety
(90) days prior to the date of this Letter or my Fund Account Application
Form, whichever is applicable), an aggregate amount (excluding any
reinvestments of distributions) of at least fifty thousand dollars ($50,000)
which, together with my current holdings of the Fund (at public offering price
on date of this Letter or my Fund Account Application Form, whichever is
applicable), will equal or exceed the amount checked below:
__ $50,000 __ $100,000 __ $250,000 __ $500,000 __ $1,000,000
Subject to the conditions specified below, including the terms of
escrow, to which I hereby agree, each purchase occurring after the date of
this Letter will be made at the public offering price applicable to a single
transaction of the dollar amount specified above, as described in the Fund's
prospectus. "Fund" in this Letter of Intent shall refer to the Fund or
Portfolio, as the case may be. No portion of the sales charge imposed on
purchases made prior to the date of this Letter will be refunded.
I am making no commitment to purchase shares, but if my purchases
within thirteen months from the date of my first purchase do not aggregate the
minimum amount specified above, I will pay the increased amount of sales
charges prescribed in the terms of escrow described below. I understand that
4.75% of the minimum dollar amount specified above will be held in escrow in
the form of shares (computed to the nearest full share). These shares will be
held subject to the terms of escrow described below.
From the initial purchase (or subsequent purchases if necessary),
4.75% of the dollar amount specified in this Letter shall be held in escrow in
shares of the Fund by the Fund's transfer agent. For example, if the minimum
amount specified under the Letter is $50,000, the escrow shall be shares
valued in the amount of $2,375 (computed at the public offering price adjusted
for a $50,000 purchase). All dividends and any capital gains distribution on
the escrowed shares will be credited to my account.
If the total minimum investment specified under the Letter is
completed within a thirteen month period, escrowed shares will be promptly
released to me. However, shares disposed of prior to completion of the
purchase requirement under the Letter will be deducted from the amount
required to complete the investment commitment.
Upon expiration of this Letter, the total purchases pursuant to the
Letter are less than the amount specified in the Letter as the intended
aggregate purchases, Calvert Distributors, Inc. ("CDI") will bill me for an
amount equal to the difference between the lower load I paid and the dollar
amount of sales charges which I would have paid if the total amount purchased
had been made at a single time. If not paid by the investor within 20 days,
CDI will debit the difference from my account. Full shares, if any, remaining
in escrow after the aforementioned adjustment will be released and, upon
request, remitted to me.
I irrevocably constitute and appoint CDI as my attorney-in-fact, with
full power of substitution, to surrender for redemption any or all escrowed
shares on the books of the Fund. This power of attorney is coupled with an
interest.
The commission allowed by CDI to the broker-dealer named herein shall
be at the rate applicable to the minimum amount of my specified intended
purchases.
The Letter may be revised upward by me at any time during the
thirteen-month period, and such a revision will be treated as a new Letter,
except that the thirteen-month period during which the purchase must be made
will remain unchanged and there will be no retroactive reduction of the sales
charges paid on prior purchases.
In determining the total amount of purchases made hereunder, shares
disposed of prior to termination of this Letter will be deducted. My
broker-dealer shall refer to this Letter of Intent in placing any future
purchase orders for me while this Letter is in effect.
Dealer
Name of Investor(s)
By
Authorized Signer
Address
Signature of Investor(s)
Date
Signature of Investor(s)
Date
<PAGE>
PART C. OTHER INFORMATION
Item 23. Exhibits
1. Declaration of Trust (incorporated by reference to
Registrant's Initial Registration Statement,
October 20, 1980).
2. By-Laws (incorporated by reference to Registrant's
Initial Registration Statement, October 20,
1980).
4. Specimen Stock Certificate for the Vermont Municipal
Portfolio (incorporated by reference to
Registrant's Post-Effective Amendment No. 29,
August 30, 1991); for the Limited-Term
Portfolio, Long-Term Portfolio, and all other
Portfolios (except Vermont Municipal),
(incorporated by reference to Registrant's
Post-Effective Amendment No. 32, January 29,
1993).
5. Advisory Contract (incorporated by reference to
Registrant's Post-Effective Amendment No. 29,
August 30, 1991).
6. Underwriting Agreement, (incorporated by reference to
Registrant's Post-Effective Amendment No. 45,
April __, 1998).
7. Trustees' Deferred Compensation Agreement (incorporated
by reference to Registrant's Post-Effective
Amendment No. 30, January 31, 1992).
8. Custodial Contract (with respect to all Portfolios
except Vermont Municipal Portfolio,
(incorporated by reference to Registrant's
Post-Effective Amendment No. 34, November 30,
1993); with respect to Vermont Municipal
Portfolio, (incorporated by reference to
Registrant's Post-Effective Amendment No. 31,
April 30, 1992).
9.a. Transfer Agency Contract and Shareholder Servicing
Contract, (incorporated by reference to Registrant's
Post-Effective Amendment No. 45, April __, 1998).
9.b. Administrative Services Agreement
(incorporated by reference to Registrant's
Post-Effective Amendment No. 15, January 30,
1989).
10. Opinion and Consent of Counsel as to Legality
of Shares Being Registered.
15. Plan of Distribution for the Class A Shares of
the Long-Term Portfolio, (incorporated by
reference to Registrant's Post-Effective
Amendment No. 5, September 13, 1983; with
respect to Class A Shares of the Vermont
Municipal Portfolio, the Plan of Distribution
was terminated, and the termination was
ratified by the Fund Trustees on November 6,
1991; for the Class B and C shares of the
Limited-Term, Long-Term, and Vermont
Portfolios, (incorporated by reference to
Registrant's Post-Effective Amendment No. 45,
April __, 1998).
16. Schedule for Computation of Performance
Quotation (with respect to the Money Market,
Limited-Term and Long-Term Portfolios,
incorporated by reference to Registrant's
Post-Effective Amendment No. 14, filed March
1, 1988; with respect to the Calvert Cash
Reserves Tax-Free Portfolio, incorporated by
reference to Registrant's Post-Effective
Amendment No. 15, filed January 30, 1989; with
respect to the California Money Market
Portfolio, incorporated by reference to
Registrant's Post-Effective Amendment No. 22,
filed October 29, 1990; with respect to the
New Jersey Money Market Portfolio and Vermont
Municipal Portfolio, incorporated by reference
to Registrant's Post-Effective Amendment No.
29, August 30, 1991).
Item 24. Persons Controlled By or Under Common Control With Registrant
Not applicable.
Item 26. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Barbara J. Krumsiek Calvert Variable Series, Inc. Officer
Calvert Municipal Fund, Inc. and
Calvert World Values Fund, Inc. Director
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income and
Calvert Tax-Free Reserves Trustee
Calvert Social Investment Fund
Calvert Cash Reserves
The Calvert Fund
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
----------------
Calvert Group, Ltd. Officer
Holding Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Distributors, Inc. Officer
Broker-Dealer and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert New World Fund, Inc. Director
Investment Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
--------------
Alliance Capital Mgmt. L.P. Sr. Vice President
Mutual Fund Division Director
1345 Avenue of the Americas
New York, NY 10105
--------------
Ronald M. Wolfsheimer First Variable Rate Fund Officer
for Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
--------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Distributors, Inc. Director
Broker-Dealer and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
David R. Rochat First Variable Rate Fund Officer
for Government Income and
Calvert Tax-Free Reserves Trustee
Calvert Cash Reserves
The Calvert Fund
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Municipal Fund, Inc. Officer
Investment Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Chelsea Securities, Inc. Officer
Securities Firm and
Post Office Box 93 Director
Chelsea, Vermont 05038
---------------
Grady, Berwald & Co. Officer
Holding Company and
43A South Finley Avenue Director
Basking Ridge, NJ 07920
---------------
Reno J. Martini Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
First Variable Rate Fund Officer
for Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert New World Fund, Inc. Director
Investment Company and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Director
Investment Advisor and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
---------------
Charles T. Nason Acacia Mutual Life Insurance Officer
Acacia National Life Insurance and Director
Insurance Companies
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Financial Corporation Officer
Holding Company and
7315 Wisconsin Avenue Director
Bethesda, Maryland 20814
---------------
Acacia Federal Savings Bank Director
Savings Bank
7600-B Leesburg Pike
Falls Church, Virginia 22043
---------------
Enterprise Resources, Inc. Director
Business Support Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Realty Square, L.L.C. Director
Realty Investments
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Gardner Montgomery Company Director
Tax Return Preparation Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Director
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Director
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Services, Inc. Director
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Social Investment Fund Trustee
Investment Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
-----------------
The Advisors Group, Ltd. Director
Broker-Dealer and
Investment Advisor
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Robert-John H. Acacia National Life Insurance Officer
Sands Insurance Company and
7315 Wisconsin Avenue Director
Bethesda, Maryland 20814
----------------
Acacia Mutual Life Insurance Officer
Insurance Company
7315 Wisconsin Avenue
Bethesda, Maryland 20814
----------------
Acacia Financial Corporation Officer
Holding Company and
7315 Wisconsin Avenue Director
Bethesda, Maryland 20814
----------------
Acacia Federal Savings Bank Officer
Savings Bank
7600-B Leesburg Pike
Falls Church, Virginia 22043
---------------
Enterprise Resources, Inc. Director
Business Support Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Realty Square, L.L.C. Director
Realty Investments
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Gardner Montgomery Company Director
Tax Return Preparation Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
The Advisors Group, Ltd. Director
Broker-Dealer and
Investment Advisor
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Director
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Director
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management, Co., Inc. Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Services, Inc. Director
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
William M. Tartikoff Acacia National Life Insurance Officer
Insurance Company
7315 Wisconsin Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Officer
Services Company
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co. Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Director
Broker-Dealer and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Susan Walker Bender Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Katherine Stoner Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Ivy Wafford Duke Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Daniel K. Hayes Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
Steve Van Order Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
John Nichols Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
David Leach Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
Matthew D. Gelfand Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
Strategic Investment Management Officer
Investment Advisor
1001 19th Street North
Arlington, Virginia 20009
------------------
Item 27. Principal Underwriters
(a) Registrant's principal underwriter also underwrites
shares of First Variable Rate Fund for Government Income, Calvert
Tax-Free Reserves, Calvert Social Investment Fund, Calvert Cash Reserves,
Calvert Municipal Fund, Inc., Calvert World Values Fund, Inc.,
Calvert New World Fund, Inc., and Calvert Variable Series, Inc.
(b) Positions of Underwriter's Officers and Directors
Name and Principal Position(s) with Position(s) with
Business Address Underwriter Registrant
Barbara J. Krumsiek Director and President President and Trustee
Ronald M. Wolfsheimer Director, Senior Vice Treasurer
President and Chief Financial Officer
William M. Tartikoff Director, Senior Vice Vice President and
President and Secretary Secretary
Craig Cloyed Senior Vice President None
Karen Becker Vice President, Operations None
Steve Cohen Vice President None
Geoffrey Ashton Regional Vice President None
Martin Brown Regional Vice President None
Janet Haley Regional Vice President None
Ben Ogbogu Regional Vice President None
Susan Walker Bender Assistant Secretary Assistant Secretary
Katherine Stoner Assistant Secretary Assistant Secretary
Ivy Wafford Duke Assistant Secretary Assistant Secretary
(c) Inapplicable.
Item 28. Location of Accounts and Records
Ronald M. Wolfsheimer, Treasurer
and
William M. Tartikoff, Assistant Secretary
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
Item 29. Management Services
Not Applicable
Item 32. Undertakings
Not Applicable
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that it
has duly caused this registration statement to be signed on its behalf
by the undersigned, thereto duly authorized in the City of Bethesda, and
State of Maryland, on the 14th day of January, 1999.
CALVERT TAX-FREE RESERVES
By:
_________________**_________________
Barbara J. Krumsiek
President and Trustee
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following
persons in the capacities indicated.
Signature Title Date
__________**____________ President and 1/14/99
Barbara J. Krumsiek Trustee (Principal Executive Officer)
__________**____________ Principal Accounting 1/14/99
Ronald M. Wolfsheimer Officer
__________**____________ Trustee 1/14/99
Richard L. Baird, Jr.
__________**____________ Trustee 1/14/99
Frank H. Blatz, Jr., Esq.
__________**____________ Trustee 1/14/99
Frederick T. Borts, M.D.
__________**____________ Trustee 1/14/99
Charles E. Diehl
__________**____________ Trustee 1/14/99
Douglas E. Feldman
__________**____________ Trustee 1/14/99
Peter W. Gavian
__________**____________ Trustee 1/14/99
John G. Guffey, Jr.
__________**____________ Trustee 1/14/99
M. Charito Kruvant
__________**____________ Trustee 1/14/99
Arthur J. Pugh
__________**____________ Trustee 1/14/99
David R. Rochat
__________**____________ Trustee 1/14/99
D. Wayne Silby
**By Katherine Stoner as Attorney-in-fact, pursuant to Power of Attorney Forms
on file.
Exhibit 10
January 14, 1999
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Exhibit 10, Form N-1A
Calvert Tax-Free Reserves
File numbers 2-69565 and 811-3101
Ladies and Gentlemen:
As counsel to Calvert Group, Ltd., it is my opinion that the
securities being registered by this Post-Effective Amendment No. 46 will
be legally issued, fully paid and non-assessable when sold. My opinion
is based on an examination of documents related to Calvert Tax-Free
Reserves (the "Trust"), including its Declaration of Trust, its By-Laws,
other original or photostatic copies of Trust records, certificates of
public officials, documents, papers, statutes, and authorities as I
deemed necessary to form the basis of this opinion.
I therefore consent to filing this opinion of counsel with the
Securities and Exchange Commission as an Exhibit to the Trust's
Post-Effective Amendment No. 46 to its Registration Statement.
Sincerely,
/s/
Katherine Stoner
Associate General Counsel
