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. 49 XX
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 49 XX
CALVERT TAX-FREE RESERVES
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER: (301) 951-4881
WILLIAM M. TARTIKOFF, ESQ.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
(NAME AND ADDRESS OF AGENT FOR SERVICE)
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE
__ IMMEDIATELY UPON FILING XX ON APRIL 30, 2000
PURSUANT TO PARAGRAPH (B) PURSUANT TO PARAGRAPH (B)
__ 60 DAYS AFTER FILING __ ON (DATE)
PURSUANT TO PARAGRAPH (A) PURSUANT TO PARAGRAPH (A)
OF RULE 485.
PROSPECTUS
APRIL 30, 2000
CALVERT TAX-FREE RESERVES
MONEY MARKET PORTFOLIO
LIMITED-TERM PORTFOLIO
LONG-TERM PORTFOLIO
CALVERT NATIONAL MUNICIPAL INTERMEDIATE FUND
<PAGE>
PROSPECTUS
APRIL 30, 2000
CALVERT TAX-FREE RESERVES FUND
CTFR MONEY MARKET PORTFOLIO
CTFR LIMITED-TERM PORTFOLIO
CTFR LONG-TERM PORTFOLIO
CALVERT NATIONAL MUNICIPAL INTERMEDIATE FUND
ABOUT THE FUND
2 INVESTMENT OBJECTIVE, STRATEGY, PAST PERFORMANCE
11 FEES AND EXPENSES
13 INVESTMENT PRACTICES AND RISKS
ABOUT YOUR INVESTMENT
18 CALVERT GROUP AND THE PORTFOLIO MANAGEMENT TEAM
18 ADVISORY FEES
19 HOW TO BUY SHARES (SALES CHARGES, ETC.)
22 IMPORTANT - HOW SHARES ARE PRICED
23 OTHER CALVERT GROUP FEATURES
(EXCHANGES, MINIMUM ACCOUNT BALANCE, ETC.)
26 DIVIDENDS, CAPITAL GAINS AND TAXES
28 HOW TO SELL SHARES
30 FINANCIAL HIGHLIGHTS
35 EXHIBIT A - REDUCED SALES CHARGES
37 EXHIBIT B - SERVICE FEES AND
OTHER ARRANGEMENTS WITH DEALERS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC")OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
CTFR MONEY MARKET
OBJECTIVE
CTFR MONEY MARKET (THE "FUND") SEEKS TO EARN THE HIGHEST LEVEL OF INTEREST
INCOME, EXEMPT FROM FEDERAL INCOME TAXES, AS IS CONSISTENT WITH PRUDENT
INVESTMENT MANAGEMENT, PRESERVATION OF CAPITAL, AND THE QUALITY AND MATURITY
CHARACTERISTICS OF THE FUND.
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS
CTFR MONEY MARKET INVESTS IN FIXED AND FLOATING RATE MUNICIPAL BONDS AND NOTES,
VARIABLE RATE DEMAND NOTES, TAX-EXEMPT COMMERCIAL PAPER, AND OTHER HIGH
QUALITY, SHORT-TERM MUNICIPAL OBLIGATIONS. THE ADVISOR LOOKS FOR SECURITIES
WITH STRONG CREDIT QUALITY THAT ARE ATTRACTIVELY PRICED. THIS MAY INCLUDE
INVESTMENTS WITH UNUSUAL FEATURES OR PRIVATELY PLACED ISSUES THAT ARE NOT
WIDELY FOLLOWED IN THE FIXED INCOME MARKETPLACE. ALL INVESTMENTS MUST COMPLY
WITH THE SEC MONEY MARKET FUND REQUIREMENTS.
MANY OF THE INSTRUMENTS HELD BY THE FUND ARE SUPPORTED BY A CREDIT FACILITY (TO
IMPROVE THE CREDIT QUALITY) OR LIQUIDITY FACILITY (TO SHORTEN THE
MATURITY) PROVIDED BY BANKS; THUS, THE FUND HAS AN EXPOSURE TO THE BANKING
INDUSTRY.
THE FUND MAY PURCHASE SECURITIES THAT HAVE NOT BEEN RATED BY A RATING AGENCY, SO
LONG AS THE ADVISOR DETERMINES THEY ARE OF COMPARABLE CREDIT QUALITY TO
RATED SECURITIES PERMISSIBLE FOR THE FUND.
UNRATED AND PRIVATELY PLACED SECURITIES MAY BE LESS LIQUID THAN THOSE THAT ARE
RATED OR HAVE AN ACTIVE TRADING MARKET.
CTFR MONEY MARKET'S YIELD WILL CHANGE IN RESPONSE TO MARKET INTEREST RATES. IN
GENERAL, AS MARKET RATES GO UP SO WILL THE FUND'S YIELD, AND VICE VERSA.
ALTHOUGH THE FUND TRIES TO KEEP THE VALUE OF ITS SHARES CONSTANT AT $1.00
PER SHARE, EXTREME CHANGES IN MARKET RATES, AND OR SUDDEN CREDIT
DETERIORATION OF A HOLDING COULD CAUSE THE VALUE TO DECREASE. THE FUND
LIMITS THE AMOUNT IT INVESTS IN ANY ONE ISSUER TO TRY TO LESSEN ITS
EXPOSURE.
IN ADDITION TO INTEREST RATE RISK AND CREDIT RISK, DIFFERENT TYPES OF MUNICIPAL
BONDS MAY BE AFFECTED DIFFERENTLY, BASED ON MANY FACTORS, INCLUDING
ECONOMIC AND REGULATORY DEVELOPMENTS, CHANGES OR PROPOSED CHANGES IN THE
FEDERAL AND STATE TAX STRUCTURE, DEREGULATION, AND COURT RULINGS, AMONG
OTHER FACTORS.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00
PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
<PAGE>
CTFR MONEY MARKET PERFORMANCE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S CLASS O ANNUAL RETURNS AND ITS
LONG-TERM PERFORMANCE. THE CHART AND TABLE PROVIDE SOME INDICATION OF THE
RISKS OF INVESTING IN THE FUND. THE CHART SHOWS HOW THE PERFORMANCE HAS
VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE FUND'S RETURNS OVER TIME TO THE
LIPPER TAX-EXEMPT MONEY MARKET INDEX, A COMPOSITE INDEX OF THE ANNUAL RETURN
OF MUTUAL FUNDS THAT HAVE AN INVESTMENT GOAL SIMILAR TO THAT OF THE FUND.
THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE HOW THE FUND WILL
PERFORM IN THE FUTURE.
CTFR MONEY MARKET
YEAR-BY-YEAR TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q4 '90 1.53%
WORST QUARTER (OF PERIODS SHOWN) Q1 '93 0.56%
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
1 YEAR 5 YEAR 10 YEAR
CTFR MONEY MARKET (CLASS O) 3.04% 3.40% 3.63%
LIPPER TAX-EXEMPT
MONEY MARKET INDEX 2.81% 3.13% 3.27%
FOR CURRENT YIELD INFORMATION CALL 800-368-2745, OR VISIT CALVERT GROUP'S
WEBSITE AT WWW.CALVERT.COM
<PAGE>
CTFR LIMITED-TERM
OBJECTIVE
CTFR LIMITED-TERM (THE "FUND") SEEKS TO EARN THE HIGHEST LEVEL OF INTEREST
INCOME EXEMPT FROM FEDERAL INCOME TAXES AS IS CONSISTENT WITH PRUDENT
INVESTMENT MANAGEMENT, PRESERVATION OF CAPITAL, AND THE QUALITY AND MATURITY
CHARACTERISTICS OF THE FUND.
PRINCIPAL INVESTMENT STRATEGIES
WHILE SEEKING TO ACHIEVE ITS OBJECTIVE, CTFR LIMITED-TERM STRIVES TO MINIMIZE
VOLATILITY IN THE NET ASSET VALUE (NAV) PER SHARE. THE ADVISOR INTENDS
UNDER NORMAL CIRCUMSTANCES TO MAINTAIN AN AVERAGE PORTFOLIO MATURITY OF
THREE YEARS OR LESS. THE FUND TYPICALLY INVESTS AT LEAST 85% OF ITS NET ASSETS
IN INVESTMENT GRADE DEBT SECURITIES. THE ADVISOR LOOKS FOR SECURITIES
WITH STRONG CREDIT QUALITY THAT ARE ATTRACTIVELY PRICED. THIS MAY INCLUDE
INVESTMENTS WITH UNUSUAL FEATURES OR PRIVATELY PLACED ISSUES THAT ARE NOT
WIDELY FOLLOWED IN THE FIXED INCOME MARKETPLACE.
THE FUND MAY INVEST IN A VARIETY OF TAX-EXEMPT OBLIGATIONS INCLUDING
TAX-SUPPORTED DEBT (GENERAL OBLIGATION BONDS AND NOTES OF STATE AND
LOCAL ISSUERS), VARIOUS TYPES OF REVENUE DEBT (TRANSPORTATION, HOUSING,
UTILITIES, HOSPITAL), SPECIAL TAX OBLIGATIONS, AND QUALIFIED PRIVATE ACTIVITY
BONDS AND OTHER STATE AND LOCAL GOVERNMENT AUTHORITIES, TAX AND REVENUE
ANTICIPATION NOTES AND BOND ANTICIPATION NOTES, MUNICIPAL LEASES, AND
CERTIFICATES OF PARTICIPATION IN SUCH INVESTMENTS. THE OBLIGATIONS MAY BE
STRUCTURED AS VARIABLE RATE OR ADJUSTABLE RATE OBLIGATIONS AND ARE OFTEN
SUPPORTED BY A THIRD PARTY LETTER OF CREDIT.
MANY OF THE INSTRUMENTS HELD BY THE FUND ARE SUPPORTED BY A CREDIT FACILITY (TO
IMPROVE THE CREDIT QUALITY) OR LIQUIDITY FACILITY (TO SHORTEN THE
MATURITY) PROVIDED BY BANKS; THUS, THE FUND HAS AN EXPOSURE TO THE BANKING
INDUSTRY.
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM, MOST LIKELY FOR ANY OF THE FOLLOWING REASONS:
- - THE BOND MARKET GOES DOWN
- - THE INDIVIDUAL BONDS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED, DUE TO
CREDIT, POLITICAL OR OTHER RISKS
- - THE ADVISOR'S FORECAST AS TO INTEREST RATES IS NOT CORRECT. INCREASES IN
MARKET INTEREST RATES CAN CAUSE THE
PRICE OF A DEBT SECURITY TO DECREASE.
- - THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE BOND MARKET DOES NOT
PERFORM AS WELL AS EXPECTED
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
<PAGE>
CTFR LIMITED-TERM PERFORMANCE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. THE CHART AND TABLE PROVIDE SOME INDICATION OF THE RISKS OF
INVESTING IN THE FUND. THE CHART SHOWS HOW THE PERFORMANCE HAS VARIED FROM
YEAR TO YEAR. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER TIME TO THAT OF
THE LEHMAN MUNICIPAL BOND INDEX. THIS IS A WIDELY RECOGNIZED, UNMANAGED
INDEX OF BOND PRICES. IT ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE
LIPPER SHORT MUNICIPAL DEBT FUND INDEX, A COMPOSITE INDEX OF THE ANNUAL
RETURN OF MUTUAL FUNDS THAT HAVE AN INVESTMENT GOAL SIMILAR TO THAT OF
THE FUND. THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE HOW
THE FUND WILL PERFORM IN THE FUTURE. THE BAR CHART DOES NOT REFLECT ANY
SALES CHARGE THAT YOU MAY BE REQUIRED TO PAY UPON PURCHASE OR REDEMPTION
OF THE FUND'S SHARES. ANY SALES CHARGE WILL REDUCE YOUR RETURN. THE AVERAGE
TOTAL RETURN TABLE SHOWS RETURNS WITH THE MAXIMUM SALES CHARGE DEDUCTED. NO
SALES CHARGE HAS BEEN APPLIED TO THE INDEX USED FOR COMPARISON IN THE
TABLE.
CTFR LIMITED-TERM
YEAR-BY-YEAR TOTAL RETURN (AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q4 '90 1.98%
WORST QUARTER (OF PERIODS SHOWN) Q1 '94 0.45%
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR 10 YEAR
CTFR LIMITED-TERM 1.81% 3.84% 4.35%
LEHMAN MUNICIPAL BOND INDEX TR (2.06%) 6.91% 6.89%
LIPPER SHORT MUNICIPAL DEBT
FUND INDEX 2.07% 4.38% N/A
<PAGE>
CMF INTERMEDIATE
OBJECTIVE
CALVERT NATIONAL MUNICIPAL INTERMEDIATE FUND (THE "FUND") SEEKS TO EARN THE
HIGHEST LEVEL OF INTEREST INCOME EXEMPT FROM FEDERAL INCOME TAXES AS IS
CONSISTENT WITH PRUDENT INVESTMENT MANAGEMENT, PRESERVATION OF CAPITAL, AND
CERTAIN QUALITY AND MATURITY CHARACTERISTICS.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND TYPICALLY INVESTS AT LEAST 65% OF ITS NET ASSETS IN INVESTMENT GRADE
DEBT SECURITIES. THE ADVISOR LOOKS FOR SECURITIES WITH STRONG CREDIT
QUALITY THAT ARE ATTRACTIVELY PRICED. THE AVERAGE DOLLAR-WEIGHTED MATURITY
WILL BE BETWEEN 3 AND 10 YEARS.
TYPES OF INVESTMENTS
THE FUND MAY INVEST IN TAX-EXEMPT OBLIGATIONS, SUCH AS TAX-SUPPORTED DEBT
(GENERAL OBLIGATION BONDS OF STATE AND LOCAL ISSUERS), VARIOUS TYPES OF
REVENUE DEBT (TRANSPORTATION, HOUSING, UTILITIES, HOSPITAL), SPECIAL TAX
OBLIGATIONS, AND QUALIFIED PRIVATE ACTIVITY BONDS AND OTHER STATE AND LOCAL
GOVERNMENT AUTHORITIES, MUNICIPAL LEASES, AND CERTIFICATES OF PARTICIPATION
IN SUCH INVESTMENTS.
UNDER NORMAL MARKET CONDITIONS, THE FUND WILL INVEST AT LEAST 65% OF ITS TOTAL
ASSETS IN MUNICIPAL OBLIGATIONS WHOSE INTEREST IS EXEMPT FROM FEDERAL TAX.
THE FUND WILL ALSO ATTEMPT TO INVEST THE REMAINING 35% OF ITS TOTAL ASSETS
IN SUCH OBLIGATIONS, BUT MAY INVEST IT IN MUNICIPAL OBLIGATIONS OF OTHER STATES,
TERRITORIES AND POSSESSIONS OF THE UNITED STATES, THE DISTRICT OF
COLUMBIA AND THEIR RESPECTIVE AUTHORITIES, AGENCIES, INSTRUMENTALITIES AND
POLITICAL SUBDIVISIONS OR IN SHORT-TERM TAXABLE MONEY MARKET-TYPE
INSTRUMENTS. DIVIDENDS DERIVED FROM INTEREST ON TAX-EXEMPT OBLIGATIONS OF
OTHER GOVERNMENTAL ISSUERS WILL BE EXEMPT FROM FEDERAL INCOME TAX, BUT
MAY BE SUBJECT TO STATE INCOME TAXES. THE INTEREST OF CERTAIN OBLIGATIONS MAY
BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX.
<PAGE>
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM, MOST LIKELY FOR ANY OF THE FOLLOWING REASONS:
- - THE BOND MARKET GOES DOWN
- - THE INDIVIDUAL BONDS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED, DUE TO
CREDIT, POLITICAL OR OTHER RISKS
- - THE ADVISOR'S FORECAST AS TO INTEREST RATES IS NOT CORRECT. INCREASES IN
MARKET INTEREST RATES CAN CAUSE THE PRICE OF A DEBT SECURITY TO
DECREASE.
- - THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE BOND MARKET DOES NOT
PERFORM AS WELL AS EXPECTED
- - THE FUND IS NON-DIVERSIFIED. COMPARED TO OTHER FUNDS, THE FUND MAY INVEST MORE
OF ITS ASSETS IN A SMALLER NUMBER OF BONDS. GAINS OR LOSSES ON A SINGLE
BOND MAY HAVE GREATER IMPACT ON THE FUND.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
CMF INTERMEDIATE PERFORMANCE
THE FOLLOWING BAR CHART AND TABLE SHOW THE FUND'S ANNUAL RETURNS AND ITS
LONG-TERM PERFORMANCE. THE INFORMATION PROVIDES SOME INDICATION OF THE RISKS
OF INVESTING IN THE FUND. THE CHART SHOWS HOW THE PERFORMANCE OF THE SHARES
HAS VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER
TIME TO THAT OF THE LEHMAN MUNICIPAL 10 YEAR BOND INDEX TR. THIS IS A
WIDELY RECOGNIZED, UNMANAGED INDEX OF BOND PRICES. IT ALSO SHOWS THE
FUND'S RETURNS COMPARED TO THE LIPPER INTERMEDIATE MUNICIPAL FUND INDEX, A
COMPOSITE OF THE ANNUAL RETURN OF MUTUAL FUNDS THAT HAVE AN INVESTMENT GOAL
SIMILAR TO THAT OF THE FUND. THE FUND'S PAST PERFORMANCE DOES NOT
NECESSARILY INDICATE HOW THE FUND WILL PERFORM IN THE FUTURE.
THE BAR CHART DOES NOT REFLECT ANY SALES CHARGE THAT YOU MAY BE REQUIRED TO PAY
UPON PURCHASE OR REDEMPTION OF THE FUND'S SHARES. ANY SALES CHARGE WILL
REDUCE YOUR RETURN. THE AVERAGE TOTAL RETURN TABLE SHOWS RETURNS WITH THE
MAXIMUM SALES CHARGE DEDUCTED. NO SALES CHARGE HAS BEEN APPLIED TO THE INDEX OR
AVERAGE USED FOR COMPARISON IN THE TABLE.
<PAGE>
CMF INTERMEDIATE
YEAR-BY-YEAR TOTAL RETURN (AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '95 5.19%
WORST QUARTER (OF PERIODS SHOWN) Q1 '94 (2.40%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR SINCE
INCEPTION
CMF INTERMEDIATE (INCEPTION 9/30/92) (4.74%) 4.99% 4.75%
LEHMAN MUNICIPAL BOND
10 YEAR INDEX TR (1.25%) 7.12% 7.10%
LIPPER INTERMEDIATE MUNICIPAL
FUND INDEX (1.37%) 5.59% 5.90%
<PAGE>
CTFR LONG-TERM
OBJECTIVE
CTFR LONG-TERM (THE "FUND") SEEKS TO EARN THE HIGHEST LEVEL OF INTEREST INCOME
EXEMPT FROM FEDERAL INCOME TAXES AS IS CONSISTENT WITH PRUDENT
INVESTMENT MANAGEMENT, PRESERVATION OF CAPITAL, AND THE QUALITY AND MATURITY
CHARACTERISTICS OF THE FUND.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND TYPICALLY INVESTS AT LEAST 65% OF ITS NET ASSETS IN INVESTMENT GRADE
DEBT SECURITIES. THE ADVISOR LOOKS FOR SECURITIES WITH STRONG CREDIT QUALITY
THAT ARE ATTRACTIVELY PRICED IN VARIOUS MATURITY RANGES. TO THE EXTENT IT
MAY DO SO CONSISTENT WITH ITS INVESTMENT OBJECTIVE, THE FUND FOLLOWS A STRATEGY
TO ALSO SEEK TO PROVIDE A COMPETITIVE RATE OF TOTAL RETURN. THERE IS NO
LIMIT ON THE FUND'S AVERAGE PORTFOLIO MATURITY.
THE FUND MAY INVEST IN A VARIETY OF TAX-EXEMPT OBLIGATIONS INCLUDING
TAX-SUPPORTED DEBT (GENERAL OBLIGATION BONDS OF STATE AND LOCAL ISSUERS),
VARIOUS TYPES OF REVENUE DEBT (TRANSPORTATION, HOUSING, UTILITIES,
HOSPITAL), SPECIAL TAX OBLIGATIONS, AND QUALIFIED PRIVATE ACTIVITY BONDS AND
OTHER STATE AND LOCAL GOVERNMENT AUTHORITIES, MUNICIPAL LEASES, AND
CERTIFICATES OF PARTICIPATION IN SUCH INVESTMENTS.
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM, MOST LIKELY FOR ANY OF THE FOLLOWING REASONS:
- - THE BOND MARKET GOES DOWN
- - THE INDIVIDUAL BONDS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED, DUE TO
CREDIT, POLITICAL OR OTHER RISKS
- - THE ADVISOR'S FORECAST AS TO INTEREST RATES IS NOT CORRECT. INCREASES IN
MARKET INTEREST RATES CAN CAUSE THE PRICE OF A DEBT SECURITY TO
DECREASE.
- - THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE BOND MARKET DOES NOT
PERFORM AS WELL AS EXPECTED
- - THE FUND IS NON-DIVERSIFIED. COMPARED TO OTHER FUNDS, THE FUND MAY INVEST MORE
OF ITS ASSETS IN A SMALLER NUMBER OF BONDS. GAINS OR LOSSES ON A SINGLE
BOND MAY HAVE GREATER IMPACT ON THE FUND.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
<PAGE>
CTFR LONG-TERM PERFORMANCE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. THE CHART AND TABLE PROVIDE SOME INDICATION OF THE RISKS OF
INVESTING IN THE FUND. THE CHART SHOWS HOW THE PERFORMANCE OF THE SHARES
HAS VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE FUND'S
PERFORMANCE OVER TIME TO THAT OF THE LEHMAN MUNICIPAL BOND INDEX. THIS IS A
WIDELY RECOGNIZED, UNMANAGED INDEX OF BOND PRICES. IT ALSO SHOWS THE FUND'S
RETURNS COMPARED TO THE LIPPER GENERAL MUNICIPAL DEBT INDEX, A COMPOSITE
INDEX OF THE ANNUAL RETURN OF MUTUAL FUNDS THAT HAVE AN INVESTMENT GOAL
SIMILAR TO THAT OF THE FUND. THE FUND'S PAST PERFORMANCE DOES NOT
NECESSARILY INDICATE HOW THE FUND WILL PERFORM IN THE FUTURE.
THE BAR CHART DOES NOT REFLECT ANY SALES CHARGE THAT YOU MAY BE REQUIRED TO PAY
UPON PURCHASE OR REDEMPTION OF THE FUND'S SHARES. ANY SALES CHARGE WILL
REDUCE YOUR RETURN. THE AVERAGE TOTAL RETURN TABLE SHOWS RETURNS WITH THE
MAXIMUM SALES CHARGE DEDUCTED. NO SALES CHARGE HAS BEEN APPLIED TO THE INDEX
USED FOR COMPARISON IN THE TABLE.
CTFR LONG-TERM
YEAR-BY-YEAR TOTAL RETURN (AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '95 5.99%
WORST QUARTER (OF PERIODS SHOWN) Q1 '94 (3.59%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR 10 YEAR
CTFR LONG-TERM (8.07%) 4.55% 5.50%
LEHMAN MUNICIPAL BOND INDEX TR (2.06%) 6.91% 6.89%
LIPPER GENERAL MUNICIPAL DEBT INDEX (4.07%) 6.14% 6.29%
<PAGE>
FEES AND EXPENSES
MONEY LIMITED- INTER- LONG-
MARKET TERM MEDIATE TERM
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM
YOUR INVESTMENT)
MAXIMUM SALES CHARGE (LOAD)
IMPOSED ON PURCHASES NONE 1.00% 2.75% 3.75%
(AS A PERCENTAGE OF
OFFERING PRICE)
MAXIMUM DEFERRED SALES
CHARGE (LOAD)
(AS A PERCENTAGE OF PURCHASE NONE NONE1 NONE2 NONE2
OR REDEMPTION PROCEEDS,
WHICHEVER IS LOWER)
MAXIMUM ACCOUNT FEE 3 NONE NONE NONE
ANNUAL FUND OPERATING
EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)4
MANAGEMENT FEES .46% .60% .70% .60%
DISTRIBUTION AND SERVICE
(12B-1) FEES NONE NONE .00% .09%
OTHER EXPENSES .19% .11% .23% .19%
TOTAL ANNUAL FUND
OPERATING EXPENSES .65% .71% .93% .88%
1 PURCHASES OF LIMITED-TERM SHARES FOR ACCOUNTS WITH $250,000 OR MORE ARE NOT
SUBJECT TO FRONT-END SALES CHARGES, BUT MAY BE SUBJECT TO A 0.10%
CONTINGENT DEFERRED SALES CHARGE ON SHARES REDEEMED WITHIN 9 MONTHS OF
PURCHASE. (SEE "HOW TO BUY SHARES")
2 PURCHASES OF INTERMEDIATE AND LONG-TERM SHARES FOR ACCOUNTS WITH $1 MILLION OR
MORE ARE NOT SUBJECT TO FRONT-END SALES CHARGES, BUT MAY BE SUBJECT TO A
1.0% CONTINGENT DEFERRED SALES CHARGE ON SHARES REDEEMED WITHIN 1 YEAR OF
PURCHASE. (SEE "HOW TO BUY SHARES")
3 FOR EACH ACCOUNT WITH A BALANCE OF LESS THAN $1,000, THE FUND CHARGES A
MONTHLY ACCOUNT MAINTENANCE FEE OF $3.
4 EXPENSES ARE BASED ON THE FUND'S MOST RECENT FISCAL YEAR. MANAGEMENT FEES
INCLUDE THE ADMINISTRATIVE FEE PAID BY THE FUND TO CALVERT ADMINISTRATIVE
SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR, CALVERT ASSET MANAGEMENT
COMPANY, INC. ("CAMCO").
<PAGE>
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN A FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE EXAMPLE ASSUMES
THAT:
- - YOU INVEST $10,000 IN THE FUND FOR THE TIME PERIODS INDICATED;
- - YOUR INVESTMENT HAS A 5% RETURN EACH YEAR; AND
- - THE FUND'S OPERATING EXPENSES REMAIN THE SAME.
ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, UNDER THESE ASSUMPTIONS YOUR
COSTS WOULD BE:
PORTFOLIO NUMBER OF YEARS INVESTMENT IS HELD
1 YEAR 3 YEARS 5 YEARS 10YEARS
MONEY MARKET $66 $208 $362 $810
LIMITED-TERM $172 $325 $491 $974
INTERMEDIATE $367 $563 $776 $1,387
LONG-TERM $461 $645 $844 $1,419
<PAGE>
INVESTMENT PRACTICES AND RISKS
THE MOST CONCISE DESCRIPTION OF THE PRINCIPAL INVESTMENT STRATEGIES AND
ASSOCIATED RISKS IS UNDER THEEARLIER SUMMARY FOR EACH FUND. LIMITED
TERM, INTERMEDIATE, AND LONG-TERM ARE ALSO PERMITTED TO INVEST IN CERTAIN
OTHER INVESTMENTS AND TO USE CERTAIN INVESTMENT TECHNIQUES THAT HAVE
HIGHER RISKS ASSOCIATED WITH THEM. ON THE FOLLOWING PAGES ARE BRIEF
DESCRIPTIONS OF THE FUND'S INVESTMENT PRACTICES AND TECHNIQUES.
FOR EACH OF THE INVESTMENT PRACTICES LISTED, THE TABLE BELOW SHOWS THE
LIMITATIONS FOR LIMITED -TERM, INTERMEDIATE AND LONG-TERM AS A PERCENTAGE OF
ASSETS AND THE PRINCIPAL TYPES OF RISK INVOLVED. (SEE THE PAGES FOLLOWING
THE TABLE FOR A DESCRIPTION OF THE TYPES OF RISKS). NUMBERS IN THIS TABLE
SHOW MAXIMUM ALLOWABLE AMOUNT ONLY; FOR ACTUAL USAGE, CONSULT THE ANNUAL/SEMI
ANNUAL REPORTS.
KEY TO TABLE
J FUND CURRENTLY USES AS A PRINCIPAL INVESTMENT PRACTICE
Q PERMITTED, BUT NOT TYPICALLY USED AS A PRINCIPAL INVESTMENT PRACTICE
(% OF ASSETS ALLOWABLE, IF RESTRICTED)
8 NOT PERMITTED
XN ALLOWED UP TO X% OF FUND'S NET ASSETS
XT ALLOWED UP TO X% OF FUND'S TOTAL ASSETS
NA NOT APPLICABLE TO THIS TYPE OF FUND
INVESTMENT PRACTICES
TEMPORARY DEFENSIVE POSITIONS.
DURING ADVERSE MARKET, ECONOMIC OR POLITICAL CONDITIONS, THE FUND MAY DEPART
FROM ITS PRINCIPAL INVESTMENT STRATEGIES BY INCREASING ITS INVESTMENT IN
U.S. GOVERNMENT SECURITIES AND OTHER SHORT-TERM INTEREST-BEARING SECURITIES.
DURING TIMES OF ANY TEMPORARY DEFENSIVE POSITIONS, A FUND MAY NOT BE ABLE TO
ACHIEVE ITS INVESTMENT OBJECTIVE.
RISKS: OPPORTUNITY.
LTD.-TERM INTER-MEDIATE LONG-TERM
Q Q Q
<PAGE>
INVESTMENT PRACTICES AND RISKS (CONT'D)
INVESTMENT PRACTICES
CONVENTIONAL SECURITIES
INVESTMENT GRADE BONDS. BONDS RATED BBB/BAA OR HIGHER OR COMPARABLE UNRATED
BONDS. RISKS: INTEREST RATE, MARKET, POLITICAL AND CREDIT.
J J J
BELOW-INVESTMENT GRADE BONDS. BONDS RATED BELOW BBB/BAA OR COMPARABLE UNRATED
BONDS, ALSO KNOWN AS HIGH-YIELD BONDS. THEY ARE SUBJECT TO GREATER CREDIT
RISK THAN INVESTMENT GRADE BONDS. RISKS: CREDIT, MARKET, INTEREST RATE,
LIQUIDITY, POLITICAL AND INFORMATION.
Q Q Q
15N 35N 35N
UNRATED DEBT SECURITIES. BONDS THAT HAVE NOT BEEN RATED BY A RECOGNIZED RATING
AGENCY; THE ADVISOR HAS DETERMINED THE CREDIT QUALITY BASED ON ITS OWN
RESEARCH. RISKS: CREDIT, MARKET, INTEREST RATE, LIQUIDITY, POLITICAL AND
INFORMATION.
Q Q Q
ILLIQUID SECURITIES. SECURITIES WHICH CANNOT BE READILY SOLD BECAUSE THERE IS NO
ACTIVE MARKET.
RISKS: LIQUIDITY, MARKET AND TRANSACTION.
Q Q Q
15N 15N 15N
UNLEVERAGED DERIVATIVE SECURITIES
ASSET-BACKED SECURITIES. SECURITIES ARE ISSUED BY A SPECIAL PURPOSE ENTITY AND
ARE BACKED BY FIXED-INCOME OR OTHER INTEREST BEARING ASSETS. RISKS:
CREDIT, INTEREST RATE, POLITICAL AND LIQUIDITY.
Q Q Q
MORTGAGE-BACKED SECURITIES. (TYPICALLY, SINGLE-FAMILY MORTGAGE BONDS).
SECURITIES ARE BACKED BY POOLS OF MORTGAGES, INCLUDING PASSTHROUGH
CERTIFICATES. RISKS: CREDIT, EXTENSION, PREPAYMENT, LIQUIDITY, POLITICAL AND
INTEREST RATE.
Q Q Q
<PAGE>
INVESTMENT PRACTICES AND RISKS (CONT'D)
INVESTMENT PRACTICES
LEVERAGED DERIVATIVE INSTRUMENTS
OPTIONS ON SECURITIES AND INDICES. CONTRACTS GIVING THE HOLDER THE RIGHT BUT NOT
THE OBLIGATION TO PURCHASE OR SELL A SECURITY (OR THE CASH VALUE, IN THE
CASE OF AN OPTION ON AN INDEX) AT A SPECIFIED PRICE WITHIN A SPECIFIED
TIME. ANY OPTIONS WRITTEN BY THE FUNDS MUST BE COVERED. RISKS: INTEREST
RATE, MARKET, LEVERAGE, CORRELATION, LIQUIDITY, CREDIT AND OPPORTUNITY.
NA Q Q
5N 5N
FUTURES CONTRACT. AGREEMENT TO BUY OR SELL A SPECIFIC AMOUNT OF A COMMODITY OR
FINANCIAL INSTRUMENT AT A PARTICULAR PRICE ON A SPECIFIC FUTURE DATE.
RISKS: INTEREST RATE, MARKET, LEVERAGE, CORRELATION, LIQUIDITY AND
OPPORTUNITY.
NA Q Q
5N 5N
STRUCTURED SECURITIES. INVERSE FLOATING RATE MUNICIPAL NOTES AND BONDS. THESE
SECURITIES TEND TO BE HIGHLY SENSITIVE TO INTEREST RATE MOVEMENTS.
RISKS: CREDIT, INTEREST RATE, MARKET,
LEVERAGE, LIQUIDITY, POLITICAL AND CORRELATION.
Q Q Q
THE FUNDS HAVE ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS (FOR EXAMPLE,
REPURCHASE AGREEMENTS, REVERSE REPURCHASE AGREEMENTS, BORROWING, PLEDGING, AND
SECURITIES LENDING, AND WHEN-ISSUED SECURITIES.) THESE POLICIES AND
RESTRICTIONS ARE DISCUSSED IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI.")
TYPES OF INVESTMENT RISK
CORRELATION RISK
THIS OCCURS WHEN A FUND "HEDGES"- USES ONE INVESTMENT TO OFFSET THE FUND'S
POSITION IN ANOTHER. IF THE TWO INVESTMENTS DO NOT BEHAVE IN RELATION TO
ONE ANOTHER THE WAY FUND MANAGERS EXPECT THEM TO, THEN UNEXPECTED OR
UNDESIRED RESULTS MAY OCCUR. FOR EXAMPLE, A HEDGE MAY ELIMINATE OR REDUCE GAINS
AS WELL AS OFFSET LOSSES.
CREDIT RISK
THE RISK THAT THE ISSUER OF A SECURITY OR THE COUNTERPARTY TO AN INVESTMENT
CONTRACT MAY DEFAULT OR BECOME UNABLE TO PAY ITS OBLIGATIONS WHEN DUE.
<PAGE>
EXTENSION RISK
THE RISK THAT AN UNEXPECTED RISE IN INTEREST RATES WILL EXTEND THE LIFE OF A
MORTGAGE-BACKED SECURITY BEYOND THE EXPECTED PREPAYMENT TIME, TYPICALLY
REDUCING THE SECURITY'S VALUE.
INFORMATION RISK
THE RISK THAT INFORMATION ABOUT A SECURITY OR ISSUER OR THE MARKET MIGHT NOT BE
AVAILABLE, COMPLETE, ACCURATE OR COMPARABLE.
INTEREST RATE RISK
THE RISK THAT CHANGES IN INTEREST RATES WILL ADVERSELY AFFECT THE VALUE OF AN
INVESTOR'S SECURITIES. WHEN INTEREST RATES RISE, THE VALUE OF FIXED-INCOME
SECURITIES WILL GENERALLY FALL. CONVERSELY, A DROP IN INTEREST RATES WILL
GENERALLY CAUSE AN INCREASE IN THE VALUE OF FIXED-INCOME SECURITIES. LONGER-
TERM SECURITIES AND ZERO COUPON/"STRIPPED" COUPON SECURITIES ("STRIPS") ARE
SUBJECT TO GREATER INTEREST RATE RISK.
LEVERAGE RISK
THE RISK THAT OCCURS IN SOME SECURITIES OR TECHNIQUES WHICH TEND TO MAGNIFY THE
EFFECT OF SMALL CHANGES
IN AN INDEX OR A MARKET. THIS CAN RESULT IN A LOSS THAT EXCEEDS THE AMOUNT
ACTUALLY INVESTED.
LIQUIDITY RISK
THE RISK THAT OCCURS WHEN INVESTMENTS CANNOT BE READILY SOLD. A FUND MAY HAVE TO
ACCEPT A LESS-THAN-DESIRABLE PRICE TO COMPLETE THE SALE OF AN ILLIQUID
SECURITY OR MAY NOT BE ABLE TO SELL IT AT ALL.
MANAGEMENT RISK
THE RISK THAT A FUND'S PORTFOLIO MANAGEMENT PRACTICES MIGHT NOT WORK TO ACHIEVE
THEIR DESIRED RESULT.
MARKET RISK
THE RISK THAT SECURITIES PRICES IN A MARKET, A SECTOR OR AN INDUSTRY WILL
FLUCTUATE, AND THAT SUCH MOVEMENTS MIGHT REDUCE AN INVESTMENT'S VALUE.
OPPORTUNITY RISK
THE RISK OF MISSING OUT ON AN INVESTMENT OPPORTUNITY BECAUSE THE ASSETS NEEDED
TO TAKE ADVANTAGE OF IT ARE COMMITTED TO LESS ADVANTAGEOUS INVESTMENTS
OR STRATEGIES.
POLITICAL RISK (MUNICIPAL BONDS)
THE RISK THAT DIFFERENT TYPES OF MUNICIPAL BONDS MAY BE ADVERSELY AFFECTED BY
CHANGES OR PROPOSED CHANGES IN THE FEDERAL OR STATE TAX STRUCTURE,
ECONOMIC AND REGULATORY DEVELOPMENT, JUDICIAL OPINIONS, AND OTHER FACTORS.
<PAGE>
PREPAYMENT RISK
THE RISK THAT UNANTICIPATED PREPAYMENTS MAY OCCUR, REDUCING THE VALUE OF A
MORTGAGE-BACKED SECURITY. THE FUND MUST THEN REINVEST THOSE ASSETS AT THE
CURRENT, MARKET RATE WHICH MAY BE LOWER.
TRANSACTION RISK
THE RISK THAT A FUND MAY BE DELAYED OR UNABLE TO SETTLE A TRANSACTION OR THAT
COMMISSIONS AND SETTLEMENT EXPENSES MAY BE HIGHER THAN USUAL.
<PAGE>
CALVERT GROUP AND THE PORTFOLIO MANAGEMENT TEAM
CALVERT ASSET MANAGEMENT COMPANY, INC. (4550 MONTGOMERY AVENUE, SUITE 1000N,
BETHESDA, MD 20814) ("CAMCO") IS THE FUNDS' INVESTMENT ADVISOR. CAMCO
PROVIDES THE FUNDS WITH INVESTMENT SUPERVISION AND MANAGEMENT AND OFFICE
SPACE; FURNISHES EXECUTIVE AND OTHER PERSONNEL TO THE FUNDS, AND PAYS THE
SALARIES AND FEES OF ALL TRUSTEES/DIRECTORS WHO ARE AFFILIATED PERSONS
OF THE ADVISOR. IT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1976. CAMCO IS
THE INVESTMENT ADVISOR FOR OVER 25 MUTUAL FUND PORTFOLIOS, INCLUDING THE FIRST
AND LARGEST FAMILY OF SOCIALLY SCREENED FUNDS. AS OF DECEMBER 31, 1999,
CAMCO HAD OVER $6 BILLION IN ASSETS UNDER MANAGEMENT.
CAMCO USES A TEAM APPROACH TO ITS MANAGEMENT OF THE FUND. SINCE INCEPTION,
INVESTMENT SELECTIONS FOR THE FUND HAVE BEEN MADE BY A COMMITTEE OF THE
ADVISOR'S FIXED-INCOME PORTFOLIO MANAGERS. RENO J. MARTINI, SENIOR VICE
PRESIDENT AND CHIEF INVESTMENT OFFICER OF CAMCO, HEADS THIS TEAM AND
OVERSEES THE MANAGEMENT OF ALL CALVERT FUNDS FOR CAMCO. MR. MARTINI HAS OVER
18 YEARS OF EXPERIENCE IN EVALUATING AND PURCHASING MUNICIPAL SECURITIES AND
HAS BEEN THE HEAD OF CAMCO'S ASSET MANAGEMENT TEAM SINCE 1985.
ADVISORY FEES
THE FOLLOWING TABLE SHOWS THE AGGREGATE ANNUAL ADVISORY FEE PAID TO CAMCO BY
EACH FUND FOR THE MOST RECENT FISCAL YEAR AS A PERCENTAGE OF THAT
FUND'S AVERAGE DAILY NET ASSETS.
FUND ADVISORY FEE
MONEY MARKET .20%
LIMITED-TERM .60%
INTERMEDIATE .60%
LONG-TERM .60%
<PAGE>
HOW TO BUY SHARES
GETTING STARTED - BEFORE YOU OPEN AN ACCOUNT
YOU HAVE A FEW DECISIONS TO MAKE BEFORE YOU OPEN AN ACCOUNT IN A MUTUAL FUND.
FIRST, DECIDE WHICH FUND OR FUNDS BEST SUITS YOUR NEEDS AND YOUR GOALS.
SECOND, DECIDE WHAT KIND OF ACCOUNT YOU WANT TO OPEN. CALVERT OFFERS INDIVIDUAL,
JOINT, TRUST, UNIFORM GIFTS/TRANSFERS TO MINOR ACCOUNTS, AND SEVERAL
OTHER TYPES OF ACCOUNTS.
MONEY MARKET OFFERS THREE CLASSES OF SHARES, ALL OF WHICH ARE SOLD WITHOUT A
SALES CHARGE. ONLY MONEY MARKET CLASS O IS OFFERED BY THIS PROSPECTUS.
SHARES OF LIMITED-TERM, INTERMEDIATE AND LONG-TERM ARE SOLD WITH A FRONT-END
SALES CHARGE.
INVESTORS PAY A SALES CHARGE AT THE TIME OF EACH PURCHASE. THIS TABLE SHOWS THE
CHARGES BOTH AS A PERCENTAGE OF OFFERING PRICE AND AS A PERCENTAGE OF THE
AMOUNT YOU INVEST. THE TERM "OFFERING PRICE" INCLUDES THE FRONT-END SALES
CHARGE. IF YOU INVEST MORE, THE SALES CHARGE WILL BE LOWER. FOR EXAMPLE,
IF YOU INVEST MORE THAN $50,000 IN LIMITED-TERM, OR IF YOUR CUMULATIVE PURCHASES
OR THE VALUE IN YOUR ACCOUNT IS MORE THAN $50,000,4 THEN THE SALES
CHARGE IS REDUCED TO .75%.
LIMITED-TERM
SALES CHARGE AS % OF AMOUNT
YOUR INVESTMENT % OF OFFERING PRICE INVESTED
LESS THAN $50,000 1.00% 1.01%
$50,000 BUT LESS THAN $100,000 0.75% 0.76%
$100,000 BUT LESS THAN $250,000 0.50% 0.50%
$250,000 AND OVER NONE5 NONE5
INTERMEDIATE
SALES CHARGE AS % OF AMOUNT
YOUR INVESTMENT % OF OFFERING PRICE INVESTED
LESS THAN $50,000 2.75% 2.83%
$50,000 BUT LESS THAN $100,000 2.25% 2.30%
$100,000 BUT LESS THAN $250,000 1.75% 1.78%
$250,000 BUT LESS THAN $500,000 1.25% 1.27%
$500,000 BUT LESS THAN $1,000,000 1.00% 1.01%
$1,000,000 AND OVER NONE6 NONE6
<PAGE>
LONG-TERM
SALES CHARGE AS % OF AMOUNT
YOUR INVESTMENT % OF OFFERING PRICE INVESTED
LESS THAN $50,000 3.75% 3.90%
$50,000 BUT LESS THAN $100,000 3.00% 3.09%
$100,000 BUT LESS THAN $250,000 2.25% 2.30%
$250,000 BUT LESS THAN $500,000 1.75% 1.78%
$500,000 BUT LESS THAN $1,000,000 1.00% 1.01%
$1,000,000 AND OVER NONE6 NONE6
4 THIS IS CALLED "RIGHTS OF ACCUMULATION." THE SALES CHARGE IS CALCULATED BY
TAKING INTO ACCOUNT NOT ONLY THE DOLLAR AMOUNT OF THE NEW PURCHASE OF
SHARES, BUT ALSO THE HIGHER OF COST OR CURRENT VALUE OF SHARES YOU HAVE
PREVIOUSLY PURCHASED IN CALVERT GROUP FUNDS THAT IMPOSE SALES CHARGES. THIS
AUTOMATICALLY APPLIES TO YOUR ACCOUNT FOR EACH NEW PURCHASE OF SHARES.
5 PURCHASES OF LIMITED-TERM SHARES AT NAV FOR ACCOUNTS WITH $250,000 OR MORE ON
WHICH A FINDER'S FEE HAS
BEEN PAID ARE SUBJECT TO A NINE MONTH CONTINGENT DEFERRED SALES CHARGE ("CDSC")
OF 0.10%. SEE THE
"CALCULATION OF CONTINGENT DEFERRED SALES CHARGE AND WAIVER OF SALES CHARGES."
6 PURCHASES OF INTERMEDIATE AND CTFR LONG-TERM SHARES AT NAV FOR ACCOUNTS WITH
$1,000,000 OR MORE ON WHICH A FINDER'S FEE HAS BEEN PAID ARE SUBJECT TO A
ONE YEAR CDSC OF 1.00%. SEE THE "CALCULATION OF CONTINGENT DEFERRED SALES
CHARGE."
THE FRONT-END SALES CHARGE MAY BE WAIVED FOR CERTAIN PURCHASES OR INVESTORS,
SUCH AS PARTICIPANTS IN CERTAIN GROUP RETIREMENT PLANS OR OTHER
QUALIFIED GROUPS AND CLIENTS OF REGISTERED INVESTMENT ADVISERS. FOR
DETAILS ON THESE AND OTHER PURCHASES THAT MAY QUALIFY FOR A REDUCED SALES
CHARGE, SEE EXHIBIT A.
CALCULATION OF CONTINGENT DEFERRED SALES CHARGE
THE CDSC WILL NOT BE CHARGED ON SHARES YOU RECEIVED AS DIVIDENDS OR FROM CAPITAL
GAINS DISTRIBUTIONS OR ON ANY CAPITAL APPRECIATION (GAIN IN THE VALUE) OF SHARES
THAT ARE SOLD.
SHARES THAT ARE NOT SUBJECT TO THE CDSC WILL BE REDEEMED FIRST, FOLLOWED BY
SHARES YOU HAVE HELD THE LONGEST. THE CDSC IS CALCULATED BY DETERMINING THE
SHARE VALUE AT BOTH THE TIME OF PURCHASE AND REDEMPTION AND THEN MULTIPLYING
WHICHEVER VALUE IS LESS BY THE PERCENTAGE THAT APPLIES AS SHOWN ABOVE. IF YOU
CHOOSE TO SELL ONLY PART OF YOUR SHARES, THE CAPITAL APPRECIATION FOR THOSE
SHARES ONLY IS INCLUDED IN THE CALCULATION, RATHER THAN THE CAPITAL APPRECIATION
FOR THE ENTIRE ACCOUNT.
<PAGE>
DISTRIBUTION AND SERVICE FEES
INTERMEDIATE AND LONG-TERM HAVE EACH ADOPTED A PLAN UNDER RULE 12B-1 OF THE
INVESTMENT COMPANY ACT OF 1940 THAT ALLOWS THE FUND TO PAY DISTRIBUTION FEES
FOR THE SALE AND DISTRIBUTION OF ITS SHARES. THE DISTRIBUTION PLAN ALSO
PAYS SERVICE FEES TO PERSONS (SUCH AS YOUR FINANCIAL PROFESSIONAL) FOR
SERVICES PROVIDED TO SHAREHOLDERS. BECAUSE THESE FEES ARE PAID OUT OF A FUND'S
ASSETS ON AN ONGOING BASIS, OVER TIME, THESE FEES WILL INCREASE THE COST OF
YOUR INVESTMENT AND MAY COST YOU MORE THAN PAYING OTHER TYPES OF SALES
CHARGES. PLEASE SEE EXHIBIT B FOR MORE SERVICE FEE INFORMATION.
THE TABLE BELOW SHOWS THE MAXIMUM ANNUAL PERCENTAGE PAYABLE UNDER THE
DISTRIBUTION PLAN, AND THE AMOUNT ACTUALLY PAID BY EACH FUND FOR THE MOST
RECENT FISCAL YEAR. THE FEES ARE BASED ON AVERAGE DAILY NET ASSETS.
MAXIMUM PAYABLE UNDER PLAN/AMOUNT ACTUALLY PAID
MONEY MARKET NONE/NONE
LIMITED-TERM NONE/NONE
INTERMEDIATE 0.25%/NONE
LONG-TERM 0.35%/0.09%
NEXT STEP - ACCOUNT APPLICATION
COMPLETE AND SIGN AN APPLICATION FOR EACH NEW ACCOUNT. FOR MORE INFORMATION,
CONTACT YOUR FINANCIAL PROFESSIONAL OR OUR SHAREHOLDER SERVICES
DEPARTMENT AT 800-368-2748.
MINIMUM TO OPEN AN ACCOUNT MINIMUM ADDITIONAL
$2,000 INVESTMENTS -$250
PLEASE MAKE YOUR CHECK PAYABLE
TO THE FUND AND MAIL IT TO:
NEW ACCOUNTS SUBSEQUENT INVESTMENTS
(INCLUDE APPLICATION) (INCLUDE INVESTMENT SLIP)
CALVERT GROUP CALVERT GROUP
P.O. BOX 219544 P.O. BOX 219739
KANSAS, CITY MO KANSAS CITY, MO
64121-9544 64121-9739
CERTIFIED OR C/O NFDS,
OVERNIGHT MAIL 330 WEST 9TH ST.
KANSAS CITY, MO 64105-1807
AT THE CALVERT OFFICE VISIT THE CALVERT OFFICE TO MAKE
INVESTMENTS BY CHECK. SEE THE
BACK COVER PAGE FOR THE ADDRESS.
<PAGE>
IMPORTANT - HOW SHARES ARE PRICED
THE PRICE OF SHARES IS BASED ON EACH FUND'S NET ASSET VALUE ("NAV"). NAV IS
COMPUTED 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. IF A FUND HAS MORE THAN ONE CLASS OF SHARES, THE NAV OF
EACH CLASS WILL BE DIFFERENT, DEPENDING ON THE NUMBER OF SHARES
OUTSTANDING FOR EACH CLASS.
PORTFOLIO SECURITIES AND OTHER ASSETS ARE VALUED BASED ON MARKET QUOTATIONS. 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. CTFR MONEY MARKET IS VALUED ACCORDING TO THE "AMORTIZED
COST" METHOD, WHICH IS INTENDED TO STABILIZE THE NAV AT $1 PER SHARE.
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, HOWEVER,
SUCH AS COLUMBUS DAY AND VETERANS' DAY, WHEN THE NYSE IS OPEN AND THE FUND
IS OPEN BUT PURCHASES CANNOT BE RECEIVED BECAUSE THE BANKS ARE CLOSED.
WHEN YOUR ACCOUNT WILL BE CREDITED
YOUR PURCHASE WILL BE PROCESSED AT THE NAV NEXT CALCULATED AFTER YOUR ORDER IS
RECEIVED IN GOOD ORDER. ALL OF YOUR PURCHASES MUST BE MADE IN US DOLLARS. NO
CASH OR THIRD PARTY CHECKS WILL BE ACCEPTED. NO CREDIT CARD OR CREDIT LOAN
CHECKS WILL BE ACCEPTED. EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING
OF SHARES FOR A PERIOD OF TIME OR TO REJECT ANY SPECIFIC PURCHASE ORDER. AS
A CONVENIENCE, CHECK PURCHASES RECEIVED AT CALVERT'S OFFICE IN BETHESDA,
MARYLAND WILL BE SENT BY OVERNIGHT DELIVERY TO THE TRANSFER AGENT AND WILL
BE CREDITED THE NEXT BUSINESS DAY UPON RECEIPT. ANY CHECK PURCHASE RECEIVED
WITHOUT AN INVESTMENT SLIP MAY CAUSE DELAYED CREDITING. ANY PURCHASE LESS THAN
THE $250 MINIMUM FOR SUBSEQUENT INVESTMENTS WILL BE CHARGED A SERVICE FEE
OF $3. IF YOUR CHECK DOES NOT CLEAR YOUR BANK, YOUR PURCHASE WILL BE
CANCELED AND YOU WILL BE CHARGED A $25 FEE PLUS ANY COSTS INCURRED. ALL
PURCHASES WILL BE CONFIRMED AND CREDITED TO YOUR ACCOUNT IN FULL AND
FRACTIONAL SHARES (ROUNDED TO THE NEAREST 1/1000TH OF A SHARE).
CTFR MONEY MARKET
YOUR PURCHASE WILL BE CREDITED AT THE NET ASSET VALUE CALCULATED AFTER YOUR
ORDER IS RECEIVED AND ACCEPTED. IF THE TRANSFER AGENT RECEIVES YOUR WIRE
PURCHASE BY 5 P.M. ET, YOUR ACCOUNT WILL BEGIN EARNING DIVIDENDS ON THE
NEXT BUSINESS DAY. EXCHANGES BEGIN EARNING DIVIDENDS THE NEXT BUSINESS DAY
AFTER THE EXCHANGE REQUEST IS RECEIVED BY MAIL OR TELEPHONE. PURCHASES
RECEIVED BY CHECK WILL BEGIN EARNING DIVIDENDS THE NEXT BUSINESS DAY
AFTER THEY ARE CREDITED TO THE ACCOUNT.
<PAGE>
OTHER CALVERT GROUP FEATURES
CALVERT INFORMATION NETWORK
FOR 24 HOUR PERFORMANCE AND ACCOUNT INFORMATION CALL 800-368-2745 OR VISIT
WWW.CALVERT.COM
YOU CAN OBTAIN CURRENT PERFORMANCE AND PRICING INFORMATION, VERIFY ACCOUNT
BALANCES, AND AUTHORIZE CERTAIN TRANSACTIONS WITH THE CONVENIENCE OF ONE
PHONE CALL, 24 HOURS A DAY.
ACCOUNT SERVICES
BY SIGNING UP FOR SERVICES WHEN YOU OPEN YOUR ACCOUNT, YOU AVOID HAVING TO
OBTAIN A SIGNATURE GUARANTEE. IF YOU WISH TO ADD SERVICES AT A LATER
DATE, A SIGNATURE GUARANTEE TO VERIFY YOUR SIGNATURE MAY BE OBTAINED FROM
ANY BANK, TRUST COMPANY AND SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, BROKER-
DEALER FIRM OR MEMBER OF A DOMESTIC STOCK EXCHANGE. A NOTARY PUBLIC
CANNOT PROVIDE A SIGNATURE GUARANTEE.
CALVERT MONEY CONTROLLER
CALVERT MONEY CONTROLLER ALLOWS YOU TO PURCHASE OR SELL SHARES BY ELECTRONIC
FUNDS TRANSFER WITHOUT THE TIME DELAY OF MAILING A CHECK OR THE ADDED
EXPENSE OF A WIRE. USE THIS SERVICE TO TRANSFER UP TO $300,000
ELECTRONICALLY. ALLOW ONE OR TWO BUSINESS DAYS AFTER YOU PLACE YOUR REQUEST FOR
THE TRANSFER TO TAKE PLACE. MONEY TRANSFERRED TO PURCHASE NEW SHARES WILL
BE SUBJECT TO A HOLD OF UP TO 10 BUSINESS DAYS BEFORE REDEMPTION REQUESTS
WILL BE HONORED. TRANSACTION REQUESTS MUST BE RECEIVED BY 4 P.M. ET. YOU MAY
REQUEST THIS SERVICE ON YOUR INITIAL ACCOUNT APPLICATION. CALVERT MONEY
CONTROLLER TRANSACTIONS RETURNED FOR INSUFFICIENT FUNDS WILL INCUR A $25
CHARGE.
TELEPHONE TRANSACTIONS
YOU MAY PURCHASE, REDEEM, OR EXCHANGE SHARES, WIRE FUNDS AND USE CALVERT MONEY
CONTROLLER BY TELEPHONE IF YOU HAVE PRE-AUTHORIZED SERVICE INSTRUCTIONS.
YOU RECEIVE TELEPHONE PRIVILEGES AUTOMATICALLY WHEN YOU OPEN YOUR ACCOUNT
UNLESS YOU ELECT OTHERWISE. FOR OUR MUTUAL PROTECTION, THE FUND, THE
SHAREHOLDER SERVICING AGENT AND THEIR AFFILIATES USE PRECAUTIONS SUCH AS
VERIFYING SHAREHOLDER IDENTITY AND RECORDING TELEPHONE CALLS TO CONFIRM
INSTRUCTIONS GIVEN BY PHONE. A CONFIRMATION STATEMENT IS SENT FOR MOST
TRANSACTIONS; PLEASE REVIEW THIS STATEMENT AND VERIFY THE ACCURACY OF YOUR
TRANSACTION IMMEDIATELY.
EXCHANGES
CALVERT GROUP OFFERS A WIDE VARIETY OF INVESTMENT OPTIONS THAT INCLUDES COMMON
STOCK FUNDS, TAX-EXEMPT AND CORPORATE BOND FUNDS, AND MONEY MARKET
FUNDS (CALL YOUR FINANCIAL PROFESSIONAL OR CALVERT REPRESENTATIVE FOR MORE
INFORMATION). WE MAKE IT EASY FOR YOU TO PURCHASE SHARES IN OTHER CALVERT
FUNDS IF
<PAGE>
YOUR INVESTMENT GOALS CHANGE. THE EXCHANGE PRIVILEGE OFFERS FLEXIBILITY BY
ALLOWING YOU TO EXCHANGE SHARES ON WHICH YOU HAVE ALREADY PAID A SALES
CHARGE FROM ONE MUTUAL FUND TO ANOTHER AT NO ADDITIONAL CHARGE.
COMPLETE AND SIGN AN ACCOUNT APPLICATION, TAKING CARE TO REGISTER YOUR NEW
ACCOUNT IN THE SAME NAME AND TAXPAYER IDENTIFICATION NUMBER AS YOUR
EXISTING CALVERT ACCOUNT(S). EXCHANGE INSTRUCTIONS MAY THEN BE GIVEN BY
TELEPHONE IF TELEPHONE REDEMPTIONS HAVE BEEN AUTHORIZED AND THE SHARES ARE NOT
IN CERTIFICATE FORM.
BEFORE YOU MAKE AN EXCHANGE, PLEASE NOTE THE FOLLOWING:
EACH EXCHANGE REPRESENTS THE SALE OF SHARES OF ONE FUND AND THE PURCHASE OF
SHARES OF ANOTHER. THEREFORE, YOU COULD REALIZE A TAXABLE GAIN OR
LOSS.
YOU MAY EXCHANGE SHARES ACQUIRED BY REINVESTMENT OF DIVIDENDS OR DISTRIBUTIONS
INTO ANOTHER CALVERT FUND AT NO ADDITIONAL CHARGE.
SHARES MAY ONLY BE EXCHANGED FOR SHARES OF THE SAME CLASS OF ANOTHER CALVERT
FUND.
NO CDSC IS IMPOSED ON EXCHANGES OF SHARES SUBJECT TO A CDSC AT THE TIME OF THE
EXCHANGE. THE APPLICABLE CDSC IS IMPOSED AT THE TIME THE SHARES ACQUIRED BY
THE EXCHANGE ARE REDEEMED.
EXCHANGE REQUESTS WILL NOT BE ACCEPTED ON ANY DAY WHEN CALVERT IS OPEN BUT THE
FUND'S CUSTODIAN BANK IS CLOSED (E.G., COLUMBUS DAY AND VETERAN'S DAY);
THESE EXCHANGE REQUESTS WILL BE PROCESSED THE NEXT DAY THE FUND'S CUSTODIAN
BANK IS OPEN.
EACH FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR CANCEL
ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR CONDITIONS
OF PURCHASE OF SHARES OF ANY FUND; OR WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS. TO PROTECT THE INTERESTS OF INVESTORS, EACH
FUND AND THE DISTRIBUTOR MAY REJECT ANY ORDER CONSIDERED MARKET-TIMING
ACTIVITY.
EACH FUND RESERVES THE RIGHT TO TERMINATE OR MODIFY THE EXCHANGE PRIVILEGE WITH
60 DAYS' WRITTEN NOTICE.
ELECTRONIC DELIVERY OF PROSPECTUSES AND SHAREHOLDER REPORTS
YOU MAY REQUEST TO RECEIVE ELECTRONIC DELIVERY OF PROSPECTUSES AND ANNUAL AND
SEMI-ANNUAL REPORTS.
<PAGE>
COMBINED GENERAL MAILINGS (HOUSEHOLDING)
MULTIPLE ACCOUNTS WITH THE SAME SOCIAL SECURITY NUMBER WILL RECEIVE ONE MAILING
PER HOUSEHOLD OF INFORMATION SUCH AS PROSPECTUSES AND SEMI-ANNUAL AND
ANNUAL REPORTS. YOU MAY REQUEST FURTHER GROUPING OF ACCOUNTS TO RECEIVE
FEWER MAILINGS. SEPARATE STATEMENTS WILL BE GENERATED FOR EACH SEPARATE
ACCOUNT AND WILL BE MAILED IN ONE ENVELOPE FOR EACH COMBINATION ABOVE.
SPECIAL SERVICES AND CHARGES
EACH FUND PAYS FOR SHAREHOLDER SERVICES BUT NOT FOR SPECIAL SERVICES THAT ARE
REQUIRED BY A FEW SHAREHOLDERS, SUCH AS A REQUEST FOR A HISTORICAL
TRANSCRIPT OF AN ACCOUNT OR A STOP PAYMENT ON A DRAFT. YOU MAY BE REQUIRED
TO PAY A FEE FOR THESE SPECIAL SERVICES; FOR EXAMPLE, THE FEE FOR STOP
PAYMENTS IS $25. CTFR MONEY MARKET WILL CHARGE A $25 SERVICE FEE FOR DRAFTS
RETURNED FOR INSUFFICIENT OR UNCOLLECTED FUNDS.
IF YOU ARE PURCHASING SHARES THROUGH A PROGRAM OF SERVICES OFFERED BY A
BROKER/DEALER OR FINANCIAL INSTITUTION, YOU SHOULD READ THE PROGRAM
MATERIALS TOGETHER WITH THIS PROSPECTUS. CERTAIN FEATURES MAY BE MODIFIED
IN THESE PROGRAMS. INVESTORS MAY BE CHARGED A FEE IF THEY EFFECT TRANSACTIONS
IN FUND SHARES THROUGH A BROKER OR AGENT.
MINIMUM ACCOUNT BALANCE
PLEASE MAINTAIN A BALANCE IN EACH OF YOUR ACCOUNTS OF AT LEAST $1,000 PER CLASS.
IF THE BALANCE IN YOUR CTFR MONEY MARKET ACCOUNT FALLS BELOW THE MINIMUM
DURING A MONTH, A $3 MONTHLY FEE MAY BE CHARGED TO YOUR ACCOUNT. IF THE
BALANCE IN ANY OF YOUR ACCOUNTS FALLS BELOW THE MINIMUM DURING A MONTH, YOUR
ACCOUNT MAY BE CLOSED AND THE PROCEEDS MAILED TO THE ADDRESS OF RECORD. YOU WILL
RECEIVE NOTICE THAT YOUR ACCOUNT IS BELOW THE MINIMUM, AND WILL BE CLOSED IF
THE BALANCE IS NOT BROUGHT UP TO THE REQUIRED MINIMUM AMOUNTWITHIN 30 DAYS.
<PAGE>
DIVIDENDS, CAPITAL GAINS AND TAXES
EACH FUND PAYS DIVIDENDS FROM ITS NET INVESTMENT INCOME AS SHOWN BELOW. 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 AND DISTRIBUTION PAYMENTS WILL VARY BETWEEN CLASSES.
CTFR MONEY MARKET ACCRUED DAILY, PAID MONTHLY
CTFR LIMITED-TERM PAID MONTHLY
CMF INTERMEDIATE PAID MONTHLY
CTFR LONG-TERM PAID MONTHLY
DIVIDEND PAYMENT OPTIONS
DIVIDENDS AND ANY DISTRIBUTIONS ARE AUTOMATICALLY REINVESTED IN THE SAME FUND AT
NAV (WITHOUT SALES CHARGE), UNLESS YOU ELECT TO HAVE AMOUNTS OF $10 OR
MORE PAID IN CASH (BY CHECK OR BY CALVERT MONEY CONTROLLER). DIVIDENDS AND
DISTRIBUTIONS FROM ANY CALVERT GROUP FUND MAY BE AUTOMATICALLY INVESTED IN
AN IDENTICALLY REGISTERED ACCOUNT IN ANY OTHER CALVERT GROUP FUND AT NAV. IF
REINVESTED IN THE SAME ACCOUNT, NEW SHARES WILL BE PURCHASED AT NAV ON
THE REINVESTMENT DATE, WHICH IS GENERALLY 1 TO 3 DAYS PRIOR TO THE PAYMENT
DATE. YOU MUST NOTIFY THE FUNDS IN WRITING TO CHANGE YOUR PAYMENT OPTIONS. IF
YOU ELECT TO HAVE DIVIDENDS AND/OR DISTRIBUTIONS PAID IN CASH, AND THE US
POSTAL SERVICE RETURNS THE CHECK AS UNDELIVERABLE, IT, AS WELL AS FUTURE
DIVIDENDS AND DISTRIBUTIONS, WILL BE REINVESTED IN ADDITIONAL SHARES. NO
DIVIDENDS WILL ACCRUE ON AMOUNTS REPRESENTED BY UNCASHED DISTRIBUTION OR
REDEMPTION CHECKS.
BUYING A DIVIDEND (NOT APPLICABLE TO CTFR MONEY MARKET)
AT THE TIME OF PURCHASE, THE SHARE PRICE OF EACH CLASS MAY REFLECT UNDISTRIBUTED
INCOME, CAPITAL GAINS OR UNREALIZED APPRECIATION OF SECURITIES. ANY INCOME OR
CAPITAL GAINS FROM THESE AMOUNTS WHICH ARE LATER DISTRIBUTED TO YOU ARE
FULLY TAXABLE. ON THE RECORD DATE FOR A DISTRIBUTION, SHARE VALUE IS REDUCED
BY THE AMOUNT OF THE DISTRIBUTION. IF YOU BUY SHARES JUST BEFORE THE RECORD
DATE ("BUYING A DIVIDEND") YOU WILL PAY THE FULL PRICE FOR THE SHARES AND
THEN RECEIVE A PORTION OF THE PRICE BACK AS A TAXABLE DISTRIBUTION.
<PAGE>
FEDERAL TAXES
DIVIDENDS DERIVED FROM INTEREST ON MUNICIPAL OBLIGATIONS CONSTITUTE
EXEMPT-INTEREST DIVIDENDS, ON WHICH YOU ARE NOT SUBJECT TO FEDERAL INCOME
TAX. HOWEVER, DIVIDENDS WHICH ARE FROM TAXABLE INTEREST AND ANY DISTRIBUTIONS
OF SHORT TERM CAPITAL GAIN ARE TAXABLE TO YOU AS ORDINARY INCOME. IF THE FUND
MAKES ANY DISTRIBUTIONS OF LONG-TERM CAPITAL GAINS, THEN THESE ARE
TAXABLE TO YOU AS LONG-TERM CAPITAL GAINS, REGARDLESS OF HOW LONG YOU HELD
YOUR SHARES OF THE FUND. DIVIDENDS ATTRIBUTABLE TO INTEREST ON CERTAIN
PRIVATE ACTIVITY BONDS MUST BE INCLUDED IN FEDERAL ALTERNATIVE MINIMUM TAX FOR
INDIVIDUALS AND FOR CORPORATIONS. THE FUND MAY DERIVE UP TO 20% OF
ITS INCOME FROM TAXABLE INVESTMENTS, FOR LIQUIDITY PURPOSES OR PENDING
INVESTMENT. INTEREST EARNED FROM TAXABLE INVESTMENTS WILL BE TAXABLE AS
ORDINARY INCOME.
IF ANY TAXABLE INCOME OR GAINS ARE PAID, IN JANUARY, THE FUND WILL MAIL YOU FORM
1099-DIV INDICATING THE FEDERAL TAX STATUS OF DIVIDENDS AND ANY CAPITAL GAIN
DISTRIBUTIONS PAID TO YOU 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.
CTFR LIMITED-TERM, LONG-TERM AND CMF INTERMEDIATE ONLY:
YOU MAY REALIZE A CAPITAL GAIN OR LOSS WHEN YOU SELL OR EXCHANGE SHARES. THIS
CAPITAL GAIN OR LOSS WILL BE SHORT- OR LONG-TERM, DEPENDING ON HOW LONG
YOU HAVE OWNED THE SHARES WHICH WERE SOLD. IN JANUARY, THESE FUNDS WILL MAIL
YOU FORM 1099-B INDICATING THE TOTAL AMOUNT OF ALL SALES, INCLUDING EXCHANGES.
YOU SHOULD KEEP YOUR ANNUAL YEAR-END ACCOUNT STATEMENTS TO DETERMINE THE COST
(BASIS) OF THE SHARES TO REPORT ON YOUR TAX RETURNS.
OTHER TAX INFORMATION
YOU MAY BE SUBJECT TO STATE OR LOCAL TAXES ON YOUR INVESTMENT, DEPENDING ON THE
LAWS IN YOUR AREA. A LETTER WILL BE MAILED TO YOU IN JANUARY DETAILING THE
PERCENTAGE INVESTED IN YOUR STATE THE PREVIOUS TAX YEAR. SUCH DIVIDENDS
MAY BE EXEMPT FROM CERTAIN STATE INCOME TAXES.
TAXPAYER IDENTIFICATION NUMBER
IF WE DO NOT HAVE YOUR CORRECT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
("TIN") AND A SIGNED CERTIFIED APPLICATION OR FORM W-9, FEDERAL LAW
REQUIRES US TO WITHHOLD 31% OF YOUR REPORTABLE DIVIDENDS, AND POSSIBLY 31%
OF CERTAIN REDEMPTIONS. IN ADDITION, YOU MAY BE SUBJECT TO A FINE BY THE
INTERNAL REVENUE SERVICE. YOU WILL ALSO BE PROHIBITED FROM OPENING ANOTHER
ACCOUNT BY EXCHANGE. IF THIS TIN INFORMATION IS NOT RECEIVED WITHIN 60
DAYS AFTER YOUR ACCOUNT IS ESTABLISHED, YOUR ACCOUNT MAY BE REDEEMED
(CLOSED) AT THE CURRENT NAV ON THE DATE OF REDEMPTION. CALVERT GROUP RESERVES
THE RIGHT TO REJECT ANY NEW ACCOUNT OR ANY PURCHASE ORDER FOR FAILURE TO
SUPPLY A CERTIFIED TIN.
<PAGE>
HOW TO SELL SHARES
YOU MAY REDEEM ALL OR A PORTION OF YOUR SHARES ON ANY DAY YOUR FUND IS OPEN FOR
BUSINESS, PROVIDED THE AMOUNT REQUESTED IS NOT ON HOLD. WHEN YOU PURCHASE
BY CHECK OR WITH CALVERT MONEY CONTROLLER (ELECTRONIC FUNDS TRANSFER), THE
PURCHASE WILL BE ON HOLD FOR UP TO 10 BUSINESS DAYS FROM THE DATE OF
RECEIPT. DURING THE HOLD PERIOD, REDEMPTIONS PROCEEDS WILL NOT BE SENT UNTIL THE
TRANSFER AGENT IS REASONABLY SATISFIED THAT THE PURCHASE PAYMENT HAS
BEEN COLLECTED. DRAFTS WRITTEN ON CTFR MONEY MARKET DURING THE HOLD
PERIOD WILL BE RETURNED FOR UNCOLLECTED FUNDS.
YOUR SHARES WILL BE REDEEMED AT THE NEXT NAV CALCULATED AFTER YOUR REDEMPTION
REQUEST IS RECEIVED (LESS ANY APPLICABLE CDSC). THE PROCEEDS WILL NORMALLY
BE SENT TO YOU ON THE NEXT BUSINESS DAY, BUT IF MAKING IMMEDIATE PAYMENT
COULD ADVERSELY AFFECT THE FUND, IT MAY TAKE UP TO SEVEN (7) DAYS TO MAKE
PAYMENT. CALVERT MONEY CONTROLLER REDEMPTIONS GENERALLY WILL BE CREDITED TO YOUR
BANK ACCOUNT BY THE SECOND BUSINESS DAY AFTER YOUR PHONE CALL. 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 AFFECTED FUND, WHICHEVER IS LESS. WHEN THE NYSE IS CLOSED
(OR WHEN TRADING IS RESTRICTED) FOR ANY REASON OTHER THAN ITS CUSTOMARY
WEEKEND OR HOLIDAY CLOSINGS, OR UNDER ANY
EMERGENCY CIRCUMSTANCES AS DETERMINED BY THE SECURITIES AND EXCHANGE
COMMISSION, REDEMPTIONS MAY BE SUSPENDED OR PAYMENT DATES POSTPONED. PLEASE
NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY AND
VETERANS' DAY, WHEN THE NYSE IS OPEN AND THE FUND IS OPEN BUT REDEMPTIONS CANNOT
BE MAILED OR WIRED BECAUSE THE POST OFFICES AND BANKS ARE CLOSED.
FOLLOW THESE SUGGESTIONS TO ENSURE TIMELY PROCESSING OF YOUR REDEMPTION REQUEST:
BY TELEPHONE
YOU MAY REDEEM SHARES FROM YOUR ACCOUNT BY TELEPHONE AND HAVE YOUR MONEY MAILED
TO YOUR ADDRESS OF RECORD OR ELECTRONICALLY TRANSFERRED OR WIRED TO A
BANK YOU HAVE PREVIOUSLY AUTHORIZED. A CHARGE OF $5 MAY BE IMPOSED ON
WIRE TRANSFERS OF LESS THAN $1,000.
WRITTEN REQUESTS
CALVERT GROUP, P.O. BOX 219544, KANSAS CITY, MO 64121-9544
YOUR LETTER SHOULD INCLUDE YOUR ACCOUNT NUMBER AND FUND AND THE NUMBER OF SHARES
OR THE DOLLAR AMOUNT YOU ARE REDEEMING. PLEASE PROVIDE A DAYTIME TELEPHONE
NUMBER, IF POSSIBLE, FOR US TO CALL IF WE HAVE QUESTIONS. IF THE MONEY
IS BEING SENT TO A NEW BANK, PERSON, OR ADDRESS OTHER THAN THE ADDRESS OF
RECORD, YOUR LETTER MUST BE SIGNATURE GUARANTEED.
<PAGE>
DRAFTWRITING (CTFR MONEY MARKET ONLY)
YOU MAY REDEEM SHARES IN YOUR CTFR MONEY MARKET ACCOUNT BY WRITING A DRAFT FOR
AT LEAST $250. IF YOU COMPLETE AND RETURN THE SIGNATURE CARD FOR
DRAFTWRITING, THE FUND WILL MAIL BANK DRAFTS TO YOU, PRINTED WITH YOUR NAME
AND ADDRESS. DRAFTS MAY NOT BE ORDERED UNTIL YOUR INITIAL PURCHASE HAS
CLEARED. CALVERT WILL PROVIDE PRINTED DRAFTS (CHECKS). YOU MAY NOT
PRINT YOUR OWN. ANY CUSTOMER-PRINTED CHECKS WILL NOT BE HONORED AND WILL
BE RETURNED WITHOUT NOTICE. THE FUND WILL CHARGE A SERVICE FEE FOR DRAFTS
RETURNED FOR INSUFFICIENT FUNDS. THE FUND WILL CHARGE $25 FOR ANY STOP PAYMENT
ON DRAFTS. THE FUND WILL CHARGE A $25 FEE ON DRAFTS RETURNED FOR ANY
REASON. AS A SERVICE TO SHAREHOLDERS, SHARES MAY BE AUTOMATICALLY TRANSFERRED
BETWEEN YOUR CALVERT ACCOUNTS TO COVER DRAFTS YOU HAVE WRITTEN. THE SIGNATURE
OF ONLY ONE AUTHORIZED SIGNER IS REQUIRED TO HONOR A DRAFT.
SYSTEMATIC CHECK REDEMPTIONS
IF YOU MAINTAIN AN ACCOUNT WITH A BALANCE OF $10,000 OR MORE, YOU MAY HAVE UP TO
TWO (2) REDEMPTION CHECKS FOR A FIXED AMOUNT SENT TO YOU ON THE 15TH OF
THE MONTH, SIMPLY BY SENDING A LETTER WITH ALL INFORMATION, INCLUDING YOUR
ACCOUNT NUMBER, AND THE DOLLAR AMOUNT ($100 MINIMUM). IF YOU WOULD LIKE
A REGULAR CHECK MAILED TO ANOTHER PERSON OR PLACE, YOUR LETTER MUST BE
SIGNATURE GUARANTEED. SHARES SUBJECT TO A CDSC WHICH ARE REDEEMED BY
SYSTEMATIC CHECK REDEMPTION WILL BE CHARGED THE CDSC.
CORPORATIONS AND ASSOCIATIONS
YOUR LETTER OF INSTRUCTION AND CORPORATE RESOLUTION SHOULD BE SIGNED BY
PERSON(S) AUTHORIZED TO ACT ON THE ACCOUNT, ACCOMPANIED BY SIGNATURE
GUARANTEE(S).
TRUSTS
YOUR LETTER OF INSTRUCTION SHOULD BE SIGNED BY THE TRUSTEE(S) (AS TRUSTEE(S)),
WITH A SIGNATURE GUARANTEE. (IF THE TRUSTEE'S NAME IS NOT REGISTERED ON YOUR
ACCOUNT, PLEASE PROVIDE A COPY OF THE TRUST DOCUMENT, CERTIFIED WITHIN THE
LAST 60 DAYS.)
THROUGH YOUR DEALER
YOUR DEALER MUST RECEIVE YOUR REQUEST BEFORE THE CLOSE OF REGULAR TRADING ON THE
NYSE TO RECEIVE THAT DAY'S NAV. YOUR DEALER WILL BE RESPONSIBLE FOR
FURNISHING ALL NECESSARY DOCUMENTATION TO CALVERT GROUP AND MAY CHARGE
YOU FOR SERVICES PROVIDED.
<PAGE>
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUNDS'
FINANCIAL PERFORMANCE FOR THE PAST 5 FISCAL YEARS (OR IF SHORTER, THE
PERIOD OF THE FUND'S OPERATIONS). THE FUND'S FISCAL YEAR END IS DECEMBER 31.
CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS FOR A SINGLE SHARE, BY FUND
AND CLASS. THE TOTAL RETURNS IN THE TABLE REPRESENT THE RATE THAT AN
INVESTOR WOULD HAVE EARNED (OR LOST) ON AN INVESTMENT IN A FUND (ASSUMING
REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS), AND DOES NOT REFLECT ANY
APPLICABLE FRONT- OR BACK-END SALES CHARGE. THIS INFORMATION HAS BEEN
AUDITED BY PRICEWATERHOUSECOOPERS LLP WHOSE REPORT, ALONG WITH A FUND'S
FINANCIAL STATEMENTS, ARE INCLUDED IN THE FUND'S ANNUAL REPORT, WHICH IS
AVAILABLE UPON REQUEST.
<PAGE>
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
CLASS 0 SHARES 1999 1998 1997
NET ASSET VALUE, BEGINNING $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .030 .032 .033
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.030) (.032) (.033)
NET ASSET VALUE, ENDING $1.00 $1.00 $1.00
TOTAL RETURN 3.04% 3.22% 3.38%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 2.97% 3.17% 3.32%
TOTAL EXPENSES .65% .65% .65%
EXPENSES BEFORE OFFSETS .65% .65% .65%
NET EXPENSES .64% .64% .64%
NET ASSETS, ENDING (IN THOUSANDS)
$1,277,935 $1,355,322 $1,405,350
YEARS ENDED
DECEMBER 31, DECEMBER 31,
CLASS O SHARES 1996 1995
NET ASSET VALUE, BEGINNING $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .033 .040
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.033) (.040)
NET ASSET VALUE, ENDING $1.00 $1.00
TOTAL RETURN 3.33% 4.02%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 3.28% 3.93%
TOTAL EXPENSES .65% .62%
EXPENSES BEFORE OFFSETS .65% .62%
NET EXPENSES .64% .61%
NET ASSETS, ENDING (IN THOUSANDS) $1,550,731 $1,740,839
<PAGE>
LIMITED-TERM PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $10.71 $10.70 $10.69
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .37 .40 .42
NET REALIZED AND UNREALIZED GAIN (LOSS)
(.07) .01 .01
TOTAL FROM INVESTMENT OPERATIONS
.30 .41 .43
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.37) (.40) (.42)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(.07) .01 .01
NET ASSET VALUE, ENDING $10.64 $10.71 $10.70
TOTAL RETURN* 2.86% 3.87% 4.07%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 3.47% 3.70% 3.91%
TOTAL EXPENSES .71% .71% .70%
EXPENSES BEFORE OFFSETS .71% .71% .70%
NET EXPENSES .70% .70% .69%
PORTFOLIO TURNOVER 78% 45% 52%
NET ASSETS, ENDING (IN THOUSANDS)
$523,743 $547,212 $490,180
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $10.72 $10.59
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .44 .45
NET REALIZED AND UNREALIZED GAIN (LOSS) (.03) .13
TOTAL FROM INVESTMENT OPERATIONS .41 .58
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.44) (.45)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(.03) .13
NET ASSET VALUE, ENDING $10.69 $10.72
TOTAL RETURN* 3.94% 5.55%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.12% 4.21%
TOTAL EXPENSES .71% .71%
EXPENSES BEFORE OFFSETS .71% .71%
NET EXPENSES .70% .70%
PORTFOLIO TURNOVER 45% 33%
NET ASSETS, ENDING (IN THOUSANDS) $512,342 $457,707
<PAGE>
INTERMEDIATE PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $10.82 $10.79 $10.56
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .43 .45 .50
NET REALIZED AND UNREALIZED GAIN (LOSS)
(.64) .13 .23
TOTAL FROM INVESTMENT OPERATIONS
(.21) .58 .73
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.43) (.46) (.50)
NET REALIZED GAINS (.06) (.09) -
TOTAL DISTRIBUTIONS (.49) (.55) (.50)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(.70) .03 .23
NET ASSET VALUE, ENDING $10.12 $10.82 $10.79
TOTAL RETURN * (2.01%) 5.46% 7.11%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.12% 4.17% 4.71%
TOTAL EXPENSES .93% .97% .97%
EXPENSES BEFORE OFFSETS .93% .97% .97%
NET EXPENSES .90% .94% .94%
PORTFOLIO TURNOVER 38% 44% 29%
NET ASSETS, ENDING (IN THOUSANDS)
$58,093 $71,065 $48,933
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $10.62 $9.81
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .50 .51
NET REALIZED AND UNREALIZED GAIN (LOSS) (.06) .80
TOTAL FROM INVESTMENT OPERATIONS .44 1.31
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.50) (.50)
TOTAL DISTRIBUTIONS (.50) (.50)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE (.06) .81
NET ASSET VALUE, ENDING $10.56 $10.62
TOTAL RETURN * 4.32% 13.64%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.83% 4.97%
TOTAL EXPENSES 1.04% .96%
EXPENSES BEFORE OFFSETS 1.04% .96%
NET EXPENSES 1.01% .94%
PORTFOLIO TURNOVER 23% 57%
NET ASSETS, ENDING (IN THOUSANDS) $45,612 $40,146
<PAGE>
LONG-TERM PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $16.81 $17.28 $16.81
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .70 .78 .87
NET REALIZED AND UNREALIZED GAIN (LOSS)
(1.44) .06 .50
TOTAL FROM INVESTMENT OPERATIONS
(.74) .84 1.37
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.70) (.80) (.87)
NET REALIZED GAINS (.07) (.51) (.03)
TOTAL DISTRIBUTIONS (.77) (1.31) (.90)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(1.51) (.47) .47
NET ASSET VALUE, ENDING $15.30 $16.81 $17.28
TOTAL RETURN * (4.52%) 5.01% 8.41%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.35% 4.58% 5.16%
TOTAL EXPENSES .88% .87% .87%
EXPENSES BEFORE OFFSETS .88% .87% .87%
NET EXPENSES .84% .84% .85%
PORTFOLIO TURNOVER 80% 72% 41%
NET ASSETS, ENDING (IN THOUSANDS)
$51,146 $57,677 $50,966
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $17.31 $15.83
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .93 .95
NET REALIZED AND UNREALIZED GAIN (LOSS) (.46) 1.53
TOTAL FROM INVESTMENTS .47 2.48
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.95) (.91)
NET REALIZED GAINS (.02) (.09)
TOTAL DISTRIBUTIONS (.97) (1.00)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE (.50) 1.48
NET ASSET VALUE, ENDING $16.81 $17.31
TOTAL RETURN * 2.89% 16.05%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 5.50% 5.71%
TOTAL EXPENSES .89% .87%
EXPENSES BEFORE OFFSETS .89% .87%
NET EXPENSES .86% .85%
PORTFOLIO TURNOVER 41% 58%
NET ASSETS, ENDING (IN THOUSANDS) $52,945 $57,359
(A) ANNUALIZED
* TOTAL RETURN IS NOT ANNUALIZED FOR PERIODS LESS THAN ONE YEAR AND DOES NOT
REFLECT DEDUCTION OF CLASS A FRONT-END SALES CHARGE.
<PAGE>
EXHIBIT A
REDUCED SALES CHARGES -- (CTFR LIMITED-TERM, CMF INTERMEDIATE AND CTFR
LONG-TERM)
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE THROUGH SEVERAL PURCHASE PLANS
AVAILABLE. YOU MUST NOTIFY THE FUND AT THE TIME OF PURCHASE TO TAKE ADVANTAGE OF
THE REDUCED SALES CHARGE.
RIGHTS OF ACCUMULATION CAN BE APPLIED TO SEVERAL ACCOUNTS
THE SALES CHARGE BREAKPOINTS ARE AUTOMATICALLY CALCULATED FOR EACH ACCOUNT BASED
ON THE HIGHER OF COST OR CURRENT VALUE OF SHARES PREVIOUSLY PURCHASED. THIS
PRIVILEGE CAN BE APPLIED TO A FAMILY GROUP OR OTHER QUALIFIED GROUP* UPON
REQUEST. SHARES COULD THEN BE PURCHASED AT THE REDUCED SALES CHARGE WHICH
APPLIES TO THE ENTIRE GROUP; THAT IS, BASED ON THE HIGHER OF COST OR CURRENT
VALUE OF SHARES PREVIOUSLY PURCHASED AND CURRENTLY HELD BY ALL THE MEMBERS OF
THE GROUP.
LETTER OF INTENT
IF YOU (OR YOUR GROUP, AS DESCRIBED ABOVE) PLAN TO PURCHASE $50,000 OR MORE OF
CALVERT FUND SHARES OVER THE NEXT 13 MONTHS, YOUR SALES CHARGE MAY BE REDUCED
THROUGH A "LETTER OF INTENT." YOU PAY THE LOWER SALES CHARGE APPLICABLE TO THE
TOTAL AMOUNT YOU PLAN TO INVEST OVER THE 13-MONTH PERIOD, EXCLUDING ANY MONEY
MARKET PORTFOLIO PURCHASES. PART OF YOUR SHARES WILL BE HELD IN ESCROW, SO THAT
IF YOU DO NOT INVEST THE AMOUNT INDICATED, YOU WILL HAVE TO PAY THE SALES CHARGE
APPLICABLE TO THE SMALLER INVESTMENT ACTUALLY MADE. FOR MORE INFORMATION, SEE
THE SAI.
NEITHER THE FUNDS, NOR CALVERT DISTRIBUTORS, INC. ("CDI"), NOR ANY AFFILIATE
THEREOF WILL REIMBURSE A PLAN OR PARTICIPANT FOR ANY SALES CHARGES PAID PRIOR TO
RECEIPT OF SUCH WRITTEN COMMUNICATION AND CONFIRMATION BY CALVERT GROUP. PLAN
ADMINISTRATORS SHOULD SEND REQUESTS FOR THE WAIVER OF SALES CHARGES BASED ON THE
ABOVE CONDITIONS TO: CALVERT GROUP RETIREMENT PLANS, 4550 MONTGOMERY AVENUE,
SUITE 1000N, BETHESDA, MARYLAND 20814.
* A "QUALIFIED GROUP" IS ONE WHICH:
1. HAS BEEN IN EXISTENCE FOR MORE THAN SIX MONTHS, AND
2. HAS A PURPOSE OTHER THAN ACQUIRING SHARES AT A DISCOUNT, AND
3. SATISFIES UNIFORM CRITERIA WHICH ENABLE CDI AND BROKERS OFFERING SHARES TO
REALIZE ECONOMIES OF SCALE IN DISTRIBUTING SUCH SHARES.
A QUALIFIED GROUP MUST HAVE MORE THAN 10 MEMBERS, MUST BE AVAILABLE TO ARRANGE
FOR GROUP MEETINGS BETWEEN REPRESENTATIVES OF CDI OR BROKERS DISTRIBUTING
SHARES, MUST AGREE TO INCLUDE SALES AND OTHER MATERIALS RELATED TO THE FUNDS IN
ITS PUBLICATIONS AND MAILINGS TO MEMBERS AT REDUCED OR NO COST TO CDI OR
BROKERS. A PENSION PLAN IS NOT A QUALIFIED GROUP FOR RIGHTS OF ACCUMULATION.
<PAGE>
OTHER CIRCUMSTANCES
THERE IS NO SALES CHARGE ON SHARES OF ANY FUND OF THE CALVERT GROUP OF FUNDS
SOLD TO (I) CURRENT OR RETIRED DIRECTORS, TRUSTEES, OR OFFICERS OF THE CALVERT
GROUP OF FUNDS, EMPLOYEES OF CALVERT GROUP, LTD. AND ITS AFFILIATES, OR THEIR
FAMILY MEMBERS; (II) CSIF ADVISORY COUNCIL MEMBERS, DIRECTORS, OFFICERS, AND
EMPLOYEES OF ANY SUBADVISOR FOR THE CALVERT GROUP OF FUNDS, EMPLOYEES OF
BROKER/DEALERS DISTRIBUTING THE FUND'S SHARES AND IMMEDIATE FAMILY MEMBERS OF
THE COUNCIL, SUBADVISOR, OR BROKER/DEALER; (III) PURCHASES MADE THROUGH A
REGISTERED INVESTMENT ADVISOR; (IV) TRUST DEPARTMENTS OF BANKS OR SAVINGS
INSTITUTIONS FOR TRUST CLIENTS OF SUCH BANK OR INSTITUTION, (V) PURCHASES
THROUGH A BROKER MAINTAINING AN OMNIBUS ACCOUNT WITH THE FUND, PROVIDED THE
PURCHASES ARE MADE BY (A) INVESTMENT ADVISORS OR FINANCIAL PLANNERS PLACING
TRADES FOR THEIR OWN ACCOUNTS (OR THE ACCOUNTS OF THEIR CLIENTS) AND WHO CHARGE
A MANAGEMENT, CONSULTING, OR OTHER FEE FOR THEIR SERVICES; OR (B) CLIENTS OF
SUCH INVESTMENT ADVISORS OR FINANCIAL PLANNERS WHO PLACE TRADES FOR THEIR OWN
ACCOUNTS IF SUCH ACCOUNTS ARE LINKED TO THE MASTER ACCOUNT OF SUCH INVESTMENT
ADVISOR OR FINANCIAL PLANNER ON THE BOOKS AND RECORDS OF THE BROKER OR AGENT; OR
(C) RETIREMENT AND DEFERRED COMPENSATION PLANS AND TRUSTS, INCLUDING, BUT NOT
LIMITED TO, THOSE DEFINED IN SECTION 401(A) OR SECTION 403(B) OF THE I.R.C., AND
"RABBI TRUSTS."
ESTABLISHED ACCOUNTS
SHARES OF THE LONG-TERM PORTFOLIO MAY BE SOLD AT NET ASSET VALUE TO YOU IF YOUR
ACCOUNT WAS ESTABLISHED ON OR BEFORE SEPTEMBER 15, 1987, OR APRIL 30, 1988, FOR
THE LIMITED-TERM PORTFOLIO.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS FROM OTHER CALVERT GROUP FUNDS
YOU MAY PREARRANGE TO HAVE YOUR DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS FROM
ANOTHER CALVERT GROUP FUND AUTOMATICALLY INVESTED IN ANOTHER ACCOUNT WITH NO
ADDITIONAL SALES CHARGE.
PURCHASES MADE AT NAV
EXCEPT FOR MONEY MARKET FUNDS, IF YOU MAKE A PURCHASE AT NAV, YOU MAY EXCHANGE
THAT AMOUNT TO ANOTHER CALVERT GROUP FUND AT NO ADDITIONAL SALES CHARGE.
REINSTATEMENT PRIVILEGE
IF YOU REDEEM SHARES AND THEN WITHIN 60 DAYS DECIDE TO REINVEST IN THE SAME
FUND, YOU MAY DO SO AT THE NET ASSET VALUE NEXT COMPUTED AFTER THE REINVESTMENT
ORDER IS RECEIVED, WITHOUT A SALES CHARGE. YOU MAY USE THE REINSTATEMENT
PRIVILEGE ONLY ONCE. THE FUNDS RESERVE THE RIGHT TO MODIFY OR ELIMINATE THIS
PRIVILEGE.
<PAGE>
EXHIBIT B
SERVICE FEES AND ARRANGEMENTS WITH DEALERS
CALVERT DISTRIBUTORS, INC., EACH FUND'S UNDERWRITER, PAYS DEALERS A COMMISSION,
OR REALLOWANCE (EXPRESSED AS A PERCENTAGE OF THE OFFERING PRICE) WHEN YOU
PURCHASE SHARES. CDI ALSO PAYS DEALERS AN ONGOING SERVICE FEE WHILE YOU OWN
SHARES OF A FUND (EXPRESSED AS AN ANNUAL PERCENTAGE RATE OF AVERAGE DAILY NET
ASSETS HELD IN CALVERT ACCOUNTS BY THAT DEALER). THE TABLE BELOW SHOWS THE
AMOUNT OF PAYMENT WHICH DIFFERS DEPENDING ON THE CLASS.
MAXIMUM COMMISSION/SERVICE FEES
CTFR MONEY MARKET (CLASS O) NONE/0.25%
CTFR LIMITED-TERM 1.00%/0.15%
CMF INTERMEDIATE 2.25%/0.15%**
CTFR LONG-TERM 3.00%/0.25%**
**IF FINDER'S FEE IS PAID (SEE BELOW), CMF INTERMEDIATE AND CTFR LONG-TERM
SERVICE FEE BEGINS 13TH MONTH AFTER PURCHASE.
OCCASIONALLY, CDI MAY REALLOW TO DEALERS THE FULL FRONT-END SALES CHARGE. CDI
MAY ALSO PAY ADDITIONAL CONCESSIONS, INCLUDING NON-CASH PROMOTIONAL INCENTIVES,
SUCH AS MERCHANDISE OR TRIPS, TO BROKERS EMPLOYING REGISTERED REPRESENTATIVES
WHO HAVE SOLD OR ARE EXPECTED TO SELL A MINIMUM DOLLAR AMOUNT OF SHARES OF THE
FUNDS AND/OR SHARES OF OTHER FUNDS UNDERWRITTEN BY CDI. CDI MAY MAKE EXPENSE
REIMBURSEMENTS FOR SPECIAL TRAINING OF A BROKER'S REGISTERED REPRESENTATIVES,
ADVERTISING OR EQUIPMENT, OR TO DEFRAY THE EXPENSES OF SALES CONTESTS. CAMCO,
CDI, OR THEIR AFFILIATES MAY PAY, FROM THEIR OWN RESOURCES, CERTAIN
BROKER-DEALERS AND/OR OTHER PERSONS, FOR THE SALE AND DISTRIBUTION OF THE
SECURITIES OR FOR SERVICES TO THE FUND. THESE AMOUNTS MAY BE SIGNIFICANT.
PAYMENTS MAY INCLUDE ADDITIONAL COMPENSATION BEYOND THE REGULARLY SCHEDULED
RATES, AND FINDER'S FEES. CDI PAYS DEALERS A FINDER'S FEE ON CTFR LONG-TERM
SHARES PURCHASED AT NAV IN ACCOUNTS WITH $1 MILLION OR MORE. THE CTFR LONG-TERM
FINDER'S FEE IS 1% OF THE NAV PURCHASE AMOUNT ON THE FIRST $2 MILLION, .80% ON
$2 TO $3 MILLION, .50% ON $3 TO $50 MILLION, .25% ON $50 TO $100 MILLION, AND
.15 OVER $100 MILLION. CDI ALSO PAYS DEALERS A FINDER'S FEE ON CTFR LIMITED-TERM
SHARES PURCHASED AT NAV IN ACCOUNTS WITH $250,000 OR MORE. THE CTFR LIMITED-TERM
FINDER'S FEE IS 0.10% OF THE NAV PURCHASE AMOUNT. CDI RESERVES THE RIGHT TO
RECOUP ANY PORTION OF THE AMOUNT PAID TO THE DEALER IF THE INVESTOR REDEEMS SOME
OR ALL OF THE SHARES FROM THE FUNDS WITHIN 12 MONTHS OF THE DATE OF PURCHASE.
ALL PAYMENTS WILL BE IN COMPLIANCE WITH THE RULES OF THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC.
<PAGE>
TO OPEN AN ACCOUNT:
800-368-2748
PERFORMANCE AND PRICES:
WWW.CALVERT.COM
CALVERT INFORMATION NETWORK
24 HOURS, 7 DAYS A WEEK
800-368-2745
SERVICE FOR EXISTING ACCOUNTS:
SHAREHOLDERS 800-368-2745
BROKERS 800-368-2746
TDD FOR HEARING-IMPAIRED:
800-541-1524
BRANCH OFFICE:
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
REGISTERED, CERTIFIED OR
OVERNIGHT MAIL:
CALVERT GROUP
C/O NFDS
330 WEST 9TH STREET
KANSAS CITY, MO 64105
CALVERT GROUP WEB-SITE:
WWW.CALVERT.COM
PRINCIPAL UNDERWRITER
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
<PAGE>
FOR INVESTORS WHO WANT MORE INFORMATION ABOUT THE FUNDS, THE FOLLOWING DOCUMENTS
ARE AVAILABLE FREE UPON REQUEST:
ANNUAL/SEMI-ANNUAL REPORTS: ADDITIONAL INFORMATION ABOUT EACH FUND'S INVESTMENTS
IS AVAILABLE IN THE FUND'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. IN
EACH FUND'S ANNUAL REPORT, YOU WILL FIND A DISCUSSION OF THE MARKET CONDITIONS
AND INVESTMENT STRATEGIES THAT SIGNIFICANTLY AFFECTED THE FUND'S PERFORMANCE
DURING ITS LAST FISCAL YEAR.
STATEMENT OF ADDITIONAL INFORMATION (SAI): THE SAI FOR EACH FUND PROVIDES MORE
DETAILED INFORMATION ABOUT THE FUND AND IS INCORPORATED INTO THIS PROSPECTUS BY
REFERENCE.
YOU CAN GET FREE COPIES OF REPORTS AND SAIS, REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING YOUR FINANCIAL
PROFESSIONAL, OR THE FUNDS AT:
CALVERT GROUP
4550 MONTGOMERY AVE., SUITE 1000N
BETHESDA, MD 20814
TELEPHONE: 1-800-368-2745
CALVERT GROUP WEB-SITE:
WWW.CALVERT.COM
YOU CAN REVIEW THE FUNDS' REPORTS AND SAIS AT THE PUBLIC REFERENCE ROOM OF THE
SECURITIES AND EXCHANGE COMMISSION. YOU CAN GET TEXT ONLY COPIES:
- - FOR A FEE, BY WRITING TO OR CALLING THE PUBLIC REFERENCE SECTION OF THE
COMMISSION, WASHINGTON, D.C. 20549-0102, TELEPHONE: 202-942-8090.
- - FREE FROM THE COMMISSION'S INTERNET WEBSITE AT HTTP://WWW.SEC.GOV.
INVESTMENT COMPANY ACT FILE: NO. 811-3101 (CTFR)
NO. 811-6525 (CMF)
CALVERT
TAX-FREE RESERVES CALIFORNIA
MONEY MARKET PORTFOLIO
PROSPECTUS
APRIL 30, 2000
<PAGE>
PROSPECTUS
APRIL 30, 2000
CALVERT TAX-FREE RESERVES (CTFR)
CALIFORNIA MONEY MARKET PORTFOLIO
ABOUT THE FUND
2 INVESTMENT OBJECTIVE, STRATEGY, PAST PERFORMANCE
5 FEES AND EXPENSES
ABOUT YOUR INVESTMENT
6 MANAGEMENT AND ADVISORY FEES
7 HOW TO BUY SHARES
7 IMPORTANT - HOW SHARES ARE PRICED
8 WHEN YOUR ACCOUNT WILL BE CREDITED
8 OTHER CALVERT GROUP FEATURES
(EXCHANGES, MINIMUM ACCOUNT BALANCE, ETC.)
10 DIVIDENDS, CAPITAL GAINS AND TAXES
12 HOW TO SELL SHARES
14 FINANCIAL HIGHLIGHTS
16 SERVICE FEES AND ARRANGEMENTS
WITH DEALERS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
INVESTMENT OBJECTIVE, STRATEGY AND PAST PERFORMANCE
OBJECTIVE
CTFR CALIFORNIA MONEY MARKET (THE "FUND") SEEKS TO EARN THE HIGHEST LEVEL OF
INTEREST INCOME, EXEMPT FROM FEDERAL AND CALIFORNIA STATE INCOME TAXES, AS IS
CONSISTENT WITH PRUDENT INVESTMENT MANAGEMENT, PRESERVATION OF CAPITAL, AND THE
QUALITY AND MATURITY CHARACTERISTICS OF THE FUND.
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS
CTFR CALIFORNIA MONEY MARKET INVESTS IN FIXED AND FLOATING RATE MUNICIPAL BONDS
AND NOTES, VARIABLE RATE DEMAND NOTES, TAX EXEMPT COMMERCIAL PAPER, AND OTHER
HIGH QUALITY, SHORT TERM MUNICIPAL OBLIGATIONS. THE ADVISOR LOOKS FOR SECURITIES
WITH STRONG CREDIT QUALITY THAT ARE ATTRACTIVELY PRICED. THIS MAY INCLUDE
INVESTMENTS WITH UNUSUAL FEATURES OR PRIVATELY PLACED ISSUES, THAT ARE NOT
WIDELY FOLLOWED IN THE FIXED INCOME MARKETPLACE. ALL INVESTMENTS MUST COMPLY
WITH THE SEC MONEY MARKET FUND REQUIREMENTS.
UNDER NORMAL MARKET CONDITIONS, THE FUND WILL INVEST AT LEAST 80% OF ITS TOTAL
ASSETS IN MUNICIPAL OBLIGATIONS WHOSE INTEREST IS EXEMPT FROM FEDERAL AND
CALIFORNIA STATE INCOME TAX. THE FUND WILL ALSO ATTEMPT TO INVEST THE REMAINING
20% OF ITS TOTAL ASSETS IN SUCH OBLIGATIONS, BUT MAY INVEST IT IN MUNICIPAL
OBLIGATIONS OF OTHER STATES, TERRITORIES AND POSSESSIONS OF THE UNITED STATES,
THE DISTRICT OF COLUMBIA AND THEIR RESPECTIVE AUTHORITIES, AGENCIES,
INSTRUMENTALITIES AND POLITICAL SUBDIVISIONS OR IN SHORT TERM TAXABLE MONEY
MARKET TYPE INSTRUMENTS. DIVIDENDS PAID BY THE FUND WHICH ARE DERIVED FROM
INTEREST ATTRIBUTABLE TO CALIFORNIA MUNICIPAL OBLIGATIONS WILL BE EXEMPT FROM
FEDERAL AND CALIFORNIA STATE PERSONAL INCOME TAXES. DIVIDENDS DERIVED FROM
INTEREST ON TAX EXEMPT OBLIGATIONS OF OTHER GOVERNMENTAL ISSUERS WILL BE EXEMPT
FROM FEDERAL INCOME TAX, BUT WILL BE SUBJECT TO CALIFORNIA STATE INCOME TAXES.
BECAUSE THE FUND INVESTS PRIMARILY IN CALIFORNIA MUNICIPAL OBLIGATIONS, THE
ECONOMY AND POLITICAL CLIMATE IN THAT STATE HAVE A GREAT IMPACT ON THE FUND. THE
FUND MAY INVEST UP TO 25% OF ITS ASSETS IN A SINGLE ISSUER.
MANY OF THE INSTRUMENTS HELD BY THE FUND ARE SUPPORTED A CREDIT FACILITY (TO
IMPROVE CREDIT QUALITY) OR LIQUIDITY FACILITY (TO SHORTEN THE MATURITY) PROVIDED
BY BANKS; THUS, THE FUND HAS A WIDE EXPOSURE TO THE BANKING INDUSTRY.
THE FUND MAY PURCHASE SECURITIES THAT HAVE NOT BEEN RATED BY A RATING AGENCY, SO
LONG AS THE ADVISOR DETERMINES THEY ARE OF COMPARABLE CREDIT QUALITY TO RATED
SECURITIES PERMISSIBLE FOR THE FUND.
UNRATED AND PRIVATELY PLACED SECURITIES MAY BE LESS LIQUID THAN THOSE THAT ARE
RATED OR HAVE AN ACTIVE TRADING MARKET.
<PAGE>
THE FUND'S YIELD WILL CHANGE IN RESPONSE TO MARKET INTEREST RATES. IN GENERAL,
AS MARKET RATES GO UP SO WILL THE FUND'S YIELD, AND VICE VERSA. ALTHOUGH THE
FUND TRIES TO KEEP THE VALUE OF ITS SHARES CONSTANT AT $1.00 PER SHARE, EXTREME
CHANGES IN MARKET RATES, AND OR SUDDEN CREDIT DETERIORATION OF A HOLDING COULD
CAUSE THE VALUE TO DECREASE. THE FUND LIMITS THE AMOUNT IT INVESTS IN ANY ONE
ISSUER TO TRY TO LESSEN ITS EXPOSURE.
IN ADDITION TO INTEREST RATE RISK AND CREDIT RISK, DIFFERENT TYPES OF MUNICIPAL
BONDS MAY BE AFFECTED DIFFERENTLY, BASED ON MANY FACTORS, INCLUDING ECONOMIC AND
REGULATORY DEVELOPMENTS, CHANGES OR PROPOSED CHANGES IN THE FEDERAL AND STATE
TAX STRUCTURE, DEREGULATION, AND COURT RULINGS, AMONG OTHER FACTORS.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
<PAGE>
CTFR CALIFORNIA MONEY MARKET PERFORMANCE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG TERM
PERFORMANCE. THE CHART AND TABLE PROVIDE SOME INDICATION OF THE RISKS OF
INVESTING IN THE FUND. THE CHART SHOWS HOW THE PERFORMANCE HAS VARIED FROM YEAR
TO YEAR. THE TABLE COMPARES THE FUND'S RETURNS OVER TIME TO THE LIPPER
CALIFORNIA TAX EXEMPT MONEY MARKET INDEX, A COMPOSITE INDEX OF THE ANNUAL RETURN
OF MUTUAL FUNDS THAT HAVE AN INVESTMENT GOAL SIMILAR TO THAT OF THE FUND. THE
FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE HOW THE FUND WILL PERFORM
IN THE FUTURE.
CTFR CALIFORNIA MONEY MARKET
YEAR-BY-YEAR TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q2 '90 1.52%
WORST QUARTER (OF PERIODS SHOWN) Q1 '93 0.53%
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
1 YEAR 5 YEAR 10 YEAR
CTFR CALIFORNIA MONEY MARKET 2.80% 3.25% 3.48%
LIPPER CALIFORNIA TAX EXEMPT
MONEY MARKET INDEX 2.52% 3.03% 3.14%
FOR CURRENT YIELD INFORMATION CALL 800-368-2745, OR VISIT CALVERT GROUP'S WEB
SITE AT WWW.CALVERT.COM
<PAGE>
FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF THE FUND.
SHAREHOLDER FEES
(PAID DIRECTLY FROM YOUR ACCOUNT)
MAXIMUM SALES CHARGE (LOAD) NONE
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
MAXIMUM ACCOUNT FEE 1
ANNUAL FUND OPERATING EXPENSES2
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
MANAGEMENT FEES .51%
DISTRIBUTION AND SERVICE (12B-1) FEES NONE
OTHER EXPENSES .15%
TOTAL ANNUAL FUND OPERATING EXPENSES .66%
1 FOR EACH ACCOUNT WITH A BALANCE OF LESS THAN $1,000, THE FUND CHARGES A
MONTHLY ACCOUNT MAINTENANCE FEE OF $3.
2 EXPENSES ARE BASED ON THE FUND'S MOST RECENT FISCAL YEAR. MANAGEMENT FEES
INCLUDE THE ADMINISTRATIVE FEE PAID BY THE FUND TO CALVERT
ADMINISTRATIVE SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR, CALVERT
ASSET MANAGEMENT COMPANY, INC. ("CAMCO").
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN A FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE EXAMPLE ASSUMES THAT:
- - YOU INVEST $10,000 IN THE FUND FOR THE TIME PERIODS INDICATED;
- - YOUR INVESTMENT HAS A 5% RETURN EACH YEAR; AND
- - THE FUND'S OPERATING EXPENSES REMAIN THE SAME.
ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, UNDER THESE ASSUMPTIONS YOUR
COSTS WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
CTFR CALIFORNIA
MONEY MARKET $67 $211 $368 $822
<PAGE>
MANAGEMENT AND ADVISORY FEES
ABOUT CALVERT GROUP
CAMCO (4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MD 20814) IS THE FUNDS'
INVESTMENT ADVISOR. CAMCO PROVIDES THE FUNDS WITH INVESTMENT SUPERVISION AND
MANAGEMENT AND OFFICE SPACE; FURNISHES EXECUTIVE AND OTHER PERSONNEL TO THE
FUNDS, AND PAYS THE SALARIES AND FEES OF ALL TRUSTEES/DIRECTORS WHO ARE
AFFILIATED PERSONS OF THE ADVISOR. IT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1976.
CAMCO IS THE INVESTMENT ADVISOR FOR OVER 25 MUTUAL FUND PORTFOLIOS, INCLUDING
THE FIRST AND LARGEST FAMILY OF SOCIALLY SCREENED FUNDS. AS OF DECEMBER 31,
1999, CAMCO HAD OVER $6 BILLION IN ASSETS UNDER MANAGEMENT.
ADVISORY FEES
THE FOLLOWING TABLE SHOWS THE AGGREGATE ANNUAL ADVISORY FEE PAID TO CAMCO BY THE
FUND FOR THE MOST RECENT FISCAL YEAR AS A PERCENTAGE OF THE FUND'S AVERAGE DAILY
NET ASSETS.
FUND ADVISORY FEE
CTFR CALIFORNIA MONEY MARKET .50%
<PAGE>
HOW TO BUY SHARES
COMPLETE AND SIGN AN APPLICATION FOR EACH NEW ACCOUNT. FOR MORE INFORMATION,
CONTACT YOUR FINANCIAL PROFESSIONAL OR OUR SHAREHOLDER SERVICES DEPARTMENT AT
800 368 2748.
MINIMUM TO OPEN AN ACCOUNT MINIMUM ADDITIONAL INVESTMENTS
$2,000 $250
PLEASE MAKE YOUR CHECK PAYABLE
TO THE FUND AND MAIL IT TO:
NEW ACCOUNTS
(INCLUDE APPLICATION)
CALVERT GROUP
P.O. BOX 219544
KANSAS CITY, MO 64121-9544
SUBSEQUENT INVESTMENTS
(INCLUDE INVESTMENT SLIP)
CALVERT GROUP
P.O. BOX 219739
KANSAS CITY, MO 64121-9739
BY REGISTERED, CALVERT GROUP
CERTIFIED, OR C/O NFDS,
OVERNIGHT MAIL 330 WEST 9TH ST.
KANSAS CITY, MO 64105-1807
AT THE CALVERT OFFICE: VISIT THE CALVERT OFFICE TO MAKE
INVESTMENTS BY CHECK.
IMPORTANT - HOW SHARES ARE PRICED
THE PRICE OF SHARES IS BASED ON THE FUND'S NET ASSET VALUE ("NAV"). NAV IS
COMPUTED BY ADDING THE VALUE OF THE FUND'S HOLDINGS PLUS OTHER ASSETS,
SUBTRACTING LIABILITIES, AND THEN DIVIDING THE RESULT BY THE NUMBER OF SHARES
OUTSTANDING.
CTFR CALIFORNIA MONEY MARKET IS VALUED ACCORDING TO THE "AMORTIZED COST" METHOD,
WHICH IS INTENDED TO STABILIZE THE NAV AT $1 PER SHARE.
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). THE FUND IS OPEN FOR BUSINESS EACH DAY THE NYSE IS OPEN.
PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY
AND VETERANS' DAY, WHEN THE NYSE IS OPEN AND THE FUND IS OPEN BUT PURCHASES
CANNOT BE RECEIVED BECAUSE THE BANKS ARE CLOSED.
<PAGE>
WHEN YOUR ACCOUNT WILL BE CREDITED
ALL OF YOUR PURCHASES MUST BE MADE IN US DOLLARS. NO CASH OR THIRD PARTY CHECKS
WILL BE ACCEPTED. NO CREDIT CARD OR CREDIT LOAN CHECKS WILL BE ACCEPTED. THE
FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES FOR A PERIOD OF TIME
OR TO REJECT ANY SPECIFIC PURCHASE ORDER. AS A CONVENIENCE, CHECK PURCHASES
RECEIVED AT CALVERT'S OFFICE IN BETHESDA, MARYLAND WILL BE SENT BY OVERNIGHT
DELIVERY TO THE TRANSFER AGENT AND WILL BE CREDITED THE NEXT BUSINESS DAY UPON
RECEIPT. ANY CHECK PURCHASE RECEIVED WITHOUT AN INVESTMENT SLIP MAY CAUSE
DELAYED CREDITING. ANY PURCHASE LESS THAN THE $250 MINIMUM FOR SUBSEQUENT
INVESTMENTS WILL BE CHARGED A SERVICE FEE OF $3. IF YOUR CHECK DOES NOT CLEAR
YOUR BANK, YOUR PURCHASE WILL BE CANCELED AND YOU WILL BE CHARGED A $25 FEE PLUS
ANY COSTS INCURRED.
YOUR PURCHASE WILL BE CREDITED AT THE NET ASSET VALUE NEXT CALCULATED AFTER YOUR
ORDER IS RECEIVED AND ACCEPTED. IF THE TRANSFER AGENT RECEIVES YOUR WIRE
PURCHASE BY 5 P.M. ET, YOUR ACCOUNT WILL BEGIN EARNING DIVIDENDS ON THE NEXT
BUSINESS DAY. EXCHANGES BEGIN EARNING DIVIDENDS THE NEXT BUSINESS DAY AFTER THE
EXCHANGE REQUEST IS RECEIVED BY MAIL OR TELEPHONE. PURCHASES RECEIVED BY CHECK
WILL BEGIN EARNING DIVIDENDS THE NEXT BUSINESS DAY AFTER THEY ARE CREDITED TO
THE ACCOUNT.
OTHER CALVERT GROUP FEATURES
CALVERT INFORMATION NETWORK
FOR 24 HOUR PERFORMANCE AND ACCOUNT INFORMATION CALL 800 368 2745 OR VISIT
WWW.CALVERT.COM
YOU CAN OBTAIN CURRENT PERFORMANCE AND PRICING INFORMATION, VERIFY ACCOUNT
BALANCES, AND AUTHORIZE CERTAIN TRANSACTIONS WITH THE CONVENIENCE OF ONE PHONE
CALL, 24 HOURS A DAY.
ACCOUNT SERVICES
BY SIGNING UP FOR SERVICES WHEN YOU OPEN YOUR ACCOUNT, YOU AVOID HAVING TO
OBTAIN A SIGNATURE GUARANTEE. IF YOU WISH TO ADD SERVICES AT A LATER DATE, A
SIGNATURE GUARANTEE TO VERIFY YOUR SIGNATURE MAY BE OBTAINED FROM ANY BANK,
TRUST COMPANY AND SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, BROKER DEALER FIRM
OR MEMBER OF A DOMESTIC STOCK EXCHANGE. A NOTARY PUBLIC CANNOT PROVIDE A
SIGNATURE GUARANTEE.
CALVERT MONEY CONTROLLER
CALVERT MONEY CONTROLLER ALLOWS YOU TO PURCHASE OR SELL SHARES BY ELECTRONIC
FUNDS TRANSFER WITHOUT THE TIME DELAY OF MAILING A CHECK OR THE ADDED EXPENSE OF
A WIRE. USE THIS SERVICE TO TRANSFER UP TO $300,000 ELECTRONICALLY. ALLOW ONE OR
TWO BUSINESS DAYS AFTER YOU PLACE YOUR REQUEST FOR THE TRANSFER TO TAKE PLACE.
MONEY TRANSFERRED TO PURCHASE NEW SHARES WILL BE SUBJECT TO A HOLD OF UP TO 10
BUSINESS DAYS BEFORE REDEMPTION REQUESTS WILL BE HONORED. TRANSACTION REQUESTS
<PAGE>
MUST BE RECEIVED BY 4 P.M. ET. YOU MAY REQUEST THIS SERVICE ON YOUR INITIAL
ACCOUNT APPLICATION. CALVERT MONEY CONTROLLER TRANSACTIONS RETURNED FOR
INSUFFICIENT FUNDS WILL INCUR A $25 CHARGE.
TELEPHONE TRANSACTIONS
YOU MAY PURCHASE, REDEEM, OR EXCHANGE SHARES, WIRE FUNDS AND USE CALVERT MONEY
CONTROLLER BY TELEPHONE IF YOU HAVE PRE AUTHORIZED SERVICE INSTRUCTIONS. YOU
RECEIVE TELEPHONE PRIVILEGES AUTOMATICALLY WHEN YOU OPEN YOUR ACCOUNT UNLESS YOU
ELECT OTHERWISE. FOR OUR MUTUAL PROTECTION, THE FUND, THE SHAREHOLDER SERVICING
AGENT AND THEIR AFFILIATES USE PRECAUTIONS SUCH AS VERIFYING SHAREHOLDER
IDENTITY AND RECORDING TELEPHONE CALLS TO CONFIRM INSTRUCTIONS GIVEN BY PHONE. A
CONFIRMATION STATEMENT IS SENT FOR MOST TRANSACTIONS; PLEASE REVIEW THIS
STATEMENT AND VERIFY THE ACCURACY OF YOUR TRANSACTION IMMEDIATELY.
EXCHANGES
CALVERT GROUP OFFERS A WIDE VARIETY OF INVESTMENT OPTIONS THAT INCLUDES COMMON
STOCK FUNDS, TAX EXEMPT AND CORPORATE BOND FUNDS, AND MONEY MARKET FUNDS (CALL
YOUR FINANCIAL PROFESSIONAL OR CALVERT REPRESENTATIVE FOR MORE INFORMATION). WE
MAKE IT EASY FOR YOU TO PURCHASE SHARES IN OTHER CALVERT FUNDS IF YOUR
INVESTMENT GOALS CHANGE. THE EXCHANGE PRIVILEGE OFFERS FLEXIBILITY BY ALLOWING
YOU TO EXCHANGE SHARES ON WHICH YOU HAVE ALREADY PAID A SALES CHARGE FROM ONE
MUTUAL FUND TO ANOTHER AT NO ADDITIONAL CHARGE.
COMPLETE AND SIGN AN ACCOUNT APPLICATION, TAKING CARE TO REGISTER YOUR NEW
ACCOUNT IN THE SAME NAME AND TAXPAYER IDENTIFICATION NUMBER AS YOUR EXISTING
CALVERT ACCOUNT(S). EXCHANGE INSTRUCTIONS MAY THEN BE GIVEN BY TELEPHONE IF
TELEPHONE REDEMPTIONS HAVE BEEN AUTHORIZED AND THE SHARES ARE NOT IN CERTIFICATE
FORM.
BEFORE YOU MAKE AN EXCHANGE, PLEASE NOTE THE FOLLOWING:
EACH EXCHANGE REPRESENTS THE SALE OF SHARES OF ONE FUND AND THE PURCHASE OF
SHARES OF ANOTHER. THEREFORE, YOU COULD REALIZE A TAXABLE GAIN OR LOSS.
YOU MAY EXCHANGE SHARES ACQUIRED BY REINVESTMENT OF DIVIDENDS OR DISTRIBUTIONS
INTO ANOTHER CALVERT FUND AT NO ADDITIONAL CHARGE.
SHARES MAY ONLY BE EXCHANGED FOR SHARES OF THE SAME CLASS OF ANOTHER CALVERT
FUND.
EXCHANGE REQUESTS WILL NOT BE ACCEPTED ON ANY DAY WHEN CALVERT IS OPEN BUT THE
FUND'S CUSTODIAN BANK IS CLOSED (E.G., COLUMBUS DAY AND VETERAN'S DAY); THESE
EXCHANGE REQUESTS WILL BE PROCESSED THE NEXT DAY THE FUND'S CUSTODIAN BANK IS
OPEN.
THE FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR CANCEL
<PAGE>
ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR CONDITIONS OF
PURCHASE OF SHARES OF ANY FUND; OR WITHDRAW ALL OR ANY PART OF THE OFFERING MADE
BY THIS PROSPECTUS. TO PROTECT THE INTERESTS OF INVESTORS, THE FUND AND THE
DISTRIBUTOR MAY REJECT ANY ORDER CONSIDERED MARKET-TIMING ACTIVITY.
THE FUND RESERVES THE RIGHT TO TERMINATE OR MODIFY THE EXCHANGE PRIVILEGE WITH
60 DAYS' WRITTEN NOTICE.
ELECTRONIC DELIVERY OF PROSPECTUSES AND SHAREHOLDER REPORTS
YOU MAY REQUEST TO RECEIVE ELECTRONIC DELIVERY OF PROSPECTUSES AND ANNUAL AND
SEMI-ANNUAL REPORTS.
COMBINED GENERAL MAILINGS (HOUSEHOLDING)
MULTIPLE ACCOUNTS WITH THE SAME SOCIAL SECURITY NUMBER WILL RECEIVE ONE MAILING
PER HOUSEHOLD OF INFORMATION SUCH AS PROSPECTUSES AND SEMI ANNUAL AND ANNUAL
REPORTS. YOU MAY REQUEST FURTHER GROUPING OF ACCOUNTS TO RECEIVE FEWER MAILINGS.
SEPARATE STATEMENTS WILL BE GENERATED FOR EACH SEPARATE ACCOUNT AND WILL BE
MAILED IN ONE ENVELOPE FOR EACH COMBINATION ABOVE.
SPECIAL SERVICES AND CHARGES
THE FUND PAYS FOR SHAREHOLDER SERVICES BUT NOT FOR SPECIAL SERVICES THAT ARE
REQUIRED BY A FEW SHAREHOLDERS, SUCH AS A REQUEST FOR A HISTORICAL TRANSCRIPT OF
AN ACCOUNT OR A STOP PAYMENT ON A DRAFT. YOU MAY BE REQUIRED TO PAY A FEE FOR
THESE SPECIAL SERVICES; FOR EXAMPLE, THE FEE FOR STOP PAYMENTS IS $25. THE FUND
WILL CHARGE A $25 SERVICE FEE FOR DRAFTS RETURNED FOR INSUFFICIENT OR
UNCOLLECTED FUNDS.
IF YOU ARE PURCHASING SHARES THROUGH A PROGRAM OF SERVICES OFFERED BY A
BROKER/DEALER OR FINANCIAL INSTITUTION, YOU SHOULD READ THE PROGRAM MATERIALS
TOGETHER WITH THIS PROSPECTUS. CERTAIN FEATURES MAY BE MODIFIED IN THESE
PROGRAMS. INVESTORS MAY BE CHARGED A FEE IF THEY EFFECT TRANSACTIONS IN FUND
SHARES THROUGH A BROKER OR AGENT.
MINIMUM ACCOUNT BALANCE
PLEASE MAINTAIN A BALANCE IN YOUR ACCOUNT OF AT LEAST $1,000. IF THE BALANCE IN
YOUR ACCOUNT FALLS BELOW THE MINIMUM DURING A MONTH, A $3 MONTHLY FEE MAY BE
CHARGED TO YOUR ACCOUNT.
DIVIDENDS, CAPITAL GAINS AND TAXES
THE FUND PAYS DIVIDENDS FROM ITS NET INVESTMENT INCOME AS SHOWN BELOW. NET
INVESTMENT INCOME CONSISTS OF INTEREST INCOME, NET SHORT TERM CAPITAL GAINS, IF
ANY, AND DIVIDENDS DECLARED AND PAID ON INVESTMENTS, LESS EXPENSES.
DISTRIBUTIONS OF NET SHORT TERM CAPITAL GAINS (TREATED AS DIVIDENDS FOR TAX
PURPOSES) AND NET LONG TERM CAPITAL GAINS, IF ANY, ARE NORMALLY PAID ONCE A
YEAR; HOWEVER, THE FUND DOES NOT ANTICIPATE MAKING ANY SUCH DISTRIBUTIONS UNLESS
<PAGE>
AVAILABLE CAPITAL LOSS CARRYOVERS HAVE BEEN USED OR HAVE EXPIRED. DIVIDENDS IN
CTFR CALIFORNIA MONEY MARKET ARE ACCRUED DAILY AND PAID MONTHLY.
DIVIDEND PAYMENT OPTIONS
DIVIDENDS AND ANY DISTRIBUTIONS ARE AUTOMATICALLY REINVESTED IN THE SAME FUND AT
NAV (WITHOUT SALES CHARGE), UNLESS YOU ELECT TO HAVE AMOUNTS OF $10 OR MORE PAID
IN CASH (BY CHECK OR BY CALVERT MONEY CONTROLLER). DIVIDENDS AND DISTRIBUTIONS
FROM ANY CALVERT GROUP FUND MAY BE AUTOMATICALLY INVESTED IN AN IDENTICALLY
REGISTERED ACCOUNT IN ANY OTHER CALVERT GROUP FUND AT NAV. IF REINVESTED IN THE
SAME ACCOUNT, NEW SHARES WILL BE PURCHASED AT NAV ON THE REINVESTMENT DATE,
WHICH IS GENERALLY 1 TO 3 DAYS PRIOR TO THE PAYMENT DATE. YOU MUST NOTIFY THE
FUND IN WRITING TO CHANGE YOUR PAYMENT OPTIONS. IF YOU ELECT TO HAVE DIVIDENDS
AND/OR DISTRIBUTIONS PAID IN CASH, AND THE US POSTAL SERVICE RETURNS THE CHECK
AS UNDELIVERABLE, IT, AS WELL AS FUTURE DIVIDENDS AND DISTRIBUTIONS, WILL BE
REINVESTED IN ADDITIONAL SHARES.
FEDERAL TAXES
DIVIDENDS DERIVED FROM INTEREST ON MUNICIPAL OBLIGATIONS CONSTITUTE EXEMPT
INTEREST DIVIDENDS, ON WHICH YOU ARE NOT SUBJECT TO FEDERAL INCOME TAX. HOWEVER,
DIVIDENDS WHICH ARE FROM TAXABLE INTEREST AND ANY DISTRIBUTIONS OF SHORT TERM
CAPITAL GAIN ARE TAXABLE TO YOU AS ORDINARY INCOME. IF THE FUND MAKES ANY
DISTRIBUTIONS OF LONG TERM CAPITAL GAINS, THEN THESE ARE TAXABLE TO YOU AS LONG
TERM CAPITAL GAINS, REGARDLESS OF HOW LONG YOU HELD YOUR SHARES OF THE FUND.
DIVIDENDS ATTRIBUTABLE TO INTEREST ON CERTAIN PRIVATE ACTIVITY BONDS MUST BE
INCLUDED IN FEDERAL ALTERNATIVE MINIMUM TAX FOR INDIVIDUALS AND FOR
CORPORATIONS. THE FUND MAY DERIVE UP TO 20% OF ITS INCOME FROM TAXABLE SHORT
TERM MONEY MARKET INVESTMENTS, FOR LIQUIDITY PURPOSES OR PENDING INVESTMENT.
INTEREST EARNED FROM TAXABLE INVESTMENTS WILL BE TAXABLE AS ORDINARY INCOME.
IF ANY TAXABLE INCOME OR GAINS ARE PAID, IN JANUARY, THE FUND WILL MAIL YOU FORM
1099-DIV INDICATING THE FEDERAL TAX STATUS OF DIVIDENDS AND ANY CAPITAL GAIN
DISTRIBUTIONS PAID TO YOU 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.
OTHER TAX INFORMATION
TO THE EXTENT THAT EXEMPT INTEREST DIVIDENDS ARE DERIVED FROM EARNINGS
ATTRIBUTABLE TO CALIFORNIA MUNICIPAL OBLIGATIONS, THEY WILL ALSO BE EXEMPT FROM
STATE AND LOCAL PERSONAL INCOME TAX IN CALIFORNIA. THE DIVIDENDS MAY BE SUBJECT
TO CALIFORNIA FRANCHISE TAXES AND CORPORATE INCOME TAXES IF RECEIVED BY A
CORPORATION SUBJECT TO SUCH TAXES. A LETTER WILL BE MAILED TO YOU IN JANUARY
DETAILING THE PERCENTAGE INVESTED IN CALIFORNIA DURING THE PREVIOUS TAX YEAR.
<PAGE>
TAXPAYER IDENTIFICATION NUMBER
IF WE DO NOT HAVE YOUR CORRECT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
("TIN") AND A SIGNED CERTIFIED APPLICATION OR FORM W-9, FEDERAL LAW REQUIRES US
TO WITHHOLD 31% OF YOUR REPORTABLE DIVIDENDS, AND POSSIBLY 31% OF CERTAIN
REDEMPTIONS. IN ADDITION, YOU MAY BE SUBJECT TO A FINE BY THE INTERNAL REVENUE
SERVICE. YOU WILL ALSO BE PROHIBITED FROM OPENING ANOTHER ACCOUNT BY EXCHANGE.
IF THIS TIN INFORMATION IS NOT RECEIVED WITHIN 60 DAYS AFTER YOUR ACCOUNT IS
ESTABLISHED, YOUR ACCOUNT MAY BE REDEEMED (CLOSED) AT THE CURRENT NAV ON THE
DATE OF REDEMPTION. CALVERT GROUP RESERVES THE RIGHT TO REJECT ANY NEW ACCOUNT
OR ANY PURCHASE ORDER FOR FAILURE TO SUPPLY A CERTIFIED TIN.
HOW TO SELL SHARES
YOU MAY REDEEM ALL OR A PORTION OF YOUR SHARES ON ANY DAY THE FUND IS OPEN FOR
BUSINESS, PROVIDED THE AMOUNT REQUESTED IS NOT ON HOLD. WHEN YOU PURCHASE BY
CHECK OR WITH CALVERT MONEY CONTROLLER (ELECTRONIC FUNDS TRANSFER), THE PURCHASE
WILL BE ON HOLD FOR UP TO 10 BUSINESS DAYS FROM THE DATE OF RECEIPT. DURING THE
HOLD PERIOD, REDEMPTIONS PROCEEDS WILL NOT BE SENT UNTIL THE TRANSFER AGENT IS
REASONABLY SATISFIED THAT THE PURCHASE PAYMENT HAS BEEN COLLECTED. DRAFTS
WRITTEN DURING THE HOLD PERIOD WILL BE RETURNED FOR UNCOLLECTED FUNDS.
YOUR SHARES WILL BE REDEEMED AT THE NEXT NAV CALCULATED AFTER YOUR REDEMPTION
REQUEST IS RECEIVED. THE PROCEEDS WILL NORMALLY BE SENT TO YOU ON THE NEXT
BUSINESS DAY, BUT IF MAKING IMMEDIATE PAYMENT COULD ADVERSELY AFFECT THE FUND,
IT MAY TAKE UP TO SEVEN (7) DAYS TO MAKE PAYMENT. CALVERT MONEY CONTROLLER
REDEMPTIONS GENERALLY WILL BE CREDITED TO YOUR BANK ACCOUNT BY THE SECOND
BUSINESS DAY AFTER YOUR PHONE CALL. 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 AFFECTED FUND, WHICHEVER IS LESS.
WHEN THE NYSE IS CLOSED (OR WHEN TRADING IS RESTRICTED) FOR ANY REASON OTHER
THAN ITS CUSTOMARY WEEKEND OR HOLIDAY CLOSINGS, OR UNDER ANY EMERGENCY
CIRCUMSTANCES AS DETERMINED BY THE SECURITIES AND EXCHANGE COMMISSION,
REDEMPTIONS MAY BE SUSPENDED OR PAYMENT DATES POSTPONED. PLEASE NOTE THAT THERE
ARE SOME FEDERAL HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY AND VETERANS' DAY, WHEN
THE NYSE IS OPEN AND THE FUND IS OPEN BUT REDEMPTIONS CANNOT BE MAILED OR WIRED
BECAUSE THE POST OFFICES AND BANKS ARE CLOSED.
<PAGE>
FOLLOW THESE SUGGESTIONS TO ENSURE TIMELY PROCESSING OF YOUR REDEMPTION REQUEST:
BY TELEPHONE
YOU MAY REDEEM SHARES FROM YOUR ACCOUNT BY TELEPHONE AND HAVE YOUR MONEY MAILED
TO YOUR ADDRESS OF RECORD OR ELECTRONICALLY TRANSFERRED OR WIRED TO A BANK YOU
HAVE PREVIOUSLY AUTHORIZED. A CHARGE OF $5 MAY BE IMPOSED ON WIRE TRANSFERS OF
LESS THAN $1,000.
WRITTEN REQUESTS
CALVERT GROUP, P.O. BOX 219544, KANSAS CITY, MO 64121 9544
YOUR LETTER SHOULD INCLUDE YOUR ACCOUNT NUMBER AND FUND AND THE NUMBER OF SHARES
OR THE DOLLAR AMOUNT YOU ARE REDEEMING. PLEASE PROVIDE A DAYTIME TELEPHONE
NUMBER, IF POSSIBLE, FOR US TO CALL IF WE HAVE QUESTIONS. IF THE MONEY IS BEING
SENT TO A NEW BANK, PERSON, OR ADDRESS OTHER THAN THE ADDRESS OF RECORD, YOUR
LETTER MUST BE SIGNATURE GUARANTEED.
DRAFTWRITING
YOU MAY REDEEM SHARES IN YOUR ACCOUNT BY WRITING A DRAFT FOR AT LEAST $250. IF
YOU COMPLETE AND RETURN THE SIGNATURE CARD FOR DRAFTWRITING, THE FUND WILL MAIL
BANK DRAFTS TO YOU, PRINTED WITH YOUR NAME AND ADDRESS. DRAFTS MAY NOT BE
ORDERED UNTIL YOUR INITIAL PURCHASE HAS CLEARED. CALVERT WILL PROVIDE PRINTED
DRAFTS (CHECKS). YOU MAY NOT PRINT YOUR OWN. ANY CUSTOMER-PRINTED CHECKS WILL
NOT BE HONORED AND WILL BE RETURNED WITHOUT NOTICE. THE FUND WILL CHARGE A
SERVICE FEE FOR DRAFTS RETURNED FOR INSUFFICIENT FUNDS. THE FUND WILL CHARGE $25
FOR ANY STOP PAYMENT ON DRAFTS OR FOR DRAFTS RETURNED FOR ANY REASON. AS A
SERVICE TO SHAREHOLDERS, SHARES MAY BE AUTOMATICALLY TRANSFERRED BETWEEN YOUR
CALVERT ACCOUNTS TO COVER DRAFTS YOU HAVE WRITTEN. THE SIGNATURE OF ONLY ONE
AUTHORIZED SIGNER IS REQUIRED TO HONOR A DRAFT.
SYSTEMATIC CHECK REDEMPTIONS
IF YOU MAINTAIN AN ACCOUNT WITH A BALANCE OF $10,000 OR MORE, YOU MAY HAVE UP TO
TWO (2) REDEMPTION CHECKS FOR A FIXED AMOUNT SENT TO YOU ON THE 15TH OF THE
MONTH, SIMPLY BY SENDING A LETTER WITH ALL INFORMATION, INCLUDING YOUR ACCOUNT
NUMBER, AND THE DOLLAR AMOUNT ($100 MINIMUM). IF YOU WOULD LIKE A REGULAR CHECK
MAILED TO ANOTHER PERSON OR PLACE, YOUR LETTER MUST BE SIGNATURE GUARANTEED.
CORPORATIONS AND ASSOCIATIONS
YOUR LETTER OF INSTRUCTION AND CORPORATE RESOLUTION SHOULD BE SIGNED BY
PERSON(S) AUTHORIZED TO ACT ON THE ACCOUNT, ACCOMPANIED BY SIGNATURE
GUARANTEE(S).
TRUSTS
YOUR LETTER OF INSTRUCTION SHOULD BE SIGNED BY THE TRUSTEE(S) (AS TRUSTEE(S)),
WITH A SIGNATURE GUARANTEE. (IF THE TRUSTEE'S NAME IS NOT REGISTERED ON YOUR
ACCOUNT,
<PAGE>
PLEASE PROVIDE A COPY OF THE TRUST DOCUMENT, CERTIFIED WITHIN THE LAST 60 DAYS.)
THROUGH YOUR DEALER
YOUR DEALER MUST RECEIVE YOUR REQUEST BEFORE THE CLOSE OF REGULAR TRADING ON THE
NYSE TO RECEIVE THAT DAY'S NAV. YOUR DEALER WILL BE RESPONSIBLE FOR FURNISHING
ALL NECESSARY DOCUMENTATION TO CALVERT GROUP AND MAY CHARGE YOU FOR SERVICES
PROVIDED.
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUND'S
FINANCIAL PERFORMANCE FOR THE PAST 5 FISCAL YEARS. THE FUND'S FISCAL YEAR END IS
DECEMBER 31. CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS FOR A SINGLE SHARE.
THE TOTAL RETURNS IN THE TABLE REPRESENT THE RATE THAT AN INVESTOR WOULD HAVE
EARNED (OR LOST) ON AN INVESTMENT IN A FUND (ASSUMING REINVESTMENT OF ALL
DIVIDENDS AND DISTRIBUTIONS). THIS INFORMATION HAS BEEN AUDITED BY
PRICEWATERHOUSECOOPERS LLP WHOSE REPORT, ALONG WITH A FUND'S FINANCIAL
STATEMENTS, ARE INCLUDED IN THE FUND'S ANNUAL REPORT, WHICH IS AVAILABLE UPON
REQUEST.
<PAGE>
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .028 .031 .032
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.028) (.031) (.032)
NET ASSET VALUE, ENDING $1.00 $1.00 $1.00
TOTAL RETURN 2.80% 3.19% 3.28%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 2.75% 3.13% 3.22%
TOTAL EXPENSES .66% .69% .71%
EXPENSES BEFORE OFFSETS .66% .67% .66%
NET EXPENSES .65% .65% .65%
NET ASSETS, ENDING (IN THOUSANDS)
$427,945 $437,575 $321,001
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .031 .037
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.031) (.037)
NET ASSET VALUE, ENDING $1.00 $1.00
TOTAL RETURN 3.17% 3.78%*
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 3.14% 3.69%
TOTAL EXPENSES .72% .76%
EXPENSES BEFORE OFFSETS .69% .76%
NET EXPENSES .68% .75%
NET ASSETS, ENDING (IN THOUSANDS) $346,008 $300,351
* TOTAL RETURN NUMBERS DO NOT REFLECT THE TENDER OPTION AGREEMENT. ON
DECEMBER 15, 1994, THE PORTFOLIO ENTERED INTO A TENDERED OPTION AGREEMENT WITH
THE ADVISOR VALUED AT $600,000 TO SECURE PAYMENT OF AN "AT RISK" INVESTMENT. ON
JUNE 30, 1995, THE INVESTMENT PAID THE PORTFOLIO IN FULL AND THE OPTION EXPIRED
UNUSED. THE EXPIRATION LOSS WAS APPLIED AGAINST THE ADVISOR'S CAPITAL
CONTRIBUTION OF THE OPTION.
<PAGE>
SERVICE FEES AND ARRANGEMENTS WITH DEALERS
CALVERT DISTRIBUTORS, INC., THE FUND'S UNDERWRITER, PAYS DEALERS AN ONGOING
SERVICE FEE OF UP TO 0.20% WHILE YOU OWN SHARES OF THE FUND (EXPRESSED AS AN
ANNUAL PERCENTAGE RATE OF AVERAGE DAILY NET ASSETS HELD IN CALVERT ACCOUNTS BY
THAT DEALER).
CAMCO, CDI, OR THEIR AFFILIATES MAY PAY, FROM THEIR OWN RESOURCES, CERTAIN
BROKER-DEALERS AND/OR OTHER PERSONS, FOR THE SALE AND DISTRIBUTION OF THE
SECURITIES OR FOR SERVICES TO THE FUND. THESE AMOUNTS MAY BE SIGNIFICANT.
PAYMENTS MAY INCLUDE ADDITIONAL COMPENSATION BEYOND THE REGULARLY SCHEDULED
RATES, AND FINDER'S FEES.
TO OPEN AN ACCOUNT:
800-368-2748
PERFORMANCE AND PRICES:
WWW.CALVERT.COM
CALVERT INFORMATION NETWORK
24 HOURS, 7 DAYS A WEEK
800-368-2745
SERVICE FOR EXISTING ACCOUNTS:
SHAREHOLDERS 800-368-2745
BROKERS 800-368-2746
TDD FOR HEARING IMPAIRED:
800-541-1524
CALVERT OFFICE:
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
REGISTERED, CERTIFIED OR
OVERNIGHT MAIL:
CALVERT GROUP
C/O NFDS
330 WEST 9TH STREET
KANSAS CITY, MO 64105
CALVERT GROUP WEB SITE
WWW.CALVERT.COM
PRINCIPAL UNDERWRITER
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
<PAGE>
FOR INVESTORS WHO WANT MORE INFORMATION ABOUT THE FUNDS, THE FOLLOWING DOCUMENTS
ARE AVAILABLE FREE UPON REQUEST:
ANNUAL/SEMI ANNUAL REPORTS: ADDITIONAL INFORMATION ABOUT THE FUND'S INVESTMENTS
IS AVAILABLE IN THE FUND'S ANNUAL AND SEMI ANNUAL REPORTS TO SHAREHOLDERS. IN
THE FUND'S ANNUAL REPORT, YOU WILL FIND A DISCUSSION OF THE MARKET CONDITIONS
AND INVESTMENT STRATEGIES THAT SIGNIFICANTLY AFFECTED THE FUND'S PERFORMANCE
DURING ITS LAST FISCAL YEAR.
STATEMENT OF ADDITIONAL INFORMATION (SAI): THE SAI FOR THE FUND PROVIDES MORE
DETAILED INFORMATION ABOUT THE FUND AND IS INCORPORATED INTO THIS PROSPECTUS BY
REFERENCE.
YOU CAN GET FREE COPIES OF REPORTS AND SAIS, REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING YOUR FINANCIAL
PROFESSIONAL, OR THE FUNDS AT:
CALVERT GROUP
4550 MONTGOMERY AVE., SUITE 1000N
BETHESDA, MD 20814
TELEPHONE: 800-368-2745
CALVERT GROUP WEB SITE
WWW.CALVERT.COM
YOU CAN REVIEW THE FUNDS' REPORTS AND SAIS AT THE PUBLIC REFERENCE ROOM OF THE
SECURITIES AND EXCHANGE COMMISSION. YOU CAN GET TEXT ONLY COPIES:
- - FOR A FEE, BY WRITING TO OR CALLING THE PUBLIC REFERENCE SECTION OF THE
COMMISSION, WASHINGTON, D.C. 20549 0102, TELEPHONE: 202-942-8090.
- - FREE FROM THE COMMISSION'S INTERNET WEB SITE AT HTTP://WWW.SEC.GOV.
INVESTMENT COMPANY ACT FILE: NO. 811-3101 (CTFR)
PROSPECTUS
APRIL 30, 2000
CALVERT TAX-FREE RESERVES (CTFR)
MONEY MARKET PORTFOLIO INSTITUTIONAL CLASS
ABOUT THE FUND
2 INVESTMENT OBJECTIVE, STRATEGY, PAST PERFORMANCE
2 FEES AND EXPENSES
ABOUT YOUR INVESTMENT
3 CALVERT GROUP
3 ADVISORY FEES
3 HOW TO BUY SHARES
3 OTHER CALVERT GROUP FEATURES
(EXCHANGES, MINIMUM ACCOUNT BALANCE, ETC.)
4 DIVIDENDS, CAPITAL GAINS AND TAXES
5 HOW TO SELL SHARES
6 FINANCIAL HIGHLIGHTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (SEC) OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC OR
ANY STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
INVESTMENT OBJECTIVE, STRATEGY AND PAST PERFORMANCE
OBJECTIVE
CTFR MONEY MARKET (THE "FUND") SEEKS TO EARN THE HIGHEST LEVEL OF INTEREST
INCOME, EXEMPT FROM FEDERAL INCOME TAXES, AS IS CONSISTENT WITH PRUDENT
INVESTMENT MANAGEMENT, PRESERVATION OF CAPITAL, AND THE QUALITY AND MATURITY
CHARACTERISTICS OF THE FUND.
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS
THE FUND INVESTS IN FIXED AND FLOATING RATE MUNICIPAL BONDS AND NOTES, VARIABLE
RATE DEMAND NOTES, TAX-EXEMPT COMMERCIAL PAPER, AND OTHER HIGH QUALITY,
SHORT-TERM MUNICIPAL OBLIGATIONS. THE ADVISOR LOOKS FOR SECURITIES WITH STRONG
CREDIT QUALITY THAT ARE ATTRACTIVELY PRICED. THIS MAY INCLUDE INVESTMENTS WITH
UNUSUAL FEATURES OR PRIVATELY PLACED ISSUES THAT ARE NOT WIDELY FOLLOWED IN THE
FIXED INCOME MARKETPLACE. ALL INVESTMENTS MUST COMPLY WITH THE SEC MONEY MARKET
FUND (RULE 2A-7) REQUIREMENTS.
MANY OF THE INSTRUMENTS HELD BY THE FUND ARE SUPPORTED BY A CREDIT FACILITY (TO
IMPROVE THE CREDIT QUALITY) OR LIQUIDITY FACILITY (TO SHORTEN THE MATURITY)
PROVIDED BY BANKS; THUS, THE FUND HAS AN EXPOSURE TO THE BANKING INDUSTRY.
THE FUND MAY PURCHASE SECURITIES THAT HAVE NOT BEEN RATED BY A RATING AGENCY, SO
LONG AS THE ADVISOR DETERMINES THEY ARE OF COMPARABLE CREDIT QUALITY TO RATED
SECURITIES PERMISSIBLE FOR THE FUND.
UNRATED AND PRIVATELY PLACED SECURITIES MAY BE LESS LIQUID THAN THOSE THAT ARE
RATED OR HAVE AN ACTIVE TRADING MARKET.
THE FUND'S YIELD WILL CHANGE IN RESPONSE TO MARKET INTEREST RATES. IN GENERAL,
AS MARKET RATES GO UP SO WILL THE FUND'S YIELD, AND VICE VERSA. ALTHOUGH THE
FUND TRIES TO KEEP THE VALUE OF ITS SHARES CONSTANT AT $1.00 PER SHARE, EXTREME
CHANGES IN MARKET RATES, AND OR SUDDEN CREDIT DETERIORATION OF A HOLDING COULD
CAUSE THE VALUE TO DECREASE. THE FUND LIMITS THE AMOUNT IT INVESTS IN ANY ONE
ISSUER TO TRY TO LESSEN ITS EXPOSURE.
IN ADDITION TO INTEREST RATE RISK AND CREDIT RISK, DIFFERENT TYPES OF MUNICIPAL
BONDS MAY BE AFFECTED DIFFERENTLY, BASED ON MANY FACTORS, INCLUDING ECONOMIC AND
REGULATORY DEVELOPMENTS, CHANGES OR PROPOSED CHANGES IN THE FEDERAL AND STATE
TAX STRUCTURE, DEREGULATION, AND COURT RULINGS, AMONG OTHER FACTORS.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $ 1.00 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
CTFR MONEY MARKET INSTITUTIONAL CLASS PERFORMANCE
THE BAR CHART AND TABLE BELOW SHOW THE INSTITUTIONAL CLASS' ANNUAL RETURNS AND
ITS LONG-TERM PERFORMANCE. THE CHART AND TABLE PROVIDE SOME INDICATION OF THE
RISKS OF INVESTING IN THE FUND. THE CHART SHOWS HOW THE PERFORMANCE HAS VARIED
FROM YEAR TO YEAR. THE TABLE COMPARES ITS RETURNS OVER TIME TO THE LIPPER
INSTITUTIONAL TAX-EXEMPT MONEY MARKET INDEX, A COMPOSITE INDEX OF THE ANNUAL
RETURN OF MUTUAL FUNDS THAT HAVE AN INVESTMENT GOAL SIMILAR TO THAT OF THE FUND.
INSTITUTIONAL CLASS SHARES HAVE AN ACTUAL INCEPTION DATE OF 8/31/97. HOWEVER,
CLASS O SHARES (NOT OFFERED IN THIS PROSPECTUS) HAVE AN INCEPTION DATE OF
12/7/76. IN THE CHART AND TABLE BELOW, PERFORMANCE RESULTS BEFORE 8/31/97 ARE
FOR CLASS O. BECAUSE CLASS O HAD HIGHER EXPENSES, ITS PERFORMANCE WAS LOWER THAN
THE INSTITUTIONAL CLASS WOULD HAVE REALIZED IN THE SAME PERIOD. THE FUND'S PAST
PERFORMANCE DOES NOT NECESSARILY INDICATE HOW THE FUND WILL PERFORM IN THE
FUTURE.
YEAR-BY-YEAR TOTAL RETURN
BEST QUARTER (OF PERIODS SHOWN) Q4 '90 1.53%
WORST QUARTER (OF PERIODS SHOWN) Q1 '93 0.56%
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
1 YEAR 5 YEAR 10 YEAR
CTFR MONEY MARKET
INSTITUTIONAL CLASS 3.39% 3.56% 3.72%
LIPPER INSTITUTIONAL
TAX-EXEMPT
MONEY MARKET INDEX 3.02% 3.29% 3.41%
FOR CURRENT YIELD INFORMATION ON THE INSTITUTIONAL CLASS CALL
800-317-2274, OR VISIT CALVERT GROUP'S WEBSITE AT WWW.CALVERT.COM/INSTITUTIONAL
FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF A FUND.
SHAREHOLDER FEES
(PAID DIRECTLY FROM YOUR ACCOUNT)
MAXIMUM SALES CHARGE (LOAD)
IMPOSED ON PURCHASES NONE
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE
ANNUAL FUND OPERATING EXPENSES1
(EXPENSES DEDUCTED FROM FUND ASSETS)
MANAGEMENT FEES .25
DISTRIBUTION AND SERVICE (12B-1) FEES NONE
OTHER EXPENSES .06
TOTAL ANNUAL FUND OPERATING EXPENSES .31
1 EXPENSES ARE BASED ON THE FUND'S MOST RECENT FISCAL YEAR.
<PAGE>
MANAGEMENT FEES INCLUDE THE ADMINISTRATIVE FEE PAID BY THE FUND TO CALVERT
ADMINISTRATIVE SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR, CALVERT ASSET
MANAGEMENT COMPANY, INC. ("CAMCO").
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN A FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE EXAMPLE ASSUMES THAT:
- - YOU INVEST $1,000,000 IN THE FUND FOR THE TIME PERIODS
INDICATED;
- - YOUR INVESTMENT HAS A 5% RETURN EACH YEAR; AND
- - THE FUND'S OPERATING EXPENSES REMAIN THE SAME.
ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, UNDER THESE ASSUMPTIONS YOUR
COSTS WOULD BE:
NUMBER OF YEARS INVESTMENT IS HELD
1 YEAR 3 YEARS 5 YEARS 10 YEARS
$3,173 $9,971 $17,423 $39,333
ABOUT CALVERT GROUP
CAMCO (4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MD 20814) IS THE FUNDS'
INVESTMENT ADVISOR. CAMCO PROVIDES THE FUNDS WITH INVESTMENT SUPERVISION AND
MANAGEMENT AND OFFICE SPACE; FURNISHES EXECUTIVE AND OTHER PERSONNEL TO THE
FUNDS, AND PAYS THE SALARIES AND FEES OF ALL TRUSTEES/DIRECTORS WHO ARE
AFFILIATED PERSONS OF THE ADVISOR. IT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1976.
CAMCO IS THE INVESTMENT ADVISOR FOR OVER 25 MUTUAL FUND PORTFOLIOS. AS OF
DECEMBER 31, 1999, CAMCO HAD OVER $6 BILLION IN ASSETS UNDER MANAGEMENT.
ADVISORY FEES
THE AGGREGATE ANNUAL ADVISORY FEE PAID TO CAMCO BY THE FUND FOR THE MOST RECENT
FISCAL YEAR AS A PERCENTAGE OF THAT FUND'S AVERAGE DAILY NET ASSETS WAS 20%.
SHAREHOLDER GUIDE
HOW TO BUY SHARES
COMPLETE AND SIGN AN APPLICATION FOR EACH NEW ACCOUNT. FOR MORE INFORMATION,
PLEASE CONTACT THE CALVERT INSTITUTIONAL MARKETING GROUP AT 800-317-2274.
THE MINIMUM INITIAL INVESTMENT AND MINIMUM BALANCE REQUIRED IS $1,000,000. THE
MINIMUM FOR SUBSEQUENT INVESTMENTS IS $25,000. INVESTMENTS MUST BE MADE BY WIRE
OR BY EXCHANGE FROM ANOTHER CALVERT GROUP ACCOUNT.
SEND YOUR WIRE TO:
ABA#011000028
FBO: CTFR MONEY MARKET INSTIT. FUND 718
WIRE ACCOUNT #9903-765-7
INSERT YOUR NAME AND ACCOUNT NUMBER HERE
STATE STREET BANK & TRUST COMPANY
BOSTON, MASSACHUSETTS
IMPORTANT - HOW SHARES ARE PRICED
THE PRICE OF SHARES IS BASED ON THE FUND'S NET ASSET VALUE ("NAV"). NAV IS
COMPUTED BY ADDING THE VALUE OF THE FUND'S HOLDINGS PLUS OTHER ASSETS,
SUBTRACTING LIABILITIES, AND THEN DIVIDING THE RESULT BY THE NUMBER OF SHARES
OUTSTANDING.
THE FUND IS VALUED ACCORDING TO THE "AMORTIZED COST" METHOD, WHICH IS INTENDED
TO STABILIZE THE NAV AT $1 PER SHARE.
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). THE FUND IS OPEN FOR BUSINESS EACH DAY THE NYSE IS OPEN.
PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY
AND VETERANS' DAY, WHEN THE NYSE IS OPEN AND THE FUND IS OPEN BUT PURCHASES
CANNOT BE RECEIVED BECAUSE THE BANKS ARE CLOSED.
WHEN YOUR ACCOUNT WILL BE CREDITED
YOUR PURCHASE WILL BE PROCESSED AT THE NAV CALCULATED AFTER YOUR ORDER IS
RECEIVED AND ACCEPTED. A TELEPHONE ORDER PLACED TO CALVERT INSTITUTIONAL
MARKETING GROUP BY 11:00 A.M. EASTERN TIME WILL RECEIVE THE DIVIDEND ON FUND
SHARES DECLARED THAT DAY IF FEDERAL FUNDS ARE RECEIVED BY THE CUSTODIAN BY 5
P.M. EASTERN TIME. TELEPHONE ORDERS PLACED AFTER 11:00 A.M. WILL BEGIN EARNING
DIVIDENDS ON FUND SHARES THE NEXT BUSINESS DAY. IF NO TELEPHONE ORDER IS PLACED,
INVESTMENTS BEGIN EARNING DIVIDENDS THE NEXT BUSINESS DAY. EXCHANGES BEGIN
EARNING DIVIDENDS THE NEXT BUSINESS DAY AFTER THE EXCHANGE REQUEST IS RECEIVED
BY MAIL OR TELEPHONE.
ALL OF YOUR PURCHASES MUST BE MADE BY WIRE. NO CASH OR CHECKS WILL BE ACCEPTED.
THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES FOR A PERIOD OF
TIME OR TO REJECT ANY SPECIFIC PURCHASE ORDER.
OTHER CALVERT GROUP FEATURES
CALVERT INFORMATION NETWORK
FOR 24 HOUR PERFORMANCE AND ACCOUNT INFORMATION VISIT WWW.CALVERT.COM
/INSTITUTIONAL.
YOU CAN OBTAIN CURRENT PERFORMANCE AND PRICING INFORMATION, VERIFY ACCOUNT
BALANCES, AND AUTHORIZE CERTAIN TRANSACTIONS WITH THE CONVENIENCE OF ONE PHONE
CALL, 24 HOURS A DAY.
ACCOUNT SERVICES
BY SIGNING UP FOR SERVICES WHEN YOU OPEN YOUR ACCOUNT, YOU AVOID HAVING TO
OBTAIN A SIGNATURE GUARANTEE. IF YOU WISH TO ADD SERVICES AT A LATER DATE, A
SIGNATURE GUARANTEE TO VERIFY YOUR SIGNATURE MAY BE OBTAINED FROM ANY BANK,
TRUST COMPANY AND SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, BROKER-DEALER FIRM
OR MEMBER OF A DOMESTIC STOCK EXCHANGE. A NOTARY PUBLIC CANNOT PROVIDE A
SIGNATURE GUARANTEE.
TELEPHONE TRANSACTIONS
YOU MAY REDEEM BY EXCHANGE OF SHARES OR BY WIRE. INSTITUTIONAL CLASS ACCOUNT
HOLDERS RECEIVE TELEPHONE PRIVILEGES AUTOMATICALLY WHEN YOU OPEN YOUR ACCOUNT.
FOR OUR MUTUAL PROTECTION, THE FUND, THE SHAREHOLDER SERVICING AGENT AND THEIR
AFFILIATES USE PRECAUTIONS SUCH AS VERIFYING SHAREHOLDER IDENTITY AND RECORDING
<PAGE>
TELEPHONE CALLS TO CONFIRM INSTRUCTIONS GIVEN BY PHONE. A CONFIRMATION STATEMENT
IS SENT FOR MOST TRANSACTIONS; PLEASE REVIEW THIS STATEMENT AND VERIFY THE
ACCURACY OF YOUR TRANSACTION IMMEDIATELY.
CALVERT MONEY CONTROLLER
CALVERT MONEY CONTROLLER ALLOWS YOU TO PURCHASE OR SELL SHARES BY ELECTRONIC
FUNDS TRANSFER WITHOUT THE TIME DELAY OF MAILING A CHECK OR THE ADDED EXPENSE OF
A WIRE. USE THIS SERVICE TO TRANSFER UP TO $300,000 ELECTRONICALLY. ALLOW ONE OR
TWO BUSINESS DAYS AFTER YOU PLACE YOUR REQUEST FOR THE TRANSFER TO TAKE PLACE.
MONEY TRANSFERRED TO PURCHASE NEW SHARES WILL BE SUBJECT TO A HOLD OF UP TO 10
BUSINESS DAYS BEFORE REDEMPTION REQUESTS WILL BE HONORED. TRANSACTION REQUESTS
MUST BE RECEIVED BY 4 P.M. ET. YOU MAY REQUEST THIS SERVICE ON YOUR INITIAL
ACCOUNT APPLICATION. CALVERT MONEY CONTROLLER TRANSACTIONS RETURNED FOR
INSUFFICIENT FUNDS WILL INCUR A $25 CHARGE.
EXCHANGES
CALVERT GROUP OFFERS A WIDE VARIETY OF INVESTMENT OPTIONS THAT INCLUDES COMMON
STOCK FUNDS, TAX-EXEMPT AND CORPORATE BOND FUNDS, AND MONEY MARKET FUNDS. WE
MAKE IT EASY FOR YOU TO PURCHASE SHARES IN OTHER CALVERT FUNDS IF YOUR
INVESTMENT GOALS CHANGE.
COMPLETE AND SIGN AN ACCOUNT APPLICATION, TAKING CARE TO REGISTER YOUR NEW
ACCOUNT IN THE SAME NAME AND TAXPAYER IDENTIFICATION NUMBER AS YOUR EXISTING
CALVERT ACCOUNT(S). EXCHANGE INSTRUCTIONS MAY THEN BE GIVEN BY TELEPHONE IF
TELEPHONE REDEMPTIONS HAVE BEEN AUTHORIZED.
BEFORE YOU MAKE AN EXCHANGE, PLEASE NOTE THE FOLLOWING: EACH EXCHANGE REPRESENTS
THE SALE OF SHARES OF ONE FUND AND THE PURCHASE OF SHARES OF ANOTHER.
YOU MAY EXCHANGE SHARES ACQUIRED BY REINVESTMENT OF DIVIDENDS OR DISTRIBUTIONS
INTO ANOTHER CALVERT FUND AT NO ADDITIONAL CHARGE.
SHARES MAY ONLY BE EXCHANGED FOR SHARES OF THE SAME CLASS OF ANOTHER CALVERT
FUND.
EXCHANGE REQUESTS WILL NOT BE ACCEPTED ON ANY DAY WHEN CALVERT IS OPEN BUT THE
FUND'S CUSTODIAN BANK IS CLOSED (E.G., COLUMBUS DAY AND VETERAN'S DAY); THESE
EXCHANGE REQUESTS WILL BE PROCESSED THE NEXT DAY THE FUND'S CUSTODIAN BANK IS
OPEN.
THE FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR CANCEL
ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR CONDITIONS OF
PURCHASE OF SHARES OF ANY FUND; OR WITHDRAW ALL OR ANY PART OF THE OFFERING MADE
BY THIS PROSPECTUS. TO PROTECT THE INTERESTS OF INVESTORS, THE FUND AND THE
DISTRIBUTOR MAY REJECT ANY ORDER CONSIDERED MARKET-TIMING ACTIVITY.
THE FUND RESERVES THE RIGHT TO TERMINATE OR MODIFY THE EXCHANGE PRIVILEGE WITH
60 DAYS' WRITTEN NOTICE.
ELECTRONIC DELIVERY OF PROSPECTUSES AND SHAREHOLDER REPORTS
YOU MAY REQUEST TO RECEIVE ELECTRONIC DELIVERY OF PROSPECTUSES AND ANNUAL AND
SEMI-ANNUAL REPORTS.
COMBINED GENERAL MAILINGS (HOUSEHOLDING)
MULTIPLE ACCOUNTS WITH THE SAME TAX IDENTIFICATION NUMBER WILL RECEIVE ONE
MAILING PER HOUSEHOLD OF INFORMATION SUCH AS PROSPECTUSES AND SEMI-ANNUAL AND
ANNUAL REPORTS. YOU MAY REQUEST FURTHER GROUPING OF ACCOUNTS TO RECEIVE FEWER
MAILINGS. SEPARATE STATEMENTS WILL BE GENERATED FOR EACH SEPARATE ACCOUNT AND
WILL BE MAILED IN ONE ENVELOPE FOR EACH COMBINATION ABOVE.
SPECIAL SERVICES AND CHARGES
THE FUND PAYS FOR SHAREHOLDER SERVICES BUT NOT FOR SPECIAL SERVICES THAT ARE
REQUIRED BY A FEW SHAREHOLDERS, SUCH AS A REQUEST FOR A HISTORICAL TRANSCRIPT OF
AN ACCOUNT. YOU MAY BE REQUIRED TO PAY A FEE FOR THESE SPECIAL SERVICES.
IF YOU ARE PURCHASING SHARES THROUGH A PROGRAM OF SERVICES OFFERED BY A
BROKER/DEALER OR FINANCIAL INSTITUTION, YOU SHOULD READ THE PROGRAM MATERIALS
TOGETHER WITH THIS PROSPECTUS. CERTAIN FEATURES MAY BE MODIFIED IN THESE
PROGRAMS, AND THE BROKER/DEALER OR FINANCIAL INSTITUTION MAY IMPOSE CHARGES FOR
THEIR SERVICES.
MINIMUM ACCOUNT BALANCE
PLEASE MAINTAIN A BALANCE IN YOUR ACCOUNT OF AT LEAST $1,000,000 PER FUND. IF
THE ACCOUNT FALLS BELOW THE MINIMUM YOU MAY BE GIVEN A NOTICE THAT YOUR ACCOUNT
IS BELOW THE MINIMUM AND WILL BE MOVED TO CLASS O IF THE BALANCE IS NOT BROUGHT
UP TO THE REQUIRED MINIMUM AMOUNT.
DIVIDENDS, CAPITAL GAINS AND TAXES
THE 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 FUND DOES 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 WIRE TO A PREDESIGNATED BANK ACCOUNT. DIVIDENDS AND DISTRIBUTIONS
FROM ANY CALVERT GROUP FUND MAY BE AUTOMATICALLY INVESTED IN AN IDENTICALLY
REGISTERED ACCOUNT IN ANY OTHER CALVERT GROUP FUND AT NAV. IF REINVESTED IN THE
SAME ACCOUNT, NEW SHARES WILL BE PURCHASED AT NAV ON THE REINVESTMENT DATE,
WHICH IS GENERALLY 1 TO 3 DAYS PRIOR TO THE PAYMENT DATE. YOU MUST NOTIFY THE
FUND IN WRITING TO CHANGE YOUR PAYMENT OPTIONS.
FEDERAL TAXES
DIVIDENDS DERIVED FROM INTEREST ON MUNICIPAL OBLIGATIONS CONSTITUTE EXEMPT
INTEREST DIVIDENDS, ON WHICH YOU ARE NOT SUBJECT TO FEDERAL INCOME TAX. HOWEVER,
DIVIDENDS WHICH ARE FROM TAXABLE INTEREST AND ANY DISTRIBUTIONS OF SHORT TERM
CAPITAL GAIN ARE TAXABLE TO YOU AS ORDINARY INCOME. IF THE FUND MAKES ANY
DISTRIBUTIONS OF LONG-TERM CAPITAL GAINS, THEN THESE ARE TAXABLE TO YOU AS
<PAGE>
LONG-TERM CAPITAL GAINS, REGARDLESS OF HOW LONG YOU HELD YOUR SHARES OF THE
FUND. DIVIDENDS ATTRIBUTABLE TO INTEREST ON CERTAIN PRIVATE ACTIVITY BONDS MUST
BE INCLUDED IN FEDERAL ALTERNATIVE MINIMUM TAX FOR INDIVIDUALS AND FOR
CORPORATIONS. THE FUND MAY DERIVE UP TO 20% OF ITS INCOME FROM TAXABLE
SHORT-TERM MONEY MARKET INVESTMENTS, FOR LIQUIDITY PURPOSES OR PENDING
INVESTMENT. INTEREST EARNED FROM TAXABLE INVESTMENTS WILL BE TAXABLE AS ORDINARY
INCOME.
IF ANY TAXABLE INCOME OR GAINS ARE PAID, IN JANUARY, THE FUND WILL MAIL YOU FORM
1099-DIV INDICATING THE FEDERAL TAX STATUS OF DIVIDENDS AND ANY CAPITAL GAIN
DISTRIBUTIONS PAID TO YOU 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.
OTHER TAX INFORMATION
YOU MAY BE SUBJECT TO STATE OR LOCAL TAXES ON YOUR INVESTMENT, DEPENDING ON THE
LAWS IN YOUR AREA. A LETTER WILL BE MAILED TO YOU IN JANUARY DETAILING THE
PERCENTAGE INVESTED IN YOUR STATE THE PREVIOUS TAX YEAR. SUCH DIVIDENDS MAY BE
EXEMPT FROM CERTAIN STATE INCOME TAXES.
TAXPAYER IDENTIFICATION NUMBER
IF WE DO NOT HAVE YOUR CORRECT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
("TIN") AND A SIGNED CERTIFIED APPLICATION OR FORM W-9, FEDERAL LAW REQUIRES US
TO WITHHOLD 31% OF YOUR REPORTABLE DIVIDENDS, AND POSSIBLY 31% OF CERTAIN
REDEMPTIONS. IN ADDITION, YOU MAY BE SUBJECT TO A FINE BY THE INTERNAL REVENUE
SERVICE. YOU WILL ALSO BE PROHIBITED FROM OPENING ANOTHER ACCOUNT BY EXCHANGE.
IF THIS TIN INFORMATION IS NOT RECEIVED WITHIN 60 DAYS AFTER YOUR ACCOUNT IS
ESTABLISHED, YOUR ACCOUNT MAY BE REDEEMED (CLOSED) AT THE CURRENT NAV ON THE
DATE OF REDEMPTION. CALVERT GROUP RESERVES THE RIGHT TO REJECT ANY NEW ACCOUNT
OR ANY PURCHASE ORDER FOR FAILURE TO SUPPLY A CERTIFIED TIN.
HOW TO SELL SHARES
YOU MAY REDEEM ALL OR A PORTION OF YOUR SHARES ON ANY DAY THE FUND IS OPEN FOR
BUSINESS. YOUR SHARES WILL BE REDEEMED AT THE NEXT NAV CALCULATED AFTER YOUR
REDEMPTION REQUEST IS RECEIVED AND ACCEPTED IN GOOD ORDER (SEE BELOW). YOU WILL
RECEIVE DIVIDENDS THROUGH THE DATE THE REQUEST IS RECEIVED AND PROCESSED. A
TELEPHONE ORDER FOR A REDEMPTION MUST BE RECEIVED BY THE CALVERT INSTITUTIONAL
MARKETING GROUP BY 11:00 A.M. EASTERN TIME IN ORDER FOR THE PROCEEDS TO BE SENT
TO YOU ON THE SAME BUSINESS DAY. IF MAKING IMMEDIATE PAYMENT COULD ADVERSELY
AFFECT THE FUND, IT MAY TAKE UP TO SEVEN (7) DAYS TO MAKE PAYMENT. THE FUND HAS
THE RIGHT TO REDEEM SHARES IN ASSETS OTHER THAN CASH FOR REDEMPTION AMOUNTS
EXCEEDING, IN ANY 90-DAY PERIOD, $250,000 OR 1% OF THE NET ASSET VALUE OF THE
FUND, WHICHEVER IS LESS. WHEN THE NYSE IS CLOSED (OR WHEN TRADING IS RESTRICTED)
FOR ANY REASON OTHER THAN ITS CUSTOMARY WEEKEND OR HOLIDAY CLOSINGS, OR UNDER
ANY EMERGENCY CIRCUMSTANCES AS DETERMINED BY THE SECURITIES AND EXCHANGE
COMMISSION, REDEMPTIONS MAY BE SUSPENDED OR PAYMENT DATES POSTPONED. PLEASE NOTE
THAT THERE ARE SOME FEDERAL HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY AND
VETERANS' DAY, WHEN THE NYSE IS OPEN AND THE FUND IS OPEN BUT REDEMPTIONS CANNOT
BE WIRED BECAUSE THE BANKS ARE CLOSED.
FOLLOW THESE SUGGESTIONS TO ENSURE TIMELY PROCESSING OF YOUR REDEMPTION REQUEST:
BY TELEPHONE
INSTITUTIONAL MARKETING GROUP 800.317.2274
YOU MAY REDEEM SHARES FROM YOUR ACCOUNT BY TELEPHONE AND HAVE YOUR MONEY
ELECTRONICALLY TRANSFERRED OR WIRED TO A BANK YOU HAVE PREVIOUSLY AUTHORIZED. TO
BETTER ENABLE CAMCO TO KEEP THE FUND FULLY INVESTED, CALVERT REQUESTS THAT YOU
NOTIFY THE INSTITUTIONAL MARKETING GROUP AT LEAST 24 HOURS IN ADVANCE FOR ANY
REDEMPTION OVER $10 MILLION PER DAY. A CHARGE OF $5 MAY BE IMPOSED ON WIRE
TRANSFERS OF LESS THAN $50,000.
WRITTEN REQUESTS
CALVERT GROUP,
P.O. BOX 219544,
KANSAS CITY, MO 64121-9544
YOUR LETTER SHOULD INCLUDE YOUR ACCOUNT NUMBER AND FUND AND THE NUMBER OF SHARES
OR THE DOLLAR AMOUNT YOU ARE REDEEMING. PLEASE PROVIDE A DAYTIME TELEPHONE
NUMBER, IF POSSIBLE, FOR US TO CALL IF WE HAVE QUESTIONS. IF THE MONEY IS BEING
SENT TO A NEW BANK, PERSON, OR ADDRESS OTHER THAN THE ADDRESS OF RECORD, YOUR
LETTER MUST BE SIGNATURE GUARANTEED.
CORPORATIONS AND ASSOCIATIONS
YOUR LETTER OF INSTRUCTION AND CORPORATE RESOLUTION SHOULD BE SIGNED BY
PERSON(S) AUTHORIZED TO ACT ON THE ACCOUNT, ACCOMPANIED BY SIGNATURE
GUARANTEE(S).
<PAGE>
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUND'S
FINANCIAL PERFORMANCE FOR THE PAST 5 FISCAL YEARS. THE FUND'S FISCAL YEAR END IS
DECEMBER 31. CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS FOR A SINGLE SHARE.
THE TOTAL RETURNS IN THE TABLE REPRESENT THE RATE THAT AN INVESTOR WOULD HAVE
EARNED (OR LOST) ON AN INVESTMENT IN THE FUND, ASSUMING REINVESTMENT OF ALL
DIVIDENDS AND DISTRIBUTIONS. PRIOR TO JULY 1, 1997, THE FUND WAS NOT AN
INSTITUTIONAL FUND, BUT WAS KNOWN AS CLASS MMP. THIS INFORMATION HAS BEEN
AUDITED BY PRICEWATERHOUSECOOPERS LLP, WHOSE REPORT AND THE FUND'S FINANCIAL
STATEMENTS ARE INCLUDED IN THE FUND'S ANNUAL REPORT, AVAILABLE UPON REQUEST.
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
INSTITUTIONAL CLASS/MMP 1999 1998 1997
NET ASSET VALUE, BEGINNING $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .033 .035 .031
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.033) (.035) (.031)
NET ASSET VALUE, ENDING $1.00 $1.00 $1.00
TOTAL RETURN 3.39% 3.58% 3.12%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 3.36% 3.54% 3.37%
TOTAL EXPENSES .31% .30% .63%
EXPENSES BEFORE OFFSETS .31% .30% .63%
NET EXPENSES .29% .29% .62%
NET ASSETS, ENDING (IN THOUSANDS)
$237,544 $246,967 $51,087
PERIODS ENDED
DECEMBER 31, DECEMBER 31,
INSTITUTIONAL CLASS/MMP 1996 1995^
NET ASSET VALUE, BEGINNING $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .030 .008
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.030) (.008)
NET ASSET VALUE, ENDING $1.00 $1.00
TOTAL RETURN 2.68% .79%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 2.65% 3.19%(A)
TOTAL EXPENSES 1.29% 1.35%(A)
EXPENSES BEFORE OFFSETS 1.29% 1.35%(A)
NET EXPENSES 1.28% 1.34%(A)
NET ASSETS, ENDING (IN THOUSANDS) $33,160 $41,736
(A) ANNUALIZED
^ FROM OCTOBER 2, 1995 INCEPTION.
<PAGE>
TO OPEN AN ACCOUNT:
800-317-2274
SERVICE FOR EXISTING ACCOUNTS:
800-317-2274
TDD FOR HEARING-IMPAIRED:
800-541 1524
BRANCH OFFICE:
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
REGISTERED, CERTIFIED OR
OVERNIGHT MAIL:
CALVERT GROUP
C/O INSTITUTIONAL MARKETING GROUP
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
CALVERT GROUP WEB-SITE
WWW.CALVERT.COM/INSTITUTIONAL
PRINCIPAL UNDERWRITER
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
<PAGE>
FOR INVESTORS WHO WANT MORE INFORMATION ABOUT THE FUNDS, THE FOLLOWING DOCUMENTS
ARE AVAILABLE FREE UPON REQUEST:
ANNUAL/SEMI-ANNUAL REPORTS: ADDITIONAL INFORMATION ABOUT EACH FUND'S INVESTMENTS
IS AVAILABLE IN THE FUND'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. IN
EACH FUND'S ANNUAL REPORT, YOU WILL FIND A DISCUSSION OF THE MARKET CONDITIONS
AND INVESTMENT STRATEGIES THAT SIGNIFICANTLY AFFECTED THE FUND'S PERFORMANCE
DURING ITS LAST FISCAL YEAR.
STATEMENT OF ADDITIONAL INFORMATION (SAI): THE SAI FOR EACH FUND PROVIDES MORE
DETAILED INFORMATION ABOUT THE FUND AND IS INCORPORATED INTO THIS PROSPECTUS BY
REFERENCE.
YOU CAN GET FREE COPIES OF REPORTS AND SALS, REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUNDS AT:
CALVERT GROUP
ATTN: INSTITUTIONAL MARKETING GROUP
4550 MONTGOMERY AVE., SUITE 1000N
BETHESDA, MD. 20814
TELEPHONE: 1-800-317-2274
CALVERT GROUP WEB-SITE
WWW.CALVERT.COM
YOU CAN REVIEW THE FUNDS' REPORTS AND SALS AT THE PUBLIC REFERENCE ROOM OF THE
SECURITIES AND EXCHANGE COMMISSION. YOU CAN GET TEXT ONLY COPIES:
- - FOR A FEE, BY WRITING TO OR CALLING THE PUBLIC REFERENCE SECTION OF THE
COMMISSION, WASHINGTON, D.C. 20549-0102,
TELEPHONE: 202-942-8090.
- - FREE FROM THE COMMISSION'S INTERNET WEBSITE AT HTTP://WWW.SEC.GOV
INVESTMENT COMPANY ACT FILE: NO. 811-3101 (CTFR)
CALVERT
TAX-FREE RESERVES
VERMONT MUNICIPAL PORTFOLIO
PROSPECTUS
APRIL 30, 2000
<PAGE>
PROSPECTUS
APRIL 30, 2000
CALVERT TAX-FREE RESERVES FUND
VERMONT MUNICIPAL PORTFOLIO
ABOUT THE FUND
2 INVESTMENT OBJECTIVE, STRATEGY, PAST PERFORMANCE
5 FEES AND EXPENSES
6 INVESTMENT PRACTICES AND RISKS
ABOUT YOUR INVESTMENT
10 CALVERT GROUP AND THE PORTFOLIO MANAGEMENT TEAM
10 ADVISORY FEES
10 HOW TO BUY SHARES (SALES CHARGES, ETC.)
12 IMPORTANT - HOW SHARES ARE PRICED
13 OTHER CALVERT GROUP FEATURES
(EXCHANGES, MINIMUM ACCOUNT BALANCE, ETC.)
15 DIVIDENDS, CAPITAL GAINS AND TAXES
17 HOW TO SELL SHARES
19 FINANCIAL HIGHLIGHTS
21 EXHIBIT A- REDUCED SALES CHARGES
22 EXHIBIT B- SERVICE FEES AND
ARRANGEMENTS WITH DEALERS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
OBJECTIVE
CTFR VERMONT MUNICIPAL (THE "FUND") SEEKS TO EARN THE HIGHEST LEVEL OF INTEREST
INCOME EXEMPT FROM FEDERAL AND VERMONT STATE INCOME TAXES AS IS CONSISTENT WITH
PRUDENT INVESTMENT MANAGEMENT, PRESERVATION OF CAPITAL, AND THE QUALITY AND
MATURITY CHARACTERISTICS OF THE FUND.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND TYPICALLY INVESTS AT LEAST 65% OF ITS NET ASSETS IN INVESTMENT GRADE
DEBT SECURITIES. THE ADVISOR LOOKS FOR SECURITIES WITH STRONG CREDIT QUALITY
THAT ARE ATTRACTIVELY PRICED IN VARIOUS MATURITY RANGES. TO THE EXTENT IT MAY DO
SO CONSISTENT WITH ITS INVESTMENT OBJECTIVE, THE FUND FOLLOWS A STRATEGY TO ALSO
SEEK TO PROVIDE A COMPETITIVE RATE OF TOTAL RETURN. THERE IS NO LIMIT ON THE
FUND'S AVERAGE PORTFOLIO MATURITY OR DURATION (ANOTHER MEASURE OF THE FUND'S
INTEREST RATE SENSITIVITY), ALTHOUGH THE AVERAGE PORTFOLIO DURATION IS EXPECTED
TO BE BETWEEN FOUR AND NINE YEARS.
THE FUND MAY INVEST IN A VARIETY OF TAX-EXEMPT OBLIGATIONS INCLUDING
TAX-SUPPORTED DEBT (GENERAL OBLIGATION BONDS OF STATE AND LOCAL ISSUERS),
VARIOUS TYPES OF REVENUE DEBT (TRANSPORTATION, HOUSING, UTILITIES, HOSPITAL),
SPECIAL TAX OBLIGATIONS, AND QUALIFIED PRIVATE ACTIVITY BONDS AND OTHER STATE
AND LOCAL GOVERNMENT AUTHORITIES, MUNICIPAL LEASES, AND CERTIFICATES OF
PARTICIPATION IN SUCH INVESTMENTS.
UNDER NORMAL MARKET CONDITIONS, THE FUND WILL INVEST AT LEAST 65% OF ITS TOTAL
ASSETS IN MUNICIPAL OBLIGATIONS WHOSE INTEREST IS EXEMPT FROM FEDERAL AND
VERMONT STATE INCOME TAX. THE FUND WILL ALSO ATTEMPT TO INVEST THE REMAINING 35%
OF ITS TOTAL ASSETS IN SUCH OBLIGATIONS, BUT MAY INVEST IT IN MUNICIPAL
OBLIGATIONS OF OTHER STATES, TERRITORIES AND POSSESSIONS OF THE UNITED STATES,
THE DISTRICT OF COLUMBIA AND THEIR RESPECTIVE AUTHORITIES, AGENCIES,
INSTRUMENTALITIES AND POLITICAL SUBDIVISIONS OR IN SHORT-TERM TAXABLE MONEY
MARKET-TYPE INSTRUMENTS. DIVIDENDS PAID BY THE FUND WHICH ARE DERIVED FROM
INTEREST ATTRIBUTABLE TO VERMONT MUNICIPAL OBLIGATIONS WILL BE EXEMPT FROM
FEDERAL AND VERMONT STATE PERSONAL INCOME TAXES. DIVIDENDS DERIVED FROM INTEREST
ON TAX-EXEMPT OBLIGATIONS OF OTHER GOVERNMENTAL ISSUERS WILL BE EXEMPT FROM
FEDERAL INCOME TAX, BUT WILL BE SUBJECT TO VERMONT STATE INCOME TAXES.
BECAUSE THE FUND INVESTS PRIMARILY IN VERMONT MUNICIPAL OBLIGATIONS, THE ECONOMY
AND POLITICAL CLIMATE IN THAT STATE HAVE A GREAT IMPACT ON THE FUND. THE FUND
MAY INVEST UP TO 25% OF ITS ASSETS IN A SINGLE ISSUER.
<PAGE>
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM, MOST LIKELY FOR ANY OF THE FOLLOWING REASONS:
- - THE BOND MARKET GOES DOWN
- - THE INDIVIDUAL BONDS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED, DUE
TO CREDIT, POLITICAL OR OTHER RISKS
- - THE ADVISOR'S FORECAST AS TO INTEREST RATES IS NOT CORRECT. INCREASES IN
MARKET INTEREST RATES CAN CAUSE THE PRICE OF A DEBT SECURITY TO
DECREASE.
- - THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE BOND MARKET DOES
NOT PERFORM AS WELL AS EXPECTED
- - THE FUND IS NON-DIVERSIFIED. COMPARED TO OTHER FUNDS, THE FUND MAY
INVEST MORE OF ITS ASSETS IN A SMALLER NUMBER OF BONDS. GAINS OR LOSSES ON A
SINGLE BOND MAY HAVE GREATER IMPACT ON THE FUND.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
CTFR VERMONT MUNICIPAL PERFORMANCE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. THE CHART AND TABLE PROVIDE SOME INDICATION OF THE RISKS OF
INVESTING IN THE FUND. THE CHART SHOWS HOW THE PERFORMANCE OF THE SHARES HAS
VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER TIME TO
THAT OF THE LEHMAN MUNICIPAL BOND INDEX. THIS IS A WIDELY RECOGNIZED, UNMANAGED
INDEX OF BOND PRICES. IT ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE LIPPER
OTHER STATES MUNICIPAL DEBT FUNDS AVERAGE, A COMPOSITE AVERAGE OF THE ANNUAL
RETURN OF MUTUAL FUNDS THAT HAVE AN INVESTMENT GOAL SIMILAR TO THAT OF THE FUND.
THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE HOW THE FUND WILL
PERFORM IN THE FUTURE.
THE BAR CHART DOES NOT REFLECT ANY SALES CHARGE THAT YOU MAY BE REQUIRED TO PAY
UPON PURCHASE OR REDEMPTION OF THE FUND'S SHARES. ANY SALES CHARGE WILL REDUCE
YOUR RETURN. THE AVERAGE TOTAL RETURN TABLE SHOWS RETURNS WITH THE MAXIMUM SALES
CHARGE DEDUCTED. NO SALES CHARGE HAS BEEN APPLIED TO THE INDEX AND AVERAGE USED
FOR COMPARISON IN THE TABLE.
<PAGE>
CTFR VERMONT MUNICIPAL
YEAR-BY-YEAR TOTAL RETURN (AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '95 4.90%
WORST QUARTER (OF PERIODS SHOWN) Q1 '94 (3.55%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR SINCE
INCEPTION*
CTFR VERMONT MUNICIPAL (7.85%) 4.44% 5.18%
LEHMAN MUNICIPAL BOND INDEX TR (2.06%) 6.91% 6.89%
LIPPER OTHER STATES MUNICIPAL
DEBT FUNDS AVERAGE (3.83%) 5.73% 5.65%
*THE MONTH END DATE OF 4/30/91 IS USED FOR COMPARISON PURPOSES ONLY, ACTUAL FUND
INCEPTION IS 4/1/91
<PAGE>
FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF A FUND.
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR ACCOUNT)
MAXIMUM SALES CHARGE (LOAD) 3.75%
(AS A PERCENTAGE OF OFFERING PRICE)
MAXIMUM DEFERRED SALES CHARGE (LOAD) NONE1
(AS A PERCENTAGE OF PURCHASE OR
REDEMPTION PROCEEDS, WHICHEVER IS LOWER)
ANNUAL FUND OPERATING EXPENSES2
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
MANAGEMENT FEES .61%
DISTRIBUTION AND SERVICE (12B-1) FEES NONE
OTHER EXPENSES .17%
TOTAL ANNUAL FUND OPERATING EXPENSES .78%
1 PURCHASES OF SHARES FOR ACCOUNTS WITH $1 MILLION OR MORE ARE NOT SUBJECT
TO FRONT-END SALES CHARGES, BUT MAY BE SUBJECT TO A 1.0% CONTINGENT DEFERRED
SALES CHARGE ON SHARES REDEEMED WITHIN 1 YEAR OF PURCHASE. (SEE "HOW TO BUY
SHARES")
2 EXPENSES ARE BASED ON THE FUND'S MOST RECENT FISCAL YEAR. MANAGEMENT FEES
INCLUDE THE ADMINISTRATIVE FEE PAID BY THE FUND TO CALVERT ADMINISTRATIVE
SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR, CALVERT ASSET MANAGEMENT COMPANY,
INC. ("CAMCO").
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN A FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE EXAMPLE ASSUMES THAT:
- - YOU INVEST $10,000 IN THE FUND FOR THE TIME PERIODS INDICATED;
- - YOUR INVESTMENT HAS A 5% RETURN EACH YEAR; AND
- - THE FUND'S OPERATING EXPENSES REMAIN THE SAME.
ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, UNDER THESE ASSUMPTIONS YOUR
COSTS WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
CTFR VERMONT
MUNICIPAL $452 $615 $792 $1,305
<PAGE>
INVESTMENT PRACTICES AND RISKS
THE MOST CONCISE DESCRIPTION OF THE PRINCIPAL INVESTMENT STRATEGIES AND
ASSOCIATED RISKS IS UNDER THE EARLIER SUMMARY. THE FUND IS ALSO PERMITTED TO
INVEST IN CERTAIN OTHER INVESTMENTS AND TO USE CERTAIN INVESTMENT TECHNIQUES
THAT HAVE HIGHER RISKS ASSOCIATED WITH THEM. ON THE FOLLOWING PAGES ARE BRIEF
DESCRIPTIONS OF THE FUND'S INVESTMENT PRACTICES AND TECHNIQUES.
FOR EACH OF THE INVESTMENT PRACTICES LISTED, THE TABLE BELOW SHOWS THE FUND'S
LIMITATIONS AS A PERCENTAGE OF ITS ASSETS AND THE PRINCIPAL TYPES OF RISK
INVOLVED. (SEE THE PAGES FOLLOWING THE TABLE FOR A DESCRIPTION OF THE TYPES OF
RISKS). NUMBERS IN THIS TABLE SHOW MAXIMUM ALLOWABLE AMOUNT ONLY; FOR ACTUAL
USAGE, CONSULT THE ANNUAL/SEMI-ANNUAL REPORTS.
KEY TO TABLE
J FUND CURRENTLY USES AS A PRINCIPAL INVESTMENT PRACTICE
Q PERMITTED, BUT NOT TYPICALLY USED AS A PRINCIPAL INVESTMENT PRACTICE
(% OF ASSETS ALLOWABLE, IF RESTRICTED)
8 NOT PERMITTED
XN ALLOWED UP TO X% OF FUND'S NET ASSETS
XT ALLOWED UP TO X% OF FUND'S TOTAL ASSETS
NA NOT APPLICABLE TO THIS TYPE OF FUND
INVESTMENT PRACTICES
TEMPORARY DEFENSIVE POSITIONS.
DURING ADVERSE MARKET, ECONOMIC OR POLITICAL CONDITIONS, THE FUND MAY DEPART
FROM ITS PRINCIPAL INVESTMENT STRATEGIES BY INCREASING ITS INVESTMENT IN U.S.
GOVERNMENT SECURITIES AND OTHER SHORT-TERM INTEREST-BEARING SECURITIES. DURING
TIMES OF ANY TEMPORARY DEFENSIVE POSITIONS, THE FUND MAY NOT BE ABLE TO ACHIEVE
ITS INVESTMENT OBJECTIVE.
RISKS: OPPORTUNITY.
CONVENTIONAL SECURITIES
INVESTMENT GRADE BONDS. BONDS RATED BBB/BAA OR HIGHER OR COMPARABLE UNRATED
BONDS. RISKS: INTEREST RATE, MARKET, POLITICAL AND CREDIT.
Q
J
<PAGE>
INVESTMENT PRACTICES AND RISKS (CONT'D)
INVESTMENT PRACTICES
BELOW-INVESTMENT GRADE BONDS. BONDS RATED BELOW BBB/BAA OR COMPARABLE UNRATED
BONDS, ALSO KNOWN AS HIGH-YIELD BONDS. THEY ARE SUBJECT TO GREATER CREDIT RISK
THAN INVESTMENT GRADE BONDS. RISKS: CREDIT, MARKET, INTEREST RATE, LIQUIDITY,
POLITICAL AND INFORMATION.
UNRATED DEBT SECURITIES. BONDS THAT HAVE NOT BEEN RATED BY A RECOGNIZED RATING
AGENCY; THE ADVISOR HAS DETERMINED THE CREDIT QUALITY BASED ON ITS OWN RESEARCH.
RISKS: CREDIT, MARKET, INTEREST RATE, LIQUIDITY, POLITICAL AND INFORMATION.
ILLIQUID SECURITIES. SECURITIES WHICH CANNOT BE READILY SOLD BECAUSE THERE IS NO
ACTIVE MARKET. RISKS: LIQUIDITY, MARKET AND TRANSACTION.
UNLEVERAGED DERIVATIVE SECURITIES
ASSET-BACKED SECURITIES. SECURITIES ARE ISSUED BY A SPECIAL PURPOSE ENTITY AND
ARE BACKED BY FIXED-INCOME OR OTHER INTEREST BEARING ASSETS. RISKS: CREDIT,
INTEREST RATE, POLITICAL AND LIQUIDITY.
MORTGAGE-BACKED SECURITIES (TYPICALLY, SINGLE-FAMILY MORTGAGE BONDS). SECURITIES
ARE BACKED BY POOLS OF MORTGAGES, INCLUDING PASSTHROUGH CERTIFICATES.RISKS:
CREDIT, EXTENSION, PREPAYMENT, LIQUIDITY, POLITICAL AND INTEREST RATE.
LEVERAGED DERIVATIVE INSTRUMENTS
OPTIONS ON SECURITIES AND INDICES. CONTRACTS GIVING THE HOLDER THE RIGHT BUT NOT
THE OBLIGATION TO PURCHASE OR SELL A SECURITY (OR THE CASH VALUE, IN THE CASE OF
AN OPTION ON AN INDEX) AT A SPECIFIED PRICE WITHIN A SPECIFIED TIME. ANY OPTIONS
WRITTEN BY THE FUND MUST BE COVERED. RISKS: INTEREST RATE, MARKET, LEVERAGE,
CORRELATION, LIQUIDITY, CREDIT AND OPPORTUNITY.
Q
35N
Q
Q
15N
Q
Q
Q
5N
<PAGE>
INVESTMENT PRACTICES AND RISKS (CONT'D)
INVESTMENT PRACTICES
FUTURES CONTRACT. AGREEMENT TO BUY OR SELL A SPECIFIC AMOUNT OF A COMMODITY OR
FINANCIAL INSTRUMENT AT A PARTICULAR PRICE ON A SPECIFIC FUTURE DATE. RISKS:
INTEREST RATE, MARKET, LEVERAGE, CORRELATION, LIQUIDITY AND OPPORTUNITY.
STRUCTURED SECURITIES. INVERSE FLOATING RATE MUNICIPAL NOTES AND BONDS. THESE
SECURITIES TEND TO BE HIGHLY SENSITIVE TO INTEREST RATE MOVEMENTS. RISKS:
CREDIT, INTEREST RATE, MARKET, LEVERAGE, LIQUIDITY, POLITICAL AND CORRELATION.
Q
5N
Q
THE FUND HAS ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS (FOR EXAMPLE,
REPURCHASE AGREEMENTS, REVERSE REPURCHASE AGREEMENTS, BORROWING, PLEDGING, AND
SECURITIES LENDING, AND WHEN-ISSUED SECURITIES.) THESE POLICIES AND RESTRICTIONS
ARE DISCUSSED IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI.")
TYPES OF INVESTMENT RISK
CORRELATION RISK
THIS OCCURS WHEN A FUND "HEDGES"- USES ONE INVESTMENT TO OFFSET THE FUND'S
POSITION IN ANOTHER. IF THE TWO INVESTMENTS DO NOT BEHAVE IN RELATION TO ONE
ANOTHER THE WAY FUND MANAGERS EXPECT THEM TO, THEN UNEXPECTED OR UNDESIRED
RESULTS MAY OCCUR. FOR EXAMPLE, A HEDGE MAY ELIMINATE OR REDUCE GAINS AS WELL AS
OFFSET LOSSES.
CREDIT RISK
THE RISK THAT THE ISSUER OF A SECURITY OR THE COUNTERPARTY TO AN INVESTMENT
CONTRACT MAY DEFAULT OR BECOME UNABLE TO PAY ITS OBLIGATIONS WHEN DUE.
EXTENSION RISK
THE RISK THAT AN UNEXPECTED RISE IN INTEREST RATES WILL EXTEND THE LIFE OF A
MORTGAGE-BACKED SECURITY BEYOND THE EXPECTED PREPAYMENT TIME, TYPICALLY REDUCING
THE SECURITY'S VALUE.
INFORMATION RISK
THE RISK THAT INFORMATION ABOUT A SECURITY OR ISSUER OR THE MARKET MIGHT NOT BE
AVAILABLE, COMPLETE, ACCURATE OR COMPARABLE.
INTEREST RATE RISK
THE RISK THAT CHANGES IN INTEREST RATES WILL ADVERSELY AFFECT THE VALUE OF AN
INVESTOR'S SECURITIES. WHEN INTEREST RATES RISE, THE VALUE OF FIXED-INCOME
SECURITIES WILL GENERALLY FALL. CONVERSELY, A DROP IN INTEREST RATES WILL
GENERALLY CAUSE AN
<PAGE>
INCREASE IN THE VALUE OF FIXED-INCOME SECURITIES. LONGER-TERM SECURITIES AND
ZERO COUPON/"STRIPPED" COUPON SECURITIES ("STRIPS") ARE SUBJECT TO GREATER
INTEREST RATE RISK.
LEVERAGE RISK
THE RISK THAT OCCURS IN SOME SECURITIES OR TECHNIQUES WHICH TEND TO MAGNIFY THE
EFFECT OF SMALL CHANGES IN AN INDEX OR A MARKET. THIS CAN RESULT IN A LOSS THAT
EXCEEDS THE AMOUNT ACTUALLY INVESTED.
LIQUIDITY RISK
THE RISK THAT OCCURS WHEN INVESTMENTS CANNOT BE READILY SOLD. A FUND MAY HAVE TO
ACCEPT A LESS-THAN-DESIRABLE PRICE TO COMPLETE THE SALE OF AN ILLIQUID SECURITY
OR MAY NOT BE ABLE TO SELL IT AT ALL.
MANAGEMENT RISK
THE RISK THAT A FUND'S PORTFOLIO MANAGEMENT PRACTICES MIGHT NOT WORK TO ACHIEVE
THEIR DESIRED RESULT.
MARKET RISK
THE RISK THAT SECURITIES PRICES IN A MARKET, A SECTOR OR AN INDUSTRY WILL
FLUCTUATE, AND THAT SUCH MOVEMENTS MIGHT REDUCE AN INVESTMENT'S VALUE.
OPPORTUNITY RISK
THE RISK OF MISSING OUT ON AN INVESTMENT OPPORTUNITY BECAUSE THE ASSETS NEEDED
TO TAKE ADVANTAGE OF IT ARE COMMITTED TO LESS ADVANTAGEOUS INVESTMENTS OR
STRATEGIES.
POLITICAL RISK (MUNICIPAL BONDS)
THE RISK THAT DIFFERENT TYPES OF MUNICIPAL BONDS MAY BE ADVERSELY AFFECTED BY
CHANGES OR PROPOSED CHANGES IN THE FEDERAL OR STATE TAX STRUCTURE, ECONOMIC AND
REGULATORY DEVELOPMENT, JUDICIAL OPINIONS, AND OTHER FACTORS.
PREPAYMENT RISK
THE RISK THAT UNANTICIPATED PREPAYMENTS MAY OCCUR, REDUCING THE VALUE OF A
MORTGAGE-BACKED SECURITY. THE FUND MUST THEN REINVEST THOSE ASSETS AT THE
CURRENT, MARKET RATE WHICH MAY BE LOWER.
TRANSACTION RISK
THE RISK THAT A FUND MAY BE DELAYED OR UNABLE TO SETTLE A TRANSACTION OR THAT
COMMISSIONS AND SETTLEMENT EXPENSES MAY BE HIGHER THAN USUAL.
<PAGE>
ABOUT CALVERT GROUP
CAMCO (4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MD 20814) IS THE FUND'S
INVESTMENT ADVISOR. CAMCO PROVIDES THE FUND WITH INVESTMENT SUPERVISION AND
MANAGEMENT AND OFFICE SPACE, FURNISHES EXECUTIVE AND OTHER PERSONNEL TO THE FUND
AND PAYS THE SALARIES AND FEES OF ALL TRUSTEES/DIRECTORS WHO ARE AFFILIATED
PERSONS OF THE ADVISOR. IT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1976. CAMCO IS
THE INVESTMENT ADVISOR FOR OVER 25 MUTUAL FUND PORTFOLIOS. AS OF DECEMBER 31,
1999, CAMCO HAD OVER $6 BILLION IN ASSETS UNDER MANAGEMENT.
CAMCO USES A TEAM APPROACH TO ITS MANAGEMENT OF THE FUND. SINCE INCEPTION,
INVESTMENT SELECTIONS FOR THE FUND HAVE BEEN MADE BY DAVID R. ROCHAT AND RENO J.
MARTINI. MR. ROCHAT IS A DIRECTOR AND SENIOR VICE PRESIDENT OF CALVERT ASSET
MANAGEMENT COMPANY, INC. HE IS A TRUSTEE/DIRECTOR AND SENIOR VICE PRESIDENT OF
FIRST VARIABLE RATE FUND, CALVERT TAX-FREE RESERVES, MONEY MANAGEMENT PLUS, THE
CALVERT FUND, AND CALVERT MUNICIPAL FUND, INC., AND IS PRIMARILY RESPONSIBLE FOR
SETTING THE INVESTMENT STRATEGY OF THE TRADING DEPARTMENT, UTILIZING OVER 20
YEARS' EXPERIENCE IN THE SECURITIES AND INVESTMENT COMMUNITY. MR. ROCHAT JOINED
CALVERT GROUP IN 1981 AFTER ESTABLISHING AND MANAGING THE MUNICIPAL BOND
DEPARTMENT AT DONALDSON, LUFKIN, & JENRETTE SECURITIES CORPORATION. RENO J.
MARTINI, SENIOR VICE PRESIDENT AND CHIEF INVESTMENT OFFICER OF CAMCO, OVERSEES
THE MANAGEMENT OF ALL CALVERT FUNDS FOR CAMCO. MR. MARTINI HAS OVER 18 YEARS OF
EXPERIENCE IN EVALUATING AND PURCHASING MUNICIPAL SECURITIES AND HAS BEEN THE
HEAD OF CAMCO'S ASSET MANAGEMENT TEAM SINCE 1985.
ADVISORY FEES
THE FOLLOWING TABLE SHOWS THE AGGREGATE ANNUAL ADVISORY FEE PAID TO CAMCO BY THE
FUND FOR THE MOST RECENT FISCAL YEAR AS A PERCENTAGE OF AVERAGE DAILY NET
ASSETS.
FUND ADVISORY FEE
CTFR VERMONT .60%
HOW TO BUY SHARES
GETTING STARTED - BEFORE YOU OPEN AN ACCOUNT
YOU HAVE A FEW DECISIONS TO MAKE BEFORE YOU OPEN AN ACCOUNT IN A MUTUAL FUND.
FIRST, DECIDE WHICH FUND OR FUNDS BEST SUITS YOUR NEEDS AND YOUR GOALS.
SECOND, DECIDE WHAT KIND OF ACCOUNT YOU WANT TO OPEN. CALVERT OFFERS INDIVIDUAL,
JOINT, TRUST, UNIFORM GIFTS/TRANSFERS TO MINOR ACCOUNTS, AND SEVERAL OTHER TYPES
OF ACCOUNTS.
<PAGE>
SHARES OF CTFR VERMONT ARE SOLD WITH A FRONT-END SALES CHARGE.
YOU WILL PAY A SALES CHARGE AT THE TIME OF EACH PURCHASE. THIS TABLE SHOWS THE
CHARGES BOTH AS A PERCENTAGE OF OFFERING PRICE AND AS A PERCENTAGE OF THE AMOUNT
YOU INVEST. THE TERM "OFFERING PRICE" INCLUDES THE FRONT-END SALES CHARGE. IF
YOU INVEST MORE, THE SALES CHARGE WILL BE LOWER. FOR EXAMPLE, IF YOU INVEST MORE
THAN $50,000, OR IF YOUR CUMULATIVE PURCHASES OR THE VALUE IN YOUR ACCOUNT IS
MORE THAN $50,000,4 THEN THE SALES CHARGE IS REDUCED TO 3.00%.
YOUR INVESTMENT IN SALES CHARGE AS % OF AMOUNT
% OF OFFERING PRICE INVESTED
LESS THAN $50,000 3.75% 3.90%
$50,000 BUT LESS THAN $100,000 3.00% 3.09%
$100,000 BUT LESS THAN $250,000 2.25% 2.30%
$250,000 BUT LESS THAN $500,000 1.75% 1.78%
$500,000 BUT LESS THAN $1,000,000 1.00% 1.01%
$1,000,000 AND OVER NONE* NONE*
4 THIS IS CALLED "RIGHTS OF ACCUMULATION." THE SALES CHARGE IS CALCULATED BY
TAKING INTO ACCOUNT NOT ONLY THE DOLLAR AMOUNT OF THE NEW PURCHASE OF SHARES,
BUT ALSO THE HIGHER OF COST OR CURRENT VALUE OF SHARES YOU HAVE PREVIOUSLY
PURCHASED IN CALVERT GROUP FUNDS THAT IMPOSE SALES CHARGES. THIS AUTOMATICALLY
APPLIES TO YOUR ACCOUNT FOR EACH NEW PURCHASE OF SHARES.
* PURCHASES OF SHARES AT NAV FOR ACCOUNTS WITH $1,000,000 OR MORE ON WHICH A
FINDER'S FEE HAS BEEN PAID ARE SUBJECT TO A ONE YEAR CDSC OF 1.00%. SEE THE
"CALCULATION OF CONTINGENT DEFERRED SALES CHARGE."
THE FRONT-END SALES CHARGE MAY BE WAIVED FOR CERTAIN PURCHASES OR INVESTORS,
SUCH AS PARTICIPANTS IN CERTAIN GROUP RETIREMENT PLANS OR OTHER QUALIFIED GROUPS
AND CLIENTS OF REGISTERED INVESTMENT ADVISERS. FOR DETAILS ON THESE AND OTHER
PURCHASES THAT MAY QUALIFY FOR A REDUCED SALES CHARGE, SEE EXHIBIT A.
CALCULATION OF CONTINGENT DEFERRED SALES CHARGE
THE CDSC WILL NOT BE CHARGED ON SHARES YOU RECEIVED AS DIVIDENDS OR FROM CAPITAL
GAINS DISTRIBUTIONS OR ON ANY CAPITAL APPRECIATION (GAIN IN THE VALUE) OF SHARES
THAT ARE SOLD.
SHARES THAT ARE NOT SUBJECT TO THE CDSC WILL BE REDEEMED FIRST, FOLLOWED BY
SHARES YOU HAVE HELD THE LONGEST. THE CDSC IS CALCULATED BY DETERMINING THE
SHARE VALUE AT BOTH THE TIME OF PURCHASE AND REDEMPTION AND THEN MULTIPLYING
WHICHEVER VALUE IS LESS BY THE PERCENTAGE THAT APPLIES AS SHOWN ABOVE. IF YOU
CHOOSE TO SELL ONLY PART OF YOUR SHARES, THE CAPITAL APPRECIATION FOR THOSE
SHARES ONLY IS INCLUDED IN THE CALCULATION, RATHER THAN THE CAPITAL APPRECIATION
FOR THE ENTIRE ACCOUNT.
<PAGE>
NEXT STEP - ACCOUNT APPLICATION
COMPLETE AND SIGN AN APPLICATION FOR EACH NEW ACCOUNT. FOR MORE INFORMATION,
CONTACT YOUR FINANCIAL PROFESSIONAL OR OUR SHAREHOLDER SERVICES DEPARTMENT AT
800-368-2748.
MINIMUM TO OPEN AN ACCOUNT MINIMUM ADDITIONAL
$2,000 INVESTMENTS -$250
PLEASE MAKE YOUR CHECK PAYABLE
TO THE FUND AND MAIL IT TO:
NEW ACCOUNTS: SUBSEQUENT INVESTMENTS:
(INCLUDE APPLICATION) (INCLUDE INVESTMENT SLIP)
CALVERT GROUP CALVERT GROUP
P.O. BOX 219544 P.O. BOX 219739
KANSAS, CITY MO KANSAS CITY, MO
64121-9544 64121-9739
BY REGISTERED, CALVERT GROUP
CERTIFIED, OR C/O NFDS,
OVERNIGHT MAIL 330 WEST 9TH ST.
KANSAS CITY, MO 64105-1807
AT THE CALVERT OFFICE VISIT THE CALVERT OFFICE TO MAKE
INVESTMENTS BY CHECK. SEE THE BACK
COVER PAGE FOR THE ADDRESS.
IMPORTANT - HOW SHARES ARE PRICED
THE PRICE OF SHARES IS BASED ON THE FUND'S NET ASSET VALUE ("NAV"). NAV IS
COMPUTED 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.
PORTFOLIO SECURITIES AND OTHER ASSETS ARE VALUED BASED ON MARKET QUOTATIONS. 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). THE FUND IS OPEN FOR BUSINESS EACH DAY THE NYSE IS OPEN.
PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY
AND VETERANS' DAY, WHEN THE NYSE IS OPEN AND THE FUND IS OPEN BUT PURCHASES
CANNOT BE RECEIVED BECAUSE THE BANKS ARE CLOSED.
<PAGE>
WHEN YOUR ACCOUNT WILL BE CREDITED
YOUR PURCHASE WILL BE PROCESSED AT THE NAV NEXT CALCULATED AFTER YOUR ORDER IS
RECEIVED IN GOOD ORDER. ALL OF YOUR PURCHASES MUST BE MADE IN US DOLLARS. NO
CASH OR THIRD PARTY CHECKS WILL BE ACCEPTED. NO CREDIT CARD OR CREDIT LOAN
CHECKS WILL BE ACCEPTED. THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF
SHARES FOR A PERIOD OF TIME OR TO REJECT ANY SPECIFIC PURCHASE ORDER. AS A
CONVENIENCE, CHECK PURCHASES RECEIVED AT CALVERT'S OFFICE IN BETHESDA, MARYLAND
WILL BE SENT BY OVERNIGHT DELIVERY TO THE TRANSFER AGENT AND WILL BE CREDITED
THE NEXT BUSINESS DAY UPON RECEIPT. ANY CHECK PURCHASE RECEIVED WITHOUT AN
INVESTMENT SLIP MAY CAUSE DELAYED CREDITING. ANY PURCHASE LESS THAN THE $250
MINIMUM FOR SUBSEQUENT INVESTMENTS WILL BE CHARGED A SERVICE FEE OF $3. IF YOUR
CHECK DOES NOT CLEAR YOUR BANK, YOUR PURCHASE WILL BE CANCELED AND YOU WILL BE
CHARGED A $25 FEE PLUS ANY COSTS INCURRED. ALL PURCHASES WILL BE CONFIRMED AND
CREDITED TO YOUR ACCOUNT IN FULL AND FRACTIONAL SHARES (ROUNDED TO THE NEAREST
1/1000TH OF A SHARE).
OTHER CALVERT GROUP FEATURES
CALVERT INFORMATION NETWORK
FOR 24 HOUR PERFORMANCE AND ACCOUNT INFORMATION CALL 800-368-2745 OR VISIT
WWW.CALVERT.COM
YOU CAN OBTAIN CURRENT PERFORMANCE AND PRICING INFORMATION, VERIFY ACCOUNT
BALANCES, AND AUTHORIZE CERTAIN TRANSACTIONS WITH THE CONVENIENCE OF ONE PHONE
CALL, 24 HOURS A DAY.
ACCOUNT SERVICES
BY SIGNING UP FOR SERVICES WHEN YOU OPEN YOUR ACCOUNT, YOU AVOID HAVING TO
OBTAIN A SIGNATURE GUARANTEE. IF YOU WISH TO ADD SERVICES AT A LATER DATE, A
SIGNATURE GUARANTEE TO VERIFY YOUR SIGNATURE MAY BE OBTAINED FROM ANY BANK,
TRUST COMPANY AND SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, BROKER-DEALER FIRM
OR MEMBER OF A DOMESTIC STOCK EXCHANGE. A NOTARY PUBLIC CANNOT PROVIDE A
SIGNATURE GUARANTEE.
CALVERT MONEY CONTROLLER
CALVERT MONEY CONTROLLER ALLOWS YOU TO PURCHASE OR SELL SHARES BY ELECTRONIC
FUNDS TRANSFER WITHOUT THE TIME DELAY OF MAILING A CHECK OR THE ADDED EXPENSE OF
A WIRE. USE THIS SERVICE TO TRANSFER UP TO $300,000 ELECTRONICALLY. ALLOW ONE OR
TWO BUSINESS DAYS AFTER YOU PLACE YOUR REQUEST FOR THE TRANSFER TO TAKE PLACE.
MONEY TRANSFERRED TO PURCHASE NEW SHARES WILL BE SUBJECT TO A HOLD OF UP TO 10
BUSINESS DAYS BEFORE REDEMPTION REQUESTS WILL BE HONORED. TRANSACTION REQUESTS
MUST BE RECEIVED BY 4 P.M. ET. YOU MAY REQUEST THIS SERVICE ON YOUR INITIAL
ACCOUNT APPLICATION. CALVERT MONEY CONTROLLER TRANSACTIONS RETURNED FOR
INSUFFICIENT FUNDS WILL INCUR A $25 CHARGE.
<PAGE>
TELEPHONE TRANSACTIONS
YOU MAY PURCHASE, REDEEM, OR EXCHANGE SHARES, WIRE FUNDS AND USE CALVERT MONEY
CONTROLLER BY TELEPHONE IF YOU HAVE PRE-AUTHORIZED SERVICE INSTRUCTIONS. YOU
RECEIVE TELEPHONE PRIVILEGES AUTOMATICALLY WHEN YOU OPEN YOUR ACCOUNT UNLESS YOU
ELECT OTHERWISE. FOR OUR MUTUAL PROTECTION, THE FUND, THE SHAREHOLDER SERVICING
AGENT AND THEIR AFFILIATES USE PRECAUTIONS SUCH AS VERIFYING SHAREHOLDER
IDENTITY AND RECORDING TELEPHONE CALLS TO CONFIRM INSTRUCTIONS GIVEN BY PHONE. A
CONFIRMATION STATEMENT IS SENT FOR MOST TRANSACTIONS; PLEASE REVIEW THIS
STATEMENT AND VERIFY THE ACCURACY OF YOUR TRANSACTION IMMEDIATELY.
EXCHANGES
CALVERT GROUP OFFERS A WIDE VARIETY OF INVESTMENT OPTIONS THAT INCLUDES COMMON
STOCK FUNDS, TAX-EXEMPT AND CORPORATE BOND FUNDS, AND MONEY MARKET FUNDS (CALL
YOUR FINANCIAL PROFESSIONAL OR CALVERT REPRESENTATIVE FOR MORE INFORMATION). WE
MAKE IT EASY FOR YOU TO PURCHASE SHARES IN OTHER CALVERT FUNDS IF YOUR
INVESTMENT GOALS CHANGE. THE EXCHANGE PRIVILEGE OFFERS FLEXIBILITY BY ALLOWING
YOU TO EXCHANGE SHARES ON WHICH YOU HAVE ALREADY PAID A SALES CHARGE FROM ONE
MUTUAL FUND TO ANOTHER AT NO ADDITIONAL CHARGE.
COMPLETE AND SIGN AN ACCOUNT APPLICATION, TAKING CARE TO REGISTER YOUR NEW
ACCOUNT IN THE SAME NAME AND TAXPAYER IDENTIFICATION NUMBER AS YOUR EXISTING
CALVERT ACCOUNT(S). EXCHANGE INSTRUCTIONS MAY THEN BE GIVEN BY TELEPHONE IF
TELEPHONE REDEMPTIONS HAVE BEEN AUTHORIZED AND THE SHARES ARE NOT IN CERTIFICATE
FORM.
BEFORE YOU MAKE AN EXCHANGE, PLEASE NOTE THE FOLLOWING:
EACH EXCHANGE REPRESENTS THE SALE OF SHARES OF ONE FUND AND THE PURCHASE OF
SHARES OF ANOTHER. THEREFORE, YOU COULD REALIZE A TAXABLE GAIN OR LOSS.
YOU MAY EXCHANGE SHARES ACQUIRED BY REINVESTMENT OF DIVIDENDS OR DISTRIBUTIONS
INTO ANOTHER CALVERT FUND AT NO ADDITIONAL CHARGE.
SHARES MAY ONLY BE EXCHANGED FOR SHARES OF THE SAME CLASS OF ANOTHER CALVERT
FUND.
NO CDSC IS IMPOSED ON EXCHANGES OF SHARES SUBJECT TO A CDSC AT THE TIME OF THE
EXCHANGE. THE APPLICABLE CDSC IS IMPOSED AT THE TIME THE SHARES ACQUIRED BY THE
EXCHANGE ARE REDEEMED.
EXCHANGE REQUESTS WILL NOT BE ACCEPTED ON ANY DAY WHEN CALVERT IS OPEN BUT THE
FUND'S CUSTODIAN BANK IS CLOSED (E.G., COLUMBUS DAY AND VETERAN'S DAY); THESE
EXCHANGE REQUESTS WILL BE PROCESSED THE NEXT DAY THE FUND'S CUSTODIAN BANK IS
OPEN.
<PAGE>
THE FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR CANCEL
ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR CONDITIONS OF
PURCHASE OF SHARES OF ANY FUND; OR WITHDRAW ALL OR ANY PART OF THE OFFERING MADE
BY THIS PROSPECTUS. TO PROTECT THE INTERESTS OF INVESTORS, THE FUND AND THE
DISTRIBUTOR MAY REJECT ANY ORDER CONSIDERED MARKET-TIMING ACTIVITY.
THE FUND RESERVES THE RIGHT TO TERMINATE OR MODIFY THE EXCHANGE PRIVILEGE WITH
60 DAYS' WRITTEN NOTICE.
ELECTRONIC DELIVERY OF PROSPECTUSES AND SHAREHOLDER REPORTS
YOU MAY REQUEST TO RECEIVE ELECTRONIC DELIVERY OF PROSPECTUSES AND ANNUAL AND
SEMI-ANNUAL REPORTS.
COMBINED GENERAL MAILINGS (HOUSEHOLDING)
MULTIPLE ACCOUNTS WITH THE SAME SOCIAL SECURITY NUMBER WILL RECEIVE ONE MAILING
PER HOUSEHOLD OF INFORMATION SUCH AS PROSPECTUSES AND SEMI-ANNUAL AND ANNUAL
REPORTS. YOU MAY REQUEST FURTHER GROUPING OF ACCOUNTS TO RECEIVE FEWER MAILINGS.
SEPARATE STATEMENTS WILL BE GENERATED FOR EACH SEPARATE ACCOUNT AND WILL BE
MAILED IN ONE ENVELOPE FOR EACH COMBINATION ABOVE.
SPECIAL SERVICES AND CHARGES
THE FUND PAYS FOR SHAREHOLDER SERVICES BUT NOT FOR SPECIAL SERVICES THAT ARE
REQUIRED BY A FEW SHAREHOLDERS, SUCH AS A REQUEST FOR A HISTORICAL TRANSCRIPT OF
AN ACCOUNT. YOU MAY BE REQUIRED TO PAY A FEE FOR THESE SPECIAL SERVICES.
IF YOU ARE PURCHASING SHARES THROUGH A PROGRAM OF SERVICES OFFERED BY A
BROKER/DEALER OR FINANCIAL INSTITUTION, YOU SHOULD READ THE PROGRAM MATERIALS
TOGETHER WITH THIS PROSPECTUS. CERTAIN FEATURES MAY BE MODIFIED IN THESE
PROGRAMS. INVESTORS MAY BE CHARGED A FEE IF THEY EFFECT TRANSACTIONS IN FUND
SHARES THROUGH A BROKER OR AGENT.
MINIMUM ACCOUNT BALANCE
PLEASE MAINTAIN A BALANCE IN EACH OF YOUR ACCOUNTS OF AT LEAST $1,000. IF THE
BALANCE IN ANY OF YOUR ACCOUNTS FALLS BELOW THE MINIMUM DURING A MONTH, YOUR
ACCOUNT MAY BE CLOSED AND THE PROCEEDS MAILED TO THE ADDRESS OF RECORD. YOU WILL
RECEIVE NOTICE THAT YOUR ACCOUNT IS BELOW THE MINIMUM, AND WILL BE CLOSED IF THE
BALANCE IS NOT BROUGHT UP TO THE REQUIRED MINIMUM AMOUNT WITHIN 30 DAYS.
DIVIDENDS, CAPITAL GAINS, AND TAXES
THE FUND PAYS DIVIDENDS FROM ITS NET INVESTMENT INCOME AS SHOWN BELOW. 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;
<PAGE>
HOWEVER, THE FUND DOES NOT ANTICIPATE MAKING ANY SUCH DISTRIBUTIONS UNLESS
AVAILABLE CAPITAL LOSS CARRYOVERS HAVE BEEN USED OR HAVE EXPIRED.
CTFR VERMONT: PAID MONTHLY
DIVIDEND PAYMENT OPTIONS
DIVIDENDS AND ANY DISTRIBUTIONS ARE AUTOMATICALLY REINVESTED IN THE SAME FUND AT
NAV (WITHOUT SALES CHARGE), UNLESS YOU ELECT TO HAVE AMOUNTS OF $10 OR MORE PAID
IN CASH (BY CHECK OR BY CALVERT MONEY CONTROLLER). DIVIDENDS AND DISTRIBUTIONS
FROM ANY CALVERT GROUP FUND MAY BE AUTOMATICALLY INVESTED IN AN IDENTICALLY
REGISTERED ACCOUNT IN ANY OTHER CALVERT GROUP FUND AT NAV. IF REINVESTED IN THE
SAME ACCOUNT, NEW SHARES WILL BE PURCHASED AT NAV ON THE REINVESTMENT DATE,
WHICH IS GENERALLY 1 TO 3 DAYS PRIOR TO THE PAYMENT DATE. YOU MUST NOTIFY THE
FUND IN WRITING TO CHANGE YOUR PAYMENT OPTIONS. IF YOU ELECT TO HAVE DIVIDENDS
AND/OR DISTRIBUTIONS PAID IN CASH, AND THE US POSTAL SERVICE RETURNS THE CHECK
AS UNDELIVERABLE, IT, AS WELL AS FUTURE DIVIDENDS AND DISTRIBUTIONS, WILL BE
REINVESTED IN ADDITIONAL SHARES. NO DIVIDENDS WILL ACCRUE ON AMOUNTS REPRESENTED
BY UNCASHED DISTRIBUTION OR REDEMPTION CHECKS.
BUYING A DIVIDEND
AT THE TIME OF PURCHASE, THE SHARE PRICE OF EACH CLASS MAY REFLECT UNDISTRIBUTED
INCOME, CAPITAL GAINS OR UNREALIZED APPRECIATION OF SECURITIES. ANY INCOME OR
CAPITAL GAINS FROM THESE AMOUNTS WHICH ARE LATER DISTRIBUTED TO YOU ARE FULLY
TAXABLE. ON THE RECORD DATE FOR A DISTRIBUTION, SHARE VALUE IS REDUCED BY THE
AMOUNT OF THE DISTRIBUTION. IF YOU BUY SHARES JUST BEFORE THE RECORD DATE
("BUYING A DIVIDEND") YOU WILL PAY THE FULL PRICE FOR THE SHARES AND THEN
RECEIVE A PORTION OF THE PRICE BACK AS A TAXABLE DISTRIBUTION.
FEDERAL TAXES
DIVIDENDS DERIVED FROM INTEREST ON MUNICIPAL OBLIGATIONS CONSTITUTE
EXEMPT-INTEREST DIVIDENDS, ON WHICH YOU ARE NOT SUBJECT TO FEDERAL INCOME TAX.
HOWEVER, DIVIDENDS WHICH ARE FROM TAXABLE INTEREST AND ANY DISTRIBUTIONS OF
SHORT TERM CAPITAL GAIN ARE TAXABLE TO YOU AS ORDINARY INCOME. IF THE FUND MAKES
ANY DISTRIBUTIONS OF LONG-TERM CAPITAL GAINS, THEN THESE ARE TAXABLE TO YOU AS
LONG-TERM CAPITAL GAINS, REGARDLESS OF HOW LONG YOU HELD YOUR SHARES OF THE
FUND. DIVIDENDS ATTRIBUTABLE TO INTEREST ON CERTAIN PRIVATE ACTIVITY BONDS MUST
BE INCLUDED IN FEDERAL ALTERNATIVE MINIMUM TAX FOR INDIVIDUALS AND FOR
CORPORATIONS. THE FUND MAY DERIVE UP TO 20% OF ITS INCOME FROM TAXABLE
SHORT-TERM MONEY MARKET INVESTMENTS, FOR LIQUIDITY PURPOSES OR PENDING
INVESTMENT. INTEREST EARNED FROM TAXABLE INVESTMENTS WILL BE TAXABLE AS ORDINARY
INCOME.
IF ANY TAXABLE INCOME OR GAINS ARE PAID, IN JANUARY, THE FUND WILL MAIL YOU FORM
1099-DIV INDICATING THE FEDERAL TAX STATUS OF DIVIDENDS AND ANY CAPITAL GAIN
DISTRIBUTIONS PAID TO YOU DURING THE PAST YEAR. GENERALLY, DIVIDENDS AND
DISTRIBUTIONS ARE TAXABLE IN THE YEAR THEY ARE PAID. HOWEVER, ANY DIVIDENDS AND
DISTRIBU-
<PAGE>
TIONS 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.
YOU MAY REALIZE A CAPITAL GAIN OR LOSS WHEN YOU SELL OR EXCHANGE SHARES. THIS
CAPITAL GAIN OR LOSS WILL BE SHORT- OR LONG-TERM, DEPENDING ON HOW LONG YOU HAVE
OWNED THE SHARES WHICH WERE SOLD. IN JANUARY, THE FUND WILL MAIL YOU FORM 1099-B
INDICATING THE TOTAL AMOUNT OF ALL SALES, INCLUDING EXCHANGES. YOU SHOULD KEEP
YOUR ANNUAL YEAR-END ACCOUNT STATEMENTS TO DETERMINE THE COST (BASIS) OF THE
SHARES TO REPORT ON YOUR TAX RETURNS.
OTHER TAX INFORMATION
DIVIDENDS DERIVED FROM INTEREST ON VERMONT STATE OR LOCAL OBLIGATIONS ARE EXEMPT
FROM VERMONT PERSONAL INCOME TAX, AS ARE DIVIDENDS FROM OBLIGATIONS ISSUED BY
CERTAIN TERRITORIES, SUCH AS PUERTO RICO. THE FUND WILL ADVISE YOU EACH JANUARY
OF THE PERCENT OF DIVIDENDS QUALIFYING FOR THIS EXEMPTION. YOU SHOULD CONSULT
YOUR TAX ADVISOR WITH REGARD TO HOW CERTAIN DIVIDENDS AFFECT YOU.
TAXPAYER IDENTIFICATION NUMBER
IF WE DO NOT HAVE YOUR CORRECT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
("TIN") AND A SIGNED CERTIFIED APPLICATION OR FORM W-9, FEDERAL LAW REQUIRES US
TO WITHHOLD 31% OF YOUR REPORTABLE DIVIDENDS, AND POSSIBLY 31% OF CERTAIN
REDEMPTIONS. IN ADDITION, YOU MAY BE SUBJECT TO A FINE BY THE INTERNAL REVENUE
SERVICE. YOU WILL ALSO BE PROHIBITED FROM OPENING ANOTHER ACCOUNT BY EXCHANGE.
IF THIS TIN INFORMATION IS NOT RECEIVED WITHIN 60 DAYS AFTER YOUR ACCOUNT IS
ESTABLISHED, YOUR ACCOUNT MAY BE REDEEMED (CLOSED) AT THE CURRENT NAV ON THE
DATE OF REDEMPTION. CALVERT GROUP RESERVES THE RIGHT TO REJECT ANY NEW ACCOUNT
OR ANY PURCHASE ORDER FOR FAILURE TO SUPPLY A CERTIFIED TIN.
HOW TO SELL SHARES
YOU MAY REDEEM ALL OR A PORTION OF YOUR SHARES ON ANY DAY THE FUND IS OPEN FOR
BUSINESS, PROVIDED THE AMOUNT REQUESTED IS NOT ON HOLD. WHEN YOU PURCHASE BY
CHECK OR WITH CALVERT MONEY CONTROLLER (ELECTRONIC FUNDS TRANSFER), THE PURCHASE
WILL BE ON HOLD FOR UP TO 10 BUSINESS DAYS FROM THE DATE OF RECEIPT. DURING THE
HOLD PERIOD, REDEMPTIONS PROCEEDS WILL NOT BE SENT UNTIL THE TRANSFER AGENT IS
REASONABLY SATISFIED THAT THE PURCHASE PAYMENT HAS BEEN
COLLECTED.
YOUR SHARES WILL BE REDEEMED AT THE NEXT NAV CALCULATED AFTER YOUR REDEMPTION
REQUEST IS RECEIVED (LESS ANY APPLICABLE CDSC). THE PROCEEDS WILL NORMALLY BE
SENT TO YOU ON THE NEXT BUSINESS DAY, BUT IF MAKING IMMEDIATE PAYMENT COULD
ADVERSELY AFFECT THE FUND, IT MAY TAKE UP TO SEVEN (7) DAYS TO MAKE PAYMENT.
CALVERT MONEY CONTROLLER REDEMPTIONS GENERALLY WILL BE CREDITED TO YOUR BANK
<PAGE>
ACCOUNT BY THE SECOND BUSINESS DAY AFTER YOUR PHONE CALL. 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
AFFECTED FUND, WHICHEVER IS LESS. WHEN THE NYSE IS CLOSED (OR WHEN TRADING IS
RESTRICTED) FOR ANY REASON OTHER THAN ITS CUSTOMARY WEEKEND OR HOLIDAY CLOSINGS,
OR UNDER ANY EMERGENCY CIRCUMSTANCES AS DETERMINED BY THE SECURITIES AND
EXCHANGE COMMISSION, REDEMPTIONS MAY BE SUSPENDED OR PAYMENT DATES POSTPONED.
PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY
AND VETERANS' DAY, WHEN THE NYSE IS OPEN AND THE FUND IS OPEN BUT REDEMPTIONS
CANNOT BE MAILED OR WIRED BECAUSE THE POST OFFICES AND BANKS ARE CLOSED.
FOLLOW THESE SUGGESTIONS TO ENSURE TIMELY PROCESSING OF YOUR REDEMPTION REQUEST:
BY TELEPHONE
YOU MAY REDEEM SHARES FROM YOUR ACCOUNT BY TELEPHONE AND HAVE YOUR MONEY MAILED
TO YOUR ADDRESS OF RECORD OR ELECTRONICALLY TRANSFERRED OR WIRED TO A BANK YOU
HAVE PREVIOUSLY AUTHORIZED. A CHARGE OF $5 MAY BE IMPOSED ON WIRE TRANSFERS OF
LESS THAN $1,000.
WRITTEN REQUESTS
CALVERT GROUP, P.O. BOX 219544, KANSAS CITY, MO 64121-9544
YOUR LETTER SHOULD INCLUDE YOUR ACCOUNT NUMBER AND FUND AND THE NUMBER OF SHARES
OR THE DOLLAR AMOUNT YOU ARE REDEEMING. PLEASE PROVIDE A DAYTIME TELEPHONE
NUMBER, IF POSSIBLE, FOR US TO CALL IF WE HAVE QUESTIONS. IF THE MONEY IS BEING
SENT TO A NEW BANK, PERSON, OR ADDRESS OTHER THAN THE ADDRESS OF RECORD, YOUR
LETTER MUST BE SIGNATURE GUARANTEED.
SYSTEMATIC CHECK REDEMPTIONS
IF YOU MAINTAIN AN ACCOUNT WITH A BALANCE OF $10,000 OR MORE, YOU MAY HAVE UP TO
TWO (2) REDEMPTION CHECKS FOR A FIXED AMOUNT SENT TO YOU ON THE 15TH OF THE
MONTH, SIMPLY BY SENDING A LETTER WITH ALL INFORMATION, INCLUDING YOUR ACCOUNT
NUMBER, AND THE DOLLAR AMOUNT ($100 MINIMUM). IF YOU WOULD LIKE A REGULAR CHECK
MAILED TO ANOTHER PERSON OR PLACE, YOUR LETTER MUST BE SIGNATURE GUARANTEED.
SHARES SUBJECT TO THE ONE-YEAR CDSC WHICH ARE REDEEMED BY SYSTEMATIC CHECK
REDEMPTION WILL BE CHARGED THE CDSC.
CORPORATIONS AND ASSOCIATIONS
YOUR LETTER OF INSTRUCTION AND CORPORATE RESOLUTION SHOULD BE SIGNED BY
PERSON(S) AUTHORIZED TO ACT ON THE ACCOUNT, ACCOMPANIED BY SIGNATURE
GUARANTEE(S).
<PAGE>
TRUSTS
YOUR LETTER OF INSTRUCTION SHOULD BE SIGNED BY THE TRUSTEE(S) (AS TRUSTEE(S)),
WITH A SIGNATURE GUARANTEE. (IF THE TRUSTEE'S NAME IS NOT REGISTERED ON YOUR
ACCOUNT, PLEASE PROVIDE A COPY OF THE TRUST DOCUMENT, CERTIFIED WITHIN THE LAST
60 DAYS.)
THROUGH YOUR DEALER
YOUR DEALER MUST RECEIVE YOUR REQUEST BEFORE THE CLOSE OF REGULAR TRADING ON THE
NYSE TO RECEIVE THAT DAY'S NAV. YOUR DEALER WILL BE RESPONSIBLE FOR FURNISHING
ALL NECESSARY DOCUMENTATION TO CALVERT GROUP AND MAY CHARGE YOU FOR SERVICES
PROVIDED.
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUND'S
FINANCIAL PERFORMANCE FOR THE PAST 5 FISCAL YEARS. THE FUND'S FISCAL YEAR END IS
DECEMBER 31. CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS FOR A SINGLE SHARE.
THE TOTAL RETURNS IN THE TABLE REPRESENT THE RATE THAT AN INVESTOR WOULD HAVE
EARNED (OR LOST) ON AN INVESTMENT IN THE FUND (ASSUMING REINVESTMENT OF ALL
DIVIDENDS AND DISTRIBUTIONS), AND DOES NOT REFLECT ANY APPLICABLE FRONT- OR
BACK-END SALES CHARGE. THIS INFORMATION HAS BEEN AUDITED BY
PRICEWATERHOUSECOOPERS LLP, WHOSE REPORT, ALONG WITH THE FUND'S FINANCIAL
STATEMENTS, ARE INCLUDED IN THE FUND'S ANNUAL REPORT, WHICH IS AVAILABLE UPON
REQUEST.
<PAGE>
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
CLASS A SHARES 1999 1998 1997
NET ASSET VALUE, BEGINNING $16.28 $16.45 $16.33
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .71 .78 .82
NET REALIZED AND UNREALIZED GAIN (LOSS)
(1.39) .13 .26
TOTAL FROM INVESTMENT OPERATIONS
(.68) .91 1.08
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.70) (.77) (.82)
NET REALIZED GAINS - (.31) (.14)
TOTAL DISTRIBUTIONS (.70) (1.08) (.96)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(1.38) (.17) .12
NET ASSET VALUE, ENDING $14.90 $16.28 $16.45
TOTAL RETURN * (4.29%) 5.67% 6.90%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.50% 4.73% 5.11%
TOTAL EXPENSES .78% .75% .76%
EXPENSES BEFORE OFFSETS .78% .75% .76%
NET EXPENSES .76% .72% .73%
PORTFOLIO TURNOVER 21% 32% 14%
NET ASSETS, ENDING (IN THOUSANDS)
$46,452 $51,292 $50,194
YEARS ENDED
DECEMBER 31, DECEMBER 31,
CLASS A SHARES 1996 1995
NET ASSET VALUE, BEGINNING $16.62 $15.34
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .88 .87
NET REALIZED AND UNREALIZED GAIN (LOSS) (.25) 1.35
TOTAL FROM INVESTMENT OPERATIONS .63 2.22
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.85) (.85)
NET REALIZED GAINS (.07) (.09)
TOTAL DISTRIBUTIONS (.92) (.94)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE (.29) 1.28
NET ASSET VALUE, ENDING $16.33 $16.62
TOTAL RETURN * 3.98% 14.86%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 5.27% 5.35%
TOTAL EXPENSES .77% .76%
EXPENSES BEFORE OFFSETS .77% .76%
NET EXPENSES .73% .75%
PORTFOLIO TURNOVER 24% 12%
NET ASSETS, ENDING (IN THOUSANDS) $49,774 $60,203
* TOTAL RETURN DOES NOT REFLECT DEDUCTION OF CLASS A FRONT-END SALES CHARGE.
<PAGE>
EXHIBIT A
REDUCED SALES CHARGES
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE THROUGH SEVERAL PURCHASE PLANS
AVAILABLE. YOU MUST NOTIFY THE FUND AT THE TIME OF PURCHASE TO TAKE ADVANTAGE OF
THE REDUCED SALES CHARGE.
RIGHTS OF ACCUMULATION CAN BE APPLIED TO SEVERAL ACCOUNTS
THE SALES CHARGE BREAKPOINTS ARE AUTOMATICALLY CALCULATED FOR EACH ACCOUNT BASED
ON THE HIGHER OF COST OR CURRENT VALUE OF SHARES PREVIOUSLY PURCHASED. THIS
PRIVILEGE CAN BE APPLIED TO A FAMILY GROUP OR OTHER QUALIFIED GROUP* UPON
REQUEST. SHARES COULD THEN BE PURCHASED AT THE REDUCED SALES CHARGE WHICH
APPLIES TO THE ENTIRE GROUP; THAT IS, BASED ON THE HIGHER OF COST OR CURRENT
VALUE OF SHARES PREVIOUSLY PURCHASED AND CURRENTLY HELD BY ALL THE MEMBERS OF
THE GROUP.
LETTER OF INTENT
IF YOU (OR YOUR GROUP, AS DESCRIBED ABOVE) PLAN TO PURCHASE $50,000 OR MORE OF
CALVERT FUND SHARES OVER THE NEXT 13 MONTHS, YOUR SALES CHARGE MAY BE REDUCED
THROUGH A "LETTER OF INTENT." YOU PAY THE LOWER SALES CHARGE APPLICABLE TO THE
TOTAL AMOUNT YOU PLAN TO INVEST OVER THE 13-MONTH PERIOD, EXCLUDING ANY MONEY
MARKET PORTFOLIO PURCHASES. PART OF YOUR SHARES WILL BE HELD IN ESCROW, SO THAT
IF YOU DO NOT INVEST THE AMOUNT INDICATED, YOU WILL HAVE TO PAY THE SALES CHARGE
APPLICABLE TO THE SMALLER INVESTMENT ACTUALLY MADE. FOR MORE INFORMATION, SEE
THE SAI.
NEITHER THE FUNDS, NOR CALVERT DISTRIBUTORS, INC. ("CDI"), NOR ANY AFFILIATE
THEREOF WILL REIMBURSE A PLAN OR PARTICIPANT FOR ANY SALES CHARGES PAID PRIOR TO
RECEIPT OF SUCH WRITTEN COMMUNICATION AND CONFIRMATION BY CALVERT GROUP. PLAN
ADMINISTRATORS SHOULD SEND REQUESTS FOR THE WAIVER OF SALES CHARGES BASED ON THE
ABOVE CONDITIONS TO: CALVERT GROUP RETIREMENT PLANS, 4550 MONTGOMERY AVENUE,
SUITE 1000N, BETHESDA, MARYLAND 20814.
* A "QUALIFIED GROUP" IS ONE WHICH:
HAS BEEN IN EXISTENCE FOR MORE THAN SIX MONTHS, AND
HAS A PURPOSE OTHER THAN ACQUIRING SHARES AT A DISCOUNT, AND
SATISFIES UNIFORM CRITERIA WHICH ENABLE CDI AND BROKERS OFFERING SHARES TO
REALIZE ECONOMIES OF SCALE IN DISTRIBUTING SUCH SHARES.
A QUALIFIED GROUP MUST HAVE MORE THAN 10 MEMBERS, MUST BE AVAILABLE TO ARRANGE
FOR GROUP MEETINGS BETWEEN REPRESENTATIVES OF CDI OR BROKERS DISTRIBUTING
SHARES, MUST AGREE TO INCLUDE SALES AND OTHER MATERIALS RELATED TO THE FUNDS IN
ITS PUBLICATIONS AND MAILINGS TO MEMBERS AT REDUCED OR NO COST TO CDI OR
BROKERS. A PENSION PLAN IS NOT A QUALIFIED GROUP FOR RIGHTS OF ACCUMULATION.
<PAGE>
OTHER CIRCUMSTANCES
THERE IS NO SALES CHARGE ON SHARES OF ANY FUND OF THE CALVERT GROUP OF FUNDS
SOLD TO (I) CURRENT OR RETIRED DIRECTORS, TRUSTEES, OR OFFICERS OF THE CALVERT
GROUP OF FUNDS, EMPLOYEES OF CALVERT GROUP, LTD. AND ITS AFFILIATES, OR THEIR
FAMILY MEMBERS; (II) CSIF ADVISORY COUNCIL MEMBERS, DIRECTORS, OFFICERS, AND
EMPLOYEES OF ANY SUBADVISOR FOR THE CALVERT GROUP OF FUNDS, EMPLOYEES OF
BROKER/DEALERS DISTRIBUTING THE FUND'S SHARES AND IMMEDIATE FAMILY MEMBERS OF
THE COUNCIL, SUBADVISOR, OR BROKER/DEALER; (III) PURCHASES MADE THROUGH A
REGISTERED INVESTMENT ADVISOR; (IV) TRUST DEPARTMENTS OF BANKS OR SAVINGS
INSTITUTIONS FOR TRUST CLIENTS OF SUCH BANK OR INSTITUTION, (V) PURCHASES
THROUGH A BROKER MAINTAINING AN OMNIBUS ACCOUNT WITH THE FUND, PROVIDED THE
PURCHASES ARE MADE BY (A) INVESTMENT ADVISORS OR FINANCIAL PLANNERS PLACING
TRADES FOR THEIR OWN ACCOUNTS (OR THE ACCOUNTS OF THEIR CLIENTS) AND WHO CHARGE
A MANAGEMENT, CONSULTING, OR OTHER FEE FOR THEIR SERVICES; OR (B) CLIENTS OF
SUCH INVESTMENT ADVISORS OR FINANCIAL PLANNERS WHO PLACE TRADES FOR THEIR OWN
ACCOUNTS IF SUCH ACCOUNTS ARE LINKED TO THE MASTER ACCOUNT OF SUCH INVESTMENT
ADVISOR OR FINANCIAL PLANNER ON THE BOOKS AND RECORDS OF THE BROKER OR AGENT; OR
(C) RETIREMENT AND DEFERRED COMPENSATION PLANS AND TRUSTS, INCLUDING, BUT NOT
LIMITED TO, THOSE DEFINED IN SECTION 401(A) OR SECTION 403(B) OF THE I.R.C., AND
"RABBI TRUSTS."
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS FROM OTHER CALVERT GROUP FUNDS
YOU MAY PREARRANGE TO HAVE YOUR DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS FROM
ANOTHER CALVERT GROUP FUND AUTOMATICALLY INVESTED IN ANOTHER ACCOUNT WITH NO
ADDITIONAL SALES CHARGE.
PURCHASES MADE AT NAV
EXCEPT FOR MONEY MARKET FUNDS, IF YOU MAKE A PURCHASE AT NAV, YOU MAY EXCHANGE
THAT AMOUNT TO ANOTHER CALVERT GROUP FUND AT NO ADDITIONAL SALES CHARGE.
REINSTATEMENT PRIVILEGE
IF YOU REDEEM SHARES AND THEN WITHIN 60 DAYS DECIDE TO REINVEST IN THE SAME
FUND, YOU MAY DO SO AT THE NET ASSET VALUE NEXT COMPUTED AFTER THE REINVESTMENT
ORDER IS RECEIVED, WITHOUT A SALES CHARGE. YOU MAY USE THE REINSTATEMENT
PRIVILEGE ONLY ONCE. THE FUNDS RESERVE THE RIGHT TO MODIFY OR ELIMINATE THIS
PRIVILEGE.
EXHIBIT B
SERVICE FEES AND ARRANGEMENTS WITH DEALERS
CALVERT DISTRIBUTORS, INC., THE FUND'S UNDERWRITER, PAYS DEALERS A COMMISSION,
OR REALLOWANCE (EXPRESSED AS A PERCENTAGE OF THE OFFERING PRICE) WHEN YOU
PURCHASE SHARES. CDI ALSO PAYS DEALERS AN ONGOING SERVICE FEE WHILE YOU OWN
SHARES OF A FUND (EXPRESSED AS AN ANNUAL PERCENTAGE RATE OF AVERAGE DAILY NET
ASSETS HELD IN
<PAGE>
CALVERT ACCOUNTS BY THAT DEALER). THE TABLE BELOW SHOWS THE AMOUNT OF
PAYMENT.
MAXIMUM COMMISSION/SERVICE FEES
CTFR VERMONT 3.00%/0.15%**
**IF FINDER'S FEE IS PAID (SEE BELOW), THE SERVICE FEE BEGINS 13TH MONTH AFTER
PURCHASE.
OCCASIONALLY, CDI MAY REALLOW TO DEALERS THE FULL FRONT-END SALES CHARGE. CDI
MAY ALSO PAY ADDITIONAL CONCESSIONS, INCLUDING NON-CASH PROMOTIONAL INCENTIVES,
SUCH AS MERCHANDISE OR TRIPS, TO BROKERS EMPLOYING REGISTERED REPRESENTATIVES
WHO HAVE SOLD OR ARE EXPECTED TO SELL A MINIMUM DOLLAR AMOUNT OF SHARES OF THE
FUNDS AND/OR SHARES OF OTHER FUNDS UNDERWRITTEN BY CDI. CDI MAY MAKE EXPENSE
REIMBURSEMENTS FOR SPECIAL TRAINING OF A BROKER'S REGISTERED REPRESENTATIVES,
ADVERTISING OR EQUIPMENT, OR TO DEFRAY THE EXPENSES OF SALES CONTESTS. CAMCO,
CDI, OR THEIR AFFILIATES MAY PAY, FROM THEIR OWN RESOURCES, CERTAIN
BROKER-DEALERS AND/OR OTHER PERSONS, FOR THE SALE AND DISTRIBUTION OF THE
SECURITIES OR FOR SERVICES TO THE FUND. THESE AMOUNTS MAY BE SIGNIFICANT.
PAYMENTS MAY INCLUDE ADDITIONAL COMPENSATION BEYOND THE REGULARLY SCHEDULED
RATES, AND FINDER'S FEES. CDI PAYS DEALERS A FINDER'S FEE ON CTFR VERMONT SHARES
PURCHASED AT NAV IN ACCOUNTS WITH $1 MILLION OR MORE. THE CTFR VERMONT FINDER'S
FEE IS 1% OF THE NAV PURCHASE AMOUNT ON THE FIRST $2 MILLION, .80% ON $2 TO $3
MILLION, .50% ON $3 TO $50 MILLION, .25% ON $50 TO $100 MILLION, AND .15 OVER
$100 MILLION. ALL PAYMENTS WILL BE IN COMPLIANCE WITH THE RULES OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS, INC.
TO OPEN AN ACCOUNT:
800-368-2748
PERFORMANCE AND PRICES:
WWW.CALVERT.COM
CALVERT INFORMATION NETWORK
24 HOURS, 7 DAYS A WEEK
800-368-2745
SERVICE FOR EXISTING ACCOUNTS:
SHAREHOLDERS 800-368-2745
BROKERS 800-368-2746
TDD FOR HEARING-IMPAIRED:
800-541-1524
BRANCH OFFICE:
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
REGISTERED, CERTIFIED OR
OVERNIGHT MAIL:
CALVERT GROUP
C/O NFDS
330 WEST 9TH STREET
KANSAS CITY, MO 64105
CALVERT GROUP WEB-SITE
WWW.CALVERT.COM
PRINCIPAL UNDERWRITER
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
<PAGE>
FOR INVESTORS WHO WANT MORE INFORMATION ABOUT THE FUNDS, THE FOLLOWING DOCUMENTS
ARE AVAILABLE FREE UPON REQUEST:
ANNUAL/SEMI-ANNUAL REPORTS: ADDITIONAL INFORMATION ABOUT EACH FUND'S INVESTMENTS
IS AVAILABLE IN THE FUND'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. IN
EACH FUND'S ANNUAL REPORT, YOU WILL FIND A DISCUSSION OF THE MARKET CONDITIONS
AND INVESTMENT STRATEGIES THAT SIGNIFICANTLY AFFECTED THE FUND'S PERFORMANCE
DURING ITS LAST FISCAL YEAR.
STATEMENT OF ADDITIONAL INFORMATION (SAI): THE SAI FOR EACH FUND PROVIDES MORE
DETAILED INFORMATION ABOUT THE FUND AND IS INCORPORATED INTO THIS PROSPECTUS BY
REFERENCE.
YOU CAN GET FREE COPIES OF REPORTS AND SAIS, REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING YOUR FINANCIAL
PROFESSIONAL, OR THE FUNDS AT:
CALVERT GROUP
4550 MONTGOMERY AVE., SUITE 1000N
BETHESDA, MD 20814
TELEPHONE: 1-800-368-2745
CALVERT GROUP WEB-SITE
WWW.CALVERT.COM
YOU CAN REVIEW THE FUNDS' REPORTS AND SAIS AT THE PUBLIC REFERENCE ROOM OF THE
SECURITIES AND EXCHANGE COMMISSION. YOU CAN GET TEXT ONLY COPIES:
- - FOR A FEE, BY WRITING TO OR CALLING THE PUBLIC REFERENCE SECTION OF THE
COMMISSION, WASHINGTON, D.C. 20549-0102, TELEPHONE: 202-942-8090.
- - FREE FROM THE COMMISSION'S INTERNET WEBSITE AT HTTP://WWW.SEC.GOV.
INVESTMENT COMPANY ACT FILE: NO. 811-3101 (CTFR)
PROSPECTUS
THE ADVISORS GROUP
- -RESERVE FUND
- -TAX-FREE RESERVES
APRIL 30, 2000
PROSPECTUS
APRIL 30, 2000
THE ADVISORS GROUP RESERVE FUND
A CLASS OF CALVERT FIRST GOVERNMENT MONEY MARKET FUND
AND
THE ADVISORS GROUP TAX-FREE RESERVES
A CLASS OF CALVERT TAX-FREE RESERVES MONEY MARKET PORTFOLIO
ABOUT THE FUNDS
1 INVESTMENT OBJECTIVES
1 PRINCIPAL INVESTMENT STRATEGIES AND RISKS
3 PERFORMANCE
6 FEES AND EXPENSES
ABOUT THE ADVISOR
7 MANAGEMENT AND ADVISORY FEES
7 DISTRIBUTION PLAN EXPENSES AND SERVICE FEES
SHAREHOLDER GUIDE
8 HOW TO BUY SHARES
9 DIVIDENDS, CAPITAL GAINS AND TAXES
10 HOW TO SELL SHARES
10 FINANCIAL HIGHLIGHTS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") OR ANY STATE SECURITIES COMMISSION NOR HAS THE SEC
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
INVESTMENT OBJECTIVES
THE ADVISORS GROUP RESERVE FUND
THE ADVISORS GROUP RESERVE FUND (THE "RESERVE FUND") IS A U.S. GOVERNMENT-ONLY
MONEY MARKET FUND THAT SEEKS TO EARN THE HIGHEST POSSIBLE YIELD CONSISTENT WITH
SAFETY, LIQUIDITY, AND PRESERVATION OF CAPITAL. IN PURSUING ITS OBJECTIVE, THE
RESERVE FUND INVESTS ONLY IN U.S. GOVERNMENT OBLIGATIONS, INCLUDING SUCH
OBLIGATIONS SUBJECT TO REPURCHASE AGREEMENTS WITH RECOGNIZED SECURITIES DEALERS
AND BANKS. THE RESERVE FUND SEEKS TO MAINTAIN A CONSTANT NET ASSET VALUE OF
$1.00 PER SHARE.
THE RESERVE FUND IS OFFERED IN THIS PROSPECTUS TO INVESTORS WITH BROKERAGE
ACCOUNTS AT THE ADVISORS GROUP, INC.
THE ADVISORS GROUP TAX-FREE RESERVES
THE ADVISORS GROUP TAX-FREE RESERVES ("TAX-FREE RESERVES") SEEKS TO EARN THE
HIGHEST LEVEL OF INTEREST INCOME EXEMPT FROM FEDERAL INCOME TAXES AS IS
CONSISTENT WITH PRUDENT INVESTMENT MANAGEMENT, PRESERVATION OF CAPITAL, AND THE
QUALITY AND MATURITY CHARACTERISTICS OF TAX-FREE RESERVES. TAX-FREE RESERVES
SEEKS TO MAINTAIN A CONSTANT NET ASSET VALUE OF $1.00 PER SHARE.
TAX-FREE RESERVES IS OFFERED IN THIS PROSPECTUS TO INVESTORS WITH BROKERAGE
ACCOUNTS AT THE ADVISORS GROUP, INC.
PRINCIPAL INVESTMENT STRATEGIES - RESERVE FUND
FUND ASSETS ARE INVESTED IN SHORT-TERM MONEY MARKET INSTRUMENTS, SUCH AS:
OBLIGATIONS ISSUED BY THE U.S. TREASURY, SUCH AS U.S. TREASURY BILLS, NOTES AND
BONDS, SECURITIES ISSUED BY U.S. GOVERNMENT AGENCIES AND INSTRUMENTALITIES;
REPURCHASE AGREEMENTS; AND VARIABLE-RATE DEMAND NOTES. ALL INVESTMENTS MUST
COMPLY WITH THE SEC MONEY MARKET FUND REQUIREMENTS
PRINCIPAL RISKS
- - INVESTMENTS IN OBLIGATIONS NOT GUARANTEED BY THE FULL FAITH AND CREDIT OF
THE U.S. GOVERNMENT ARE SUBJECT TO THE ABILITY OF THE ISSUER TO MAKE
PAYMENT AT MATURITY.
- - THE YIELD OF THE FUND WILL CHANGE IN RESPONSE TO MARKET INTEREST RATES. IN
GENERAL, AS MARKET RATES GO UP SO WILL THE FUND'S YIELD, AND VICE VERSA.
ALTHOUGH THE FUND TRIES TO KEEP THE VALUE OF ITS SHARES CONSTANT AT $1.00 PER
SHARE, EXTREME CHANGES IN MARKET RATES, AND OR SUDDEN CREDIT DETERIORATION OF
A HOLDING COULD CAUSE THE VALUE TO DECREASE. THE FUND LIMITS THE AMOUNT
INVESTED IN ANY ONE ISSUER TO TRY TO LESSEN EXPOSURE.
<PAGE>
- - AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT
$1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS - TAX-FREE RESERVES
TAX-FREE RESERVES INVESTS IN FIXED AND FLOATING RATE MUNICIPAL BONDS AND NOTES,
VARIABLE RATE DEMAND NOTES, TAX-EXEMPT COMMERCIAL PAPER, AND OTHER HIGH QUALITY,
SHORT-TERM MUNICIPAL OBLIGATIONS. THE ADVISOR LOOKS FOR SECURITIES WITH STRONG
CREDIT QUALITY THAT ARE ATTRACTIVELY PRICED. THIS MAY INCLUDE INVESTMENTS WITH
UNUSUAL FEATURES OR PRIVATELY PLACED ISSUES THAT ARE NOT WIDELY FOLLOWED IN THE
FIXED INCOME MARKETPLACE. ALL INVESTMENTS MUST COMPLY WITH THE SEC MONEY MARKET
FUND REQUIREMENTS.
MANY OF THE INSTRUMENTS HELD BY THE FUND ARE SUPPORTED BY A CREDIT FACILITY (TO
IMPROVE THE CREDIT QUALITY) OR LIQUIDITY FACILITY (TO SHORTEN THE MATURITY)
PROVIDED BY BANKS; THUS, THE FUND HAS AN EXPOSURE TO THE BANKING INDUSTRY.
THE FUND MAY PURCHASE SECURITIES THAT HAVE NOT BEEN RATED BY A RATING AGENCY, SO
LONG AS THE ADVISOR DETERMINES THEY ARE OF COMPARABLE CREDIT QUALITY TO RATED
SECURITIES PERMISSIBLE FOR THE FUND.
UNRATED AND PRIVATELY PLACED SECURITIES MAY BE LESS LIQUID THAN THOSE THAT ARE
RATED OR HAVE AN ACTIVE TRADING MARKET.
TAX-FREE RESERVE'S YIELD WILL CHANGE IN RESPONSE TO MARKET INTEREST RATES. IN
GENERAL, AS MARKET RATES GO UP SO WILL THE FUND'S YIELD, AND VICE VERSA.
ALTHOUGH THE FUND TRIES TO KEEP THE VALUE OF ITS SHARES CONSTANT AT $1.00 PER
SHARE, EXTREME CHANGES IN MARKET RATES, AND OR SUDDEN CREDIT DETERIORATION OF A
HOLDING COULD CAUSE THE VALUE TO DECREASE. THE FUND LIMITS THE AMOUNT IT INVESTS
IN ANY ONE ISSUER TO TRY TO LESSEN ITS EXPOSURE.
IN ADDITION TO INTEREST RATE RISK AND CREDIT RISK, DIFFERENT TYPES OF MUNICIPAL
BONDS MAY BE AFFECTED DIFFERENTLY, BASED ON MANY FACTORS, INCLUDING ECONOMIC AND
REGULATORY DEVELOPMENTS, CHANGES OR PROPOSED CHANGES IN THE FEDERAL AND STATE
TAX STRUCTURE, DEREGULATION, AND COURT RULINGS, AMONG OTHER FACTORS.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER
SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
<PAGE>
PERFORMANCE
THE BAR CHARTS AND TABLES BELOW SHOW THE ANNUAL RETURNS AND LONG-TERM
PERFORMANCE BY CALENDAR YEAR FOR CLASS O OF EACH OF THE FUNDS, SHOWN AS CALVERT
FIRST GOVERNMENT FOR THE RESERVE FUND AND CTFR MONEY MARKET FOR THE TAX-FREE
RESERVES FUND. THE CHARTS SHOWS HOW THE PERFORMANCE HAS VARIED FROM YEAR TO
YEAR. THE TABLES COMPARE CLASS O RETURNS OVER TIME TO THE LIPPER U.S. GOVERNMENT
MONEY MARKET INDEX FOR THE RESERVE FUND, AND THE LIPPER TAX-EXEMPT MONEY MARKET
INDEX FOR TAX-FREE RESERVES. EACH INDEX IS A COMPOSITE INDEX OF THE ANNUAL
RETURN OF MUTUAL FUNDS THAT HAVE SIMILAR INVESTMENT GOALS. EACH FUND'S PAST
PERFORMANCE DOES NOT NECESSARILY INDICATE HOW IT WILL PERFORM IN THE FUTURE.
PLEASE NOTE THAT PERFORMANCE FOR THE RESERVE FUND AND TAX-FREE RESERVES IS NOT
SHOWN SINCE IT DID NOT HAVE A FULL CALENDAR YEAR OF PERFORMANCE DURING THE TIME
PERIODS SHOWN.
<PAGE>
CALVERT FIRST GOVERNMENT CLASS O
YEAR-BY-YEAR TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '90 1.90%
WORST QUARTER (OF PERIODS SHOWN) Q2 '93 0.66%
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED DECEMBER 31, 1999)
1 YEAR 5 YEAR 10 YEAR
CALVERT FIRST GOVERNMENT CLASS O 4.38% 4.86% 4.72%
LIPPER U.S. GOVERNMENT MONEY
MARKET INDEX 4.58% 4.98% 4.79%
<PAGE>
CTFR MONEY MARKET CLASS O
YEAR-BY-YEAR TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q4 '90 1.53%
WORST QUARTER (OF PERIODS SHOWN) Q1 '93 0.56%
AVERAGE ANNUAL TOTAL RETURNS (FOR THE PERIODS ENDED DECEMBER 31, 1999)
1 YEAR 5 YEAR 10 YEAR
CTFR MONEY MARKET CLASS O 3.04% 3.40% 3.63%
LIPPER TAX-EXEMPT MONEY
MARKET INDEX 2.81% 3.13% 3.27%
FOR CURRENT YIELD INFORMATION ON THE RESERVE FUND AND TAX-FREE RESERVES,
CALL 1-800-777-1500.
<PAGE>
FEES AND EXPENSES
THESE TABLES DESCRIBE THE FEES AND EXPENSES YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF EACH FUND.
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR INVESTMENT)
RESERVE TAX-FREE
FUND RESERVES
MAXIMUM SALES LOAD ON PURCHASES NONE NONE
MAXIMUM DEFERRED SALES LOAD NONE NONE
MAXIMUM SALES LOAD ON REINVESTED
DIVIDENDS NONE NONE
REDEMPTION FEES NONE NONE
EXCHANGE FEE NONE NONE
ANNUAL FUND OPERATING EXPENSES1
(EXPENSES THAT ARE DEDUCTED FROM FUND ASSETS)
RESERVE TAX-FREE
FUND RESERVES
MANAGEMENT FEES .50% .46%
DISTRIBUTION AND SERVICE (12B-1) FEES .25% .25%
OTHER EXPENSES .20% .14%
TOTAL ANNUAL FUND OPERATING EXPENSES .95% .85%
1 EXPENSES ARE BASED ON THE FUND'S MOST RECENT FISCAL YEAR. MANAGEMENT FEES
INCLUDE THE ADMINISTRATIVE FEE PAID BY THE FUND TO CALVERT ADMINISTRATIVE
SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR.
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN A FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE EXAMPLE ASSUMES THAT:
- - YOU INVEST $10,000 IN A FUND FOR THE TIME PERIODS INDICATED;
- - YOU REDEEM ALL SHARES AT THE END OF THE PERIODS;
- - YOUR INVESTMENT HAS A 5% RETURN EACH YEAR; AND
- - THE FUND'S OPERATING EXPENSES REMAIN THE SAME.
ALTHOUGH YOUR ACTUAL COSTS MAY BE HIGHER OR LOWER, UNDER THESE ASSUMPTIONS YOUR
COSTS WOULD BE:
1 YEAR 3 YEARS 5 YEARS 10 YEARS
RESERVE FUND $97 $303 $525 $1,166
TAX-FREE RESERVES $87 $271 $471 $1,049
<PAGE>
MANAGEMENT AND ADVISORY FEES
CALVERT ASSET MANAGEMENT COMPANY, INC. (4550 MONTGOMERY AVENUE, SUITE 1000N,
BETHESDA, MD 20814) ("CAMCO") IS THE FUND'S INVESTMENT ADVISOR. CAMCO HAS BEEN
MANAGING MUTUAL FUNDS SINCE 1976, AND IS A SUBSIDIARY OF CALVERT GROUP, LTD.
CAMCO CURRENTLY ADVISES OVER 25 MUTUAL FUND PORTFOLIOS, INCLUDING THE FIRST AND
LARGEST FAMILY OF SOCIALLY SCREENED FUNDS. AS OF DECEMBER 31, 1999, IT HAD OVER
$6.5 BILLION IN ASSETS UNDER MANAGEMENT.
CAMCO PROVIDES THE FUNDS WITH INVESTMENT SUPERVISION AND MANAGEMENT;
ADMINISTRATIVE SERVICES AND OFFICE SPACE; AND FURNISHES EXECUTIVE AND OTHER
PERSONNEL TO THE FUNDS. CAMCO ALSO PAYS THE SALARIES AND FEES OF ALL TRUSTEES
WHO ARE AFFILIATED PERSONS OF THE ADVISOR. CAMCO MAY PAY CERTAIN ADVERTISING AND
PROMOTIONAL EXPENSES OF THE FUNDS. PURSUANT TO THE INVESTMENT ADVISORY
AGREEMENT, CAMCO IS ENTITLED TO AN ANNUAL ADVISORY FEE OF 0.25% OF THE AVERAGE
DAILY NET ASSETS OF THE RESERVE FUND. THE TAX-FREE RESERVES INVESTMENT ADVISORY
AGREEMENT ENTITLES CAMCO TO RECEIVE AN ANNUAL ADVISORY FEE OF 0.25% OF THE FIRST
$500 MILLION OF AVERAGE DAILY NET ASSETS, 0.20% OF THE NEXT $500 MILLION, AND
0.15% ON ASSETS OF $1 BILLION OR MORE. CAMCO MAY VOLUNTARILY WAIVE A PORTION OF
ITS ADVISORY FEE.
DISTRIBUTION AND SERVICE FEES
THE FUNDS HAVE EACH ADOPTED A PLAN UNDER RULE 12B-1 OF THE INVESTMENT COMPANY
ACT OF 1940 THAT ALLOWS THE FUND TO PAY DISTRIBUTION FEES FOR THE SALE AND
DISTRIBUTION OF ITS SHARES. THE DISTRIBUTION PLAN ALSO PAYS SERVICE FEES TO
PERSONS (SUCH AS YOUR FINANCIAL PROFESSIONAL) FOR SERVICES PROVIDED TO
SHAREHOLDERS. BECAUSE THESE FEES ARE PAID OUT OF A FUND'S ASSETS ON AN ONGOING
BASIS, OVER TIME, THESE FEES WILL INCREASE THE COST OF YOUR INVESTMENT AND MAY
COST YOU MORE THAN PAYING OTHER TYPES OF SALES CHARGES.
THE TABLE BELOW SHOWS THE MAXIMUM ANNUAL PERCENTAGE PAYABLE UNDER THE
DISTRIBUTION PLAN, AND THE AMOUNT ACTUALLY PAID BY EACH FUND FOR THE MOST RECENT
FISCAL YEAR. THE FEES ARE BASED ON AVERAGE DAILY NET ASSETS.
MAXIMUM PAYABLE UNDER PLAN/AMOUNT ACTUALLY PAID
RESERVE FUND 0.25%/0.25%
TAX-FREE RESERVES 0.25%/0.25%
CALVERT DISTRIBUTORS, INC. ("CDI"), THE FUND'S PRINCIPAL UNDERWRITER, PAYS
DEALERS AN ONGOING SERVICE FEE OF UP TO 0.25% WHILE YOU OWN SHARES OF A FUND
(EXPRESSED AS AN ANNUAL PERCENTAGE RATE OF AVERAGE DAILY NET ASSETS HELD IN
CALVERT ACCOUNTS BY THAT DEALER).
<PAGE>
SHAREHOLDER GUIDE
HOW TO BUY SHARES
PLEASE CONTACT YOUR LOCAL OFFICE OF THE ADVISORS GROUP, INC. TO OPEN YOUR MONEY
MARKET ACCOUNT. ALL TRANSACTIONS WILL BE PROCESSED ELECTRONICALLY THROUGH THE
NATIONAL FINANCIAL PROPRIETARY MONEY MARKET SWEEP PROGRAM ON BEHALF OF THE
ADVISORS GROUP, INC.
THERE IS NO MINIMUM FOR INITIAL INVESTMENTS AND NO MINIMUM FOR SUBSEQUENT
INVESTMENTS, PROVIDED YOU HAVE A BROKERAGE ACCOUNT WITH THE ADVISORS GROUP, INC.
BECAUSE YOU ARE PURCHASING SHARES THROUGH A PROGRAM OF SERVICES OFFERED BY THE
ADVISORS GROUP, INC., A REGISTERED BROKER/DEALER AND INVESTMENT ADVISOR, YOU
SHOULD READ PROGRAM MATERIALS TOGETHER WITH THIS PROSPECTUS. CERTAIN ACCOUNT
FEATURES HAVE BEEN MODIFIED FOR THIS PROGRAM, AND THE ADVISORS GROUP, INC. MAY
IMPOSE CHARGES FOR THEIR SERVICES. THE ADVISORS GROUP, INC. IS AN AFFILIATE OF
THE FUNDS' INVESTMENT ADVISOR, CAMCO, AND THE FUNDS' PRINCIPAL UNDERWRITER, CDI.
CAMCO, CDI OR THEIR AFFILIATES MAY PAY, FROM THEIR OWN RESOURCES, THE ADVISORS
GROUP, INC. FOR THE SALE AND DISTRIBUTION OF THE FUNDS' SHARES OR FOR SERVICES
TO THE FUND. THESE AMOUNTS MAY BE SIGNIFICANT. PAYMENTS MAY INCLUDE COMPENSATION
BEYOND THE REGULARLY SCHEDULED RATES.
IMPORTANT - HOW SHARES ARE PRICED
THE PRICE OF SHARES IS BASED ON EACH FUND'S NET ASSET VALUE ("NAV"). NAV IS
DETERMINED ACCORDING TO THE "AMORTIZED COST" METHOD. IT IS COMPUTED PER CLASS BY
ADDING THE VALUE OF A FUND'S HOLDINGS PLUS OTHER ASSETS, SUBTRACTING
LIABILITIES, AND THEN DIVIDING THE RESULT BY THE NUMBER OF SHARES OUTSTANDING.
THE NAV IS CALCULATED AS OF THE CLOSE OF EACH BUSINESS DAY, WHICH COINCIDES WITH
THE CLOSING OF THE REGULAR SESSION OF THE NEW YORK STOCK EXCHANGE ("NYSE")
(NORMALLY 4:00 P.M. ET). EACH FUND IS OPEN FOR BUSINESS EACH DAY THE NYSE IS
OPEN. PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, SUCH AS COLUMBUS DAY AND
VETERANS DAY, WHEN THE NYSE IS OPEN AND EACH FUND IS OPEN, BUT PURCHASES CANNOT
BE RECEIVED BECAUSE THE BANKS ARE CLOSED.
WHEN YOUR ACCOUNT WILL BE CREDITED
YOUR PURCHASE WILL BE PROCESSED AT THE NAV NEXT CALCULATED AFTER YOUR ORDER IS
RECEIVED. ELECTRONIC SWEEPS INTO AN ACCOUNT BEGIN EARNING DIVIDENDS THE NEXT
BUSINESS DAY.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES FOR A PERIOD OF
TIME OR TO REJECT ANY SPECIFIC PURCHASE ORDER.
<PAGE>
DIVIDENDS, CAPITAL GAINS AND TAXES
EACH FUND ACCRUES DIVIDENDS DAILY FROM ITS NET INVESTMENT INCOME, AND PAYS THE
DIVIDENDS MONTHLY. NET INVESTMENT INCOME CONSISTS OF INTEREST INCOME, NET
SHORT-TERM CAPITAL GAINS, IF ANY, AND DIVIDENDS DECLARED AND PAID ON
INVESTMENTS, LESS EXPENSES. DISTRIBUTIONS OF NET SHORT-TERM CAPITAL GAINS
(TREATED AS DIVIDENDS FOR TAX PURPOSES) AND NET LONG-TERM CAPITAL GAINS, IF ANY,
ARE NORMALLY PAID ONCE A YEAR; HOWEVER, THE FUNDS DO NOT ANTICIPATE MAKING ANY
SUCH DISTRIBUTIONS UNLESS AVAILABLE CAPITAL LOSS CARRYOVERS HAVE BEEN USED OR
HAVE EXPIRED.
DIVIDEND PAYMENT OPTIONS
DIVIDENDS AND ANY DISTRIBUTIONS ARE AUTOMATICALLY REINVESTED IN THE SAME FUND AT
NAV, UNLESS YOU ELECT TO HAVE AMOUNTS OF $10 OR MORE PAID IN CASH (BY CHECK).
FEDERAL TAXES
IN JANUARY, THE ADVISORS GROUP, INC. WILL MAIL FORM 1099-DIV, INDICATING TAXABLE
DIVIDENDS AND ANY CAPITAL GAIN DISTRIBUTIONS PAID TO YOU DURING THE PAST YEAR.
GENERALLY, DIVIDENDS AND DISTRIBUTIONS ARE TAXABLE IN THE YEAR THEY ARE PAID.
HOWEVER, ANY DIVIDENDS AND DISTRIBUTIONS PAID IN JANUARY BUT DECLARED DURING THE
PRIOR THREE MONTHS ARE TAXABLE IN THE YEAR DECLARED. DIVIDENDS AND DISTRIBUTIONS
ARE TAXABLE TO YOU REGARDLESS OF WHETHER THEY ARE TAKEN IN CASH OR REINVESTED.
DIVIDENDS, INCLUDING SHORT-TERM CAPITAL GAINS, ARE TAXABLE AS ORDINARY INCOME.
DISTRIBUTIONS FROM LONG-TERM CAPITAL GAINS ARE TAXABLE AS LONG-TERM CAPITAL
GAINS, REGARDLESS OF HOW LONG YOU HAVE OWNED SHARES. TAX-FREE RESERVES MAY
DERIVE UP TO 20% OF ITS INCOME FROM TAXABLE INVESTMENTS, FOR LIQUIDITY PURPOSES
OR PENDING INVESTMENT.
OTHER TAX INFORMATION
IN ADDITION TO FEDERAL TAXES FOR THE RESERVE FUND, YOU MAY BE SUBJECT TO STATE
OR LOCAL TAXES ON YOUR INVESTMENT, DEPENDING ON THE LAWS IN YOUR AREA. YOU WILL
BE NOTIFIED TO THE EXTENT, IF ANY, THAT DIVIDENDS REFLECT INTEREST RECEIVED FROM
US GOVERNMENT SECURITIES. SUCH DIVIDENDS MAY BE EXEMPT FROM CERTAIN STATE INCOME
TAXES.
TAXPAYER IDENTIFICATION NUMBER
IF WE DO NOT HAVE YOUR CORRECT SOCIAL SECURITY OR TAXPAYER IDENTIFICATION NUMBER
("TIN") AND A SIGNED CERTIFIED APPLICATION OR FORM W-9, FEDERAL LAW REQUIRES US
TO WITHHOLD 31% OF YOUR REPORTABLE DIVIDENDS, AND POSSIBLY 31% OF CERTAIN
REDEMPTIONS. IN ADDITION, YOU MAY BE SUBJECT TO A FINE BY THE INTERNAL REVENUE
SERVICE.
<PAGE>
HOW TO SELL SHARES
YOU MAY REDEEM ALL OR A PORTION OF YOUR SHARES ON ANY DAY THE FUNDS ARE OPEN FOR
BUSINESS, PROVIDED THE AMOUNT REQUESTED IS NOT ON HOLD. YOUR SHARES WILL BE
REDEEMED AT THE NEXT NAV CALCULATED AFTER YOUR REDEMPTION REQUEST IS RECEIVED.
YOU WILL RECEIVE DIVIDENDS THROUGH THE DATE THE REQUEST IS RECEIVED AND
PROCESSED. THE PROCEEDS WILL NORMALLY BE SENT TO YOU ON THE NEXT BUSINESS DAY,
BUT IF MAKING IMMEDIATE PAYMENT COULD ADVERSELY AFFECT THE FUND, IT MAY TAKE UP
TO SEVEN (7) DAYS TO MAKE PAYMENT. THE FUNDS HAVE THE RIGHT TO REDEEM SHARES IN
ASSETS OTHER THAN CASH FOR REDEMPTION AMOUNTS EXCEEDING, IN ANY 90-DAY PERIOD,
$250,000 OR 1% OF THE NET ASSET VALUE OF THE FUND, WHICHEVER IS LESS. WHEN THE
NYSE IS CLOSED (OR WHEN TRADING IS RESTRICTED) FOR ANY REASON OTHER THAN ITS
CUSTOMARY WEEKEND OR HOLIDAY CLOSINGS, OR UNDER ANY EMERGENCY CIRCUMSTANCES AS
DETERMINED BY THE SECURITIES AND EXCHANGE COMMISSION, REDEMPTIONS MAY BE
SUSPENDED OR PAYMENT DATES POSTPONED. PLEASE NOTE THAT THERE ARE SOME FEDERAL
HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY AND VETERANS DAY, WHEN THE NYSE IS OPEN
AND THE FUND IS OPEN, BUT REDEMPTIONS CANNOT BE MAILED OR WIRED BECAUSE THE POST
OFFICES AND BANKS ARE CLOSED.
BY TELEPHONE
YOU MAY REDEEM SHARES FROM YOUR ACCOUNT BY TELEPHONE AND HAVE YOUR MONEY SENT BY
CHECK, ELECTRONICALLY TRANSFERRED, OR WIRED TO A BANK YOU HAVE PREVIOUSLY
AUTHORIZED BY CONTACTING YOUR LOCAL OFFICE OF THE ADVISORS GROUP, INC.
CHECKWRITING
CHECKWRITING IS OFFERED THROUGH THE ADVISORS GROUP, INC. THE CHECKWRITING
FEATURES VARY, DEPENDING ON WHAT YOU CHOOSE WHEN YOU OPEN THE MONEY MARKET SWEEP
ACCOUNT WITH THE ADVISORS GROUP, INC. PLEASE SEE THE ADVISORS GROUP, INC.
PROGRAM MATERIALS FOR INFORMATION.
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUND'S
FINANCIAL PERFORMANCE FOR THE PAST FIVE (5) FISCAL YEARS (OR, IF SHORTER, THE
PERIOD OF THE FUND'S OPERATIONS). CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS
FOR A SINGLE SHARE BY CLASS. THE TOTAL RETURNS IN THE TABLE REPRESENT THE RATE
THAT AN INVESTOR WOULD HAVE EARNED (OR LOST) ON AN INVESTMENT IN THE FUND
(ASSUMING REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS), AND DOES NOT REFLECT
ANY APPLICABLE FRONT- OR BACK-END SALES CHARGE. THIS INFORMATION HAS BEEN
AUDITED BY PRICEWATERHOUSECOOPERS LLP, WHOSE REPORT, ALONG WITH THE FUND'S
FINANCIAL STATEMENTS, ARE INCLUDED IN THE FUND'S ANNUAL REPORT, AVAILABLE UPON
REQUEST.
<PAGE>
FINANCIAL HIGHLIGHTS
PERIOD ENDED
DECEMBER 31,
RESERVE FUND 1999^
NET ASSET VALUE, BEGINNING $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .035
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.035)
NET ASSET VALUE, ENDING $1.00
TOTAL RETURN 3.59%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.29%(A)
TOTAL EXPENSES .95%(A)
EXPENSES BEFORE OFFSETS .95%(A)
NET EXPENSES .94%(A)
NET ASSETS, ENDING (IN THOUSANDS) $100,778
PERIOD ENDED
DECEMBER 31,
TAX-FREE RESERVES 1999^
NET ASSET VALUE, BEGINNING $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .025
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.025)
NET ASSET VALUE, ENDING $1.00
TOTAL RETURN* 2.50%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 2.90%(A)
TOTAL EXPENSES .85%(A)
EXPENSES BEFORE OFFSETS .85%(A)
NET EXPENSES .84%(A)
NET ASSETS, ENDING (IN THOUSANDS) $37,053
(A) ANNUALIZED
* TOTAL RETURN IS NOT ANNUALIZED FOR PERIODS LESS THAN ONE YEAR.
^ FROM MARCH 1, 1999 INCEPTION.
<PAGE>
TO OPEN AN ACCOUNT:
800-777-1500
PERFORMANCE AND PRICES:
800-777-1500
SERVICE FOR EXISTING ACCOUNTS:
800-777-1500
REGISTERED, CERTIFIED OR
OVERNIGHT MAIL:
THE ADVISORS GROUP, INC.
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
PRINCIPAL UNDERWRITER
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
<PAGE>
FOR INVESTORS WHO WANT MORE INFORMATION ABOUT THE FUNDS, THE FOLLOWING DOCUMENTS
ARE AVAILABLE FREE UPON REQUEST:
ANNUAL/SEMI-ANNUAL REPORTS: ADDITIONAL INFORMATION ABOUT EACH FUND'S INVESTMENTS
IS AVAILABLE IN THE FUND'S ANNUAL AND SEMI-ANNUAL REPORTS TO SHAREHOLDERS. IN
EACH FUND'S ANNUAL REPORT, YOU WILL FIND A DISCUSSION OF THE MARKET CONDITIONS
AND INVESTMENT STRATEGIES THAT SIGNIFICANTLY AFFECTED THE FUND'S PERFORMANCE
DURING ITS LAST FISCAL YEAR.
STATEMENT OF ADDITIONAL INFORMATION (SAI): THE SAI FOR EACH FUND PROVIDES MORE
DETAILED INFORMATION ABOUT THE FUND AND IS INCORPORATED INTO THIS PROSPECTUS BY
REFERENCE.
YOU CAN GET FREE COPIES OF REPORTS AND SAIS, REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING YOUR FINANCIAL
PROFESSIONAL, OR THE FUNDS AT:
CALVERT GROUP, LTD.
4550 MONTGOMERY AVE.
SUITE 1000N
BETHESDA, MD 20814
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INVESTMENT COMPANY ACT FILE: NO. 811-2633 (FIRST VARIABLE RATE FUND)
NO. 811-3101 (CALVERT TAX-FREE RESERVES)
CALVERT TAX-FREE RESERVES
MONEY MARKET PORTFOLIO
LIMITED-TERM PORTFOLIO
CALIFORNIA MONEY MARKET PORTFOLIO
4550 MONTGOMERY AVENUE, BETHESDA, MARYLAND 20814
STATEMENT OF ADDITIONAL INFORMATION
APRIL 30, 2000
NEW ACCOUNT (800) 368-2748 SHAREHOLDER
INFORMATION: (301) 951-4820 SERVICES: (800) 368-2745
BROKER (800) 368-2746 TDD FOR THE HEARING-
SERVICES: (301) 951-4850 IMPAIRED: (800) 541-1524
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. INVESTORS
SHOULD READ THE STATEMENT OF ADDITIONAL INFORMATION IN CONJUNCTION WITH THE
APPROPRIATE FIRST VARIABLE RATE FUND CALVERT FIRST GOVERNMENT MONEY MARKET FUND
(THE "FUND") PROSPECTUS, DATED APRIL 30, 2000 (ONE PROSPECTUS IS ISSUED FOR
CLASSES O, B, AND C, ONE PROSPECTUS FOR CLASS T, AND ONE PROSPECTUS FOR THE
INSTITUTIONAL CLASS). THE FUND'S AUDITED FINANCIAL STATEMENT INCLUDED IN ITS
MOST RECENT ANNUAL REPORT TO SHAREHOLDERS, ARE EXPRESSLY INCORPORATED BY
REFERENCE, AND MADE A PART OF THIS SAI. THE PROSPECTUS AND THE MOST RECENT
SHAREHOLDER REPORT MAY BE OBTAINED FREE OF CHARGE BY WRITING THE FUND AT THE
ABOVE ADDRESS OR CALLING THE FUND, OR BY VISITING OUR WEBSITE AT
WWW.CALVERT.COM.
TABLE OF CONTENTS
INVESTMENT POLICIES AND RISKS 2
INVESTMENT RESTRICTIONS 5
PURCHASES AND REDEMPTIONS OF SHARES 6
DIVIDENDS AND DISTRIBUTIONS 6
TAX MATTERS 6
VALUATION OF SHARES 7
CALCULATION OF YIELD AND TOTAL RETURN 8
ADVERTISING 10
TRUSTEES AND OFFICERS 10
INVESTMENT ADVISOR 14
ADMINISTRATIVE SERVICES AGENT 14
TRANSFER AND SHAREHOLDER SERVICING AGENTS 15
INDEPENDENT ACCOUNTANTS AND CUSTODIANS 15
METHOD OF DISTRIBUTION 15
PORTFOLIO TRANSACTIONS 16
PERSONAL SECURITIES TRANSACTIONS 17
GENERAL INFORMATION 18
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 18
APPENDIX 18
- ------------
INVESTMENT POLICIES AND RISKS
-----------------------------
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. THESE TWO PORTFOLIOS DIFFER IN THEIR ANTICIPATED INCOME
YIELDS, QUALITY, LENGTH OF AVERAGE WEIGHTED MATURITY, AND CAPITAL VALUE
VOLATILITY. THE CALIFORNIA MONEY MARKET PORTFOLIO INVESTS PRIMARILY IN A
DIVERSIFIED PORTFOLIO OF MUNICIPAL OBLIGATIONS WHOSE INTEREST IS EXEMPT FROM
FEDERAL AND CALIFORNIA STATE INCOME TAX. 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 OBLIGATIONS AND DEMAND NOTES
EACH PORTFOLIO MAY INVEST IN VARIABLE RATE OBLIGATIONS. VARIABLE RATE
OBLIGATIONS HAVE A YIELD THAT IS ADJUSTED PERIODICALLY BASED ON CHANGES IN THE
LEVEL OF PREVAILING INTEREST RATES. FLOATING RATE OBLIGATIONS HAVE AN INTEREST
RATE FIXED TO A KNOWN LENDING RATE, SUCH AS THE PRIME RATE, AND ARE
AUTOMATICALLY ADJUSTED WHEN THE KNOWN RATE CHANGES. VARIABLE RATE OBLIGATIONS
LESSEN THE CAPITAL FLUCTUATIONS USUALLY INHERENT IN FIXED INCOME INVESTMENTS.
THIS DIMINISHES THE RISK OF CAPITAL DEPRECIATION OF INVESTMENT SECURITIES IN A
PORTFOLIO AND, CONSEQUENTLY, OF PORTFOLIO SHARES. HOWEVER, IF INTEREST RATES
DECLINE, THE YIELD OF THE INVESTED PORTFOLIO WILL DECLINE, CAUSING THE PORTFOLIO
AND ITS SHAREHOLDERS TO FOREGO THE OPPORTUNITY FOR CAPITAL APPRECIATION OF THE
PORTFOLIO'S INVESTMENTS AND OF THEIR SHARES.
EACH PORTFOLIO MAY INVEST IN FLOATING RATE AND VARIABLE RATE DEMAND NOTES.
DEMAND NOTES PROVIDE THAT THE HOLDER MAY DEMAND PAYMENT OF THE NOTE AT ITS PAR
VALUE PLUS ACCRUED INTEREST BY GIVING NOTICE TO THE ISSUER. TO ENSURE THE
ABILITY OF THE ISSUER TO MAKE PAYMENT ON DEMAND, A BANK LETTER OF CREDIT OR
OTHER LIQUIDITY FACILITY MAY SUPPORT THE NOTE.
THE BOARD OF TRUSTEES HAS APPROVED INVESTMENTS BY THE MONEY MARKET
PORTFOLIO IN FLOATING AND VARIABLE RATE DEMAND NOTES UPON THE FOLLOWING
CONDITIONS: THE PORTFOLIO 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 PORTFOLIO CAN RECOVER THE
PRINCIPAL THROUGH DEMAND.
MUNICIPAL LEASES (LIMITED TERM ONLY)
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.
THERE ARE ADDITIONAL RISKS INHERENT IN INVESTING IN THIS TYPE OF MUNICIPAL
SECURITY. UNLIKE MUNICIPAL NOTES AND BONDS, WHERE A MUNICIPALITY IS OBLIGATED BY
LAW TO MAKE INTEREST AND PRINCIPAL PAYMENTS WHEN DUE, FUNDING FOR LEASE PAYMENTS
NEEDS TO BE APPROPRIATED EACH FISCAL YEAR IN THE BUDGET. IT IS POSSIBLE THAT A
MUNICIPALITY WILL NOT APPROPRIATE FUNDS FOR LEASE PAYMENTS. THE ADVISOR
CONSIDERS RISK OF CANCELLATION IN ITS INVESTMENT ANALYSIS. THE FUND'S ADVISOR,
UNDER THE SUPERVISION OF THE BOARD OF TRUSTEES 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 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; AND (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.
OBLIGATIONS WITH PUTS ATTACHED
THE PORTFOLIOS HAVE 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." UNCONDITIONAL PUTS ARE READILY EXERCISABLE IN THE EVENT OF A DEFAULT IN
PAYMENT OF PRINCIPAL OR INTEREST ON THE UNDERLYING SECURITIES. THE MONEY MARKET
AND CALIFORNIA MONEY MARKET PORTFOLIOS MUST LIMIT THEIR 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 PORTFOLIO INTENDS TO MINIMIZE TAXABLE INCOME THROUGH INVESTMENT, WHEN
POSSIBLE, IN SHORT-TERM TAX-EXEMPT SECURITIES. TO MINIMIZE TAXABLE INCOME, THE
PORTFOLIO MAY ALSO HOLD CASH WHICH IS NOT EARNING INCOME.
REPURCHASE AGREEMENTS
THE PORTFOLIOS MAY PURCHASE DEBT SECURITIES SUBJECT TO REPURCHASE
AGREEMENTS, WHICH ARE ARRANGEMENTS UNDER WHICH THE PORTFOLIOS BUYS A SECURITY,
AND THE SELLER SIMULTANEOUSLY AGREES TO REPURCHASE THE SECURITY AT A SPECIFIED
TIME AND PRICE REFLECTING A MARKET RATE OF INTEREST. THE PORTFOLIOS ENGAGE IN
REPURCHASE AGREEMENTS IN ORDER TO EARN A HIGHER RATE OF RETURN THAN THEY COULD
EARN SIMPLY BY INVESTING IN THE OBLIGATION WHICH IS THE SUBJECT OF THE
REPURCHASE AGREEMENT. REPURCHASE AGREEMENTS ARE NOT, HOWEVER, WITHOUT RISK. IN
THE EVENT OF THE BANKRUPTCY OF A SELLER DURING THE TERM OF A REPURCHASE
AGREEMENT, A LEGAL QUESTION EXISTS AS TO WHETHER THE PORTFOLIOS WOULD BE DEEMED
THE OWNER OF THE UNDERLYING SECURITY OR WOULD BE DEEMED ONLY TO HAVE A SECURITY
INTEREST IN AND LIEN UPON SUCH SECURITY. THE PORTFOLIOS WILL ONLY ENGAGE IN
REPURCHASE AGREEMENTS WITH RECOGNIZED SECURITIES DEALERS AND BANKS DETERMINED TO
PRESENT MINIMAL CREDIT RISK BY THE ADVISOR. IN ADDITION, THE PORTFOLIOS WILL
ONLY ENGAGE IN REPURCHASE AGREEMENTS REASONABLY DESIGNED TO SECURE FULLY DURING
THE TERM OF THE AGREEMENT THE SELLER'S OBLIGATION TO REPURCHASE THE UNDERLYING
SECURITY AND WILL MONITOR THE MARKET VALUE OF THE UNDERLYING SECURITY DURING THE
TERM OF THE AGREEMENT. IF THE VALUE OF THE UNDERLYING SECURITY DECLINES AND IS
NOT AT LEAST EQUAL TO THE REPURCHASE PRICE DUE THE PORTFOLIOS PURSUANT TO THE
AGREEMENT, THE PORTFOLIOS WILL REQUIRE THE SELLER TO PLEDGE ADDITIONAL
SECURITIES OR CASH TO SECURE THE SELLER'S OBLIGATIONS PURSUANT TO THE AGREEMENT.
IF THE SELLER DEFAULTS ON ITS OBLIGATION TO REPURCHASE AND THE VALUE OF THE
UNDERLYING SECURITY DECLINES, THE PORTFOLIOS MAY INCUR A LOSS AND MAY INCUR
EXPENSES IN SELLING THE UNDERLYING SECURITY. REPURCHASE AGREEMENTS ARE ALWAYS
FOR PERIODS OF LESS THAN ONE YEAR. REPURCHASE AGREEMENTS NOT TERMINABLE WITHIN
SEVEN DAYS ARE CONSIDERED ILLIQUID.
REVERSE REPURCHASE AGREEMENTS
THE PORTFOLIOS MAY ALSO ENGAGE IN REVERSE REPURCHASE AGREEMENTS. UNDER A
REVERSE REPURCHASE AGREEMENT, THE PORTFOLIOS SELLS SECURITIES TO A BANK OR
SECURITIES DEALER AND AGREES TO REPURCHASE THOSE SECURITIES FROM SUCH PARTY AT
AN AGREED UPON DATE AND PRICE REFLECTING A MARKET RATE OF INTEREST. THE
PORTFOLIOS INVESTS THE PROCEEDS FROM EACH REVERSE REPURCHASE AGREEMENT IN
OBLIGATIONS IN WHICH IT IS AUTHORIZED TO INVEST. THE PORTFOLIOS INTEND TO ENTER
INTO A REVERSE REPURCHASE AGREEMENT ONLY WHEN THE INTEREST INCOME PROVIDED FOR
IN THE OBLIGATION IN WHICH THE PORTFOLIOS INVESTS THE PROCEEDS IS EXPECTED TO
EXCEED THE AMOUNT THE PORTFOLIOS WILL PAY IN INTEREST TO THE OTHER PARTY TO THE
AGREEMENT PLUS ALL COSTS ASSOCIATED WITH THE TRANSACTIONS. THE PORTFOLIOS DO NOT
INTEND TO BORROW FOR LEVERAGE PURPOSES. THE PORTFOLIOS WILL ONLY BE PERMITTED TO
PLEDGE ASSETS TO THE EXTENT NECESSARY TO SECURE BORROWINGS AND REVERSE
REPURCHASE AGREEMENTS.
DURING THE TIME A REVERSE REPURCHASE AGREEMENT IS OUTSTANDING, THE
PORTFOLIOS WILL MAINTAIN IN A SEGREGATED ACCOUNT AN AMOUNT OF CASH, US
GOVERNMENT SECURITIES OR OTHER LIQUID, HIGH-QUALITY DEBT SECURITIES EQUAL IN
VALUE TO THE REPURCHASE PRICE. THE PORTFOLIOS WILL MARK TO MARKET THE VALUE OF
ASSETS HELD IN THE SEGREGATED ACCOUNT, AND WILL PLACE ADDITIONAL ASSETS IN THE
ACCOUNT WHENEVER THE TOTAL VALUE OF THE ACCOUNT FALLS BELOW THE AMOUNT REQUIRED
UNDER APPLICABLE REGULATIONS.
THE PORTFOLIOS' USE OF REVERSE REPURCHASE AGREEMENTS INVOLVES THE RISK THAT
THE OTHER PARTY TO THE AGREEMENTS COULD BECOME SUBJECT TO BANKRUPTCY OR
LIQUIDATION PROCEEDINGS DURING THE PERIOD THE AGREEMENTS ARE OUTSTANDING. IN
SUCH EVENT, THE PORTFOLIOS MAY NOT BE ABLE TO REPURCHASE THE SECURITIES IT HAS
SOLD TO THAT OTHER PARTY. UNDER THOSE CIRCUMSTANCES, IF AT THE EXPIRATION OF THE
AGREEMENT SUCH SECURITIES ARE OF GREATER VALUE THAN THE PROCEEDS OBTAINED BY THE
PORTFOLIOS UNDER THE AGREEMENTS, THE PORTFOLIOS MAY HAVE BEEN BETTER OFF HAD
THEY NOT ENTERED INTO THE AGREEMENT. HOWEVER, THE PORTFOLIOS WILL ENTER INTO
REVERSE REPURCHASE AGREEMENTS ONLY WITH BANKS AND DEALERS WHICH THE ADVISOR
BELIEVES PRESENT MINIMAL CREDIT RISKS UNDER GUIDELINES ADOPTED BY THE
PORTFOLIOS' BOARD OF TRUSTEES. IN ADDITION, THE PORTFOLIOS BEAR THE RISK THAT
THE MARKET VALUE OF THE SECURITIES THEY SOLD MAY DECLINE BELOW THE AGREED-UPON
REPURCHASE PRICE, IN WHICH CASE THE DEALER MAY REQUEST THE PORTFOLIOS TO POST
ADDITIONAL COLLATERAL.
WHEN-ISSUED PURCHASES (LIMITED-TERM ONLY)
NEW ISSUES OF MUNICIPAL OBLIGATIONS ARE OFFERED ON A WHEN-ISSUED BASIS;
THAT IS, DELIVERY AND PAYMENT FOR THE SECURITIES NORMALLY TAKE PLACE 15 TO 45
DAYS AFTER THE DATE OF THE TRANSACTION. THE PAYMENT OBLIGATION AND THE YIELD
THAT WILL BE RECEIVED ON THE SECURITIES ARE EACH FIXED AT THE TIME THE BUYER
ENTERS INTO THE COMMITMENT. THE PORTFOLIO WILL ONLY MAKE COMMITMENTS TO PURCHASE
THESE SECURITIES WITH THE INTENTION OF ACTUALLY ACQUIRING THEM, BUT MAY SELL
THESE SECURITIES BEFORE THE SETTLEMENT DATE IF IT IS DEEMED ADVISABLE AS A
MATTER OF INVESTMENT STRATEGY.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS AND THE SECURITIES HELD IN THE
PORTFOLIO 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 PORTFOLIO 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 PORTFOLIO'S ASSETS MAY VARY.
WHEN THE TIME COMES TO PAY FOR WHEN-ISSUED SECURITIES, THE PORTFOLIO 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
PORFOLIO'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. WHEN- ISSUED
SECURITIES DO NOT EARN INCOME UNTIL THEY HAVE IN FACT BEEN ISSUED.
WHEN THE PORTFOLIO PURCHASES A WHEN-ISSUED SECURITY, IT WILL MAINTAIN AN
AMOUNT OF CASH, CASH EQUIVALENTS (FOR EXAMPLE, COMMERCIAL PAPER AND DAILY TENDER
ADJUSTABLE NOTES) OR SHORT-TERM HIGH-GRADE FIXED INCOME SECURITIES IN A
SEGREGATED ACCOUNT SO THAT THE AMOUNT SO SEGREGATED EQUALS THE MARKET VALUE OF
THE WHEN-ISSUED PURCHASE, THEREBY ENSURING THE TRANSACTION IS UNLEVERAGED.
NON-INVESTMENT GRADE DEBT SECURITIES (LIMITED-TERM ONLY)
NON-INVESTMENT GRADE DEBT SECURITIES ARE LOWER QUALITY DEBT SECURITIES
(GENERALLY THOSE RATED BB OR LOWER BY S&P OR BA OR LOWER BY MOODY'S, KNOWN AS
"JUNK BONDS." THESE SECURITIES HAVE MODERATE TO POOR PROTECTION OF PRINCIPAL AND
INTEREST PAYMENTS AND HAVE SPECULATIVE CHARACTERISTICS. (SEE APPENDIX FOR A
DESCRIPTION OF THE RATINGS.) THESE SECURITIES INVOLVE GREATER RISK OF DEFAULT OR
PRICE DECLINES DUE TO CHANGES IN THE ISSUER'S CREDITWORTHINESS THAN
INVESTMENT-GRADE DEBT SECURITIES. BECAUSE THE MARKET FOR LOWER-RATED SECURITIES
MAY BE THINNER AND LESS ACTIVE THAN FOR HIGHER-RATED SECURITIES, THERE MAY BE
MARKET PRICE VOLATILITY FOR THESE SECURITIES AND LIMITED LIQUIDITY IN THE RESALE
MARKET. MARKET PRICES FOR THESE SECURITIES MAY DECLINE SIGNIFICANTLY IN PERIODS
OF GENERAL ECONOMIC DIFFICULTY OR RISING INTEREST RATES.
THE QUALITY LIMITATION SET FORTH IN THE PORTFOLIO'S INVESTMENT POLICY IS
DETERMINED IMMEDIATELY AFTER THE PORTFOLIO'S ACQUISITION OF A GIVEN SECURITY.
ACCORDINGLY, ANY LATER CHANGE IN RATINGS WILL NOT BE CONSIDERED WHEN DETERMINING
WHETHER AN INVESTMENT COMPLIES WITH THE PORTFOLIO'S INVESTMENT POLICY.
WHEN PURCHASING NON-INVESTMENT GRADE DEBT SECURITIES, RATED OR UNRATED, THE
ADVISOR PREPARES ITS OWN CAREFUL CREDIT ANALYSIS TO ATTEMPT TO IDENTIFY THOSE
ISSUERS WHOSE FINANCIAL CONDITION IS ADEQUATE TO MEET FUTURE OBLIGATIONS OR IS
EXPECTED TO BE ADEQUATE IN THE FUTURE. THROUGH PORTFOLIO DIVERSIFICATION AND
CREDIT ANALYSIS, INVESTMENT RISK CAN BE REDUCED, ALTHOUGH THERE CAN BE NO
ASSURANCE THAT LOSSES WILL NOT OCCUR.
INVESTMENT RESTRICTIONS
-----------------------
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 OR PURCHASE PUT OR CALL OPTIONS. THE FUNDS RESERVE THE RIGHT TO
PURCHASE SECURITIES WITH PUTS ATTACHED OR WITH DEMAND FEATURES.
(4) THE LIMITED-TERM PORTFOLIO MAY NOT INVEST MORE THAN 15% OF NET ASSETS IN
NON-INVESTMENT GRADE DEBT SECURITIES AND THE PORTFOLIO DOES NOT GENERALLY INTEND
TO PURCHASE MORE THAN 5% OF NON-INVESTMENT GRADE SECURITIES.
(5) THE LIMITED-TERM PORTFOLIO MAY NOT MAINTAIN AN AVERAGE MATURITY OF MORE THAN
THREE YEARS AND THE PORTFOLIO DOES NOT GENERALLY INTEND TO MAINTAIN AN AVERAGE
MATURITY OF MORE THAN ONE YEAR.
(6) THE PORTFOLIOS MAY NOT PURCHASE ILLIQUID SECURITIES IF MORE THAN 10% OF THE
VALUE OF THAT
PORTFOLIO'S NET ASSETS (15% FOR LIMITED-TERM) WOULD BE INVESTED IN SUCH
SECURITIES.
PURCHASES AND REDEMPTIONS OF SHARES
-----------------------------------
SHARE CERTIFICATES WILL NOT BE ISSUED UNLESS REQUESTED IN WRITING BY THE
INVESTOR. NO CERTIFICATES WILL BE ISSUED FOR FRACTIONAL SHARES.
DRAFT WRITING IS AVAILABLE FOR THE MONEY MARKET PORTFOLIO (CLASS O) AND
CALIFORNIA 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.
DIVIDENDS AND DISTRIBUTIONS
---------------------------
THE MONEY MARKET AND CALIFORNIA MONEY MARKET PORTFOLIOS DECLARE DAILY AND
PAY MONTHLY DIVIDENDS OF THEIR 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.
PURCHASERS OF SHARES OF THE MONEY MARKET AND CALIFORNIA 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 AND CALIFORNIA MONEY MARKET
PORTFOLIO SHAREHOLDERS REDEEMING SHARES BY DRAFT WILL RECEIVE DIVIDENDS UP TO
THE DATE SUCH DRAFT IS PRESENTED TO THE PORTFOLIO FOR PAYMENT.
TAX MATTERS
-----------
THE PORTFOLIOS INTEND TO CONTINUE TO QUALIFY AS REGULATED INVESTMENT
COMPANIES UNDER SUBCHAPTER M OF THE INTERNAL REVENUE CODE. IF FOR ANY REASON ONE
OF THE PORTFOLIOS SHOULD FAIL TO QUALIFY, IT WOULD BE TAXED AS A CORPORATION AT
THE FUND LEVEL, RATHER THAN PASSING THROUGH ITS INCOME AND GAINS TO
SHAREHOLDERS.
DISTRIBUTIONS OF REALIZED NET CAPITAL GAINS, IF ANY, ARE NORMALLY PAID ONCE
A YEAR; HOWEVER, THE PORTFOLIOS DO NOT INTEND TO MAKE ANY SUCH DISTRIBUTIONS
UNLESS AVAILABLE CAPITAL LOSS CARRYOVERS, IF ANY, HAVE BEEN USED OR HAVE
EXPIRED. THE CAPITAL LOSS CARRYFORWARD AS OF DECEMBER 31, 1999, FOR THE MONEY
MARKET PORTFOLIO WAS $209,214, CALIFORNIA MONEY MARKET PORTFOLIO WAS $132,799,
AND LIMITED-TERM PORTFOLIO WAS $120,535.
THE PORTFOLIO'S DIVIDENDS OF NET INVESTMENT INCOME CONSTITUTE
EXEMPT-INTEREST DIVIDENDS ON WHICH SHAREHOLDERS ARE NOT GENERALLY SUBJECT TO
FEDERAL INCOME TAX; IN ADDITION, TO THE EXTENT INCOME DIVIDENDS PAID BY THE
CALIFORNIA MONEY MARKET PORTFOLIO ARE DERIVED FROM EARNINGS ATTRIBUTABLE TO
OBLIGATIONS OF CALIFORNIA AND ITS POLITICAL SUBDIVISIONS, THEY WILL ALSO BE
EXEMPT FROM STATE AND LOCAL PERSONAL INCOME TAX IN CALIFORNIA. 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 PORTFOLIOS. THE PORTFOLIO WILL NOTIFY SHAREHOLDERS
ANNUALLY ABOUT THE FEDERAL TAX STATUS OF DIVIDENDS AND DISTRIBUTIONS PAID BY THE
PORTFOLIO 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 PORTFOLIO.
"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.
THE PORTFOLIO 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 PORTFOLIO 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.
VALUATION OF SHARES
-------------------
MONEY MARKET AND CALIFORNIA MONEY MARKET PORTFOLIOS
THE MONEY MARKET AND CALIFORNIA MONEY MARKET PORTFOLIOS' ASSETS 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.
LIMITED-TERM PORTFOLIO
AS OF THE MOST RECENT CALCULATION ON FEBRUARY 29, 2000, LIMITED-TERM
PORTFOLIO'S NET ASSET VALUE PER SHARE HAS FLUCTUATED LESS THAN 1% PER YEAR ON
AVERAGE SINCE ITS INCEPTION IN APRIL 1981. ITS 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.
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, 12/31/99
MONEY MARKET PORTFOLIO
CLASS O ($1,277,935,288/1,278,187,007 SHARES) $1.00
INSTITUTIONAL CLASS ($237,543,856/237,587,793 SHARES) $1.00
CLASS T ($37,052,707/37,058,165 SHARES) $1.00
CALIFORNIA MONEY MARKET PORTFOLIO
($427,944,627/428,077,051 SHARES) $1.00
LIMITED-TERM PORTFOLIO
NET ASSET VALUE PER SHARE
($523,743,063/49,237,156 SHARES) $10.64
MAXIMUM SALES CHARGE
(1.00% OF OFFERING PRICE) .11
OFFERING PRICE PER SHARE $10.75
CALCULATION OF YIELD AND TOTAL RETURN
-------------------------------------
MONEY MARKET AND CALIFORNIA MONEY MARKET PORTFOLIO
FROM TIME TO TIME THE MONEY MARKET AND CALIFORNIA MONEY MARKET PORTFOLIOS
ADVERTISE THEIR "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 AND
CALIFORNIA MONEY MARKET PORTFOLIOS 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
THESE PORTFOLIOS ALSO MAY ADVERTISE, FROM TIME TO TIME, "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, 1999:
SIMPLE EFFECTIVE TAX-EQUIVALENT TAX-EQUIVALENT
YIELD YIELD (39.6% BRACKET) (36% BRACKET)
MONEY MARKET CLASS O 4.33% 4.42% 7.32% 6.91%
MONEY MARKET INSTITUTIONAL CLASS
4.63% 4.74% 7.85% 7.41%
MONEY MARKET CLASS T 3.92% 4.00% 6.62% 6.25%
CALIFORNIA MONEY MARKET
3.80% 3.87% 6.41% 6.05%
THE STANDARDIZED TOTAL RETURN FOR INSTITUTIONAL CLASS SHARES IS "LINKED" TO
CLASS O TOTAL RETURN. THAT IS, INSTITUTIONAL CLASS SHARES HAVE AN ACTUAL
INCEPTION DATE OF AUGUST 1, 1997. HOWEVER, CLASS O SHARES HAVE AN INCEPTION
DATE OF SEVERAL YEARS EARLIER. IN THE TABLE SHOWN IN THE PROSPECTUS,
PERFORMANCE RESULTS BEFORE THE INSTITUTIONAL CLASS ACTUAL INCEPTION DATE ARE FOR
CLASS O. BECAUSE CLASS O HAD HIGHER EXPENSES, ITS PERFORMANCE WAS LOWER THAN
THE INSTITUTIONAL CLASS WOULD HAVE REALIZED IN THE SAME PERIOD. NONSTANDARDIZED
TOTAL RETURN FOR INSTITUTIONAL CLASS SHARES MAY ALSO BE SHOWN FROM THE ACTUAL
INSTITUTIONAL CLASS INCEPTION DATE; THIS FIGURE IS NOT LINKED TO CLASS O TOTAL
RETURN,
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" OR "AT NAV" 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 (ENDED 12/31/99) ARE AS FOLLOWS:
WITH MAX. LOAD W/O MAX. LOAD
ONE YEAR 1.81% 2.86%
FIVE YEARS 3.84% 4.06%
TEN YEARS 4.35% 4.46%
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 30-DAY PERIOD
ENDED DECEMBER 31, 1999 WAS 3.85%.
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, 1999, THE PORTFOLIO'S TAX
EQUIVALENT YIELD WAS 6.02 FOR AN INVESTOR IN THE 36% FEDERAL INCOME TAX BRACKET,
AND 6.37% FOR AN INVESTOR IN THE 39.6% FEDERAL INCOME TAX BRACKET.
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, 1999). CALVERT GROUP WAS ALSO THE
FIRST TO OFFER A FAMILY OF SOCIALLY RESPONSIBLE MUTUAL FUND PORTFOLIOS.
TRUSTEES AND OFFICERS
---------------------
THE FUND'S BOARD OF TRUSTEES SUPERVISES THE FUND'S ACTIVITIES AND REVIEWS
ITS CONTRACTS WITH COMPANIES THAT PROVIDE IT WITH SERVICES.
RICHARD L. BAIRD, JR., TRUSTEE. MR. BAIRD IS EXECUTIVE VICE PRESIDENT FOR
THE FAMILY HEALTH COUNCIL, INC. IN PITTSBURGH, PENNSYLVANIA, A NON-PROFIT
CORPORATION WHICH PROVIDES FAMILY PLANNING SERVICES, NUTRITION, MATERNAL/CHILD
HEALTH CARE, AND VARIOUS HEALTH SCREENING SERVICES. MR. BAIRD IS A
TRUSTEE/DIRECTOR OF EACH OF THE INVESTMENT COMPANIES IN THE CALVERT GROUP OF
FUNDS, EXCEPT FOR CALVERT VARIABLE SERIES, INC., CALVERT NEW WORLD FUND, INC.
AND CALVERT WORLD VALUES FUND, INC. DOB: 05/09/48. ADDRESS: 211 OVERLOOK DRIVE,
PITTSBURGH, PENNSYLVANIA 15216.
FRANK H. BLATZ, JR., ESQ., TRUSTEE. MR. BLATZ IS A PARTNER IN THE LAW FIRM
OF SNEVILY, ELY, WILLIAMS & BLATZ. HE WAS FORMERLY A PARTNER WITH ABRAMS, BLATZ,
GRAN, HENDRICKS & REINA, P.A. HE IS ALSO A DIRECTOR OF CALVERT VARIABLE SERIES,
INC. DOB: 10/29/35. ADDRESS: 282 SOUTH AVENUE, SUITE 201, P.O. 207, FANWOOD, NJ
07023.
FREDERICK T. BORTS, M.D., TRUSTEE. DR. BORTS IS A RADIOLOGIST WITH KAISER
PERMANENTE. PRIOR TO THAT, HE WAS A RADIOLOGIST AT BETHLEHEM MEDICAL IMAGING IN
ALLENTOWN, PENNSYLVANIA. DOB: 07/23/49. ADDRESS: 2610 NONOHE STREET, WAHIAWA,
HAWAII, 96786.
CHARLES E. DIEHL, TRUSTEE. MR. DIEHL IS A SELF-EMPLOYED CONSULTANT AND IS
VICE PRESIDENT AND TREASURER EMERITUS OF THE GEORGE WASHINGTON UNIVERSITY. HE
HAS RETIRED FROM UNIVERSITY SUPPORT SERVICES, INC. OF HERNDON, VIRGINIA.
FORMERLY, HE WAS A DIRECTOR OF ACACIA MUTUAL LIFE INSURANCE COMPANY, AND IS
CURRENTLY A DIRECTOR OF 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 EXECUTIVE VICE PRESIDENT OF
CALVERT SOCIAL INVESTMENT FUND. HE IS ON THE BOARD OF DIRECTORS OF THE CALVERT
SOCIAL INVESTMENT FOUNDATION, ORGANIZING DIRECTOR OF THE COMMUNITY CAPITAL BANK
IN BROOKLYN, NEW YORK, AND A FINANCIAL CONSULTANT TO VARIOUS ORGANIZATIONS. IN
ADDITION, HE IS A DIRECTOR OF THE COMMUNITY BANKERS MUTUAL FUND OF DENVER,
COLORADO, A DIRECTOR OF ARIEL FUNDS, AND THE TREASURER AND DIRECTOR OF SILBY,
GUFFEY, AND CO., INC., A VENTURE CAPITAL FIRM. MR. GUFFEY IS A TRUSTEE/DIRECTOR
OF EACH OF THE OTHER INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS, EXCEPT
FOR CALVERT VARIABLE SERIES, INC. AND CALVERT NEW WORLD FUND, INC. DOB:
05/15/48. ADDRESS: 388 CALLI CALINA, SANTA FE, NEW MEXICO 87501.
MR. GUFFEY HAS BEEN ADVISED THAT THE SECURITIES AND EXCHANGE COMMISSION
("SEC") HAS ENTERED AN ORDER AGAINST HIM RELATING TO HIS FORMER SERVICE AS A
DIRECTOR OF COMMUNITY BANKERS MUTUAL FUND, INC. THIS FUND IS NOT CONNECTED WITH
ANY CALVERT FUND OR THE CALVERT GROUP AND CEASED OPERATIONS IN SEPTEMBER, 1994.
MR. GUFFEY CONSENTED TO THE ENTRY OF THE ORDER WITHOUT ADMITTING OR DENYING THE
FINDINGS IN THE ORDER. THE ORDER CONTAINS FINDINGS THAT (1) THE COMMUNITY
BANKERS MUTUAL FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION WERE
MATERIALLY FALSE AND MISLEADING BECAUSE THEY MISSTATED OR FAILED TO STATE
MATERIAL FACTS CONCERNING THE PRICING OF FUND SHARES AND THE PERCENTAGE OF
ILLIQUID SECURITIES IN THE FUND'S PORTFOLIO AND THAT MR. GUFFEY, AS A MEMBER OF
THE FUND'S BOARD, SHOULD HAVE KNOWN OF THESE MISSTATEMENTS AND THEREFORE
VIOLATED THE SECURITIES ACT OF 1933; (2) THE PRICE OF THE FUND'S SHARES SOLD TO
THE PUBLIC WAS NOT BASED ON THE CURRENT NET ASSET VALUE OF THE SHARES, IN
VIOLATION OF THE INVESTMENT COMPANY ACT OF 1940 (THE "INVESTMENT COMPANY ACT");
AND (3) THE BOARD OF THE FUND, INCLUDING MR. GUFFEY, VIOLATED THE INVESTMENT
COMPANY ACT BY DIRECTING THE FILING OF A MATERIALLY FALSE REGISTRATION
STATEMENT. THE ORDER DIRECTED MR. GUFFEY TO CEASE AND DESIST FROM COMMITTING OR
CAUSING FUTURE VIOLATIONS AND TO PAY A CIVIL PENALTY OF $5,000. THE SEC PLACED
NO RESTRICTIONS ON MR. GUFFEY'S CONTINUING TO SERVE AS A TRUSTEE OR DIRECTOR OF
MUTUAL FUNDS.
*BARBARA J. KRUMSIEK, PRESIDENT AND TRUSTEE. MS. KRUMSIEK SERVES AS PRESIDENT,
CHIEF EXECUTIVE OFFICER AND VICE CHAIRMAN OF CALVERT GROUP, LTD. AND AS AN
OFFICER AND DIRECTOR OF EACH OF ITS AFFILIATED COMPANIES. SHE IS A DIRECTOR OF
CALVERT-SLOAN ADVISERS, L.L.C., AND A TRUSTEE/DIRECTOR OF EACH OF THE INVESTMENT
COMPANIES IN THE CALVERT GROUP OF FUNDS. MS. KRUMSIEK IS THE PRESIDENT OF EACH
OF THE INVESTMENT COMPANIES, EXCEPT FOR CALVERT SOCIAL INVESTMENT FUND, OF WHICH
SHE IS THE SENIOR VICE PRESIDENT. MS. KRUMSIEK IS ON THE BOARD OF DIRECTORS OF
CALVERT SOCIAL INVESTMENT FOUNDATION. PRIOR TO JOINING CALVERT GROUP, MS.
KRUMSIEK SERVED AS A MANAGING DIRECTOR OF ALLIANCE FUND DISTRIBUTORS, INC. DOB:
08/09/52.
M. CHARITO KRUVANT, TRUSTEE. MS. KRUVANT IS PRESIDENT AND CEO OF CREATIVE
ASSOCIATES INTERNATIONAL, INC., A FIRM THAT SPECIALIZES IN HUMAN RESOURCES
DEVELOPMENT, INFORMATION MANAGEMENT, PUBLIC AFFAIRS AND PRIVATE ENTERPRISE
DEVELOPMENT. SHE IS ALSO A DIRECTOR OF CALVERT VARIABLE SERIES, INC., AND ACACIA
FEDERAL SAVINGS BANK. DOB: 12/08/45. ADDRESS: 5301 WISCONSIN AVENUE, N.W.,
WASHINGTON, D.C. 20015.
ARTHUR J. PUGH, TRUSTEE. MR. PUGH IS A DIRECTOR OF CALVERT VARIABLE SERIES,
INC., AND SERVES AS A DIRECTOR OF ACACIA FEDERAL SAVINGS BANK. DOB: 09/24/37.
ADDRESS: 4823 PRESTWICK DRIVE, FAIRFAX, VIRGINIA 22030.
*DAVID R. ROCHAT, SENIOR VICE PRESIDENT AND TRUSTEE. MR. ROCHAT IS
EXECUTIVE VICE PRESIDENT OF CALVERT ASSET MANAGEMENT COMPANY, INC., DIRECTOR AND
SECRETARY OF GRADY, BERWALD AND CO., INC., AND DIRECTOR AND PRESIDENT OF CHELSEA
SECURITIES, INC. HE IS THE SENIOR VICE PRESIDENT OF FIRST VARIABLE RATE FUND,
CALVERT TAX-FREE RESERVES, CALVERT MUNICIPAL FUND, INC., CALVERT CASH RESERVES,
AND THE CALVERT FUND. DOB: 10/07/37. ADDRESS: BOX 93, CHELSEA, VERMONT 05038.
*D. WAYNE SILBY, ESQ., TRUSTEE. MR. SILBY IS A TRUSTEE/DIRECTOR OF EACH OF
THE INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS, EXCEPT FOR CALVERT
VARIABLE SERIES, INC. AND CALVERT NEW WORLD FUND. MR. SILBY IS EXECUTIVE
CHAIRMAN OF GROUP SERVE, INC., AN INTERNET COMPANY FOCUSED ON COMMUNITY BUILDING
COLLABORATIVE TOOLS, AND AN OFFICER, DIRECTOR AND SHAREHOLDER OF SILBY, GUFFEY &
COMPANY, INC., WHICH SERVES AS GENERAL PARTNER OF CALVERT SOCIAL VENTURE
PARTNERS ("CSVP"). CSVP IS A VENTURE CAPITAL FIRM INVESTING IN SOCIALLY
RESPONSIBLE SMALL COMPANIES. HE IS ALSO A DIRECTOR OF ACACIA LIFE INSURANCE
COMPANY AND CHAIRMAN OF CALVERT SOCIAL INVESTMENT FOUNDATION. DOB: 07/20/48.
ADDRESS: 1715 18TH STREET, N.W., WASHINGTON, D.C. 20009.
RENO J. MARTINI, SENIOR VICE PRESIDENT. MR. MARTINI IS A DIRECTOR AND
SENIOR VICE PRESIDENT OF CALVERT GROUP, LTD., AND SENIOR VICE PRESIDENT AND
CHIEF INVESTMENT OFFICER OF CALVERT ASSET MANAGEMENT COMPANY, INC. MR. MARTINI
IS ALSO A DIRECTOR AND PRESIDENT OF CALVERT-SLOAN ADVISERS, L.L.C., AND A
DIRECTOR AND OFFICER OF CALVERT NEW WORLD FUND. DOB: 1/13/50.
RONALD M. WOLFSHEIMER, CPA, TREASURER. MR. WOLFSHEIMER IS SENIOR VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER OF CALVERT GROUP, LTD. AND ITS
SUBSIDIARIES AND AN OFFICER OF EACH OF THE OTHER INVESTMENT COMPANIES IN THE
CALVERT GROUP OF FUNDS. MR. WOLFSHEIMER IS VICE PRESIDENT AND TREASURER OF
CALVERT-SLOAN ADVISERS, L.L.C., AND A DIRECTOR OF CALVERT DISTRIBUTORS, INC.
DOB: 07/24/47.
WILLIAM M. TARTIKOFF, ESQ., VICE PRESIDENT AND SECRETARY. MR. TARTIKOFF IS
AN OFFICER OF EACH OF THE INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS,
AND IS SENIOR VICE PRESIDENT, SECRETARY, AND GENERAL COUNSEL OF CALVERT GROUP,
LTD., AND EACH OF ITS SUBSIDIARIES. MR. TARTIKOFF IS ALSO VICE PRESIDENT AND
SECRETARY OF CALVERT-SLOAN ADVISERS, L.L.C., A DIRECTOR OF CALVERT DISTRIBUTORS,
INC., AND IS AN OFFICER OF ACACIA NATIONAL LIFE INSURANCE COMPANY. DOB:
08/12/47.
DANIEL K. HAYES, VICE PRESIDENT. MR. HAYES IS VICE PRESIDENT OF CALVERT
ASSET MANAGEMENT COMPANY, INC., AND IS AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS, EXCEPT FOR CALVERT NEW WORLD
FUND, INC. DOB: 09/09/50.
SUSAN WALKER BENDER, ESQ., ASSISTANT SECRETARY. MS. BENDER IS ASSOCIATE
GENERAL COUNSEL OF CALVERT GROUP, LTD. AND AN OFFICER OF EACH OF ITS
SUBSIDIARIES AND CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH
OF THE OTHER INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. DOB: 01/29/59.
IVY WAFFORD DUKE, ESQ., ASSISTANT SECRETARY. MS. DUKE IS ASSOCIATE GENERAL
COUNSEL OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS AND SECRETARY AND PROVIDES
COUNSEL TO THE CALVERT SOCIAL INVESTMENT FOUNDATION. PRIOR TO WORKING AT CALVERT
GROUP, MS. DUKE WAS AN ASSOCIATE IN THE INVESTMENT MANAGEMENT GROUP OF THE
BUSINESS AND FINANCE DEPARTMENT AT DRINKER BIDDLE & REATH. DOB: 09/07/68.
VICTOR FRYE, ESQ., ASSISTANT SECRETARY AND COMPLIANCE OFFICER. MR. FRYE IS
COUNSEL AND COMPLIANCE OFFICER OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS
SUBSIDIARIES AND CALVERT-SLOAN ADVISERS, L.L.C. HE IS ALSO AN OFFICER OF EACH OF
THE OTHER INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. PRIOR TO WORKING
AT CALVERT GROUP, MR. FRYE WAS COUNSEL AND MANAGER OF THE COMPLIANCE DEPARTMENT
AT THE ADVISORS GROUP. DOB: 10/15/58.
JENNIFER P. STREAKS, ESQ., ASSISTANT SECRETARY. MS. STREAKS IS ASSISTANT
GENERAL COUNSEL OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. PRIOR TO WORKING AT CALVERT
GROUP, MS. STREAKS WAS A REGULATORY ANALYST IN THE MARKET REGULATION DEPARTMENT
OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS. DOB: 08/02/71.
MICHAEL V. YUHAS JR., CPA, CONTROLLER OF FUNDS. MR. YUHAS IS THE DIRECTOR
OF FUND ADMINISTRATION OF CALVERT GROUP, LTD., AND AN OFFICER OF EACH OF THE
OTHER INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. DOB: 08/04/61.
THE ADDRESS OF 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 ANY CLASS 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 MMES. KRUMSIEK AND
KRUVANT ARE AMONG THE DIRECTORS, CALVERT WORLD VALUES FUND, INC., OF WHICH ONLY
MESSRS. GUFFEY AND SILBY AND MS. KRUMSIEK ARE AMONG THE DIRECTORS, AND CALVERT
NEW WORLD FUND, INC., OF WHICH ONLY MS. KRUMSIEK AND MR. MARTINI ARE AMONG THE
DIRECTORS.
THE AUDIT COMMITTEE OF THE BOARD IS COMPOSED OF MESSRS. BAIRD, FELDMAN,
GUFFEY AND PUGH AND MS. KRUVANT. THE INVESTMENT POLICY IS COMPOSED OF MESSRS.
BORTS, DIEHL, GAVIAN, ROCHAT AND SILBY AND MS. KRUMSIEK.
DURING 1999, TRUSTEES OF THE FUND NOT AFFILIATED WITH THE FUND'S ADVISOR
WERE PAID $153,867, $41,049, AND $51,758, BY THE MONEY MARKET, CALIFORNIA 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 1999
(UNAUDITED NUMBERS)
AGGREGATE PENSION OR TOTAL COMPENSATION
COMPENSATION RETIREMENT BENEFITS FROM
FROM REGISTRANT ACCRUED AS REGISTRANT AND FUND
FOR SERVICE PART OF COMPLEX PAID TO
AS TRUSTEE OF REGISTRANT TRUSTEE**
EXPENSES*
NAME OF TRUSTEE
RICHARD L. BAIRD, JR. $25,302 $0 $39,250
FRANK H. BLATZ, JR. $26,346 $26,346 $48,250
FREDERICK T. BORTS $24,781 $0 $35,500
CHARLES E. DIEHL $26,346 $0 $48,250
DOUGLAS E. FELDMAN $25,823 $0 $37,000
PETER W. GAVIAN $25,823 $0 $37,000
JOHN G. GUFFEY, JR. $25,303 $4,908 $56,365
M. CHARITO KRUVANT $24,781 $14,868 $45,250
ARTHUR J. PUGH $26,346 $0 $48,250
D. WAYNE SILBY $22,698 $0 $60,831
* CERTAIN TRUSTEES HAVE CHOSEN TO DEFER THEIR COMPENSATION. AS OF DECEMBER 31,
1999, TOTAL DEFERRED COMPENSATION FROM THE FUND COMPLEX, INCLUDING DIVIDENDS AND
CAPITAL APPRECIATION FOR THE TRUSTEES SHOWN WAS: BLATZ, $784,000; DIEHL,
$760,650; GAVIAN, $194,300; GUFFEY, $11,100; KRUVANT, $58,700; AND PUGH,
$134,450.
** THE FUND COMPLEX CONSISTS OF NINE (9) REGISTERED INVESTMENT COMPANIES.
INVESTMENT ADVISOR
------------------
THE FUND'S INVESTMENT ADVISOR IS CALVERT ASSET MANAGEMENT COMPANY, INC.,
4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND 20814, A SUBSIDIARY OF
CALVERT GROUP, LTD., WHICH IS A SUBSIDIARY OF AMERITAS ACACIA MUTUAL HOLDING
COMPANY OF LINCOLN, NEBRASKA.
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.
III) WITH RESPECT TO THE CALIFORNIA MONEY MARKET PORTFOLIO, 0.50% OF THE
FIRST $500 MILLION OF THE 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.
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
EMPLOYEES OF THE ADVISOR OR ITS AFFILIATES, AND PAYS CERTAIN FUND ADVERTISING
AND PROMOTIONAL EXPENSES. THE FUND PAYS ALL OTHER ADMINISTRATIVE AND OPERATING
EXPENSES, INCLUDING: CUSTODIAL FEES; SHAREHOLDER SERVICING, DIVIDEND DISBURSING
AND TRANSFER AGENCY FEES; ADMINISTRATIVE SERVICE FEES; FEDERAL AND STATE
SECURITIES REGISTRATION FEES; INSURANCE PREMIUMS; TRADE ASSOCIATION DUES;
INTEREST, TAXES AND OTHER BUSINESS FEES; LEGAL AND AUDIT FEES; AND BROKERAGE
COMMISSIONS AND OTHER COSTS ASSOCIATED WITH THE PURCHASE AND SALE OF PORTFOLIO
SECURITIES.
THE ADVISOR MAY VOLUNTARILY REIMBURSE THE PORTFOLIOS FOR EXPENSES. THE
ADVISORY FEES PAID BY THE PORTFOLIOS TO THE ADVISOR AND, IF APPLICABLE ANY
REIMBURSEMENT FROM THE ADVISOR TO THE PORTFOLIO FOR THE PAST 3 FISCAL YEARS
WERE:
1997 1998 1999
MONEY MARKET $5,409,090/$25,375 $3,109,517 $3,241,132
CALIFORNIA MONEY MARKET $1,643,147/$164,315 $1,866,734/$84,515 $2,175,707
LIMITED-TERM $3,164,772 $3,048,758 $3,285,530
FOR PORTFOLIOS WITH MULTIPLE CLASSES, INVESTMENT ADVISORY FEES ARE
ALLOCATED AS A PORTFOLIO LEVEL EXPENSE BASED ON NET ASSETS.
ADMINISTRATIVE SERVICES AGENT
-----------------------------
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. 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 0.26% RESPECTIVELY, BASED ON AVERAGE DAILY NET ASSETS.
LIMITED-TERM AND CALIFORNIA MONEY MARKET PORTFOLIOS (TOGETHER WITH THE OTHER
CTFR PORTFOLIOS EXCLUDING MONEY MARKET PORTFOLIO) PAY AN AGGREGATE ANNUAL FEE OF
$80,000, ALLOCATED AMONG THE CTFR PORTFOLIOS (EXCLUDING MONEY MARKET) BASED ON
AVERAGE DAILY NET ASSETS. THE ADMINISTRATIVE SERVICE FEES PAID BY THE PORTFOLIOS
TO CALVERT ADMINISTRATIVE SERVICES COMPANY FOR THE PAST 3 FISCAL YEARS WERE:
1997 1998 1999
MONEY MARKET CLASS O $1,682,754 $3,644,196 $3,487,416
MONEY MARKET INSTITUTIONAL CLASS
$24,010 $85,699 $149,269
MONEY MARKET CLASS T N/A N/A $54,349
CALIFORNIA MONEY MARKET $26,655 $30,080 $31,685
LIMITED-TERM $43,210 $41,317 $40,553
ADMINISTRATIVE SERVICE FEES ARE ALLOCATED AS A CLASS-LEVEL EXPENSE, AGAIN
BASED ON NET ASSETS.
TRANSFER AND SHAREHOLDER SERVICING AGENTS
-----------------------------------------
NATIONAL FINANCIAL DATA SERVICES, INC. ("NFDS"), 330 W. 9TH STREET, KANSAS
CITY, MISSOURI 64105, A SUBSIDIARY OF STATE STREET BANK & TRUST, HAS BEEN
RETAINED BY THE FUND TO ACT AS TRANSFER AGENT AND DIVIDEND DISBURSING AGENT.
THESE RESPONSIBILITIES INCLUDE: RESPONDING TO CERTAIN SHAREHOLDER INQUIRIES AND
INSTRUCTIONS, CREDITING AND DEBITING SHAREHOLDER ACCOUNTS FOR PURCHASES AND
REDEMPTIONS OF FUND SHARES AND CONFIRMING SUCH TRANSACTIONS, AND DAILY UPDATING
OF SHAREHOLDER ACCOUNTS TO REFLECT DECLARATION AND PAYMENT OF DIVIDENDS.
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), 4550 MONTGOMERY AVENUE,
BETHESDA, MARYLAND 20814, A SUBSIDIARY OF CALVERT GROUP, LTD., HAS BEEN RETAINED
BY THE FUND TO ACT AS SHAREHOLDER SERVICING AGENT. SHAREHOLDER SERVICING
RESPONSIBILITIES INCLUDE RESPONDING TO SHAREHOLDER INQUIRIES AND INSTRUCTIONS
CONCERNING THEIR ACCOUNTS, ENTERING ANY TELEPHONED PURCHASES OR REDEMPTIONS INTO
THE NFDS SYSTEM, MAINTENANCE OF BROKER-DEALER DATA, AND PREPARING AND
DISTRIBUTING STATEMENTS TO SHAREHOLDERS REGARDING THEIR ACCOUNTS.
FOR THESE SERVICES, NFDS AND CSSI RECEIVE A FEE BASED ON THE NUMBER OF
SHAREHOLDER ACCOUNTS AND SHAREHOLDER TRANSACTIONS, PER PORTFOLIO.
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
--------------------------------------
PRICEWATERHOUSECOOPERS LLP, 250 WEST PRATT STREET, BALTIMORE, MARYLAND
21201, HAS BEEN SELECTED BY THE BOARD OF TRUSTEES TO SERVE AS INDEPENDENT
ACCOUNTANTS FOR FISCAL YEAR 2000. STATE STREET BANK & TRUST COMPANY, N.A., 225
FRANKLIN STREET, BOSTON, MA 02110, CURRENTLY SERVES AS CUSTODIAN OF THE
PORTFOLIO'S INVESTMENTS. ALLFIRST FINANCIAL INC., 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 HAS ENTERED INTO A PRINCIPAL UNDERWRITING AGREEMENT
WITH CALVERT DISTRIBUTORS INC. ("CDI"), 4550 MONTGOMERY AVENUE, BETHESDA,
MARYLAND 20814. CDI IS AN AFFILIATE OF THE FUND'S ADVISOR. PURSUANT TO THE
AGREEMENT, CDI SERVES AS DISTRIBUTOR AND PRINCIPAL UNDERWRITER FOR THE
PORTFOLIOS. CDI MARKETS AND DISTRIBUTES THE FUNDS' SHARES AND IS RESPONSIBLE FOR
PREPARING ADVERTISING AND SALES LITERATURE, AND PRINTING AND MAILING
PROSPECTUSES TO PROSPECTIVE INVESTORS.
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, INCLUDING ECONOMIES OF SCALE AT
HIGHER ASSET LEVELS, BETTER INVESTMENT OPPORTUNITIES AND MORE FLEXIBILITY IN
MANAGING A GROWING PORTFOLIO.
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
PORTFOLIOS. FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, THEY PAID
BROKER/DEALERS FROM THEIR OWN RESOURCES A TOTAL OF $1,026,100 FOR DISTRIBUTION
EXPENSES FOR ALL FUNDS IN THE CALVERT GROUP. THE ADVISOR AND/OR CDI HAS AGREED
TO PAY CERTAIN FIRMS COMPENSATION BASED ON SALES OF FUND SHARES OR ON ASSETS
HELD IN THOSE FIRM'S ACCOUNTS FOR THEIR MARKETING AND DISTRIBUTION OF THE FUND
SHARES, ABOVE THE USUAL SALES CHARGES AND SERVICES FEES. THIS LIST MAY BE
CHANGED FROM TIME TO TIME. AS OF DECEMBER 31, 1999, THE ADVISOR AND/OR CDI HAD
SPECIAL ARRANGEMENTS WITH THE FOLLOWING FIRMS: MORGAN STANLEY DEAN WITTER,
PRUDENTIAL SECURITIES, SALOMON SMITH BARNEY, AMERICAN EXPRESS FINANCIAL
ADVISORS, MERRILL LYNCH, AND THE ADVISORS GROUP.
CDI MAKES A CONTINUOUS OFFERING OF THE FUND'S SECURITIES ON A "BEST
EFFORTS" BASIS. UNDER THE TERMS OF THE AGREEMENT, CDI IS ENTITLED TO RECEIVE,
PURSUANT TO THE MONEY MARKET PORTFOLIO'S CLASS T DISTRIBUTION PLAN, A
DISTRIBUTION FEE AND A SERVICE FEE FROM THE CLASS BASED ON THE AVERAGE DAILY NET
ASSETS OF THE CLASS. THESE FEES ARE PAID PURSUANT TO THE FUND'S DISTRIBUTION
PLAN. FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, THE MONEY MARKET'S PORTFOLIO
CLASS T DISTRIBUTION PLAN EXPENSES WERE SPENT FOR THE FOLLOWING PURPOSES:
CTFR MONEY MARKET PORTFOLIO
CLASS T
COMPENSATION TO BROKER-DEALERS $52,259
COMPENSATION TO SALES PERSONNEL
ADVERTISING
PRINTING AND MAILING OF PROSPECTUSES
TO OTHER THAN CURRENT SHAREHOLDERS
COMPENSATION TO UNDERWRITERS
INTEREST, FINANCING CHARGES
OTHER _______
TOTAL PAID TO CDI $52,259
CDI ALSO RECEIVES ANY FRONT-END SALES CHARGES OR CDSC PAID ON LIMITED-TERM
PORTFOLIO CLASS A SHARES, AND COMPENSATES BROKER-DEALER FIRMS FOR SALES OF
SHARES AT A MAXIMUM COMMISSION RATE OF 1.00%.
THE AGGREGATE AMOUNT OF SALES CHARGES (GROSS UNDERWRITING COMMISSION) AND
THE NET AMOUNT RETAINED BY CDI (I.E., NET OF REALLOWANCE AND FINDER'S FEES) FOR
THE LAST 3 THREE FISCAL YEARS ARE:
1997 1998 1999
GROSS/NET GROSS/NET GROSS/NET
LIMITED-TERM $103,293/(101,074) $81,552/(129,017) $133,454/(98,447)
FUND TRUSTEES AND CERTAIN OTHER AFFILIATED PERSONS OF THE FUND ARE EXEMPT
FROM THE SALES CHARGE SINCE THE DISTRIBUTION COSTS ARE MINIMAL TO PERSON ALREADY
FAMILIAR WITH THE FUND. OTHER GROUPS (E.G., GROUP RETIREMENT PLANS) ARE EXEMPT
DUE TO ECONOMIES OF SCALE IN DISTRIBUTION. SEE EXHIBIT A TO THE PROSPECTUS.
PORTFOLIO TRANSACTIONS
----------------------
PORTFOLIO TRANSACTIONS ARE UNDERTAKEN ON THE BASIS OF THEIR DESIRABILITY
FROM AN INVESTMENT STANDPOINT. THE ADVISOR MAKES INVESTMENT DECISIONS AND THE
CHOICE OF BROKERS AND DEALERS UNDER THE DIRECTION AND SUPERVISION OF THE FUND'S
BOARD OF TRUSTEES.
BROKER-DEALERS WHO EXECUTE PORTFOLIO TRANSACTIONS ON BEHALF OF THE FUND ARE
SELECTED ON THE BASIS OF THEIR EXECUTION CAPABILITY AND TRADING EXPERTISE
CONSIDERING, AMONG OTHER FACTORS, THE OVERALL REASONABLENESS OF THE BROKERAGE
COMMISSIONS, CURRENT MARKET CONDITIONS, SIZE AND TIMING OF THE ORDER, DIFFICULTY
OF EXECUTION, PER SHARE PRICE, MARKET FAMILIARITY, RELIABILITY, INTEGRITY, AND
FINANCIAL CONDITION, SUBJECT TO THE ADVISOR'S OBLIGATION TO SEEK BEST EXECUTION.
THE ADVISOR MAY ALSO CONSIDER SALES OF FUND SHARES AS A FACTOR IN THE SELECTION
OF BROKERS.
FOR THE LAST THREE FISCAL YEARS TOTAL BROKERAGE COMMISSIONS PAID ARE AS
FOLLOWS:
1997 1998 1999
MONEY MARKET $0 $0 $0
CALIFORNIA MONEY MARKET $0 $0 $0
LIMITED-TERM $0 $0 $0
THE FUND DID NOT PAY ANY BROKERAGE COMMISSIONS TO AFFILIATED PERSON DURING
THE LAST THREE FISCAL YEARS.
WHILE THE FUND'S ADVISOR SELECTS BROKERS PRIMARILY ON THE BASIS OF BEST
EXECUTION, IN SOME CASES IT MAY DIRECT TRANSACTIONS TO BROKERS BASED ON THE
QUALITY AND AMOUNT OF THE RESEARCH AND RESEARCH-RELATED SERVICES WHICH THE
BROKERS PROVIDE TO IT.
THESE RESEARCH SERVICES INCLUDE ADVICE, EITHER DIRECTLY OR THROUGH
PUBLICATIONS OR WRITINGS, AS TO THE VALUE OF SECURITIES, THE ADVISABILITY OF
INVESTING IN, PURCHASING OR SELLING SECURITIES, AND THE AVAILABILITY OF
SECURITIES OR PURCHASERS OR SELLERS OF SECURITIES; FURNISHING OF ANALYSES AND
REPORTS CONCERNING ISSUERS, SECURITIES OR INDUSTRIES; PROVIDING INFORMATION ON
ECONOMIC FACTORS AND TRENDS; ASSISTING IN DETERMINING PORTFOLIOS STRATEGY;
PROVIDING COMPUTER SOFTWARE USED IN SECURITY ANALYSES; PROVIDING PORTFOLIO
PERFORMANCE EVALUATION AND TECHNICAL MARKET ANALYSES; AND PROVIDING OTHER
SERVICES RELEVANT TO THE INVESTMENT DECISION MAKING PROCESS. OTHER SUCH SERVICES
ARE DESIGNED PRIMARILY TO ASSIST THE ADVISOR IN MONITORING THE INVESTMENT
ACTIVITIES OF THE FUND. SUCH SERVICES INCLUDE PORTFOLIO ATTRIBUTION SYSTEMS,
RETURN-BASED STYLE ANALYSIS, AND TRADE-EXECUTION ANALYSIS. THE ADVISOR MAY ALSO
DIRECT SELLING CONCESSIONS AND/OR DISCOUNTS IN FIXED-PRICE OFFERINGS FOR
RESEARCH SERVICES.
IF, IN THE JUDGEMENT OF THE ADVISOR, THE FUND OR OTHER ACCOUNTS MANAGED BY
IT WILL BE BENEFITED BY SUPPLEMENTAL RESEARCH SERVICES, IT IS AUTHORIZED TO PAY
BROKERAGE COMMISSIONS TO A BROKER FURNISHING SUCH SERVICES WHICH ARE IN EXCESS
OF COMMISSIONS WHICH ANOTHER BROKER MAY HAVE CHARGED FOR EFFECTING THE SAME
TRANSACTION. IT IS THE POLICY OF THE ADVISOR THAT SUCH RESEARCH SERVICES WILL
BE USED FOR THE BENEFIT OF THE FUND AS WELL AS OTHER CALVERT GROUP FUNDS AND
MANAGED ACCOUNTS.
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, THE ADVISOR DIRECTED BROKERAGE
FOR RESEARCH SERVICES IN THE FOLLOWING AMOUNTS:
RELATED
AMOUNT OF TRANSACTIONS COMMISSIONS
MONEY MARKET $0 $0
CALIFORNIA MONEY MARKET $0 $0
LIMITED-TERM $0 $0
THE PORTFOLIO TURNOVER RATES FOR THE LAST TWO FISCAL YEARS ARE AS FOLLOWS:
1998 1999
MONEY MARKET N/A N/A
CALIFORNIA MONEY MARKET N/A N/A
LIMITED-TERM 45% 78%
PERSONAL SECURITIES TRANSACTIONS
--------------------------------
THE FUND, ITS ADVISOR, AND PRINCIPAL UNDERWRITER HAVE ADOPTED A CODE OF
ETHICS PURSUANT TO RULE 17J-1 OF THE INVESTMENT COMPANY ACT OF 1940. THE CODE OF
ETHICS IS DESIGNED TO PROTECT THE PUBLIC FROM ABUSIVE TRADING PRACTICES AND TO
MAINTAIN ETHICAL STANDARDS FOR ACCESS PERSON AS DEFINED IN THE RULE WHEN DEALING
WITH THE PUBLIC. THE CODE OF ETHICS PERMITS THE FUND'S INVESTMENT PERSONNEL TO
INVEST IN SECURITIES THAT MAY BE PURCHASED OR HELD BY THE FUND. THE CODE OF
ETHICS CONTAINS CERTAIN CONDITIONS SUCH AS PRECLEARANCE AND RESTRICTIONS ON USE
OF MATERIAL INFORMATION.
GENERAL INFORMATION
-------------------
THE FUND IS AN OPEN-END MANAGEMENT INVESTMENT COMPANY, ORGANIZED AS A
MASSACHUSETTS BUSINESS TRUST ON OCTOBER 20, 1980. THE MONEY MARKET, CALIFORNIA
MONEY MARKET AND LIMITED-TERM ORTFOLIOS ARE DIVERSIFIED. THE OTHER SERIES OF THE
FUND INCLUDE THE LONG-TERM PORTFOLIO AND 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).
EACH CLASS REPRESENTS INTERESTS IN THE SAME PORTFOLIO OF INVESTMENTS BUT,
AS FURTHER DESCRIBED IN THE PROSPECTUS, EACH CLASS IS SUBJECT TO DIFFERING SALES
CHARGES AND EXPENSES, WHICH DIFFERENCES WILL RESULT IN DIFFERING NET ASSET
VALUES AND DISTRIBUTIONS. UPON ANY LIQUIDATION OF THE FUND, SHAREHOLDERS OF EACH
CLASS ARE ENTITLED TO SHARE PRO RATA IN THE NET ASSETS BELONGING TO THAT SERIES
AVAILABLE FOR DISTRIBUTION.
THE FUND IS NOT REQUIRED TO HOLD ANNUAL SHAREHOLDER MEETINGS, BUT SPECIAL
MEETINGS MAY BE CALLED FOR CERTAIN PURPOSES SUCH AS ELECTING TRUSTEES, CHANGING
FUNDAMENTAL POLICIES, OR APPROVING A MANAGEMENT CONTRACT. AS A SHAREHOLDER, YOU
RECEIVE ONE VOTE FOR EACH SHARE YOU OWN, EXCEPT THAT MATTERS AFFECTING CLASSES
DIFFERENTLY, SUCH AS DISTRIBUTION PLANS, WILL BE VOTED ON SEPARATELY BY THE
AFFECTED CLASS(ES).
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
---------------------------------------------------
AS OF APRIL 13, 2000, THE FOLLOWING SHAREHOLDERS OWNED OF RECORD 5% OR MORE
OF THE CLASS OR PORTFOLIO SHOWN:
NAME AND ADDRESS % OF OWNERSHIP
CALVERT TAX-FREE RESERVES LIMITED TERM PORTFOLIO
CHARLES SCHWAB & CO. INC. 5.21%
REINVEST ACCOUNT
ATTN: MUTUAL FUND DEPT.
101 MONTGOMERY ST.
SAN FRANCISCO, CA 94104-4122
CALVERT TAX- FREE RESERVES CALIFORNIA MONEY MARKET FUND
BRUCE WALKUP & BETTY WALKUP TR 16.88%
PERSONAL ACCT.
650 CALIFORNIA ST. STE 2600
SAN FRANCISCO, CA 94108-2607
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
CALVERT TAX-FREE RESERVES
LONG-TERM PORTFOLIO
VERMONT MUNICIPAL PORTFOLIO
CALVERT MUNICIPAL FUND, INC.
CALVERT NATIONAL MUNICIPAL INTERMEDIATE FUND
CALVERT CALIFORNIA MUNICIPAL INTERMEDIATE FUND
CALVERT MARYLAND MUNICIPAL INTERMEDIATE FUND
CALVERT VIRGINIA MUNICIPAL INTERMEDIATE FUND
4550 MONTGOMERY AVENUE, BETHESDA, MARYLAND 20814
STATEMENT OF ADDITIONAL INFORMATION
APRIL 30, 2000
NEW ACCOUNT (800) 368-2748 SHAREHOLDER
INFORMATION: (301) 951-4820 SERVICES: (800) 368-2745
BROKER (800) 368-2746 TDD FOR THE HEARING-
SERVICES: (301) 951-4850 IMPAIRED: (800) 541-1524
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS. INVESTORS
SHOULD READ THE STATEMENT OF ADDITIONAL INFORMATION IN CONJUNCTION WITH THE
APPROPRIATE FIRST VARIABLE RATE FUND CALVERT FIRST GOVERNMENT MONEY MARKET FUND
(THE "FUND") PROSPECTUS, DATED APRIL 30, 2000 (ONE PROSPECTUS IS ISSUED FOR
CLASSES O, B, AND C, ONE PROSPECTUS FOR CLASS T, AND ONE PROSPECTUS FOR THE
INSTITUTIONAL CLASS). THE FUND'S AUDITED FINANCIAL STATEMENT INCLUDED IN ITS
MOST RECENT ANNUAL REPORT TO SHAREHOLDERS, ARE EXPRESSLY INCORPORATED BY
REFERENCE, AND MADE A PART OF THIS SAI. THE PROSPECTUS AND THE MOST RECENT
SHAREHOLDER REPORT MAY BE OBTAINED FREE OF CHARGE BY WRITING THE FUND AT THE
ABOVE ADDRESS OR CALLING THE FUND, OR BY VISITING OUR WEBSITE AT
WWW.CALVERT.COM.
TABLE OF CONTENTS
INVESTMENT POLICIES AND RISKS 2
INVESTMENT RESTRICTIONS 10
PURCHASES AND REDEMPTIONS OF SHARES 10
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS 11
VALUATION OF SHARES 12
CALCULATION OF YIELD AND TOTAL RETURN 13
ADVERTISING 14
TRUSTEES/DIRECTORS AND OFFICERS 15
INVESTMENT ADVISOR 19
ADMINISTRATIVE SERVICES AGENT 19
TRANSFER AND SHAREHOLDER SERVICING AGENTS 20
INDEPENDENT ACCOUNTANTS AND CUSTODIANS 20
METHOD OF DISTRIBUTION 20
PORTFOLIO TRANSACTIONS 22
PERSONAL SECURITIES TRANSACTIONS 23
GENERAL INFORMATION 23
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 24
APPENDIX 24
INVESTMENT POLICIES AND RISKS
-----------------------------
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 OBLIGATIONS AND DEMAND NOTES
THE PORTFOLIOS MAY INVEST IN VARIABLE RATE OBLIGATIONS. VARIABLE RATE
OBLIGATIONS HAVE A YIELD THAT IS ADJUSTED PERIODICALLY BASED ON CHANGES IN THE
LEVEL OF PREVAILING INTEREST RATES. FLOATING RATE OBLIGATIONS HAVE AN INTEREST
RATE FIXED TO A KNOWN LENDING RATE, SUCH AS THE PRIME RATE, AND ARE
AUTOMATICALLY ADJUSTED WHEN THE KNOWN RATE CHANGES. VARIABLE RATE OBLIGATIONS
LESSEN THE CAPITAL FLUCTUATIONS USUALLY INHERENT IN FIXED INCOME INVESTMENTS.
THIS DIMINISHES THE RISK OF CAPITAL DEPRECIATION OF INVESTMENT SECURITIES IN A
PORTFOLIO AND, CONSEQUENTLY, OF PORTFOLIO SHARES. HOWEVER, IF INTEREST RATES
DECLINE, THE YIELD OF THE INVESTED PORTFOLIO WILL DECLINE, CAUSING THE PORTFOLIO
AND ITS SHAREHOLDERS TO FOREGO THE OPPORTUNITY FOR CAPITAL APPRECIATION OF THE
PORTFOLIO'S INVESTMENTS AND OF THEIR SHARES.
THE PORTFOLIOS MAY INVEST IN FLOATING RATE AND VARIABLE RATE DEMAND NOTES.
DEMAND NOTES PROVIDE THAT THE HOLDER MAY DEMAND PAYMENT OF THE NOTE AT ITS PAR
VALUE PLUS ACCRUED INTEREST BY GIVING NOTICE TO THE ISSUER. TO ENSURE THE
ABILITY OF THE ISSUER TO MAKE PAYMENT ON DEMAND, A BANK LETTER OF CREDIT OR
OTHER LIQUIDITY FACILITY MAY SUPPORT THE NOTE.
THE BOARD OF TRUSTEES/DIRECTORS HAS APPROVED INVESTMENTS IN FLOATING AND
VARIABLE RATE DEMAND NOTES UPON THE FOLLOWING CONDITIONS: THE PORTFOLIO 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 PORTFOLIO CAN RECOVER THE PRINCIPAL THROUGH DEMAND.
MUNICIPAL LEASES
THE PORTFOLIOS 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 PORTFOLIOS MAY PURCHASE UNRATED LEASES.
THERE ARE ADDITIONAL RISKS INHERENT IN INVESTING IN THIS TYPE OF MUNICIPAL
SECURITY. UNLIKE MUNICIPAL NOTES AND BONDS, WHERE A MUNICIPALITY IS OBLIGATED BY
LAW TO MAKE INTEREST AND PRINCIPAL PAYMENTS WHEN DUE, FUNDING FOR LEASE PAYMENTS
NEEDS TO BE APPROPRIATED EACH FISCAL YEAR IN THE BUDGET. IT IS POSSIBLE THAT A
MUNICIPALITY WILL NOT APPROPRIATE FUNDS FOR LEASE PAYMENTS. THE ADVISOR
CONSIDERS RISK OF CANCELLATION IN ITS INVESTMENT ANALYSIS. THE 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; AND (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.
OBLIGATIONS WITH PUTS ATTACHED
THE PORTFOLIOS MAY 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." UNCONDITIONAL
PUTS ARE READILY EXERCISABLE IN THE EVENT OF A DEFAULT IN PAYMENT OF PRINCIPAL
OR INTEREST ON THE UNDERLYING SECURITIES.
TEMPORARY INVESTMENTS
FROM TIME TO TIME FOR LIQUIDITY PURPOSES OR PENDING THE INVESTMENT OF THE
PROCEEDS OF THE SALE OF PORTFOLIO SHARES, THE PORTFOLIOS MAY INVEST IN AND
DERIVE UP TO 20% OF ITS INCOME FROM TAXABLE OBLIGATIONS OF THE U.S. GOVERNMENT,
ITS AGENCIES AND INSTRUMENTALITIES. INTEREST EARNED FROM SUCH TAXABLE
INVESTMENTS WILL BE TAXABLE TO INVESTORS AS ORDINARY INCOME UNLESS THE INVESTORS
ARE OTHERWISE EXEMPT FORM TAXATION.
THE PORTFOLIO INTENDS TO MINIMIZE TAXABLE INCOME THROUGH INVESTMENT, WHEN
POSSIBLE, IN SHORT-TERM TAX-EXEMPT SECURITIES. TO MINIMIZE TAXABLE INCOME, THE
PORTFOLIO MAY ALSO HOLD CASH WHICH IS NOT EARNING INCOME.
REPURCHASE AGREEMENTS
THE PORTFOLIOS MAY PURCHASE DEBT SECURITIES SUBJECT TO REPURCHASE
AGREEMENTS, WHICH ARE ARRANGEMENTS UNDER WHICH THE PORTFOLIO BUYS A SECURITY,
AND THE SELLER SIMULTANEOUSLY AGREES TO REPURCHASE THE SECURITY AT A SPECIFIED
TIME AND PRICE REFLECTING A MARKET RATE OF INTEREST. THE PORTFOLIOS ENGAGE IN
REPURCHASE AGREEMENTS IN ORDER TO EARN A HIGHER RATE OF RETURN THAN THEY COULD
EARN SIMPLY BY INVESTING IN THE OBLIGATION WHICH IS THE SUBJECT OF THE
REPURCHASE AGREEMENT. REPURCHASE AGREEMENTS ARE NOT, HOWEVER, WITHOUT RISK. IN
THE EVENT OF THE BANKRUPTCY OF A SELLER DURING THE TERM OF A REPURCHASE
AGREEMENT, A LEGAL QUESTION EXISTS AS TO WHETHER THE PORTFOLIO WOULD BE DEEMED
THE OWNER OF THE UNDERLYING SECURITY OR WOULD BE DEEMED ONLY TO HAVE A SECURITY
INTEREST IN AND LIEN UPON SUCH SECURITY. THE PORTFOLIOS WILL ONLY ENGAGE IN
REPURCHASE AGREEMENTS WITH RECOGNIZED SECURITIES DEALERS AND BANKS DETERMINED TO
PRESENT MINIMAL CREDIT RISK BY THE ADVISOR. IN ADDITION, THE PORTFOLIO WILL ONLY
ENGAGE IN REPURCHASE AGREEMENTS REASONABLY DESIGNED TO SECURE FULLY DURING THE
TERM OF THE AGREEMENT THE SELLER'S OBLIGATION TO REPURCHASE THE UNDERLYING
SECURITY AND WILL MONITOR THE MARKET VALUE OF THE UNDERLYING SECURITY DURING THE
TERM OF THE AGREEMENT. IF THE VALUE OF THE UNDERLYING SECURITY DECLINES AND IS
NOT AT LEAST EQUAL TO THE REPURCHASE PRICE DUE THE PORTFOLIO PURSUANT TO THE
AGREEMENT, THE PORTFOLIO WILL REQUIRE THE SELLER TO PLEDGE ADDITIONAL SECURITIES
OR CASH TO SECURE THE SELLER'S OBLIGATIONS PURSUANT TO THE AGREEMENT. IF THE
SELLER DEFAULTS ON ITS OBLIGATION TO REPURCHASE AND THE VALUE OF THE UNDERLYING
SECURITY DECLINES, THE PORTFOLIO MAY INCUR A LOSS AND MAY INCUR EXPENSES IN
SELLING THE UNDERLYING SECURITY. REPURCHASE AGREEMENTS ARE ALWAYS FOR PERIODS OF
LESS THAN ONE YEAR. REPURCHASE AGREEMENTS NOT TERMINABLE WITHIN SEVEN DAYS ARE
CONSIDERED ILLIQUID.
REVERSE REPURCHASE AGREEMENTS
THE PORTFOLIOS MAY ALSO ENGAGE IN REVERSE REPURCHASE AGREEMENTS. UNDER A
REVERSE REPURCHASE AGREEMENT, THE PORTFOLIO SELLS SECURITIES TO A BANK OR
SECURITIES DEALER AND AGREES TO REPURCHASE THOSE SECURITIES FROM SUCH PARTY AT
AN AGREED UPON DATE AND PRICE REFLECTING A MARKET RATE OF INTEREST. THE
PORTFOLIO INVESTS THE PROCEEDS FROM EACH REVERSE REPURCHASE AGREEMENT IN
OBLIGATIONS IN WHICH IT IS AUTHORIZED TO INVEST. THE PORTFOLIO INTENDS TO ENTER
INTO A REVERSE REPURCHASE AGREEMENT ONLY WHEN THE INTEREST INCOME PROVIDED FOR
IN THE OBLIGATION IN WHICH THE PORTFOLIO INVESTS THE PROCEEDS IS EXPECTED TO
EXCEED THE AMOUNT THE PORTFOLIO WILL PAY IN INTEREST TO THE OTHER PARTY TO THE
AGREEMENT PLUS ALL COSTS ASSOCIATED WITH THE TRANSACTIONS. THE PORTFOLIO DOES
NOT INTEND TO BORROW FOR LEVERAGE PURPOSES. THE PORTFOLIO WILL ONLY BE PERMITTED
TO PLEDGE ASSETS TO THE EXTENT NECESSARY TO SECURE BORROWINGS AND REVERSE
REPURCHASE AGREEMENTS.
DURING THE TIME A REVERSE REPURCHASE AGREEMENT IS OUTSTANDING, THE
PORTFOLIO WILL MAINTAIN IN A SEGREGATED ACCOUNT AN AMOUNT OF CASH, US GOVERNMENT
SECURITIES OR OTHER LIQUID, HIGH-QUALITY DEBT SECURITIES EQUAL IN VALUE TO THE
REPURCHASE PRICE. THE PORTFOLIO WILL MARK TO MARKET THE VALUE OF ASSETS HELD IN
THE SEGREGATED ACCOUNT, AND WILL PLACE ADDITIONAL ASSETS IN THE ACCOUNT WHENEVER
THE TOTAL VALUE OF THE ACCOUNT FALLS BELOW THE AMOUNT REQUIRED UNDER APPLICABLE
REGULATIONS.
THE PORTFOLIO'S USE OF REVERSE REPURCHASE AGREEMENTS INVOLVES THE RISK THAT
THE OTHER PARTY TO THE AGREEMENTS COULD BECOME SUBJECT TO BANKRUPTCY OR
LIQUIDATION PROCEEDINGS DURING THE PERIOD THE AGREEMENTS ARE OUTSTANDING. IN
SUCH EVENT, THE PORTFOLIO MAY NOT BE ABLE TO REPURCHASE THE SECURITIES IT HAS
SOLD TO THAT OTHER PARTY. UNDER THOSE CIRCUMSTANCES, IF AT THE EXPIRATION OF THE
AGREEMENT SUCH SECURITIES ARE OF GREATER VALUE THAN THE PROCEEDS OBTAINED BY THE
PORTFOLIO UNDER THE AGREEMENTS, THE PORTFOLIO MAY HAVE BEEN BETTER OFF HAD IT
NOT ENTERED INTO THE AGREEMENT. HOWEVER, THE PORTFOLIO WILL ENTER INTO REVERSE
REPURCHASE AGREEMENTS ONLY WITH BANKS AND DEALERS WHICH THE ADVISOR BELIEVES
PRESENT MINIMAL CREDIT RISKS UNDER GUIDELINES ADOPTED BY THE PORTFOLIO'S BOARD
OF TRUSTEES/DIRECTORS. IN ADDITION, THE PORTFOLIO BEARS THE RISK THAT THE MARKET
VALUE OF THE SECURITIES IT SOLD MAY DECLINE BELOW THE AGREED-UPON REPURCHASE
PRICE, IN WHICH CASE THE DEALER MAY REQUEST THE PORTFOLIO TO POST ADDITIONAL
COLLATERAL.
WHEN-ISSUED PURCHASES
NEW ISSUES OF MUNICIPAL OBLIGATIONS ARE OFFERED ON A WHEN-ISSUED BASIS;
THAT IS, DELIVERY AND PAYMENT FOR THE SECURITIES NORMALLY TAKE PLACE 15 TO 45
DAYS AFTER THE DATE OF THE TRANSACTION. THE PAYMENT OBLIGATION AND THE YIELD
THAT WILL BE RECEIVED ON THE SECURITIES ARE EACH FIXED AT THE TIME THE BUYER
ENTERS INTO THE COMMITMENT. THE PORTFOLIOS WILL ONLY MAKE COMMITMENTS TO
PURCHASE THESE SECURITIES WITH THE INTENTION OF ACTUALLY ACQUIRING THEM, BUT MAY
SELL THESE SECURITIES BEFORE THE SETTLEMENT DATE IF IT IS DEEMED ADVISABLE AS A
MATTER OF INVESTMENT STRATEGY.
SECURITIES PURCHASED ON A WHEN-ISSUED BASIS AND THE SECURITIES HELD IN A
PORTFOLIO 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 PORTFOLIO 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 PORTFOLIO'S ASSETS MAY VARY.
WHEN THE TIME COMES TO PAY FOR WHEN-ISSUED SECURITIES, THE PORTFOLIO 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
PORTFOLIO'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. WHEN ISSUED
SECURITIES DO NOT EARN INCOME UNTIL THEY HAVE IN FACT BEEN ISSUED.
WHEN THE PORTFOLIO PURCHASES A WHEN-ISSUED SECURITY, IT WILL MAINTAIN AN
AMOUNT OF CASH, CASH EQUIVALENTS (FOR EXAMPLE, COMMERCIAL PAPER AND DAILY TENDER
ADJUSTABLE NOTES) OR SHORT-TERM HIGH-GRADE FIXED INCOME SECURITIES IN A
SEGREGATED ACCOUNT SO THAT THE AMOUNT SO SEGREGATED EQUALS THE MARKET VALUE OF
THE WHEN-ISSUED PURCHASE, THEREBY ENSURING THE TRANSACTION IS UNLEVERAGED.
NON-INVESTMENT GRADE DEBT SECURITIES
NON-INVESTMENT GRADE DEBT SECURITIES ARE LOWER QUALITY DEBT SECURITIES
(GENERALLY THOSE RATED BB OR LOWER BY S&P OR BA OR LOWER BY MOODY'S, KNOWN AS
"JUNK BONDS." THESE SECURITIES HAVE MODERATE TO POOR PROTECTION OF PRINCIPAL AND
INTEREST PAYMENTS AND HAVE SPECULATIVE CHARACTERISTICS. (SEE APPENDIX FOR A
DESCRIPTION OF THE RATINGS.) THESE SECURITIES INVOLVE GREATER RISK OF DEFAULT OR
PRICE DECLINES DUE TO CHANGES IN THE ISSUER'S CREDITWORTHINESS THAN
INVESTMENT-GRADE DEBT SECURITIES. BECAUSE THE MARKET FOR LOWER-RATED SECURITIES
MAY BE THINNER AND LESS ACTIVE THAN FOR HIGHER-RATED SECURITIES, THERE MAY BE
MARKET PRICE VOLATILITY FOR THESE SECURITIES AND LIMITED LIQUIDITY IN THE RESALE
MARKET. MARKET PRICES FOR THESE SECURITIES MAY DECLINE SIGNIFICANTLY IN PERIODS
OF GENERAL ECONOMIC DIFFICULTY OR RISING INTEREST RATES.
THE QUALITY LIMITATION SET FORTH IN THE PORTFOLIO'S INVESTMENT POLICY IS
DETERMINED IMMEDIATELY AFTER THE PORTFOLIO'S ACQUISITION OF A GIVEN SECURITY.
ACCORDINGLY, ANY LATER CHANGE IN RATINGS WILL NOT BE CONSIDERED WHEN DETERMINING
WHETHER AN INVESTMENT COMPLIES WITH THE PORTFOLIO'S INVESTMENT POLICY.
WHEN PURCHASING NON-INVESTMENT GRADE DEBT SECURITIES, RATED OR UNRATED, THE
ADVISOR PREPARES ITS OWN CAREFUL CREDIT ANALYSIS TO ATTEMPT TO IDENTIFY THOSE
ISSUERS WHOSE FINANCIAL CONDITION IS ADEQUATE TO MEET FUTURE OBLIGATIONS OR IS
EXPECTED TO BE ADEQUATE IN THE FUTURE. THROUGH PORTFOLIO DIVERSIFICATION AND
CREDIT ANALYSIS, INVESTMENT RISK CAN BE REDUCED, ALTHOUGH THERE CAN BE NO
ASSURANCE THAT LOSSES WILL NOT OCCUR.
DERIVATIVES
THE PORTFOLIOS CAN USE VARIOUS TECHNIQUES TO INCREASE OR DECREASE THEIR
EXPOSURE TO CHANGING SECURITY PRICES, INTEREST RATES, OR OTHER FACTORS THAT
AFFECT SECURITY VALUES. THESE TECHNIQUES MAY INVOLVE DERIVATIVE TRANSACTIONS
SUCH AS BUYING AND SELLING OPTIONS AND FUTURES CONTRACTS AND LEVERAGED NOTES,
ENTERING INTO SWAP AGREEMENTS, AND PURCHASING INDEXED SECURITIES. THE PORTFOLIO
CAN USE THESE PRACTICES EITHER AS SUBSTITUTION OR AS PROTECTION AGAINST AN
ADVERSE MOVE IN THE PORTFOLIO TO ADJUST THE RISK AND RETURN CHARACTERISTICS OF
THE PORTFOLIO. IF THE ADVISOR JUDGES MARKET CONDITIONS INCORRECTLY OR EMPLOYS A
STRATEGY THAT DOES NOT CORRELATE WELL WITH A PORTFOLIO'S INVESTMENTS, OR IF THE
COUNTERPARTY TO THE TRANSACTION DOES NOT PERFORM AS PROMISED, THESE TECHNIQUES
COULD RESULT IN A LOSS. THESE TECHNIQUES MAY INCREASE THE VOLATILITY OF A
PORTFOLIO AND MAY INVOLVE A SMALL INVESTMENT OF CASH RELATIVE TO THE MAGNITUDE
OF THE RISK ASSUMED. DERIVATIVES ARE OFTEN ILLIQUID.
OPTIONS AND FUTURES CONTRACTS
THE PORTFOLIOS MAY, IN PURSUIT OF ITS RESPECTIVE INVESTMENT OBJECTIVES,
PURCHASE PUT AND CALL OPTIONS AND ENGAGE IN THE WRITING OF COVERED CALL OPTIONS
AND SECURED PUT OPTIONS ON SECURITIES AND EMPLOY A VARIETY OF OTHER INVESTMENT
TECHNIQUES SUCH AS INTEREST RATE FUTURES CONTRACTS, AND OPTIONS ON SUCH FUTURES,
AS DESCRIBED MORE FULLY BELOW.
THE PORTFOLIOS MAY ENGAGE IN SUCH TRANSACTIONS ONLY TO HEDGE THE EXISTING
POSITIONS IN THE PORTFOLIO. THEY WILL NOT ENGAGE IN SUCH TRANSACTIONS FOR THE
PURPOSES OF SPECULATION OR LEVERAGE. SUCH INVESTMENT POLICIES AND TECHNIQUES MAY
INVOLVE A GREATER DEGREE OF RISK THAN THOSE INHERENT IN MORE CONSERVATIVE
INVESTMENT APPROACHES.
THE PORTFOLIOS MAY WRITE "COVERED OPTIONS" ON SECURITIES IN STANDARD
CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES. THE PORTFOLIO MAY WRITE SUCH
OPTIONS IN ORDER TO RECEIVE THE PREMIUMS FROM OPTIONS THAT EXPIRE AND TO SEEK
NET GAINS FROM CLOSING PURCHASE TRANSACTIONS WITH RESPECT TO SUCH OPTIONS.
PUT AND CALL OPTIONS. THE PORTFOLIOS MAY PURCHASE PUT AND CALL OPTIONS, IN
STANDARD CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES. THE PORTFOLIO WILL
PURCHASE SUCH OPTIONS ONLY TO HEDGE AGAINST CHANGES IN THE VALUE OF SECURITIES
THE PORTFOLIO HOLD AND NOT FOR THE PURPOSES OF SPECULATION OR LEVERAGE. BY
BUYING A PUT, A PORTFOLIO HAS THE RIGHT TO SELL THE SECURITY AT THE EXERCISE
PRICE, THUS LIMITING ITS RISK OF LOSS THROUGH A DECLINE IN THE MARKET VALUE OF
THE SECURITY UNTIL THE PUT EXPIRES. THE AMOUNT OF ANY APPRECIATION IN THE VALUE
OF THE UNDERLYING SECURITY WILL BE PARTIALLY OFFSET BY THE AMOUNT OF THE PREMIUM
PAID FOR THE PUT OPTION AND ANY RELATED TRANSACTION COSTS. PRIOR TO ITS
EXPIRATION, A PUT OPTION MAY BE SOLD IN A CLOSING SALE TRANSACTION AND ANY
PROFIT OR LOSS FROM THE SALE WILL DEPEND ON WHETHER THE AMOUNT RECEIVED IS MORE
OR LESS THAN THE PREMIUM PAID FOR THE PUT OPTION PLUS THE RELATED TRANSACTION
COSTS.
THE PORTFOLIO MAY PURCHASE CALL OPTIONS ON SECURITIES WHICH IT MAY INTEND
TO PURCHASE OR AS AN INTEREST RATE HEDGE. SUCH TRANSACTIONS MAY BE ENTERED INTO
IN ORDER TO LIMIT THE RISK OF A SUBSTANTIAL INCREASE IN THE MARKET PRICE OF THE
SECURITY WHICH THE PORTFOLIO INTENDS TO PURCHASE OR IN THE LEVEL OF MARKET
INTEREST RATES. PRIOR TO ITS EXPIRATION, A CALL OPTION MAY BE SOLD IN A CLOSING
SALE TRANSACTION. ANY PROFIT OR LOSS FROM SUCH A SALE WILL DEPEND ON WHETHER THE
AMOUNT RECEIVED IS MORE OR LESS THAN THE PREMIUM PAID FOR THE CALL OPTION PLUS
THE RELATED TRANSACTION COSTS.
COVERED OPTIONS. THE PORTFOLIO MAY WRITE ONLY COVERED OPTIONS ON SECURITIES IN
STANDARD CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES. THIS MEANS THAT, IN
THE CASE OF CALL OPTIONS, SO LONG AS A PORTFOLIO IS OBLIGATED AS THE WRITER OF A
CALL OPTION, THAT PORTFOLIO WILL OWN THE UNDERLYING SECURITY SUBJECT TO THE
OPTION AND, IN THE CASE OF PUT OPTIONS, THAT PORTFOLIO WILL, THROUGH ITS
CUSTODIAN, DEPOSIT AND MAINTAIN EITHER CASH OR SECURITIES WITH A MARKET VALUE
EQUAL TO OR GREATER THAN THE EXERCISE PRICE OF THE OPTION.
WHEN A PORTFOLIO WRITES A COVERED CALL OPTION, THE PORTFOLIO GIVES THE
PURCHASER THE RIGHT TO PURCHASE THE SECURITY AT THE CALL OPTION PRICE AT ANY
TIME DURING THE LIFE OF THE OPTION. AS THE WRITER OF THE OPTION, THE PORTFOLIO
RECEIVES A PREMIUM, LESS A COMMISSION, AND IN EXCHANGE FOREGOES THE OPPORTUNITY
TO PROFIT FROM ANY INCREASE IN THE MARKET VALUE OF THE SECURITY EXCEEDING THE
CALL OPTION PRICE. THE PREMIUM SERVES TO MITIGATE THE EFFECT OF ANY DEPRECIATION
IN THE MARKET VALUE OF THE SECURITY. WRITING COVERED CALL OPTIONS CAN INCREASE
THE INCOME OF THE PORTFOLIO AND THUS REDUCE DECLINES IN THE NET ASSET VALUE PER
SHARE OF THE PORTFOLIO IF SECURITIES COVERED BY SUCH OPTIONS DECLINE IN VALUE.
EXERCISE OF A CALL OPTION BY THE PURCHASER HOWEVER WILL CAUSE THE PORTFOLIO TO
FOREGO FUTURE APPRECIATION OF THE SECURITIES COVERED BY THE OPTION.
WHEN A PORTFOLIO WRITES A COVERED PUT OPTION, IT WILL GAIN A PROFIT IN THE
AMOUNT OF THE PREMIUM, LESS A COMMISSION, SO LONG AS THE PRICE OF THE UNDERLYING
SECURITY REMAINS ABOVE THE EXERCISE PRICE. HOWEVER, THE PORTFOLIO REMAINS
OBLIGATED TO PURCHASE THE UNDERLYING SECURITY FROM THE BUYER OF THE PUT OPTION
(USUALLY IN THE EVENT THE PRICE OF THE SECURITY FALLS BELOW THE EXERCISE PRICE)
AT ANY TIME DURING THE OPTION PERIOD. IF THE PRICE OF THE UNDERLYING SECURITY
FALLS BELOW THE EXERCISE PRICE, THE PORTFOLIO MAY REALIZE A LOSS IN THE AMOUNT
OF THE DIFFERENCE BETWEEN THE EXERCISE PRICE AND THE SALE PRICE OF THE SECURITY,
LESS THE PREMIUM RECEIVED.
THE PORTFOLIO MAY PURCHASE SECURITIES WHICH MAY BE COVERED WITH CALL
OPTIONS SOLELY ON THE BASIS OF CONSIDERATIONS CONSISTENT WITH THE INVESTMENT
OBJECTIVES AND POLICIES OF THE PORTFOLIO. THE PORTFOLIO'S TURNOVER MAY INCREASE
THROUGH THE EXERCISE OF A CALL OPTION; THIS WILL GENERALLY OCCUR IF THE MARKET
VALUE OF A "COVERED" SECURITY INCREASES AND THE PORTFOLIO HAS NOT ENTERED INTO A
CLOSING PURCHASE TRANSACTION.
RISKS RELATED TO OPTIONS TRANSACTIONS. THE PORTFOLIO CAN CLOSE OUT ITS
RESPECTIVE POSITIONS IN EXCHANGE-TRADED OPTIONS ONLY ON AN EXCHANGE WHICH
PROVIDES A SECONDARY MARKET IN SUCH OPTIONS. ALTHOUGH THE PORTFOLIO INTENDS TO
ACQUIRE AND WRITE ONLY SUCH EXCHANGE-TRADED OPTIONS FOR WHICH AN ACTIVE
SECONDARY MARKET APPEARS TO EXIST, THERE CAN BE NO ASSURANCE THAT SUCH A MARKET
WILL EXIST FOR ANY PARTICULAR OPTION CONTRACT AT ANY PARTICULAR TIME. THIS MIGHT
PREVENT THE PORTFOLIO FROM CLOSING AN OPTIONS POSITION, WHICH COULD IMPAIR THE
PORTFOLIO'S ABILITY TO HEDGE EFFECTIVELY. THE INABILITY TO CLOSE OUT A CALL
POSITION MAY HAVE AN ADVERSE EFFECT ON LIQUIDITY BECAUSE THE PORTFOLIO MAY BE
REQUIRED TO HOLD THE SECURITIES UNDERLYING THE OPTION UNTIL THE OPTION EXPIRES
OR IS EXERCISED.
TRANSACTIONS IN FUTURES CONTRACTS
THE PORTFOLIOS MAY ENGAGE IN THE PURCHASE AND SALE OF FUTURES CONTRACTS ON
AN INDEX OF MUNICIPAL BONDS OR ON U.S. TREASURY SECURITIES, OR OPTIONS ON SUCH
FUTURES CONTRACTS, FOR HEDGING PURPOSES ONLY. THE PORTFOLIO MAY SELL SUCH
FUTURES CONTRACTS IN ANTICIPATION OF A DECLINE IN THE COST OF MUNICIPAL BONDS IT
HOLDS OR MAY PURCHASE SUCH FUTURES CONTRACTS IN ANTICIPATION OF AN INCREASE IN
THE VALUE OF MUNICIPAL BONDS THE PORTFOLIO INTENDS TO ACQUIRE. THE PORTFOLIO
ALSO IS AUTHORIZED TO PURCHASE AND SELL OTHER FINANCIAL FUTURES CONTRACTS WHICH
IN THE OPINION OF THE INVESTMENT ADVISOR PROVIDE AN APPROPRIATE HEDGE FOR SOME
OR ALL OF THE PORTFOLIO'S SECURITIES.
BECAUSE OF LOW INITIAL MARGIN DEPOSITS MADE UPON THE OPENING OF A FUTURES
POSITION, FUTURES TRANSACTIONS INVOLVE SUBSTANTIAL LEVERAGE. AS A RESULT,
RELATIVELY SMALL MOVEMENTS IN THE PRICE OF THE FUTURES CONTRACT CAN RESULT IN
SUBSTANTIAL UNREALIZED GAINS OR LOSSES. BECAUSE THE PORTFOLIO WILL ENGAGE IN THE
PURCHASE AND SALE OF FINANCIAL FUTURES CONTRACTS SOLELY FOR HEDGING PURPOSES,
HOWEVER, ANY LOSSES INCURRED IN CONNECTION THEREWITH SHOULD, IF THE HEDGING
STRATEGY IS SUCCESSFUL, BE OFFSET IN WHOLE OR IN PART BY INCREASES IN THE VALUE
OF SECURITIES HELD BY THE PORTFOLIO OR DECREASES IN THE PRICE OF SECURITIES THE
PORTFOLIO INTENDS TO ACQUIRE.
MUNICIPAL BOND INDEX FUTURES CONTRACTS COMMENCED TRADING IN JUNE 1985, AND
IT IS POSSIBLE THAT TRADING IN SUCH FUTURES CONTRACTS WILL BE LESS LIQUID THAN
THAT IN OTHER FUTURES CONTRACTS. THE TRADING OF FUTURES CONTRACTS AND OPTIONS
THEREON IS SUBJECT TO CERTAIN MARKET RISKS, SUCH AS TRADING HALTS, SUSPENSIONS,
EXCHANGE OR CLEARING HOUSE EQUIPMENT FAILURES, GOVERNMENT INTERVENTION OR OTHER
DISRUPTIONS OF NORMAL TRADING ACTIVITY, WHICH COULD AT TIMES MAKE IT DIFFICULT
OR IMPOSSIBLE TO LIQUIDATE EXISTING POSITIONS.
THE LIQUIDITY OF A SECONDARY MARKET IN FUTURES CONTRACTS MAY BE FURTHER
ADVERSELY AFFECTED BY "DAILY PRICE FLUCTUATION LIMITS" ESTABLISHED BY CONTRACT
MARKETS, WHICH LIMIT THE AMOUNT OF FLUCTUATION IN THE PRICE OF A FUTURES
CONTRACT OR OPTION THEREON DURING A SINGLE TRADING DAY. ONCE THE DAILY LIMIT HAS
BEEN REACHED IN THE CONTRACT, NO TRADES MAY BE ENTERED INTO AT A PRICE BEYOND
THE LIMIT, THUS PREVENTING THE LIQUIDATION OF OPEN POSITIONS. PRICES OF EXISTING
CONTRACTS HAVE IN THE PAST MOVED THE DAILY LIMIT ON A NUMBER OF CONSECUTIVE
TRADING DAYS. THE PORTFOLIO WILL ENTER INTO A FUTURES POSITION ONLY IF, IN THE
JUDGMENT OF THE INVESTMENT ADVISOR, THERE APPEARS TO BE AN ACTIVELY TRADED
SECONDARY MARKET FOR SUCH FUTURES CONTRACTS.
THE SUCCESSFUL USE OF TRANSACTIONS IN FUTURES CONTRACTS AND OPTIONS THEREON
DEPENDS ON THE ABILITY OF THE INVESTMENT ADVISOR TO CORRECTLY FORECAST THE
DIRECTION AND EXTENT OF PRICE MOVEMENTS OF THESE INSTRUMENTS, AS WELL AS PRICE
MOVEMENTS OF THE SECURITIES HELD BY THE PORTFOLIO WITHIN A GIVEN TIME FRAME. TO
THE EXTENT THESE PRICES REMAIN STABLE DURING THE PERIOD IN WHICH A FUTURES OR
OPTION CONTRACT IS HELD BY THE PORTFOLIO, OR MOVE IN A DIRECTION OPPOSITE TO
THAT ANTICIPATED, THE PORTFOLIO MAY REALIZE A LOSS ON THE HEDGING TRANSACTION
WHICH IS NOT FULLY OR PARTIALLY OFFSET BY AN INCREASE IN THE VALUE OF THE
PORTFOLIO'S SECURITIES. AS A RESULT, THE PORTFOLIO'S TOTAL RETURN FOR SUCH
PERIOD MAY BE LESS THAN IF IT HAD NOT ENGAGED IN THE HEDGING TRANSACTION.
DESCRIPTION OF FINANCIAL FUTURES CONTRACTS
FUTURES CONTRACTS. A FUTURES CONTRACT OBLIGATES THE SELLER OF A CONTRACT TO
DELIVER AND THE PURCHASER OF A CONTRACT TO TAKE DELIVERY OF THE TYPE OF
FINANCIAL INSTRUMENT CALLED FOR IN THE CONTRACT OR, IN SOME INSTANCES, TO MAKE A
CASH SETTLEMENT, AT A SPECIFIED FUTURE TIME FOR A SPECIFIED PRICE. ALTHOUGH THE
TERMS OF A CONTRACT CALL FOR ACTUAL DELIVERY OR ACCEPTANCE OF SECURITIES, OR FOR
A CASH SETTLEMENT, IN MOST CASES THE CONTRACTS ARE CLOSED OUT BEFORE THE
DELIVERY DATE WITHOUT THE DELIVERY OR ACCEPTANCE TAKING PLACE. THE PORTFOLIO
INTENDS TO CLOSE OUT ITS FUTURES CONTRACTS PRIOR TO THE DELIVERY DATE OF SUCH
CONTRACTS.
THE PORTFOLIOS MAY SELL FUTURES CONTRACTS IN ANTICIPATION OF A DECLINE IN
THE VALUE OF ITS INVESTMENTS IN MUNICIPAL BONDS. THE LOSS ASSOCIATED WITH ANY
SUCH DECLINE COULD BE REDUCED WITHOUT EMPLOYING FUTURES AS A HEDGE BY SELLING
LONG-TERM SECURITIES AND EITHER REINVESTING THE PROCEEDS IN SECURITIES WITH
SHORTER MATURITIES OR BY HOLDING ASSETS IN CASH. THIS STRATEGY, HOWEVER, ENTAILS
INCREASED TRANSACTION COSTS IN THE FORM OF BROKERAGE COMMISSIONS AND DEALER
SPREADS AND WILL TYPICALLY REDUCE THE PORTFOLIO'S AVERAGE YIELDS AS A RESULT OF
THE SHORTENING OF MATURITIES.
THE PURCHASE OR SALE OF A FUTURES CONTRACT DIFFERS FROM THE PURCHASE OR
SALE OF A SECURITY, IN THAT NO PRICE OR PREMIUM IS PAID OR RECEIVED. INSTEAD, AN
AMOUNT OF CASH OR SECURITIES ACCEPTABLE TO THE PORTFOLIO'S FUTURES COMMISSION
MERCHANT AND THE RELEVANT CONTRACT MARKET, WHICH VARIES BUT IS GENERALLY ABOUT
5% OR LESS OF THE CONTRACT AMOUNT, MUST BE DEPOSITED WITH THE BROKER. THIS
AMOUNT IS KNOWN AS "INITIAL MARGIN," AND REPRESENTS A "GOOD FAITH" DEPOSIT
ASSURING THE PERFORMANCE OF BOTH THE PURCHASER AND THE SELLER UNDER THE FUTURES
CONTRACT. SUBSEQUENT PAYMENTS TO AND FROM THE BROKER, KNOWN AS "VARIATION
MARGIN," ARE REQUIRED TO BE MADE ON A DAILY BASIS AS THE PRICE OF THE FUTURES
CONTRACT FLUCTUATES, MAKING THE LONG OR SHORT POSITIONS IN THE FUTURES CONTRACT
MORE OR LESS VALUABLE, A PROCESS KNOWN AS "MARKING TO THE MARKET." PRIOR TO THE
SETTLEMENT DATE OF THE FUTURES CONTRACT, THE POSITION MAY BE CLOSED OUT BY
TAKING AN OPPOSITE POSITION WHICH WILL OPERATE TO TERMINATE THE POSITION IN THE
FUTURES CONTRACT. A FINAL DETERMINATION OF VARIATION MARGIN IS THEN MADE,
ADDITIONAL CASH IS REQUIRED TO BE PAID TO OR RELEASED BY THE BROKER, AND THE
PURCHASER REALIZES A LOSS OR GAIN. IN ADDITION, A COMMISSION IS PAID ON EACH
COMPLETED PURCHASE AND SALE TRANSACTION.
THE SALE OF FINANCIAL FUTURES CONTRACTS PROVIDES AN ALTERNATIVE MEANS OF
HEDGING THE PORTFOLIO AGAINST DECLINES IN THE VALUE OF ITS INVESTMENTS IN
MUNICIPAL BONDS. AS SUCH VALUES DECLINE, THE VALUE OF THE PORTFOLIO'S POSITION
IN THE FUTURES CONTRACTS WILL TEND TO INCREASE, THUS OFFSETTING ALL OR A PORTION
OF THE DEPRECIATION IN THE MARKET VALUE OF THE PORTFOLIO'S FIXED INCOME
INVESTMENTS WHICH ARE BEING HEDGED. WHILE THE PORTFOLIO WILL INCUR COMMISSION
EXPENSES IN ESTABLISHING AND CLOSING OUT FUTURES POSITIONS, COMMISSIONS ON
FUTURES TRANSACTIONS MAY BE SIGNIFICANTLY LOWER THAN TRANSACTION COSTS INCURRED
IN THE PURCHASE AND SALE OF FIXED INCOME SECURITIES. IN ADDITION, THE ABILITY OF
THE PORTFOLIO TO TRADE IN THE STANDARDIZED CONTRACTS AVAILABLE IN THE FUTURES
MARKET MAY OFFER A MORE EFFECTIVE HEDGING STRATEGY THAN A PROGRAM TO REDUCE THE
AVERAGE MATURING OF PORTFOLIO SECURITIES, DUE TO THE UNIQUE AND VARIED CREDIT
AND TECHNICAL CHARACTERISTICS OF THE MUNICIPAL DEBT INSTRUMENTS AVAILABLE TO THE
PORTFOLIO. EMPLOYING FUTURES AS A HEDGE MAY ALSO PERMIT THE PORTFOLIO TO ASSUME
A HEDGING POSTURE WITHOUT REDUCING THE YIELD ON ITS INVESTMENTS, BEYOND ANY
AMOUNTS REQUIRED TO ENGAGE IN FUTURES TRADING.
THE PORTFOLIOS MAY ENGAGE IN THE PURCHASE AND SALE OF FUTURES CONTRACTS ON
AN INDEX OF MUNICIPAL SECURITIES. THESE INSTRUMENTS PROVIDE FOR THE PURCHASE OR
SALE OF A HYPOTHETICAL PORTFOLIO OF MUNICIPAL BONDS AT A FIXED PRICE IN A STATED
DELIVERY MONTH. UNLIKE MOST OTHER FUTURES CONTRACTS, HOWEVER, A MUNICIPAL BOND
INDEX FUTURES CONTRACT DOES NOT REQUIRE ACTUAL DELIVERY OF SECURITIES BUT
RESULTS IN A CASH SETTLEMENT BASED UPON THE DIFFERENCE IN VALUE OF THE INDEX
BETWEEN THE TIME THE CONTRACT WAS ENTERED INTO AND THE TIME IT IS LIQUIDATED.
THE MUNICIPAL BOND INDEX UNDERLYING THE FUTURES CONTRACTS TRADED BY THE
PORTFOLIO IS THE BOND BUYER MUNICIPAL BOND INDEX, DEVELOPED BY THE BOND BUYER
AND THE CHICAGO BOARD OF TRADE ("CBT"), THE CONTRACT MARKET ON WHICH THE FUTURES
CONTRACTS ARE TRADED. AS CURRENTLY STRUCTURED, THE INDEX IS COMPRISED OF 40
TAX-EXEMPT TERM MUNICIPAL REVENUE AND GENERAL OBLIGATION BONDS. EACH BOND
INCLUDED IN THE INDEX MUST BE RATED EITHER A- OR HIGHER BY STANDARD & POOR'S OR
A OR HIGHER BY MOODY'S INVESTORS SERVICE AND MUST HAVE A REMAINING MATURITY OF
19 YEARS OR MORE. TWICE A MONTH NEW ISSUES SATISFYING THE ELIGIBILITY
REQUIREMENTS ARE ADDED TO, AND AN EQUAL NUMBER OF OLD ISSUES WILL BE DELETED
FROM, THE INDEX. THE VALUE OF THE INDEX IS COMPUTED DAILY ACCORDING TO A FORMULA
BASED UPON THE PRICE OF EACH BOND IN THE INDEX, AS EVALUATED BY FOUR
DEALER-TO-DEALERS BROKERS.
THE PORTFOLIO MAY ALSO PURCHASE AND SELL FUTURES CONTRACTS ON U.S. TREASURY
BILLS, NOTES AND BONDS FOR THE SAME TYPES OF HEDGING PURPOSES. SUCH FUTURES
CONTRACTS PROVIDE FOR DELIVERY OF THE UNDERLYING SECURITY AT A SPECIFIED FUTURE
TIME FOR A FIXED PRICE, AND THE VALUE OF THE FUTURES CONTRACT THEREFORE
GENERALLY FLUCTUATES WITH MOVEMENTS IN INTEREST RATES.
THE MUNICIPAL BOND INDEX FUTURES CONTRACT, FUTURES CONTRACTS ON U.S.
TREASURY SECURITIES AND OPTIONS ON SUCH FUTURES CONTRACTS ARE TRADED ON THE CBT,
WHICH, LIKE OTHER CONTRACT MARKETS, ASSURES THE PERFORMANCE OF THE PARTIES TO
EACH FUTURES CONTRACT THROUGH A CLEARING CORPORATION, A NONPROFIT ORGANIZATION
MANAGED BY THE EXCHANGE MEMBERSHIP, WHICH IS ALSO RESPONSIBLE FOR HANDLING DAILY
ACCOUNTING OF DEPOSITS OR WITHDRAWALS OF MARGIN.
THE PORTFOLIO MAY ALSO PURCHASE FINANCIAL FUTURES CONTRACTS WHEN IT IS NOT
FULLY INVESTED IN MUNICIPAL BONDS IN ANTICIPATION OF AN INCREASE IN THE COST OF
SECURITIES THE PORTFOLIO INTENDS TO PURCHASE. AS SUCH SECURITIES ARE PURCHASED,
AN EQUIVALENT AMOUNT OF FUTURES CONTRACTS WILL BE CLOSED OUT. IN A SUBSTANTIAL
MAJORITY OF THESE TRANSACTIONS, THE PORTFOLIO WILL PURCHASE MUNICIPAL BONDS UPON
TERMINATION OF THE FUTURES CONTRACTS. DUE TO CHANGING MARKET CONDITIONS AND
INTEREST RATE FORECASTS, HOWEVER, A FUTURES POSITION MAY BE TERMINATED WITHOUT A
CORRESPONDING PURCHASE OF SECURITIES. NEVERTHELESS, ALL PURCHASES OF FUTURES
CONTRACTS BY THE PORTFOLIO WILL BE SUBJECT TO CERTAIN RESTRICTIONS, DESCRIBED
BELOW.
OPTIONS ON FUTURES CONTRACTS. AN OPTION ON A FUTURES CONTRACT PROVIDES THE
PURCHASER WITH THE RIGHT, BUT NOT THE OBLIGATION, TO ENTER INTO A LONG POSITION
IN THE UNDERLYING FUTURES CONTRACT (THAT IS, PURCHASE THE FUTURES CONTRACT), IN
THE CASE OF A "CALL" OPTION, OR A SHORT POSITION (SELL THE FUTURES CONTRACT), IN
THE CASE OF A "PUT" OPTION, FOR A FIXED PRICE UP TO A STATED EXPIRATION DATE.
THE OPTION IS PURCHASED FOR A NON-REFUNDABLE FEE, KNOWN AS THE "PREMIUM." UPON
EXERCISE OF THE OPTION, THE CONTRACT MARKET CLEARING HOUSE ASSIGNS EACH PARTY TO
THE OPTION AN OPPOSITE POSITION IN THE UNDERLYING FUTURES CONTRACT. IN THE EVENT
OF EXERCISE, THEREFORE, THE PARTIES ARE SUBJECT TO ALL OF THE RISKS OF FUTURES
TRADING, SUCH AS PAYMENT OF INITIAL AND VARIATION MARGIN. IN ADDITION, THE
SELLER, OR "WRITER," OF THE OPTION IS SUBJECT TO MARGIN REQUIREMENTS ON THE
OPTION POSITION. OPTIONS ON FUTURES CONTRACTS ARE TRADED ON THE SAME CONTRACT
MARKETS AS THE UNDERLYING FUTURES CONTRACTS.
THE PORTFOLIO MAY PURCHASE OPTIONS ON FUTURES CONTRACTS FOR THE SAME TYPES
OF HEDGING PURPOSES DESCRIBED ABOVE IN CONNECTION WITH FUTURES CONTRACTS. FOR
EXAMPLE, IN ORDER TO PROTECT AGAINST AN ANTICIPATED DECLINE IN THE VALUE OF
SECURITIES IT HOLDS, THE PORTFOLIO COULD PURCHASE PUT OPTIONS ON FUTURES
CONTRACTS, INSTEAD OF SELLING THE UNDERLYING FUTURES CONTRACTS. CONVERSELY, IN
ORDER TO PROTECT AGAINST THE ADVERSE EFFECTS OF ANTICIPATED INCREASES IN THE
COSTS OF SECURITIES TO BE ACQUIRED, THE PORTFOLIO COULD PURCHASE CALL OPTIONS ON
FUTURES CONTRACTS, INSTEAD OF PURCHASING THE UNDERLYING FUTURES CONTRACTS. THE
PORTFOLIO GENERALLY WILL SELL OPTIONS ON FUTURES CONTRACTS ONLY TO CLOSE OUT AN
EXISTING POSITION.
THE PORTFOLIO WILL NOT ENGAGE IN TRANSACTIONS IN SUCH INSTRUMENTS UNLESS
AND UNTIL THE INVESTMENT ADVISOR DETERMINES THAT MARKET CONDITIONS AND THE
CIRCUMSTANCES OF THE PORTFOLIO WARRANT SUCH TRADING. TO THE EXTENT THE PORTFOLIO
ENGAGES IN THE PURCHASE AND SALE OF FUTURES CONTRACTS OR OPTIONS THEREON, IT
WILL DO SO ONLY AT A LEVEL WHICH IS REFLECTIVE OF THE INVESTMENT ADVISOR'S VIEW
OF THE HEDGING NEEDS OF THE PORTFOLIO, THE LIQUIDITY OF THE MARKET FOR FUTURES
CONTRACTS AND THE ANTICIPATED CORRELATION BETWEEN MOVEMENTS IN THE VALUE OF THE
FUTURES OR OPTION CONTRACT AND THE VALUE OF SECURITIES HELD BY THE PORTFOLIO.
RESTRICTIONS ON THE USE OF FUTURES CONTRACTS AND OPTIONS ON FUTURES
CONTRACTS. UNDER REGULATIONS OF THE COMMODITY FUTURES TRADING COMMISSION
("CFTC"), THE FUTURES TRADING ACTIVITIES DESCRIBED HEREIN WILL NOT RESULT IN THE
PORTFOLIO BEING DEEMED TO BE A "COMMODITY POOL," AS DEFINED UNDER SUCH
REGULATIONS, PROVIDED THAT CERTAIN TRADING RESTRICTIONS ARE ADHERED TO. IN
PARTICULAR, CFTC REGULATIONS REQUIRE THAT ALL FUTURES AND OPTION POSITIONS
ENTERED INTO BY THE PORTFOLIO QUALIFY AS BONA FIDE HEDGE TRANSACTIONS, AS
DEFINED UNDER CFTC REGULATIONS, OR, IN THE CASE OF LONG POSITIONS, THAT THE
VALUE OF SUCH POSITIONS NOT EXCEED AN AMOUNT OF SEGREGATED FUNDS DETERMINED BY
REFERENCE TO CERTAIN CASH AND SECURITIES POSITIONS MAINTAINED BY THE PORTFOLIO
AND ACCRUED PROFITS ON SUCH POSITIONS. IN ADDITION, THE PORTFOLIO MAY NOT
PURCHASE OR SELL ANY SUCH INSTRUMENTS IF, IMMEDIATELY THEREAFTER, THE SUM OF THE
AMOUNT OF INITIAL MARGIN DEPOSITS ON THE PORTFOLIO'S EXISTING FUTURES POSITIONS
WOULD EXCEED 5% OF THE MARKET VALUE OF ITS NET ASSETS.
WHEN THE PORTFOLIO PURCHASES A FUTURES CONTRACT, IT WILL MAINTAIN AN AMOUNT
OF CASH, CASH EQUIVALENTS (FOR EXAMPLE, COMMERCIAL PAPER AND DAILY TENDER
ADJUSTABLE NOTES) OR SHORT-TERM HIGH-GRADE FIXED INCOME SECURITIES IN A
SEGREGATED ACCOUNT SO THAT THE AMOUNT SO SEGREGATED PLUS THE AMOUNT OF INITIAL
AND VARIATION MARGIN HELD IN THE ACCOUNT OF ITS BROKER EQUALS THE MARKET VALUE
OF THE FUTURES CONTRACT, THEREBY ENSURING THE USE OF SUCH FUTURES IS
UNLEVERAGED.
RISK FACTORS IN TRANSACTIONS IN FUTURES CONTRACTS. THE PARTICULAR MUNICIPAL
BONDS COMPRISING THE INDEX UNDERLYING THE MUNICIPAL BOND INDEX FUTURES CONTRACT
MAY VARY FROM THE BONDS HELD BY THE PORTFOLIO. IN ADDITION, THE SECURITIES
UNDERLYING FUTURES CONTRACTS ON U.S. TREASURY SECURITIES WILL NOT BE THE SAME AS
SECURITIES HELD BY THE PORTFOLIO. AS A RESULT, THE PORTFOLIO'S ABILITY
EFFECTIVELY TO HEDGE ALL OR A PORTION OF THE VALUE OF ITS MUNICIPAL BONDS
THROUGH THE USE OF FUTURES CONTRACTS WILL DEPEND IN PART ON THE DEGREE TO WHICH
PRICE MOVEMENTS IN THE INDEX UNDERLYING THE MUNICIPAL BOND INDEX FUTURES
CONTRACT, OR THE U.S. TREASURY SECURITIES UNDERLYING OTHER FUTURES CONTRACTS
TRADE, CORRELATE WITH PRICE MOVEMENTS OF THE MUNICIPAL BONDS HELD BY THE
PORTFOLIO.
FOR EXAMPLE, WHERE PRICES OF SECURITIES IN THE PORTFOLIO DO NOT MOVE IN THE
SAME DIRECTION OR TO THE SAME EXTENT AS THE VALUES OF THE SECURITIES OR INDEX
UNDERLYING A FUTURES CONTRACT, THE TRADING OF SUCH FUTURES CONTRACTS MAY NOT
EFFECTIVELY HEDGE THE PORTFOLIO'S INVESTMENTS AND MAY RESULT IN TRADING LOSSES.
THE CORRELATION MAY BE AFFECTED BY DISPARITIES IN THE AVERAGE MATURITY, RATINGS,
GEOGRAPHICAL MIX OR STRUCTURE OF THE PORTFOLIO'S INVESTMENTS AS COMPARED TO
THOSE COMPRISING THE INDEX, AND GENERAL ECONOMIC OR POLITICAL FACTORS. IN
ADDITION, THE CORRELATION BETWEEN MOVEMENTS IN THE VALUE OF THE INDEX UNDERLYING
A FUTURES CONTRACT MAY BE SUBJECT TO CHANGE OVER TIME, AS ADDITIONS TO AND
DELETIONS FROM THE INDEX ALTER ITS STRUCTURE. IN THE CASE OF FUTURES CONTRACTS
ON U.S. TREASURY SECURITIES AND OPTIONS THEREON, THE ANTICIPATED CORRELATION OF
PRICE MOVEMENTS BETWEEN THE U.S. TREASURY SECURITIES UNDERLYING THE FUTURES OR
OPTIONS AND MUNICIPAL BONDS MAY BE ADVERSELY AFFECTED BY ECONOMIC, POLITICAL,
LEGISLATIVE OR OTHER DEVELOPMENTS THAT HAVE A DISPARATE IMPACT ON THE RESPECTIVE
MARKETS FOR SUCH SECURITIES. IN THE EVENT THAT THE INVESTMENT ADVISOR DETERMINES
TO ENTER INTO TRANSACTIONS IN FINANCIAL FUTURES CONTRACTS OTHER THAN THE
MUNICIPAL BOND INDEX FUTURES CONTRACT OR FUTURES ON U.S. TREASURY SECURITIES,
THE RISK OF IMPERFECT CORRELATION BETWEEN MOVEMENTS IN THE PRICES OF SUCH
FUTURES CONTRACTS AND THE PRICES OF MUNICIPAL BONDS HELD BY THE PORTFOLIO MAY BE
GREATER.
THE TRADING OF FUTURES CONTRACTS ON AN INDEX ALSO ENTAILS THE RISK OF
IMPERFECT CORRELATION BETWEEN MOVEMENTS IN THE PRICE OF THE FUTURES CONTRACT AND
THE VALUE OF THE UNDERLYING INDEX. THE ANTICIPATED SPREAD BETWEEN THE PRICES MAY
BE DISTORTED DUE TO DIFFERENCES IN THE NATURE OF THE MARKETS, SUCH AS MARGIN
REQUIREMENTS, LIQUIDITY AND THE PARTICIPATION OF SPECULATORS IN THE FUTURES
MARKETS. THE RISK OF IMPERFECT CORRELATION, HOWEVER, GENERALLY DIMINISHES AS THE
DELIVERY MONTH SPECIFIED IN THE FUTURES CONTRACT APPROACHES.
PRIOR TO EXERCISE OR EXPIRATION, A POSITION IN FUTURES CONTRACTS OR OPTIONS
THEREON MAY BE TERMINATED ONLY BY ENTERING INTO A CLOSING PURCHASE OR SALE
TRANSACTION. THIS REQUIRES A SECONDARY MARKET ON THE RELEVANT CONTRACT MARKET.
THE PORTFOLIO WILL ENTER INTO A FUTURES OR OPTION POSITION ONLY IF THERE APPEARS
TO BE A LIQUID SECONDARY MARKET THEREFOR, ALTHOUGH THERE CAN BE NO ASSURANCE
THAT SUCH A LIQUID SECONDARY MARKET WILL EXIST FOR ANY PARTICULAR CONTRACT AT
ANY SPECIFIC TIME. THUS, IT MAY NOT BE POSSIBLE TO CLOSE OUT A POSITION ONCE IT
HAS BEEN ESTABLISHED. UNDER SUCH CIRCUMSTANCES, THE PORTFOLIO COULD BE REQUIRED
TO MAKE CONTINUING DAILY CASH PAYMENTS OF VARIATION MARGIN IN THE EVENT OF
ADVERSE PRICE MOVEMENTS. IN SUCH SITUATION, IF THE PORTFOLIO HAS INSUFFICIENT
CASH, IT MAY BE REQUIRED TO SELL PORTFOLIO SECURITIES TO MEET DAILY VARIATION
MARGIN REQUIREMENTS AT A TIME WHEN IT MAY BE DISADVANTAGEOUS TO DO SO. IN
ADDITION, THE PORTFOLIO MAY BE REQUIRED TO PERFORM UNDER THE TERMS OF THE
FUTURES OR OPTION CONTRACTS IT HOLDS. THE INABILITY TO CLOSE OUT FUTURES OR
OPTIONS POSITIONS ALSO COULD HAVE AN ADVERSE IMPACT ON THE PORTFOLIO'S ABILITY
EFFECTIVELY TO HEDGE ITS PORTFOLIO.
WHEN THE PORTFOLIO PURCHASES AN OPTION ON A FUTURES CONTRACT, ITS RISK IS
LIMITED TO THE AMOUNT OF THE PREMIUM, PLUS RELATED TRANSACTION COSTS, ALTHOUGH
THIS ENTIRE AMOUNT MAY BE LOST. IN ADDITION, IN ORDER TO PROFIT FROM THE
PURCHASE OF AN OPTION ON A FUTURES CONTRACT, THE PORTFOLIO MAY BE REQUIRED TO
EXERCISE THE OPTION AND LIQUIDATE THE UNDERLYING FUTURES CONTRACT, SUBJECT TO
THE AVAILABILITY OF A LIQUID SECONDARY MARKET. THE TRADING OF OPTIONS ON FUTURES
CONTRACTS ALSO ENTAILS THE RISK THAT CHANGES IN THE VALUE OF THE UNDERLYING
FUTURES CONTRACT WILL NOT BE FULLY REFLECTED IN THE VALUE OF THE OPTION,
ALTHOUGH THE RISK OF IMPERFECT CORRELATION GENERALLY TENDS TO DIMINISH AS THE
MATURITY DATE OF THE FUTURES CONTRACT OR EXPIRATION DATE OF THE OPTION
APPROACHES.
"TRADING LIMITS" OR "POSITION LIMITS" MAY ALSO BE IMPOSED ON THE MAXIMUM
NUMBER OF CONTRACTS WHICH ANY PERSON MAY HOLD AT A GIVEN TIME. A CONTRACT MARKET
MAY ORDER THE LIQUIDATION OF POSITIONS FOUND TO BE IN VIOLATION OF THESE LIMITS
AND IT MAY IMPOSE OTHER SANCTIONS OR RESTRICTIONS. THE INVESTMENT ADVISOR DOES
NOT BELIEVE THAT TRADING LIMITS WILL HAVE ANY ADVERSE IMPACT ON THE STRATEGIES
FOR HEDGING THE PORTFOLIO'S INVESTMENTS.
FURTHER, THE TRADING OF FUTURES CONTRACTS IS SUBJECT TO THE RISK OF THE
INSOLVENCY OF A BROKERAGE FIRM OR CLEARING CORPORATION, WHICH COULD MAKE IT
DIFFICULT OR IMPOSSIBLE TO LIQUIDATE EXISTING POSITIONS OR TO RECOVER EXCESS
VARIATION MARGIN PAYMENTS.
IN ADDITION TO THE RISKS OF IMPERFECT CORRELATION AND LACK OF A LIQUID
SECONDARY MARKET FOR SUCH INSTRUMENTS, TRANSACTIONS IN FUTURES CONTRACTS INVOLVE
RISKS RELATED TO LEVERAGING AND THE POTENTIAL FOR INCORRECT FORECASTS OF THE
DIRECTION AND EXTENT OF INTEREST RATE MOVEMENTS WITHIN A GIVEN TIME FRAME.
INVESTMENT RESTRICTIONS
-----------------------
FUNDAMENTAL INVESTMENT RESTRICTIONS
THE PORTFOLIOS HAS ADOPTED THE FOLLOWING FUNDAMENTAL INVESTMENT
RESTRICTIONS. THESE RESTRICTIONS CANNOT BE CHANGED WITHOUT THE APPROVAL OF THE
HOLDERS OF A MAJORITY OF THE OUTSTANDING SHARES OF THE PORTFOLIO. NO PORTFOLIO
MAY:
(1) MAKE ANY INVESTMENT INCONSISTENT WITH ITS CLASSIFICATION AS A NONDIVERSIFIED
INVESTMENT COMPANY UNDER THE 1940 ACT.
(2) 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) ISSUE SENIOR SECURITIES OR BORROW MONEY, EXCEPT FROM BANKS FOR TEMPORARY OR
EMERGENCY PURPOSES AND THEN ONLY IN AN AMOUNT UP TO 33 1/3% OF THE VALUE OF ITS
TOTAL ASSETS OR AS PERMITTED BY LAW AND EXCEPT BY ENGAGING IN REVERSE REPURCHASE
AGREEMENTS, WHERE ALLOWED. IN ORDER TO SECURE ANY PERMITTED BORROWINGS AND
REVERSE REPURCHASE AGREEMENTS UNDER THIS SECTION, THE PORTFOLIOS MAY PLEDGE,
MORTGAGE OR HYPOTHECATE ITS ASSETS.
(4) UNDERWRITE THE SECURITIES OF OTHER ISSUERS, EXCEPT AS ALLOWED BY LAW OR TO
THE EXTENT THAT THE PURCHASE OF MUNICIPAL OBLIGATIONS IN ACCORDANCE WITH ITS
INVESTMENT OBJECTIVE AND POLICIES, EITHER DIRECTLY FROM THE ISSUER, OR FROM AN
UNDERWRITER FOR AN ISSUER, MAY BE DEEMED AN UNDERWRITING.
(5) INVEST DIRECTLY IN COMMODITIES OR REAL ESTATE, ALTHOUGH IT MAY INVEST IN
SECURITIES WHICH ARE SECURED BY REAL ESTATE OR REAL ESTATE MORTGAGES AND
SECURITIES OF ISSUERS WHICH INVEST OR DEAL IN COMMODITIES, COMMODITY FUTURES,
REAL ESTATE OR REAL ESTATE MORTGAGES.
(6) 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 ITS
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS, SHALL NOT CONSTITUTE THE MAKING
OF A LOAN.
NONFUNDAMENTAL INVESTMENT RESTRICTIONS
THE BOARD OF TRUSTEES/DIRECTORS 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 ITS TOTAL ASSETS.
(3) EACH PORTFOLIO MAY NOT SELL SECURITIES SHORT, PURCHASE SECURITIES ON MARGIN,
OR WRITE OR PURCHASE PUT OR CALL OPTIONS, EXCEPT AS PERMITTED IN CONNECTION WITH
TRANSACTIONS IN FUTURES CONTRACTS AND OPTIONS THEREON. THE PORTFOLIO RESERVE THE
RIGHT TO PURCHASE SECURITIES WITH PUTS ATTACHED OR WITH DEMAND FEATURES.
(4) THE PORTFOLIOS MAY NOT INVEST MORE THAN 35% OF NET ASSETS IN NON-INVESTMENT
GRADE DEBT SECURITIES. THE PORTFOLIOS DO NOT INTEND TO PURCHASE MORE THAN 15% OF
NON-INVESTMENT GRADE DEBT SECURITIES.
(5) THE PORTFOLIOS MAY NOT PURCHASE ILLIQUID SECURITIES IF MORE THAN 15% OF THE
VALUE OF THE PORTFOLIO'S NET ASSETS WOULD BE INVESTED IN SUCH SECURITIES.
(6) LONG-TERM ONLY: THOUGH NONDIVERSIFIED, THE PORTFOLIO DOES NOT INTEND TO
PURCHASE MORE THAN 15% OF ASSETS IN ANY ONE ISSUER.
(7) EACH PORTFOLIO MAY NOT PURCHASE OR SELL A FUTURES CONTRACT OR AN OPTION
THEREON IF IMMEDIATELY
THEREAFTER, THE SUM OF THE AMOUNT OF INITIAL MARGIN DEPOSITS ON FUTURES AND
PREMIUMS ON SUCH OPTIONS
WOULD EXCEED 5% OF THE PORTFOLIO'S TOTAL ASSETS, BASED ON NET PREMIUM PAYMENTS.
(8) EACH PORTFOLIO MAY NOT INVEST IN PUTS OR CALLS ON A SECURITY, INCLUDING
STRADDLES, SPREADS, OR ANY COMBINATION, IF THE VALUE OF THAT OPTION PREMIUM,
WHEN AGGREGATED WITH THE PREMIUMS ON ALL OTHER OPTIONS ON SECURITIES HELD BY THE
PORTFOLIO, EXCEEDS 5% OF THE PORTFOLIO'S TOTAL ASSETS.
PURCHASES AND REDEMPTIONS OF SHARES
-----------------------------------
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. SEE THE PROSPECTUS FOR MORE DETAILS ON
PURCHASES AND REDEMPTIONS.
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
----------------------------------------
THE PORTFOLIOS INTEND TO CONTINUE TO QUALIFY AS REGULATED INVESTMENT
COMPANIES UNDER SUBCHAPTER M OF THE INTERNAL REVENUE CODE. IF FOR ANY REASON A
PORTFOLIO SHOULD FAIL TO QUALIFY, IT WOULD BE TAXED AS A CORPORATION RATHER THAN
PASSING THROUGH ITS INCOME AND GAINS TO SHAREHOLDERS.
THE PORTFOLIOS DECLARE AND PAY MONTHLY DIVIDENDS OF NET INCOME TO
SHAREHOLDERS OF RECORD AS OF THE CLOSE OF BUSINESS ON EACH DESIGNATED MONTHLY
RECORD DATE. 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.
DIVIDENDS ARE AUTOMATICALLY REINVESTED AT NET ASSET VALUE IN ADDITIONAL
SHARES. CAPITAL GAINS, IF ANY, ARE NORMALLY PAID ONCE A YEAR AND WILL BE
AUTOMATICALLY REINVESTED AT NET ASSET VALUE IN ADDITIONAL SHARES, UNLESS YOU
CHOOSE OTHERWISE. THE PORTFOLIOS DO NOT INTEND TO MAKE ANY SUCH DISTRIBUTIONS
UNLESS AVAILABLE CAPITAL LOSS CARRYOVERS, IF ANY, HAVE BEEN USED OR HAVE
EXPIRED. THE CAPITAL LOSS CARRYFORWARDS AS OF DECEMBER 31, 1999 WERE AS
FOLLOWS:
1999
LONG- TERM $783,509
VERMONT $54,676
NATIONAL $607,240
CALIFORNIA $574,670
MARYLAND $135,440
VIRGINIA $88,301
YOU MAY ELECT TO HAVE THEIR DIVIDENDS AND DISTRIBUTIONS PAID OUT MONTHLY IN
CASH. YOU MAY ALSO REQUEST TO HAVE YOUR DIVIDENDS AND DISTRIBUTIONS FROM THE
PORTFOLIO INVESTED IN SHARES OF ANY OTHER CALVERT GROUP FUND, TO BE INVESTED IN
THAT FUND OR PORTFOLIO WITHOUT A SALES CHARGE.
THE PORTFOLIO'S DIVIDENDS OF NET INVESTMENT INCOME CONSTITUTE
EXEMPT-INTEREST DIVIDENDS ON WHICH SHAREHOLDERS ARE NOT GENERALLY SUBJECT TO
FEDERAL INCOME TAX; OR FOR THE STATE - SPECIFIC PORTFOLIOS, TO THEIR RESPECTIVE
STATE 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. THE 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 PORTFOLIO. THE PORTFOLIO WILL NOTIFY SHAREHOLDERS
ANNUALLY ABOUT THE FEDERAL TAX STATUS OF DIVIDENDS AND DISTRIBUTIONS PAID BY THE
PORTFOLIO 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 ADVISERS BEFORE PURCHASING SHARES OF THE PORTFOLIO.
"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.
THE PORTFOLIO IS REQUIRED TO WITHHOLD 31% OF ANY LONG-TERM CAPITAL GAIN
DIVIDENDS AND 31% OF EACH REDEMPTION TRANSACTION OCCURRING IN THE 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 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 TOTAL 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 PORTFOLIO FOR FURTHER INFORMATION.
VALUATION OF SHARES
-------------------
EACH PORTFOLIO'S ASSETS ARE NORMALLY 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 PORTFOLIO'S ADVISOR UNDER THE
SUPERVISION OF THE BOARD OF TRUSTEES/DIRECTORS. THE 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 PORTFOLIO DOES NOT DETERMINE
NET ASSET VALUE ON CERTAIN NATIONAL HOLIDAYS OR OTHER DAYS ON WHICH THE NEW YORK
STOCK EXCHANGE IS CLOSED: NEW YEAR'S DAY, MARTIN LUTHER KING DAY, PRESIDENTS'
DAY, GOOD FRIDAY, MEMORIAL DAY, INDEPENDENCE DAY, LABOR DAY, THANKSGIVING DAY
AND CHRISTMAS DAY.
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/DIRECTORS. 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.
NET ASSET VALUE AND OFFERING PRICE PER SHARE AS OF DECEMBER 31, 1999:
LONG-TERM NET ASSET VALUE PER SHARE
$51,145,860/3,343,530 SHARES) $15.30
MAXIMUM SALES CHARGE
(3.75% OF OFFERING PRICE) .60
OFFERING PRICE PER SHARE $15.90
VERMONT NET ASSET VALUE PER SHARE
($46,451,792/3,116,675 SHARES) $14.90
MAXIMUM SALES CHARGE
(3.75% OF OFFERING PRICE) .58
OFFERING PRICE PER SHARE $15.48
NATIONAL
NET ASSET VALUE PER SHARE
($58,093,129,/5,738,547 SHARES) $10.12
MAXIMUM SALES CHARGE
(2.75% OF OFFERING PRICE .29
OFFERING PRICE PER SHARE $10.41
CALIFORNIA
NET ASSET VALUE PER SHARE
($30,385,024/2,998,527 SHARES) $10.13
MAXIMUM SALES CHARGE
(2.75% OF OFFERING PRICE) .29
OFFERING PRICE PER SHARE $10.42
MARYLAND
NET ASSET VALUE PER SHARE
($10,710,708/2,181,652 SHARES) $4.91
MAXIMUM SALES CHARGE
(2.75% OF OFFERING PRICE) .14
OFFERING PRICE PER SHARE $5.05
VIRGINIA
NET ASSET VALUE PER SHARE
($14,316,656/2,888,008 SHARES) $4.96
MAXIMUM SALES CHARGE
(2.75% OF OFFERING PRICE) .14
OFFERING PRICE PER SHARE $5.10
CALCULATION OF YIELD AND TOTAL RETURN
-------------------------------------
FROM TIME TO TIME, THE PORTFOLIOS ADVERTISE THEIR "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 TEN-YEAR. 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 INVESTMENT OF $1,000 LESS
ANY SALES CHARGE ACTUALLY IMPOSED AT THE BEGINNING OF THE PERIOD FOR WHICH THE
PERFORMANCE IS BEING CALCULATED. NOTE: "TOTAL RETURN" AS QUOTED IN THE FINANCIAL
HIGHLIGHTS SECTION OF THE FUND'S PROSPECTUS AND ANNUAL REPORT TO SHAREHOLDERS,
HOWEVER, PER SEC INSTRUCTIONS, DOES NOT REFLECT DEDUCTION OF THE SALES CHARGE,
AND CORRESPONDS TO "RETURN WITHOUT MAXIMUM LOAD" OR "AT NAV" 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 = AVERAGE ANNUAL 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 AS OF DECEMBER 31, 1999 ARE AS FOLLOWS:
WITH MAX. LOAD W/O MAX. LOAD
LONG-TERM
ONE YEAR (8.07%) (4.52%)
FIVE YEARS 4.55% 5.36%
TEN YEARS 5.50% 5.91%
VERMONT
ONE YEAR (7.85%) (4.29%)
FIVE YEARS 4.44% 5.24%
FROM INCEPTION 5.18% 5.64%
(4/01/91)
NATIONAL
ONE YEAR (4.74%) (2.01%)
FIVE YEARS 4.99% 5.59%
FROM INCEPTION 4.75% 5.14%
(9/30/92)
CALIFORNIA
ONE YEAR (4.40%) (1.73%)
FIVE YEARS 4.59% 5.18%
FROM INCEPTION 4.53% 4.91%
(5/29/92)
MARYLAND
ONE YEAR (4.57%) (1.82%)
FIVE YEARS 4.97% 5.55%
FROM INCEPTION 3.77% 4.23%
(9/30/93)
VIRGINIA
ONE YEAR (4.56%) (1.84%)
FIVE YEARS 4.78% 5.35%
FROM INCEPTION 3.81% 4.27%
(9/30/93)
THE 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. "YIELD" QUOTATIONS FOR EACH
CLASS 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 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 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.
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 PER CLASS BY TAKING THE PORTION OF THE CLASS' 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, 1999, THE YIELDS WERE:
YIELD TAX-EQUIVALENT TAX-EQUIVALENT
YIELD YIELD
(ASSUMES 36% FEDERAL BRACKET) (ASSUME 39.6% BRACKET)
LONG-TERM 4.64% 7.25% 7.68%
VERMONT 4.46% 6.97% 7.38%
NATIONAL 4.48% 7.00% 7.42%
CALIFORNIA 4.24% 6.63% 7.02%
VIRGINIA 3.93% 6.14% 6.51%
MARYLAND 4.24% 6.63% 7.02%
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, 1999). CALVERT GROUP WAS ALSO THE
FIRST TO OFFER A FAMILY OF SOCIALLY RESPONSIBLE MUTUAL FUND PORTFOLIOS.
TRUSTEES/DIRECTORS AND OFFICERS
-------------------------------
THE FUND'S BOARD OF TRUSTEES/DIRECTORS SUPERVISES THE FUND'S ACTIVITIES AND
REVIEWS ITS CONTRACTS WITH COMPANIES THAT PROVIDE IT WITH SERVICES.
RICHARD L. BAIRD, JR., TRUSTEE/DIRECTOR. 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/DIRECTOR. MR. BLATZ IS A PARTNER IN THE
LAW FIRM OF SNEVILY, ELY, WILLIAMS & BLATZ. HE WAS FORMERLY A PARTNER WITH
ABRAMS, BLATZ, GRAN, HENDRICKS & REINA, P.A. HE IS ALSO A DIRECTOR OF CALVERT
VARIABLE SERIES, INC. DOB: 10/29/35. ADDRESS: 282 SOUTH AVENUE, SUITE 201, P.O.
BOX 207, FANWOOD, NJ 07023.
FREDERICK T. BORTS, M.D., TRUSTEE/DIRECTOR. DR. BORTS IS A RADIOLOGIST WITH
KAISER PERMANENTE. PRIOR TO THAT, HE WAS A RADIOLOGIST AT BETHLEHEM MEDICAL
IMAGING IN ALLENTOWN, PENNSYLVANIA. DOB: 07/23/49. ADDRESS: 2610 NONOHE STREET,
WAHIAWA, HAWAII, 96786-2843.
CHARLES E. DIEHL, TRUSTEE/DIRECTOR. 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/DIRECTOR. 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/DIRECTOR. 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/DIRECTOR. MR. GUFFEY IS EXECUTIVE VICE
PRESIDENT OF CALVERT SOCIAL INVESTMENT FUND. HE IS ON THE BOARD OF DIRECTORS OF
THE CALVERT SOCIAL INVESTMENT FOUNDATION, ORGANIZING DIRECTOR OF THE COMMUNITY
CAPITAL BANK IN BROOKLYN, NEW YORK, AND A FINANCIAL CONSULTANT TO VARIOUS
ORGANIZATIONS. IN ADDITION, HE IS A DIRECTOR OF THE COMMUNITY BANKERS MUTUAL
FUND OF DENVER, COLORADO, A DIRECTOR OF ARIEL FUNDS, AND THE TREASURER AND
DIRECTOR OF SILBY, GUFFEY, AND CO., INC., A VENTURE CAPITAL FIRM. MR. GUFFEY IS
A TRUSTEE/DIRECTOR OF EACH OF THE OTHER INVESTMENT COMPANIES IN THE CALVERT
GROUP OF FUNDS, EXCEPT FOR CALVERT VARIABLE SERIES, INC. AND CALVERT NEW WORLD
FUND, INC. DOB: 5/15/48. ADDRESS: 388 CALLI CALINA, SANTA FE, NM 87501.
MR. GUFFEY HAS BEEN ADVISED THAT THE SECURITIES AND EXCHANGE COMMISSION
("SEC") HAS ENTERED AN ORDER AGAINST HIM RELATING TO HIS FORMER SERVICE AS A
DIRECTOR OF COMMUNITY BANKERS MUTUAL FUND, INC. THIS FUND IS NOT CONNECTED WITH
ANY CALVERT FUND OR THE CALVERT GROUP AND CEASED OPERATIONS IN SEPTEMBER, 1994.
MR. GUFFEY CONSENTED TO THE ENTRY OF THE ORDER WITHOUT ADMITTING OR DENYING THE
FINDINGS IN THE ORDER. THE ORDER CONTAINS FINDINGS THAT (1) THE COMMUNITY
BANKERS MUTUAL FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION WERE
MATERIALLY FALSE AND MISLEADING BECAUSE THEY MISSTATED OR FAILED TO STATE
MATERIAL FACTS CONCERNING THE PRICING OF FUND SHARES AND THE PERCENTAGE OF
ILLIQUID SECURITIES IN THE FUND'S PORTFOLIO AND THAT MR. GUFFEY, AS A MEMBER OF
THE FUND'S BOARD, SHOULD HAVE KNOWN OF THESE MISSTATEMENTS AND THEREFORE
VIOLATED THE SECURITIES ACT OF 1933; (2) THE PRICE OF THE FUND'S SHARES SOLD TO
THE PUBLIC WAS NOT BASED ON THE CURRENT NET ASSET VALUE OF THE SHARES, IN
VIOLATION OF THE INVESTMENT COMPANY ACT OF 1940 (THE "INVESTMENT COMPANY ACT");
AND (3) THE BOARD OF THE FUND, INCLUDING MR. GUFFEY, VIOLATED THE INVESTMENT
COMPANY ACT BY DIRECTING THE FILING OF A MATERIALLY FALSE REGISTRATION
STATEMENT. THE ORDER DIRECTED MR. GUFFEY TO CEASE AND DESIST FROM COMMITTING OR
CAUSING FUTURE VIOLATIONS AND TO PAY A CIVIL PENALTY OF $5,000. THE SEC PLACED
NO RESTRICTIONS ON MR. GUFFEY'S CONTINUING TO SERVE AS A TRUSTEE OR DIRECTOR OF
MUTUAL FUNDS.
*BARBARA J. KRUMSIEK, PRESIDENT AND TRUSTEE/DIRECTOR. 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. MS. KRUMSIEK IS ON
THE BOARD OF DIRECTORS OF CALVERT SOCIAL INVESTMENT FOUNDATION. 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/DIRECTOR. MS. KRUVANT IS PRESIDENT AND CEO OF
CREATIVE ASSOCIATES INTERNATIONAL, INC., A FIRM THAT SPECIALIZES IN HUMAN
RESOURCES DEVELOPMENT, INFORMATION MANAGEMENT, PUBLIC AFFAIRS AND PRIVATE
ENTERPRISE DEVELOPMENT. SHE IS ALSO A DIRECTOR OF CALVERT VARIABLE SERIES, INC.,
AND ACACIA FEDERAL SAVINGS BANK. DOB: 12/08/45. ADDRESS: 5301 WISCONSIN AVENUE,
N.W., WASHINGTON, D.C. 20015.
ARTHUR J. PUGH, TRUSTEE/DIRECTOR. 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/DIRECTOR. 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/DIRECTOR. 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 LIFE INSURANCE
COMPANY AND CHAIRMAN OF CALVERT SOCIAL INVESTMENT FOUNDATION. DOB: 07/20/48.
ADDRESS: 1715 18TH STREET, N.W., WASHINGTON, D.C. 20009.
RENO J. MARTINI, SENIOR VICE PRESIDENT. MR. MARTINI IS A DIRECTOR AND
SENIOR VICE PRESIDENT OF CALVERT GROUP, LTD., AND SENIOR VICE PRESIDENT AND
CHIEF INVESTMENT OFFICER OF CALVERT ASSET MANAGEMENT COMPANY, INC. MR. MARTINI
IS ALSO A DIRECTOR AND PRESIDENT OF CALVERT-SLOAN ADVISERS, L.L.C., AND A
DIRECTOR AND OFFICER OF CALVERT NEW WORLD FUND. DOB: 1/13/50.
RONALD M. WOLFSHEIMER, CPA, TREASURER. MR. WOLFSHEIMER IS SENIOR VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER OF CALVERT GROUP, LTD. AND ITS
SUBSIDIARIES AND AN OFFICER OF EACH OF THE OTHER INVESTMENT COMPANIES IN THE
CALVERT GROUP OF FUNDS. MR. WOLFSHEIMER IS VICE PRESIDENT AND TREASURER OF
CALVERT-SLOAN ADVISERS, L.L.C., AND A DIRECTOR OF CALVERT DISTRIBUTORS, INC.
DOB: 07/24/47.
WILLIAM M. TARTIKOFF, ESQ., VICE PRESIDENT AND SECRETARY. MR. TARTIKOFF IS
AN OFFICER OF EACH OF THE INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS,
AND IS SENIOR VICE PRESIDENT, SECRETARY, AND GENERAL COUNSEL OF CALVERT GROUP,
LTD., AND EACH OF ITS SUBSIDIARIES. MR. TARTIKOFF IS ALSO VICE PRESIDENT AND
SECRETARY OF CALVERT-SLOAN ADVISERS, L.L.C., A DIRECTOR OF CALVERT DISTRIBUTORS,
INC., AND IS AN OFFICER OF ACACIA NATIONAL LIFE INSURANCE COMPANY. DOB:
08/12/47.
DANIEL K. HAYES, VICE PRESIDENT. MR. HAYES IS VICE PRESIDENT OF CALVERT
ASSET MANAGEMENT COMPANY, INC., AND IS AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS, EXCEPT FOR CALVERT NEW WORLD
FUND, INC. DOB: 09/09/50.
SUSAN WALKER BENDER, ESQ., ASSISTANT SECRETARY. MS. BENDER IS ASSOCIATE
GENERAL COUNSEL OF CALVERT GROUP, LTD. AND AN OFFICER OF EACH OF ITS
SUBSIDIARIES AND CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH
OF THE OTHER INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. DOB: 01/29/59.
IVY WAFFORD DUKE, ESQ., ASSISTANT SECRETARY. MS. DUKE IS ASSOCIATE GENERAL
COUNSEL OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. SHE ALSO SERVES AS SECRETARY
AND PROVIDES COUNSEL TO THE CALVERT SOCIAL INVESTMENT FOUNDATION. PRIOR TO
WORKING AT CALVERT GROUP, MS. DUKE WAS AN ASSOCIATE IN THE INVESTMENT MANAGEMENT
GROUP OF THE BUSINESS AND FINANCE DEPARTMENT AT DRINKER BIDDLE & REATH. DOB:
09/07/68.
VICTOR FRYE, ESQ., ASSISTANT SECRETARY AND COMPLIANCE OFFICER. MR. FRYE IS
COUNSEL AND COMPLIANCE OFFICER OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS
SUBSIDIARIES AND CALVERT-SLOAN ADVISERS, L.L.C. HE IS ALSO AN OFFICER OF EACH OF
THE OTHER INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. PRIOR TO WORKING
AT CALVERT GROUP, MR. FRYE WAS COUNSEL AND MANAGER OF THE COMPLIANCE DEPARTMENT
AT THE ADVISORS GROUP. DOB: 10/15/58.
JENNIFER STREAKS, ESQ., ASSISTANT SECRETARY. MS. STREAKS IS ASSISTANT
GENERAL COUNSEL OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP FUNDS. PRIOR TO WORKING AT CALVERT
GROUP, MS. STREAKS WAS A REGULATORY ANALYST IN THE MARKET REGULATIONS DEPARTMENT
OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS. DOB: 08/02/71.
MICHAEL V. YUHAS JR., CPA, CONTROLLER OF FUNDS. MR. YUHAS IS THE DIRECTOR
OF FUND ADMINISTRATION OF CALVERT GROUP, LTD., AND AN OFFICER OF EACH OF THE
OTHER INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. DOB: 08/04/61.
THE ADDRESS OF DIRECTORS AND OFFICERS, UNLESS OTHERWISE NOTED, IS 4550
MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND 20814. TRUSTEES/DIRECTORS AND
OFFICERS OF THE FUND AS A GROUP OWN LESS THAN 1% OF THE FUND'S OUTSTANDING
SHARES. TRUSTEES/DIRECTORS 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, MMES. KRUMSIEK AND
KRUVANT ARE AMONG THE DIRECTORS, CALVERT WORLD VALUES FUND, INC., OF WHICH ONLY
MESSRS. GUFFEY AND SILBY AND MS. KRUMSIEK ARE AMONG THE DIRECTORS, AND CALVERT
NEW WORLD FUND, INC., OF WHICH ONLY MS. KRUMSIEK AND MR. MARTINI ARE AMONG THE
DIRECTORS.
THE AUDIT COMMITTEE OF THE BOARD IS COMPOSED OF MESSRS. BAIRD, BLATZ,
FELDMAN, GUFFEY AND PUGH AND MS. KRUVANT. THE BOARD'S INVESTMENT POLICY
COMMITTEE IS COMPOSED OF MESSRS. BORTS, DIEHL, GAVIAN, ROCHAT AND SILBY AND MS.
KRUMSIEK.
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/DIRECTORS
OF THE CALVERT GROUP OF FUNDS PLUS A FEE OF $750 TO $1,500 FOR EACH BOARD AND
COMMITTEE MEETING ATTENDED; SUCH FEES ARE ALLOCATED AMONG THE FUNDS ON THE BASIS
OF THEIR NET ASSETS.
TRUSTEES/DIRECTORS 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/DIRECTORS DEFERRED
COMPENSATION PLAN (SHOWN AS "PENSION OR RETIREMENT BENEFITS ACCRUED AS PART OF
FUND EXPENSES," BELOW). DEFERRAL OF THE FEES IS DESIGNED TO MAINTAIN THE PARTIES
IN THE SAME POSITION AS IF THE FEES WERE PAID ON A CURRENT BASIS.
TRUSTEE/DIRECTORS COMPENSATION TABLE
FISCAL YEAR 1999
(UNAUDITED NUMBERS)
Aggregate Pension or Total Compensation
Compensation Retirement Benefits from
from Registrant Accrued as Registrant and Fund
for Service part of Complex paid to
as Trustee/Directors Registrant Trustee/Directors**
Expenses*
CALVERT TAX-FREE RESERVES
RICHARD L. BAIRD, JR. $25,302 $0 $39,250
FRANK H. BLATZ, JR. $26,346 $26,346 $48,250
FREDERICK T. BORTS $24,781 $0 $35,500
CHARLES E. DIEHL $26,346 $0 $48,250
DOUGLAS E. FELDMAN $25,823 $0 $37,000
PETER W. GAVIAN $25,823 $0 $37,000
JOHN G. GUFFEY, JR. $25,303 $4,908 $56,365
M. CHARITO KRUVANT $24,781 $14,868 $45,250
ARTHUR J. PUGH $26,346 $0 $48,250
D. WAYNE SILBY $22,698 $0 $60,831
CALVERT MUNICIPAL FUND
RICHARD L. BAIRD, JR. $1140 $0 $39,250
FRANK H. BLATZ, JR. $1186 $1186 $48,250
FREDERICK T. BORTS $1118 $0 $35,500
CHARLES E. DIEHL $1186 $0 $48,250
DOUGLAS E. FELDMAN $1161 $0 $37,000
PETER W. GAVIAN $1161 $0 $37,000
JOHN G. GUFFEY, JR. $1138 $214 $56,365
M. CHARITO KRUVANT $1117 $670 $45,250
ARTHUR J. PUGH $1186 $0 $48,250
D. WAYNE SILBY $1028 $0 $60,831
* CERTAIN TRUSTEES HAVE CHOSEN TO DEFER THEIR COMPENSATION. AS OF DECEMBER 31,
1999, TOTAL DEFERRED COMPENSATION FROM THE FUND COMPLEX, INCLUDING DIVIDENDS AND
CAPITAL APPRECIATION FOR THE TRUSTEES SHOWN WAS: BLATZ, $784,000; DIEHL,
$760,650; GAVIAN, $194,300; GUFFEY, $11,100; KRUVANT, $58,700; AND PUGH,
$134,450.
** THE FUND COMPLEX CONSISTS OF NINE (9) REGISTERED INVESTMENT COMPANIES.
INVESTMENT ADVISOR
------------------
THE FUND'S INVESTMENT ADVISOR IS CALVERT ASSET MANAGEMENT COMPANY, INC.,
4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND 20814, A SUBSIDIARY OF
CALVERT GROUP, LTD., WHICH IS A CONTROLLED SUBSIDIARY OF AMERITAS-ACACIA MUTUAL
HOLDING COMPANY.
UNDER THE ADVISORY AGREEMENT, 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 FROM EACH
PORTFOLIO AN ANNUAL FEE OF 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 EMPLOYEES OF THE ADVISOR, OR ITS AFFILIATES AND PAYS CERTAIN FUND
ADVERTISING AND PROMOTIONAL EXPENSES. THE FUND PAYS ALL OTHER ADMINISTRATIVE AND
OPERATING EXPENSES, INCLUDING: CUSTODIAL FEES; SHAREHOLDER SERVICING; DIVIDEND
DISBURSING AND TRANSFER AGENCY FEES; ADMINISTRATIVE SERVICE FEES; FEDERAL AND
STATE SECURITIES REGISTRATION FEES; INSURANCE PREMIUMS; TRADE ASSOCIATION DUES;
INTEREST, TAXES AND OTHER BUSINESS FEES; LEGAL AND AUDIT FEES; AND BROKERAGE
COMMISSIONS AND OTHER COSTS ASSOCIATED WITH THE PURCHASE AND SALE OF PORTFOLIO
SECURITIES.
THE ADVISOR MAY VOLUNTARILY REIMBURSE THE PORTFOLIO FOR EXPENSES. THE
FOLLOWING TABLE SHOWS THE ADVISORY FEES PAID BY EACH PORTFOLIO TO THE ADVISOR
FOR FISCAL YEARS 1997, 1998 AND 1999.
1997 1998 1999
LONG-TERM 307,550 331,988 337,132
VERMONT 296,024 305,695 302,238
NATIONAL 285,023 396,802 387,442
CALIFORNIA 204,019 205,130 201,388
MARYLAND 70,899 74,404 69,121
VIRGINIA 79,695 84,448 88,853
ADMINISTRATIVE SERVICES AGENT
-----------------------------
CALVERT ADMINISTRATIVE SERVICES COMPANY ("CASC"), AN AFFILIATE OF THE
ADVISOR, HAS BEEN RETAINED BY THE FUND TO PROVIDE CERTAIN ADMINISTRATIVE
SERVICES NECESSARY TO THE CONDUCT OF THE FUND'S AFFAIRS. PRIOR TO AUGUST 1,
1997, CASC RECEIVED AN AGGREGATED FEE FROM CALVERT TAX-FREE RESERVES (CTFR) OF
$200,000 PER YEAR FOR PROVIDING SUCH SERVICES, ALLOCATED AMONG THE FIVE CTFR
PORTFOLIOS BASED ON ASSETS. EFFECTIVE AUGUST 1, 1997, THE FEE STRUCTURE CHANGED.
EXCLUSIVE OF THE CTFR MONEY MARKET PORTFOLIO, CTFR PAYS AN ANNUAL FEE OF
$80,000, ALLOCATED BETWEEN THE REMAINING PORTFOLIOS BASED ON ASSETS. THE CALVERT
MUNICIPAL FUND PORTFOLIO (NATIONAL, CALIFORNIA, MARYLAND AND VIRGINIA) PAY A FEE
OF 0.10% OF THEIR RESPECTIVE AVERAGE ANNUAL NET ASSETS. THE SERVICE FEES PAID
BY THE PORTFOLIOS TO CALVERT ADMINISTRATIVE SERVICES COMPANY FOR THE PAST 3
FISCAL YEARS WERE:
1997 1998 1999
LONG-TERM $4,158 $4,476 $2,017
VERMONT $4,004 $4,127 $0
NATIONAL $47,504 $66,134 $62,430
CALIFORNIA $34,003 $34,188 $27,667
MARYLAND $11,816 $12,401 $6,807
VIRGINIA $13,283 $14,075 $9,329
TRANSFER AND SHAREHOLDER SERVICING AGENTS
-----------------------------------------
NATIONAL FINANCIAL DATA SERVICES, INC. ("NFDS"), 330 W. 9TH STREET, KANSAS
CITY, MISSOURI 64105, A SUBSIDIARY OF STATE STREET BANK & TRUST, HAS BEEN
RETAINED BY THE FUND TO ACT AS TRANSFER AGENT AND DIVIDEND DISBURSING AGENT.
THESE RESPONSIBILITIES INCLUDE: RESPONDING TO CERTAIN SHAREHOLDER INQUIRIES AND
INSTRUCTIONS, CREDITING AND DEBITING SHAREHOLDER ACCOUNTS FOR PURCHASES AND
REDEMPTIONS OF FUND SHARES AND CONFIRMING SUCH TRANSACTIONS, AND DAILY UPDATING
OF SHAREHOLDER ACCOUNTS TO REFLECT DECLARATION AND PAYMENT OF DIVIDENDS.
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), 4550 MONTGOMERY AVENUE,
BETHESDA, MARYLAND 20814, A SUBSIDIARY OF CALVERT GROUP, LTD., HAS BEEN RETAINED
BY THE FUND TO ACT AS SHAREHOLDER SERVICING AGENT. SHAREHOLDER SERVICING
RESPONSIBILITIES INCLUDE RESPONDING TO SHAREHOLDER INQUIRIES AND INSTRUCTIONS
CONCERNING THEIR ACCOUNTS, ENTERING ANY TELEPHONED PURCHASES OR REDEMPTIONS INTO
THE NFDS SYSTEM, MAINTENANCE OF BROKER-DEALER DATA, AND PREPARING AND
DISTRIBUTING STATEMENTS TO SHAREHOLDERS REGARDING THEIR ACCOUNTS.
FOR THESE SERVICES, NFDS AND CALVERT SHAREHOLDER SERVICES, INC. RECEIVE A
FEE BASED ON THE NUMBER OF SHAREHOLDER ACCOUNTS AND TRANSACTIONS.
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
--------------------------------------
PRICEWATERHOUSECOOPERS LLP, 250 WEST PRATT STREET, BALTIMORE MARYLAND
21201, HAS BEEN SELECTED BY THE BOARD OF TRUSTEES/DIRECTORS TO SERVE AS
INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR 2000. STATE STREET BANK & TRUST COMPANY,
N.A., 225 FRANKLIN STREET, BOSTON, MA 02110, CURRENTLY SERVES AS CUSTODIAN OF
THE PORTFOLIO'S INVESTMENTS. ALLFIRST FINANCIAL, INC. 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
----------------------
CALVERT DISTRIBUTIONS, INC, ("CDI"), 4550 MONTGOMERY AVE., SUITE 1000N
BETHESDA, MARYLAND 20814, IS THE PRINCIPAL UNDERWRITER AND DISTRIBUTOR FOR THE
FUND. CDI IS AN AFFILIATE OF THE FUND'S ADVISOR. UNDER THE TERMS OF ITS
UNDERWRITING AGREEMENT WITH THE FUNDS, CDI MARKETS AND DISTRIBUTES THE FUND'S
SHARES AND IS RESPONSIBLE FOR PREPARING ADVERTISING AND SALES LITERATURE, AND
PRINTING AND MAILING PROSPECTUSES TO PROSPECTIVE INVESTORS.
CTFR LONG-TERM AND VERMONT
SHARES ARE OFFERED AT NET ASSET VALUE PLUS A FRONT-END SALES CHARGE AS FOLLOWS:
AS A % OF AS A % OF ALLOWED TO
AMOUNT OF OFFERING NET AMOUNT BROKERS AS A %
INVESTMENT PRICE INVESTED OFFERING PRICE
LESS THAN $50,000 3.75% 3.90% 3.00%
$50,000 BUT
LESS THAN $100,000 3.00% 3.09% 2.25%
$100,000 BUT
LESS THAN $250,000 2.25% 2.30% 1.75%
$250,000 BUT
LESS THAN $500,000 1.75% 1.78% 1.25%
$500,000 BUT
LESS THAN $1,000,000 1.00% 1.01% 0.80%
$1,000,000 AND OVER 0.00 0.00% 0.00%
NATIONAL, CALIFORNIA, MARYLAND AND VIRGINIA
SHARES ARE OFFERED AT NET ASSET VALUE PLUS A FRONT-END SALES CHARGE AS FOLLOWS:
AS A % OF AS A % OF ALLOWED TO
AMOUNT OF OFFERING NET AMOUNT BROKERS AS A %
INVESTMENT PRICE INVESTED OFFERING PRICE
LESS THAN $50,000 2.75% 2.83% 2.25%
$50,000 BUT
LESS THAN $100,000 2.25% 2.30% 1.75%
$100,000 BUT
LESS THAN $250,000 1.75% 1.78% 1.25%
$250,000 BUT
LESS THAN $500,000 1.25% 1.27% 0.95%
$500,000 BUT
LESS THAN $1,000,000 1.00% 1.01% 0.80%
$1,000,000 AND OVER 0.00 0.00% 0.00%
PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 LONG-TERM,
NATIONAL, CALIFORNIA, MARYLAND AND VIRGINIA HAVE EACH ADOPTED DISTRIBUTION PLANS
(THE "PLANS") WHICH PERMIT THE FUND TO PAY CERTAIN EXPENSES ASSOCIATED WITH THE
DISTRIBUTION AND SERVICING OF ITS SHARES (VERMONT HAS NOT ADOPTED A DISTRIBUTION
PLAN).
CDI RECEIVES ANY FRONT-END SALES CHARGE OR CDSC PAID. A PORTION OF THE
FRONT-END SALES CHARGE MAY BE REALLOWED TO DEALERS. THE AGGREGATE AMOUNT OF
SALES CHARGES (GROSS UNDERWRITING COMMISSIONS), AND FOR CLASS A ONLY, THE AMOUNT
RETAINED BY CDI (NET OF REALLOWANCE AND FINDERS FEES) FOR THE LAST THREE FISCAL
YEARS ARE:
FISCAL YEAR 1997 1998 1999
GROSS/NET GROSS/NET GROSS/NET
LONG-TERM $35,466/$11,017 $44,897/$(4,778) $40,239/$15,336
NATIONAL $62,546/$17,870 $51,922/$10,056 $38,952/$8,092
VERMONT $58,265/$25,819 $63,649/$28,472 $52,430/$31,429
CALIFORNIA $49,851/$15,411 $37,645/$6,053 $12,643/$3,637
VIRGINIA $20,163/$7,697 $12,662/$5,678 $9,491/$3,192
FUND TRUSTEES AND CERTAIN OTHER AFFILIATED PERSONS OF THE FUND ARE EXEMPT
FROM THE SALES CHARGE SINCE THE DISTRIBUTION COSTS ARE MINIMAL TO PERSONS
ALREADY FAMILIAR WITH THE FUND. OTHER GROUPS ARE EXEMPT DUE TO ECONOMIES OF
SCALE IN DISTRIBUTION. SEE EXHIBIT A TO THE PROSPECTUS.
THE DISTRIBUTION PLANS WERE APPROVED BY THE BOARD OF TRUSTEES/DIRECTORS,
INCLUDING THE TRUSTEES/DIRECTORS WHO ARE NOT "INTERESTED PERSONS" OF THE FUND
(AS THAT TERM IS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940) 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/DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE FUND IS COMMITTED TO
THE DISCRETION OF SUCH DISINTERESTED TRUSTEES/DIRECTORS. IN ESTABLISHING THE
PLAN, THE TRUSTEES/DIRECTORS CONSIDERED VARIOUS FACTORS INCLUDING THE AMOUNT OF
THE DISTRIBUTION FEE. THE TRUSTEES/DIRECTORS DETERMINED THAT THERE IS A
REASONABLE LIKELIHOOD THAT THE PLAN WILL BENEFIT THE PORTFOLIO AND ITS
SHAREHOLDERS, INCLUDING ECONOMICS OF SCALE AT HIGHER ASSETS LEVELS BETTER
INVESTMENT OPPORTUNITIES AND MORE FLEXIBILITY IN MANAGING A GROWING PORTFOLIO.
THE PLAN MAY BE TERMINATED BY VOTE OF A MAJORITY OF THE NON-INTERESTED
TRUSTEES/DIRECTORS WHO HAVE NO DIRECT OR INDIRECT FINANCIAL INTEREST IN THE PLAN
OR BY VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF THE PORTFOLIO. ANY CHANGE
IN THE PLAN THAT WOULD MATERIALLY INCREASE THE DISTRIBUTION COST TO THE
PORTFOLIO REQUIRES APPROVAL OF THE SHAREHOLDERS OF THE AFFECTED CLASS;
OTHERWISE, THE PLAN MAY BE AMENDED BY THE TRUSTEES/DIRECTORS, 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 ANNUALLY APPROVED BY (I) THE VOTE OF A MAJORITY OF THE
TRUSTEES/DIRECTORS 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
PORTFOLIO. FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, THEY PAID TO
BROKER/DEALERS FROM THEIR OWN RESOURCES A TOTAL OF $1,026,100 FOR DISTRIBUTION
EXPENSES FOR ALL FUNDS IN THE CALVERT GROUP. THE ADVISOR AND/OR CDI HAS AGREED
TO PAY CERTAIN FIRMS COMPENSATION BASED ON SALES OF FUND SHARES OR ON ASSETS
HELD IN THOSE FIRM'S ACCOUNTS FOR THEIR MARKETING AND DISTRIBUTION OF FUND
SHARES, ABOVE THE USUAL SALES CHARGES AND SERVICE FEES. THIS LIST MAY BE CHANGED
FORM TIME TO TIME. AS OF DECEMBER 31, 1999, THE ADVISOR AND/OR CDI HAD SPECIAL
ARRANGEMENTS WITH THE FOLLOWING FIRMS: MORGAN STANLEY DEAN WITTER, PRUDENTIAL
SECURITIES, SALOMON SMITH BARNEY, AMERICAN EXPRESS FINANCIAL ADVISORS, MERRILL
LYNCH, AND THE ADVISORS GROUP.
CDI, MAKES A CONTINUOUS OFFERING OF THE FUND'S SECURITIES ON A "BEST
EFFORTS" BASIS. UNDER THE TERMS OF THE AGREEMENT, CDI IS ENTITLED TO RECEIVE,
PURSUANT TO THE DISTRIBUTION PLANS, A DISTRIBUTION FEE AND A SERVICE FEE FROM
THE FUND BASED ON THE AVERAGE DAILY NET ASSETS OF THE FUND. THESE FEES ARE PAID
PURSUANT TO THE FUND'S DISTRIBUTION PLAN. THE DISTRIBUTION PLAN EXPENSES PAID BY
LONG-TERM TO CDI FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, WERE SPENT FOR THE
FOLLOWING PURPOSES:
COMPENSATION TO BROKER-DEALERS $39,626
COMPENSATION TO SALES PERSONNEL 5,046
ADVERTISING 1,415
PRINTING AND MAILING OF PROSPECTUSES 4,501
TO OTHER THAN CURRENT SHAREHOLDERS
COMPENSATION TO UNDERWRITERS
INTEREST, FINANCIAL CHARGES
OTHER
TOTAL PAID TO CDI $50,588
NATIONAL, CALIFORNIA, MARYLAND AND VIRGINIA DID NOT PAY ANY DISTRIBUTION
PLAN EXPENSES DURING FISCAL YEAR 1999.
PORTFOLIO TRANSACTIONS
----------------------
PORTFOLIO TRANSACTIONS ARE UNDERTAKEN ON THE BASIS OF THEIR DESIRABILITY
FROM AN INVESTMENT STANDPOINT. THE FUND'S ADVISOR MAKES INVESTMENT DECISIONS AND
THE CHOICE OF BROKERS AND DEALERS UNDER THE DIRECTION AND SUPERVISION OF THE
FUND'S BOARD OF TRUSTEES/DIRECTORS.
BROKER-DEALERS WHO EXECUTE PORTFOLIO TRANSACTIONS ON BEHALF OF THE FUND ARE
SELECTED ON THE BASIS OF THEIR EXECUTION CAPABILITY AND TRADING EXPERTISE
CONSIDERING, AMONG OTHER FACTORS, THE OVERALL REASONABLENESS OF THE BROKERAGE
COMMISSIONS, CURRENT MARKET CONDITIONS, SIZE AND TIMING OF THE ORDER, DIFFICULTY
OF EXECUTION, PER SHARE PRICE, ETC., MARKET FAMILIARITY, RELIABILITY, INTEGRITY,
AND FINANCIAL CONDITION, SUBJECT TO THE ADVISOR'S OBLIGATION TO SEEK BEST
EXECUTION. THE ADVISOR MAY ALSO CONSIDER SALES FOR FUND SHARES AS A FACTOR IN
THE SELECTION OF BROKERS.
THE FUND DID NOT PAY ANY BROKERAGE COMMISSIONS DURING THE LAST THREE FISCAL
YEARS.
WHILE THE FUND'S ADVISOR SELECTS BROKERS PRIMARILY ON THE BASIS OF BEST
EXECUTION, IN SOME CASES IT MAY DIRECT TRANSACTIONS TO BROKERS BASED ON THE
QUALITY AND AMOUNT OF THE RESEARCH AND RESEARCH-RELATED SERVICES WHICH THE
BROKERS PROVIDE TO IT. THESE RESEARCH SERVICES INCLUDE ADVICE, EITHER DIRECTLY
OR THROUGH PUBLICATIONS OR WRITINGS, AS TO THE VALUE OF SECURITIES, THE
ADVISABILITY OF INVESTING IN, PURCHASING OR SELLING SECURITIES, AND THE
AVAILABILITY OF SECURITIES OR PURCHASERS OR SELLERS OF SECURITIES; FURNISHING OF
ANALYSES AND REPORTS CONCERNING ISSUERS, SECURITIES OR INDUSTRIES; PROVIDING
INFORMATION ON ECONOMIC FACTORS AND TRENDS; ASSISTING IN DETERMINING PORTFOLIO
STRATEGY; PROVIDING COMPUTER SOFTWARE USED IN SECURITY ANALYSES; PROVIDING
PORTFOLIO PERFORMANCE EVALUATION AND TECHNICAL MARKET ANALYSES; AND PROVIDING
OTHER SERVICES RELEVANT TO THE INVESTMENT DECISION MAKING PROCESS. OTHER SUCH
SERVICES ARE DESIGNED PRIMARILY TO ASSIST THE ADVISOR IN MONITORING THE
INVESTMENT ACTIVITIES OF THE FUND. SUCH SERVICES INCLUDE PORTFOLIO ATTRIBUTION
SYSTEMS, RETURN-BASES STYLE ANALYSIS, AND TRADE-EXECUTION ANALYSIS.
THE ADVISOR MAY ALSO DIRECT SELLING CONCESSIONS AND/OR DISCOUNTS IN FIXED-PRICE
OFFERINGS FOR RESEARCH SERVICES.
IF, IN THE JUDGEMENT OF THE ADVISOR, THE FUND OR OTHER ACCOUNTS MANAGED BY
THEM WILL BE BENEFITED BY SUPPLEMENTAL RESEARCH SERVICES, THEY ARE AUTHORIZED TO
PAY BROKERAGE COMMISSIONS TO A BROKER FURNISHING SUCH SERVICES WHICH ARE IN
EXCESS OF COMMISSION WHICH ANOTHER BROKER MAY HAVE CHARGED FOR EFFECTING THE
SAME TRANSACTIONS. IT IS THE POLICY OF THE ADVISOR THAT SUCH RESEARCH SERVICES
WILL BE USED FOR THE BENEFIT OF THE FUND AS WELL AS OTHER CALVERT GROUP FUNDS
AND MANAGED ACCOUNTS.
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, THE FUND, PAID $0 IN
COMMISSIONS FOR DIRECTED BROKERAGE FOR RESEARCH SERVICES.
THE PORTFOLIO TURNOVER RATES FOR THE LAST TWO FISCAL YEARS ARE AS FOLLOWS:
1998 1999
LONG-TERM 72% 80%
VERMONT 32% 21%
NATIONAL 44% 38%
CALIFORNIA 12% 11%
MARYLAND 24% 0%
VIRGINIA 36% 12%
PERSONAL SECURITIES TRANSACTIONS
--------------------------------
THE FUND, ITS ADVISOR, AND PRINCIPAL UNDERWRITER HAVE ADOPTED A CODE OF
ETHICS PURSUANT TO RULE 17J-1 OF THE INVESTMENT COMPANY ACT OF 1940. THE CODE OF
ETHICS IS DESIGNED TO PROTECT THE PUBLIC FROM ABUSIVE TRADING PRACTICES AND TO
MAINTAIN ETHICAL STANDARDS FOR ACCESS PERSONS AS DEFINED IN THE RULE WHEN
DEALING WITH THE PUBLIC. THE CODE OF ETHICS PERMITS THE FUND'S INVESTMENT
PERSONNEL TO INVEST IN SECURITIES THAT MAYBE PURCHASED OR HELD BY THE FUND. THE
CODE OF ETHICS CONTAINS CERTAIN CONDITIONS SUCH AS PRECLEARANCE AND RESTRICTIONS
ON USE OF MATERIAL INFORMATION.
GENERAL INFORMATION
-------------------
THE PORTFOLIOS ARE OPEN-END, NON-DIVERSIFIED INVESTMENT MANAGEMENT
INVESTMENT COMPANIES. LONG-TERM AND VERMONT ARE SERIES OF CALVERT TAX-FREE
RESERVES, WHICH WAS ORGANIZED AS A MASSACHUSETTS BUSINESS TRUST ON OCTOBER 20,
1980. THE OTHER SERIES OF THE FUND INCLUDE THE MONEY MARKET PORTFOLIO,
LIMITED-TERM PORTFOLIO AND CALIFORNIA MONEY MARKET PORTFOLIO. THE CTFR
NATIONAL, CALIFORNIA, MARYLAND AND VIRGINIA ARE SERIES OF CALVERT MUNICIPAL
FUND, INC., A MARYLAND CORPORATION ORGANIZED ON FEBRUARY 4, 1992. CALVERT
TAX-FREE RESERVE'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 FUND IS NOT REQUIRED TO HOLD ANNUAL SHAREHOLDER MEETINGS, BUT SPECIAL
MEETINGS MAY BE CALLED FOR CERTAIN PURPOSES SUCH AS ELECTING TRUSTEES/DIRECTORS,
CHANGING FUNDAMENTAL POLICIES, OR APPROVING A MANAGEMENT CONTRACT. AS A
SHAREHOLDER, YOU RECEIVE ONE VOTE FOR EACH SHARE YOU OWN.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
---------------------------------------------------
AS OF APRIL 13, 2000 THE FOLLOWING SHAREHOLDERS OWNED OF RECORD 5% OR MORE
OF THE FUND:
NAME AND ADDRESS % OF OWNERSHIP
CALVERT CALIFORNIA MUNICIPAL INTERMEDIATE FUND
CATALYST PRODUCTIONS 15.54%
1431 CENTER STREET
OAKLAND, CA 94607-2054
NATIONAL CITY BANK KENTUCKY TTEE 8.21%
ANCHORAGE TR FBO S WHALEY
DTD 12-10-77
PO BOX 94984
CLEVELAND, OH 44101-4984
JAMES J BOCHNOWSKI 6.15%
JANET J BOCHNOWSKI COMM PROPERTY
28 CAMINO POR LOS ARBOLES
ATHERTON, CA 94027-5941
CALIFORNIA NATIONAL MUNICIPAL INTERMEDIATE FUND
JOHN A SWANSON 11.23%
113 WATERS EDGE LANE
MONETA, VA 24121-2938
ROBERT P. TAISHOFF TTEE 8.98%
U/A 06/02/98
LAWRENCE B TAISHOFF FLINT TRUST
1321 WASHINGTON DR.
ANNAPOLIS, MD 21403-4730
CALVERT MARYLAND MUNICIPAL INTERMEDIATE FUND
CHARLES SCHWAB & CO. INC. 6.24%
REINVEST ACCOUNT
ATTN: MUTUAL FUND DEPT
101 MONTGOMERY ST.
SAN FRANCISCO , CA 94104-4122
CALVERT VIRGINIA MUNICIPAL INTERMEDIATE FUND
CHARLES SCHWAB & CO. INC. 31.24%
REINVEST ACCOUNT
ATTN: MUTUAL FUND DEPARTMENT
101 MONTGOMERY ST.
SAN FRANCISCO, CA 94104-4122
CALVERT TAX-FREE RESERVES LONG-TERM PORTFOLIO
JOHN A SWANSON 8.70%
113 WATERS EDGE LANE
MONETA, VA 24121-2938
HAROLD LUSTIG 7.22%
OR LAURA LUSTIG JTWROS
47 DAVIS HILL RD
WESTON, CT 06883-1960
CALVERT TAX-FREE RESERVES VERMONT MUNICIPAL PORTFOLIO
MERFARM AND CO. 8.65%
C/O TRUST OPS
164 COLLEGE ST.
BURLINGTON, VT 05401-8417
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 PRIVATE ACTIVITY 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 PRIVATE ACTIVITY 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, SUITE 1000N
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
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS:
99B.1 DECLARATION OF TRUST (INCORPORATED BY REFERENCE TO REGISTRANT'S
INITIAL REGISTRATION STATEMENT, OCTOBER 20, 1980),
FILED HEREWITH.
99B.2 BY-LAWS (INCORPORATED BY REFERENCE TO REGISTRANT'S INITIAL
REGISTRATION STATEMENT, OCTOBER 20, 1980) FILED HEREWITH.
99.B5. INVESTMENT ADVISORY AGREEMENT, INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 48, DATED APRIL 27,
1999, ACCESSION NUMBER 0000319676-99-000011.
99.B6 UNDERWRITING AGREEMENT, INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 15, FILED
APRIL 30, 1998, ACCESSION NUMBER 0000882671-98-000012.
99.B7 DEFERRED COMPENSATION AGREEMENT INCORPORATED BY REFERENCE
TO REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 30,
JANUARY 31, 1992, FILED HEREWITH.
99.B8. CUSTODIAL CONTRACT FILED HEREWITH.
99.B9 A TRANSFER AGENCY CONTRACT AND SHAREHOLDER SERVICING CONTRACT,
INCORPORATED BY REFERENCE TO REGISTRANT'S POST-EFFECTIVE
AMENDMENT NO. 45, APRIL 30, 1998, ACCESSION
NUMBER 0000319676-98-000007.
99.B9 B. ADMINISTRATIVE SERVICES AGREEMENT, AMENDMENT TO AGREEMENT,
AND SCHEDULE A FILED HEREWITH.
99.B10 OPINION AND CONSENT OF COUNSEL FILED HEREWITH.
99.B11 CONSENT OF INDEPENDENT ACCOUNTANTS TO USE OF REPORT FILED HEREWITH.
99.B15 PLAN OF DISTRIBUTION FILED HEREWITH.
99.B15A PLAN OF DISTRIBUTION FOR CLASS T, FILED HEREWITH.
99.B17.A MULTIPLE-CLASS PLAN PURSUANT TO INVESTMENT COMPANY ACT OF 1940 RULE
18F-3, AS AMENDED, FILED HEREWITH.
99.B17.B POWER OF ATTORNEY FORMS SIGNED BY EACH DIRECTOR, INCORPORATED BY
REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 48, DATED
APRIL 27, 1999, ACCESSION NUMBER 0000319676-99-000011.
99.B18 CODE OF ETHICS FILED HEREWITH.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
NOT APPLICABLE.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
NOT APPLICABLE.
ITEM 25. INDEMNIFICATION
REGISTRANT'S DECLARATION OF TRUST, WHICH DECLARATION IS EXHIBIT 1 OF
THIS REGISTRATION STATEMENT, PROVIDES, IN SUMMARY, THAT OFFICERS, TRUSTEES,
EMPLOYEES, AND AGENTS SHALL BE INDEMNIFIED BY REGISTRANT AGAINST LIABILITIES
AND EXPENSES INCURRED BY SUCH PERSONS IN CONNECTION WITH ACTIONS, SUITS, OR
PROCEEDINGS ARISING OUT OF THEIR OFFICES OR DUTIES OF EMPLOYMENT, EXCEPT THAT
NO INDEMNIFICATION CAN BE MADE TO SUCH A PERSON IF HE HAS BEEN ADJUDGED LIABLE
OF WILLFUL MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE, OR RECKLESS DISREGARD OF
HIS DUTIES. IN THE ABSENCE OF SUCH AN ADJUDICATION, THE DETERMINATION OF
ELIGIBILITY FOR INDEMNIFICATION SHALL BE MADE BY INDEPENDENT COUNSEL IN A
WRITTEN OPINION OR BY THE VOTE OF A MAJORITY OF A QUORUM OF TRUSTEES WHO ARE
NEITHER "INTERESTED PERSONS" OF REGISTRANT, AS THAT TERM IS DEFINED IN SECTION
2(A)(19) OF THE INVESTMENT COMPANY ACT OF 1940, NOR PARTIES TO THE PROCEEDING.
REGISTRANT'S DECLARATION OF TRUST ALSO PROVIDES THAT REGISTRANT MAY
PURCHASE AND MAINTAIN LIABILITY INSURANCE ON BEHALF OF ANY OFFICER, TRUSTEE,
EMPLOYEE OR AGENT AGAINST ANY LIABILITIES ARISING FROM SUCH STATUS. IN THIS
REGARD, REGISTRANT MAINTAINS A DIRECTORS & OFFICERS (PARTNERS) LIABILITY
INSURANCE POLICY WITH CHUBB GROUP OF INSURANCE COMPANIES, 15 MOUNTAIN VIEW
ROAD, WARREN, NEW JERSEY 07061, PROVIDING REGISTRANT WITH $5 MILLION IN
DIRECTORS AND OFFICERS LIABILITY COVERAGE, PLUS $5 MILLION IN EXCESS DIRECTORS
AND OFFICERS LIABILITY COVERAGE FOR THE INDEPENDENT TRUSTEES/DIRECTORS ONLY.
REGISTRANT ALSO MAINTAINS AN $9 MILLION INVESTMENT COMPANY BLANKET BOND ISSUED
BY ICI MUTUAL INSURANCE COMPANY, P.O. BOX 730, BURLINGTON, VERMONT, 05402.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
NAME OF COMPANY, PRINCIPAL
NAME BUSINESS AND ADDRESS CAPACITY
BARBARA J. KRUMSIEK CALVERT VARIABLE SERIES, INC. OFFICER
CALVERT MUNICIPAL FUND, INC. AND
CALVERT WORLD VALUES FUND, INC. DIRECTOR
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME AND
CALVERT TAX-FREE RESERVES TRUSTEE
CALVERT SOCIAL INVESTMENT FUND
CALVERT CASH RESERVES
THE CALVERT FUND
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT-SLOAN ADVISERS, LLC DIRECTOR
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT NEW WORLD FUND, INC. DIRECTOR
INVESTMENT COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
--------------
ALLIANCE CAPITAL MGMT. L.P. SR. VICE PRESIDENT
MUTUAL FUND DIVISION DIRECTOR
1345 AVENUE OF THE AMERICAS
NEW YORK, NY 10105
--------------
RONALD M. WOLFSHEIMER FIRST VARIABLE RATE FUND OFFICER
FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
--------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
DAVID R. ROCHAT FIRST VARIABLE RATE FUND OFFICER
FOR GOVERNMENT INCOME AND
CALVERT TAX-FREE RESERVES TRUSTEE
CALVERT CASH RESERVES
THE CALVERT FUND
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT MUNICIPAL FUND, INC. OFFICER
INVESTMENT COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CHELSEA SECURITIES, INC. OFFICER
SECURITIES FIRM AND
POST OFFICE BOX 93 DIRECTOR
CHELSEA, VERMONT 05038
---------------
GRADY, BERWALD & CO. OFFICER
HOLDING COMPANY AND
43A SOUTH FINLEY AVENUE DIRECTOR
BASKING RIDGE, NJ 07920
---------------
RENO J. MARTINI CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
FIRST VARIABLE RATE FUND OFFICER
FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT NEW WORLD FUND, INC. DIRECTOR
INVESTMENT COMPANY AND
4550 MONTGOMERY AVENUE OFFICER
BETHESDA, MARYLAND 20814
---------------
CALVERT-SLOAN ADVISERS, LLC DIRECTOR
INVESTMENT ADVISOR AND
4550 MONTGOMERY AVENUE OFFICER
BETHESDA, MARYLAND 20814
---------------
CHARLES T. NASON AMERITAS ACACIA MUTUAL HOLDING COMPANY OFFICER
ACACIA LIFE INSURANCE AND DIRECTOR
INSURANCE COMPANIES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ACACIA FINANCIAL CORPORATION OFFICER
HOLDING COMPANY AND
7315 WISCONSIN AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
ACACIA FEDERAL SAVINGS BANK DIRECTOR
SAVINGS BANK
7600-B LEESBURG PIKE
FALLS CHURCH, VIRGINIA 22043
---------------
ENTERPRISE RESOURCES, INC. DIRECTOR
BUSINESS SUPPORT SERVICES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ACACIA REALTY SQUARE, L.L.C. DIRECTOR
REALTY INVESTMENTS
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
GARDNER MONTGOMERY COMPANY DIRECTOR
TAX RETURN PREPARATION SERVICES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. DIRECTOR
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. DIRECTOR
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. DIRECTOR
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SHAREHOLDER SERVICES, INC. DIRECTOR
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SOCIAL INVESTMENT FUND TRUSTEE
INVESTMENT COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
-----------------
THE ADVISORS GROUP, LTD. DIRECTOR
BROKER-DEALER AND
INVESTMENT ADVISOR
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ROBERT-JOHN H. AMERITAS ACACIA MUTUAL HOLDING COMPANY OFFICER
ACACIA LIFE INSURANCE
ACACIA NATIONAL LIFE INSURANCE OFFICER
INSURANCE COMPANY AND
7315 WISCONSIN AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
ACACIA LIFE INSURANCE OFFICER
INSURANCE COMPANY
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
----------------
ACACIA FINANCIAL CORPORATION OFFICER
HOLDING COMPANY AND
7315 WISCONSIN AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
ACACIA FEDERAL SAVINGS BANK OFFICER
SAVINGS BANK
7600-B LEESBURG PIKE
FALLS CHURCH, VIRGINIA 22043
---------------
ENTERPRISE RESOURCES, INC. DIRECTOR
BUSINESS SUPPORT SERVICES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ACACIA REALTY SQUARE, L.L.C. DIRECTOR
REALTY INVESTMENTS
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
THE ADVISORS GROUP, LTD. DIRECTOR
BROKER-DEALER AND
INVESTMENT ADVISOR
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
GARDNER MONTGOMERY COMPANY DIRECTOR
TAX RETURN PREPARATION SERVICES
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. DIRECTOR
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. DIRECTOR
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT, CO., INC. DIRECTOR
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SHAREHOLDER SERVICES, INC. DIRECTOR
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
WILLIAM M. TARTIKOFF ACACIA NATIONAL LIFE INSURANCE OFFICER
INSURANCE COMPANY
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE OFFICER
SERVICES COMPANY
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO. INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. DIRECTOR
BROKER-DEALER AND
4550 MONTGOMERY AVENUE OFFICER
BETHESDA, MARYLAND 20814
----------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
SUSAN WALKER BENDER CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
IVY WAFFORD DUKE CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
JENNIFER STREAKS CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
VICTOR FRYE CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
THE ADVISORS GROUP, LTD. COUNSEL
BROKER-DEALER AND AND
INVESTMENT ADVISOR COMPLIANCE
7315 WISCONSIN AVENUE MANAGER
BETHESDA, MARYLAND 20814
---------------
DANIEL K. HAYES CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
JOHN NICHOLS CALVERT ASSET MANAGEMENT OFFICER
COMPANY, INC.
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
DAVID LEACH CALVERT ASSET MANAGEMENT OFFICER
COMPANY, INC.
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
MATTHEW D. GELFAND CALVERT ASSET MANAGEMENT OFFICER
COMPANY, INC.
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
STRATEGIC INVESTMENT MANAGEMENT OFFICER
INVESTMENT ADVISOR
1001 19TH STREET NORTH
ARLINGTON, VIRGINIA 20009
------------------
ITEM 27. PRINCIPAL UNDERWRITERS
(A) REGISTRANT'S PRINCIPAL UNDERWRITER UNDERWRITES SHARES OF
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME, CALVERT TAX-FREE RESERVES,
CALVERT SOCIAL INVESTMENT FUND, CALVERT CASH RESERVES, THE CALVERT FUND,
CALVERT MUNICIPAL FUND, INC., CALVERT WORLD VALUES FUND, INC., CALVERT NEW
WORLD FUND, INC., AND CALVERT VARIABLE SERIES, INC. (FORMERLY NAMED ACACIA
CAPITAL CORPORATION).
(B) POSITIONS OF UNDERWRITER'S OFFICERS AND DIRECTORS
NAME AND PRINCIPAL POSITION(S) WITH POSITION(S) WITH
BUSINESS ADDRESS UNDERWRITER REGISTRANT
BARBARA J. KRUMSIEK DIRECTOR AND PRESIDENT PRESIDENT AND TRUSTEE
RONALD M. WOLFSHEIMER DIRECTOR, SENIOR VICE TREASURER
PRESIDENT AND CHIEF FINANCIAL OFFICER
WILLIAM M. TARTIKOFF DIRECTOR, SENIOR VICE VICE PRESIDENT AND
PRESIDENT AND SECRETARY SECRETARY
CRAIG CLOYED SENIOR VICE PRESIDENT NONE
KAREN BECKER VICE PRESIDENT, OPERATIONS NONE
MATTHEW GELFAND VICE PRESIDENT NONE
GEOFFREY ASHTON REGIONAL VICE PRESIDENT NONE
MARTIN BROWN REGIONAL VICE PRESIDENT NONE
BILL HAIRGROVE REGIONAL VICE PRESIDENT NONE
ANTHONY EAMES REGIONAL VICE PRESIDENT NONE
STEVE HIMBER REGIONAL VICE PRESIDENT NONE
TANYA WILLIAMS REGIONAL VICE PRESIDENT NONE
BEN OGBOGU REGIONAL VICE PRESIDENT NONE
TOM STANTON REGIONAL VICE PRESIDENT NONE
CHRISTINE TESKE REGIONAL VICE PRESIDENT NONE
JENNIFER STREAKS ASSISTANT SECRETARY NONE
SUSAN WALKER BENDER ASSISTANT SECRETARY ASSISTANT SECRETARY
IVY WAFFORD DUKE ASSISTANT SECRETARY ASSISTANT SECRETARY
VICTOR FRYE ASSISTANT SECRETARY NONE
AND COMPLIANCE OFFICER
(C) INAPPLICABLE.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
RONALD M. WOLFSHEIMER, TREASURER
AND
WILLIAM M. TARTIKOFF, ASSISTANT SECRETARY
4550 MONTGOMERY AVENUE, SUITE 1000N
BETHESDA, MARYLAND 20814
ITEM 29. MANAGEMENT SERVICES
NOT APPLICABLE
ITEM 30. UNDERTAKINGS
NOT APPLICABLE
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND THE INVESTMENT
COMPANY ACT OF 1940, THE REGISTRANT CERTIFIES THAT IT MEETS ALL OF THE
REQUIREMENTS FOR EFFECTIVENESS OF THIS REGISTRATION STATEMENT UNDER RULE
485(B) UNDER THE SECURITIES ACT AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, DULY AUTHORIZED, IN
THE CITY OF BETHESDA, AND STATE OF MARYLAND, ON THE 27TH DAY OF APRIL, 2000.
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 AND ON THE DATE INDICATED.
SIGNATURE TITLE DATE
__________**____________ PRESIDENT AND 4/27/00
BARBARA J. KRUMSIEK TRUSTEE (PRINCIPAL EXECUTIVE OFFICER)
__________**____________ PRINCIPAL ACCOUNTING 4/27/00
RONALD M. WOLFSHEIMER OFFICER
__________**____________ TRUSTEE 4/27/00
RICHARD L. BAIRD, JR.
__________**____________ TRUSTEE 4/27/00
FRANK H. BLATZ, JR., ESQ.
__________**____________ TRUSTEE 4/27/00
FREDERICK T. BORTS, M.D.
__________**____________ TRUSTEE 4/27/00
CHARLES E. DIEHL
__________**____________ TRUSTEE 4/27/00
DOUGLAS E. FELDMAN
__________**____________ TRUSTEE 4/27/00
PETER W. GAVIAN
__________**____________ TRUSTEE 4/27/00
JOHN G. GUFFEY, JR.
__________**____________ TRUSTEE 4/27/00
M. CHARITO KRUVANT
__________**____________ TRUSTEE 4/27/00
ARTHUR J. PUGH
__________**____________ TRUSTEE 4/27/00
DAVID R. ROCHAT
__________**____________ TRUSTEE 4/27/00
D. WAYNE SILBY
**BY SUSAN WALKER BENDER AS ATTORNEY-IN-FACT, PURSUANT TO POWER OF ATTORNEY
FORMS ON FILE.
EXHIBIT 1
DECLARATION OF TRUST
CALVERT TAX-FREE RESERVES
DECLARATION OF TRUST
CALVERT TAX-FREE RESERVES
DECLARATION OF TRUST
ARTICLE I NAME AND DEFINITIONS
1
1. NAME
1
2. DEFINITIONS -
(A) AFFILIATED PERSON, ASSIGNMENT,
COMMISSION, INTERESTED PERSON,
MAJORITY SHAREHOLDER VOTE, PRINCIPAL
UNDERWRITER
1
(B) TRUST
1
(C) ACCUMULATED NET INCOME
1
(D) SHAREHOLDER
1
(E) TRUSTEES
1
(F) SHARES
1
(G) 1940 ACT
1
(H) COMMISSION
1
(I) BUSINESS DAY
2
ARTICLE II PURPOSE OF TRUST
ARTICLE III BENEFICIAL INTEREST
2
1. SHARES OF BENEFICIAL INTEREST
2
2. OWNERSHIP OF SHARES
3
3. INVESTMENT IN THE TRUST
3
4. NO PRE-EMPTIVE RIGHTS
3
5. PROVISIONS RELATING TO SERIES OF SHARES
3
ARTICLE IV THE TRUSTEES
4
1. MANAGEMENT OF THE TRUST
4
2. ELECTION OF TRUSTEES
4
3. TERM OF OFFICE OF TRUSTEES
4
4. TERMINATION OF SERVICE AND
APPOINTMENT OF TRUSTEES
5
5. TEMPORARY ABSENCE OF TRUSTEE
5
6. NUMBER OF TRUSTEES
5
7. EFFECT OF DEATH, RESIGNATION, ETC.
OF A TRUSTEE
5
8. OWNERSHIP OF THE TRUST
6
ARTICLE V POWERS OF THE TRUSTEES
6
1. POWERS
6
2. TRUSTEES AND OFFICERS AS SHAREHOLDERS
9
3. PARTIES TO CONTRACT
9
ARTICLE VI TRUSTEES' EXPENSES AND COMPENSATION
9
1. TRUSTEE REIMBURSEMENT
9
2. TRUSTEE COMPENSATION
10
ARTICLE VII INVESTMENT ADVISER, ADMINISTRATIVE
SERVICES, PRINCIPAL UNDERWRITER AND
TRANSFER AGENT
10
1. INVESTMENT ADVISER
10
2. ADMINISTRATIVE SERVICES
10
3. PRINCIPAL UNDERWRITER
11
4. TRANSFER AGENT
11
ARTICLE VIII SHAREHOLDERS' VOTING POWERS AND MEETINGS
11
1. VOTING POWERS
11
2. MEETINGS
12
3. QUORUM AND REQUIRED VOTE
12
4. PROXIES
12
5. ADDITIONAL PROVISIONS
12
ARTICLE LX CUSTODIANS
12
1. APPOINTMENT OF CUSTODIAN AND DUTIES
12
2. CENTRAL CERTIFICATE SYSTEM
13
3. SPECIAL CUSTODIANS
13
4. SPECIAL DEPOSITORIES
14
ARTICLE X DISTRIBUTIONS AND REDEMPTIONS
14
1. DISTRIBUTIONS
14
2. REDEMPTIONS AND REPURCHASES
15
3. DETERMINATION OF ACCUMULATED NET INCOME
16
4. NET ASSET VALUE OF SHARES
16
5. SUSPENSION OF THE RIGHT OF REDEMPTION
16
6. TRUST'S RIGHT TO REDEEM SHARES
17
ARTICLE XI LIMITATION OF LIABILITY AND INDEMNIFICATION
17
1. LIMITATION OF PERSONAL LIABILITY AND
INDEMNIFICATION OF SHAREHOLDERS
17
2. LIMITATION OF PERSONAL LIABILITY OF
TRUSTEES, OFFICERS, EMPLOYEES OR
AGENTS OF THE TRUST
18
3. EXPRESS EXCULPATORY CLAUSES AND
INSTRUMENTS
18
4. MANDATORY INDEMNIFICATION
18
ARTICLE XII MISCELLANEOUS
19
1. TRUST IS NOT A PARTNERSHIP
19
2. TRUSTEE'S GOOD FAITH ACTION, EXPERT
ADVICE, NO BOND OR SURETY
19
3. ESTABLISHMENT OF RECORD DATES
20
4. TERMINATION OF TRUST
20
5. OFFICES OF THE TRUST, FILING OF COPIES,
REFERENCES, HEADINGS
21
6. APPLICABLE LAW
21
7. AMENDMENTS
21
8. CONFLICTS WITH LAW OR REGULATIONS
21
9. USE OF NAME
22
CALVERT TAX-FREE RESERVES
DECLARATION OF TRUST
DECLARATION OF TRUST MADE THIS DAY OF OCTOBER, 1980, BY WAYNE B.
BARDSLEY, JOHN G. GUFFEY, JR., AND D. WAYNE SILBY.
WHEREAS, THE TRUSTEES DESIRE TO ESTABLISH A TRUST FUND FOR THE INVESTMENT
AND REINVESTMENT OF FUNDS CONTRIBUTED THERETO;
NOW, THEREFORE, THE TRUSTEES DECLARE THAT ALL MONEY AND PROPERTY CONTRIBUTED
TO THE TRUST FUND HEREUNDER SHALL BE HELD AND MANAGED UNDER THIS DECLARATION OF
TRUST IN TRUST AS HEREIN SET FORTH BELOW.
ARTICLE I
NAMES AND DEFINITIONS
SECTION 1. NAME. THIS TRUST SHALL BE KNOWN AS "CALVERT TAX-FREE RESERVES."
SHOULD THE TRUSTEES DETERMINE THAT THE USE OF SUCH NAME IS NOT ADVISABLE OR
OTHERWISE CEASE USING SUCH NAME, THEN THEY MAY HOLD THE PROPERTY OF THE TRUST
AND CONDUCT ITS BUSINESS UNDER ANOTHER NAME OF THEIR CHOOSING, AND SHALL
UNDERTAKE TO CHANGE THE NAME OF THE TRUST ACCORDINGLY.
SECTION 2. DEFINITIONS. WHEREVER USED HEREIN, UNLESS OTHERWISE REQUIRED BY
THE CONTEXT OR SPECIFICALLY PROVIDED:
(A) THE TERMS "AFFILIATED PERSON", "ASSIGNMENT", "INTERESTED
PERSON", "MAJORITY SHAREHOLDER VOTE" (THE 67% OR 50% REQUIREMENT OF THE THIRD
SENTENCE OF SECTION 2(A) (42) OF THE 1940 ACT, WHICHEVER MAY BE APPLICABLE), AND
"PRINCIPAL UNDERWRITER" SHALL HAVE THE MEANINGS GIVEN THEM IN THE INVESTMENT
COMPANY ACT OF 1940 , AS AMENDED FROM TIME TO TIME;
(B) THE "TRUST" REFERS TO CALVERT TAX-FREE RESERVES;
(C) "ACCUMULATED NET INCOME" MEANS THE ACCUMULATED NET INCOME OF THE
TRUST DETERMINED IN THE MANNER PROVIDED OR AUTHORIZED IN ARTICLE X, SECTION 3;
(D) "SHAREHOLDER" MEANS A RECORD OWNER OF SHARES OF THE TRUST;
(E) THE "TRUSTEES" REFERS TO THE INDIVIDUAL TRUSTEES IN THEIR
CAPACITY AS TRUSTEES HEREUNDER OF THE TRUST AND THEIR SUCCESSOR OR SUCCESSORS
FOR THE TINE BEING IN OFFICE AS SUCH TRUSTEES;
(F) "SHARES" MEANS THE EQUAL PROPORTIONATE UNITS OF INTEREST INTO
WHICH THE BENEFICIAL INTEREST IN THE TRUST SHALL BE DIVIDED FROM TIME TO TIME
AND INCLUDES FRACTIONS OF SHARES AS WELL AS WHOLE SHARES;
(G) THE "1940 ACT" REFERS TO THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED FROM TIME TO TIME; AND
(H) THE "COMMISSION" REFERS TO THE COMMISSION DESCRIBED IN THE 1940
ACT AND TO ANY SUCCEEDING GOVERNMENTAL AUTHORITY.
(I) A "BUSINESS DAY" MEANS A DAY WHEN THE NEW YORK STOCK EXCHANGE IS
OPEN FOR TRADING AND THE TRUSTEES HAVE NOT DETERMINED THAT THE TRUST SHALL BE
CLOSED FOR BUSINESS IN OBSERVANCE OF A HOLIDAY OBSERVED GENERALLY BY BANKS IN
NEW YORK CITY, WASHINGTON, D.C., OR BY THE OFFICES OF THE FEDERAL GOVERNMENT IN
WASHINGTON, D.C.
ARTICLE II
PURPOSE CF TRUST
THIS TRUST IS ORGANIZED TO OPERATE AS AN INVESTMENT COMPANY REGISTERED UNDER
THE 1940 ACT FOR THE PURPOSE OF INVESTING AND REINVESTING ITS ASSETS IN
SECURITIES.
ARTICLE III
BENEFICIAL I VEST
SECTION 1. SHARES OF BENEFICIAL INTEREST. THE BENEFICIAL INTEREST IN THE
TRUST SHALL AT ALL TIMES BE DIVIDED INTO TRANSFERABLE SHARES, WITHOUT PAR VALUE,
EACH OF WHICH SHALL REPRESENT AN EQUAL PROPORTIONATE INTEREST IN THE TRUST WITH
EACH OTHER SHARE OUTSTANDING, NONE HAVING PRIORITY OR PREFERENCE OVER ANOTHER,
EXCEPT TO THE EXTENT MODIFIED BY THE TRUSTEES UNDER THE PROVISIONS OF THIS
SECTION. THE NUMBER OF SHARES WHICH MAY BE ISSUED IS UNLIMITED. THE TRUSTEES MAY
FROM TIME TO TIME DIVIDE OR COMBINE THE OUTSTANDING SHARES INTO A GREATER OR
LESSER NUMBER WITHOUT THEREBY CHANGING THE PROPORTIONATE BENEFICIAL INTEREST IN
THE TRUST. CONTRIBUTIONS TO THE TRUST MAY BE ACCEPTED FOR, AND SHARES SHALL BE
REDEEMED AS, WHOLE SHARES AND/OR FRACTIONS. SHARES MAY BE REPRESENTED BY
CERTIFICATES OR BY SUITABLE ENTRIES IN THE BOOKS OF THE TRUST.
FROM TIME TO TIME AS THEY DEEM APPROPRIATE, THE TRUSTEES MAY CREATE SERIES
AND/OR CLASSES OF SHARES. REFERENCES IN THIS DECLARATION OF TRUST TO SHARES OF
THE TRUST SHALL APPLY TO EACH SUCH SERIES OF SHARES AND (TO THE EXTENT NOT
INCONSISTENT WITH THE RIGHTS AND RESTRICTIONS OF A CLASS) TO EACH SUCH CLASS OF
SHARES, EXCEPT TO THE EXTENT MODIFIED BY THE TRUSTEES UNDER THE PROVISIONS OF
THIS SECTION.
ANY SERIES OF SHARES CREATED HEREUNDER SHALL REPRESENT THE BENEFICIAL
INTEREST IN THE ASSETS (AND RELATED LIABILITIES) ALLOCATED BY THE TRUSTEES TO
SUCH SERIES OF SHARES AND ACQUIRED BY THE TRUST ONLY AFTER CREATION OF THE
RESPECTIVE SERIES OF SHARES AND ONLY ON THE ACCOUNT OF SUCH SERIES. UPON
CREATION OF ANY SERIES OF SHARES, THE TRUSTEES SHALL DESIGNATE IT APPROPRIATELY
AND DETERMINE THE INVESTMENT POLICIES WITH RESPECT TO THE ASSETS ALLOCATED TO
SUCH SERIES OF SHARES, PREFERENCES, REDEMPTION RIGHTS, DIVIDEND RIGHTS,
CONVERSION RIGHTS, LIQUIDATION RIGHTS, VOTING RIGHTS, AND SUCH OTHER RIGHTS AND
RESTRICTIONS AS THE TRUSTEES DEEM APPROPRIATE, TO THE EXTENT NOT INCONSISTENT
WITH THE PROVISIONS OF THIS DECLARATION OF TRUST.
THE TRUSTEES MAY DIVIDE THE SHARES OR ANY SERIES OF SHARES INTO MORE THAN
ONE CLASS. UPON CREATION OF ANY ADDITIONAL CLASS OF SHARES, THE TRUSTEES SHALL
DESIGNATE IT APPROPRIATELY AND DETERMINE ITS PREFERENCES, REDEMPTION RIGHTS,
DIVIDEND RIGHTS, CONVERSION RIGHTS, LIQUIDATION RIGHTS, VOTING RIGHTS, AND SUCH
OTHER RIGHTS AND RESTRICTIONS AS THE TRUSTEES DEEM APPROPRIATE.
SECTION 2. OWNERSHIP OF SHARES. THE OWNERSHIP OF SHARES SHALL BE RECORDED IN
THE BOOKS OF THE TRUST OR OF A TRANSFER AGENT. THE TRUSTEES MAY MAKE SUCH RULES
AS THEY CONSIDER APPROPRIATE FOR THE TRANSFER OF SHARES AND SIMILAR MATTERS. THE
RECORD BOOKS OF THE TRUST OR ANY TRANSFER AGENT, AS THE CASE MAY BE, SHALL BE
CONCLUSIVE AS TO WHO ARE THE HOLDERS OF SHARES AND AS TO THE NUMBER OF SHARES
HELD FROM TIME TO TIME BY EACH.
SECTION 3. INVESTMENT IN THE TRUST. THE TRUSTEES MAY ACCEPT INVESTMENTS IN
THE TRUST FROM SUCH PERSONS AND ON SUCH TERMS AS THEY MAY FROM TIME TO TIME
AUTHORIZE AND MAY CEASE OFFERING SHARES TO THE PUBLIC AT ANY TIME. AFTER THE
DATE OF THE INITIAL CONTRIBUTION OF CAPITAL TO THE TRUST, THE NUMBER OF SHARES
DETERMINED BY THE TRUSTEES TO REPRESENT THE INITIAL CONTRIBUTION SHALL BE
CONSIDERED AS OUTSTANDING AND THE AMOUNT RECEIVED BY THE TRUSTEES ON ACCOUNT OF
THE CONTRIBUTION SHALL BE TREATED AS AN ASSET OF THE TRUST. SUBSEQUENT TO SUCH
INITIAL CONTRIBUTION OF CAPITAL, SHARES (INCLUDING SHARES WHICH MAY HAVE BEEN
REDEEMED OR REPURCHASED BY THE TRUST) MAY BE ISSUED OR SOLD AT A PRICE WHICH
WILL NET THE TRUST, BEFORE PAYING ANY TAXES IN CONNECTION WITH SUCH ISSUE OR
SALE, NOT LESS THAN THE NET ASSET VALUE (AS DEFINED IN ARTICLE X, SECTION 4)
THEREOF; PROVIDED, HOWEVER, THAT THE TRUSTEES MAY IN THEIR DISCRETION IMPOSE A
SALES CHARGE UPON INVESTMENTS IN THE TRUST.
SECTION 4. NO PRE-EMPTIVE RIGHTS. SHAREHOLDERS SHALL HAVE NO PRE-EMPTIVE OR
OTHER RIGHT TO SUBSCRIBE TO ANY ADDITIONAL SHARES OR OTHER SECURITIES ISSUED BY
THE TRUST OR THE TRUSTEES.
SECTION 5. PROVISIONS RELATING TO SERIES OF SHARES. WHENEVER NO SHARES OF A
SERIES ARE OUTSTANDING, THEN THE TRUSTEES MAY ABOLISH SUCH SERIES (OR ANY CLASS
OF SHARES OF A SERIES FOR WHICH THERE ARE NO OUTSTANDING SHARES). WHENEVER MORE
THAN ONE SERIES OF SHARES IS OUTSTANDING, THEN THE FOLLOWING PROVISIONS SHALL
APPLY:
(A) ASSETS BELONGING TO EACH SERIES. ALL CONSIDERATION RECEIVED BY THE TRUST
FOR THE ISSUE OR SALE OF SHARES OF A PARTICULAR SERIES, TOGETHER WITH ALL ASSETS
IN WHICH SUCH CONSIDERATION IS INVESTED OR REINVESTED, ALL INCOME, EARNINGS AND
PROCEEDS THEREOF, AND ANY FUNDS DERIVED FROM ANY REINVESTMENT OF SUCH PROCEEDS,
SHALL IRREVOCABLY BELONG TO THAT SERIES FOR ALL. PURPOSES, SUBJECT ONLY TO THE
RIGHTS OF CREDITORS, AND SHALL BE SO RECORDED UPON THE BOOKS OF THE TRUST. IN
THE EVENT THERE ARE ASSETS, INCOME, EARNINGS, AND PROCEEDS THEREOF WHICH ARE NOT
READILY IDENTIFIABLE AS BELONGING TO A PARTICULAR SERIES, THEN THE TRUSTEES
SHALL ALLOCATE SUCH ITEMS TO THE VARIOUS SERIES THEN EXISTING, IN SUCH MANNER
AND ON SUCH BASIS AS THEY, IN THEIR SOLE DISCRETION, DEEM FAIR AND EQUITABLE.
THE AMOUNT OF EACH SUCH ITEM ALLOCATED TO A PARTICULAR SERIES BY THE TRUSTEES
SHALL THEN BELONG TO THAT SERIES, AND EACH SUCH ALLOCATION SHALL BE CONCLUSIVE
AND BINDING UPON THE SHAREHOLDERS OF ALL SERIES FOR ALL PURPOSES.
(B) LIABILITIES BELONGING TO EACH SERIES. THE ASSETS BELONGING TO EACH
PARTICULAR SERIES SHALL BE CHARGED WITH THE LIABILITIES, EXPENSES, COSTS AND
RESERVES OF THE TRUST ATTRIBUTABLE TO THAT SERIES; ANY GENERAL LIABILITIES.
EXPENSES, COSTS AND RESERVES OF THE TRUST WHICH ARE NOT READILY IDENTIFIABLE AS
ATTRIBUTABLE TO A PARTICULAR SERIES SHALL BE ALLOCATED BY THE TRUSTEES TO THE
VARIOUS SERIES THEN EXISTING, IN SUCH MANNER AND ON SUCH BASIS AS THEY, IN THEIR
SOLE DISCRETION, DEEM FAIR AND EQUITABLE. EACH SUCH ALLOCATION SHALL BE
CONCLUSIVE AND BINDING UPON THE SHAREHOLDERS OF ALL SERIES FOR ALL PURPOSES.
(C) SERIES SHARES, DIVIDENDS AND LIQUIDATION. EACH SHARE OF EACH RESPECTIVE
CLASS OF A SERIES SHALL HAVE THE SAME RIGHTS AND PRO RATA BENEFICIAL INTEREST IN
THE ASSETS AND LIABILITIES OF THE SERIES AS ANY OTHER SUCH SHARE. ANY DIVIDENDS
PAID ON THE SHARES OF ANY SERIES SHALL ONLY BE PAYABLE FROM AND TO THE EXTENT OF
THE ASSETS (NET OF LIABILITIES) BELONGING TO THAT SERIES. IN THE EVENT OF
LIQUIDATION OF A SERIES, ONLY THE ASSETS (LESS PROVISION FOR LIABILITIES) OF
THAT SERIES SHALL BE DISTRIBUTED TO THE HOLDERS OF THE SHARES OF THAT SERIES.
(D) VOTING BY SERIES. EXCEPT AS PROVIDED IN THIS SECTION OR AS LIMITED BY
THE RIGHTS AND RESTRICTIONS OF ANY CLASS, EACH SHARE OF THE TRUST SHALL VOTE
WITH AND IN THE SAME MANNER AS ANY OTHER SHARE ON MATTERS SUBMITTED TO A VOTE OF
THE SHAREHOLDERS, WITHOUT DIFFERENTIATION AMONG VOTES FROM THE SEPARATE SERIES;
PROVIDED, HOWEVER, THAT (I) AS TO ANY MATTER WITH RESPECT TO WHICH A SEPARATE
VOTE OF ANY SERIES IS REQUIRED BY THE 1940 ACT OR WOULD BE REQUIRED UNDER THE
MASSACHUSETTS BUSINESS CORPORATION LAW IF THE TRUST WERE A MASSACHUSETTS
BUSINESS CORPORATION, SUCH REQUIREMENTS AS TO A SEPARATE VOTE BY THE SERIES
SHALL APPLY IN LIEU OF THE VOTING DESCRIBED ABOVE HEREIN; (II) IN THE EVENT THAT
THE SEPARATE VOTE REQUIREMENTS REFERRED TO IN (I) ABOVE APPLY WITH RESPECT TO
ONE OR MORE SERIES, THEN, SUBJECT TO (III) BELOW, THE SHARES OF ALL OTHER SERIES
SHALL VOTE WITHOUT DIFFERENTIATION AMONG THEIR VOTES; AND (III) AS TO ANY MATTER
WHICH DOES NOT AFFECT THE INTEREST OF A PARTICULAR SERIES, ONLY THE HOLDERS OF
SHARES OF THE ONE OR MORE AFFECTED SERIES SHALL BE ENTITLED TO VOTE.
ARTICLE IV
THE TRUSTEES
SECTION 1. MANAGEMENT OF THE TRUST. THE BUSINESS AND AFFAIRS OF THE TRUST
SHALL BE MANAGED BY THE TRUSTEES, AND THEY SHALL HAVE ALL POWERS NECESSARY AND
DESIRABLE TO CARRY OUT THAT RESPONSIBILITY.
SECTION 2. ELECTION OF TRUSTEES. DURING THE YEAR FOLLOWING THE END OF THE
TRUST'S FIRST FISCAL YEAR SUBSEQUENT TO ITS INITIAL PUBLIC OFFERING OF SHARES,
THE SHAREHOLDERS SHALL ELECT, AT A MEETING CALLED BY THE THEN TRUSTEES OF THE
TRUST, THE TRUSTEES WHO WILL SERVE FOR SUCH REGULAR TERMS AS MAY BE PROVIDED IN
THE BY-LAWS OF THE TRUST.
SECTION 3. TERM OF OFFICE OF TRUSTEES. THE TRUSTEES SHALL HOLD OFFICE DURING
THE LIFETIME OF THIS TRUST, AND UNTIL THE EXPIRATION OF THE TERM OF OFFICE FOR
WHICH EACH WAS ELECTED; EXCEPT (A) THAT ANY TRUSTEE MAY RESIGN HIS TRUST BY
WRITTEN INSTRUMENT SIGNED BY HIM AND DELIVERED TO THE OTHER TRUSTEES, WHICH
SHALL TAKE EFFECT UPON SUCH DELIVERY OR UPON SUCH LATER DATE AS IS SPECIFIED
THEREIN; (B) THAT ANY TRUSTEE MAY BE REMOVED AT ANY TIME BY WRITTEN INSTRUMENT
SIGNED BY AT LEAST TWO-THIRDS OF THE NUMBER OF TRUSTEES PRIOR TO SUCH REMOVAL,
SPECIFYING THE DATE WHEN SUCH REMOVAL SHALL BECOME EFFECTIVE; (C) THAT ANY
TRUSTEE WHO REQUESTS IN WRITING TO BE RETIRED OR WHO HAS BECOME MENTALLY OR
PHYSICALLY INCAPACITATED MAY BE RETIRED BY WRITTEN INSTRUMENT SIGNED BY A
MAJORITY OF THE OTHER TRUSTEES, SPECIFYING THE DATE OF HIS RETIREMENT; AND (D) A
TRUSTEE MAY BE REMOVED AT ANY SPECIAL MEETING OF SHAREHOLDERS OF THE TRUST BY A
VOTE OF TWO-THIRDS OF THE OUTSTANDING SHARES.
SECTION 4. TERMINATION OF SERVICE AND APPOINTMENT OF TRUSTEES. IN CASE OF THE
DEATH, RESIGNATION, RETIREMENT, REMOVAL OR MENTAL OR PHYSICAL INCAPACITY OF ANY
OF THE TRUSTEES, OR IN CASE A VACANCY SHALL, BY REASON OF AN INCREASE IN NUMBER,
OR FOR ANY OTHER REASON, EXIST, THE REMAINING TRUSTEES SHALL FILL SUCH VACANCY
BY APPOINTING FOR THE REMAINING TERM OF THE PREDECESSOR TRUSTEE SUCH OTHER
PERSON AS THEY IN THEIR DISCRETION SHALL SEE FIT. SUCH APPOINTMENT SHALL BE
EFFECTED BY THE SIGNING OF A WRITTEN INSTRUMENT BY A MAJORITY OF THE TRUSTEES IN
OFFICE. WITHIN THREE MONTHS OF SUCH APPOINTMENT, THE TRUSTEES SHALL CAUSE NOTICE
OF SUCH APPOINTMENT TO BE MAILED TO EACH SHAREHOLDER AT HIS ADDRESS AS RECORDED
ON THE BOOKS OF THE TRUST. AN APPOINTMENT OF A TRUSTEE MAY BE MADE BY THE
TRUSTEES THEN IN OFFICE AND NOTICE THEREOF MAILED TO SHAREHOLDERS AS AFORESAID
IN ANTICIPATION OF A VACANCY TO OCCUR BY REASON OF RETIREMENT, RESIGNATION OR
INCREASE IN NUMBER OF TRUSTEES EFFECTIVE AT A LATER DATE, PROVIDED THAT SAID
APPOINTMENT SHALL BECOME EFFECTIVE ONLY AT OR AFTER THE EFFECTIVE DATE OF SAID
RETIREMENT, RESIGNATION OR INCREASE IN NUMBER OF TRUSTEES. AS SOON AS ANY
TRUSTEE SO APPOINTED SHALL HAVE ACCEPTED THIS TRUST, THE TRUST ESTATE SHALL VEST
IN THE NEW TRUSTEE OR TRUSTEES, TOGETHER WITH THE CONTINUING TRUSTEES, WITHOUT
ANY FURTHER ACT OR CONVEYANCE, AND HE SHALL BE DEEMED A TRUSTEE HEREUNDER. ANY
APPOINTMENT AUTHORIZED BY THIS SECTION 4 IS SUBJECT TO THE PROVISIONS OF SECTION
16 (A) OF THE 1940 ACT.
SECTION 5. TEMPORARY ABSENCE OF TRUSTEE. ANY TRUSTEE MAY, BY POWER OF
ATTORNEY, DELEGATE HIS POWER FOR A PERIOD NOT EXCEEDING SIX MONTHS AT ANY ONE
TIME TO ANY OTHER TRUSTEE OR TRUSTEES, PROVIDED THAT IN NO CASE SHALL LESS THAN
TWO OF THE TRUSTEES PERSONALLY EXERCISE THEIR POWER HEREUNDER, EXCEPT AS HEREIN
OTHERWISE EXPRESSLY PROVIDED.
SECTION 6. NUMBER OF TRUSTEES. THE NUMBER OF TRUSTEES SERVING HEREUNDER AT
ANY TIME SHALL BE DETERMINED BY THE TRUSTEES THEMSELVES, BUT SHALL NOT BE LESS
THAN THREE (3) NOR MORE THAN FIFTEEN (15).
WHENEVER A VACANCY IN THE BOARD OF TRUSTEES SHALL OCCUR, UNTIL SUCH VACANCY
IS FILLED OR WHILE ANY TRUSTEE IS ABSENT FROM HIS STATE OF DOMICILE, OR IS
PHYSICALLY OR MENTALLY INCAPACITATED, THE OTHER TRUSTEES SHALL HAVE ALL THE
POWERS HEREUNDER AND THE CERTIFICATE SIGNED BY A MAJORITY OF THE OTHER TRUSTEES
OF SUCH VACANCY, ABSENCE OR INCAPACITY, SHALL BE CONCLUSIVE, PROVIDED, HOWEVER,
THAT NO VACANCY WHICH REDUCES THE NUMBER OF TRUSTEES BELOW THREE (3) SHALL
REMAIN UNFILLED FOR A PERIOD LONGER THAN SIX CALENDAR MONTHS.
SECTION 7. EFFECT OF DEATH, RESIGNATION, ETC., OF A TRUSTEE. THE DEATH,
RESIGNATION, RETIREMENT, REMOVAL, OR MENTAL OR PHYSICAL INCAPACITY OF THE
TRUSTEES, OR ANY ONE OF THEM SHALL NOT OPERATE TO ANNUL THE TRUST OR TO REVOKE
ANY EXISTING AGENCY CREATED PURSUANT TO THE TERMS OF THIS DECLARATION OF TRUST.
SECTION 8. OWNERSHIP OF THE TRUST. THE ASSETS OF THE TRUST SHALL BE HELD
SEPARATE AND APART FROM ANY ASSETS NOW OR HEREAFTER HELD IN ANY CAPACITY OTHER
THAN AS TRUSTEE HEREUNDER BY THE TRUSTEES OR BY ANY SUCCESSOR TRUSTEES. ALL OF
THE ASSETS OF THE TRUST SHALL AT ALL TIMES BE CONSIDERED AS VESTED IN THE
TRUSTEES. NO SHAREHOLDER SHALL BE DEEMED TO HAVE SEVERABLE OWNERSHIP IN ANY
INDIVIDUAL ASSET OF THE TRUST OR ANY RIGHT OF PARTITION OR POSSESSION THEREOF,
BUT EACH SHAREHOLDER SHALL HAVE A PROPORTIONATE UNDIVIDED BENEFICIAL INTEREST IN
THE TRUST.
ARTICLE V
POWERS OF THE TRUSTEES
SECTION 1. POWERS. THE TRUSTEES IN ALL INSTANCES SHALL ACT AS PRINCIPALS,
AND ARE AND SHALL BE FREE FROM THE CONTROL OF THE SHAREHOLDERS. THE TRUSTEES
SHALL HAVE FULL POWER AND AUTHORITY TO DO ANY AND ALL ACTS AND TO MAKE AND
EXECUTE ANY AND ALL CONTRACTS AND INSTRUMENTS THAT THEY MAY CONSIDER NECESSARY
OR APPROPRIATE IN CONNECTION WITH THE MANAGEMENT OF THE TRUST. THE TRUSTEES
SHALL NOT BE BOUND OR LIMITED BY PRESENT OR FUTURE LAWS OR CUSTOMS IN REGARD TO
INVESTMENT BY TRUSTEES OR FIDUCIARIES, BUT SHALL HAVE FULL AUTHORITY AND POWER
TO MAKE ANY AND ALL INVESTMENTS WHICH THEY, IN THEIR UNCONTROLLED DISCRETION,
SHALL DEEM PROPER TO ACCOMPLISH THE PURPOSE OF THIS TRUST. WITHOUT LIMITING THE
FOREGOING, THE TRUSTEES SHALL HAVE THE FOLLOWING SPECIFIC POWERS AND AUTHORITY,
SUBJECT TO ANY APPLICABLE LIMITATION IN THIS DECLARATION OF TRUST OR IN THE
BY-LAWS OF THE TRUST.
(A) TO BUY, AND INVEST FUNDS OF THE TRUST, IN SECURITIES INCLUDING, BUT NOT
LIMITED TO, COMMON STOCKS, PREFERRED STOCKS, BONDS, DEBENTURES, WARRANTS AND
RIGHTS TO PURCHASE SECURITIES, OPTIONS, CERTIFICATES OF BENEFICIAL INTEREST,
MONEY MARKET INSTRUMENTS, NOTES OR OTHER EVIDENCES OF INDEBTEDNESS ISSUED BY
CORPORATIONS, TRUSTS, ASSOCIATIONS, OR BANKING INSTITUTIONS, DOMESTIC OR
FOREIGN, OR ISSUED OR GUARANTEED BY THE UNITED STATES OF AMERICA OR ANY AGENCY
OR INSTRUMENTALITY THEREOF, BY THE GOVERNMENT OF ANY FOREIGN COUNTRY, BY ANY
STATE OF THE UNITED STATES (INCLUDING THE DISTRICT OF COLUMBIA, PUERTO RICO AND
GUAM) OR BY ANY POLITICAL SUBDIVISION OR AGENCY OR INSTRUMENTALITY OF ANY STATE
OR FOREIGN COUNTRY, OR IN "WHEN-ISSUED" OR "DELAYED-DELIVERY" CONTRACTS FOR ANY
SUCH SECURITIES, OR IN ANY REPURCHASE AGREEMENT (AGREEMENTS UNDER WHICH THE
SELLER AGREES AT THE TIME OF SALE TO REPURCHASE THE SECURITY AT AN AGREED TIME
AND PRICE); OR RETAIN TRUST ASSETS IN CASH, AND FROM TIME TO TIME CHANGE THE
INVESTMENTS CONSTITUTING THE ASSETS OF THE TRUST;
(B) TO ADOPT BY-LAWS NOT INCONSISTENT WITH THE DECLARATION OF TRUST
PROVIDING FOR THE CONDUCT OF THE BUSINESS OF THE TRUST AND TO AMEND AND REPEAL
THEM TO THE EXTENT THAT THEY DO NOT RESERVE THAT RIGHT TO THE SHAREHOLDERS;
(C) TO ELECT AND REMOVE SUCH OFFICERS AND APPOINT AND TERMINATE SUCH AGENTS
AS THEY CONSIDER APPROPRIATE;
(D) TO APPOINT OR OTHERWISE ENGAGE ONE OR MORE BANKS OR TRUST COMPANIES OR
MEMBER FIRMS OF ANY NATIONAL SECURITIES EXCHANGE REGISTERED UNDER THE SECURITIES
EXCHANGE ACT OF 1934 AS CUSTODIAN OF ANY ASSETS OF THE TRUST, SUBJECT TO ANY
CONDITIONS SET FORTH IN THIS DECLARATION OF TRUST OR IN THE BY-LAWS.
(E) TO APPOINT OR OTHERWISE ENGAGE CUSTODIAL AGENTS, TRANSFER AGENTS,
DIVIDEND DISBURSING AGENTS, SHAREHOLDER SERVICING AGENTS, INVESTMENT ADVISERS,
SUB-INVESTMENT ADVISERS, PRINCIPAL UNDERWRITERS, ADMINISTRATIVE SERVICE AGENTS,
AND SUCH OTHER AGENTS AS THE TRUSTEES MAY FROM TIME TO TIME APPOINT OR OTHERWISE
ENGAGE;
(F) TO PROVIDE FOR THE DISTRIBUTION OF INTERESTS OF THE TRUST EITHER THROUGH
A PRINCIPAL UNDERWRITER IN THE MANNER HEREINAFTER PROVIDED FOR OR BY THE TRUST
ITSELF, OR BOTH;
(G) TO SET RECORD DATES IN THE MANNER HEREINAFTER PROVIDED FOR;
(H) TO DELEGATE SUCH AUTHORITY AS THEY CONSIDER DESIRABLE TO A COMMITTEE OR
COMMITTEES COMPOSED OF TRUSTEES, INCLUDING WITHOUT LIMITATION, AN EXECUTIVE
COMMITTEE, OR TO ANY OFFICERS OF THE TRUST AND TO ANY AGENT, CUSTODIAN OR
UNDERWRITER;
(I) TO SELL OR EXCHANGE ANY OR ALL OF THE ASSETS OF THE TRUST, SUBJECT TO
THE PROVISIONS OF ARTICLE XII, SECTION 4(B) HEREOF;
(J) TO VOTE OR GIVE ASSENT, OR EXERCISE ANY RIGHTS OF OWNERSHIP, WITH
RESPECT TO STOCK OR OTHER SECURITIES OR PROPERTY; AND TO EXECUTE AND DELIVER
POWERS OF ATTORNEY TO SUCH PERSON OR PERSONS AS THE TRUSTEES SHALL DEEM PROPER,
GRANTING TO SUCH PERSON OR PERSONS SUCH POWER AND DISCRETION WITH RELATION TO
SECURITIES OR PROPERTY AS THE TRUSTEES SHALL DEEM PROPER;
(K) TO EXERCISE POWERS AND RIGHTS OF SUBSCRIPTION OR OTHERWISE WHICH IN ANY
MANNER ARISE OUT OF OWNERSHIP OF SECURITIES;
(1) TO HOLD ANY SECURITY OR PROPERTY IN A FORM NOT INDICATING ANY TRUST,
WHETHER IN BEARER, UNREGISTERED OR OTHER NEGOTIABLE FORM; OR EITHER IN ITS OWN
NAME OR IN THE NAME OF A CUSTODIAN OR A NOMINEE OR NOMINEES, SUBJECT IN EITHER
CASE TO GROUPER SAFEGUARDS ACCORDING TO THE USUAL PRACTICE OF MASSACHUSETTS
TRUST COMPANIES OR INVESTMENT COMPANIES;
(M) TO CONSENT TO OR PARTICIPATE IN ANY PLAN FOR THE REORGANIZATION,
CONSOLIDATION OR MERGER OF ANY CORPORATION OR CONCERN, ANY SECURITY OF WHICH IS
HELD IN THE TRUST; TO CONSENT TO ANY CONTRACT, LEASE, MORTGAGE, PURCHASE, OR
SALE OF PROPERTY BY SUCH CORPORATION OR CONCERN, AND TO PAY CALLS OR
SUBSCRIPTIONS WITH RESPECT TO ANY SECURITY HELD IN THE TRUST;
(N) TO ENGAGE IN AND TO PROSECUTE, COMPOUND, COMPROMISE, ABANDON, OR ADJUST,
BY ARBITRATION, OR OTHERWISE, ANY ACTIONS, SUITS, PROCEEDINGS, DISPUTES, CLAIMS,
DEMANDS, AND THINGS RELATING TO THE TRUST, AND OUT OF THE ASSETS OF THE TRUST TO
PAY, OR TO SATISFY, ANY DEBTS, CLAIMS OR EXPENSES INCURRED IN CONNECTION
THEREWITH, INCLUDING THOSE OF LITIGATION, UPON ANY EVIDENCE THAT THE TRUSTEES
MAY DEEM SUFFICIENT (SUCH POWERS SHALL INCLUDE WITHOUT LIMITATION ANY ACTIONS,
SUITS, PROCEEDINGS, DISPUTES, CLAIMS, DEMANDS AND THINGS RELATING TO THE TRUST
WHEREIN ANY OF THE TRUSTEES MAY BE NAMED INDIVIDUALLY AND THE SUBJECT MATTER OF
WHICH ARISES BY REASON OF BUSINESS FOR OR ON BEHALF OF THE TRUST);
(O) TO MAKE DISTRIBUTIONS OF INCOME AND OF CAPITAL GAINS TO SHAREHOLDERS IN
THE MANNER HEREINAFTER PROVIDED FOR;
(P) TO BORROW MONEY AND ENTER INTO REVERSE REPURCHASE AGREEMENTS (AGREEMENTS
IN WHICH THE TRUST SELLS ASSETS WHILE CONCURRENTLY AGREEING TO REPURCHASE SUCH
ASSETS AT A LATER DATE AT A SPECIFIC PRICE) IF SUCH BORROWINGS ARE MADE
TEMPORARILY FOR EXTRAORDINARY OR EMERGENCY PURPOSES OR TO PERMIT REDEMPTIONS OF
SHARES WITHOUT SELLING PORTFOLIO SECURITIES. ANY BORROWINGS HEREUNDER MAY BE
MADE WITH OR WITHOUT COLLATERAL SECURITY AND THE TRUSTEES MAY, IN THEIR
DISCRETION, PLEDGE, MORTGAGE, CHARGE, HYPOTHECATE OR OTHERWISE ENCUMBER THE
GROSS ASSETS OF THE TRUST AS SECURITY FOR ANY LOANS OR REVERSE REPURCHASE
AGREEMENTS, SUBJECT TO THE LIMITATIONS PROVIDED HEREIN.
(Q) TO LEND PORTFOLIO SECURITIES OF THE TRUST PURSUANT TO POLICIES
ESTABLISHED BY THE TRUSTEES.
(R) TO INVEST IN SECURITIES HAVING LEGAL OR CONTRACTUAL RESTRICTIONS ON
THEIR RESALE OR FOR WHICH NO READILY AVAILABLE MARKET EXISTS.
(S) FROM TIME TO TIME TO ISSUE AND SELL THE SHARES OF THE TRUST EITHER FOR
CASH OR FOR PROPERTY WHENEVER AND IN SUCH AMOUNTS AS THE TRUSTEES MAY DEEM
DESIRABLE, BUT SUBJECT TO THE LIMITATION SET FORTH IN SECTION 3 OF ARTICLE III.
(T) TO PURCHASE INSURANCE OF ANY KIND, INCLUDING, WITHOUT LIMITATION,
INSURANCE ON BEHALF OF ANY PERSON WHO IS OR WAS A TRUSTEE, OFFICER, EMPLOYEE OR
AGENT OF THE TRUST, OR IS OR WAS SERVING AT THE REQUEST OF THE TRUST AS A
TRUSTEE, DIRECTOR, OFFICER, AGENT OR EMPLOYEE OF ANOTHER CORPORATION,
PARTNERSHIP, JOINT VENTURE, TRUST OR OTHER ENTERPRISE AGAINST ANY LIABILITY
ASSERTED AGAINST HIM AND INCURRED BY HIM IN ANY SUCH CAPACITY OR ARISING OUT OF
HIS STATUS AS SUCH.
NO ONE DEALING WITH THE TRUSTEES SHALL BE UNDER OBLIGATION TO MAKE ANY INQUIRY
CONCERNING THE AUTHORITY OF THE TRUSTEES.
SECTION 2. TRUSTEES AND OFFICERS AS SHAREHOLDERS. ANY TRUSTEE, OFFICER OR
OTHER AGENT OF THE TRUST MAY ACQUIRE, OWN AND DISPOSE OF SHARES OF THE TRUST TO
THE SAME EXTENT AS IF HE WERE NOT A TRUSTEE, OFFICER OR AGENT; AND THE TRUSTEES
MAY ISSUE AND SELL OR CAUSE TO BE ISSUED OR SOLD SHARES OF THE TRUST TO AND BUY
SUCH SHARES FROM ANY SUCH PERSON OR ANY FIRM OR COMPANY IN WHICH HE IS AN
INTERESTED PERSON SUBJECT ONLY TO THE GENERAL LIMITATIONS HEREIN CONTAINED AS TO
THE SALE AND PURCHASE OF SUCH SHARES; AND ALL SUBJECT TO ANY RESTRICTIONS WHICH
MAY BE CONTAINED IN THE BY-LAWS.
SECTION 3. PARTIES TO CONTRACT. THE TRUSTEES MAY ENTER INTO ANY CONTRACT OF
THE CHARACTER DESCRIBED IN SECTIONS 1, 2, 3, OR 4 OF ARTICLE VII, OR IN ARTICLE
IX HEREOF, OR OF ANY OTHER CHARACTER NOT PROHIBITED BY THE 1940 ACT WITH ANY
CORPORATION, FIRM, TRUST OR ASSOCIATION, ALTHOUGH ONE OR MORE OF THE
SHAREHOLDERS, TRUSTEES, OFFICERS, EMPLOYEES OR AGENTS OF THE TRUST OR THEIR
AFFILIATES MAY BE AN OFFICER, DIRECTOR, TRUSTEE, SHAREHOLDER OR INTERESTED
PERSON OF SUCH OTHER PARTY TO THE CONTRACT, AND NO SUCH CONTRACT SHALL BE
INVALIDATED OR RENDERED VOIDABLE BY REASON OF THE EXISTENCE OF ANY SUCH
RELATIONSHIP, NOR SHALL ANY PERSON HOLDING SUCH RELATIONSHIP BE LIABLE MERELY BY
REASON OF SUCH RELATIONSHIP FOR ANY LOSS OR EXPENSE TO THE TRUST UNDER OR BY
REASON OF SAID CONTRACT OR ACCOUNTABLE FOR ANY PROFIT REALIZED DIRECTLY OR
INDIRECTLY THEREFROM, IN THE ABSENCE OF ACTUAL FRAUD. THE SAME PERSON (INCLUDING
A FIRM, CORPORATION, TRUST OR ASSOCIATION) MAY BE THE OTHER PARTY TO CONTRACTS
ENTERED INTO PURSUANT TO SECTIONS 1, 2, 3, AND 4 OF ARTICLE VII OR ARTICLE IX OR
ANY OTHER CAPACITY DEEMED LEGAL UNDER THE 1940 ACT, AND ANY INDIVIDUAL MAY BE
FINANCIALLY INTERESTED OR OTHERWISE AN INTERESTED PERSON OF PARTIES TO ANY OR
ALL OF THE CONTRACTS MENTIONED IN THIS SECTION 4.
ARTICLE VI
TRUSTEES' EXPENSES AND COMPENSATION
SECTION 1. TRUSTEE REIMBURSEMENT. THE TRUSTEES SHALL BE REIMBURSED FROM THE
TRUST ESTATE FOR ALL OF THEIR EXPENSES AND DISBURSEMENTS NOT OTHERWISE
REIMBURSED, INCLUDING, WITHOUT LIMITATION, EXPENSES OF ORGANIZING THE TRUST AND
CONTINUING ITS EXISTENCE; FEES AND EXPENSES OF TRUSTEES AND OFFICERS OF THE
TRUST; FEES FOR INVESTMENT ADVISORY SERVICES, ADMINISTRATIVE SERVICES AND
PRINCIPAL UNDERWRITING SERVICES PROVIDED FOR IN ARTICLE VII, SECTIONS 1, 2, AND
3; FEES AND EXPENSES OF PREPARING AND PRINTING ITS REGISTRATION STATEMENTS UNDER
THE SECURITIES ACT OF 1933 AND THE INVESTMENT COMPANY ACT OF 1940 AND ANY
AMENDMENTS THERETO; EXPENSES OF REGISTERING AND QUALIFYING THE TRUST AND ITS
SHARES UNDER FEDERAL AND STATE LAWS AND REGULATIONS; EXPENSES OF PREPARING,
PRINTING AND DISTRIBUTING PROSPECTUSES AND ANY AMENDMENTS THEREOF SENT TO
SHAREHOLDERS, UNDERWRITERS, BROKER-DEALERS AND TO INVESTORS WHO MAY BE
CONSIDERING THE PURCHASE OF SHARES; EXPENSES OF REGISTERING, LICENSING OR OTHER
AUTHORIZATION OF THE TRUST AS A BROKER-DEALER AND OF ITS OFFICERS AS AGENTS AND
SALESMEN UNDER FEDERAL AND STATE LAWS AND REGULATIONS; INTEREST EXPENSE, TAXES,
FEES AND COMMISSIONS OF EVERY KIND; EXPENSES OF ISSUE (INCLUDING COST OF SHARE
CERTIFICATES), REPURCHASE AND REDEMPTION OF SHARES, INCLUDING EXPENSES
ATTRIBUTABLE TO A PROGRAM OF PERIODIC ISSUE; CHARGES AND EXPENSES OF CUSTODIANS,
TRANSFER AGENTS, DIVIDEND DISBURSING AGENTS, SHAREHOLDER SERVICING AGENTS AND
REGISTRARS; PRINTING AND MAILING COSTS; AUDITING, ACCOUNTING AND LEGAL EXPENSES;
REPORTS TO SHAREHOLDERS AND GOVERNMENTAL OFFICERS AND COMMISSIONS; EXPENSES OF
MEETINGS OF SHAREHOLDERS AND PROXY SOLICITATIONS THEREFOR; INSURANCE EXPENSES;
ASSOCIATION MEMBERSHIP DUES AND NONRECURRING ITEMS AS MAY ARISE, INCLUDING ALL
LOSSES AND LIABILITIES BY THEM INCURRED IN ADMINISTERING THE TRUST, INCLUDING
EXPENSES INCURRED IN CONNECTION WITH LITIGATION, PROCEEDINGS AND CLAIMS AND THE
OBLIGATIONS OF THE TRUST UNDER ARTICLE XI, HEREOF TO INDEMNIFY ITS TRUSTEES,
OFFICERS, EMPLOYEES, SHAREHOLDERS AND AGENTS, AND FOR THE PAYMENT OF SUCH
EXPENSES, DISBURSEMENTS, LOSSES AND LIABILITIES, THE TRUSTEES SHALL HAVE A LIEN
ON THE TRUST ESTATE PRIOR TO ANY RIGHTS OR INTERESTS OF THE SHAREHOLDERS
THERETO. THIS SECTION SHALL NOT PRECLUDE THE TRUST FROM DIRECTLY PAYING ANY OF
THE AFOREMENTIONED FEES AND EXPENSES.
SECTION 2. TRUSTEE COMPENSATION. THE TRUSTEES SHALL BE ENTITLED TO
COMPENSATION FROM THE TRUST FOR THEIR RESPECTIVE SERVICES AS TRUSTEES, TO BE
DETERMINED FROM TIME TO TIME BY VOTE OF THE TRUSTEES, AND THE TRUSTEES SHALL
ALSO DETERMINE THE COMPENSATION OF ALL OFFICERS, CONSULTANTS AND AGENTS WHOM
THEY MAY ELECT OR APPOINT. THE TRUST MAY PAY ANY TRUSTEE OR ANY CORPORATION,
FIRM, TRUST OR ASSOCIATION OF WHICH A TRUSTEE IS AN INTERESTED PERSON FOR
SERVICES RENDERED TO THE TRUST IN ANY CAPACITY NOT PROHIBITED BY THE 1940 ACT,
AND SUCH PAYMENTS SHALL NOT BE DEEMED COMPENSATION FOR SERVICES AS A TRUSTEE
UNDER THE FIRST SENTENCE OF THIS SECTION 2 OF ARTICLE VI.
ARTICLE VII
INVESTMENT ADVISER, ADMINISTRATIVE SERVICES,
PRINCIPAL UNDERWRITER AND TRANSFER AGENT
SECTION 1. INVESTMENT ADVISER. SUBJECT TO A MAJORITY SHAREHOLDER VOTE, THE
TRUSTEES MAY IN THEIR DISCRETION FROM TIME TO TIME ENTER INTO AN INVESTMENT
ADVISORY CONTRACT WHEREBY THE OTHER PARTY TO SUCH CONTRACT SHALL UNDERTAKE TO
FURNISH THE TRUSTEES INVESTMENT ADVISORY SERVICES UPON SUCH TERMS AND CONDITIONS
AND FOR SUCH COMPENSATION AS THE TRUSTEES MAY IN THEIR DISCRETION DETERMINE.
SUBJECT TO A MAJORITY SHAREHOLDER VOTE, THE INVESTMENT ADVISER MAY ENTER INTO A
SUB-INVESTMENT ADVISORY CONTRACT TO RECEIVE INVESTMENT ADVICE, STATISTICAL AND
FACTUAL INFORMATION FROM THE SUB-INVESTMENT ADVISER UPON SUCH TERMS AND
CONDITIONS AND FOR SUCH COMPENSATION AS THE TRUSTEES MAY IN THEIR DISCRETION
AGREE TO. NOTWITHSTANDING ANY PROVISIONS OF THIS DECLARATION OF TRUST, THE
TRUSTEES MAY AUTHORIZE THE INVESTMENT ADVISER OR SUB-INVESTMENT ADVISER OR ANY
PERSON FURNISHING ADMINISTRATIVE PERSONNEL AND SERVICES AS SET FORTH IN ARTICLE
VII, SECTION 2 (SUBJECT TO SUCH GENERAL OR SPECIFIC INSTRUCTIONS AS THE TRUSTEES
MAY FROM TIME TO TIME ADOPT) TO EFFECT PURCHASES, SALES OR EXCHANGES OF
PORTFOLIO SECURITIES OF THE TRUST ON BEHALF OF THE TRUSTEES OR MAY AUTHORIZE ANY
OFFICER OR TRUSTEE TO EFFECT SUCH PURCHASES, SALES OR EXCHANGES PURSUANT TO
RECOMMENDATIONS OF THE INVESTMENT ADVISER (AND ALL WITHOUT FURTHER ACTION BY THE
TRUSTEES). ANY SUCH PURCHASES, SALES AND EXCHANGES SHALL BE DEEMED TO HAVE BEEN
AUTHORIZED BY THE TRUSTEES. THE TRUSTEES MAY ALSO AUTHORIZE THE INVESTMENT
ADVISER TO DETERMINE WHAT FIRMS SHALL BE EMPLOYED TO EFFECT TRANSACTIONS IN
SECURITIES FOR THE ACCOUNT OF THE TRUST AND TO DETERMINE WHAT FIRMS SHALL
PARTICIPATE IN ANY SUCH TRANSACTIONS OR SHALL SHARE IN COMMISSIONS OR FEES
CHARGED IN CONNECTION WITH SUCH TRANSACTIONS.
SECTION 2. ADMINISTRATIVE SERVICES. THE TRUSTEES MAY IN THEIR DISCRETION
FROM TIME TO TIME CONTRACT FOR ADMINISTRATIVE PERSONNEL AND SERVICES WHEREBY THE
OTHER PARTY SHALL AGREE TO PROVIDE THE TRUSTEES ADMINISTRATIVE PERSONNEL AND
SERVICES TO OPERATE THE TRUST ON A DAILY BASIS, ON SUCH TERMS AND CONDITIONS AS
THE TRUSTEES MAY IN THEIR DISCRETION DETERMINE. SUCH SERVICES MAY BE PROVIDED BY
ONE OR MORE ENTITIES.
SECTION 3. PRINCIPAL UNDERWRITER. THE TRUSTEES MAY IN THEIR DISCRETION FROM
TIME TO TIME ENTER INTO AN EXCLUSIVE OR NON-EXCLUSIVE CONTRACT OR CONTRACTS
PROVIDING FOR THE SALE OF THE SHARES OF THE TRUST TO NET THE TRUST NOT LESS THAN
THE AMOUNT PROVIDED IN ARTICLE III, SECTION 3 HEREOF, WHEREBY THE TRUST MAY
EITHER AGREE TO SELL THE SHARES TO THE OTHER PARTY TO THE CONTRACT OR APPOINT
SUCH OTHER PARTY ITS SALES AGENT FOR SUCH SHARES. IN EITHER CASE, THE CONTRACT
SHALL BE ON SUCH TERMS AND CONDITIONS AS THE TRUSTEES MAY IN THEIR DISCRETION
DETERMINE NOT INCONSISTENT WITH THE PROVISIONS OF THIS ARTICLE VII; AND SUCH
CONTRACTS MAY ALSO PROVIDE FOR THE REPURCHASE OR SALES OF SHARES OF THE TRUST BY
SUCH OTHER PARTY AS PRINCIPAL OR AS AGENT OF THE TRUST AND MAY PROVIDE THAT THE
OTHER PARTY MAY MAINTAIN A MARKET FOR SHARES OF THE TRUST.
SECTION 4. TRANSFER AGENT. THE TRUSTEES MAY IN THEIR DISCRETION FROM TIME TO
TIME ENTER INTO TRANSFER AGENCY AND SHAREHOLDER SERVICES CONTRACTS WHEREBY THE
OTHER PARTY SHALL UNDERTAKE TO FURNISH THE TRUSTEES TRANSFER AGENCY AND
SHAREHOLDER SERVICES. THE CONTRACTS SHALL BE ON SUCH TERMS AND CONDITIONS AS THE
TRUSTEES MAY IN THEIR DISCRETION DETERMINE NOT INCONSISTENT WITH THE PROVISIONS
OF THIS DECLARATION OF TRUST. SUCH SERVICES MAY BE PROVIDED BY ONE OR MORE
ENTITIES.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
SECTION 1. VOTING POWERS. THE SHAREHOLDERS SHALL HAVE POWER TO VOTE (I) FOR
THE ELECTION OF TRUSTEES AS PROVIDED IN ARTICLE IV, SECTION 2; (II) FOR THE
REMOVAL OF TRUSTEES AS PROVIDED IN ARTICLE IV, SECTION 3(D); (III) WITH RESPECT
TO ANY INVESTMENT ADVISER OR SUB-INVESTMENT ADVISER AS PROVIDED IN ARTICLE VII,
SECTION 1; (IV) WITH RESPECT TO THE AMENDMENT OF THIS DECLARATION OF TRUST AS
PROVIDED IN ARTICLE XII, SECTION 7; (V) TO THE SAME EXTENT AS THE SHAREHOLDERS
OF A MASSACHUSETTS BUSINESS CORPORATION AS TO WHETHER OR NOT A COURT ACTION,
PROCEEDING OR CLAIM SHOULD BE BROUGHT OR MAINTAINED DERIVATIVELY OR AS A CLASS
ACTION ON BEHALF OF THE TRUST OR THE SHAREHOLDERS; AND (VI) WITH RESPECT TO SUCH
ADDITIONAL MATTERS RELATING TO THE TRUST AS MAY BE REQUIRED BY LAW, BY THIS
DECLARATION OF TRUST, OR THE BY-LAWS OF THE TRUST OR ANY REGULATION OF THE TRUST
BY THE COMMISSION OR ANY STATE, OR AS THE TRUSTEES MAY CONSIDER DESIRABLE. EACH
WHOLE SHARE SHALL BE ENTITLED TO ONE VOTE AS TO ANY MATTER ON WHICH IT IS
ENTITLED TO VOTE, AND EACH FRACTIONAL SHARE SHALL BE ENTITLED TO A PROPORTIONATE
FRACTIONAL VOTE. THERE SHALL BE NO CUMULATIVE VOTING IN THE ELECTION OF
TRUSTEES. UNTIL SHARES ARE ISSUED, THE TRUSTEES MAY EXERCISE ALL RIGHTS OF
SHAREHOLDERS AND MAY TAKE ANY ACTION REQUIRED OR PERMITTED BY LAW, THIS
DECLARATION OF TRUST OR ANY BY-LAWS OF THE TRUST TO BE TAKEN BY SHAREHOLDERS.
SECTION 2. MEETINGS. SHAREHOLDER MEETINGS SHALL BE :FIELD AS SPECIFIED IN
SECTION 2 OF ARTICLE IV AND IN THE BY-LAWS AT THE PRINCIPAL OFFICE OF THE TRUST
OR AT SUCH OTHER PLACE AS THE TRUSTEES MAY DESIGNATE. SPECIAL MEETINGS OF THE
SHAREHOLDERS MAY BE CALLED BY THE TRUSTEES OR BY OFFICERS OF THE TRUST GIVEN
SUCH AUTHORITY IN THE BY-LAWS AND SHALL BE CALLED BY THE TRUSTEES AT A PLACE
DESIGNATED BY THEM UPON THE WRITTEN REQUEST OF SHAREHOLDERS OWNING AT LEAST
ONE-TENTH OF THE OUTSTANDING SHARES ENTITLED TO VOTE. SHAREHOLDERS SHALL BE
ENTITLED TO AT LEAST TEN DAYS' NOTICE OF ANY MEETING.
SECTION 3. QUORUM, AND REQUIRED VOTE. EXCEPT AS OTHERWISE PROVIDED BY LAW, TO
CONSTITUTE A QUORUM FOR THE TRANSACTION OF ANY BUSINESS AT ANY MEETING OF
SHAREHOLDERS THERE MUST BE PRESENT, IN PERSON OR BY PROXY, HOLDERS OF ONE-FOURTH
OF THE TOTAL NUMBER OF SHARES OF THE TRUST THEN OUTSTANDING AND ENTITLED TO VOTE
AT SUCH MEETING. IF A QUORUM, AS ABOVE DEFINED, SHALL NOT BE PRESENT FOR THE
PURPOSE OF ANY VOTE THAT MAY PROPERLY COME BEFORE THE MEETING, THE SHAREHOLDERS
PRESENT IN PERSON OR BY PROXY AND ENTITLED TO VOTE AT SUCH MEETING ON SUCH
MATTER HOLDING A MAJORITY OF THE SHARES PRESENT ENTITLED TO VOTE ON SUCH MATTER
MAY BY VOTE ADJOURN THE MEETING FROM TIME TO TIME TO BE HELD AT THE SAME PLACE
WITHOUT FURTHER NOTICE THAN BY ANNOUNCEMENT TO BE GIVEN AT THE MEETING UNTIL A
QUORUM, AS ABOVE DEFINED, ENTITLED TO VOTE ON SUCH MATTER SHALL BE PRESENT,
WHEREUPON ANY SUCH MATTER MAY BE VOTED UPON AT THE MEETING AS THOUGH HELD WHEN
ORIGINALLY CONVENED. SUBJECT TO ANY APPLICABLE REQUIREMENT OF LAW OR OF THIS
DECLARATION OF TRUST OR THE BY-LAWS, A PLURALITY OF THE VOTES CAST SHALL ELECT
TRUSTEE AND ALL OTHER MATTERS SHALL BE DECIDED BY A MAJORITY OF THE VOTES CAST
ENTITLED TO VOTE THEREON.
SECTION 4. PROXIES. ANY VOTE BY A SHAREHOLDER OF THE TRUST MAY BE MADE IN
PERSON OR BY PROXY, PROVIDED THAT NO PROXY SHALL BE VOTED AT ANY MEETING UNLESS
IT SHALL HAVE BEEN PLACED ON FILE WITH THE TRUSTEES OR THEIR DESIGNATE PRIOR TO
THE TIME THE VOTE IS TAKEN. PURSUANT TO A RESOLUTION OF A MAJORITY OF THE
TRUSTEES, PROXIES MAY BE SOLICITED IN THE NAME OF ONE OR MORE TRUSTEES OR ONE OR
MORE OFFICERS OF THE TRUST. ONLY SHAREHOLDERS OF RECORD SHALL BE ENTITLED TO
VOTE. A PROXY PURPORTING TO BE EXECUTED BY OR ON BEHALF OF A SHAREHOLDER SHALL
BE DEEMED VALID UNLESS CHALLENGED AT OR PRIOR TO ITS EXERCISE, AND THE BURDEN OF
PROVING INVALIDITY SHALL REST ON THE CHALLENGER.
SECTION 5. ADDITIONAL PROVISIONS. THE BY-LAWS MAY INCLUDE FURTHER PROVISIONS
FOR SHAREHOLDERS' VOTES AND MEETINGS AND RELATED MATTERS.
ARTICLE IX
CUSTODIANS
SECTION 1. APPOINTMENT OF CUSTODIAN AND DUTIES. THE TRUSTEES SHALL APPOINT
OR OTHERWISE ENGAGE A BANK OR TRUST COMPANY HAVING AN AGGREGATE CAPITAL, SURPLUS
AND UNDIVIDED PROFITS (AS SHOWN IN ITS LAST PUBLISHED REPORT) OF AT LEAST TWO
MILLION DOLLARS ($2,000,000) AS ITS CUSTODIAN WITH AUTHORITY AS ITS AGENT, BUT
SUBJECT TO SUCH RESTRICTIONS, LIMITATIONS AND OTHER REQUIREMENTS, IF ANY, AS MAY
BE CONTAINED IN THE BY-LAWS OF THE TRUST:
(1) TO RECEIVE AND HOLD SECURITIES OWNED BY THE TRUST AND DELIVER THE SAME
UPON WRITTEN ORDER
(2) TO RECEIVE AND RECEIPT FOR ANY MONEYS DUE TO THE TRUST AND DEPOSIT THE
SAME IN ITS OWN BANKING DEPARTMENT OR ELSEWHERE AS THE TRUSTEES MAY DIRECT;
(3) TO DISBURSE SUCH FUNDS UPON ORDERS OR VOUCHERS;
(4) TO KEEP, IF AUTHORIZED TO DO SO BY THE TRUSTEES, THE BOOKS AND ACCOUNTS
OF THE TRUST AND FURNISH CLERICAL AND ACCOUNTING SERVICES; AND
(5) TO COMPUTE, IF AUTHORIZED TO DO SO BY THE TRUSTEES, THE ACCUMULATED NET
INCOME OF THE TRUST AND THE NET ASSET VALUE OF THE SHARES IN ACCORDANCE WITH THE
PROVISIONS HEREOF;
ALL UPON SUCH BASIS OF COMPENSATION AS MAY BE AGREED UPON BETWEEN THE TRUSTEES
AND THE CUSTODIAN. IF SO DIRECTED BY A MAJORITY SHAREHOLDER VOTE, THE CUSTODIAN
SHALL DELIVER AND PAY OVER ALL PROPERTY OF THE TRUST HELD BY IT AS SPECIFIED IN
SUCH VOTE.
THE TRUSTEES MAY ALSO AUTHORIZE THE CUSTODIAN TO EMPLOY ONE OR MORE
SUB-CUSTODIANS FROM TIME TO TIME TO PERFORM SUCH OF THE ACTS AND SERVICES OF THE
CUSTODIAN AND UPON SUCH TERMS AND CONDITIONS, AS MAY BE AGREED UPON BETWEEN THE
CUSTODIAN AND SUCH SUB-CUSTODIAN AND APPROVED BY THE TRUSTEES, PROVIDED THAT IN
EVERY CASE SUCH SUB-CUSTODIAN SHALL BE A BANK OR TRUST COMPANY ORGANIZED UNDER
THE LAWS OF THE UNITED STATES OR ONE OF THE STATES THEREOF AND HAVING AN
AGGREGATE CAPITAL, SURPLUS AND UNDIVIDED PROFITS (AS SHOWN IN ITS LAST,
PUBLISHED REPORT) OF AT LEAST TWO MILLION DOLLARS ($2,000,000) OR A MEMBER FIRM
OF A NATIONAL SECURITIES EXCHANGE REGISTERED UNDER THE SECURITIES EXCHANGE ACT
OF 1934.
SECTION 2. CENTRAL CERTIFICATE SYSTEMSUBJECT TO SUCH RULES, REGULATIONS AND
ORDERS AS THE COMMISSION MAY ADOPT, THE TRUSTEES MAY DIRECT THE CUSTODIAN TO
DEPOSIT ALL OR ANY PART OF THE SECURITIES OWNED BY THE TRUST IN A SYSTEM FOR THE
CENTRAL HANDLING OF SECURITIES ESTABLISHED BY A NATIONAL SECURITIES EXCHANGE OR
A NATIONAL SECURITIES ASSOCIATION REGISTERED WITH THE COMMISSION UNDER THE
SECURITIES EXCHANGE ACT OF 1934, OR SUCH OTHER PERSON AS MAY BE PERMITTED BY THE
COMMISSION OR OTHERWISE IN ACCORDANCE WITH THE 1940 ACT, PURSUANT TO WHICH
SYSTEM ALL SECURITIES OF ANY PARTICULAR CLASS OR SERIES OF ANY ISSUER DEPOSITED
WITHIN THE SYSTEM ARE TREATED AS FUNGIBLE AND MAY BE TRANSFERRED OR PLEDGED BY
BOOKKEEPING ENTRY WITHOUT PHYSICAL DELIVERY OF SUCH SECURITIES, PROVIDED THAT
ALL SUCH DEPOSITS SHALL BE SUBJECT TO WITHDRAWAL ONLY UPON THE ORDER OF THE
CUSTODIAN AT THE DIRECTION OF THE TRUSTEES.
SECTION 3. SPECIAL CUSTODIANS. THE TRUSTEES MAY APPOINT OR OTHERWISE ENGAGE
ANY INSTITUTION WHICH WOULD BE PERMITTED TO ACT AS A SUB-CUSTODIAN HEREUNDER TO
ACT AS A SPECIAL CUSTODIAN OF THE TRUST. ANY SPECIAL CUSTODIAN WHICH IS A MEMBER
FIRM OF A NATIONAL SECURITIES EXCHANGE SHALL HAVE CUSTODY ONLY OF SECURITIES
OWNED BY THE TRUST AND SHALL NOT HOLD ANY OF ITS CASH. SPECIAL CUSTODIANS SHALL
BE APPOINTED PURSUANT TO A WRITTEN AGREEMENT APPROVED AND THEREAFTER AT LEAST
ANNUALLY RATIFIED BY THE TRUSTEES, AND ANY SUCH WRITTEN AGREEMENT SHALL MEET
SUCH REQUIREMENTS AS MAY BE SPECIFIED BY LAW OR BY THE REGULATIONS OF THE
COMMISSION. ANY SUCH WRITTEN AGREEMENT WITH A MEMBER FIRM OF A NATIONAL
SECURITIES EXCHANGE SHALL ALSO REQUIRE THAT THE SPECIAL CUSTODIAN SHALL DELIVER
TO THE CUSTODIAN ITS RECEIPT, EVIDENCING THAT IT HOLDS THE SPECIFIC SECURITIES
IN QUESTION ON BEHALF OF THE TRUST IN ITS SAFEKEEPING, BEFORE ANY PAYMENT CAN BE
MADE FOR SUCH SECURITIES BY THE TRUST. SPECIAL CUSTODIANS SHALL BE USED BY THE
TRUST ONLY FOR PURPOSES OF SAFEKEEPING DESIGNATED TYPES OF SECURITIES FOR
PERIODS OF LIMITED DURATION IN CASES WHERE, IN THE OPINION OF THE TRUSTEES,
OFFICERS OF THE TRUST, ITS INVESTMENT ADVISER OR OTHER AUTHORIZED AGENT, SUCH
SAFEKEEPING SERVICES WOULD BE MORE APPROPRIATE OR CONVENIENT TO THE TRUST THAN
THE SAFEKEEPING OF SUCH SECURITIES WITH THE CUSTODIAN.
SECTION 4. SPECIAL DEPOSITORIES. THE TRUSTEES MAY BY RESOLUTION APPOINT AS
SPECIAL DEPOSITORIES ANY COMMERCIAL BANKS INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION HAVING AGGREGATE CAPITAL, SURPLUS AND UNDIVIDED PROFITS
(AS SHOWN IN THEIR RESPECTIVE LAST PUBLISHED REPORTS) OF AT LEAST TWO MILLION
DOLLARS ($2,000,000). THE TRUST MAY MAINTAIN WITH A SPECIAL DEPOSITORY ONLY
DEMAND DEPOSIT ACCOUNTS AND SHALL NOT PERMIT THE AGGREGATE BALANCES IN SUCH
ACCOUNTS TO EXCEED THE AMOUNT OF ANY FIDELITY BOND COVERING ANY OFFICER OF THE
TRUST AUTHORIZED BY THE TRUSTEES TO HAVE SIGNATURE AUTHORITY OVER SUCH DEMAND
DEPOSIT ACCOUNTS.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
SECTION 1. DISTRIBUTIONS.
(A) THE TRUSTEES MAY FROM TIME TO TIME DECLARE AND PAY DIVIDENDS, AND THE
AMOUNT OF SUCH DIVIDENDS AND THE PAYMENT OF THEM SHALL BE WHOLLY IN THE
DISCRETION OF THE TRUSTEES.
(B) THE TRUSTEES MAY, ON EACH DAY ACCUMULATED NET INCOME OF THE TRUST (AS
DEFINED IN SECTION 3 OF THIS ARTICLE X) IS DETERMINED, DECLARE SUCH ACCUMULATED
NET INCOME AS A DIVIDEND TO SHAREHOLDERS OF RECORD AT SUCH TIME AS THE TRUSTEES
SHALL DESIGNATE, PAYABLE IN ADDITIONAL FULL AND FRACTIONAL SHARES OR IN CASH.
THE TRUSTEES MAY, IF THEY DEEM IT ADVISABLE, DECLARE A NEGATIVE DIVIDEND (OR
REVERSE SPLIT) AND DEDUCT SUCH AMOUNT FROM THE PREVIOUSLY ACCUMULATED DIVIDENDS
OF EACH SHAREHOLDER OR FROM SUCH SHAREHOLDER'S INTEREST IN THE TRUST.
(C) THE TRUSTEES MAY DISTRIBUTE IN RESPECT OF ANY FISCAL YEAR AS ORDINARY
DIVIDENDS AND AS CAPITAL GAINS DISTRIBUTION, RESPECTIVELY, AMOUNTS SUFFICIENT TO
ENABLE THE TRUST AS A REGULATED INVESTMENT COMPANY TO AVOID ANY LIABILITY FOR
FEDERAL INCOME TAXES IN RESPECT OF THAT YEAR.
(D) THE DECISION OF THE TRUSTEES AS TO WHAT, IN ACCORDANCE WITH GOOD
ACCOUNTING PRACTICE, IS INCOME AND WHAT IS PRINCIPAL SHALL BE FINAL, EXCEPT AS
SPECIFICALLY PROVIDED HEREIN THE DECISION OF THE TRUSTEES AS TO WHAT EXPENSES
AND CHARGES OF THE TRUST SHALL BE CHARGED AGAINST PRINCIPAL AND WHAT AGAINST
INCOME SHALL BE FINAL. ANY INCOME NOT DISTRIBUTED IN ANY YEAR MAY BE PERMITTED
TO ACCUMULATE AND AS LONG AS NOT DISTRIBUTED MAY BE INVESTED FROM TIME TO TIME
IN THE SAME MANNER AS THE PRINCIPAL FUNDS OF THE TRUST.
(E) THE TRUSTEES SHALL HAVE POWER, TO THE FULLEST EXTENT PERMITTED BY LAW,
AT ANY TIME, OR FROM TIME TO TIME, TO DECLARE AND CAUSE TO BE PAID DIVIDENDS,
WHICH DIVIDENDS, AT THE ELECTION OF THE TRUSTEES, MAY BE ACCRUED, AUTOMATICALLY
REINVESTED IN ADDITIONAL SHARES (OR FRACTIONS THEREOF) OF THE TRUST OR PAID IN
CASH OR ADDITIONAL SHARES, ALL UPON SUCH TERMS AND CONDITIONS AS THE TRUSTEES
MAY PRESCRIBE.
(F) ANYTHING IN THIS INSTRUMENT TO THE CONTRARY NOTWITHSTANDING, THE
TRUSTEES MAY AT ANY TIME DECLARE AND DISTRIBUTE A DIVIDEND CONSISTING OF SHARES
OF THE TRUST.
SECTION 2. REDEMPTIONS AND REPURCHASES.
(A) IN CASE ANY SHAREHOLDER OF RECORD OF THE TRUST AT ANY TIME DESIRES OR
AUTHORIZES THE DISPOSITION OF SHARES RECORDED IN HIS NAME, HE OR HIS AUTHORIZED
AGENT MAY DEPOSIT A WRITTEN REQUEST (OR SUCH OTHER FORM OF REQUEST AS THE
TRUSTEES MAY FROM TIME TO TIME AUTHORIZE) REQUESTING THAT THE TRUST PURCHASE HIS
SHARES, TOGETHER WITH SUCH OTHER INSTRUMENTS OR AUTHORIZATION TO EFFECT THE
TRANSFER AS THE TRUSTEES MAY FROM TIME TO TIME REQUIRE, AT THE OFFICE OF THE
TRUST, AND THE TRUST SHALL PURCHASE HIS SAID SHARES, BUT ONLY AT THE NET ASSET
VALUE OF SUCH SHARES (AS DEFINED IN SECTION 4 OF THIS ARTICLE X) DETERMINED BY
OR ON BEHALF OF THE TRUSTEES NEXT AFTER SAID REQUEST.
PAYMENT FOR SUCH SHARES SHALL BE MADE BY THE TRUST TO THE SHAREHOLDER OF
RECORD AT A TIME DETERMINED BY THE TRUSTEES WITHIN SEVEN (7) DAYS AFTER THE DATE
UPON WHICH THE REQUEST (AND, IF REQUIRED, SUCH OTHER INSTRUMENTS OR
AUTHORIZATIONS OF TRANSFER) IS DEPOSITED, SUBJECT TO THE RIGHT OF THE TRUSTEES
TO POSTPONE THE DATE OF PAYMENT PURSUANT TO SECTION 5 OF THIS ARTICLE X. IF THE
REDEMPTION IS POSTPONED BEYOND THE DATE ON WHICH IT WOULD NORMALLY OCCUR BY
REASON OF A DECLARATION BY THE TRUSTEES SUSPENDING THE RIGHT OF REDEMPTION
PURSUANT TO SECTION 5 OF THIS ARTICLE X, THE RIGHT OF THE SHAREHOLDER TO HAVE
HIS SHARES PURCHASED BY THE TRUST SHALL BE SIMILARLY SUSPENDED, AND HE MAY
WITHDRAW HIS REQUEST (OR SUCH OTHER INSTRUMENTS OR AUTHORIZATIONS OF TRANSFER)
FROM DEPOSIT IF HE SO ELECTS; OR, IF HE DOES NOT SO ELECT, THE PURCHASE PRICE
SHALL BE THE NET ASSET VALUE OF HIS SHARES, DETERMINED NEXT AFTER TERMINATION OF
SUCH SUSPENSION AND PAYMENT THEREFOR SHALL BE MADE WITHIN SEVEN (7) DAYS
THEREAFTER.
(B) THE TRUST MAY PURCHASE SHARES OF THE TRUST BY AGREEMENT WITH THE OWNER
THEREOF (1) AT A PRICE NOT EXCEEDING THE NET ASSET VALUE PER SHARE DETERMINED
NEXT AFTER THE PURCHASE OR CONTRACT OF PURCHASE IS MADE OR (2) AT A PRICE NOT
EXCEEDING THE NET ASSET VALUE PER SHARE DETERMINED AT SOME LATER TIME.
(C) SHARES PURCHASED BY THE TRUST EITHER PURSUANT TO PARAGRAPH (A) OR
PARAGRAPH (B) OF THIS SECTION 2 SHALL BE DEEMED TREASURY SHARES AND MAY BE
RESOLD BY THE TRUST.
(D) IF THE TRUSTEES DETERMINE THAT ECONOMIC CONDITIONS WOULD MAKE IT
SERIOUSLY DETRIMENTAL TO THE BEST INTERESTS OF THE REMAINING SHAREHOLDERS OF THE
TRUST TO MAKE PAYMENT WHOLLY OR PARTLY IN CASH, THE TRUST MAY PAY THE REDEMPTION
PRICE IN WHOLE OR IN PART BY A DISTRIBUTION IN KIND OF SECURITIES FROM THE
PORTFOLIO OF THE TRUST, IN LIEU OF CASH IN CONFORMITY WITH APPLICABLE RULES OF
THE COMMISSION TAKING SUCH SECURITIES AT THE SAME VALUE EMPLOYED IN DETERMINING
NET ASSET VALUE, AND SELECTING THE SECURITIES IN SUCH MANNER AS THE TRUSTEES MAY
DEEM FAIR AND EQUITABLE.
SECTION 3. DETERMINATION OF ACCUMULATED NET INCOME. THE ACCUMULATED NET
INCOME OF THE TRUST SHALL TO DETERMINED BY OR ON BEHALF OF THE TRUSTEES DAILY OR
MORE FREQUENTLY AT THE DISCRETION OF THE TRUSTEES, ON EACH BUSINESS DAY AT SUCH
TIME OR TIMES AS THE TRUSTEES SHALL IN THEIR DISCRETION DETERMINE. SUCH
DETERMINATION SHALL BE MADE IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES AND PRACTICES AND THE ACCOUNTING POLICIES ESTABLISHED BY THE
TRUSTEES, AND MAY INCLUDE REALIZED AND/OR UNREALIZED GAINS FROM THE SALE OR
DISPOSITION OF SECURITIES OR OTHER PROPERTY OF THE TRUST. THE POWER AND DUTY TO
DETERMINE ACCUMULATED NET INCOME MAY BE DELEGATED BY THE TRUSTEES FROM TIME TO
TIME TO ONE OR MORE OF THE TRUSTEES OR OFFICERS OF THE TRUST, TO THE OTHER PARTY
TO ANY CONTRACT ENTERED INTO PURSUANT TO SECTION 1 OR 2 OF ARTICLE VIII, OR TO
THE CUSTODIAN OR TO A TRANSFER AGENT.
SECTION 4. NET ASSET VALUE OF SHARES. THE NET ASSET VALUE OF EACH SHARE OF
THE TRUST OUTSTANDING SHALL BE DETERMINED AT LEAST ONCE ON EACH BUSINESS DAY BY
OR ON BEHALF OF THE TRUSTEES. THE POWER AND DUTY TO DETERMINE NET ASSET VALUE
MAY BE DELEGATED BY THE TRUSTEES FROM TIME TO TIME TO ONE OR MORE OF THE
TRUSTEES OR OFFICERS OF THE TRUST, TO THE OTHER PARTY TO ANY CONTRACT ENTERED
INTO PURSUANT TO SECTION 1 OR 2 OF ARTICLE VII, OR TO THE CUSTODIAN OR TO A
TRANSFER AGENT.
THE NET ASSET VALUE OF EACH SHARE OF THE TRUST AS OF ANY PARTICULAR TIME
SHALL BE THE QUOTIENT (ADJUSTED TO THE NUMBER OF SIGNIFICANT DIGITS DETERMINED
BY THE TRUSTEES) OBTAINED BY DIVIDING THE VALUE, AS OF SUCH TIME, OF THE NET
ASSETS OF THE TRUST (I.E., THE VALUE OF THE ASSETS OF THE TRUST LESS ITS
LIABILITIES EXCLUSIVE OF CAPITAL AND SURPLUS) BY THE TOTAL NUMBER OF SHARES
OUTSTANDING (EXCLUSIVE OF TREASURY SHARES) AT SUCH TIME IN ACCORDANCE WITH THE
REQUIREMENTS OF THE 1940 ACT AND ANY APPLICABLE RULES, REGULATIONS AND ORDERS
THEREUNDER, AND APPLICABLE PROVISIONS OF THE BY-LAWS OF THE TRUST IN CONFORMITY
WITH GENERALLY ACCEPTED ACCOUNTING PRACTICES AND PRINCIPLES.
SECTION 5. SUSPENSION OF THE RIGHT OF REDEMPTION. THE TRUSTEES MAY DECLARE A
SUSPENSION OF THE DETERMINATION OF NET ASSET VALUE AND/OR THE RIGHT OF
REDEMPTION OR POSTPONE THE DATE OF PAYMENT OR THE WHOLE OR ANY PART OF ANY
PERIOD (I) DURING WHICH THE NEW YORK STOCK EXCHANGE IS CLOSED OTHER THAN
CUSTOMARY WEEKEND AND HOLIDAY CLOSINGS, (II) DURING WHICH TRADING ON THE NEW
YORK STOCK EXCHANGE IS RESTRICTED, (III) DURING WHICH AN EMERGENCY EXISTS AS A
RESULT OF WHICH DISPOSAL BY THE TRUST OF SECURITIES OWNED BY IT IS NOT
REASONABLY PRACTICABLE OR IT IS NOT REASONABLY PRACTICABLE FOR THE TRUST FAIRLY
TO DETERMINE THE VALUE OF ITS NET ASSETS, OR (IV) DURING ANY OTHER PERIOD WHEN
THE COMMISSION MAY FOR THE PROTECTION OF SECURITY HOLDERS OF THE TRUST BY ORDER,
RULE OR INTERPRETATION PERMIT SUSPENSION OF THE RIGHT OF REDEMPTION OR
POSTPONEMENT OF THE DATE OF PAYMENT ON REDEMPTION; PROVIDED THAT APPLICABLE
RULES, INTERPRETATIONS AND REGULATIONS OF THE COMMISSION SHALL GOVERN AS TO
WHETHER THE CONDITIONS PRESCRIBED IN (II) OR (III) EXIST. SUCH SUSPENSION SHALL
TAKE EFFECT AT SUCH TIME AS THE TRUSTEES SHALL SPECIFY BUT NOT LATER THAN THE
CLOSE OF BUSINESS ON THE BUSINESS DAY NEXT FOLLOWING THE DECLARATION OF
SUSPENSION, AND THEREAFTER THERE SHALL BE NO RIGHT OF REDEMPTION OR PAYMENT
UNTIL THE TRUSTEES SHALL DECLARE THE SUSPENSION AT AN END, EXCEPT THAT THE
SUSPENSION SHALL TERMINATE IN ANY EVENT ON THE FIRST DAY ON WHICH SAID STOCK
EXCHANGE SHALL HAVE REOPENED OR THE PERIOD SPECIFIED IN (II) OR (III) SHALL HAVE
EXPIRED (AS TO WHICH IN THE ABSENCE OF AN OFFICIAL RULING BY THE COMMISSION, THE
DETERMINATION OF THE TRUSTEES SHALL BE CONCLUSIVE).
SECTION 6. TRUST'S RIGHT TO REDEEM SHARES. THE TRUST SHALL HAVE THE RIGHT TO
CAUSE THE REDEMPTION OF SHARES IN ANY SHAREHOLDER'S ACCOUNT FOR THEIR THEN
CURRENT NET ASSET VALUE (WHICH WILL BE PROMPTLY PAID TO THE SHAREHOLDER IN CASH)
IF AT ANY TIME THE TOTAL INVESTMENT IN THE ACCOUNT DOES NOT HAVE A MINIMUM
DOLLAR VALUE DETERMINED FROM TIME TO TIME BY THE TRUSTEES IN THEIR SOLE
DISCRETION. SHARES OF THE TRUST ARE REDEEMABLE AT THE OPTION OF THE TRUST IF, IN
THE OPINION OF THE TRUSTEES, OWNERSHIP OF TRUST SHARES HAS OR MAY BECOME
CONCENTRATED TO AN EXTENT WHICH WOULD CAUSE THE TRUST TO BE A PERSONAL HOLDING
COMPANY WITHIN THE MEANING OF THE FEDERAL INTERNAL REVENUE CODE (AND THEREBY
DISQUALIFIED UNDER SUB-CHAPTER M OF SAID CODE); IN SUCH CIRCUMSTANCES THE TRUST
MAY COMPEL THE REDEMPTION OF SHARES, REJECT ANY ORDER FOR THE PURCHASE OF SHARES
OR REFUSE TO GIVE EFFECT TO THE TRANSFER OF SHARES.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
SECTION 1. LIMITATION OF PERSONAL LIABILITY AND INDEMNIFICATION OF
SHAREHOLDERS. THE TRUSTEES, OFFICERS, EMPLOYEES OR AGENTS OF THE TRUST SHALL
HAVE NO POWER TO BIND ANY SHAREHOLDER PERSONALLY OR TO CALL UPON ANY SHAREHOLDER
FOR THE PAYMENT OF ANY SUM OF MONEY OR ASSESSMENT WHATSOEVER, OTHER THAN SUCH AS
THE SHAREHOLDER MAY AT ANY TIME AGREE TO PAY BY WAY OF SUBSCRIPTION TO ANY
SHARES OR OTHERWISE.
NO SHAREHOLDER OR FORMER SHAREHOLDER OF THE TRUST SHALL BE LIABLE SOLELY BY
REASON OF HIS BEING OR HAVING BEEN A SHAREHOLDER FOR ANY DEBT, CLAIM, ACTION,
DEMAND, SUIT, PROCEEDING, JUDGMENT, DECREE, LIABILITY OR OBLIGATION OF ANY KIND,
AGAINST, OR WITH RESPECT TO THE TRUST ARISING OUT OF ANY ACTION TAKEN OR OMITTED
FOR OR ON BEHALF OF THE TRUST, AND THE TRUST SHALL BE SOLELY LIABLE THEREFORE
AND RESORT SHALL BE HAD SOLELY TO THE TRUST PROPERTY FOR THE PAYMENT OR
PERFORMANCE THEREOF.
EACH SHAREHOLDER OR FORMER SHAREHOLDER OF THE TRUST (OR THEIR HEIRS,
EXECUTORS, ADMINISTRATORS OR OTHER LEGAL REPRESENTATIVES OR, IN CASE OF A
CORPORATE ENTITY, ITS CORPORATE OR GENERAL SUCCESSOR) SHALL BE ENTITLED TO
INDEMNITY AND REIMBURSEMENT OUT OF THE TRUST PROPERTY TO THE FULL EXTENT OF SUCH
LIABILITY AND THE COSTS OF ANY LITIGATION OR OTHER PROCEEDINGS IN WHICH SUCH
LIABILITY SHALL HAVE BEEN DETERMINED, INCLUDING, WITHOUT LIMITATION, THE FEES
AND DISBURSEMENTS OF COUNSEL IF, CONTRARY TO THE PROVISIONS HEREOF, SUCH
SHAREHOLDER OR FORMER SHAREHOLDER OF THE TRUST SHALL BE HELD TO PERSONAL
LIABILITY.
THE TRUST SHALL, UPON REQUEST BY THE SHAREHOLDER OR FORMER SHAREHOLDER,
ASSUME THE DEFENSE OF ANY CLAIM MADE AGAINST ANY SHAREHOLDER FOR ANY ACT OR
OBLIGATION OF THE TRUST AND SATISFY ANY JUDGMENT THEREON.
SECTION 2. LIMITATION OF PERSONAL LIABILITY OF TRUSTEES, OFFICERS, EMPLOYEES
OR AGENTS OF THE TRUST. NO TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF THE TRUST
SHALL HAVE THE POWER TO BIND ANY OTHER TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF
THE TRUST PERSONALLY. THE TRUSTEES, OFFICERS, EMPLOYEES OR AGENTS OF THE TRUST
INCURRING ANY DEBTS, LIABILITIES OR OBLIGATIONS, OR IN TAKING OR OMITTING ANY
OTHER ACTIONS FOR OR IN CONNECTION WITH THE TRUST ARE, AND EACH SHALL BE DEEMED
TO BE, ACTING AS TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF THE TRUST AND NOT IN HIS
OWN INDIVIDUAL CAPACITY.
PROVIDED THEY HAVE ACTED UNDER THE BELIEF THAT THEIR ACTIONS ARE IN THE BEST
INTEREST OF THE TRUST, THE TRUSTEES AND OFFICERS SHALL NOT BE RESPONSIBLE FOR OR
LIABLE IN ANY EVENT FOR NEGLECT OR WRONGDOING BY THEM OR ANY OFFICER, AGENT,
EMPLOYEE, INVESTMENT ADVISER, PRINCIPAL UNDERWRITER, TRANSFER AGENT OR CUSTODIAN
OF THE TRUST OR OF ANY ENTITY PROVIDING ADMINISTRATIVE SERVICES FOR THE TRUST,
BUT NOTHING HEREIN CONTAINED SHALL PROTECT ANY TRUSTEE OR OFFICER AGAINST ANY
LIABILITY TO WHICH HE WOULD OTHERWISE BE SUBJECT BY REASON OF WILLFUL
MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE OR RECKLESS DISREGARD OF THE DUTIES
INVOLVED IN THE CONDUCT OF HIS OFFICE.
SECTION 3. EXPRESS EXCULPATORY CLAUSES AND INSTRUMENTS. THE TRUSTEES SHALL
USE APPROPRIATE MEANS TO ASSURE THAT ALL PERSONS HAVING DEALINGS WITH THE TRUST
SHALL BE INFORMED THAT THE PROPERTY OF THE SHAREHOLDERS AND THE TRUSTEES,
OFFICERS, EMPLOYEES AND AGENTS OF THE TRUST SHALL NOT BE SUBJECT TO CLAIMS
AGAINST OR OBLIGATIONS OF THE TRUST TO ANY EXTENT WHATSOEVER. THE TRUSTEES MAY
CAUSE TO BE INSERTED IN ANY WRITTEN AGREEMENT, UNDERTAKING OR OBLIGATION MADE OR
ISSUED ON BEHALF OF THE TRUST (INCLUDING CERTIFICATES FOR SHARES OF THE TRUST)
AN APPROPRIATE REFERENCE TO THIS DECLARATION, PROVIDING THAT NEITHER THE
SHAREHOLDERS, THE TRUSTEES, THE OFFICERS, THE EMPLOYEES NOR ANY AGENT OF THE
TRUST SHALL BE LIABLE THEREUNDER, AND THAT THE OTHER PARTIES TO SUCH INSTRUMENT
SHALL LOOK SOLELY TO THE TRUST PROPERTY FOR THE PAYMENT OF ANY CLAIM THEREUNDER
OR FOR THE PERFORMANCE THEREOF; BUT THE OMISSION OF SUCH PROVISIONS FROM ANY
SUCH INSTRUMENT SHALL NOT RENDER ANY SHAREHOLDER, TRUSTEE, OFFICER, EMPLOYEE OR
AGENT LIABLE, NOR SHALL THE TRUSTEE, OR ANY OFFICER, AGENT OR EMPLOYEE OF THE
TRUST BE LIABLE TO ANYONE FOR SUCH OMISSION. IF, NOTWITHSTANDING THIS PROVISION,
ANY SHAREHOLDER, TRUSTEE, OFFICER, EMPLOYEE OR AGENT SHALL BE HELD LIABLE TO ANY
OTHER PERSON BY REASON OF THE OMISSION OF SUCH PROVISION FROM ANY SUCH
AGREEMENT, UNDERTAKING OR OBLIGATION, THE SHAREHOLDER, TRUSTEE, OFFICER,
EMPLOYEE OR AGENT SHALL BE ENTITLED TO INDEMNITY AND REIMBURSEMENT OUT OF THE
TRUST PROPERTY, AS PROVIDED IN THIS ARTICLE XI.
SECTION 4. MANDATORY INDEMNIFICATION.
(A) SUBJECT ONLY TO THE PROVISIONS HEREOF, EVERY PERSON WHO IS OR HAS BEEN A
TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF THE TRUST AND EVERY PERSON WHO SERVES AT
THE TRUST'S REQUEST AS DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF ANOTHER
CORPORATION, PARTNERSHIP, JOINT VENTURE, TRUST OR OTHER ENTERPRISE SHALL BE
INDEMNIFIED BY THE TRUST TO THE FULLEST EXTENT PERMITTED BY LAW AGAINST ALL
LIABILITIES AND AGAINST ALL EXPENSES REASONABLY INCURRED OR PAID BY HIM IN
CONNECTION WITH ANY DEBT, CLAIM, ACTION, DEMAND, SUIT, PROCEEDING, JUDGMENT,
DECREE, LIABILITY OR OBLIGATION OF ANY KIND IN WHICH HE BECOMES INVOLVED AS A
PARTY OR OTHERWISE OR IS THREATENED BY VIRTUE OF HIS BEING OR HAVING BEEN A
TRUSTEE, OFFICER, EMPLOYEE OR AGENT: OF THE TRUST OR OF ANOTHER CORPORATION,
PARTNERSHIP, JOINT VENTURE, TRUST OR OTHER ENTERPRISE AT THE REQUEST OF THE
TRUST AGAINST AMOUNTS PAID OR INCURRED BY HIM IN THE COMPROMISE OR SETTLEMENT
THEREOF.
(B) THE WORDS "CLAIM", "ACTION", "SUIT", OR "PROCEEDING" SHALL APPLY TO ALL
CLAIMS, ACTIONS, SUITS OR PROCEEDINGS (CIVIL, CRIMINAL, ADMINISTRATIVE,
LEGISLATIVE, INVESTIGATIVE OR OTHER, INCLUDING APPEALS), ACTUAL OR THREATENED,
AND THE WORDS "LIABILITIES" AND "EXPENSES" SHALL INCLUDE, WITHOUT LIMITATION,
ATTORNEYS' FEES, COSTS, JUDGMENTS, AMOUNTS PAID IN SETTLEMENT, FINES, PENALTIES
AND OTHER LIABILITIES.
(C) NO INDEMNIFICATION SHALL BE PROVIDED HEREUNDER AGAINST ANY LIABILITIES
TO THE TRUST OR ITS SHAREHOLDERS ADJUDICATED TO HAVE BEEN INCURRED BY REASON OF
WILLFUL MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE, OR RECKLESS DISREGARD OF THE
DUTIES INVOLVED IN THE CONDUCT OF HIS OFFICE.
(D) THE RIGHTS OF INDEMNIFICATION HEREIN PROVIDED :NAY BE INSURED AGAINST BY
POLICIES MAINTAINED BY THE TRUST, SHALL BE SEVERABLE, SHALL NOT AFFECT ANY OTHER
RIGHTS TO WHICH ANY TRUSTEE, OFFICER, EMPLOYEE OR AGENT MAY NOW OR HEREAFTER BE
ENTITLED, SHALL CONTINUE AS TO A PERSON WHO HAS CEASED TO BE SUCH TRUSTEE,
OFFICER, EMPLOYEE, OR AGENT AND SHALL INURE TO THE BENEFIT OF THE HEIRS,
EXECUTORS AND ADMINISTRATORS OF SUCH A PERSON; PROVIDED, HOWEVER, THAT NO PERSON
MAY SATISFY ANY RIGHT OF INDEMNITY OR REIMBURSEMENT GRANTED HEREIN EXCEPT OUT OF
THE PROPERTY OF THE TRUST, AND NO OTHER PERSON SHALL BE PERSONALLY LIABLE TO
PROVIDE INDEMNITY OR REIMBURSEMENT HEREUNDER (EXCEPT AN INSURER OR SURETY OR
PERSON OTHERWISE BOUND BY CONTRACT).
(E) EXPENSES IN CONNECTION WITH THE PREPARATION AND PRESENTATION OF A
DEFENSE TO ANY CLAIM, ACTION, SUIT OR PROCEEDING OF THE CHARACTER DESCRIBED IN
PARAGRAPH (A) OF THIS SECTION 4 MAY BE PAID BY THE TRUST PRIOR TO FINAL
DISPOSITION THEREOF UPON RECEIPT OF A WRITTEN UNDERTAKING BY OR ON BEHALF OF THE
TRUSTEE, OFFICER, EMPLOYEE OR AGENT TO REIMBURSE TO THE TRUST IF IT IS
ULTIMATELY DETERMINED UNDER THIS SECTION 4 THAT HE IS NOT ENTITLED TO
INDEMNIFICATION.
ARTICLE XII
MISCELLANEOUS
SECTION 1. TRUST IS NOT A PARTNERSHIP. IT IS HEREBY EXPRESSLY DECLARED THAT
A TRUST AND NOT A PARTNERSHIP IS CREATED HEREBY.
SECTION 2. TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY.
THE EXERCISE BY THE TRUSTEES OF THEIR POWERS AND DISCRETION HEREUNDER IN GOOD
FAITH AND WITH REASONABLE CARE UNDER THE CIRCUMSTANCES THEN PREVAILING, SHALL BE
BINDING UPON EVERYONE INTERESTED. SUBJECT TO THE PROVISIONS OF ARTICLE XI, THE
TRUSTEES SHALL NOT BE LIABLE FOR ERRORS OF JUDGMENT OR MISTAKES OF FACT OR LAW.
THE TRUSTEES MAY TAKE ADVICE OF COUNSEL OR OTHER EXPERTS WITH RESPECT TO THE
MEANING AND OPERATION OF THIS DECLARATION OF TRUST, AND SUBJECT TO THE
PROVISIONS OF ARTICLE XI, SHALL TO UNDER NO LIABILITY FOR ANY ACT OR OMISSION IN
ACCORDANCE WITH SUCH ADVICE OR FOR FAILING TO FOLLOW SUCH ADVICE. THE TRUSTEES
SHALL NOT BE REQUIRED TO GIVE ANY BOND AS SUCH, NOR ANY SURETY IF A BOND IS
REQUIRED.
SECTION 3. ESTABLISHMENT OF RECORD DATES. THE TRUSTEES MAY CLOSE THE SHARE
TRANSFER BOOKS OF THE TRUST FOR A PERIOD NOT EXCEEDING SIXTY (60) DAYS PRECEDING
THE DATE OF ANY MEETING OF SHAREHOLDERS, OR THE DATE FOR THE PAYMENT OF ANY
DIVIDEND AND OR THE MAKING OF ANY DISTRIBUTION TO SHAREHOLDERS, OR THE DATE FOR
THE ALLOTMENT OF RIGHTS, OR THE DATE WHEN ANY CHANGE OR CONVERSION OR EXCHANGE
OF SHARES SHALL GO INTO EFFECT; OR IN LIEU OF CLOSING THE SHARE TRANSFER BOOKS
AS AFORESAID, THE TRUSTEES MAY FIX IN ADVANCE A DATE, NOT EXCEEDING SIXTY (60)
DAYS PRECEDING THE DATE OF ANY MEETING OF SHAREHOLDERS, OR THE DATE FOR THE
PAYMENT OF ANY DIVIDEND OR THE MAKING OF ANY DISTRIBUTION TO SHAREHOLDERS, OR
THE DATE FOR THE ALLOTMENT OF RIGHTS, OR THE DATE WHEN ANY CHANGE OR CONVERSION
OR EXCHANGE OF SHARES SHALL GO INTO EFFECT, OR THE LAST DAY ON WHICH THE CONSENT
OR DISSENT OF SHAREHOLDERS MAY BE EFFECTIVELY EXPRESSED FOR ANY PURPOSE, AS A
RECORD DATE FOR THE DETERMINATION OF THE SHAREHOLDERS ENTITLED TO NOTICE OF,
AND, TO VOTE AT, ANY SUCH MEETING AND ANY ADJOURNMENT THEREOF, OR ENTITLED TO
RECEIVE PAYMENT OF ANY SUCH DIVIDEND OR DISTRIBUTION, OR TO ANY SUCH ALLOTMENT
OF RIGHTS, OR TO EXERCISE THE RIGHTS IN RESPECT OF ANY SUCH CHANGE, CONVERSION
OR EXCHANGE OF SHARES, OR TO EXERCISE THE RIGHT TO GIVE SUCH CONSENT OR DISSENT,
AND IN SUCH CASE, SUCH SHAREHOLDERS AND ONLY SUCH SHAREHOLDERS AS SHALL BE
SHAREHOLDERS OF RECORD ON THE DATE SO FIXED SHALL BE ENTITLED TO SUCH NOTICE OF,
AND TO VOTE AT, SUCH MEETING, OR TO RECEIVE PAYMENT OF SUCH DIVIDEND OR
DISTRIBUTION, OR TO RECEIVE SUCH ALLOTMENT OR RIGHTS, OR TO EXERCISE SUCH
RIGHTS, AS THE CASE MAY BE, NOTWITHSTANDING ANY TRANSFER OF ANY SHARES ON THE
BOOKS OF THE TRUST AFTER ANY SUCH DATE FIXED AS AFORESAID.
SECTION 4. TERMINATION OF TRUST.
(A) THIS TRUST SHALL CONTINUE WITHOUT LIMITATION OF TIME BUT SUBJECT TO THE
PROVISIONS OF PARAGRAPHS (B), (C), AND (D) OF THIS SECTION 4.
(B) THE TRUSTEES, WITH THE APPROVAL OF THE HOLDERS OF A MAJORITY OF THE
OUTSTANDING SHARES, MAY MERGE, CONSOLIDATE, OR SELL AND CONVEY THE ASSETS OF THE
TRUST INCLUDING ITS GOODWILL TO ANOTHER TRUST OR CORPORATION ORGANIZED UNDER THE
LAWS OF ANY STATE OF THE UNITED STATES FOR AN ADEQUATE CONSIDERATION WHICH MAY
INCLUDE THE ASSUMPTION OF ALL OUTSTANDING OBLIGATIONS, TAXES, AND OTHER
LIABILITIES, ACCRUED OR CONTINGENT, OF THE TRUST AND WHICH MAY INCLUDE SHARES OF
BENEFICIAL INTEREST OR STOCK OF SUCH TRUST OR CORPORATION. UPON MAKING PROVISION
FOR THE PAYMENT OF ALL SUCH LIABILITIES, BY SUCH ASSUMPTION OR OTHERWISE, THE
TRUSTEES SHALL. DISTRIBUTE THE NET PROCEEDS OF THE TRANSACTION RATABLY AMONG THE
HOLDERS OF THE SHARES OF THE TRUST THEN OUTSTANDING.
(C) SUBJECT TO A MAJORITY SHAREHOLDER VOTE, THE TRUSTEES MAY AT ANY TIME
SELL AND CONVERT INTO MONEY ALL THE ASSETS OF THE TRUST. UPON MAKING PROVISION
FOR THE PAYMENT OF ALL OUTSTANDING OBLIGATIONS, TAXES AND OTHER LIABILITIES,
ACCRUED OR CONTINGENT, OF THE TRUST, THE TRUSTEES SHALL DISTRIBUTE THE REMAINING
ASSETS OF THE TRUST RATABLY AMONG THE HOLDERS OF THE OUTSTANDING SHARES.
(D) UPON COMPLETION OF THE DISTRIBUTION OF THE REMAINING PROCEEDS OR THE
REMAINING ASSETS AS PROVIDED IN PARAGRAPHS (B) AND (C),THE TRUST SHALL TERMINATE
AND THE TRUSTEES SHALL BE DISCHARGED OF ANY AND ALL FURTHER LIABILITIES AND
DUTIES HEREUNDER AND THE RIGHT, TITLE, AND INTEREST OF ALL PARTIES SHALL BE
CANCELED AND DISCHARGED.
SECTION 5. OFFICES OF THE TRUST, FILING OF COPIES, REFERENCES, HEADINGS. THE
TRUST MAY MAINTAIN SUCH OFFICES IN SUCH LOCATIONS AS THE TRUSTEES MAY FROM TIME
TO TIME DETERMINE. THE ORIGINAL OR A COPY OF THIS INSTRUMENT AND OF EACH
DECLARATION OF TRUST SUPPLEMENTAL HERETO SHALL BE KEPT AT THE OFFICE OF THE
TRUST WHERE IT MAY BE INSPECTED BY ANY SHAREHOLDER. A COPY OF THIS INSTRUMENT
AND OF EACH SUPPLEMENTAL DECLARATION OF TRUST SHALL BE FILED BY THE TRUSTEES
WITH THE MASSACHUSETTS SECRETARY OF STATE, AS WELL AS ANY OTHER GOVERNMENTAL
OFFICE WHERE SUCH FILING MAY FROM TIME TO TIME BE REQUIRED. ANYONE DEALING WITH
THE TRUST MAY RELY ON A CERTIFICATE BY AN OFFICER OF THE TRUST AS TO WHETHER OR
NOT ANY SUCH SUPPLEMENTAL DECLARATION OF TRUST HAS BEEN MADE AND AS TO ANY
MATTERS IN CONNECTION WITH THE TRUST HEREUNDER, AND WITH THE SAME EFFECT AS IF
IT WERE THE ORIGINAL, MAY RELY ON A COPY CERTIFIED BY AN OFFICER OF THE TRUST TO
BE A COPY OF THIS INSTRUMENT OR OF ANY SUCH SUPPLEMENTAL DECLARATION OF TRUST.
IN THIS INSTRUMENT OR IN ANY SUCH SUPPLEMENTAL DECLARATION OF TRUST, REFERENCES
TO THIS INSTRUMENT, AND ALL EXPRESSIONS LIKE "HEREIN," "HEREOF" AND "HEREUNDER,"
SHALL BE DEEMED TO REFER TO THIS INSTRUMENT AS AMENDED OR AFFECTED BY ANY SUCH
SUPPLEMENTAL DECLARATION OF TRUST. HEADINGS ARE PLACED HEREIN FOR CONVENIENCE OR
REFERENCE ONLY AND IN CASE OF ANY CONFLICT, THE TEXT OF THIS INSTRUMENT, RATHER
THAN THE HEADINGS, SHALL CONTROL. THIS INSTRUMENT MAY BE EXECUTED IN ANY NUMBER
OF COUNTERPARTS EACH OF WHICH SHALL BE DEEMED AN ORIGINAL.
SECTION 6. APPLICABLE LAW. THE TRUST SET FORTH IN THIS INSTRUMENT IS CREATED
UNDER AND IS TO BE GOVERNED BY AND CONSTRUED AND ADMINISTERED ACCORDING TO THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. THE TRUST SHALL BE OF THE TYPE
COMMONLY CALLED A MASSACHUSETTS BUSINESS TRUST, AND WITHOUT LIMITING THE
PROVISIONS HEREOF, THE TRUST MAY EXERCISE ALL POWERS WHICH ARE ORDINARILY
EXERCISED BY SUCH A TRUST.
SECTION 7. AMENDMENTS. PRIOR TO THE INITIAL ISSUANCE OF SHARES PURSUANT TO
THE SECOND SENTENCE OF SECTION 3 OF ARTICLE III, A MAJORITY OF THE TRUSTEES THEN
IN OFFICE MAY AMEND OR OTHERWISE SUPPLEMENT THIS INSTRUMENT BY MAKING A
DECLARATION OF TRUST SUPPLEMENTAL HERETO, WHICH THEREAFTER SHALL FORM A PART
HEREOF. SUBSEQUENT TO SUCH INITIAL ISSUANCE OF SHARES, IF AUTHORIZED BY A
MAJORITY OF THE TRUSTEES THEN IN OFFICE AND BY A MAJORITY SHAREHOLDER VOTE, OR
BY ANY LARGER VOTE WHICH MAY BE REQUIRED BY APPLICABLE LAW OR THIS DECLARATION
OF TRUST IN ANY PARTICULAR CASE, THE TRUSTEES SHALL AMEND OR OTHERWISE
SUPPLEMENT THIS INSTRUMENT, BY MAKING A DECLARATION OF TRUST SUPPLEMENTAL
HERETO, WHICH THEREAFTER SHALL FORM A PART HEREOF. ANY SUCH SUPPLEMENTAL
DECLARATION OF TRUST SHALL BE SIGNED BY AT LEAST A MAJORITY OF THE TRUSTEES THEN
IN OFFICE. COPIES OF THE SUPPLEMENTAL DECLARATION OF TRUST SHALL BE FILED AS
SPECIFIED IN SECTION 5 OF THIS ARTICLE XII.
SECTION 8. CONFLICTS WITH LAW OR REGULATIONS.
(A) THE PROVISIONS OF THIS DECLARATION OF TRUST ARE SEVERABLE, AND IF THE
TRUSTEES DETERMINE, WITH THE ADVICE OF COUNSEL, THAT ANY SUCH PROVISION IS IN
UNRESOLVABLE CONFLICT WITH THE 1940 ACT, WITH THE PROVISIONS OF THE INTERNAL
REVENUE CODE RELATING TO THE TAX TREATMENT OF A REGULATED INVESTMENT COMPANY OR
OTHER MATTERS CONCERNING REGULATED INVESTMENT COMPANIES, OR WITH OTHER
APPLICABLE LAWS OR REGULATIONS, THE CONFLICTING PROVISION SHALL BE DEEMED NEVER
TO HAVE CONSTITUTED A PART OF THIS DECLARATION OF TRUST; PROVIDED, HOWEVER, THAT
SUCH DETERMINATION SHALL NOT AFFECT ANY OF THE REMAINING PROVISIONS HEREOF NOR
RENDER INVALID OR IMPROPER ANY ACTION TAKEN OR OMITTED PRIOR TO SUCH
DETERMINATION.
(B) IF ANY PROVISION OF THIS DECLARATION OF TRUST SHALL BE HELD INVALID OR
UNENFORCEABLE IN ANY JURISDICTION, SUCH INVALIDITY OR UNENFORCEABILITY SHALL NOT
ATTACH TO SUCH PROVISION IN ANY OTHER JURISDICTION OR ANY OTHER PROVISION HEREOF
IN ANY JURISDICTION.
SECTION 9. USE OF NAME. THE TRUSTEES OF THE TRUST ACKNOWLEDGE THAT, IN
CONSIDERATION OF ITS ASSUMPTION OF CERTAIN EXPENSES OF FORMATION OF THE TRUST,
CALVERT MUNICIPAL MANAGEMENT COMPANY HAS RESERVED FOR ITSELF THE RIGHTS TO THE
NAME "CALVERT TAX-FREE RESERVES" (OR ANY SIMILAR NAME) AND THAT USE BY THE TRUST
OF SUCH NAME SHALL CONTINUE ONLY WITH THE CONTINUING CONSENT OF CALVERT
MUNICIPAL MANAGEMENT COMPANY, WHICH CONSENT MAY BE WITHDRAWN AT ANY TIME,
EFFECTIVE IMMEDIATELY, UPON WRITTEN NOTICE THEREOF TO THE TRUST.
IN WITNESS WHEREOF, THE UNDERSIGNED HAVE EXECUTED THIS INSTRUMENT ON THE
DATE FIRST WRITTEN ABOVE.
WAYNE B. BARDSLEY
JOHN G. GUFFEY, JR.
BY-LAWS
OF
CALVERT TAX-FREE RESERVES
ARTICLE I
SHAREHOLDERS
SECTION 1. MEETINGS. MEETINGS OF THE SHAREHOLDERS SHALL BE HELD AT THE
PRINCIPAL OFFICES OF THE TRUST IN WASHINGTON, D.C. OR AT SUCH PLACE WITHIN OR
WITHOUT THE COMMONWEALTH OF MASSACHUSETTS AND ON SUCH DATES AND AT SUCH TIMES AS
THE TRUSTEES SHALL DESIGNATE.
SECTION 2. NOTICE OF MEETINGS. NOTICE OF ALL MEETINGS OF THE SHAREHOLDERS,
STATING THE TIME, PLACE, AND PURPOSES OF THE MEETING, SHALL BE GIVEN BY THE
TRUSTEES BY MAIL TO EACH SHAREHOLDER AT HIS ADDRESS AS RECORDED WITH THE TRUST
AT LEAST TEN (10) DAYS AND NOT MORE THAN NINETY (90) DAYS BEFORE THE MEETING.
ANY ADJOURNED MEETING MAY BE HELD AS ADJOURNED WITHOUT FURTHER NOTICE. NO NOTICE
NEED BE GIVEN TO ANY SHAREHOLDER WHO SHALL HAVE FAILED TO INFORM THE TRUST OF
HIS CURRENT ADDRESS OR IF A WRITTEN WAIVER OF NOTICE, EXECUTED BEFORE OR AFTER
THE MEETING BY THE SHAREHOLDER OR HIS ATTORNEY THEREUNTO AUTHORIZED, IS FILED
WITH THE RECORDS OF THE MEETING.
SECTION 3. RECORD DATE FOR MEETINGS AND OTHER PURPOSES. FOR THE PURPOSE
OF DETERMINING THE SHAREHOLDERS WHO ARE ENTITLED TO NOTICE OF AND TO VOTE AT ANY
MEETING, INCLUDING ANY ADJOURNMENT THEREOF, OR WHO ARE ENTITLED TO PARTICIPATE
IN ANY DISTRIBUTION, OR FOR THE PURPOSE OF ANY OTHER ACTION, THE TRUSTEES MAY
FROM TIME TO TIME CLOSE THE TRANSFER BOOKS FOR SUCH PERIOD, NOT EXCEEDING NINETY
(90) DAYS, AS THE TRUSTEES MAY DETERMINE; OR WITHOUT CLOSING THE TRANSFER BOOKS,
THE TRUSTEES MAY FIX A DATE NOT MORE THAN NINETY (90) DAYS PRIOR TO THE DATE OF
ANY MEETING OF SHAREHOLDERS OR DISTRIBUTION OR OTHER ACTION AS A RECORD DATE FOR
THE DETERMINATION OF THE PERSONS TO BE TREATED AS SHAREHOLDERS GOVERNED BY THE
DECLARATION OF TRUST.
SECTION 4. PROXIES. AT ANY MEETING OF SHAREHOLDERS, ANY HOLDER OF SHARES
ENTITLED TO VOTE THEREAT MAY VOTE EITHER IN PERSON OR BY PROXY, PROVIDED THAT NO
PROXY SHALL BE VOTED AT ANY MEETING UNLESS IT SHALL HAVE BEEN PLACED ON FILE
WITH THE SECRETARY, OR WITH SUCH OTHER OFFICER OR AGENT OF THE TRUST AS THE
SECRETARY MAY DIRECT, FOR VERIFICATION PRIOR TO THE TIME AT WHICH SUCH VOTE
SHALL BE TAKEN. PURSUANT TO A RESOLUTION OF A MAJORITY OF THE TRUSTEES, PROXIES
MAY BE SOLICITED IN THE NAME OF ONE OR MORE TRUSTEES OR ONE OR MORE OFFICERS OF
THE TRUST. ONLY SHAREHOLDERS OF RECORD SHALL BE ENTITLED TO VOTE. EACH FULL
SHARE SHALL BE ENTITLED TO ONE VOTE, AND FRACTIONAL SHARES SHALL BE ENTITLED TO
A VOTE OF SUCH FRACTION. WHEN ANY SHARE IS HELD JOINTLY BY SEVERAL PERSONS, ANY
ONE OF THEM MAY VOTE AT ANY MEETING IN PERSON OR BY PROXY IN RESPECT OF SUCH
SHARE, BUT IF MORE THAN ONE OF THEM SHALL BE PRESENT AT SUCH MEETING IN PERSON
OR BY PROXY, AND SUCH JOINT OWNERS OR THEIR PROXIES DISAGREE AS TO ANY VOTE TO
BE CAST, SUCH VOTE SHALL NOT BE RECEIVED IN RESPECT OF SUCH SHARE. A PROXY
PURPORTING TO BE EXECUTED BY OR ON BEHALF OF A SHAREHOLDER SHALL BE DEEMED VALID
UNLESS CHALLENGED AT OR PRIOR TO ITS EXERCISE, AND THE BURDEN OF PROVING
INVALIDITY SHALL REST ON THE CHALLENGER. IF THE HOLDER OF ANY SUCH SHARE IS A
MINOR OR A PERSON OF UNSOUND MIND, AND SUBJECT TO GUARDIANSHIP OR TO THE LEGAL
CONTROL OF ANY OTHER PERSON AS REGARDS THE CHARGE OR MANAGEMENT OF SUCH SHARE,
HE MAY VOTE BY HIS GUARDIAN OR SUCH OTHER PERSON APPOINTED OR HAVING SUCH
CONTROL, AND SUCH VOTE MAY BE GIVEN IN PERSON OR BY PROXY.
SECTION 5. INSPECTION OF RECORDS. THE RECORDS, ACCOUNTS AND BOOKS OF THE
TRUST SHALL BE OPEN TO INSPECTION BY SHAREHOLDERS TO THE SAME EXTENT AS IS
PERMITTED SHAREHOLDERS OF A MASSACHUSETTS BUSINESS CORPORATION.
SECTION 6. ACTION WITHOUT MEETING. ANY ACTION WHICH MAY BE TAKEN BY
SHAREHOLDERS MAY BE TAKEN WITHOUT A MEETING IF ALL SHAREHOLDERS ENTITLED TO VOTE
ON THE MATTER CONSENT TO THE ACTION IN WRITING AND THE WRITTEN CONSENTS ARE
FILED WITH THE RECORDS OF THE MEETING OF SHAREHOLDERS. SUCH CONSENTS SHALL BE
TREATED FOR ALL PURPOSES AS A VOTE TAKEN AT A MEETING OF SHAREHOLDERS.
ARTICLE II
TRUSTEES
SECTION 1. THE TRUSTEES. THE TRUST SHALL HAVE TWELVE (12) TRUSTEES,
UNLESS AND UNTIL SUCH NUMBER BE CHANGED BY AMENDMENT OF THE BY-LAWS OR BY
RESOLUTION OF THE TRUSTEES. THE TERM OF OFFICE OF EACH TRUSTEE SHALL EXPIRE UPON
THE ELECTION OF A SUCCESSOR TRUSTEE AT A MEETING OF SHAREHOLDERS.
SECTION 2. MEETINGS OF TRUSTEES. THE TRUSTEES MAY IN THEIR DISCRETION
PROVIDE FOR REGULAR OR STATED MEETINGS OF THE TRUSTEES. NOTICE OF REGULAR OR
STATED MEETINGS NEED NOT BE GIVEN. MEETINGS OF THE TRUSTEES OTHER THAN REGULAR
OR STATED MEETINGS SHALL BE HELD WHENEVER CALLED BY THE CHAIRMAN OF THE BOARD OF
TRUSTEES, THE PRESIDENT, OR BY ANY THREE OF THE TRUSTEES, AT THE TIME BEING IN
OFFICE. NOTICE OF THE TIME AND PLACE OF EACH MEETING OTHER THAN REGULAR OR
STATED MEETINGS SHALL BE GIVEN BY THE SECRETARY OR ASSISTANT SECRETARY OR BY THE
OFFICER OR TRUSTEES CALLING THE MEETING AND SHALL BE MAILED TO EACH TRUSTEE AT
LEAST FOUR DAYS BEFORE THE MEETING, OR SHALL BE TELEGRAPHED, CABLED, OR
PERSONALLY DELIVERED TO EACH TRUSTEE AT LEAST THREE DAYS BEFORE THE MEETING.
NOTICE BY TELEPHONE SHALL CONSTITUTE PERSONAL DELIVERY FOR THESE PURPOSES.
NOTICE MAY, HOWEVER, BE WAIVED BY ANY TRUSTEE BEFORE OR AFTER ANY MEETING. THE
BUSINESS TO BE TRANSACTED AND THE PURPOSE OF ANY MEETING OTHER THAN REGULAR OR
STATED MEETINGS SHALL BE STATED IN THE NOTICE OR WAIVER OF NOTICE OF SUCH
MEETING. NO NOTICE NEED BE GIVEN OF ACTION PROPOSED TO BE TAKEN BY UNANIMOUS
WRITTEN CONSENT. THE ATTENDANCE OF A TRUSTEE AT A MEETING SHALL CONSTITUTE A
WAIVER OF NOTICE OF SUCH MEETING EXCEPT WHERE A TRUSTEE ATTENDS A MEETING FOR
THE EXPRESS PURPOSE OF OBJECTING TO THE TRANSACTION OF ANY BUSINESS ON THE
GROUND THAT THE MEETING HAS NOT BEEN LAWFULLY CALLED OR CONVENED. THE TRUSTEES
MAY MEET BY MEANS OF A TELEPHONE CONFERENCE CIRCUIT OR SIMILAR COMMUNICATIONS
EQUIPMENT BY MEANS OF WHICH ALL PERSONS PARTICIPATING IN THE MEETING CAN HEAR
EACH OTHER, WHICH TELEPHONE CONFERENCE MEETING SHALL BE DEEMED TO HAVE BEEN HELD
AT A PLACE DESIGNATED BY THE TRUSTEES AT THE MEETING. PARTICIPATION IN A
TELEPHONE CONFERENCE MEETING SHALL CONSTITUTE PRESENCE IN PERSON AT SUCH
MEETING. ANY ACTION REQUIRED OR PERMITTED TO BE TAKEN AT ANY MEETING OF THE
TRUSTEES MAY BE TAKEN BY THE TRUSTEES WITHOUT A MEETING IF ALL THE TRUSTEES
CONSENT TO THE ACTION IN WRITING AND THE WRITTEN CONSENTS ARE FILED WITH THE
RECORDS OF THE TRUSTEES' MEETINGS. SUCH CONSENTS SHALL BE TREATED AS A VOTE FOR
ALL PURPOSES.
SECTION 3. QUORUM AND VOTE. A MAJORITY OF THE TRUSTEES SHALL BE PRESENT
IN PERSON AT ANY REGULAR OR SPECIAL MEETING OF THE TRUSTEES IN ORDER TO
CONSTITUTE A QUORUM FOR THE TRANSACTION OF BUSINESS AT SUCH MEETING AND (EXCEPT
AS OTHERWISE REQUIRED BY LAW, THE DECLARATION OF TRUST OR THESE BY-LAWS) THE ACT
OF A MAJORITY OF THE TRUSTEES PRESENT AT ANY MEETING AT WHICH A QUORUM IS
PRESENT SHALL BE THE ACT OF THE TRUSTEES. IN THE ABSENCE OF A QUORUM, A MAJORITY
OF THE TRUSTEES PRESENT MAY ADJOURN THE MEETING FROM TIME TO TIME UNTIL A QUORUM
SHALL BE PRESENT. NOTICE OF ANY ADJOURNED MEETING NEED NOT BE GIVEN.
SECTION 4. COMPENSATION OF TRUSTEES. THE COMPENSATION OF THE TRUSTEES
SHALL BE FIXED FROM TIME TO TIME BY THE TRUSTEES. NO TRUSTEE SHALL BE PRECLUDED
FROM SERVING THE TRUST IN ANY OTHER CAPACITY, AS AN OFFICER, AGENT OR OTHERWISE,
AND RECEIVING COMPENSATION THEREFOR.
ARTICLE III
COMMITTEES
SECTION 1. EXECUTIVE AND OTHER COMMITTEES. THE TRUSTEES BY VOTE OF A
MAJORITY OF ALL THE TRUSTEES MAY ELECT FROM THEIR OWN NUMBER AN EXECUTIVE
COMMITTEE, TO CONSIST OF NOT LESS THAN TWO (2) MEMBERS TO HOLD OFFICE AT THE
PLEASURE OF THE TRUSTEES, WHICH SHALL HAVE THE POWER TO CONDUCT THE CURRENT AND
ORDINARY BUSINESS OF THE TRUST WHILE THE TRUSTEES ARE NOT IN SESSION AND SUCH
OTHER POWERS OF THE TRUSTEES AS THE TRUSTEES MAY, FROM TIME TO TIME, DELEGATE TO
THEM EXCEPT THOSE POWERS WHICH BY LAW, THE DECLARATION OF TRUST, OR THESE
BY-LAWS THEY ARE PROHIBITED FROM DELEGATING. THE TRUSTEE MAY ALSO ELECT FROM
THEIR OWN NUMBER OTHER COMMITTEES FROM TIME TO TIME, THE NUMBER COMPOSING SUCH
COMMITTEES, THE POWERS CONFERRED UPON THE SAME (SUBJECT TO THE SAME LIMITATIONS
AS THE EXECUTIVE COMMITTEE) AND THE TERM OF MEMBERSHIP ON SUCH COMMITTEES TO BE
DETERMINED BY THE TRUSTEES. THE TRUSTEES MAY DESIGNATE A CHAIRMAN OF ANY SUCH
COMMITTEE; IN THE ABSENCE OF SUCH A DESIGNATION, THE COMMITTEE MAY ELECT ITS OWN
CHAIRMAN.
SECTION 2. MEETING, QUORUM AND MANNER OF ACTING. THE TRUSTEES MAY (1)
PROVIDE FOR STATED MEETINGS OF ANY COMMITTEES, (2) SPECIFY THE MANNER OF CALLING
AND NOTICE REQUIRED FOR SPECIAL MEETINGS OF ANY COMMITTEE, (3) SPECIFY THE
NUMBER OF MEMBERS OF A COMMITTEE REQUIRED TO CONSTITUTE A QUORUM AND THE NUMBER
OF MEMBERS OF A COMMITTEE REQUIRED TO EXERCISE SPECIFIED POWERS DELEGATED TO
SUCH COMMITTEE, (4) AUTHORIZE THE MAKING OF DECISIONS TO EXERCISE SPECIFIED
POWERS BY WRITTEN ASSENT OF THE REQUISITE NUMBER OF MEMBERS OF A COMMITTEE
WITHOUT A MEETING, AND (5) AUTHORIZE THE MEMBERS OF A COMMITTEE TO MEET BY MEANS
OF A TELEPHONE CONFERENCE CIRCUIT.
ALL COMMITTEES SHALL KEEP REGULAR MINUTES OF THEIR MEETINGS AND RECORDS
OF DECISIONS TAKEN WITHOUT A MEETING AND CAUSE THEM TO BE RECORDED IN A BOOK
DESIGNATED FOR THAT PURPOSE AND KEPT IN THE OFFICE OF THE TRUST. ALL ACTION BY
COMMITTEES SHALL BE REPORTED TO THE TRUSTEES AT THEIR MEETING NEXT SUCCEEDING
SUCH ACTION.
SECTION 3. COMPENSATION. THE MEMBERS OF ANY DULY APPOINTED COMMITTEE
SHALL RECEIVE SUCH COMPENSATION AND/OR FEES AS, FROM TIME TO TIME, MAY BE FIXED
BY THE TRUSTEES.
ARTICLE IV
OFFICERS
SECTION 1. GENERAL PROVISIONS. THE OFFICERS OF THE TRUST SHALL BE A
PRESIDENT AND A SECRETARY WHO SHALL BE ELECTED BY THE TRUSTEES. THE TRUSTEES MAY
ELECT OR APPOINT SUCH OTHER OFFICERS OR AGENTS AS THE BUSINESS OF THE TRUST MAY
REQUIRE, INCLUDING A CHAIRMAN, A TREASURER, ONE OR MORE VICE PRESIDENTS, ONE OR
MORE ASSISTANT SECRETARIES, AND ONE OR MORE ASSISTANT TREASURERS. THE TRUSTEES
MAY DELEGATE TO ANY OFFICER OR COMMITTEE THE POWER TO APPOINT ANY SUBORDINATE
OFFICERS OR AGENTS.
SECTION 2. TERM OF OFFICE AND QUALIFICATIONS. EXCEPT AS OTHERWISE
PROVIDED BY LAW, THE DECLARATION OF TRUST OR THESE BY-LAWS, THE PRESIDENT AND
THE SECRETARY SHALL EACH HOLD OFFICE UNTIL HIS SUCCESSOR SHALL HAVE BEEN DULY
ELECTED AND QUALIFIED, AND ALL OTHER OFFICERS SHALL HOLD OFFICE AT THE PLEASURE
OF THE TRUSTEES. ANY TWO OR MORE OF THE OFFICES MAY BE HELD BY THE SAME PERSON,
EXCEPT THAT THE SAME PERSON MAY NOT BE BOTH PRESIDENT AND SECRETARY. THE
CHAIRMAN, IF THERE BE SUCH AN OFFICER, AND THE PRESIDENT SHALL BE TRUSTEES, BUT
NO OTHER OFFICER OF THE TRUST NEED BE A TRUSTEE.
SECTION 3. REMOVAL. THE TRUSTEES, AT ANY REGULAR OR SPECIAL MEETING OF
THE TRUSTEES, MAY REMOVE ANY OFFICER WITH OR WITHOUT CAUSE BY A VOTE OF THE
MAJORITY OF THE TRUSTEES. ANY OFFICER OR AGENT APPOINTED BY ANY OFFICER OR
COMMITTEE MAY BE REMOVED WITH OR WITHOUT CAUSE BY SUCH APPOINTING OFFICER OR
COMMITTEE.
SECTION 4. BONDS AND SURETY. ANY OFFICER MAY BE REQUIRED BY THE TRUSTEES
TO BE BONDED FOR THE FAITHFUL PERFORMANCE OF HIS DUTIES IN SUCH AMOUNT AND WITH
SUCH SURETIES AS THE TRUSTEES MAY DETERMINE.
SECTION 5. CHAIRMAN, PRESIDENT, AND VICE-PRESIDENTS. THE CHAIRMAN, IF
THERE BE SUCH AN OFFICER, SHALL, IF PRESENT, PRESIDE AT ALL MEETINGS OF THE
SHAREHOLDERS AND OF THE TRUSTEES AND SHALL EXERCISE AND PERFORM SUCH OTHER
POWERS AND DUTIES AS MAY BE FROM TIME TO TIME ASSIGNED TO HIM BY THE TRUSTEES.
SUBJECT TO SUCH SUPERVISORY POWERS, IF ANY, AS MAY BE GIVEN BY THE TRUSTEES TO
THE CHAIRMAN, THE PRESIDENT SHALL BE THE CHIEF EXECUTIVE OFFICER OF THE TRUST
AND, SUBJECT TO THE CONTROL OF THE TRUSTEES, SHALL HAVE GENERAL SUPERVISION,
DIRECTION AND CONTROL OF THE BUSINESS OF THE TRUST AND OF ITS EMPLOYEES AND
SHALL EXERCISE SUCH GENERAL POWERS OF MANAGEMENT AS ARE USUALLY VESTED IN THE
OFFICE OF PRESIDENT OF A CORPORATION. IN THE ABSENCE OF THE CHAIRMAN, THE
PRESIDENT SHALL PRESIDE AT ALL MEETINGS OF THE SHAREHOLDERS AND OF THE TRUSTEES.
THE PRESIDENT SHALL HAVE THE POWER IN THE NAME AND ON BEHALF OF THE TRUST TO
GRANT, ISSUE, EXECUTE OR SIGN ANY AND ALL DOCUMENTS, CONTRACTS, AGREEMENTS,
DEEDS, MORTGAGES, PROXIES, POWERS OF ATTORNEY OR OTHER INSTRUMENTS AS MAY BE
DEEMED ADVISABLE OR NECESSARY IN FURTHERANCE OF THE INTERESTS OF THE TRUST. THE
PRESIDENT SHALL HAVE THE POWER TO EMPLOY ATTORNEYS AND COUNSEL FOR THE TRUST AND
TO EMPLOY SUCH SUBORDINATE OFFICERS, AGENTS, CLERKS AND EMPLOYEES AS HE MAY FIND
NECESSARY TO TRANSACT THE BUSINESS OF THE TRUST. THE PRESIDENT SHALL HAVE SUCH
FURTHER POWERS AND DUTIES AS, FROM TIME TO TIME, MAY BE CONFERRED UPON HIM OR
ASSIGNED TO HIM BY THE TRUSTEES. IN THE ABSENCE OR DISABILITY OF THE PRESIDENT,
THE VICE-PRESIDENT OR, IF THERE BE MORE THAN ONE VICE-PRESIDENT, ANY
VICE-PRESIDENT DESIGNATED BY THE TRUSTEES SHALL PERFORM ALL OF THE DUTIES OF THE
PRESIDENT, AND WHEN SO ACTING SHALL HAVE ALL THE POWERS OF THE PRESIDENT,
SUBJECT TO THE DIRECTION OF THE TRUSTEES. EACH VICE-PRESIDENT SHALL PERFORM SUCH
OTHER DUTIES AS MAY BE ASSIGNED TO HIM FROM TIME TO TIME BY THE TRUSTEES OR THE
PRESIDENT.
SECTION 6. SECRETARY. THE SECRETARY SHALL KEEP THE MINUTES OF ALL
MEETINGS OF, AND RECORD ALL VOTES OF, THE SHAREHOLDERS, THE TRUSTEES AND
COMMITTEES, IF ANY, IN PROPER BOOKS PROVIDED FOR THAT PURPOSE. HE SHALL BE
CUSTODIAN OF THE SEAL OF THE TRUST; HE SHALL HAVE CHARGE OF THE SHARE TRANSFER
BOOKS, LISTS AND RECORDS UNLESS THE SAME ARE IN THE CHARGE OF A TRANSFER AGENT.
HE SHALL ATTEND TO THE GIVING AND SERVING OF ALL NOTICES BY THE TRUST IN
ACCORDANCE WITH THE PROVISIONS OF THESE BY-LAWS AND AS REQUIRED BY LAW; AND
SUBJECT TO THESE BY-LAWS, HE SHALL IN GENERAL PERFORM ALL DUTIES INCIDENT TO THE
OFFICE OF SECRETARY AND SUCH OTHER DUTIES AS FROM TIME TO TIME MAY BE ASSIGNED
TO HIM BY THE TRUSTEES. THE SECRETARY MAY DELEGATE ANY OF HIS POWER, AUTHORITY
OR DUTIES TO ANY ASSISTANT SECRETARY OF THE TRUST.
SECTION 7. TREASURER. THE TREASURER, IF THERE BE SUCH AN OFFICER,
SHALL BE THE PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER OF THE TRUST. HE SHALL
DELIVER ALL FUNDS OF THE TRUST WHICH MAY COME INTO HIS HANDS TO SUCH CUSTODIAN,
SUBCUSTODIAN, OR SPECIAL DEPOSITORY AS THE TRUSTEES SHALL EMPLOY PURSUANT TO
ARTICLE IX OF THE DECLARATION OF TRUST. HE SHALL RENDER A STATEMENT OF CONDITION
OF THE FINANCES OF THE TRUST TO THE TRUSTEES AS OFTEN AS THEY SHALL REQUIRE THE
SAME, AND HE SHALL IN GENERAL PERFORM ALL THE DUTIES INCIDENT TO THE OFFICE OF
TREASURER AND SUCH OTHER DUTIES AS FROM TIME TO TIME MAY BE ASSIGNED TO HIM BY
THE TRUSTEES. THE TREASURER MAY DELEGATE ANY OF HIS POWER, AUTHORITY OR DUTIES
TO ANY ASSISTANT TREASURER OF THE TRUST.
SECTION 8. OTHER OFFICERS AND DUTIES. THE TRUSTEES MAY ELECT SUCH OTHER
OFFICERS AND ASSISTANT OFFICERS AS THEY SHALL FROM TIME TO TIME DETERMINE TO BE
NECESSARY OR DESIRABLE IN ORDER TO CONDUCT THE BUSINESS OF THE TRUST. ASSISTANT
OFFICERS SHALL ACT GENERALLY IN THE ABSENCE OR DISABILITY OF THE OFFICER WHOM
THEY ASSIST AND SHALL ASSIST THAT OFFICER IN THE DUTIES OF HIS OFFICE. EACH
OFFICER, EMPLOYEE, AGENT OF THE TRUST SHALL HAVE SUCH OTHER DUTIES AND AUTHORITY
AS MAY BE ASSIGNED HIM BY THE PRESIDENT.
SECTION 9. EVIDENCE OF AUTHORITY. ANYONE DEALING WITH THE TRUST SHALL BE
FULLY JUSTIFIED IN RELYING ON A COPY OF A RESOLUTION OF THE TRUSTEES OR OF ANY
COMMITTEE THEREOF EMPOWERED TO ACT IN THE PREMISES WHICH IS CERTIFIED AS TRUE BY
THE SECRETARY OR AN ASSISTANT SECRETARY UNDER THE SEAL OF THE TRUST.
SECTION 10. COMPENSATION. THE COMPENSATION OF THE OFFICERS SHALL BE
FIXED FROM TIME TO TIME BY THE TRUSTEES OR BY ANY COMMITTEE OR OFFICER UPON WHOM
SUCH POWER MAY BE CONFERRED BY THE TRUSTEES. NO OFFICER SHALL BE PREVENTED FROM
RECEIVING SUCH COMPENSATION BY REASON OF THE FACT THAT HE IS ALSO A TRUSTEE.
ARTICLE V
FISCAL YEAR
THE FISCAL YEAR OF THE TRUST SHALL BEGIN ON THE FIRST DAY OF JANUARY IN
EACH YEAR AND SHALL END ON THE 31ST DAY OF DECEMBER IN EACH YEAR, PROVIDED,
HOWEVER, THAT THE TRUSTEES MAY FROM TIME TO TIME CHANGE THE FISCAL YEAR.
ARTICLE VI
SEAL
THE TRUSTEES MAY ADOPT A SEAL WHICH SHALL BE IN SUCH FORM AND SHALL HAVE
SUCH INSCRIPTION THEREON AS THE TRUSTEES MAY FROM TIME TO TIME PRESCRIBE.
ARTICLE VII
WAIVERS OF NOTICE
WHENEVER ANY NOTICE WHATEVER IS REQUIRED TO BE GIVEN BY LAW, THE
DECLARATION OF TRUST OR THESE BY-LAWS, A WAIVER THEREOF IN WRITING, SIGNED BY
THE PERSON OR PERSONS ENTITLED TO SAID NOTICE, WHETHER BEFORE OR AFTER THE TIME
STATED THEREIN, SHALL BE DEEMED EQUIVALENT THERETO. A NOTICE SHALL BE DEEMED TO
HAVE BEEN GIVEN IF TELEGRAPHED, CABLED, OR SENT BY WIRELESS AT THE TIME WHEN IT
HAS BEEN DELIVERED TO A REPRESENTATIVE OF ANY TELEGRAPH, CABLE OR WIRELESS
COMPANY WITH INSTRUCTIONS THAT IT BE TELEGRAPHED, CABLED OR SENT BY WIRELESS.
ANY NOTICE SHALL BE DEEMED TO HAVE BEEN GIVEN IF MAILED AT THE TIME WHEN IT HAS
BEEN DEPOSITED IN THE MAIL.
ARTICLE VIII
SHARES OF BENEFICIAL INTEREST
SECTION 1. BENEFICIAL INTEREST. THE BENEFICIAL INTEREST IN THE TRUST
SHALL AT ALL TIMES BE DIVIDED INTO AN UNLIMITED NUMBER OF SHARES WITHOUT PAR
VALUE WHICH THE TRUSTEES MAY FROM TIME TO TIME ISSUE AND SELL OR CAUSE TO BE
ISSUED AND SOLD.
SECTION 2. BOOK ENTRY SHARES. NO CERTIFICATES NEED BE ISSUED TO
REPRESENT SHARES IN THE TRUST. THE TRUST SHALL MAINTAIN ADEQUATE RECORDS TO
DETERMINE THE HOLDINGS OF EACH SHAREHOLDER OF RECORD, AND SUCH RECORDS SHALL BE
DEEMED THE EQUIVALENT OF A CERTIFICATE REPRESENTING THE SHARES FOR ALL PURPOSES.
SECTION 3. CERTIFICATES. ALL CERTIFICATES FOR SHARES SHALL BE SIGNED BY
THE CHAIRMAN, PRESIDENT OR ANY VICE-PRESIDENT AND BY THE TREASURER, SECRETARY OR
ASSISTANT TREASURER OR ASSISTANT SECRETARY AND SEALED WITH THE SEAL OF THE
TRUST. THE SIGNATURES MAY BE EITHER MANUAL OR FACSIMILE SIGNATURES, AND THE SEAL
MAY BE EITHER FACSIMILE OR ANY OTHER FORM OF SEAL. CERTIFICATES FOR SHARES FOR
WHICH THE TRUST HAS APPOINTED A TRANSFER AGENT SHALL NOT BE VALID UNLESS
COUNTERSIGNED BY SUCH TRANSFER AGENT.
SECTION 4. TRANSFER OF SHARES. THE SHARES OF THE TRUST SHALL BE
TRANSFERABLE, SO AS TO AFFECT THE RIGHTS OF THE TRUST, ONLY BY TRANSFER RECORDED
IN THE BOOKS OF THE TRUST, IN PERSON OR BY ATTORNEY.
SECTION 5. EQUITABLE INTEREST NOT RECOGNIZED. THE TRUST SHALL BE
ENTITLED TO TREAT THE HOLDER OF RECORD OF ANY SHARE AS THE ABSOLUTE OWNER
THEREOF AND SHALL NOT BE BOUND TO RECOGNIZE ANY EQUITABLE OR OTHER CLAIM OR
INTEREST IN SUCH SHARE ON THE PART OF ANY OTHER PERSON EXCEPT AS MAY BE
OTHERWISE EXPRESSLY PROVIDED BY LAW.
SECTION 6. LOST, DESTROYED OR MUTILATED CERTIFICATES. IN CASE ANY
CERTIFICATE FOR SHARES IS LOST, MUTILATED OR DESTROYED, THE TRUSTEES MAY ISSUE A
NEW CERTIFICATE IN PLACE THEREOF UPON SUCH INDEMNITY TO THE TRUST AGAINST LOSS
AND UPON SUCH OTHER TERMS AND CONDITIONS AS THE TRUSTEES MAY DEEM ADVISABLE.
ARTICLE IX
AMENDMENTS
THESE BY-LAWS, OR ANY OF THEM, MAY BE ALTERED, AMENDED OR REPEALED, OR
NEW BY-LAWS MAY BE ADOPTED (A) BY VOTE OF A MAJORITY OF THE SHARES OUTSTANDING
AND ENTITLED TO VOTE OR (B) BY VOTE OF A MAJORITY OF THE TRUSTEES, PROVIDED,
HOWEVER, THAT NO BY-LAW MAY BE AMENDED, ADOPTED OR REPEALED BY THE TRUSTEES IF
SUCH AMENDMENT, ADOPTION OR REPEAL REQUIRES, PURSUANT TO LAW, THE DECLARATION OF
TRUST OR THESE BY-LAWS, A VOTE OF THE SHAREHOLDERS, AND FURTHER PROVIDED THAT NO
BY-LAW MAY BE AMENDED, ADOPTED OR REPEALED BY THE TRUSTEES UNLESS NOTICE OF SUCH
ACTION, INCLUDING THE SPECIFIC WORDING OF THE RESOLUTION OF AMENDMENT, ADOPTION
OR REPEAL, SHALL HAVE BEEN MAILED TO EACH TRUSTEE AT LEAST FOUR DAYS BEFORE THE
MEETING OR TELEGRAPHED, CABLED, OR PERSONALLY DELIVERED TO EACH TRUSTEE AT LEAST
THREE DAYS BEFORE THE MEETING. NOTICE MAY, HOWEVER, BE WAIVED BY ANY TRUSTEE
BEFORE OR AFTER ANY MEETING.
ARTICLE X
BOOKS AND RECORDS
THE BOOKS, ACCOUNTS AND RECORDS OF THE TRUST, INCLUDING THE STOCK LEDGER
OR LEDGERS, MAY BE KEPT IN OR OUTSIDE THE COMMONWEALTH OF MASSACHUSETTS AT SUCH
OFFICES OR AGENCIES OF THE TRUST AS MAY FROM TIME TO TIME BE DETERMINED BY THE
TRUSTEES.
AS AMENDED APRIL 25, 1984
DEFERRED COMPENSATION AGREEMENT
AGREEMENT ENTERED INTO THIS _____ DAY OF ______________, 19___, BETWEEN CALVERT
VARIABLE SERIES, INC., FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME, CALVERT
TAX-FREE RESERVES, THE CALVERT FUND, CALVERT CASH RESERVES, CALVERT SOCIAL
INVESTMENT FUND, CALVERT MUNICIPAL FUND, INC., CALVERT NEW WORLD FUND, INC.,
AND/OR CALVERT WORLD VALUES FUND, INC.(HEREINAFTER REFERRED TO AS THE FUND OR
FUNDS), AND ______________ (DIRECTOR OR TRUSTEE, HEREINAFTER REFERRED TO AS THE
TRUSTEE).
WHEREAS, THE TRUSTEE WILL BE RENDERING VALUABLE SERVICES TO THE FUND OR FUNDS AS
A MEMBER OF THE BOARD OF TRUSTEES, AND THE FUND OR FUNDS IS WILLING TO
ACCOMMODATE THE TRUSTEE'S DESIRE TO BE COMPENSATED FOR SUCH SERVICES ON A
DEFERRED BASIS;
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. WITH RESPECT TO SERVICES PERFORMED BY THE TRUSTEE FOR THE FUND OR FUNDS
ON AND AFTER THE FIRST DAY OF , 19___, THE TRUSTEE SHALL DEFER % OF THE
AMOUNTS OTHERWISE PAYABLE TO THE TRUSTEE FOR SERVING AS A TRUSTEE. THE DEFERRED
COMPENSATION SHALL BE CREDITED TO A BOOK RESERVE MAINTAINED BY THE FUND OR FUNDS
IN THE TRUSTEE'S NAME TOGETHER WITH CREDITED AMOUNTS IN THE NATURE OF EARNINGS
("ACCOUNT(S)"). THE ACCOUNT MAINTAINED FOR THE TRUSTEE SHALL BE PAID TO THE
TRUSTEE ON A DEFERRED BASIS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
2. THE FUND OR FUNDS SHALL CREDIT THE TRUSTEE'S ACCOUNT AS OF THE DAY SUCH
AMOUNT WOULD HAVE BEEN PAID TO THE TRUSTEE IF THIS AGREEMENT WERE NOT IN EFFECT.
SUCH ACCOUNTS SHALL BE VALUED AT FAIR MARKET VALUE AS OF THE LAST DAY OF THE
CALENDAR YEAR AND SUCH OTHER DATES AS ARE NECESSARY FOR THE PROPER
ADMINISTRATION OF THIS AGREEMENT, AND EACH TRUSTEE SHALL RECEIVE A WRITTEN
ACCOUNTING OF HIS ACCOUNT BALANCE(S) FOLLOWING SUCH VALUATION.
A TRUSTEE MAY REQUEST THAT HIS/HER DEFERRED COMPENSATION BE ALLOCATED AMONG
THE AVAILABLE FUNDS OR PLACED IN A MONEY MARKET DEPOSIT ACCOUNT. THE INITIAL
ALLOCATION REQUEST MAY BE MADE AT THE TIME OF ENROLLMENT. ONCE MADE, AN
INVESTMENT ALLOCATION REQUEST SHALL REMAIN IN EFFECT FOR ALL SUBSEQUENT DEFERRED
COMPENSATION UNTIL CHANGED BY THE TRUSTEE. A TRUSTEE MAY CHANGE HIS/HER
INVESTMENT ALLOCATION BY SUBMITTING A WRITTEN REQUEST TO THE ADMINISTRATOR ON
SUCH FORM AS MAY BE REQUIRED BY THE ADMINISTRATOR OR BY TELEPHONING THE
ADMINISTRATOR (OR HIS/HER DELEGATE). SUCH CHANGES SHALL BECOME EFFECTIVE AS SOON
AS ADMINISTRATIVELY FEASIBLE AFTER THE ADMINISTRATOR RECEIVES SUCH REQUEST.
ALTHOUGH THE FUND INTENDS TO INVEST THE DEFERRED COMPENSATION ACCORDING TO THE
TRUSTEE'S REQUESTS, IT RESERVES THE RIGHT TO INVEST THE DEFERRED COMPENSATION
WITHOUT REGARD TO SUCH REQUESTS. THE ADMINISTRATOR IS THE CALVERT GROUP, LTD.
CONTROLLER.
3. AS OF JANUARY 31 OF THE CALENDAR YEAR FOLLOWING THE CALENDAR YEAR THE
TRUSTEE DIES, RETIRES, RESIGNS OR OTHERWISE CEASES TO BE A MEMBER OF THE BOARD
OF TRUSTEES OF THE FUND OR FUNDS; THE FUND OR FUNDS SHALL: (CHECK ONE)
( ) PAY THE TRUSTEE (OR HIS OR HER BENEFICIARY) A LUMP SUM AMOUNT
EQUAL TO THE BALANCE IN THE TRUSTEE'S ACCOUNT ON THAT DATE OR
( ) COMMENCE MAKING ANNUAL PAYMENTS TO THE TRUSTEE (OR HIS OR HER
BENEFICIARY) FOR A PERIOD OF ____ (2 THROUGH 15) YEARS.
IF THE SECOND BOX IS SELECTED, SUCH PAYMENTS SHALL BE MADE ON JANUARY 31ST
OF EACH YEAR IN APPROXIMATELY EQUAL ANNUAL INSTALLMENTS AS ADJUSTED AND COMPUTED
BY THE FUND OR FUNDS, WITH THE FINAL PAYMENT EQUALING THE THEN REMAINING BALANCE
IN THE TRUSTEE'S ACCOUNT. IF THE BALANCE IN THE TRUSTEE'S ACCOUNT AS OF THE DATE
OF THE FIRST SCHEDULED PAYMENT IS LESS THAN $2,000, THE FUND OR FUNDS SHALL
INSTEAD PAY SUCH AMOUNT IN A LUMP SUM AS OF THAT DATE. THE TRUSTEE MAY NOT
SELECT A PERIOD OF TIME, WHICH WILL CAUSE AN ANNUAL PAYMENT TO BE LESS THAN
$1,000. NOTWITHSTANDING THE FOREGOING, IN THE EVENT THAT THE TRUSTEE CEASES TO
BE A TRUSTEE OF THE FUND OR FUNDS AND BECOMES A PROPRIETOR, OFFICER, PARTNER,
EMPLOYEE, OR OTHERWISE BECOMES AFFILIATED WITH ANY BUSINESS OR ENTITY THAT IS IN
COMPETITION WITH THE FUND OR FUNDS, OR BECOMES EMPLOYED BY ANY GOVERNMENTAL
AGENCY HAVING JURISDICTION OVER THE AFFAIRS OF THE FUND OR FUNDS, THE FUND OR
FUNDS RESERVES THE RIGHT AT THE SOLE DISCRETION OF THE BOARD OF TRUSTEES TO MAKE
AN IMMEDIATE LUMP SUM PAYMENT TO THE TRUSTEE IN AN AMOUNT EQUAL TO THE BALANCE
IN THE TRUSTEE'S ACCOUNT AT THAT TIME.
NOTWITHSTANDING THE PRECEDING PARAGRAPH, THE FUND OR FUNDS MAY AT ANY TIME
MAKE A LUMP SUM PAYMENT TO THE TRUSTEE (OR SURVIVING BENEFICIARY) EQUAL TO A
PART OR ALL OF THE BALANCE IN THE TRUSTEE'S ACCOUNT UPON A SHOWING OF A
FINANCIAL EMERGENCY CAUSED BY CIRCUMSTANCES BEYOND THE CONTROL OF THE TRUSTEE
(OR SURVIVING BENEFICIARY) WHICH WOULD RESULT IN SERIOUS FINANCIAL HARDSHIP IF
SUCH PAYMENTS WERE NOT MADE. THE DETERMINATION OF WHETHER SUCH EMERGENCY EXISTS
SHALL BE MADE AT THE SOLE DISCRETION OF THE BOARD OF TRUSTEES OF THE FUND OR
FUNDS. THE AMOUNT OF THE PAYMENT SHALL BE LIMITED TO THE AMOUNT NECESSARY TO
MEET THE FINANCIAL EMERGENCY, AND ANY REMAINING BALANCE IN THE TRUSTEE'S ACCOUNT
SHALL THEREAFTER BE PAID AT THE TIME AND IN THE MANNER OTHERWISE SET FORTH IN
THIS SECTION.
4. IN THE EVENT THAT THE TRUSTEE DIES BEFORE PAYMENTS HAVE COMMENCED OR BEEN
COMPLETED UNDER SECTION 3 HEREOF, THE FUND OR FUNDS SHALL MAKE PAYMENT IN
ACCORDANCE WITH SECTION 3 TO THE TRUSTEE'S DESIGNATED BENEFICIARY, WHO SHALL BE:
IN THE EVENT THAT BOTH THE TRUSTEE AND THE DESIGNATED BENEFICIARY HAVE DIED
BEFORE THE COMMENCEMENT OR COMPLETION OF PAYMENTS UNDER SECTION 3, AN AMOUNT
EQUAL TO THE THEN REMAINING BALANCE IN THE TRUSTEE'S ACCOUNT (OR THE PORTION
THEREOF THAT WOULD HAVE BEEN PAYABLE TO THE BENEFICIARY) SHALL BE PAID IN A LUMP
SUM. SUCH PAYMENT SHALL BE MADE TO THE ESTATE OF THE TRUSTEE UNLESS PAYMENTS TO
THE BENEFICIARY HAVE ALREADY COMMENCED, IN WHICH CASE THE LUMP SUM PAYMENT SHALL
BE MADE TO THE ESTATE OF THE BENEFICIARY.
5. THE AGREEMENT SHALL REMAIN IN EFFECT WITH RESPECT TO THE TRUSTEE'S
COMPENSATION FOR SERVICES PERFORMED AS A TRUSTEE OF THE FUND OR FUNDS IN ALL
FUTURE YEARS UNLESS TERMINATED ON A PROSPECTIVE BASIS IN ACCORDANCE WITH THIS
SECTION. EITHER THE TRUSTEE OR THE FUND OR FUNDS MAY TERMINATE THIS AGREEMENT BY
WRITTEN NOTICE DELIVERED OR MAILED TO THE OTHER PARTY NO LATER THAN DECEMBER 31
OF THE CALENDAR YEAR PRECEDING THE CALENDAR YEAR IN WHICH SUCH TERMINATION IS TO
TAKE EFFECT. IN ADDITION, THE TRUSTEE MAY ALTER THE AMOUNT OF DEFERRAL FOR ANY
FUTURE CALENDAR YEAR IF THE TRUSTEE AND THE FUND OR FUNDS ENTER INTO AN
AMENDMENT ON OR BEFORE DECEMBER 31ST OF THE CALENDAR YEAR PRECEDING THE CALENDAR
YEAR FOR WHICH THE AMENDMENT IS TO TAKE EFFECT. THE AMENDMENT WILL BE DEEMED TO
SUPERSEDE THE AMOUNT OF DEFERRAL FOR ALL FUTURE YEARS UNLESS OTHERWISE AMENDED
OR TERMINATED. ANY TERMINATION OR NEW AMENDMENT SHALL RELATE SOLELY TO
COMPENSATION FOR SERVICES PERFORMED AFTER THE TERMINATION OR AMENDMENT BECOMES
EFFECTIVE AND SHALL NOT ALTER THE TERMS OF THE AGREEMENT WITH RESPECT TO THE
DEFERRED PAYMENT OF COMPENSATION FOR SERVICES PERFORMED DURING ANY CALENDAR YEAR
IN WHICH THIS AGREEMENT WAS IN EFFECT. NOTWITHSTANDING THE FOREGOING, THE
TRUSTEE MAY AT ANY TIME AMEND THE BENEFICIARY DESIGNATION HEREUNDER BY WRITTEN
NOTICE TO THE FUND OR FUNDS.
6. NOTHING CONTAINED IN THIS AGREEMENT AND NO ACTION TAKEN PURSUANT TO THE
PROVISIONS OF THIS AGREEMENT SHALL CREATE OR BE CONSTRUED TO CREATE A TRUST OF
ANY KIND, OR A FIDUCIARY RELATIONSHIP BETWEEN THE FUND OR FUNDS AND THE TRUSTEE,
ANY DESIGNATED BENEFICIARY OR ANY OTHER PERSON. ANY COMPENSATION DEFERRED UNDER
THE PROVISIONS OF THIS AGREEMENT SHALL CONTINUE FOR ALL PURPOSES TO BE A PART OF
THE GENERAL FUNDS OF THE FUND OR FUNDS. TO THE EXTENT THAT ANY PERSON ACQUIRES A
RIGHT TO RECEIVE PAYMENTS FROM THE FUND OR FUNDS UNDER THIS AGREEMENT, SUCH
RIGHT SHALL BE NO GREATER THAN THE RIGHT OF ANY UNSECURED GENERAL CREDITOR OF
THE FUND OR FUNDS.
7. THE RIGHT OF THE TRUSTEE OR ANY OTHER PERSON TO RECEIVE PAYMENTS UNDER
THIS AGREEMENT SHALL NOT BE ASSIGNED, TRANSFERRED, PLEDGED OR ENCUMBERED EXCEPT
BY WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION.
8. IF THE FUND OR FUNDS SHALL FIND THAT ANY PERSON TO WHOM ANY PAYMENT IS
PAYABLE UNDER THIS AGREEMENT IS UNABLE TO CARE FOR HIS OR HER AFFAIRS BECAUSE OF
ILLNESS OR ACCIDENT, OR IS A MINOR, ANY PAYMENT DUE (UNLESS A PRIOR CLAIM
THEREFOR SHALL HAVE BEEN MADE BY A DULY APPOINTED GUARDIAN, COMMITTEE OR OTHER
LEGAL REPRESENTATIVE) MAY BE PAID TO THE SPOUSE, A PARENT, OR A BROTHER OR
SISTER, OR TO ANY PERSON DEEMED BY THE FUND OR FUNDS TO HAVE INCURRED EXPENSE
FOR THE PERSON WHO IS OTHERWISE ENTITLED TO PAYMENT, IN SUCH MANNER AND
PROPORTIONS AS THE FUND OR FUNDS MAY DETERMINE. ANY SUCH PAYMENT SHALL SERVE TO
DISCHARGE THE LIABILITY OF THE FUND OR FUNDS UNDER THIS AGREEMENT TO MAKE
PAYMENT TO THE PERSON WHO IS OTHERWISE ENTITLED TO PAYMENT.
9. ANY WRITTEN NOTICE TO THE FUND OR FUNDS REFERRED TO IN THIS AGREEMENT
SHALL BE MADE BY MAILING OR DELIVERING SUCH NOTICE TO THE FUND OR FUNDS AT 4550
MONTGOMERY AVENUE, BETHESDA, MD 20814, TO THE ATTENTION OF THE CONTROLLER,
CALVERT GROUP, LTD. ANY WRITTEN NOTICE TO THE TRUSTEE REFERRED TO IN THIS
AGREEMENT SHALL BE MADE BY DELIVERY TO THE TRUSTEE IN PERSON OR BY MAILING SUCH
NOTICE TO THE TRUSTEE AT HIS OR HER PLACE OF RESIDENCE OR BUSINESS ADDRESS.
10. TO THE EXTENT REQUIRED BY LAW, THE FUND OR FUNDS SHALL WITHHOLD FEDERAL
OR STATE INCOME TAXES FROM ANY PAYMENTS HEREUNDER AND SHALL FURNISH THE TRUSTEE
(OR BENEFICIARY) AND THE APPLICABLE GOVERNMENTAL AGENCY OR AGENCIES WITH SUCH
REPORTS, STATEMENTS OR INFORMATION AS MAY BE REQUIRED IN CONNECTION WITH SUCH
PAYMENTS.
11. THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE
FUND OR FUNDS AND ITS SUCCESSORS AND ASSIGNS AND THE TRUSTEE AND HIS OR HER
HEIRS, EXECUTORS, ADMINISTRATORS AND LEGAL REPRESENTATIVE.
12. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF MARYLAND.
<PAGE>
IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AGREEMENT TO BE EXECUTED AS OF
THE DATE FIRST ABOVE WRITTEN.
CALVERT VARIABLE SERIES, INC.
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
THE CALVERT FUND
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
BY
(PRINT NAME OF TRUSTEE)
(SIGNATURE OF TRUSTEE)
DATE
ACKNOWLEDGMENT:
BY RONALD M. WOLFSHEIMER
(PRINT NAME OF OFFICER)
TREASURER
(TITLE)
(SIGNATURE OF OFFICER)
DATE
<PAGE>
C:\temp\DCAGMT2.DOC
APPLICATION FOR CALVERT GROUP
TRUSTEE DEFERRED COMPENSATION PLAN
1. INSTRUCTIONS
PLEASE COMPLETE SECTIONS 2 THROUGH 4 BELOW. THIS APPLICATION SHOULD BE
SIGNED BY THE TRUSTEE AND RETURNED TO THE ADMINISTRATOR.
2. TRUSTEE INFORMATION (PLEASE PRINT)
NAME OF FUND:
NAME OF TRUSTEE:
ADDRESS OF FUND: 4550 MONTGOMERY AVE., STE. 1000N
BETHESDA, MD 20814
3. INVESTMENT OF CONTRIBUTIONS
CONTRIBUTIONS TO THE CALVERT GROUP TRUSTEE'S DEFERRED COMPENSATION PLAN
SHALL BE INVESTED IN THE CALVERT GROUP FUNDS:
CALVERT FIRST GOVERNMENT MONEY MARKET FUND %
CSIF MANAGED INDEX PORTFOLIO _________%
CSIF MONEY MARKET PORTFOLIO %
CSIF BALANCED PORTFOLIO %
CSIF BOND PORTFOLIO %
CSIF EQUITY PORTFOLIO %
CALVERT INCOME FUND %
CALVERT NEW VISION SMALL CAP FUND %
CALVERT INTERNATIONAL EQUITY PORTFOLIO %
CALVERT CAPITAL ACCUMULATION FUND %
CALVERT NEW AFRICA FUND %
TOTAL %
4. PURSUANT TO SECTION 3, I CHOOSE TO HAVE MY ANNUAL PAYMENTS BE MADE FOR:
A ____ LUMP SUM OR
B ____ YEARS (NO LESS THAN 2 NOR GREATER THAN 15).
5. ACCEPTANCE
TRUSTEE ACCEPTANCE: I HEREBY AGREE TO THE TERMS AND CONDITIONS OF THE
CALVERT GROUP TRUSTEE DEFERRED COMPENSATION PLAN. I HAVE READ THE PROSPECTUS(ES)
OF THE CHOSEN FUND(S).
NAME DATE
FOR OFFICE USE ONLY
FUND NUMBER(S): ACCOUNT NUMBER:
7
CUSTODIAN AGREEMENT
THIS AGREEMENT, DATED AS OF APRIL 1, 1991, IS BETWEEN STATE STREET BANK AND
TRUST COMPANY, A MASSACHUSETTS TRUST COMPANY, HAVING ITS PRINCIPAL PLACE OF
BUSINESS AT 225 FRANKLIN STREET, BOSTON, MASSACHUSETTS, 02110 ("STATE STREET" OR
THE "CUSTODIAN"), AND [FUND], ON BEHALF OF [PORTFOLIO], HAVING ITS PRINCIPAL
PLACE OF BUSINESS AT 4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND,
20814. IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS CONTAINED IN
THIS AGREEMENT, THE PARTIES AGREE AS FOLLOWS:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
THE PORTFOLIO HEREBY EMPLOYS STATE STREET AS THE CUSTODIAN OF ITS ASSETS,
INCLUDING SECURITIES. THE PORTFOLIO AGREES TO DELIVER TO THE CUSTODIAN ALL
SECURITIES AND CASH NOW OR HEREAFTER OWNED OR ACQUIRED, AND ALL PAYMENTS OF
INCOME, PAYMENTS OF PRINCIPAL OR CAPITAL DISTRIBUTIONS RECEIVED BY IT ON
SECURITIES OWNED BY THE PORTFOLIO AT ANY GIVEN TIME, AND THE CASH CONSIDERATION
RECEIVED BY IT FOR SHARES OF THE PORTFOLIO. THE CUSTODIAN WILL NOT BE
RESPONSIBLE FOR ANY PROPERTY OF THE PORTFOLIO HELD OR RECEIVED BY THE PORTFOLIO
AND NOT DELIVERED TO THE CUSTODIAN.
UPON RECEIPT OF "PROPER INSTRUCTIONS" (AS DEFINED IN SECTION 4), THE
CUSTODIAN WILL EMPLOY ONE OR MORE SUBCUSTODIANS LOCATED IN THE UNITED STATES,
BUT ONLY IN ACCORDANCE WITH AN APPLICABLE VOTE BY THE BOARD OF
DIRECTORS/TRUSTEES OF THE FUND, AND PROVIDED THAT THE CUSTODIAN WILL HAVE NO
MORE OR LESS RESPONSIBILITY OR LIABILITY TO THE PORTFOLIO ON ACCOUNT OF ANY
ACTIONS OR OMISSIONS OF ANY SUB-CUSTODIAN SO EMPLOYED THAN ANY SUCH
SUB-CUSTODIAN HAS TO THE CUSTODIAN, AND FURTHER PROVIDED THAT THE CUSTODIAN WILL
NOT RELEASE THE SUB-CUSTODIAN FROM ANY RESPONSIBILITY OR LIABILITY UNLESS
MUTUALLY AGREED UPON BY THE PARTIES IN WRITING.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIO
2.1 HOLDING SECURITIES. THE CUSTODIAN WILL HOLD AND PHYSICALLY SEGREGATE
FOR THE ACCOUNT OF THE PORTFOLIO ALL NON-CASH PROPERTY OTHER THAN (A) SECURITIES
MAINTAINED IN A CLEARING AGENCY ACTING AS A SECURITIES DEPOSITORY OR IN A
BOOK-ENTRY SYSTEM AUTHORIZED BY THE U.S. DEPARTMENT OF THE TREASURY
(COLLECTIVELY REFERRED TO AS "SECURITIES SYSTEM;" SEE SECTION 2.10), AND (B)
COMMERCIAL PAPER OF AN ISSUER FOR WHICH THE CUSTODIAN ACTS AS ISSUING AND PAYING
AGENT ("DIRECT PAPER") WHICH IS DEPOSITED AND/OR MAINTAINED IN THE DIRECT PAPER
SYSTEM OF THE CUSTODIAN (SEE SECTION 2.11).
2.2 DELIVERY OF SECURITIES. THE CUSTODIAN WILL RELEASE AND DELIVER
PORTFOLIO SECURITIES HELD BY THE CUSTODIAN OR IN A SECURITIES SYSTEM ACCOUNT OF
THE CUSTODIAN OR IN THE CUSTODIAN'S DIRECT PAPER BOOK ENTRY SYSTEM ACCOUNT
("DIRECT PAPER SYSTEM ACCOUNT") ONLY UPON RECEIPT OF PROPER INSTRUCTIONS, WHICH
MAY BE CONTINUING INSTRUCTIONS WHEN DEEMED APPROPRIATE BY MUTUAL AGREEMENT OF
THE PARTIES, AND ONLY IN THE FOLLOWING CASES:
L) SALE. UPON THE SALE OF AND RECEIPT OF PAYMENT FOR PORTFOLIO SECURITIES;
2) SECURITIES SYSTEM. IN THE CASE OF A SALE EFFECTED THROUGH A SECURITIES
SYSTEM, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 2.10;
3) TENDER OFFER. TO THE DEPOSITORY AGENT OR OTHER RECEIVING AGENT IN
CONNECTION WITH TENDER OR OTHER SIMILAR OFFERS FOR THE PORTFOLIO'S SECURITIES;
4) REDEMPTION BY ISSUER. TO THE ISSUER OR ITS AGENT WHEN PORTFOLIO
SECURITIES ARE CALLED, REDEEMED, RETIRED OR OTHERWISE BECOME PAYABLE; PROVIDED
THAT, IN ANY SUCH CASE, THE CASH OR OTHER CONSIDERATION IS TO BE DELIVERED TO
THE CUSTODIAN;
5) TRANSFER TO ISSUER, NOMINEE; EXCHANGE. TO THE ISSUER OR ITS AGENT FOR
TRANSFER INTO THE NAME OF THE PORTFOLIO OR INTO THE NAME OF ANY NOMINEE OR
NOMINEES OF THE CUSTODIAN OR INTO THE NAME OR NOMINEE NAME OF ANY AGENT
APPOINTED PURSUANT TO THIS AGREEMENT OR INTO THE NAME OR NOMINEE NAME OF ANY
SUB-CUSTODIAN APPOINTED PURSUANT TO SECTION L; OR FOR EXCHANGE FOR A DIFFERENT
NUMBER OF BONDS, CERTIFICATES OR OTHER EVIDENCE REPRESENTING THE SAME AGGREGATE
FACE AMOUNT OR NUMBER OF UNITS AND BEARING THE SAME INTEREST RATE, MATURITY DATE
AND CALL PROVISIONS, IF ANY; PROVIDED THAT, IN ANY SUCH CASE, THE NEW SECURITIES
ARE TO BE DELIVERED TO THE CUSTODIAN;
6) SALE TO BROKER OR DEALER. UPON THE SALE OF PORTFOLIO SECURITIES TO THE
BROKER OR ITS CLEARING AGENT OR DEALER, AGAINST A RECEIPT, FOR EXAMINATION IN
ACCORDANCE WITH "STREET DELIVERY" CUSTOM; PROVIDED THAT THE CUSTODIAN WILL HAVE
NO RESPONSIBILITY OR LIABILITY FOR ANY LOSS ARISING FROM THE DELIVERY OF SUCH
SECURITIES PRIOR TO RECEIVING PAYMENT FOR SUCH SECURITIES EXCEPT AS MAY ARISE
FROM THE CUSTODIAN'S FAILURE TO ACT IN ACCORDANCE WITH ITS DUTIES AS SET FORTH
IN THIS AGREEMENT.
7) EXCHANGE OR CONVERSION. FOR EXCHANGE OR CONVERSION PURSUANT TO ANY PLAN
OF MERGER, CONSOLIDATION, RECAPITALIZATION, REORGANIZATION, SPLIT-UP OF SHARES,
CHANGE OF PAR VALUE OR READJUSTMENT OF THE SECURITIES OF THE ISSUER OF SUCH
SECURITIES, OR PURSUANT TO PROVISIONS FOR CONVERSION CONTAINED IN SUCH
SECURITIES, OR PURSUANT TO ANY DEPOSIT AGREEMENT PROVIDED THAT, IN ANY SUCH
CASE, THE NEW SECURITIES AND CASH, IF ANY, ARE TO BE DELIVERED TO THE CUSTODIAN;
8) WARRANTS, RIGHTS. IN THE CASE OF WARRANTS, RIGHTS OR SIMILAR SECURITIES,
THE SURRENDER THEREOF IN THE EXERCISE OF SUCH WARRANTS, RIGHTS OR SIMILAR
SECURITIES OR THE SURRENDER OF INTERIM RECEIPTS OR TEMPORARY SECURITIES FOR
DEFINITIVE SECURITIES; PROVIDED THAT, IN ANY SUCH CASE, THE NEW SECURITIES AND
CASH, IF ANY, ARE TO BE DELIVERED TO THE CUSTODIAN;
9) LOANS OF SECURITIES. FOR DELIVERY IN CONNECTION WITH ANY LOANS OF
SECURITIES MADE BY THE PORTFOLIO, MADE ONLY AGAINST RECEIPT OF ADEQUATE
COLLATERAL AS AGREED ON FROM TIME TO TIME BY THE CUSTODIAN AND THE PORTFOLIO.
LOANS MAY BE IN THE FORM OF CASH, OBLIGATIONS ISSUED BY THE UNITED STATES
GOVERNMENT, ITS AGENCIES OR INSTRUMENTALITIES, OR SUCH OTHER PROPERTY AS
MUTUALLY AGREED BY THE PARTIES, EXCEPT THAT IN CONNECTION WITH ANY LOANS FOR
WHICH COLLATERAL IS TO BE CREDITED TO THE CUSTODIAN'S ACCOUNT IN THE BOOK-ENTRY
SYSTEM AUTHORIZED BY THE U.S. DEPARTMENT OF THE TREASURY, THE CUSTODIAN WILL NOT
BE HELD LIABLE OR RESPONSIBLE FOR THE DELIVERY OF SECURITIES OWNED BY THE
PORTFOLIO PRIOR TO THE RECEIPT OF SUCH COLLATERAL, UNLESS THE CUSTODIAN FAILS TO
ACT IN ACCORDANCE WITH ITS DUTIES SET FORTH IN THIS AGREEMENT;
10) BORROWINGS. FOR DELIVERY AS SECURITY IN CONNECTION WITH ANY BORROWINGS
BY THE PORTFOLIO REQUIRING A PLEDGE OF ASSETS BY THE PORTFOLIO, MADE ONLY
AGAINST RECEIPT OF AMOUNTS BORROWED; EXCEPT, WHERE ADDITIONAL COLLATERAL IS
REQUIRED TO SECURE A BORROWING ALREADY MADE, FURTHER SECURITIES MAY BE RELEASED
FOR THAT PURPOSE, SUBJECT TO PROPER INSTRUCTIONS;
11) OPTIONS. FOR DELIVERY IN ACCORDANCE WITH THE PROVISIONS OF ANY
AGREEMENT AMONG THE PORTFOLIO, THE CUSTODIAN AND A BROKER-DEALER REGISTERED
UNDER THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT") AND A MEMBER OF
THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. ("NASD"), RELATING TO
COMPLIANCE WITH THE RULES OF THE OPTIONS CLEARING CORPORATION, ANY REGISTERED
NATIONAL SECURITIES EXCHANGE, ANY SIMILAR ORGANIZATION OR ORGANIZATIONS, OR THE
INVESTMENT COMPANY ACT OF 1940, REGARDING ESCROW OR OTHER ARRANGEMENTS IN
CONNECTION WITH TRANSACTIONS BY THE PORTFOLIO;
12) FUTURES. FOR DELIVERY IN ACCORDANCE WITH THE PROVISIONS OF ANY
AGREEMENT AMONG THE PORTFOLIO, THE CUSTODIAN, AND A FUTURES COMMISSION MERCHANT
REGISTERED UNDER THE COMMODITY EXCHANGE ACT, RELATING TO COMPLIANCE WITH THE
RULES OF THE COMMODITY FUTURES TRADING COMMISSION AND/OR ANY CONTRACT MARKET,
ANY SIMILAR ORGANIZATION OR ORGANIZATIONS, OR THE INVESTMENT COMPANY ACT OF
1940, REGARDING ACCOUNT DEPOSITS IN CONNECTION WITH TRANSACTIONS BY THE
PORTFOLIO;
13) IN-KIND DISTRIBUTIONS. UPON RECEIPT OF INSTRUCTIONS FROM THE
PORTFOLIO'S TRANSFER AGENT, FOR DELIVERY TO THE TRANSFER AGENT OR TO THE HOLDERS
OF SHARES IN CONNECTION WITH DISTRIBUTIONS IN KIND, AS MAY BE DESCRIBED FROM
TIME TO TIME IN THE PORTFOLIO'S CURRENTLY EFFECTIVE PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION, IN SATISFACTION OF SHAREHOLDER REQUESTS FOR REPURCHASE
OR REDEMPTION;
14) MISCELLANEOUS. FOR ANY OTHER PROPER CORPORATE PURPOSE, MADE ONLY UPON
RECEIPT OF A CERTIFIED COPY OF A RESOLUTION OF THE BOARD OF TRUSTEES SIGNED BY
AN OFFICER OF THE FUND AND CERTIFIED BY THE SECRETARY OR AN ASSISTANT SECRETARY,
SPECIFYING THE SECURITIES TO BE DELIVERED, SETTING FORTH THE PURPOSE FOR WHICH
SUCH DELIVERY IS TO BE MADE, DECLARING SUCH PURPOSE TO BE A PROPER CORPORATE
PURPOSE, AND NAMING THE PERSON OR PERSONS TO WHOM DELIVERY OF THE SECURITIES
WILL BE MADE.
IN ALL CASES, PAYMENTS TO THE PORTFOLIO WILL BE MADE IN CASH, BY A
CERTIFIED CHECK OR A TREASURER'S OR CASHIER'S CHECK OF A BANK, BY EFFECTIVE BANK
WIRE TRANSFER THROUGH THE FEDERAL RESERVE WIRE SYSTEM OR, IF APPROPRIATE,
OUTSIDE OF THE FEDERAL RESERVE WIRE SYSTEM AND SUBSEQUENT CREDIT TO THE
PORTFOLIO'S CUSTODIAN ACCOUNT, OR, IN CASE OF DELIVERY THROUGH A STOCK CLEARING
COMPANY, BY BOOK-ENTRY CREDIT BY THE STOCK CLEARING COMPANY IN ACCORDANCE WITH
THE THEN CURRENT STREET CUSTOM, OR SUCH OTHER FORM OF PAYMENT AS MAY BE MUTUALLY
AGREED ON BY THE PARTIES, IN ALL SUCH CASES COLLECTED FUNDS TO BE PROMPTLY
CREDITED TO THE PORTFOLIO.
2.3 REGISTRATION OF SECURITIES. SECURITIES HELD BY THE CUSTODIAN (OTHER
THAN BEARER SECURITIES) WILL BE REGISTERED (A) IN THE NAME OF THE PORTFOLIO OR
(B) IN THE NAME OF ANY NOMINEE OF THE PORTFOLIO OR OF ANY NOMINEE OF THE
CUSTODIAN ASSIGNED EXCLUSIVELY TO THE PORTFOLIO, UNLESS THE PORTFOLIO HAS
AUTHORIZED IN WRITING THE APPOINTMENT OF A NOMINEE TO BE USED IN COMMON WITH
OTHER REGISTERED INVESTMENT COMPANIES HAVING THE SAME INVESTMENT ADVISER AS THE
PORTFOLIO, OR IN THE NAME OR NOMINEE NAME OF ANY AGENT APPOINTED PURSUANT TO
SECTION 2.9 OR IN THE NAME OR NOMINEE NAME OF ANY SUB-CUSTODIAN APPOINTED
PURSUANT TO SECTION 1. ALL SECURITIES ACCEPTED BY THE CUSTODIAN ON BEHALF OF THE
PORTFOLIO UNDER THE TERMS OF THIS AGREEMENT WILL BE IN "STREET NAME" OR OTHER
GOOD DELIVERY FORM.
2.4 BANK ACCOUNTS. THE CUSTODIAN WILL OPEN AND MAINTAIN A SEPARATE BANK
ACCOUNT OR ACCOUNTS IN THE NAME OF THE PORTFOLIO, SUBJECT ONLY TO DRAFT OR ORDER
BY THE CUSTODIAN ACTING PURSUANT TO THE TERMS OF THIS AGREEMENT. THE CUSTODIAN
WILL HOLD IN THE ACCOUNT(S), IN ACCORDANCE WITH THE PROVISIONS OF THIS
AGREEMENT, ALL CASH RECEIVED BY IT FROM OR FOR THE ACCOUNT OF THE PORTFOLIO,
OTHER THAN CASH MAINTAINED BY THE PORTFOLIO IN A BANK ACCOUNT ESTABLISHED AND
USED IN ACCORDANCE WITH RULE 17F-3 UNDER THE INVESTMENT COMPANY ACT OF 1940.
FUNDS HELD BY THE CUSTODIAN FOR THE PORTFOLIO MAY BE DEPOSITED FOR THE
PORTFOLIO'S CREDIT IN THE BANK AFFILIATE OF THE CUSTODIAN OR IN SUCH OTHER BANKS
OR TRUST COMPANIES AS THE CUSTODIAN MAY IN ITS DISCRETION DEEM NECESSARY OR
DESIRABLE; PROVIDED, HOWEVER, THAT EVERY SUCH BANK OR TRUST COMPANY MUST BE
QUALIFIED TO ACT AS A CUSTODIAN UNDER THE INVESTMENT COMPANY ACT OF 1940. FUNDS
WILL BE DEPOSITED BY THE CUSTODIAN IN ITS CAPACITY AS CUSTODIAN AND WILL BE
WITHDRAWABLE BY THE CUSTODIAN ONLY IN THAT CAPACITY.
2.5 SALE OF SHARES AND AVAILABILITY OF FEDERAL FUNDS. UPON MUTUAL AGREEMENT
BETWEEN THE PORTFOLIO AND THE CUSTODIAN, THE CUSTODIAN WILL, UPON THE RECEIPT OF
PROPER INSTRUCTIONS, MAKE FEDERAL FUNDS AVAILABLE TO THE PORTFOLIO AS OF
SPECIFIED TIMES AGREED UPON FROM TIME TO TIME BY THE PORTFOLIO AND THE CUSTODIAN
IN THE AMOUNT OF CHECKS RECEIVED IN PAYMENT FOR SHARES OF THE PORTFOLIO WHICH
ARE DEPOSITED INTO THE PORTFOLIO'S ACCOUNT.
2.6 COLLECTION OF INCOME, DIVIDENDS. THE CUSTODIAN WILL COLLECT ON A TIMELY
BASIS ALL INCOME AND OTHER PAYMENTS WITH RESPECT TO REGISTERED SECURITIES HELD
TO WHICH THE PORTFOLIO IS ENTITLED EITHER BY LAW OR PURSUANT TO CUSTOM IN THE
SECURITIES BUSINESS. THE CUSTODIAN WILL ALSO COLLECT ON A TIMELY BASIS ALL
INCOME AND OTHER PAYMENTS WITH RESPECT TO BEARER SECURITIES IF, ON THE DATE OF
PAYMENT BY THE ISSUER, THE SECURITIES ARE HELD BY THE CUSTODIAN OR ITS AGENT.
THE CUSTODIAN WILL CREDIT ALL SUCH INCOME OR OTHER PAYMENTS, AS COLLECTED, TO
THE PORTFOLIO'S CUSTODIAN ACCOUNT. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, THE CUSTODIAN WILL DETACH AND PRESENT FOR PAYMENT ALL COUPONS AND
OTHER INCOME ITEMS REQUIRING PRESENTATION AS AND WHEN THEY BECOME DUE AND WILL
COLLECT INTEREST WHEN DUE ON SECURITIES HELD PURSUANT TO THIS AGREEMENT. THE
CUSTODIAN WILL ALSO RECEIVE AND COLLECT ALL STOCK DIVIDENDS, RIGHTS AND OTHER
ITEMS OF LIKE NATURE AS AND WHEN THEY BECOME DUE OR PAYABLE. INCOME DUE THE
PORTFOLIO ON SECURITIES LOANED PURSUANT TO THE PROVISIONS OF SECTION 2.2(10)
WILL BE THE RESPONSIBILITY OF THE PORTFOLIO; THE CUSTODIAN WILL HAVE NO DUTY OR
RESPONSIBILITY IN CONNECTION WITH LOANED SECURITIES OTHER THAN TO PROVIDE THE
PORTFOLIO WITH SUCH INFORMATION OR DATA AS MAY BE NECESSARY TO ASSIST THE
PORTFOLIO IN ARRANGING FOR THE TIMELY DELIVERY TO THE CUSTODIAN OF THE INCOME TO
WHICH THE PORTFOLIO IS PROPERLY ENTITLED.
2.7 PAYMENT OF PORTFOLIO MONIES. UPON RECEIPT OF PROPER INSTRUCTIONS, WHICH
MAY BE CONTINUING INSTRUCTIONS WHEN DEEMED APPROPRIATE BY MUTUAL AGREEMENT OF
THE PARTIES, THE CUSTODIAN WILL PAY OUT MONIES OF THE PORTFOLIO IN THE FOLLOWING
CASES ONLY:
L) PURCHASES. UPON THE PURCHASE OF DOMESTIC SECURITIES, OPTIONS, FUTURES
CONTRACTS OR OPTIONS ON FUTURES CONTRACTS FOR THE ACCOUNT OF THE PORTFOLIO BUT
ONLY (A) AGAINST THE DELIVERY OF SUCH SECURITIES, OR EVIDENCE OF TITLE TO SUCH
OPTIONS, FUTURES CONTRACTS OR OPTIONS ON FUTURES CONTRACTS, TO THE CUSTODIAN (OR
ANY BANK, BANKING FIRM OR TRUST COMPANY DOING BUSINESS IN THE UNITED STATES OR
ABROAD WHICH IS QUALIFIED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
TO ACT AS A CUSTODIAN AND HAS BEEN DESIGNATED BY THE CUSTODIAN AS ITS AGENT FOR
THIS PURPOSE IN ACCORDANCE WITH SECTION 2.9 OF THIS AGREEMENT) REGISTERED IN THE
NAME OF THE PORTFOLIO OR IN THE NAME OF A NOMINEE OF THE PORTFOLIO OR OF THE
CUSTODIAN REFERRED TO IN SECTION 2.3 OF THIS AGREEMENT, OR IN OTHER PROPER FORM
FOR TRANSFER; (B) IN THE CASE OF A PURCHASE EFFECTED THROUGH A SECURITIES
SYSTEM, IN ACCORDANCE WITH THE CONDITIONS SET FORTH IN SECTION 2.10 OF THIS
AGREEMENT; (C) IN THE CASE OF A PURCHASE INVOLVING THE DIRECT PAPER SYSTEM, IN
ACCORDANCE WITH THE CONDITIONS SET FORTH IN SECTION 2.11; OR (D) IN THE CASE OF
REPURCHASE AGREEMENTS ENTERED INTO BETWEEN THE PORTFOLIO AND THE CUSTODIAN, OR
ANOTHER BANK, OR A BROKER-DEALER WHICH IS A MEMBER OF NASD, (I) AGAINST DELIVERY
OF THE SECURITIES EITHER IN CERTIFICATE FORM OR THROUGH AN ENTRY CREDITING THE
CUSTODIAN'S ACCOUNT AT THE FEDERAL RESERVE BANK WITH SUCH SECURITIES OR (II)
AGAINST DELIVERY OF THE RECEIPT EVIDENCING PURCHASE BY THE PORTFOLIO OF
SECURITIES OWNED BY THE CUSTODIAN ALONG WITH WRITTEN EVIDENCE OF THE AGREEMENT
BY THE CUSTODIAN TO REPURCHASE SUCH SECURITIES FROM THE PORTFOLIO. ALL COUPON
BONDS ACCEPTED BY THE CUSTODIAN MUST HAVE THE COUPONS ATTACHED OR MUST BE
ACCOMPANIED BY A CHECK PAYABLE ON COUPON PAYABLE DATE FOR THE INTEREST DUE ON
THAT DATE.
2) EXCHANGES. IN CONNECTION WITH CONVERSION, EXCHANGE OR SURRENDER OF
SECURITIES OWNED BY THE PORTFOLIO AS SET FORTH IN SECTION 2.2 HEREOF;
3) REDEMPTIONS. FOR THE REDEMPTION OR REPURCHASE OF SHARES ISSUED BY THE
PORTFOLIO AS SET FORTH IN THIS AGREEMENT;
4) EXPENSE AND LIABILITY. FOR THE PAYMENT OF ANY EXPENSE OR LIABILITY
INCURRED BY THE PORTFOLIO, INCLUDING BUT NOT LIMITED TO THE FOLLOWING PAYMENTS
FOR THE ACCOUNT OF THE PORTFOLIO: INTEREST, TAXES, MANAGEMENT, ACCOUNTING,
TRANSFER AGENT AND LEGAL FEES, AND OPERATING EXPENSES OF THE PORTFOLIO WHETHER
OR NOT SUCH EXPENSES ARE TO BE IN WHOLE OR PART CAPITALIZED OR TREATED AS
DEFERRED EXPENSES;
5) DIVIDENDS. FOR THE PAYMENT OF ANY DIVIDENDS OR OTHER DISTRIBUTIONS TO
SHAREHOLDERS DECLARED BY THE PORTFOLIO;
6) SHORT SALE DIVIDEND. FOR PAYMENT OF THE AMOUNT OF DIVIDENDS RECEIVED IN
RESPECT OF SECURITIES SOLD SHORT;
7) LOAN. FOR REPAYMENT OF A LOAN UPON REDELIVERY OF PLEDGED SECURITIES AND
UPON SURRENDER OF THE NOTE(S), IF ANY, EVIDENCING THE LOAN;
8) MISCELLANEOUS. FOR ANY OTHER PROPER PURPOSE UPON RECEIPT OF A CERTIFIED
COPY OF A RESOLUTION OF THE BOARD OF TRUSTEES SIGNED BY AN OFFICER OF THE FUND
AND CERTIFIED BY ITS SECRETARY OR AN ASSISTANT SECRETARY, SPECIFYING THE AMOUNT
OF SUCH PAYMENT, SETTING FORTH THE PURPOSE FOR WHICH SUCH PAYMENT IS TO BE MADE,
DECLARING SUCH PURPOSE TO BE A PROPER PURPOSE, AND NAMING THE PERSON OR PERSONS
TO WHOM SUCH PAYMENT IS TO BE MADE.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
WHERE PAYMENT FOR PORTFOLIO SECURITIES IS MADE BY THE CUSTODIAN IN ADVANCE OF
RECEIPT OF THE SECURITIES PURCHASED IN THE ABSENCE OF SPECIFIC WRITTEN
INSTRUCTIONS FROM THE PORTFOLIO TO SO PAY IN ADVANCE, THE CUSTODIAN WILL BE
ABSOLUTELY LIABLE TO THE PORTFOLIO FOR SUCH SECURITIES TO THE SAME EXTENT AS IF
THE SECURITIES HAD BEEN RECEIVED BY THE CUSTODIAN.
2.9 APPOINTMENT OF AGENTS. AT ITS DISCRETION, THE CUSTODIAN MAY AT ANY TIME
APPOINT (AND MAY AT ANY TIME REMOVE) ANY OTHER BANK OR TRUST COMPANY QUALIFIED
TO ACT AS A CUSTODIAN UNDER THE INVESTMENT COMPANY ACT OF 1940 AS ITS AGENT TO
CARRY OUT SUCH OF THE PROVISIONS OF THIS SECTION 2 AS THE CUSTODIAN MAY FROM
TIME TO TIME DIRECT; PROVIDED, HOWEVER, THAT THE APPOINTMENT OF ANY AGENT WILL
NOT RELIEVE THE CUSTODIAN OF ITS RESPONSIBILITIES OR LIABILITIES UNDER THIS
AGREEMENT.
2.10 DEPOSIT OF SECURITIES IN SECURITIES SYSTEMS. THE CUSTODIAN MAY DEPOSIT
AND/OR MAINTAIN PORTFOLIO SECURITIES IN A SECURITIES SYSTEM IN ACCORDANCE WITH
APPLICABLE FEDERAL RESERVE BOARD AND SECURITIES AND EXCHANGE COMMISSION RULES
AND REGULATIONS, IF ANY, AND SUBJECT TO THE FOLLOWING PROVISIONS:
L) ACCOUNT OF CUSTODIAN. THE CUSTODIAN MAY KEEP PORTFOLIO SECURITIES IN A
SECURITIES SYSTEM PROVIDED THAT SUCH SECURITIES ARE REPRESENTED IN AN ACCOUNT OF
THE CUSTODIAN IN THE SECURITIES SYSTEM THAT DOES NOT INCLUDE ANY ASSETS OF THE
CUSTODIAN OTHER THAN ASSETS HELD AS A FIDUCIARY, CUSTODIAN OR OTHERWISE FOR
CUSTOMERS;
2) RECORDS. THE CUSTODIAN'S REOCRDS, WITH RESPECT TO PORTFOLIO SECURITIES
MAINTAINED IN A SECURITIES SYSTEM, MUST IDENTIFY BY BOOK ENTRY THOSE SECURITIES
BELONGING TO THE PORTFOLIO;
3) PAYMENT/DELIVERY.
(A) SUBJECT TO SECTION 2.7 (PAYMENT OF PORTFOLIO MONIES), THE CUSTODIAN WILL
PAY FOR PORTFOLIO SECURITIES UPON (I) RECEIPT OF ADVICE FROM THE SECURITIES
SYSTEM THAT SUCH SECURITIES HAVE BEEN TRANSFERRED TO THE ACCOUNT, AND (II) THE
MAKING OF AN ENTRY ON THE RECORDS OF THE CUSTODIAN TO REFLECT SUCH PAYMENT AND
TRANSFER FOR THE ACCOUNT OF THE PORTFOLIO.
(B) SUBJECT TO SECTION 2.2 (DELIVERY OF SECURITIES), THE CUSTODIAN WILL
TRANSFER PORTFOLIO SECURITIES UPON (I) RECEIPT OF ADVICE FROM THE SECURITIES
SYSTEM THAT PAYMENT FOR SUCH SECURITIES HAS BEEN TRANSFERRED TO THE CUSTODIAN'S
ACCOUNT, AND (II) THE MAKING OF AN ENTRY ON THE RECORDS OF THE CUSTODIAN TO
REFLECT SUCH TRANSFER AND PAYMENT FOR THE ACCOUNT OF THE PORTFOLIO.
(C) COPIES OF ALL ADVICES FROM THE SECURITIES SYSTEM OF TRANSFERS OF
PORTFOLIO SECURITIES WILL IDENTIFY THE PORTFOLIO, BE MAINTAINED FOR THE
PORTFOLIO BY THE CUSTODIAN AND BE PROVIDED TO THE PORTFOLIO AT ITS REQUEST. THE
CUSTODIAN WILL FURNISH DAILY TRANSACTION SHEETS REFLECTING EACH DAY'S
TRANSACTIONS IN THE SECURITIES SYSTEM FOR THE ACCOUNT OF THE PORTFOLIO;
4) REPORTS. THE CUSTODIAN WILL PROVIDE THE PORTFOLIO WITH ANY REPORT
OBTAINED BY THE CUSTODIAN ON THE SECURITIES SYSTEM'S ACCOUNTING SYSTEM, INTERNAL
ACCOUNTING CONTROL AND PROCEDURES FOR SAFEGUARDING SECURITIES DEPOSITED IN THE
SECURITIES SYSTEM, AND FURTHER AGREES TO PROVIDE THE PORTFOLIO WITH COPIES OF
ANY DOCUMENTATION IT HAS RELATING TO ITS ARRANGEMENTS WITH THE SECURITIES
SYSTEMS AS SET FORTH IN THIS AGREEMENT OR AS OTHERWISE REQUIRED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY AGENCY OR
ORGANIZATION;
5) INDEMNIFICATION. ANYTHING TO THE CONTRARY IN THIS AGREEMENT
NOTWITHSTANDING, THE CUSTODIAN WILL BE LIABLE TO THE PORTFOLIO FOR ANY LOSS OR
EXPENSE, INCLUDING REASONABLE ATTORNEYS FEES, OR DAMAGE TO THE PORTFOLIO
RESULTING FROM USE OF THE SECURITIES SYSTEM BY REASON OF ANY FAILURE BY THE
CUSTODIAN, ITS AGENTS, OR ANY EMPLOYEE OR AGENT OF THE CUSTODIAN OR AGENT, OR
FROM FAILURE OF THE CUSTODIAN OR ANY SUCH AGENT TO ENFORCE EFFECTIVELY SUCH
RIGHTS AS IT MAY HAVE AGAINST THE SECURITIES SYSTEM; AT THE ELECTION OF THE
PORTFOLIO, IT WILL BE ENTITLED TO BE SUBROGATED TO THE RIGHTS OF THE CUSTODIAN
WITH RESPECT TO ANY CLAIM AGAINST THE SECURITIES SYSTEM OR ANY OTHER PERSON
WHICH THE CUSTODIAN MAY HAVE AS ACONSEQUENCE OF ANY SUCH LOSS, EXPENSE OR DAMAGE
IF AND TO THE EXTENT THAT THE PORTFOLIO HAS NOT BEEN MADE WHOLE FOR ANY SUCH
LOSS, EXPENSE OR DAMAGE.
2.11 PORTFOLIO ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. THE
CUSTODIAN MAY DEPOSIT AND/OR MAINTAIN SECURITIES OWNED BY THE PORTFOLIO IN THE
DIRECT PAPER SYSTEM OF THE CUSTODIAN SUBJECT TO THE FOLLOWING PROVISIONS:
L) NO TRANSACTION RELATING TO SECURITIES IN THE DIRECT PAPER SYSTEM WILL BE
EFFECTED IN THE ABSENCE OF PROPER INSTRUCTIONS;
2) THE CUSTODIAN MAY KEEP SECURITIES OF THE PORTFOLIO IN THE DIRECT PAPER
SYSTEM ONLY IF SUCH SECURITIES ARE REPRESENTED IN AN ACCOUNT OF THE CUSTODIAN IN
THE DIRECT PAPER SYSTEM THAT DOES NOT INCLUDE ANY ASSETS OF THE CUSTODIAN OTHER
THAN ASSETS HELD AS A FIDUCIARY, CUSTODIAN OR OTHERWISE FOR CUSTOMERS;
3) THE RECORDS OF THE CUSTODIAN WITH RESPECT TO SECURITIES OF THE PORTFOLIO
THAT ARE MAINTAINED IN THE DIRECT PAPER SYSTEM WILL IDENTIFY BY BOOK ENTRY THOSE
SECURITIES BELONGING TO THE PORTFOLIO;
4) THE CUSTODIAN WILL PAY FOR SECURITIES PURCHASED FOR THE ACCOUNT OF THE
PORTFOLIO UPON THE MAKING OF AN ENTRY ON THE RECORDS OF THE CUSTODIAN TO REFLECT
SUCH PAYMENT AND TRANSFER OF SECURITIES TO THE ACCOUNT OF THE PORTFOLIO. THE
CUSTODIAN WILL TRANSFER SECURITIES SOLD FOR THE ACCOUNT OF THE PORTFOLIO UPON
THE MAKING OF AN ENTRY ON THE RECORDS OF THE CUSTODIAN TO REFLECT SUCH TRANSFER
AND RECEIPT OF PAYMENT FOR THE ACCOUNT OF THE PORTFOLIO;
5) THE CUSTODIAN WILL FURNISH THE PORTFOLIO CONFIRMATION OF EACH TRANSFER TO
OR FROM THE ACCOUNT OF THE PORTFOLIO, IN THE FORM OF A WRITTEN ADVICE OR NOTICE,
OF DIRECT PAPER ON THE NEXT BUSINESS DAY FOLLOWING SUCH TRANSFER AND WILL
FURNISH TO THE PORTFOLIO COPIES OF DAILY TRANSACTION SHEETS REFLECTING EACH
DAY'S TRANSACTION IN THE SECURITIES SYSTEM FOR THE ACCOUNT OF THE PORTFOLIO;
6) THE CUSTODIAN WILL PROVIDE THE PORTFOLIO WITH ANY REPORT ON ITS SYSTEM OF
INTERNAL ACCOUNTING CONTROL AS THE PORTFOLIO MAY REASONABLY REQUEST FROM TIME TO
TIME;
2.12 SEGREGATED ACCOUNT. THE CUSTODIAN WILL, UPON RECEIPT OF PROPER
INSTRUCTIONS, ESTABLISH AND MAINTAIN A SEGREGATED ACCOUNT OR ACCOUNTS FOR AND ON
BEHALF OF THE PORTFOLIO, INTO WHICH MAY BE TRANSFERRED CASH AND/OR SECURITIES,
INCLUDING SECURITIES MAINTAINED IN AN ACCOUNT BY THE CUSTODIAN PURSUANT TO
SECTION 2.10 OF THIS AGREEMENT; (I) IN ACCORDANCE WITH THE PROVISIONS OF ANY
AGREEMENT AMONG THE PORTFOLIO, THE CUSTODIAN AND A BROKER-DEALER REGISTERED
UNDER THE EXCHANGE ACT AND A MEMBER OF THE NASD (OR ANY FUTURES COMMISSION
MERCHANT REGISTERED UNDER THE COMMODITY EXCHANGE ACT), RELATING TO COMPLIANCE
WITH THE RULES OF THE OPTIONS CLEARING CORPORATION AND OF ANY REGISTERED
NATIONAL SECURITIES EXCHANGE (OR THE COMMODITY FUTURES TRADING COMMISSION OR ANY
REGISTERED CONTRACT MARKET), OR OF ANY SIMILAR ORGANIZATION OR ORGANIZATIONS,
REGARDING ESCROW OR OTHER ARRANGEMENTS IN CONNECTION WITH TRANSACTIONS BY THE
PORTFOLIO, (II) FOR PURPOSES OF SEGREGATING CASH OR GOVERNMENT SECURITIES IN
CONNECTION WITH OPTIONS PURCHASED, SOLD OR WRITTEN BY THE PORTFOLIO OR COMMODITY
FUTURES CONTRACTS OR OPTIONS THEREON PURCHASED OR SOLD BY THE PORTFOLIO, (III)
FOR THE PURPOSES OF COMPLIANCE BY THE PORTFOLIO WITH THE PROCEDURES REQUIRED BY
INVESTMENT COMPANY ACT RELEASE NO. 10666, OR ANY SUBSEQUENT RELEASE, RULE OR
POLICY, OF THE SECURITIES AND EXCHANGE COMMISSION RELATING TO THE MAINTENANCE OF
SEGREGATED ACCOUNTS BY REGISTERED INVESTMENT COMPANIES AND (IV) FOR OTHER PROPER
CORPORATE PURPOSES UPON RECEIPT OF A CERTIFIED COPY OF A RESOLUTION OF THE BOARD
OF TRUSTEES OR OF THE EXECUTIVE COMMITTEE SIGNED BY AN OFFICER OF THE PORTFOLIO
AND CERTIFIED BY THE SECRETARY OR AN ASSISTANT SECRETARY, SETTING FORTH THE
PURPOSE OR PURPOSES OF SUCH SEGREGATED ACCOUNT AND DECLARING SUCH PURPOSES TO BE
PROPER CORPORATE PURPOSES.
2.13 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. THE CUSTODIAN WILL EXECUTE
OWNERSHIP AND OTHER CERTIFICATES AND AFFIDAVITS FOR ALL FEDERAL AND STATE TAX
PURPOSES IN CONNECTION WITH RECEIPT OF INCOME OR OTHER PAYMENTS FOR PORTFOLIO
SECURITIES AND IN CONNECTION WITH TRANSFERS OF SUCH SECURITIES.
2.14 PROXIES. IF THE SECURITIES ARE REGISTERED OTHER THAN IN THE NAME OF THE
PORTFOLIO OR A NOMINEE OF THE PORTFOLIO, THE CUSTODIAN WILL CAUSE ALL PROXIES
PROMPTLY TO BE EXECUTED BY THE REGISTERED HOLDER OF SUCH SECURITIES, WITHOUT
INDICATION OF THE MANNER IN WHICH SUCH PROXIES ARE TO BE VOTED, AND WILL
PROMPTLY DELIVER TO THE PORTFOLIO ALL PROXY SOLICITING MATERIALS AND ALL NOTICES
RELATING TO SUCH SECURITIES.
2.15 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. THE CUSTODIAN WILL
TRANSMIT PROMPTLY TO THE PORTFOLIO ALL WRITTEN INFORMATION (INCLUDING, WITHOUT
LIMITATION, PENDENCY OF CALLS AND MATURITIES OF DOMESTIC SECURITIES AND
EXPIRATIONS OF RIGHTS IN CONNECTION THEREWITH AND NOTICES OF EXERCISE OF CALL
AND PUT OPTIONS WRITTEN BY THE PORTFOLIO AND THE MATURITY OF FUTURES CONTRACTS
PURCHASED OR SOLD BY THE PORTFOLIO) RECEIVED BY THE CUSTODIAN FROM ISSUERS OF
THE PORTFOLIO SECURITIES BY THE CUSTODIAN, AN AGENT APPOINTED UNDER SECTION 2.9,
OR SUBCUSTODIAN APPOINTED UNDER SECTION 1. WITH RESPECT TO TENDER OR EXCHANGE
OFFERS, THE CUSTODIAN WILL TRANSMIT PROMPTLY TO THE PORTFOLIO ALL WRITTEN
INFORMATION RECEIVED BY THE CUSTODIAN, AN AGENT APPOINTED UNDER SECTION 2.9, OR
SUBCUSTODIAN APPOINTED UNDER SECTION 1 FROM ISSUERS OF THE SECURITIES WHOSE
TENDER OR EXCHANGE IS SOUGHT AND FROM THE PARTY (OR ITS AGENTS) MAKING THE
TENDER OR EXCHANGE OFFER. IF THE PORTFOLIO DESIRES TO TAKE ACTION WITH RESPECT
TO ANY TENDER OFFER, EXCHANGE OFFER OR ANY OTHER SIMILAR TRANSACTION, THE
PORTFOLIO WILL NOTIFY THE CUSTODIAN OF SUCH DESIRED ACTION AT LEAST 3 BUSINESS
DAYS PRIOR TO THE TIME SUCH ACTION MUST BE TAKEN UNDER THE TERMS OF THE TENDER,
EXCHANGE OFFER, OR OTHER SIMILAR TRANSACTION, AND IT WILL BE THE RESPONSIBILITY
OF THE CUSTODIAN TO TIMELY TRANSMIT TO THE APPROPRIATE PERSON(S) THE PORTFOLIO'S
NOTICE. WHERE THE PORTFOLIO DOES NOT NOTIFY THE CUSTODIAN OF ITS DESIRED ACTION
WITHIN THE 3 BUSINESS DAY PERIOD, THE CUSTODIAN WILL USE ITS BEST EFFORTS TO
TIMELY TRANSMIT THE FUND'S NOTICE TO THE APPROPRIATE PERSON.
2.16 REPORTS TO PORTFOLIO BY INDEPENDENT PUBLIC ACCOUNTANTS. THE CUSTODIAN WILL
PROVIDE THE PORTFOLIO, AT SUCH TIMES AS THE PORTFOLIO MAY REASONABLY REQUIRE,
WITH REPORTS BY INDEPENDENT PUBLIC ACCOUNTANTS ON THE ACCOUNTING SYSTEM,
INTERNAL ACCOUNTING CONTROL AND PROCEDURES FOR SAFEGUARDING SECURITIES, FUTURES
CONTRACTS AND OPTIONS ON FUTURES CONTRACTS, INCLUDING SECURITIES DEPOSITED
AND/OR MAINTAINED IN A SECURITIES SYSTEM, RELATING TO THE SERVICES PROVIDED BY
THE CUSTODIAN UNDER THIS CONTRACT; SUCH REPORTS WILL BE OF SUFFICIENT SCOPE AND
IN SUFFICIENT DETAIL, AS MAY REASONABLY BE REQUIRED BY THE PORTFOLIO TO PROVIDE
REASONABLE ASSURANCE THAT ANY MATERIAL INADEQUACIES EXISTING OR ARISING SINCE
THE PRIOR EXAMINATION WOULD BE DISCLOSED BY SUCH EXAMINATION. THE REPORTS MUST
DESCRIBE ANY MATERIAL INADEQUACIES DISCLOSED AND, IF THERE ARE NO SUCH
INADEQUACIES, THE REPORTS WILL SO STATE.
3. PAYMENTS FOR REDEMPTIONS OF SHARES OF THE PORTFOLIO
FROM SUCH FUNDS AS MAY BE AVAILABLE FOR THE PURPOSE BUT SUBJECT TO THE
LIMITATIONS OF THE GOVERNING DOCUMENTS OF THE PORTFOLIO AND ANY APPLICABLE VOTES
OF THE BOARD OF TRUSTEES OF THE FUND PURSUANT THERETO, THE CUSTODIAN WILL, UPON
RECEIPT OF INSTRUCTIONS FROM THE TRANSFER AGENT, MAKE FUNDS AVAILABLE FOR
PAYMENT TO HOLDERS OF SHARES WHO HAVE DELIVERED TO THE TRANSFER AGENT A REQUEST
FOR REDEMPTION OF THEIR SHARES. IN CONNECTION WITH THE REDEMPTION OF SHARES OF
THE PORTFOLIO, THE CUSTODIAN IS AUTHORIZED UPON RECEIPT OF INSTRUCTIONS FROM THE
TRANSFER AGENT TO WIRE FUNDS TO OR THROUGH A COMMERCIAL BANK DESIGNATED BY THE
REDEEMING SHAREHOLDER.
THE CUSTODIAN WILL RECEIVE PAYMENTS FOR PORTFOLIO SHARES ISSUED OR SOLDFROM
THE DISTRIBUTOR FOR THE PORTFOLIO'S SHARES OR FROM THE TRANSFER AGENT OF THE
PORTFOLIO AND DEPOSIT AS RECEIVED INTO THE FUND'S ACCOUNT SUCH PAYMENTS AS ARE
RECEIVED FOR SHARES OF THE PORTFOLIO ISSUED OR SOLD FROM TIME TO TIME BY THE
PORTFOLIO. THE CUSTODIAN WILL PROVIDE TIMELY NOTIFICATION TO THE PORTFOLIO AND
THE TRANSFER AGENT OF ANY RECEIPT BY IT OF PAYMENTS FOR SHARES OF THE PORTFOLIO.
4. PROPER INSTRUCTIONS
"PROPER INSTRUCTIONS" MEANS A WRITING SIGNED OR INITIALLED BY ONE OR MORE
PERSONS AUTHORIZED BY THE BOARD OF TRUSTEES. EACH SUCH WRITING MUST SET FORTH
THE SPECIFIC TRANSACTION OR TYPE OF TRANSACTION INVOLVED, INCLUDING A STATEMENT
OF THE PURPOSE FOR WHICH SUCH ACTION IS REQUESTED, AND MAY BE A BLANKET
INSTRUCTION AUTHORIZING SPECIFIC TRANSACTIONS OF A ROUTINE NATURE OR OCCURING
REPEATEDLY. ORAL INSTRUCTIONS WILL BE CONSIDERED PROPER INSTRUCTIONS IF THE
CUSTODIAN REASONABLY BELIEVES THEM TO HAVE BEEN GIVEN BY A PERSON AUTHORIZED TO
GIVE SUCH INSTRUCTIONS WITH RESPECT TO THE TRANSACTION INVOLVED. THE PORTFOLIO
WILL CAUSE ALL ORAL INSTRUCTIONS TO BE CONFIRMED IN WRITING. UPON RECEIPT OF A
CERTIFICATE OF THE SECRETARY OR AN ASSISTANT SECRETARY AS TO THE AUTHORIZATION
BY THE BOARD OF TRUSTEES OF THE FUND, ACCOMPANIED BY A DETAILED DESCRIPTION OF
PROCEDURES APPROVED BY THE BOARD OF TRUSTEES, PROPER INSTRUCTIONS MAY INCLUDE
COMMUNICATIONS EFFECTED DIRECTLY BETWEEN ELECTRO-MECHANICAL OR ELECTRONIC
DEVICES PROVIDED THAT THE BOARD OF TRUSTEES AND THE CUSTODIAN ARE SATISFIED THAT
SUCH PROCEDURES AFFORD ADEQUATE SAFEGUARDS FOR THE PORTFOLIO'S ASSETS.
5. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
IN ITS DISCRETION THE CUSTODIAN MAY, WITHOUT EXPRESS AUTHORITY FROM THE
PORTFOLIO:
L) MAKE PAYMENTS TO ITSELF OR OTHERS FOR MINOR EXPENSES OF HANDLING
SECURITIES OR OTHER SIMILAR ITEMS RELATING TO ITS DUTIES UNDER THIS AGREEMENT,
PROVIDED THAT ALL SUCH PAYMENTS WILL BE ACCOUNTED FOR TO THE PORTFOLIO;
2) SURRENDER SECURITIES IN TEMPORARY FORM FOR SECURITIES IN DEFINITIVE FORM;
3) ENDORSE FOR COLLECTION, IN THE NAME OF THE PORTFOLIO, CHECKS, DRAFTS AND
OTHER NEGOTIABLE INSTRUMENTS ON THE SAME DAY AS RECEIVED; AND
4) IN GENERAL, ATTEND TO ALL NONDISCRETIONARY DETAILS IN CONNECTION WITH THE
SALE, EXCHANGE, SUBSTITUTION, PURCHASE, TRANSFER AND OTHER DEALINGS WITH THE
SECURITIES AND PROPERTY OF THE PORTFOLIO EXCEPT AS OTHERWISE DIRECTED BY THE
BOARD OF TRUSTEES OF THE FUND.
6. EVIDENCE OF AUTHORITY, RELIANCE ON DOCUMENTS
THE CUSTODIAN WILL NOT BE LIABLE FOR ACTIONS TAKEN PURSUANT TO
INSTRUCTIONS, NOTICE, REQUEST, CONSENT, CERTIFICATE OR OTHER INSTRUMENT OR PAPER
REASONABLY AND IN GOOD FAITH BELIEVED BY IT TO BE GENUINE AND TO HAVE BEEN
PROPERLY EXECUTED BY OR ON BEHALF OF THE PORTFOLIO IN ACCORDANCE WITH PROPER
INSTRUCTIONS AS DEFINED IN SECTION 4 OF THIS AGREEMENT. THE CUSTODIAN MAY
RECEIVE AND ACCEPT A CERTIFIED COPY OF A VOTE OF THE BOARD OF TRUSTEES OF THE
FUND AS CONCLUSIVE EVIDENCE (A) OF THE AUTHORITY OF ANY PERSON TO ACT IN
ACCORDANCE WITH SUCH VOTE OR (B) OF ANY DETERMINATION OR OF ANY ACTION BY THE
BOARD OF TRUSTEES PURSUANT TO THE GOVERNING DOCUMENTS OF THE FUND AS DESCRIBED
IN SUCH VOTE, AND SUCH VOTE MAY BE CONSIDERED AS IN FULL FORCE AND EFFECT UNTIL
RECEIPT BY THE CUSTODIAN OF WRITTEN NOTICE TO THE CONTRARY. SO LONG AS AND TO
THE EXTENT THAT IT IS IN THE EXERCISE OF THE STANDARD OF CARE SET FORTH IN
SECTION 11 OF THIS AGREEMENT, THE CUSTODIAN WILL NOT BE RESPONSIBLE FOR THE
TITLE, VALIDITY OR GENUINENESS OF ANY PROPERTY OR EVIDENCE OF TIT!E RECEIVED BY
IT OR DELIVERED BY IT PURSUANT TO THIS AGREEMENT AND WILL BE HELD HARMLESS IN
ACTING UPON ANY NOTICE, REQUEST, CONSENT, CERTIFICATE OR OTHER INSTRUMENT
REASONABLY BELIEVED BY IT TO BE GENUINE AND TO BE SIGNED BY THE PROPER PARTY OR
PARTIES.
7. RECORDS, INVENTORY
THE CUSTODIAN WILL CREATE AND MAINTAIN ALL RECORDS RELATING TO ITS
ACTIVITIES AND OBLIGATIONS UNDER THIS AGREEMENT IN SUCH MANNER AS WILL MEET THE
OBLIGATIONS OF THE PORTFOLIO UNDER THE INVESTMENT COMPANY ACT OF 1940, WITH
PARTICULAR ATTENTION TO SECTION 31 AND RULES 31A-1 AND 31A-2 THEREUNDER,
APPLICABLE FEDERAL AND STATE TAX LAWS AND ANY OTHER LAW OR ADMINISTRATIVE RULES
OR PROCEDURES THAT MAY BE APPLICABLE TO THE PORTFOLIO. ALL SUCH RECORDS WILL BE
THE PROPERTY OF THE PORTFOLIO AND WILL AT ALL TIMES DURING THE REGULAR BUSINESS
HOURS OF THE CUSTODIAN BE OPEN FOR INSPECTION AND AUDIT BY DULY AUTHORIZED
OFFICERS, EMPLOYEES OR AGENTS OF THE PORTFOLIO AND EMPLOYEES AND AGENTS OF THE
SECURITIES AND EXCHANGE COMMISSION, AND, IN THE EVENT OF TERMINATION OF THIS
AGREEMENT, WILL BE DELIVERED IN ACCORDANCE WITH SECTION 12 OF THIS AGREEMENT.
THE CUSTODIAN WILL, AT THE PORTFOLIO'S REQUEST, SUPPLY THE PORTFOLIO WITH A
TABULATION OF SECURITIES OWNED BY THE PORTFOLIO AND HELD BY THE CUSTODIAN AND
WILL, WHEN REQUESTED TO DO SO BY THE PORTFOLIO AND FOR SUCH COMPENSATION AS WILL
BE AGREED UPON BETWEEN THE PORTFOLIO AND THE CUSTODIAN, INCLUDE CERTIFICATE
NUMBERS IN SUCH TABULATIONS. THE CUSTODIAN WILL CONDUCT A PERIODIC INVENTORY OF
ALL SECURITIES AND OTHER PROPERTY SUBJECT TO THIS AGREEMENT AND PROVIDE TO THE
PORTFOLIO A PERIODIC RECONCILIATION OF THE VAULTED POSITION OF THE PORTFOLIO TO
THE APPRAISED POSITION OF THE PORTFOLIO. THE CUSTODIAN WILL PROMPTLY REPORT TO
THE PORTFOLIO THE RESULTS OF THE RECONCILIATION, INDICATING ANY SHORTAGES OR
DISCREPANCIES UNCOVERED THEREBY, AND TAKE APPROPRIATE ACTION TO REMEDY ANY SUCH
SHORTAGES OR DISCREPANCIES.
8. OPINION OF THE PORTFOLIO'S INDEPENDENT ACCOUNTANT
THE CUSTODIAN WILL COOPERATE WITH THE PORTFOLIO'S INDEPENDENT PUBLIC
ACCOUNTANTS IN CONNECTION WITH THE ANNUAL AND OTHER AUDITS OF THE BOOKS AND
RECORDS OF THE PORTFOLIO AND TAKE ALL REASONABLE ACTION, AS THE PORTFOLIO MAY
FROM TIME TO TIME REQUEST, TO PROVIDE THE NECESSARY INFORMATION TO SUCH
ACCOUNTANTS FOR THE EXPRESSION OF THEIR OPINION WITHOUT ANY QUALIFICATION AS TO
THE SCOPE OF THEIR EXAMINATION, INCLUDING BUT NOT LIMITED TO, ANY OPINION IN
CONNECTION WITH THE PREPARATION OF THE PORTFOLIO'S FORM N-LA, AND FORM N-SAR OR
OTHER REPORTS TO THE SECURITIES AND EXCHANGE COMMISSION OR STATE REGULATORY
AGENCY AND WITH RESPECT TO ANY OTHER LEGAL REQUIREMENTS.
9. COMPENSATION OF CUSTODIAN
THE CUSTODIAN WILL BE ENTITLED TO REASONABLE COMPENSATION FOR ITS SERVICES
AND EXPENSES AS CUSTODIAN, AS AGREED UPON FROM TIME TO TIME BETWEEN THE
PORTFOLIO AND THE CUSTODIAN.
10. RESPONSIBILITY OF CUSTODIAN - INDEMNIFICATION
REASONABLE CARE - NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, THE CUSTODIAN WILL BE HELD TO THE EXERCISE OF REASONABLE CARE IN
CARRYING OUT THE PROVISIONS OF THIS AGREEMENT, BUT WILL BE KEPT INDEMNIFIED BY
AND WILL BE WITHOUT LIABILITY TO THE PORTFOLIO FOR ANY ACTION TAKEN OR OMITTED
BY IT IN GOOD FAITH WITHOUT NEGLIGENCE.
NOTICE TO PORTFOLIO - IN ORDER FOR THE INDEMNIFICATION PROVISION CONTAINED
IN THIS SECTION TO APPLY, IT IS UNDERSTOOD THAT IF IN ANY CASE THE PORTFOLIO MAY
BE ASKED TO INDEMNIFY OR HOLD THE CUSTODIAN HARMLESS, THE PORTFOLIO WILL BE
FULLY AND PROMPTLY ADVISED OF ALL PERTINENT FACTS CONCERNING THE SITUATION IN
QUESTION, AND IT IS FURTHER UNDERSTOOD THAT THE CUSTODIAN WILL USE ALL
REASONABLE CARE TO IDENTIFY AND NOTIFY THE PORTFOLIO PROMPTLY CONCERNING ANY
SITUATION WHICH PRESENTS OR APPEARS LIKELY TO PRESENT THE PROBABILITY OF SUCH A
CLAIM FOR INDEMNIFICATION AGAINST THE PORTFOLIO.
DEFENSE OF CUSTODIAN - THE PORTFOLIO WILL HAVE THE OPTION TO DEFEND THE
CUSTODIAN AGAINST ANY CLAIM WHICH MAY BE THE SUBJECT OF THIS INDEMNIFICATION,
AND IN THE EVENT THAT THE PORTFOLIO SO ELECTS, IT WILL SO NOTIFY THE CUSTODIAN,
AND THEREUPON THE PORTFOLIO WILL TAKE OVER COMPLETE DEFENSE OF THE CLAIM AND THE
CUSTODIAN WILL IN SUCH SITUATION INITIATE NO FURTHER LEGAL OR OTHER EXPENSES FOR
WHICH IT WILL SEEK INDEMNIFICATION UNDER THIS SECTION. THE CUSTODIAN WILL IN NO
CASE CONFESS ANY CLAIM OR MAKE ANY COMPROMISE IN ANY CASE IN WHICH THE PORTFOLIO
WILL BE ASKED TO INDEMNIFY THE CUSTODIAN EXCEPT WITH THE PORTFOLIO'S PRIOR
WRITTEN CONSENT. NOTHING IN THIS SECTION WILL BE CONSTRUED TO LIMIT ANY RIGHT
OR CAUSE OF ACTION ON THE PART OF THE CUSTODIAN UNDER THIS AGREEMENT WHICH IS
INDEPENDENT OF ANY RIGHT OR CAUSE OF ACTION ON THE PART OF THE PORTFOLIO. THE
CUSTODIAN WILL BE ENTITLED TO RELY ON AND MAY ACT UPON ADVICE OF COUNSEL (WHO
MAY BE COUNSEL FOR THE PORTFOLIO OR SUCH OTHER COUNSEL AS MAY BE AGREED TO BY
THE PARTIES) ON ALL MATTERS, AND WILL BE WITHOUT LIABILITY FOR ANY ACTION
REASONABLY TAKEN OR OMITTED PURSUANT TO SUCH ADVICE.
IF THE PORTFOLIO REQUIRES THE CUSTODIAN TO TAKE ANY ACTION WITH RESPECT TO
SECURITIES THAT INVOLVES THE PAYMENT OF MONEY, OR THAT MAY, IN THE OPINION OF
THE CUSTODIAN, RESULT IN THE CUSTODIAN OR ITS NOMINEE ASSIGNED TO THE PORTFOLIO
BEING LIABLE FOR THE PAYMENT OF MONEY OR INCURRING LIABILITY OF SOME OTHER FORM,
THE PORTFOLIO, AS A PREREQUISITE TO REQUIRING THE CUSTODIAN TO TAKE SUCH ACTION,
WILL INDEMNIFY THE CUSTODIAN IN AN AMOUNT AND FORM SATISFACTORY TO IT.
IF THE PORTFOLIO REQUIRES THE CUSTODIAN TO ADVANCE CASH OR SECURITIES FOR
ANY PURPOSE OR IN THE EVENT THAT THE CUSTODIAN OR ITS NOMINEE INCURS OR IS
ASSESSED ANY TAXES, CHARGES, EXPENSES, ASSESSMENTS, CLAIMS OR LIABILITIES IN
CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT, EXCEPT AS MAY ARISE FROM THE
CUSTODIAN'S OR ITS AGENT'S NEGLIGENT ACTION OR OMISSION, OR WILLFUL MISCONDUCT,
ANY PROPERTY HELD FOR THE ACCOUNT OF THE PORTFOLIO WILL SERVE AS SECURITY. IF
THE PORTFOLIO FAILS TO REPAY THE CUSTODIAN PROMPTLY, THE CUSTODIAN WILL BE
ENTITLED TO USE AVAILABLE CASH AND TO DISPOSE OF THE PORTFOLIO'S ASSETS TO THE
EXTENT NECESSARY FOR REIMBURSEMENT. IF THE CUSTODIAN EXERCISES THIS OPTION, IT
MUST GIVE THE PORTFOLIO REASONABLE NOTICE SO AS TO ENABLE THE PORTFOLIO TO REPAY
THE CASH OR SECURITIES ADVANCED. SUCH NOTICE WILL NOT PRECLUDE THE CUSTODIAN
FROM ASSERTING ANY LIEN UNDER THIS PROVISION.
11. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
THIS AGREEMENT WILL BECOME EFFECTIVE AS OF ITS EXECUTION, AND WILL CONTINUE
IN FORCE UNTIL TERMINATED AS PROVIDED IN THIS SECTION. IT MAY BE AMENDED AT ANY
TIME BY MUTUAL AGREEMENT OF THE PARTIES, AND MAY BE TERMINATED BY EITHER PARTY
WITH 60 DAYS WRITTEN NOTICE. THE PORTFOLIO MAY, BY ACTION OF THE FUND'S BOARD
OF TRUSTEES, IMMEDIATELY TERMINATE THIS AGREEMENT IN THE EVENT OF THE
APPOINTMENT OF A CONSERVATOR OR RECEIVER FOR THE CUSTODIAN BY THE COMPTROLLER OF
THE CURRENCY OR A LIKE EVENT AT THE DIRECTION OF AN APPROPRIATE REGULATORY
AGENCY OR COURT OF COMPETENT JURISDICTION.
IN THE EVENT THE AGREEMENT TERMINATES, THE PORTFOLIO WILL PAY THE CUSTODIAN
WHATEVER COMPENSATION IS DUE AS OF THE DATE OF THE TERMINATION, AND WILL
REIMBURSE THE CUSTODIAN FOR COSTS, EXPENSES AND DISBURSEMENTS INCURRED IN
CONNECTION WITH TERMINATION, BUT ONLY TO THE EXTENT THE PORTFOLIO GIVES PRIOR
APPROVAL FOR THE EXPENDITURES. APPROVAL WILL NOT BE UNREASONABLY WITHHELD.
12. SUCCESSOR CUSTODIAN
IF A SUCCESSOR CUSTODIAN IS APPOINTED BY THE BOARD OF TRUSTEES OF THE FUND,
THE CUSTODIAN WILL, UPON TERMINATION, DELIVER TO THE SUCCESSOR CUSTODIAN AT THE
OFFICE OF THE CUSTODIAN, DULY ENDORSED AND IN THE FORM FOR TRANSFER, ALL
SECURITIES, FUNDS AND OTHER PROPERTIES THEN HELD BY IT PURSUANT TO THIS
AGREEMENT, AND WILL TRANSFER TO AN ACCOUNT OF THE SUCCESSOR CUSTODIAN ALL OF THE
PORTFOLIO'S SECURITIES HELD IN A SECURITIES SYSTEM. THE CUSTODIAN WILL USE ITS
BEST EFFORTS TO ASSURE THAT THE SUCCESSOR CUSTODIAN WILL CONTINUE ANY
SUBCUSTODIAN AGREEMENT ENTERED INTO BY THE CUSTODIAN AND ANY SUBCUSTODIAN ON
BEHALF OF THE PORTFOLIO.
IF NO SUCCESSOR IS TO BE APPOINTED, THE CUSTODIAN WILL MAKE THE SECURITIES,
FUNDS AND OTHER PROPERTIES AVAILABLE AS ABOVE TO THE PORTFOLIO UPON RECEIPT OF A
CERTIFIED COPY OF A VOTE OF THE BOARD OF TRUSTEES OF THE FUND.
IF NO WRITTEN ORDER DESIGNATING A SUCCESSOR CUSTODIAN OR CERTIFIED COPY OF
A VOTE OF THE BOARD OF TRUSTEES IS DELIVERED TO THE CUSTODIAN ON OR BEFORE THE
EFFECTIVE DATE OF THE TERMINATION, THE CUSTODIAN WILL HAVE THE RIGHT TO MAKE
DELIVERY TO A BANK (AS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940) OR TRUST
COMPANY OF ITS OWN SELECTION HAVING AGGREGATE CAPITAL, SURPLUS, AND UNDIVIDED
PROFITS, AS SHOWN BY ITS LAST PUBLISHED REPORT, OF NOT LESS THAN $25,000,000,
WHICH WILL BECOME THE SUCCESSOR CUSTODIAN UNDER THIS AGREEMENT.
IN THE EVENT THE SECURITIES, FUNDS AND OTHER PROPERTIES REMAIN IN THE
POSSESSION OF THE CUSTODIAN AFTER THE TERMINATION DATE DUE TO FAILURE BY THE
PORTFOLIO TO PROCURE THE CERTIFIED COPY OF THE APPROPRIATE VOTE OF THE BOARD OF
TRUSTEES, THE CUSTODIAN WILL BE ENTITLED TO FAIR COMPENSATION FOR ITS SERVICES
DURING THE PERIOD DURING WHICH IT RETAINS POSSESSION OF THE PROPERTY, AND THE
PROVISIONS OF THIS AGREEMENT RELATING TO THE DUTIES AND OBLIGATIONS OF THE
CUSTODIAN WILL REMAIN IN FULL FORCE.
IF DURING THE TERM OF THIS AGREEMENT THE PORTFOLIO IS LIQUIDATED PURSUANT
TO LAW, THE CUSTODIAN WILL DISTRIBUTE THE REMAINING ASSETS OF THE PORTFOLIO
AFTER SATISFYING ALL EXPENSES AND LIABILITIES OF THE PORTFOLIO. SUCH
DISTRIBUTIONS WILL BE PRO RATA AMONG THE PORTFOLIO'S SHAREHOLDERS AS CERTIFIED
BY THE TRANSFER AGENT, AND WILL BE IN CASH OR, IF THE PORTFOLIO SO ORDERS, IN
PORTFOLIO SECURITIES. SECTION 10 (RESPONSIBILITY OF CUSTODIAN) WILL SURVIVE ANY
TERMINATION OF THIS AGREEMENT.
13. INTERPRETIVE AND ADDITIONAL PROVISIONS
IN CONNECTION WITH THE OPERATION OF THIS AGREEMENT, THE CUSTODIAN AND THE
PORTFOLIO MAY FROM TIME TO TIME AGREE ON SUCH PROVISIONS INTERPRETIVE OF OR IN
ADDITION TO THE PROVISIONS OF THIS AGREEMENT AS MAY IN THEIR JOINT OPINION BE
CONSISTENT WITH THE GENERAL TENOR OF THIS AGREEMENT. ANY SUCH INTERPRETIVE OR
ADDITIONAL PROVISIONS WILL BE IN A WRITING SIGNED BY BOTH PARTIES AND WILL BE
ANNEXED TO TH IS AGREEMENT. NO INTERPRETIVE OR ADDITIONAL PROVISIONS WILL
CONTRAVENE ANY APPLICABLE FEDERAL OR STATE REGULATIONS OR ANY PROVISION OF THE
GOVERNING DOCUMENTS OF THE PORTFOLIO, NOR WILL THEY BE DEEMED AMENDMENTS TO THIS
AGREEMENT.
14. NOTICE
NOTICE WILL BE CONSIDERED SUFFICIENT IF SENT BY REGISTERED OR CERTIFIED
MAIL, OR BY SUCH OTHER MEANS AS THE PARTIES AGREE, TO THE OTHER PARTY AT THE
ADDRESS SET FORTH ABOVE OR AT ANY OTHER ADDRESS SPECIFIED IN WRITING AND
DELIVERED TO THE OTHER PARTY.
15. BOND
THE CUSTODIAN WILL, AT ALL TIMES, MAINTAIN A BOND ISSUED BY A REPUTABLE
FIDELITY INSURANCE COMPANY AUTHORIZED TO DO BUSINESS IN THE PLACE WHERE THE BOND
IS ISSUED. THE BOND WILL BE ISSUED AGAINST LARCENY AND EMBEZZLEMENT, AND WILL
COVER EACH OFFICER AND EMPLOYEE OF THE CUSTODIAN WHO MAY, SINGLY OR JOINTLY WITH
OTHERS, HAVE ACCESS TO SECURITIES OR FUNDS OF THE PORTFOLIO, EITHER DIRECTLY OR
THROUGH AUTHORITY TO RECEIVE AND CARRY OUT ANY CERTIFICATE INSTRUCTION, ORDER
REQUEST, NOTE OR OTHER INSTRUMENT REQUIRED OR PERMITTED BY THIS AGREEMENT. THE
CUSTODIAN AGREES THAT IT WILL NOT CANCEL, TERMINATE OR MODIFY THE BOND SO AS TO
AFFECT ADVERSELY THE PORTFOLIO, EXCEPT AFTER WRITTEN NOTICE TO THE PORTFOLIO NOT
LESS THAN 10 DAYS PRIOR TO THE EFFECTIVE DATE OF SUCH CANCELLATION, TERMINATION
OR MODIFICATION. THE CUSTODIAN WILL FURNISH TO THE PORTFOLIO A COPY OF EACH
SUCH BOND AND EACH AMENDMENT THERETO.
16. CONFIDENTIALITY
THE CUSTODIAN AGREES TO TREAT ALL RECORDS AND OTHER INFORMATION RELATIVE TO
THE PORTFOLIO AND ITS PRIOR, PRESENT OR FUTURE SHAREHOLDERS AS CONFIDENTIAL, AND
THE CUSTODIAN, ON BEHALF OF ITSELF AND ITS EMPLOYEES, AGREES TO KEEP
CONFIDENTIAL ALL SUCH INFORMATION EXCEPT WHEN REQUESTED TO DIVULGE SUCH
INFORMATION BY DULY CONSTITUTED AUTHORITIES, OR WHEN SO REQUESTED BY THE
PORTFOLIO. IF REQUESTED TO DIVULGE CONFIDENTIAL INFORMATION, THE CUSTODIAN WILL
NOT RELEASE THE INFORMATION UNTIL IT NOTIFIES THE PORTFOLIO IN WRITING AND
RECEIVES APPROVAL IN WRITING FROM THE PORTFOLIO. APPROVAL BY THE PORTFOLIO WILL
NOT BE UNREASONABLY WITHHELD AND MAY NOT BE WITHHELD WHERE THE CUSTODIAN MAY BE
EXPOSED TO CIVIL OR CRIMINAL CONTEMPT PROCEEDINGS FOR FAILURE TO COMPLY.
17. EXEMPTION FROM LIENS
THE SECURITIES AND OTHER ASSETS HELD BY THE CUSTODIAN FOR THE PORTFOLIO
WILL BE SUBJECT TO NO LIEN OR CHARGE OF ANY KIND IN FAVOR OF THE CUSTODIAN OR
ANY PERSON CLAIMING THROUGH THE CUSTODIAN, BUT NOTHING HEREIN WILL BE DEEMED TO
DEPRIVE THE CUSTODIAN OF ITS RIGHT TO INVOKE ANY AND ALL REMEDIES AVAILABLE AT
LAW OR EQUITY TO COLLECT AMOUNTS DUE IT UNDER THIS AGREEMENT. NEITHER THE
CUSTODIAN NOR ANY SUBCUSTODIAN APPOINTED PURSUANT TO SECTION 1 OF THIS AGREEMENT
WILL HAVE ANY POWER OR AUTHORITY TO ASSIGN, HYPOTHECATE, PLEDGE OR OTHERWISE
DISPOSE OF ANY SECURITIES HELD BY IT FOR THE PORTFOLIO, EXCEPT UPON THE
DIRECTION OF THE PORTFOLIO, DULY GIVEN AS HEREIN PROVIDED, AND ONLY FOR THE
ACCOUNT OF THE PORTFOLIO.
18. MASSACHUSETTS LAW TO APPLY
THIS AGREEMENT WILL BE CONSTRUED AND THE PROVISIONS THEREOF INTERPRETED
UNDER AND IN ACCORDANCE WITH LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
19. GOVERNING DOCUMENTS
THE TERM "GOVERNING DOCUMENTS" REFERS TO THE FUND'S AGREEMENT OF TRUST,
BY-LAWS AND REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED FROM TIME TO TIME WITH REGARD TO THE PORTFOLIO.
20. DIRECTORS AND TRUSTEES
NEITHER THE HOLDERS OF SHARES IN THE PORTFOLIO NOR ANY DIRECTORS OR
TRUSTEES OF THE FUND WILL BE PERSONALLY LIABLE HEREUNDER.
21. MASSACHUSETTS BUSINESS TRUST
WITH RESPECT TO THE PORTFOLIO WHICH IS A PARTY TO THIS AGREEMENT AND WHICH
IS ORGANIZED AS A MASSACHUSETTS BUSINESS TRUST, THE TERM FUND MEANS AND REFERS
TO THE TRUSTEES SERVING UNDER THE APPLICABLE TRUST AGREEMENT. IT IS EXPRESSLY
AGREED THAT THE OBLIGATIONS OF THE TRUST UNDER THIS AGREEMENT WILL NOT BE
BINDING ON ANY OF THE TRUSTEES, SHAREHOLDERS, NOMINEES, OFFICERS, AGENTS OR
EMPLOYEES OF THE TRUST PERSONALLY, BUT BIND ONLY THE TRUST PROPERTY.
22. SUCCESSORS OF PARTIES
THIS CONTRACT WILL BE BINDING ON AND WILL INURE TO THE BENEFIT OF THE
PORTFOLIO AND THE CUSTODIAN AND THEIR RESPECTIVE SUCCESSORS.
IN WITNESS WHEREOF, EACH OF THE PARTIES HAS CAUSED THIS INSTRUMENT TO BE
EXECUTED IN ITS NAME AND BEHALF BY ITS DULY AUTHORIZED REPRESENTATIVE AND ITS
SEAL TO BE AFFIXED HEREUNDER AS OF THE DATES INDICATED BELOW.
[FUND]
ATTEST: BY:
STATE STREET TRUST COMPANY
ATTEST: BY
The Calvert Fund
Administrative Services Agreement
March 1, 1999
Page 3 of 5
ADMINISTRATIVE SERVICES AGREEMENT
THE CALVERT FUND
ADMINISTRATIVE SERVICES AGREEMENT, MADE THIS 1ST DAY OF MARCH, 1999, BY AND
BETWEEN CALVERT ADMINISTRATIVE SERVICES COMPANY, A DELAWARE CORPORATION
("CASC"), AND THE CALVERT FUND, ORGANIZED AS A MASSACHUSETTS BUSINESS TRUST (THE
"FUND"), EACH HAVING ITS PRINCIPAL PLACE OF BUSINESS AT 4550 MONTGOMERY AVENUE,
BETHESDA, MARYLAND.
THE PARTIES TO THIS AGREEMENT, INTENDING TO BE LEGALLY BOUND, AGREE WITH
EACH OTHER AS FOLLOWS:
1. PROVISION OF SERVICES. CASC HEREBY UNDERTAKES TO PROVIDE THE FUND
WITH CERTAIN ADMINISTRATIVE SERVICES THAT MAY BE REQUIRED IN THE CONDUCT OF
BUSINESS. SUCH SERVICES INCLUDE, BUT ARE NOT LIMITED TO, MAINTAINING THE FUND'S
ORGANIZATIONAL EXISTENCE, PREPARING THE FUND'S PROSPECTUS(ES), PREPARING
NOTICES, PROXY MATERIALS, REPORTS TO REGULATORY BODIES AND REPORTS TO
SHAREHOLDERS OF THE FUND, AND SUCH OTHER INCIDENTAL ADMINISTRATIVE SERVICES AS
ARE NECESSARY TO THE CONDUCT OF THE FUND'S AFFAIRS. CASC SHALL OVERSEE THE
DETERMINATION OF THE DAILY NET ASSET VALUE OF SHARES, THE AMOUNT OF DAILY
DIVIDENDS OF NET INVESTMENT INCOME PER SHARE, AND THE MAINTENANCE OF THE
PORTFOLIO AND GENERAL ACCOUNTING RECORDS OF THE FUND THROUGH ITS CHOSEN
ACCOUNTING AGENT. THE FUND HEREBY ENGAGES CASC TO PROVIDE IT WITH SUCH SERVICES,
OR TO CAUSE SUCH SERVICES TO BE PROVIDED TO THE FUND BY THIRD PARTIES.
2. SCOPE OF AUTHORITY. CASC IS AT ALL TIMES, IN THE PERFORMANCE OF ITS
FUNCTIONS UNDER THIS AGREEMENT, SUBJECT TO ANY DIRECTION AND CONTROL OF THE
TRUSTEES OF THE FUND AND OF ITS OFFICERS, AND TO THE TERMS OF ITS DECLARATION OF
TRUST AND BYLAWS, EXCEPT THAT IT HAS NO OBLIGATION TO PROVIDE TO THE FUND ANY
SERVICES THAT ARE CLEARLY OUTSIDE THE SCOPE OF THOSE CONTEMPLATED IN THIS
AGREEMENT. IN THE PERFORMANCE OF ITS DUTIES UNDER THIS AGREEMENT, CASC IS
AUTHORIZED TO TAKE ANY ACTION IT DEEMS ADVISABLE. CASC MAY CONTRACT WITH OTHER
PERSONS TO PROVIDE TO THE FUND ANY OF THE SERVICES CONTEMPLATED UNDER THE
AGREEMENT UNDER SUCH TERMS AS CASC DEEMS REASONABLE, AND CASC HAS THE AUTHORITY
TO DIRECT THE ACTIVITIES OF THOSE OTHER PERSONS IN THE MANNER CASC DEEMS
APPROPRIATE.
3. OTHER ACTIVITIES OF CASC. CASC AND ANY OF ITS AFFILIATES MAY RENDER
TO OTHER PERSONS SERVICES SIMILAR TO THOSE IT PROVIDES TO THE FUND UNDER THIS
AGREEMENT. CASC OR ANY INTERESTED PERSON OF CASC MAY INVEST IN THE FUND AS A
SHAREHOLDER, BECOME AN OFFICER OR TRUSTEE OF THE FUND IF PROPERLY ELECTED, OR
ENTER INTO ANY OTHER RELATIONSHIP WITH THE FUND APPROVED BY THE TRUSTEES, IF
NECESSARY, AND IN ACCORDANCE WITH LAW.
4. RECORDKEEPING AND OTHER INFORMATION. CASC WILL, COMMENCING NO LATER
THAN THE EFFECTIVE DATE OF THIS AGREEMENT, OR THE COMMENCEMENT DATE OF ANY
SUBSEQUENTLY-CONSTITUTED SERIES OR CLASSES, CREATE AND MAINTAIN ALL NECESSARY
ADMINISTRATIVE RECORDS OF THE RELEVANT SERIES OR CLASS IN ACCORDANCE WITH ALL
APPLICABLE LAWS, RULES AND REGULATIONS, INCLUDING, BUT NOT LIMITED TO, RECORDS
REQUIRED BY SECTION 31(A) OF THE INVESTMENT COMPANY ACT OF 1940 (THE "1940 ACT")
AND THE RULES UNDER THAT SECTION. ALL RECORDS ARE THE PROPERTY OF THE FUND AND
ARE AVAILABLE FOR INSPECTION AND USE BY THE FUND.
5. AUDIT, INSPECTION AND VISITATION. CASC WILL MAKE AVAILABLE DURING
REGULAR BUSINESS HOURS ALL RECORDS AND OTHER DATA CREATED AND MAINTAINED
PURSUANT TO THIS AGREEMENT FOR REASONABLE AUDIT AND INSPECTION BY THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION ("SEC"), THE FUND OR ANY PERSON
RETAINED BY THE FUND IF THAT PERSON'S FUNCTION NECESSITATES ACCESS TO SUCH
RECORDS AND DATA.
6. COMPENSATION TO CASC. THE FUND WILL COMPENSATE CASC ON A MONTHLY
BASIS FOR THE SERVICES PERFORMED UNDER THIS AGREEMENT. THE RATE OF COMPENSATION,
BASED ON AVERAGE NET ASSETS, IS SHOWN IN SCHEDULE A. CASC WILL NOT BE
RESPONSIBLE FOR ANY COSTS OR EXPENSES OF THE FUND OTHER THAN THOSE SPECIFICALLY
ASSUMED IN PARAGRAPH 1. EXPENSES INCURRED BY CASC AND NOT INCLUDED IN THE
SERVICE FEE WILL BE REIMBURSED TO CASC BY THE FUND, AS APPROPRIATE. SUCH
EXPENSES MAY INCLUDE EXPENSES INCIDENTAL TO MEETINGS OF SHAREHOLDERS, TAXES AND
CORPORATE FEES LEVIED AGAINST THE FUND OR ITS SERIES, EXPENSES OF PRINTING STOCK
CERTIFICATES REPRESENTING SHARES OF THE SERIES, EXPENSES OF PRINTING, MAILING
NOTICES, PROXY MATERIAL, REPORTS TO REGULATORY BODIES AND REPORTS TO
SHAREHOLDERS OF THE FUND, EXPENSES OF TYPESETTING PROSPECTUSES AND PRINTING AND
MAILING PROSPECTUSES TO SHAREHOLDERS, AND DATA PROCESSING EXPENSES INCIDENTAL TO
MAINTENANCE OF BOOKS AND RECORDS. SUCH CHARGES ARE PAYABLE IN FULL UPON RECEIPT
OF A BILLING INVOICE. IN LIEU OF REIMBURSING CASC FOR EXPENSES INCURRED AND NOT
INCLUDED IN THE SERVICE FEE, THE FUND MAY, IN ITS DISCRETION, DIRECTLY PAY ANY
EXPENSES.
7. USE OF NAMES. THE FUND MAY NOT USE THE NAME OF CASC IN ANY
PROSPECTUS, SALES LITERATURE OR OTHER MATERIAL RELATING TO THE FUND OR ITS
SERIES OR CLASSES IN ANY MANNER WITHOUT PRIOR APPROVAL BY CASC, SUCH APPROVAL
NOT TO BE UNREASONABLY WITHHELD; PROVIDED, HOWEVER, THAT CASC HEREBY APPROVES
ALL USES OF ITS NAME THAT MERELY REFER IN ACCURATE TERMS TO ITS APPOINTMENT OR
THAT ARE REQUIRED BY THE SEC OR A STATE SECURITIES COMMISSION. CASC MAY NOT USE
THE NAME OF THE FUND OR ITS SERIES OR CLASSES IN ANY MATERIAL RELATING TO CASC
IN ANY MANNER WITHOUT PRIOR APPROVAL BY THE FUND, SUCH APPROVAL NOT TO BE
UNREASONABLY WITHHELD; PROVIDED, HOWEVER, THAT THE FUND HEREBY APPROVES ALL USES
OF ITS NAME OR THE NAMES OF ITS SERIES OR CLASSES THAT MERELY REFER IN ACCURATE
TERMS TO THE APPOINTMENT OF CASC OR THAT ARE REQUIRED BY THE SEC.
8. SECURITY. CASC REPRESENTS AND WARRANTS THAT, TO THE BEST OF ITS
KNOWLEDGE, THE VARIOUS PROCEDURES AND SYSTEMS THAT CASC PROPOSES TO IMPLEMENT
WITH REGARD TO SAFEGUARDING INFORMATION FROM LOSS OR DAMAGE ATTRIBUTABLE TO
FIRE, THEFT OR ANY OTHER CAUSE (INCLUDING PROVISIONS FOR TWENTY-FOUR HOUR
RESTRICTED ACCESS) WITH RESPECT TO THE FUND'S BOOKS AND RECORDS ADMINISTERED
PURSUANT TO THIS AGREEMENT AND CASC'S RECORDS, DATA, EQUIPMENT, FACILITIES AND
OTHER PROPERTY USED IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT
ARE ADEQUATE AND THAT CASC WILL IMPLEMENT THESE PROCEDURES AND SYSTEM IN A
MANNER CALCULATED TO ENSURE THE PERFORMANCE OF CASC'S OBLIGATIONS UNDER THIS
AGREEMENT.
9. LIMITATION OF LIABILITY. THE FUND WILL INDEMNIFY AND HOLD CASC
HARMLESS AGAINST ANY LOSSES, CLAIMS, DAMAGES, LIABILITIES OR EXPENSES (INCLUDING
REASONABLE COUNSEL FEES AND EXPENSES) RESULTING FROM ANY CLAIM, DEMAND, ACTION
OR SUIT BROUGHT BY ANY PERSON (INCLUDING A SHAREHOLDER NAMING THE FUND OR ANY OF
ITS SERIES OR CLASSES AS A PARTY) OTHER THAN THE FUND NOT RESULTING FROM CASC'S
NEGLIGENCE, OR CAUSED BY ERRORS OF JUDGMENT OR MISTAKES OF LAW COMMITTED BY CASC
IN A GOOD FAITH EFFORT TO CARRY OUT ITS DUTIES UNDER THIS AGREEMENT.
IN NO EVENT WILL CASC BE LIABLE FOR INDIRECT, SPECIAL, OR CONSEQUENTIAL
DAMAGES (EVEN IF CASC HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES)
ARISING FROM THE OBLIGATIONS ASSUMED HEREUNDER AND THE SERVICES PROVIDED FOR BY
THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LOST PROFITS, LOSS OF USE OF
ACCOUNTING SYSTEMS, COST OF CAPITAL, COST OF SUBSTITUTE FACILITIES, PROGRAMS OR
SERVICES, DOWNTIME COSTS, OR CLAIMS OF THE FUND'S SHAREHOLDERS FOR SUCH DAMAGE.
10. LIMITATION OF FUND'S LIABILITY. CASC ACKNOWLEDGES THAT IT HAS
RECEIVED NOTICE OF AND ACCEPTS THE LIMITATION ON THE FUND'S LIABILITY. CASC
AGREES THAT THE FUND'S OBLIGATIONS IN ANY CASE EXTEND ONLY TO ITS SERIES AND
CLASSES AND THEIR ASSETS, AND THAT CASC WILL NOT SEEK SATISFACTION OF ANY
OBLIGATION FROM THE SHAREHOLDERS OR ANY TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF
THE FUND.
11. FORCE MAJEURE. CASC WILL NOT BE LIABLE FOR DELAYS OR ERRORS CAUSED
BY CIRCUMSTANCES BEYOND CASC'S CONTROL, INCLUDING BUT NOT LIMITED TO ACTS OF
CIVIL OR MILITARY AUTHORITY, NATIONAL EMERGENCIES, WORK STOPPAGES, FIRE, FLOOD
CATASTROPHE, ACTS OF GOD, INSURRECTION, WAR, RIOT, OR FAILURE OF COMMUNICATION
OR POWER SUPPLY. IN THE EVENT OF EQUIPMENT BREAKDOWNS BEYOND ITS CONTROL, CASC
WILL TAKE REASONABLE STEPS TO MINIMIZE SERVICE INTERRUPTIONS BUT WILL HAVE NO
LIABILITY IN THE EVENT INTERRUPTIONS OCCUR.
12. AMENDMENTS. CASC AND THE FUND WILL CONSULT EACH OTHER REGARDING
CASC'S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT. ANY CHANGE IN THE
FUND'S REGISTRATION STATEMENTS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE 1940 ACT OR IN THE FORMS RELATING TO ANY PLAN, PROGRAM OR SERVICE OFFERED BY
THE CURRENT PROSPECTUSES OF THE SERIES THAT WOULD REQUIRE A CHANGE IN CASC'S
OBLIGATIONS UNDER THIS AGREEMENT WILL BE SUBJECT TO CASC'S APPROVAL, WHICH WILL
NOT BE UNREASONABLY WITHHELD.
13. DURATION, TERMINATION, ETC. NEITHER THIS AGREEMENT NOR ANY OF ITS
PROVISIONS MAY BE CHANGED, WAIVED, DISCHARGED, OR TERMINATED ORALLY, BUT ONLY BY
WRITTEN INSTRUMENT WHICH WILL MAKE SPECIFIC REFERENCE TO THIS AGREEMENT AND
WHICH WILL BE SIGNED BY THE PARTY AGAINST WHICH ENFORCEMENT OF SUCH CHANGE,
WAIVER, DISCHARGE OR TERMINATION IS SOUGHT. THIS AGREEMENT WILL CONTINUE IN
EFFECT UNTIL DECEMBER 31, 1999, AND FOR ONE-YEAR TERMS THEREAFTER OR AS THE
PARTIES MAY MUTUALLY AGREE. THIS AGREEMENT MAY BE TERMINATED FOR CAUSE EITHER BY
THE FUND OR CASC, BUT ONLY AFTER A REASONABLE OPPORTUNITY TO CURE HAS BEEN
PROVIDED TO THE PARTY ACCUSED OF NOT PERFORMING ACCORDING TO THE TERMS OF THIS
AGREEMENT. WHAT CONSTITUTES A REASONABLE AMOUNT OF TIME TO CURE ANY DEFICIENCY
WILL BE DETERMINED BY THE PARTIES IN THE CONTEXT OF ACTION THAT NEEDS TO BE
TAKEN IN ORDER TO CURE THE DEFICIENCY, BUT IN NO EVENT WILL THE PARTY HAVE LESS
THAN 90 DAYS TO ATTEMPT TO CURE THE DEFICIENCY. IN THE EVENT THAT THE CAUSE
REMAINS UNREMEDIED, THE PARTIES HAVE THE OPTION TO TERMINATE THE CONTRACT PRIOR
TO ITS EXPIRATION DATE. ANY SUCH TERMINATION WILL NOT AFFECT THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER PARAGRAPHS 9 AND 10 OF THIS AGREEMENT. IN THE
EVENT THE FUND DESIGNATES A SUCCESSOR TO ANY OF CASC'S OBLIGATIONS UNDER THIS
AGREEMENT, CASC WILL, AT THE EXPENSE AND DIRECTION OF THE FUND, TRANSFER TO SUCH
SUCCESSOR ALL RELEVANT BOOKS, RECORDS AND OTHER DATA ESTABLISHED OR MAINTAINED
BY CASC.
14. MISCELLANEOUS. EACH PARTY AGREES TO PERFORM SUCH FURTHER ACTS AND
EXECUTE SUCH FURTHER DOCUMENTS AS ARE NECESSARY TO EFFECTUATE THE PURPOSES OF
THIS AGREEMENT. THIS AGREEMENT WILL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF MARYLAND. THE CAPTIONS IN THIS AGREEMENT ARE
INCLUDED FOR CONVENIENCE ONLY AND DO NOT DEFINE OR DELIMIT ANY OF THE PROVISIONS
HEREOF OR OTHERWISE AFFECT THEIR CONSTRUCTION OR EFFECT.
IN WITNESS WHEREOF, THE PARTIES HAVE DULY EXECUTED THIS AGREEMENT AS OF THE
DATE INDICATED ABOVE.
CALVERT ADMINISTRATIVE SERVICES COMPANY, INC.
BY
TITLE
THE CALVERT FUND
BY
TITLE
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
SCHEDULE A
LISTED BELOW ARE THE SERIES OF THE CALVERT FUND THAT ARE ENTITLED TO
RECEIVE ADMINISTRATIVE SERVICES FROM CALVERT ADMINISTRATIVE SERVICES COMPANY,
INC. ("CASC") UNDER THE ADMINISTRATIVE SERVICES AGREEMENT DATED MARCH 1, 1999,
AND WHICH WILL PAY ANNUAL FEES TO CASC PURSUANT TO THE AGREEMENT.
CALVERT INCOME FUND
CLASS A 0.30%
CLASS B 0.30%
CLASS C 0.30%
CLASS I 0.10%
CALVERT NEW VISION SMALL CAP FUND
CLASS A 0.25%
CLASS B 0.25%
CLASS C 0.25%
CLASS I 0.10%
FOR ITS SERVICES UNDER THIS ADMINISTRATIVE SERVICES AGREEMENT, CASC IS
ENTITLED TO RECEIVE THE FEE INDICATED ABOVE BASED ON AVERAGE NET ASSETS. THE
LIABILITY TO PAY FOR SERVICES UNDER THE AGREEMENT ARISES AT THE TIME A CLASS
COMMENCES OPERATIONS, ABSENT WAIVERS.
EXHIBIT 10
APRIL 27, 2000
SECURITIES AND EXCHANGE COMMISSION
JUDICIARY PLAZA
450 FIFTH STREET, N.W.
WASHINGTON, D.C. 20549
RE: EXHIBIT 10, FORM N-1A
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. 49 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. 49 TO ITS REGISTRATION STATEMENT.
SINCERELY,
/S/
SUSAN WALKER BENDER
ASSOCIATE GENERAL COUNSEL
CONSENT OF INDEPENDENT ACCOUNTANTS
WE CONSENT TO THE INCORPORATION BY REFERENCE IN POST EFFECTIVE
AMENDMENT NO. 49 TO THE REGISTRATION STATEMENT OF CALVERT TAX-FREE RESERVES
(COMPRISED OF THE MONEY MARKET, LIMITED-TERM, LONG-TERM, VERMONT, AND CALIFORNIA
MONEY MARKET PORTFOLIOS) ON FORM N-LA (FILE NUMBER 2-69565 AND 811-3101) OF OUR
REPORTS DATED FEBRUARY 11, 2000, ON OUR AUDITS OF THE FINANCIAL STATEMENTS AND
FINANCIAL HIGHLIGHTS OF THE PORTFOLIOS, WHICH REPORTS ARE INCLUDED IN THE ANNUAL
REPORT TO SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 1999, WHICH IS
INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT. WE ALSO CONSENT TO THE
REFERENCE OF OUR FIRM UNDER THE CAPTION "FINANCIAL HIGHLIGHTS" IN THE PROSPECTUS
AND "INDEPENDENT ACCOUNTANTS" IN THE STATEMENT OF ADDITIONAL INFORMATION.
PRICEWATERHOUSECOOPERS LLP
BALTIMORE, MARYLAND
APRIL 27, 2000
E:\AGREEMENTS\12B1_PLANS_AND_SCHED\New BC Plan.doc
THE CALVERT GROUP OF FUNDS
CLASS B AND CLASS C
DISTRIBUTION PLAN
AS APPROVED BY THE BOARDS
IN NOVEMBER 1993 AND AS AMENDED AND RESTATED
FEBRUARY 1998 PURSUANT TO RULE 12B-1
UNDER THE INVESTMENT COMPANY ACT OF 1940
THIS DISTRIBUTION PLAN APPLIES TO CLASS B AND CLASS C IN EACH PORTFOLIO OF
THE CALVERT FUNDS LISTED IN SCHEDULE A (EACH A "FUND" AND TOGETHER, THE "FUNDS")
AND TO ANY FUTURE CLASS FOR WHICH THIS DISTRIBUTION PLAN HAS BEEN APPROVED IN
ACCORDANCE WITH PARAGRAPH 2(A) BELOW. FOR PURPOSES OF THIS DISTRIBUTION PLAN
EACH SERIES PORTFOLIO OF A FUND IS REFERRED TO HEREIN AS A "SERIES" AND
TOGETHER, AS THE "SERIES".
AS PERMITTED BY RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 AND IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS PLAN, AS HEREINAFTER SET FORTH,
A FUND MAY INCUR CERTAIN EXPENDITURES TO PROMOTE ITSELF AND FURTHER THE
DISTRIBUTION OF ITS SHARES.
1. PAYMENT OF FEE
(A) AS COMPENSATION FOR CERTAIN SERVICES PERFORMED AND EXPENSES ASSUMED
BY EACH FUND'S DISTRIBUTOR AND PRINCIPAL UNDERWRITER ("DISTRIBUTOR") EACH FUND
MAY PAY THE DISTRIBUTOR A DISTRIBUTION FEE (THE "DISTRIBUTION FEE"). THE
DISTRIBUTION FEE IS INTENDED TO COMPENSATE THE DISTRIBUTOR FOR ITS MARKETING
EFFORTS, WHICH INCLUDE, BUT ARE NOT LIMITED TO THE FOLLOWING COSTS: COMMISSIONS
AND OTHER PAYMENTS ADVANCED TO SALES PERSONNEL AND THIRD PARTIES AND RELATED
INTEREST COSTS AS PERMITTED BY THE RULES OF THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC. ("NASD"), PRINTING AND MAILING PROSPECTUSES, SALES
LITERATURE AND OTHER RELEVANT MATERIAL TO OTHER THAN CURRENT SHAREHOLDERS,
ADVERTISING AND PUBLIC RELATIONS, TELEMARKETING, MARKETING-RELATED OVERHEAD
EXPENSES AND OTHER DISTRIBUTION COSTS. SUCH DISTRIBUTION FEE IS IN ADDITION TO
ANY NASD SERVICE FEE THAT MAY BE PAID HEREUNDER AND AS DESCRIBED AT SECTION 3(B)
OF THE DISTRIBUTION AGREEMENT BETWEEN THE RESPECTIVE FUNDS AND THE DISTRIBUTOR,
OR ANY FRONT-END OR DEFERRED SALES CHARGES THE DISTRIBUTOR RECEIVES FROM A FUND
WITH RESPECT TO SALES OR REDEMPTION OF FUND SHARES. TOTAL FEES PAID PURSUANT TO
THIS PLAN, INCLUDING THE DISTRIBUTION FEE DESCRIBED ABOVE, AND THE NASD SERVICE
FEE, SHALL NOT EXCEED THE RATE SET FORTH IN THE ATTACHED SCHEDULE B TO THIS
PLAN. ALL AGREEMENTS WITH ANY PERSON RELATING TO THE IMPLEMENTATION OF THIS
PLAN SHALL BE IN WRITING, AND SUCH AGREEMENTS SHALL BE SUBJECT TO TERMINATION,
WITHOUT PENALTY, PURSUANT TO THE PROVISIONS OF PARAGRAPH 2(C) OF THIS PLAN.
<PAGE>
-3-
(B) A FUND WILL PAY EACH PERSON WHICH HAS ACTED AS PRINCIPAL
UNDERWRITER OF ITS CLASS B SHARES ITS ALLOCABLE PORTION (AS SUCH TERM IS DEFINED
IN THE DISTRIBUTION AGREEMENT PURSUANT TO WHICH SUCH PERSON ACTS OR ACTED AS
PRINCIPAL UNDERWRITER OF THE CLASS B SHARES (THE "APPLICABLE DISTRIBUTION
AGREEMENT")) OF THE DISTRIBUTION FEE IN RESPECT OF CLASS B SHARES OF THE FUND.
SUCH PERSON SHALL BE PAID ITS ALLOCABLE PORTION OF SUCH DISTRIBUTION FEES
NOTWITHSTANDING SUCH PERSON'S TERMINATION AS DISTRIBUTOR OF THE CLASS B SHARES
OF THE FUND, SUCH PAYMENTS TO BE CHANGED OR TERMINATED ONLY: (I) AS REQUIRED BY
A CHANGE IN APPLICABLE LAW OR A CHANGE IN ACCOUNTING POLICY ADOPTED BY THE
INVESTMENT COMPANIES COMMITTEE OF THE AICPA AND APPROVED BY FASB THAT RESULTS IN
A DETERMINATION BY THE FUND'S INDEPENDENT ACCOUNTANTS THAT ANY ASSET BASED SALES
CHARGES (AS THAT TERM IS DEFINED BY THE NASD) IN RESPECT OF SUCH FUND, AND WHICH
ARE NOT YET DUE AND PAYABLE, MUST BE ACCOUNTED FOR BY SUCH FUND AS A LIABILITY
IN ACCORDANCE WITH GAAP, EACH AFTER THE EFFECTIVE DATE OF THIS RESTATED
DISTRIBUTION PLAN; (II) IF IN THE SOLE DISCRETION OF THE BOARD OF
TRUSTEES/DIRECTORS, AFTER DUE CONSIDERATION OF THE RELEVANT FACTORS CONSIDERED
WHEN ADOPTING AND/OR AMENDING THIS DISTRIBUTION PLAN INCLUDING THE TRANSACTIONS
CONTEMPLATED IN THAT CERTAIN PURCHASE AND SALE AGREEMENT ENTERED INTO BETWEEN A
FUND'S DISTRIBUTOR AND THE COMMISSION FINANCING ENTITY, THE BOARD OF
TRUSTEES/DIRECTORS DETERMINES, SUBJECT TO ITS FIDUCIARY DUTY, THAT THIS
DISTRIBUTION PLAN AND THE PAYMENTS THEREUNDER MUST BE CHANGED OR TERMINATED,
NOTWITHSTANDING THE EFFECT THIS ACTION MIGHT HAVE ON THE FUND'S ABILITY TO OFFER
AND SELL CLASS B SHARES; OR (III) IN CONNECTION WITH A COMPLETE TERMINATION OF
THIS DISTRIBUTION PLAN, IT BEING UNDERSTOOD THAT FOR THIS PURPOSE A COMPLETE
TERMINATION OF THIS DISTRIBUTION PLAN OCCURS ONLY IF, AS TO A FUND OR SERIES,
THIS DISTRIBUTION PLAN IS TERMINATED AND THE FUND HAS NOT ADOPTED ANY OTHER
DISTRIBUTION PLAN WITH RESPECT TO ITS CLASS B OR OTHER SUBSTANTIALLY SIMILAR
CLASS OF SHARES. THE SERVICES RENDERED BY A DISTRIBUTOR FOR WHICH THAT
DISTRIBUTOR IS ENTITLED TO RECEIVE ITS ALLOCABLE PORTION OF THE DISTRIBUTION FEE
SHALL BE DEEMED TO HAVE BEEN COMPLETED AT THE TIME OF THE INITIAL PURCHASE OF
THE COMMISSION SHARES (AS DEFINED IN THE DISTRIBUTION AGREEMENT) TAKEN INTO
ACCOUNT IN COMPUTING THAT DISTRIBUTOR'S ALLOCABLE PORTION OF THE DISTRIBUTION
FEE.
THE OBLIGATION OF A FUND TO PAY THE DISTRIBUTION FEE SHALL TERMINATE UPON
THE TERMINATION OF THIS DISTRIBUTION PLAN AS TO SUCH FUND IN ACCORDANCE WITH THE
TERMS HEREOF. EXCEPT AS PROVIDED IN THE PRECEDING PARAGRAPH, A FUND'S
OBLIGATION TO PAY THE DISTRIBUTION FEE TO A DISTRIBUTOR OF THE CLASS B SHARES OF
THE FUND SHALL BE ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE SUBJECT TO ANY
DISPUTE, OFFSET, COUNTERCLAIM OR DEFENSE WHATSOEVER (IT BEING UNDERSTOOD THAT
NOTHING IN THIS SENTENCE SHALL BE DEEMED A WAIVER BY A FUND OF ITS RIGHT
SEPARATELY TO PURSUE ANY CLAIMS IT MAY HAVE AGAINST SUCH DISTRIBUTOR AND ENFORCE
SUCH CLAIMS AGAINST ANY ASSETS (OTHER THAN ITS RIGHT TO BE PAID ITS ALLOCABLE
PORTION OF THE DISTRIBUTION FEE AND TO BE PAID THE CONTINGENT DEFERRED SALES
CHARGES) OF SUCH DISTRIBUTOR).
THE RIGHT OF A DISTRIBUTOR TO RECEIVE THE DISTRIBUTION FEE, BUT NOT THE
RELEVANT DISTRIBUTION AGREEMENT OR THAT DISTRIBUTOR'S OBLIGATIONS THEREUNDER,
MAY BE TRANSFERRED BY THAT DISTRIBUTOR IN ORDER TO RAISE FUNDS WHICH MAY BE
USEFUL OR NECESSARY TO PERFORM ITS DUTIES AS PRINCIPAL UNDERWRITER, AND ANY SUCH
TRANSFER SHALL BE EFFECTIVE UPON WRITTEN NOTICE FROM THAT DISTRIBUTOR TO THE
FUND. IN CONNECTION WITH THE FOREGOING, EACH FUND IS AUTHORIZED TO PAY ALL OR
PART OF THE DISTRIBUTION FEE DIRECTLY TO SUCH TRANSFEREE AS DIRECTED BY THAT
DISTRIBUTOR.
(C) NOTHING IN THIS DISTRIBUTION PLAN SHALL OPERATE OR BE CONSTRUED TO
LIMIT THE EXTENT TO WHICH THE FUND'S INVESTMENT ADVISOR OR ANY OTHER PERSON,
OTHER THAN THE FUND, AT ITS EXPENSE APART FROM THE DISTRIBUTION PLAN, MAY INCUR
COSTS AND PAY EXPENSES ASSOCIATED WITH THE DISTRIBUTION OF FUND SHARES.
2. EFFECTIVE DATE AND TERM
(A) THIS DISTRIBUTION PLAN SHALL BECOME EFFECTIVE AS TO ANY CLASS OF
ANY SERIES UPON APPROVAL BY MAJORITY VOTES OF (I) THE BOARD OF THE FUND AND THE
MEMBERS THEREOF WHO ARE NOT INTERESTED PERSONS WITHIN THE MEANING OF SECTION
2(A)(19) OF THE INVESTMENT COMPANY ACT OF 1940 AND HAVE NO DIRECT OR INDIRECT
FINANCIAL INTEREST IN THE OPERATION OF THE DISTRIBUTION PLAN OR IN ANY
AGREEMENTS RELATED TO THE DISTRIBUTION PLAN ("QUALIFIED TRUSTEES/DIRECTORS"),
CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING ON THIS
DISTRIBUTION PLAN, AND (II) THE OUTSTANDING VOTING SECURITIES OF THE FUND.
(B) THIS DISTRIBUTION PLAN SHALL REMAIN IN EFFECT FOR ONE YEAR FROM ITS
ADOPTION DATE AND MAY CONTINUE IN EFFECT THEREAFTER IF THIS DISTRIBUTION PLAN IS
APPROVED AT LEAST ANNUALLY BY A MAJORITY VOTE OF THE BOARD OF THE FUND,
INCLUDING A MAJORITY OF THE QUALIFIED TRUSTEES/DIRECTORS, CAST IN PERSON AT A
MEETING CALLED FOR THE PURPOSE OF VOTING ON THE DISTRIBUTION PLAN.
(C) SUBJECT TO PARAGRAPH 1(B) ABOVE, THIS DISTRIBUTION PLAN MAY BE
TERMINATED AT ANY TIME WITHOUT PAYMENT OF ANY PENALTY BY A MAJORITY VOTE OF THE
QUALIFIED TRUSTEES/DIRECTORS OR BY VOTE OF A MAJORITY OF THE OUTSTANDING VOTING
SECURITIES OF THE FUND, OR, WITH RESPECT TO THE TERMINATION OF THIS DISTRIBUTION
PLAN AS TO A PARTICULAR CLASS OF A PORTFOLIO, BY A VOTE OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF THAT CLASS.
(D) THE PROVISIONS OF THIS DISTRIBUTION PLAN ARE SEVERABLE FOR EACH
SERIES OR CLASS, AND WHENEVER ACTION IS TO BE TAKEN WITH RESPECT TO THIS
DISTRIBUTION PLAN, THAT ACTION MUST BE TAKEN SEPARATELY FOR EACH SERIES OR CLASS
AFFECTED BY THE MATTER.
3. REPORTS
THE PERSON AUTHORIZED TO DIRECT THE DISPOSITION OF MONIES PAID OR PAYABLE
BY THE FUND PURSUANT TO THE DISTRIBUTION PLAN SHALL PROVIDE, ON AT LEAST A
QUARTERLY BASIS, A WRITTEN REPORT TO EACH FUND'S BOARD OF THE AMOUNTS EXPENDED
PURSUANT TO THIS DISTRIBUTION PLAN OR ANY RELATED AGREEMENTS AND THE PURPOSES
FOR WHICH SUCH EXPENDITURES WERE MADE.
4. SELECTION OF DISINTERESTED TRUSTEES/DIRECTORS
WHILE THIS DISTRIBUTION PLAN IS IN EFFECT, THE SELECTION AND NOMINATION OF
THOSE TRUSTEES/DIRECTORS WHO ARE NOT INTERESTED PERSONS OF A FUND WITHIN THE
MEANING OF SECTION 2(A)(19) OF THE INVESTMENT COMPANY ACT OF 1940 SHALL BE
COMMITTED TO THE DISCRETION OF THE TRUSTEES/DIRECTORS THEN IN OFFICE WHO ARE NOT
INTERESTED PERSONS OF THE FUND.
5. EFFECT OF PLAN
THIS DISTRIBUTION PLAN SHALL NOT OBLIGATE THE FUND OR ANY OTHER PARTY TO
ENTER INTO AN AGREEMENT WITH ANY PARTICULAR PERSON.
6. AMENDMENT
THIS DISTRIBUTION PLAN MAY NOT BE AMENDED TO INCREASE MATERIALLY THE AMOUNT
AUTHORIZED IN PARAGRAPH 1 HEREOF TO BE SPENT BY A FUND FOR DISTRIBUTION WITHOUT
APPROVAL BY A VOTE OF THE MAJORITY OF THE OUTSTANDING SHARES OF SUCH FUND,
EXCEPT THAT IF THE AMENDMENT RELATES ONLY TO A PARTICULAR CLASS OF A FUND, SUCH
APPROVAL NEED ONLY BE BY A VOTE OF THE MAJORITY OF THE OUTSTANDING SHARES OF
THAT CLASS. ALL MATERIAL AMENDMENTS TO THIS DISTRIBUTION PLAN MUST BE APPROVED
BY A MAJORITY VOTE OF THE BOARD OF THE FUND, AND OF THE QUALIFIED
TRUSTEES/DIRECTORS, CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING
THEREON.
<PAGE>
SCHEDULE A
THE CALVERT FUND
CALVERT TAX-FREE RESERVES
CALVERT MUNICIPAL FUND
CALVERT SOCIAL INVESTMENT FUND
CALVERT WORLD VALUES FUND
CALVERT NEW WORLD FUND
FIRST VARIABLE RATE FUND
<PAGE>
SCHEDULE B
THE TOTAL FEES PAID BY THE RESPECTIVE CLASS OF EACH SERIES OF A FUND
PURSUANT TO THIS DISTRIBUTION PLAN SHALL NOT EXCEED THE RATE, AS A PERCENTAGE OF
THAT CLASS' AVERAGE ANNUAL NET ASSETS, SET FORTH BELOW:
FUND/SERIES CLASS B CLASS C
DISTRIBUTION SERVICE DISTRIBUTION
SERVICE
FEE FEE FEE FEE
THE CALVERT FUND
CALVERT NEW VISION
SMALL CAP FUND 0.75 0.25 0.75 0.25
CALVERT INCOME FUND 0.75 0.25 0.75 0.25
CALVERT TAX-FREE RESERVES
LONG-TERM 0.75 0.25 0.75 0.25
VERMONT MUNICIPAL 0.75 0.25 0.75 0.25
CALVERT MUNICIPAL FUND
NATIONAL 0.75 0.25 N/A N/A
CALIFORNIA 0.75 0.25 N/A N/A
MARYLAND 0.75 0.25 N/A N/A
VIRGINIA 0.75 0.25 N/A N/A
CALVERT SOCIAL INVESTMENT FUND
MANAGED GROWTH 0.75 0.25 0.75 0.25
EQUITY 0.75 0.25 0.75 0.25
BOND 0.75 0.25 0.75 0.25
MANAGED INDEX 0.75 0.25 0.75 0.25
CALVERT WORLD VALUES FUND
INTERNATIONAL EQUITY 0.75 0.25 0.75 0.25
CAPITAL ACCUMULATION 0.75 0.25 0.75 0.25
CALVERT NEW WORLD FUND
CALVERT NEW AFRICA 0.75 0.25 0.75 0.25
FIRST VARIABLE RATE FUND
CALVERT FIRST GOV.
MONEY MARKET 0.75 0.25 0.75 0.25
RESTATED FEB. 1998
E:\AGREEMENTS\MULTI FUND AGMTS\NEW BC PLAN.DOC
E:\AGREEMENTS\12B1_PLANS_AND_SCHED\Class T FV and CTFR.doc
CALVERT TAX-FREE RESERVES MONEY MARKET
AND
CALVERT FIRST GOVERNMENT MONEY MARKET FUND
PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
UNDER THE INVESTMENT COMPANY ACT OF 1940
CLASS T
AS PERMITTED BY RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 AND IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS DISTRIBUTION PLAN ("PLAN"), AS
HEREINAFTER SET FORTH, THE ABOVE-REFERENCED FUNDS (EACH, "FUND") MAY INCUR
CERTAIN EXPENDITURES TO PROMOTE THE FUND AND FURTHER THE DISTRIBUTION OF SHARES
OF FUND.
1. PAYMENT OF DISTRIBUTION EXPENSES. (A) THE FUND MAY INCUR EXPENDITURES FOR
CERTAIN EXPENSES ASSOCIATED WITH THE DISTRIBUTION OF ITS SHARES. SUCH
DISTRIBUTION EXPENSES INCLUDE, BUT NEED NOT BE LIMITED TO: THE COST OF PRINTING
AND MAILING PROSPECTUSES, SALES LITERATURE AND OTHER RELEVANT MATERIAL TO OTHER
THAN CURRENT SHAREHOLDERS OF THE FUND; ADVERTISING AND PUBLIC RELATIONS; AND
PAYMENTS TO SALES PERSONNEL, BROKER-DEALERS AND OTHER THIRD PARTIES IN RETURN
FOR DISTRIBUTION ASSISTANCE. PAYMENTS FOR DISTRIBUTION EXPENSES INCURRED BY THE
FUND PURSUANT TO THIS PLAN MAY BE MADE DIRECTLY OR INDIRECTLY; HOWEVER, ALL
AGREEMENTS WITH ANY PERSON RELATING TO THE IMPLEMENTATION OF THIS PLAN SHALL BE
IN WRITING, AND SUCH AGREEMENTS SHALL BE SUBJECT TO TERMINATION, WITHOUT
PENALTY, PURSUANT TO THE PROVISIONS OF PARAGRAPH 2(C) OF THIS PLAN.
(B) DISTRIBUTION EXPENSES SHALL BE PAID ACCORDING TO THE ATTACHED SCHEDULE
I.
(C) NOTHING IN THIS PLAN SHALL OPERATE OR BE CONSTRUED TO LIMIT THE EXTENT
TO WHICH THE FUND'S INVESTMENT ADVISOR OR ANY OTHER PERSON, OTHER THAN THE FUND,
AT ITS EXPENSE APART FROM THIS PLAN, MAY INCUR COSTS AND PAY EXPENSES ASSOCIATED
WITH THE DISTRIBUTION OF FUND SHARES.
2. EFFECTIVE DATE AND TERM. (A) THIS PLAN SHALL BECOME EFFECTIVE UPON
APPROVAL BY MAJORITY VOTES OF (I) THE BOARD OF TRUSTEES OF THE FUND AND THE
TRUSTEES WHO ARE NOT INTERESTED PERSONS WITHIN THE MEANING OF SECTION 2(A) (19)
OF THE INVESTMENT COMPANY ACT OF 1940 AND HAVE NO DIRECT OR INDIRECT FINANCIAL
INTEREST IN THE OPERATION OF THE PLAN OR IN ANY AGREEMENTS RELATED TO THE PLAN
(SUCH TRUSTEES ARE HEREINAFTER REFERRED TO AS "QUALIFIED TRUSTEES"), CAST IN
PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING ON THIS PLAN, AND (II) THE
OUTSTANDING VOTING SECURITIES OF THE FUND.
B) THIS PLAN SHALL REMAIN IN EFFECT FOR ONE YEAR FROM ITS ADOPTION DATE
AND MAY CONTINUE IN EFFECT THEREAFTER IF THIS PLAN IS APPROVED AT LEAST ANNUALLY
BY A MAJORITY VOTE OF THE TRUSTEES OF THE FUND, INCLUDING A MAJORITY OF THE
QUALIFIED TRUSTEES, CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING
ON THE PLAN.
C). THIS PLAN MAY BE TERMINATED AT ANY TIME BY A MAJORITY VOTE OF THE
QUALIFIED TRUSTEES OR BY VOTE OF A MAJORITY OF THE OUTSTANDING VOTING SECURITIES
OF THE FUND OR, WITH RESPECT TO A PORTFOLIO, BY A VOTE OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF THAT PORTFOLIO.
3. REPORTS. THE PERSON AUTHORIZED TO DIRECT THE DISPOSITION OF MONIES
PAID OR PAYABLE BY THE FUND PURSUANT TO THE PLAN SHALL PROVIDE, ON AT LEAST A
QUARTERLY BASIS, A WRITTEN REPORT TO THE FUND'S BOARD OF TRUSTEES OF THE AMOUNTS
EXPENDED PURSUANT TO THIS PLAN OR ANY RELATED AGREEMENT AND THE PURPOSES FOR
WHICH SUCH EXPENDITURES WERE MADE.
4. SELECTION OF DISINTERESTED TRUSTEES. WHILE THIS PLAN IS IN EFFECT, THE
SELECTION AND NOMINATION OF THOSE TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE
FUND WITHIN THE MEANING OF SECTION 2(A)(19) OF THE INVESTMENT COMPANY ACT OF
1940 SHALL BE COMMITTED TO THE DISCRETION OF THE TRUSTEES THEN IN OFFICE WHO ARE
NOT INTERESTED PERSONS OF THE FUND.
5. EFFECT OF PLAN. THIS PLAN SHALL NOT OBLIGATE THE FUND OR ANY OTHER
PERSON TO ENTER INTO AN AGREEMENT WITH ANY PARTICULAR PERSON.
6. AMENDMENT. THIS PLAN MAY NOT BE AMENDED TO INCREASE MATERIALLY THE
AMOUNT AUTHORIZED IN PARAGRAPH L(B) HEREOF TO BE SPENT FOR DISTRIBUTION WITHOUT
APPROVAL BY A VOTE OF THE MAJORITY OF THE OUTSTANDING SECURITIES OF THE FUND OR,
WITH RESPECT TO A PORTFOLIO, BY A VOTE OF A MAJORITY OF THE OUTSTANDING VOTING
SECURITIES OF THE PORTFOLIO. ALL MATERIAL AMENDMENTS TO THIS PLAN MUST BE
APPROVED BY A MAJORITY VOTE OF THE BOARD OF TRUSTEES OF THE FUND, AND OF THE
QUALIFIED TRUSTEES, CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING
THEREON.
<PAGE>
SCHEDULE I
CLASS T
PLAN OF DISTRIBUTION PURSUANT TO RULE 12B-1
UNDER THE INVESTMENT COMPANY ACT OF 1940
CLASS T DISTRIBUTION PLAN EXPENSES INCURRED BY THE FUNDS SHALL BE PAID ACCORDING
TO THE FOLLOWING ANNUAL RATE, BASED ON THE CLASS T AVERAGE DAILY NET ASSETS IN
THAT FUND:
CALVERT TAX-FREE RESERVES MONEY MARKET PORTFOLIO 0.25%
CALVERT FIRST GOVERNMENT MONEY MARKET FUND 0.25%
18f-3 Multiple Class Plan
As Restated December 1998
Page 3 of 11
THE CALVERT GROUP OF FUNDS
RULE 18F-3 MULTIPLE CLASS PLAN
UNDER THE INVESTMENT COMPANY ACT OF 1940
AS RESTATED DECEMBER 1998
RULE 18F-3 UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940
ACT"), REQUIRES THAT AN INVESTMENT COMPANY DESIRING TO OFFER MULTIPLE CLASSES OF
SHARES PURSUANT TO THE RULE ADOPT A PLAN SETTING FORTH THE DIFFERENCES AMONG THE
CLASSES WITH RESPECT TO SHAREHOLDER SERVICES, DISTRIBUTION ARRANGEMENTS, EXPENSE
ALLOCATIONS AND ANY RELATED CONVERSION FEATURES OR EXCHANGE PRIVILEGES. ANY
MATERIAL AMENDMENT TO THE PLAN MUST BE APPROVED BY THE INVESTMENT COMPANY'S
BOARD OF TRUSTEES/DIRECTORS, INCLUDING A MAJORITY OF THE DISINTERESTED BOARD
MEMBERS, WHO MUST FIND THAT THE PLAN IS IN THE BEST INTERESTS OF EACH CLASS
INDIVIDUALLY AND THE INVESTMENT COMPANY AS A WHOLE.
THIS RULE 18F-3 MULTIPLE CLASS PLAN ("PLAN") SHALL APPLY TO THOSE FUNDS IN
THE CALVERT GROUP OF FUNDS LISTED IN EXHIBIT I (EACH A "FUND" AND COLLECTIVELY,
"FUNDS") AND TO ANY FUTURE FUND FOR WHICH THIS PLAN HAS BEEN APPROVED IN
ACCORDANCE WITH THE ABOVE PARAGRAPH.
THE PROVISIONS OF THIS PLAN ARE SEVERABLE FOR EACH FUND OR SERIES THEREOF
("SERIES") OR CLASS, AND WHENEVER ACTION IS TO BE TAKEN WITH RESPECT TO THIS
PLAN, THAT ACTION MUST BE TAKEN SEPARATELY FOR EACH FUND, SERIES OR CLASS
AFFECTED BY THE MATTER.
1. CLASS DESIGNATION. A FUND MAY OFFER SHARES DESIGNATED CLASS A, CLASS B,
CLASS C , CLASS I, AND FOR CERTAIN MONEY MARKET PORTFOLIOS, CLASS O AND CLASS T.
2. DIFFERENCES IN AVAILABILITY. CLASS A, CLASS B, CLASS C, AND CLASS O
SHARES SHALL EACH BE AVAILABLE THROUGH THE SAME DISTRIBUTION CHANNELS, EXCEPT
THAT (A) CLASS B SHARES MAY NOT BE AVAILABLE THROUGH SOME DEALERS AND ARE NOT
AVAILABLE FOR PURCHASES OF $500,000 OR MORE, (B) CLASS B SHARES OF CALVERT FIRST
GOVERNMENT MONEY MARKET FUND ARE AVAILABLE ONLY THROUGH EXCHANGE FROM CLASS B OR
CLASS C SHARES OF ANOTHER CALVERT FUND, AND (C) CLASS C SHARES MAY NOT BE
AVAILABLE THROUGH SOME DEALERS AND ARE NOT AVAILABLE FOR PURCHASES OF $1 MILLION
OR MORE. CLASS I SHARES ARE GENERALLY AVAILABLE ONLY DIRECTLY FROM CALVERT GROUP
AND NOT THROUGH DEALERS, AND EACH CLASS I SHAREHOLDER MUST MAINTAIN A $1 MILLION
MINIMUM ACCOUNT BALANCE. CLASS T SHARES ARE ONLY AVAILABLE THROUGH CERTAIN
DEALERS.
3. DIFFERENCES IN SERVICES. THE SERVICES OFFERED TO SHAREHOLDERS OF EACH
CLASS SHALL BE SUBSTANTIALLY THE SAME, EXCEPT THAT THE RIGHTS OF ACCUMULATION,
LETTERS OF INTENT AND REINVESTMENT PRIVILEGES SHALL BE AVAILABLE ONLY TO HOLDERS
OF CLASS A SHARES. CLASS I PURCHASES AND REDEMPTIONS MAY ONLY BE MADE BY BANK
WIRE. CLASS T SHARES HAVE LIMITED SERVICES BY CALVERT, RATHER THE SERVICES TO
SHAREHOLDERS ARE PROVIDED BY THE DEALER OFFERING THE CLASS T SHARES.
4. DIFFERENCES IN DISTRIBUTION ARRANGEMENTS. CLASS A SHARES SHALL BE OFFERED
WITH A FRONT-END SALES CHARGE, AS SUCH TERM IS DEFINED IN RULE 2830 OF THE
CONDUCT RULES OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. THE AMOUNT
OF THE SALES CHARGE ON CLASS A SHARES IS SET FORTH AT EXHIBIT II. SALES OF CLASS
A SHARES OF $1 MILLION OR MORE SOLD AT NAV SHALL BE SUBJECT TO A 1.00%
CONTINGENT DEFERRED SALES CHARGE ("CDSC") IF THE SHARES ARE REDEEMED WITHIN ONE
YEAR OF PURCHASE. CLASS A SHARES SHALL BE SUBJECT TO A DISTRIBUTION PLAN
ADOPTED PURSUANT TO RULE 12B-1 UNDER THE 1940 ACT. THE AMOUNT OF THE
DISTRIBUTION PLAN EXPENSES FOR CLASS A SHARES, AS SET FORTH AT EXHIBIT II, ARE
USED TO PAY THE FUND'S PRINCIPAL UNDERWRITER FOR DISTRIBUTING AND OR PROVIDING
SERVICES TO THE FUND'S CLASS A SHARES. THIS AMOUNT INCLUDES A SERVICE FEE AT THE
ANNUAL RATE OF .25 OF 1% OF THE VALUE OF THE AVERAGE DAILY NET ASSETS OF CLASS
A.
CLASS B SHARES SHALL BE OFFERED WITH A CDSC AND NO FRONT-END SALES CHARGE.
THE AMOUNT OF THE CDSC ON CLASS B SHARES IS SET FORTH AT EXHIBIT II. CLASS B
SHARES SHALL BE SUBJECT TO A DISTRIBUTION PLAN ADOPTED PURSUANT TO RULE 12B-1
UNDER THE 1940 ACT. THE AMOUNT OF THE DISTRIBUTION PLAN EXPENSES FOR CLASS B
SHARES, AS SET FORTH AT EXHIBIT II, ARE USED TO PAY EACH FUND'S PRINCIPAL
UNDERWRITER FOR DISTRIBUTING AND OR PROVIDING SERVICES TO THE FUND'S CLASS B
SHARES. THIS AMOUNT INCLUDES A SERVICE FEE AT THE ANNUAL RATE OF .25 OF 1% OF
THE VALUE OF THE AVERAGE DAILY NET ASSETS OF CLASS B.
CLASS C SHARES SHALL NOT BE SUBJECT TO A FRONT-END SALES CHARGE, BUT SHALL
BE SUBJECT TO A 1.00% CDSC IF THE SHARES ARE REDEEMED WITHIN ONE YEAR OF
PURCHASE. CLASS C SHARES SHALL BE SUBJECT TO A DISTRIBUTION PLAN ADOPTED
PURSUANT TO RULE 12B-1 UNDER THE 1940 ACT. THE AMOUNT OF THE DISTRIBUTION PLAN
EXPENSES FOR CLASS C SHARES ARE SET FORTH AT EXHIBIT II. THE CLASS C
DISTRIBUTION PLAN PAYS EACH APPLICABLE FUND'S PRINCIPAL UNDERWRITER FOR
DISTRIBUTING AND OR PROVIDING SERVICES TO SUCH FUND'S CLASS C SHARES. THIS
AMOUNT INCLUDES A SERVICE FEE AT THE ANNUAL RATE OF .25 OF 1% OF THE VALUE OF
THE AVERAGE DAILY NET ASSETS OF CLASS C.
CLASS I AND CLASS O SHARES SHALL BE SUBJECT TO NEITHER A FRONT-END SALES
CHARGE, NOR A CDSC, NOR ARE THEY SUBJECT TO A DISTRIBUTION PLAN ADOPTED PURSUANT
TO RULE 12B-1 UNDER THE 1940 ACT.
CLASS T SHARES SHALL BE SUBJECT TO NEITHER A FRONT-END SALES CHARGE, NOR A CDSC,
BUT THEY ARE SUBJECT TO A DISTRIBUTION PLAN ADOPTED PURSUANT TO RULE 12B-1 UNDER
THE 1940 ACT.
5. EXPENSE ALLOCATION. THE FOLLOWING EXPENSES SHALL BE ALLOCATED, TO THE
EXTENT PRACTICABLE, ON A CLASS-BY-CLASS BASIS: (A) DISTRIBUTION PLAN FEES; (B)
TRANSFER AGENT AND SHAREHOLDER SERVICING FEES; (C) ADMINISTRATIVE SERVICE FEES;
AND (E) CERTAIN STATE REGISTRATION FEES.
6. CONVERSION FEATURES. CLASS B SHARES SHALL BE SUBJECT TO AN AUTOMATIC
CONVERSION FEATURE INTO CLASS A SHARES AFTER THEY HAVE BEEN HELD FOR THAT NUMBER
OF YEARS SET FORTH IN EXHIBIT II. CLASS A, CLASS C ,CLASS I, CLASS O, AND CLASS
T ARE NOT SUBJECT TO AUTOMATIC CONVERSION.
7. EXCHANGE PRIVILEGES. CLASS A SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A)
CLASS A SHARES OF OTHER FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP; (B)
SHARES OF FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP WHICH DO NOT HAVE
SEPARATE SHARE CLASSES; AND (C) SHARES OF CERTAIN OTHER FUNDS SPECIFIED FROM
TIME TO TIME.
CLASS B SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A) CLASS B SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP; (B) CLASS A SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP, IF THE FRONT-END LOAD ON THE
CLASS A SHARES IS PAID AT THE TIME OF THE EXCHANGE; AND (C) SHARES OF CERTAIN
OTHER FUNDS SPECIFIED FROM TIME TO TIME.
CLASS C SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A) CLASS C SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP AND CLASS B SHARES OF CALVERT
FIRST GOVERNMENT MONEY MARKET FUND; (B) CLASS A SHARES OF OTHER FUNDS MANAGED OR
ADMINISTERED BY THE CALVERT GROUP, IF THE FRONT-END LOAD ON THE CLASS A SHARES
IS PAID AT THE TIME OF THE EXCHANGE; AND (C) SHARES OF CERTAIN OTHER FUNDS
SPECIFIED FROM TIME TO TIME.
CLASS I SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A) CLASS I SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP; (B) CLASS A SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP, IF THE FRONT-END LOAD ON THE
CLASS A SHARES IS PAID AT THE TIME OF THE EXCHANGE; AND (C) SHARES OF CERTAIN
OTHER FUNDS SPECIFIED FROM TIME TO TIME.
CLASS T SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A) CLASS T SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP; (B) CLASS A SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP, IF THE FRONT-END LOAD ON THE
CLASS A SHARES IS PAID AT THE TIME OF THE EXCHANGE; AND (C) SHARES OF CERTAIN
OTHER FUNDS SPECIFIED FROM TIME TO TIME.
<PAGE>
EXHIBIT I
THE CALVERT FUND
CALVERT TAX-FREE RESERVES
CALVERT MUNICIPAL FUND, INC.
CALVERT SOCIAL INVESTMENT FUND
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
FIRST VARIABLE RATE FUND
<PAGE>
EXHIBIT II
CALVERT SOCIAL INVESTMENT FUND (CSIF)
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1FEE
SALES CHARGE
CSIF BALANCED 4.75% 0.35% 1.00%
CSIF EQUITY 4.75% 0.35% 1.00%
CSIF MANAGED INDEX 4.75% 0.25% 1.00%
CSIF BOND 3.75% 0.35% 1.00%
BALANCED,
CLASS B EQUITY, AND MAXIMUM
CONTINGENT DEFERRED SALES CHARGE MANAGED INDEX BOND 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER
PURCHASE 5% 4% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 4% 3%
MORE THAN TWO YEARS BUT LESS THAN THREE 4% 2%
MORE THAN THREE YEARS BUT LESS THAN FOUR 3% 1%
MORE THAN FOUR YEARS BUT LESS THAN FIVE 2%
MORE THAN FIVE YEARS BUT LESS THAN SIX 1%
CONVERTS TO CLASS A AFTER 8 YRS. 6 YRS.
<PAGE>
EXHIBIT II
CALVERT TAX-FREE RESERVES (CTFR)
MAXIMUM MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C CLASS T
FRONT-END 12B-1 FEE 12B-1FEE 12B-1 FEE
SALES CHARGE
CTFR MONEY MARKET N/A N/A N/A 0.25%
CTFR LONG-TERM 3.75% 0.35% 1.00%
CTFR VERMONT 3.75% N/A 1.00%
LONG-TERM MAXIMUM
CLASS B AND CLASS B
CONTINGENT DEFERRED SALES CHARGE VERMONT 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER PURCHASE 4% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 3%
MORE THAN TWO YEARS BUT LESS THAN THREE 2%
MORE THAN THREE YEARS BUT LESS THAN FOUR 1%
CONVERTS TO CLASS A AFTER 6 YRS.
<PAGE>
EXHIBIT II
CALVERT MUNICIPAL FUND, INC. (CMF)
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1FEE
SALES CHARGE
NATIONAL INTERMEDIATE 2.75% 0.25% N/A
CALIFORNIA INTERMEDIATE 2.75% 0.25% N/A
MARYLAND INTERMEDIATE 2.75% 0.25% N/A
VIRGINIA INTERMEDIATE 2.75% 0.25% N/A
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE CMF 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER PURCHASE 3% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 2%
MORE THAN TWO YEARS BUT LESS THAN THREE 2%
MORE THAN THREE YEARS BUT LESS THAN FOUR 1%
CONVERTS TO CLASS A AFTER 4 YRS.
<PAGE>
EXHIBIT II
THE CALVERT FUND
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1 FEE
SALES CHARGE
NEW VISION SMALL CAP 4.75% 0.25% 1.00%
CALVERT INCOME FUND 3.75% 0.50% 1.00%
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE NEW VISION INCOME 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER
PURCHASE 5% 4% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 4% 3%
MORE THAN TWO YEARS BUT LESS THAN THREE 4% 2%
MORE THAN THREE YEARS BUT LESS THAN FOUR 3% 1%
MORE THAN FOUR YEARS BUT LESS THAN FIVE 2%
MORE THAN FIVE YEARS BUT LESS THAN SIX 1%
CONVERTS TO CLASS A AFTER 8 YRS. 6 YRS.
<PAGE>
EXHIBIT II
CALVERT WORLD VALUES FUND, INC. (CWVF)
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1FEE
SALES CHARGE
INTERNATIONAL EQUITY 4.75% 0.35% 1.00%
CAPITAL ACCUMULATION 4.75% 0.35% 1.00%
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE CWVF 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER PURCHASE 5% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 4%
MORE THAN TWO YEARS BUT LESS THAN THREE 4%
MORE THAN THREE YEARS BUT LESS THAN FOUR 3%
MORE THAN FOUR YEARS BUT LESS THAN FIVE 2%
MORE THAN FIVE YEARS BUT LESS THAN SIX 1%
CONVERTS TO CLASS A AFTER 8 YRS.
<PAGE>
EXHIBIT II
CALVERT NEW WORLD FUND, INC. (CNWF)
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1 FEE
SALES CHARGE
CALVERT NEW AFRICA 4.75% 0.25% 1.00%
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE CNWF 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER PURCHASE 5% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 4%
MORE THAN TWO YEARS BUT LESS THAN THREE 4%
MORE THAN THREE YEARS BUT LESS THAN FOUR 3%
MORE THAN FOUR YEARS BUT LESS THAN FIVE 2%
MORE THAN FIVE YEARS BUT LESS THAN SIX 1%
CONVERTS TO CLASS A AFTER 8 YRS.
<PAGE>
EXHIBIT II
FIRST VARIABLE RATE FUND (FVRF)
MAXIMUM MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C CLASS T
FRONT-END 12B-1 FEE 12B-1 FEE 12B-1 FEE
SALES CHARGE
FIRST GOVERNMENT
MONEY MARKET N/A N/A 1.00% 0.25%
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE 12B-1 FEE
CDSC OF ORIGINAL CLASS B FUND PURCHASED 1.00%
IS APPLIED UPON REDEMPTION FROM CLASS B
OF CALVERT FIRST GOVERNMENT MONEY MARKET FUND.
CONVERSION PERIOD OF ORIGINAL CLASS B FUND PURCHASED IS APPLIED.
E:\PROCEDURES\FALL FINAL 1999 CODE of ETHICS REVISIONS.doc
REVISED DECEMBER 1999
CODE OF ETHICS AND INSIDER TRADING POLICY AND PROCEDURES
CALVERT ASSET MANAGEMENT COMPANY, INC.
CALVERT-SLOAN, ADVISERS, L.L.C.
CALVERT DISTRIBUTORS, INC.
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT MUNICIPAL FUND INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT VARIABLE SERIES, INC.
CALVERT CASH RESERVES
CALVERT NEW WORLD FUND, INC.
THE CODE OF ETHICS AND INSIDER TRADING POLICIES AND PROCEDURES ARE DESIGNED TO
PROTECT THE PUBLIC FROM ABUSIVE TRADING PRACTICES AND TO MAINTAIN ETHICAL
STANDARDS FOR ACCESS PERSONS WHEN DEALING WITH THE PUBLIC. ACTIVE LEADERSHIP
AND INTEGRITY OF MANAGEMENT DICTATES THESE PRINCIPLES BE DILIGENTLY IMPLEMENTED
AND MONITORED. THE CODE OF ETHICS IMPOSES THE FOLLOWING GENERAL OBLIGATIONS:
- - INFORMATION CONCERNING THE PURCHASE AND SALE OF SECURITIES LEARNED IN
CONNECTION WITH AN ACCESS PERSON'S SERVICE, IS PROPERTY OF THE FUND, ADVISER OR
EMPLOYER AND MAY NOT BE USED FOR PERSONAL BENEFIT.
- - FIDUCIARY DUTIES MANDATE SUITABLE INVESTMENT OPPORTUNITIES BE PRESENTED
FIRST TO THE FUND, ADVISER, OR EMPLOYER AND SHOULD NOT BE EXERCISED EVEN AFTER
FULL DISCLOSURE FOR PERSONAL BENEFIT.
- - MATERIAL INSIDE INFORMATION MUST BE KEPT CONFIDENTIAL AND RESTRICTS
TRADING OF SECURITIES.
- - FRONT RUNNING, MARKET MANIPULATION AND DECEPTIVE TRADING PRACTICES ARE
ABUSIVE TECHNIQUES PROHIBITED BY THESE PROCEDURES AND MAY RESULT, IN FINES,
TERMINATION OR LEGAL ACTIONS BY THIRD PARTIES.
- - ACCESS PERSONS MAY NOT PURCHASE IPOS DUE TO THE HIGH POTENTIAL FOR ABUSIVE
TRADING PRACTICES.
- - ACCESS PERSONS MUST NOT TRADE IN SECURITIES WITH KNOWLEDGE THAT THE FUND,
ADVISER, SUB-ADVISER OR EMPLOYER IS CONSIDERING TO MAKE A SIMILAR PURCHASE OR
SALE OF THE SAME SECURITIES.
- - ACCESS PERSONS SHALL NOT ENGAGE IN TRANSACTIONS THAT CREATE A CONFLICT OF
INTEREST INCLUDING BUT NOT LIMITED TO INAPPROPRIATELY MAKING DECISIONS ON BEHALF
OF A FUND REGARDING SECURITIES OR PRIVATE PLACEMENTS PERSONALLY OWNED BY THE
ACCESS PERSON.
CODE OF ETHICS GUIDELINES
THE LEGAL DEFINITION OF A SECURITY IS VERY BROAD AND INCORPORATES THE PURCHASE
AND SALE OF PUBLIC, PRIVATE, REGISTERED AND EXEMPT FROM REGISTRATION SECURITIES,
AS WELL AS DERIVATIVES. TO EASE THE BURDEN OF FOLLOWING THESE GUIDELINES, THE
CODE OF ETHICS REPORTING AND DISCLOSURE OBLIGATIONS AS WELL AS PRECLEARANCE
POLICIES DO NOT APPLY TO THE FOLLOWING:
1) THE SALE AND PURCHASE OF OPEN-END MUTUAL FUNDS INCLUDING MONEY MARKET
FUNDS.
2) THE SALE AND PURCHASE OF U.S. GOVERNMENT, U.S. GOVERNMENT AGENCY
SECURITIES AND MUNICIPAL SECURITIES IN TRADE AMOUNTS OF LESS THAN $20,000.
3) ACQUISITIONS THROUGH STOCK DIVIDEND PLANS, SPIN-OFFS OR OTHER
DISTRIBUTIONS APPLIED TO ALL HOLDERS OF THE SAME CLASS OF SECURITIES.
4) ACQUISITIONS THROUGH THE EXERCISE OF RIGHTS ISSUED PRO RATA TO ALL
HOLDERS.
5) ACQUISITIONS THROUGH GIFTS OR BEQUESTS.
6) TRADES IN ANY S & P 500 COMPANY OF 500 SHARES OR LESS.
7) TRADES IN REITS AND VARIABLE INSURANCE PRODUCTS.
A. DISCLOSURE OF HOLDINGS & DUPLICATE STATEMENTS AND CONFIRMATIONS FOR THE
PURCHASE AND SALE OF SECURITIES OR OPTIONS ON SECURITIES BY ACCESS PERSONS.
TO ASSURE THAT ABUSIVE OR UNETHICAL TRADING PRACTICES ARE NOT CONDUCTED BY
ACCESS PERSONS, ACCESS PERSONS ARE REQUIRED TO DISCLOSE PERSONAL SECURITIES
HOLDINGS INCLUDING PRIVATE PLACEMENT HOLDINGS AND SEND DUPLICATE BROKERAGE AND
CONFIRMATION STATEMENTS TO THE ATTENTION OF THE COMPLIANCE OFFICER AT CALVERT
GROUP, LTD., 4550 MONTGOMERY AVENUE, BETHESDA, MD 20814. PERSONAL SECURITIES
HOLDINGS MUST BE DISCLOSED AT THE POINT OF HIRE AND UPON ANNUAL ACKNOWLEDGEMENT
OF THESE PROCEDURES. DUPLICATE STATEMENTS AND CONFIRMATIONS ARE REQUIRED FOR
ANY ACCESS PERSON'S ACCOUNT OR AN ACCOUNT OVER WHICH THE ACCESS PERSON HAS
EITHER CUSTODY, CONTROL OR BENEFICIAL OWNERSHIP. ACCOUNT STATEMENTS FOR
IMMEDIATE FAMILY MEMBERS ARE ALSO REQUIRED."BENEFICIAL OWNERSHIP" SHALL HAVE THE
SAME MEANING AS IN RULE 16A-1(A)(2) UNDER THE SECURITIES EXCHANGE ACT OF 1934.
GENERALLY, A PERSON HAS A BENEFICIAL OWNERSHIP IN A SECURITY IF HE OR SHE,
DIRECTLY OR INDIRECTLY, THROUGH ANY CONTRACT, ARRANGEMENT, UNDERSTANDING,
RELATIONSHIP OR OTHERWISE, HAS OR SHARES A DIRECT OR INDIRECT PECUNIARY INTEREST
IN THE SECURITY, [HAS OR SHARES VOTING POWER (THE POWER TO VOTE OR DIRECT THE
VOTING OF THE SECURITY) OR INVESTMENT POWER (THE POWER TO DISPOSE OF OR DIRECT
THE DISPOSITION OF THE SECURITY).] BENEFICIAL OWNERSHIP" INCLUDES ACCOUNTS OF
A SPOUSE, MINOR CHILDREN AND RELATIVES RESIDENT IN THE ACCESS PERSON'S HOME, AS
WELL AS ACCOUNTS OF ANOTHER PERSON IF BY REASON OF ANY CONTRACT, UNDERSTANDING,
RELATIONSHIP, AGREEMENT OR OTHER ARRANGEMENT THE ACCESS PERSON OBTAINS THEREFROM
BENEFITS SUBSTANTIALLY EQUIVALENT TO THOSE OF OWNERSHIP, E.G., AS TRUSTEE,
SETTLOR, BENEFICIARY, POWER OF ATTORNEY.
ALL INFORMATION PROVIDED TO THE COMPLIANCE OFFICER WILL BE CONFIDENTIAL.
STATEMENTS AND CONFIRMATIONS WILL BE REVIEWED BY THE COMPLIANCE OFFICER OR HIS
OR HER DESIGNEE(S) FOR ANY PATTERN OF TRANSACTIONS INVOLVING PARALLEL
TRANSACTIONS (PORTFOLIO AND INDIVIDUAL BOTH BUYING OR BOTH SELLING THE SAME
SECURITY) GENERALLY WITHIN A 15 DAY PERIOD BEFORE OR AFTER THE TRANSACTION DATE.
AMONG THE FACTORS THAT WILL BE CONSIDERED IN THE ANALYSIS OF WHETHER ANY
PROVISION OF THE CODE HAS BEEN VIOLATED WILL BE THE NUMBER AND DOLLAR VALUE OF
THE TRANSACTIONS, THE TRADING VOLUME OF THE SECURITIES IN QUESTION, THE LENGTH
OF TIME THE SECURITY IS HELD BY THE INDIVIDUAL AND THE INDIVIDUAL'S INVOLVEMENT
IN THE INVESTMENT PROCESS. WHILE THE FOCUS OF THIS PROCEDURE OF THE CODE IS ON
"PATTERNS", IT IS IMPORTANT TO NOTE THAT A VIOLATION COULD RESULT FROM A SINGLE
TRANSACTION IF THE CIRCUMSTANCES WARRANT A FINDING THAT THE UNDERLYING
PRINCIPLES OF FAIR DEALING HAVE BEEN VIOLATED. THE COMPLIANCE OFFICER OR HIS OR
HER DESIGNEE(S), WILL SIMILARLY REVIEW THE PERSONAL SECURITIES HOLDINGS REPORTS
PROVIDED TO THE COMPLIANCE OFFICER.
B. PRECLEARANCE POLICY
BECAUSE OF THE SENSITIVE NATURE OF SECURITIES TRADING, THE COMPLIANCE OFFICER
WILL NOTIFY CERTAIN ACCESS PERSONS AND INVESTMENT PERSONNEL ABOUT THE NEED TO
FOLLOW A PRECLEARANCE POLICY. ATTACHMENT A WILL BE USED BY DESIGNATED ACCESS
PERSONS SEEKING PRECLEARANCE FOR SECURITIES TRADES INCLUDING PRECLEARANCE BY
INVESTMENT PERSONNEL FOR PRIVATE PLACEMENT TRANSACTIONS. THOSE INDIVIDUALS
SUBJECT TO THE PRECLEARANCE POLICY WILL NOT BE EXEMPT FROM THE GENERAL
PROHIBITIONS LISTED IN THE CODE OR THE POLICIES AND PROCEDURES DESIGNED TO
PREVENT INSIDER TRADING. THE COMPLIANCE OFFICER WILL REVIEW WITH THE
DIRECTORS/TRUSTEES PERIODICALLY A LIST OF PERSONS WHO ARE SUBJECT TO THE
PRECLEARANCE POLICY AND THE CRITERIA USED TO SELECT SUCH INDIVIDUALS.
THE PRECLEARANCE AUTHORIZATION SHALL BE VALID FOR A PERIOD OF THREE BUSINESS
DAYS UNLESS A FURTHER EXTENSION OF TIME IS INDICATED BY THE COMPLIANCE OFFICER.
<PAGE>
C. NOTIFICATION OF REPORTING OBLIGATION - ANNUAL CERTIFICATION TO BOARD
MEMBERS OF THE LEGAL DEPARTMENT WILL BE RESPONSIBLE FOR NOTIFYING ALL ACCESS
PERSONS ABOUT THE DUTY TO FORWARD TRADE CONFIRMATIONS TO THE COMPLIANCE OFFICER.
ONCE INFORMED OF THE DUTY TO FORWARD TRADE CONFIRMATIONS, AN ACCESS PERSON HAS A
CONTINUING OBLIGATION TO PROVIDE SUCH CONFIRMS, IN A TIMELY MANNER, UNTIL SUCH
TIME AS NOTIFIED OTHERWISE. INFORMATION COMPILED IN COMPLIANCE OFFICER REPORTS
IS AVAILABLE FOR INSPECTION BY THE SEC OR OTHER REGULATORY AUTHORITIES AT ANY
TIME DURING THE FIVE-YEAR PERIOD FOLLOWING THE END OF THE FISCAL YEAR IN WHICH
EACH REPORT IS MADE.
ANNUALLY, THE LEGAL DEPARTMENT WILL PREPARE A WRITTEN " ISSUES AND CERTIFICATION
REPORT" FOR THE BOARD THAT:
- - DESCRIBES ANY ISSUES THAT HAVE ARISEN UNDER THIS CODE OF ETHICS OR ITS
PROCEDURES SINCE THE LAST REPORT, INCLUDING INFORMATION ABOUT MATERIAL CODE OF
ETHICS OR PROCEDURE VIOLATIONS AND SANCTIONS IMPOSED IN RESPONSE TO THOSE
VIOLATIONS; AND
- - CERTIFIES TO THE BOARD THAT THE ADOPTED CODE OF ETHICS AND ITS PROCEDURES
PROVIDE REASONABLY NECESSARY MEASURES TO PREVENT INVESTMENT PERSONNEL FROM
VIOLATING THE CODE AND APPLICABLE PROCEDURES.
THE CODE OF ETHICS AND ANY MATERIAL CHANGES TO ITS PROVISIONS AND/OR PROCEDURES
MUST BE APPROVED BY A MAJORITY OF THE BOARD, INCLUDING A MAJORITY OF THE
INDEPENDENT DIRECTORS.
D. RESTRICTIONS AS TO GIFTS, ENTERTAINMENT, FAVORS AND DIRECTORSHIPS
1. GIFTS, ENTERTAINMENT AND FAVORS. ACCESS PERSONS MUST NOT MAKE BUSINESS
DECISIONS THAT ARE INFLUENCED OR APPEAR TO BE INFLUENCED BY GIVING OR ACCEPTING
GIFTS, ENTERTAINMENT OR FAVORS. ACCESS PERSONS ARE PROHIBITED FROM RECEIVING ANY
GIFT OR OTHER THING OF MORE THAN DE MINIMIS VALUE FROM ANY PERSON OR ENTITY THAT
DOES BUSINESS WITH OR ON BEHALF OF CALVERT ASSET MANAGEMENT COMPANY,
CALVERT-SLOAN ADVISERS, OR CALVERT DISTRIBUTORS INC. INVITATIONS TO AN
OCCASIONAL MEAL, SPORTING EVENT OR OTHER SIMILAR ACTIVITY WILL NOT BE DEEMED TO
VIOLATE THIS RESTRICTION UNLESS THE OCCURRENCE OF SUCH EVENTS IS SO FREQUENT OR
LAVISH AS TO SUGGEST AN IMPROPRIETY. THE PRESIDENT/CEO OF CALVERT GROUP MUST
APPROVE THE ACCEPTANCE OF ANY GIFT, ENTERTAINMENT OR FAVOR WITH A PER GIFT VALUE
OF MORE THAN $100.00.
2. DIRECTORSHIPS.
(A) GENERAL RULE:
NO ACCESS PERSON, OTHER THAN A DISINTERESTED FUND DIRECTOR/TRUSTEE, MAY SERVE ON
THE BOARD OF DIRECTORS OF A PUBLICLY-HELD OR PRIVATE FOR-PROFIT COMPANY ABSENT
PRIOR WRITTEN APPROVAL FROM THE CALVERT GROUP, LTD. BOARD OF DIRECTORS AND/OR
THE APPLICABLE FUND'S BOARD OF DIRECTORS/TRUSTEES. DISINTERESTED
DIRECTORS/TRUSTEES MUST PROVIDE ANNUAL DISCLOSURE ABOUT DIRECTORSHIPS AND OTHER
POTENTIAL CONFLICTS OF INTEREST.
(B) APPLICATIONS FOR APPROVAL:
APPLICATIONS FOR APPROVAL TO SERVE AS A DIRECTOR OF A PUBLICLY TRADED OR PRIVATE
FOR-PROFIT COMPANY SHALL BE DIRECTED, IN WRITING, TO THE OFFICE OF THE GENERAL
COUNSEL FOR PROMPT FORWARDING TO THE CALVERT GROUP, LTD. BOARD OF DIRECTORS AND
THE RESPECTIVE FUND'S BOARD OF DIRECTORS/TRUSTEES. AUTHORIZATION MAY BE GRANTED
WHERE IT IS DETERMINED THAT SUCH BOARD SERVICE WOULD BE CONSISTENT WITH THE
INTERESTS OF THE FUNDS AND THEIR SHAREHOLDERS.
(C) SUBSEQUENT INVESTMENT MANAGEMENT ACTIVITIES:
WHENEVER AN ACCESS PERSON IS GRANTED APPROVAL TO SERVE AS A DIRECTOR OF A
PUBLICLY-TRADED OR PRIVATE FOR-PROFIT COMPANY, HE OR SHE SHALL PERSONALLY
REFRAIN FROM PARTICIPATING IN ANY DELIBERATION, RECOMMENDATIONS, OR
CONSIDERATIONS OF WHETHER OR NOT TO RECOMMEND THAT ANY SECURITIES OF THAT
COMPANY BE PURCHASED, SOLD OR RETAINED IN THE INVESTMENT PORTFOLIO OF ANY
CALVERT GROUP FUND OR CALVERT ASSET MANAGEMENT COMPANY MANAGED ACCOUNT.
E. ENFORCEMENT AND SANCTIONS
EACH VIOLATION OF THIS CODE SHALL BE REPORTED TO THE BOARD OF
DIRECTORS/TRUSTEES OF THE APPLICABLE FUND OR ENTITY AT OR BEFORE THE NEXT
REGULAR MEETING OF THE BOARD. UPON DISCOVERING OR OTHERWISE BEING INFORMED OF A
VIOLATION OF THIS CODE, THE BOARD OF DIRECTORS/TRUSTEES MAY TAKE ANY ACTION IT
DEEMS APPROPRIATE INCLUDING, INTER ALIA, A LETTER OF CENSURE, TERMINATION WITH
RESPECT TO PORTFOLIO MANAGEMENT DUTIES REGARDING THE FUND, OR RECOMMENDING TO
THE OPERATING COMPANIES, SUSPENSION OR REMOVAL FROM OFFICE, IMPOSITION OF A FINE
OR TERMINATION OF EMPLOYMENT OF THE VIOLATOR.
F. RECORDKEEPING
EACH ENTITY SHALL MAINTAIN SUCH LISTS, RECORDS, AND REPORTS AS ARE REQUIRED
BY LAW.
<PAGE>
G. INSIDER TRADING POLICY AND PROCEDURES
1. SCOPE OF POLICY STATEMENT
THIS POLICY STATEMENT IS DRAFTED BROADLY; IT WILL BE APPLIED AND
INTERPRETED IN A SIMILAR MANNER. THIS POLICY STATEMENT APPLIES TO SECURITIES
TRADING AND INFORMATION HANDLING BY ALL ACCESS PERSONS.
THE LAW OF INSIDER TRADING IS UNSETTLED; AN INDIVIDUAL LEGITIMATELY MAY BE
UNCERTAIN ABOUT THE APPLICATION OF THE POLICY STATEMENT IN A PARTICULAR
CIRCUMSTANCE. OFTEN, A SINGLE QUESTION CAN FORESTALL DISCIPLINARY ACTION OR
COMPLEX LEGAL PROBLEMS. YOU SHOULD DIRECT ANY QUESTIONS RELATING TO THE POLICY
STATEMENT TO AN ATTORNEY IN THE CALVERT GROUP LEGAL DEPARTMENT. YOU MUST ALSO
NOTIFY AN ATTORNEY IN THE LEGAL DEPARTMENT IF YOU HAVE ANY REASON TO BELIEVE
THAT A VIOLATION OF THE POLICY STATEMENT HAS OCCURRED OR IS ABOUT TO OCCUR.
2. POLICY STATEMENT ON INSIDER TRADING
CALVERT FORBIDS ANY OFFICER, DIRECTOR\TRUSTEE OR EMPLOYEE FROM TRADING,
EITHER PERSONALLY OR ON BEHALF OF OTHERS, INCLUDING MUTUAL FUNDS MANAGED BY
CALVERT, ON MATERIAL NONPUBLIC INFORMATION OR COMMUNICATING MATERIAL NONPUBLIC
INFORMATION TO OTHERS IN VIOLATION OF THE LAW. THIS CONDUCT IS FREQUENTLY
REFERRED TO AS "INSIDER TRADING." CALVERT'S POLICY APPLIES TO EACH FUND, ITS
INVESTMENT ADVISOR, ITS PRINCIPAL UNDERWRITER, AND EVERY OFFICER, DIRECTOR AND
EMPLOYEE THEREOF, AND EXTENDS TO ACTIVITIES WITHIN AND OUTSIDE THEIR DUTIES AT
CALVERT. EVERY OFFICER, DIRECTOR, TRUSTEE AND EMPLOYEE MUST READ AND RETAIN THIS
POLICY STATEMENT. ANY QUESTIONS REGARDING CALVERT'S POLICY AND PROCEDURES SHOULD
BE REFERRED TO AN ATTORNEY IN THE CALVERT LEGAL DEPARTMENT. AN OFFICER,
DIRECTOR, TRUSTEE OR EMPLOYEE MUST NOTIFY AN ATTORNEY IN THE LEGAL DEPARTMENT
IMMEDIATELY IF THEY HAVE ANY REASON TO BELIEVE THAT A VIOLATION OF THE POLICY
STATEMENT HAS OCCURRED OR IS ABOUT TO OCCUR.
THE TERM "INSIDER TRADING" IS NOT DEFINED IN THE FEDERAL SECURITIES LAWS,
BUT GENERALLY IS USED TO REFER TO THE USE OF MATERIAL NONPUBLIC INFORMATION TO
TRADE IN SECURITIES (WHETHER OR NOT ONE IS AN "INSIDER") OR TO COMMUNICATIONS OF
MATERIAL NONPUBLIC INFORMATION TO OTHERS.
WHILE THE LAW CONCERNING INSIDER TRADING IS NOT STATIC, IT IS GENERALLY
UNDERSTOOD THAT THE LAW PROHIBITS:
A) TRADING BY AN INSIDER, WHILE IN POSSESSION OF MATERIAL
NONPUBLIC INFORMATION; OR
B) TRADING BY A NON-INSIDER, WHILE IN POSSESSION OF MATERIAL NONPUBLIC
INFORMATION, WHERE THE INFORMATION EITHER WAS DISCLOSED TO THE NON-INSIDER IN
VIOLATION OF AN INSIDER'S DUTY TO KEEP IT CONFIDENTIAL OR WAS MISAPPROPRIATED;
OR
C) COMMUNICATING MATERIAL NONPUBLIC INFORMATION TO OTHERS.
I. WHO IS AN INSIDER?
THE CONCEPT OF "INSIDER" IS BROAD. IT INCLUDES OFFICERS, DIRECTORS,
TRUSTEES AND EMPLOYEES OF A COMPANY. IN ADDITION, A PERSON CAN BE A "TEMPORARY
INSIDER" IF HE OR SHE ENTERS INTO A SPECIAL CONFIDENTIAL RELATIONSHIP IN THE
CONDUCT OF A COMPANY'S AFFAIRS AND AS A RESULT IS GIVEN ACCESS TO INFORMATION
SOLELY FOR THE COMPANY'S PURPOSES. A TEMPORARY INSIDER CAN INCLUDE, AMONG
OTHERS, A COMPANY'S ATTORNEYS, ACCOUNTANTS, CONSULTANTS, BANK LENDING OFFICERS,
AND THE EMPLOYEES OF SUCH ORGANIZATIONS. IN ADDITION, CALVERT MAY BECOME A
TEMPORARY INSIDER OF A COMPANY IT ADVISES OR FOR WHICH IT PERFORMS OTHER
SERVICES. ACCORDING TO THE SUPREME COURT, THE COMPANY MUST EXPECT THE OUTSIDER
TO KEEP THE DISCLOSED NONPUBLIC INFORMATION CONFIDENTIAL AND THE RELATIONSHIP
MUST AT LEAST IMPLY SUCH A DUTY BEFORE THE OUTSIDER WILL BE CONSIDERED AN
INSIDER.
II. WHAT IS MATERIAL INFORMATION?
TRADING ON INSIDE INFORMATION IS NOT A BASIS FOR LIABILITY UNLESS THE
INFORMATION IS MATERIAL. "MATERIAL INFORMATION" GENERALLY IS DEFINED AS
INFORMATION FOR WHICH THERE IS A SUBSTANTIAL LIKELIHOOD THAT A REASONABLE
INVESTOR WOULD CONSIDER IT IMPORTANT IN MAKING HIS OR HER INVESTMENT DECISIONS,
OR INFORMATION THAT IS REASONABLY CERTAIN TO HAVE A SUBSTANTIAL EFFECT ON THE
PRICE OF A COMPANY'S SECURITIES. INFORMATION THAT OFFICERS, DIRECTORS AND
EMPLOYEES SHOULD CONSIDER MATERIAL INCLUDES, BUT IS NOT LIMITED TO: DIVIDEND
CHANGES, EARNINGS ESTIMATES, CHANGES IN PREVIOUSLY RELEASED EARNINGS ESTIMATES,
SIGNIFICANT MERGER OR ACQUISITION PROPOSALS OR AGREEMENTS, MAJOR LITIGATION,
LIQUIDATION PROBLEMS, AND EXTRAORDINARY MANAGEMENT DEVELOPMENTS.
MATERIAL INFORMATION ALSO MAY RELATE TO THE MARKET FOR A COMPANY'S SECURITIES.
INFORMATION ABOUT A SIGNIFICANT ORDER TO PURCHASE OR SELL SECURITIES MAY, IN
SOME CONTEXTS, BE DEEMED MATERIAL. SIMILARLY, PREPUBLICATION INFORMATION
REGARDING REPORTS IN THE FINANCIAL PRESS ALSO MAY BE DEEMED MATERIAL. FOR
EXAMPLE, THE SUPREME COURT UPHELD THE CRIMINAL CONVICTIONS OF INSIDER TRADING
DEFENDANTS WHO CAPITALIZED ON PREPUBLICATION INFORMATION ABOUT THE WALL STREET
JOURNAL'S HEARD ON THE STREET COLUMN.
IT IS CONCEIVABLE THAT SIMILAR ADVANCE REPORTS OF SECURITIES TO BE BOUGHT OR
SOLD BY A LARGE, INFLUENTIAL INSTITUTIONAL INVESTOR, SUCH AS A FUND, MAY BE
DEEMED MATERIAL TO AN INVESTMENT IN THOSE PORTFOLIO SECURITIES. ADVANCE
KNOWLEDGE OF IMPORTANT PROPOSED GOVERNMENT REGULATION, FOR EXAMPLE, COULD ALSO
BE DEEMED MATERIAL INFORMATION REGARDING COMPANIES IN THE REGULATED INDUSTRY.
III. WHAT IS NONPUBLIC INFORMATION?
INFORMATION IS NONPUBLIC UNTIL IT HAS BEEN DISSEMINATED BROADLY TO INVESTORS IN
THE MARKET PLACE. TANGIBLE EVIDENCE OF SUCH DISSEMINATION IS THE BEST INDICATION
THAT THE INFORMATION IS PUBLIC. FOR EXAMPLE, INFORMATION IS PUBLIC AFTER IT HAS
BECOME AVAILABLE TO THE GENERAL PUBLIC THROUGH A PUBLIC FILING WITH THE SEC OR
SOME OTHER GOVERNMENTAL AGENCY, THE DOW JONES "TAPE" OR THE WALL STREET JOURNAL
OR SOME OTHER PUBLICATION OF GENERAL CIRCULATION, AND AFTER SUFFICIENT TIME HAS
PASSED SO THAT THE INFORMATION HAS BEEN DISSEMINATED WIDELY
IV. PENALTIES FOR INSIDER TRADING
PENALTIES FOR TRADING ON OR COMMUNICATING MATERIAL NONPUBLIC
INFORMATION ARE SEVERE, BOTH FOR INDIVIDUALS INVOLVED IN SUCH UNLAWFUL CONDUCT
AND THEIR EMPLOYERS. A PERSON CAN BE SUBJECT TO SOME OR ALL OF THE PENALTIES
BELOW EVEN IF HE OR SHE DOES NOT PERSONALLY BENEFIT FROM THE VIOLATION.
PENALTIES INCLUDE:
- - CIVIL INJUNCTIONS
- - TREBLE DAMAGES
- - DISGORGEMENT OF PROFITS
- - JAIL SENTENCES
- - FINES FOR THE PERSON WHO COMMITTED THE VIOLATION OF UP TO THREE TIMES THE
PROFIT GAINED OR LOSS AVOIDED, WHETHER OR NOT THE PERSON ACTUALLY BENEFITED, AND
- - FINES FOR THE EMPLOYER OR OTHER CONTROLLING PERSON OF UP TO THE GREATER OF
$1,000,000 OR THREE TIMES THE AMOUNT OF THE PROFIT GAINED OR LOSS AVOIDED.
IN ADDITION, ANY VIOLATION OF THIS POLICY STATEMENT CAN BE EXPECTED TO
RESULT IN SERIOUS SANCTIONS BY CALVERT, UP TO AND INCLUDING DISMISSAL OF THE
PERSONS INVOLVED.
<PAGE>
3. IDENTIFYING INSIDE INFORMATION
BEFORE A CALVERT EMPLOYEE EXECUTES ANY TRADE FOR HIM/HERSELF OR ON
BEHALF OF OTHERS, INCLUDING INVESTMENT COMPANIES MANAGED BY CALVERT, IN THE
SECURITIES OF A COMPANY ABOUT WHICH THE EMPLOYEE MAY HAVE POTENTIAL INSIDE
INFORMATION, THE FOLLOWING QUESTIONS SHOULD BE CONSIDERED:
A) IS THE INFORMATION MATERIAL? IS THIS INFORMATION THAT AN INVESTOR
WOULD CONSIDER IMPORTANT IN MAKING HIS OR HER INVESTMENT DECISIONS? IS THIS
INFORMATION THAT WOULD SUBSTANTIALLY AFFECT THE MARKET PRICE OF THE SECURITIES
IF GENERALLY DISCLOSED?
B) IS THE INFORMATION NONPUBLIC? HOW WAS THE INFORMATION OBTAINED? TO
WHOM HAS THIS INFORMATION BEEN PROVIDED? HAS THE INFORMATION BEEN DISSEMINATED
BROADLY TO INVESTORS IN THE MARKETPLACE BY BEING PUBLISHED IN REUTERS, THE WALL
STREET JOURNAL OR OTHER PUBLICATIONS OF GENERAL CIRCULATION? IS IT ON FILE WITH
THE SECURITIES AND EXCHANGE COMMISSION?
IF, AFTER CONSIDERATION OF THE ABOVE, IT IS FOUND THAT THE INFORMATION IS
MATERIAL AND NONPUBLIC, OR IF THERE ARE QUESTIONS AS TO WHETHER THE INFORMATION
IS MATERIAL AND NONPUBLIC, THE FOLLOWING STEPS SHOULD BE TAKEN:
A) REPORT THE MATTER IMMEDIATELY TO THE COMPLIANCE OFFICER OR AN
ATTORNEY IN THE LEGAL DEPARTMENT.
B) THE SECURITIES SHOULD NOT BE PURCHASED OR SOLD BY THE OFFICER,
DIRECTOR, TRUSTEE OR EMPLOYEE FOR HIM/HERSELF OR ON BEHALF OF OTHERS, INCLUDING
INVESTMENT COMPANIES MANAGED BY CALVERT.
C) THE INFORMATION SHOULD NOT BE COMMUNICATED INSIDE OR OUTSIDE
CALVERT, OTHER THAN TO THE LEGAL DEPARTMENT.
D) AFTER THE ISSUE HAS BEEN REVIEWED, THE LEGAL DEPARTMENT WILL
INSTRUCT THE OFFICER, DIRECTOR, OR EMPLOYEE AS TO WHETHER TO CONTINUE THE
PROHIBITIONS AGAINST TRADING AND COMMUNICATION, OR ALLOWING THE TRADE AND
COMMUNICATION OF THE INFORMATION.
4. CONTACTS WITH PUBLIC COMPANIES.
FOR CALVERT, CONTACTS WITH PUBLIC COMPANIES REPRESENT AN IMPORTANT PART OF
OUR RESEARCH EFFORTS. CALVERT MAY MAKE INVESTMENT DECISIONS ON THE BASIS OF THE
FIRM'S CONCLUSIONS FORMED THROUGH SUCH CONTACTS AND ANALYSIS OF
PUBLICLY-AVAILABLE INFORMATION. DIFFICULT LEGAL ISSUES ARISE, HOWEVER, WHEN, IN
THE COURSE OF THESE CONTACTS, A CALVERT EMPLOYEE OR OTHER PERSON SUBJECT TO THIS
POLICY STATEMENT BECOMES AWARE OF MATERIAL, NONPUBLIC INFORMATION. THIS COULD
HAPPEN, FOR EXAMPLE, IF A COMPANY'S CHIEF FINANCIAL OFFICER PREMATURELY
DISCLOSES QUARTERLY RESULTS TO AN ANALYST OR AN INVESTOR RELATION REPRESENTATIVE
MAKES A SELECTIVE DISCLOSURE OF ADVERSE NEWS TO A HANDFUL OF INVESTORS. IN SUCH
SITUATION, CALVERT MUST MAKE A JUDGMENT AS TO ITS FURTHER CONDUCT. FOR THE
PROTECTION OF THE COMPANY AND ITS EMPLOYEES, THE LEGAL DEPARTMENT SHOULD BE
CONTACTED IF AN EMPLOYEE BELIEVES THAT HE/SHE HAS RECEIVED MATERIAL, NONPUBLIC
INFORMATION.
5. TENDER OFFERS
TENDER OFFERS REPRESENT A PARTICULAR CONCERN IN THE LAW OF INSIDER TRADING
FOR TWO REASONS. FIRST, TENDER OFFER ACTIVITY OFTEN PRODUCES EXTRAORDINARY
GYRATIONS IN THE PRICE OF THE TARGET COMPANY'S SECURITIES. TRADING DURING THIS
TIME PERIOD IS MORE LIKELY TO ATTRACT REGULATORY ATTENTION (AND PRODUCES A
DISPROPORTIONATE PERCENTAGE OF INSIDER TRADING CASES). SECOND, THE SEC HAS
ADOPTED A RULE WHICH EXPRESSLY FORBIDS TRADING AND "TIPPING" WHILE IN POSSESSION
OF MATERIAL, NONPUBLIC INFORMATION REGARDING A TENDER OFFER RECEIVED FROM THE
TENDER OFFEROR, THE TARGET COMPANY OR ANYONE ACTING ON BEHALF OF EITHER. CALVERT
EMPLOYEES AND OTHERS SUBJECT TO THIS POLICY STATEMENT SHOULD EXERCISE PARTICULAR
CAUTION ANY TIME THEY BECOME AWARE OF NONPUBLIC INFORMATION RELATING TO A TENDER
OFFER.
6. EDUCATION
ANOTHER ASPECT OF CALVERT'S COMPLIANCE PROCEDURES WILL BE TO KEEP CALVERT
PERSONNEL AND OTHER ACCESS PERSONS INFORMED. THIS MEMORANDUM SERVES AS A BASIC
PRIMER ON WHAT CONSTITUTES INSIDE INFORMATION AND PERIODIC MEMORANDA WILL BE
DISTRIBUTED, PARTICULARLY WHEN A SIGNIFICANT CASE DEALING WITH THE SUBJECT HAS
BEEN DECIDED.
ALL NEW EMPLOYEES WILL BE GIVEN A COPY OF THIS STATEMENT AND WILL BE
REQUIRED TO READ IT AND AGREE TO ITS CONDITIONS. ALL EMPLOYEES WILL BE REQUIRED
TO CONFIRM THEIR UNDERSTANDING AND ACKNOWLEDGMENT OF THE STATEMENT ON AN ANNUAL
BASIS.
<PAGE>
ATTACHMENT A
[GRAPHIC OMITED]
MEMO
TO: LEGAL DEPARTMENT; COMPLIANCE
FROM:
RE: PRIOR APPROVAL OF ACCESS PERSON TRADING IN SECURITIES
THE FOLLOWING PROPOSED SECURITY(IES) TRANSACTION(S) WAS (WERE) REVIEWED BY THE
FUND, OR DESIGNATED EMPLOYEE OF THE ADVISOR (CHIEF INVESTMENT OFFICER OR
DIRECTOR OF RESEARCH) PURSUANT TO CALVERT GROUP'S CODE OF ETHICS:
NAME OF ADVISORY PERSON:
SECURITY (IES) TO BE PURCHASED OR SOLD:
BASIS OF APPROVAL OR DENIAL:
FUND OR ADVISOR DESIGNEE SIGNATURE
SIGNATURE PAGE
CODE OF ETHICS AND INSIDER TRADING POLICY AND PROCEDURES
ACKNOWLEDGEMENT FORM
I HAVE READ AND UNDERSTAND CALVERT GROUP'S CODE OF ETHICS AND INSIDER TRADING
POLICY AND PROCEDURES AND WILL COMPLY IN ALL RESPECTS WITH SUCH PROCEDURES.
SIGNATURE DATE
PRINT NAME
<PAGE>
ATTACHMENT B
ACCESS PERSONS SUBJECT TO PRECLEARANCE FOR SECURITIES TRANSACTIONS INCLUDING
PRIVATE PLACEMENTS
MICHAEL ABRAMO
FATIMA BATALVI
SUSAN BENDER
YING-WEI CHEN
TOM DAILEY
IVY DUKE
PATRICK FAUL
VICTOR FRYE
DAVID GIBSON
CEASAR GONZALES
DONNA GOMEZ
GREG HABEEB
DAN HAYES
HUI PING HO
MOHAMMED JAVAID
ANU KHONDOKAR
TRACY KNIGHT
BARBARA KRUMSIEK
EMMETT LONG
RENO MARTINI
GARY MILLER
JOHN NICHOLS
MATT NOTTINGHAM
KENDRA PLEMMONS
CARMEN REID
CHRIS SANTOS
BILL TARTIKOFF
LAURIE WEBSTER
RON WOLFSHEIMER
MIKE YUHAS
INVESTMENT PERSONNEL SUBJECT SOLEY TO PRIVATE PLACEMENT PRECLEARANCE
MEMBERS OF THE SPECIAL EQUITIES COMMITTEE OF THE BOARD OF DIRECTORS/TRUSTEES
The term "entity" will be used for any organization adopting these procedures.
For those organizations which are investment companies as defined under the
Investment Company Act of 1940, the term "Fund" may also be used if applicable.
Access person means any director/trustee, officer, general partner, or employee
of any entity adopting these procedures who participates in the selection of
securities (other than high social impact securities or special equity
securities) or who has access to information regarding impending purchases or
sales [See rule 17 j-1(e)]. The General Counsel or Compliance Officer may
designate any person, including an independent contractor or consultant, as an
access person, who, as such, shall provide signed acknowledgement of the receipt
of these procedures and their applicability. A current list of access persons
and investment personnel subject to preclearance or other requirements shall be
maintained by the Compliance Officer.
For this purpose, "securities" include options on securities and securities that
are convertible into or exchangeable for securities held or to be acquired by a
fund. A security is being considered for purchase once a recommendation has
been documented, communicated and under serious evaluation by the purchaser or
seller. Evidence of consideration may include such things as approved
recommendations in current research reports, pending or active order tickets,
and a watch list of securities under current evaluation.
Disinterested Directors and/or Trustees as defined by the Investment Company Act
of 1940, are excluded from the duplicate statement and confirmation requirement
unless the General Counsel or Compliance Officer imposes a different standard
due to an entity's active trading strategy and/or the information available to
the Disinterested Directors and/or Trustees.
All account information is subject to regulatory review. The trade confirmations
of persons other than disinterested directors or trustees may be disclosed to
other senior officers of the Fund or to legal counsel as deemed necessary for
compliance purposes and to otherwise administer the Code of Ethics.
