SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
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14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Calvert Social Investment Fund
(Name of Registrant as Specified in Its Charter)
William M. Tartikoff, Esq.
Secretary
(Name of Person Filing Proxy Statement if other than the Registrant)
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<PAGE>
{Tentative Shareholder Letter from President}
[DATE - Approximately December 31, 1998]
Dear Shareholder:
I am writing to inform you of the upcoming special meeting for shareholders of
the Calvert Social Investment Fund ("CSIF") Money Market, Balanced (formerly
known as Managed Growth), Bond, Equity and Managed Index Portfolios and for
shareholders of Calvert World Values Fund, Inc. ("CWVF") International Equity.
A summary of the proposals and the formal Notice of Meeting appears on the
next few pages, followed by the detailed proxy statement. Please take a few
minutes to read the enclosed material and vote on these important issues. The
Boards of Trustees/Directors, including myself, believe these changes are in
your best interest and that of your Portfolio.
Regardless of the number of shares you own, it is important that you take the
time to read the enclosed proxy materials, and vote on the issues as soon as
you can. You may vote by mail, by telephone, through the internet, by
facsimile machine, or in person. If you do not cast your vote, you may be
contacted by our proxy solicitation service, ADP, or by a Calvert employee.
CSIF and/or CWVF will have to incur the expense of additional solicitations.
All shareholders benefit from the speedy return of proxy votes.
I appreciate the time you will take to review this important matter. If we may
be of any assistance or if you have any questions about the proxy issues,
please call us at (800) 368-2745. Our hearing-impaired shareholders may call
(800) 541-1524 for a TDD connection.
Sincerely,
/s/
Barbara J. Krumsiek
Trustee and Senior Vice President
<PAGE>
Calvert Social Investment Fund
Money Market Portfolio
Bond Portfolio
Balanced Portfolio
Equity Portfolio
Managed Index Portfolio
Calvert World Values Fund, Inc.
International Equity Fund
Overview
This is a combined proxy statement for the funds shown above. The table below
lists the proposals, the affected portfolios, and the page on which the
discussion of the proposal begins. Please be sure to read this entire proxy
statement and cast your votes as soon as possible.
Proposal Affected Begins at
Number Portfolios Page [#]
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Proposal 1 All Portfolios Page [#]
To approve a new investment advisory agreement with the investment advisor,
Calvert Asset Management Company, Inc. This agreement is identical to the
current investment advisory agreements in all material respects, except that
it reflects a reduced advisory fee (for all Portfolios except CSIF Managed
Index) and does not provide a performance fee adjustment (for CSIF Balanced
and Equity).
Proposal 2 CSIF Balanced Page [#]
To approve a new investment subadvisory agreement between CAMCO and the
investment subadvisor, NCM Capital Management Group, Inc. This agreement is
identical to the current investment subadvisory agreement in all material
respects, except that it does not provide for a performance fee adjustment.
Proposal 3 CSIF Equity Page [#]
To approve a new investment subadvisory agreement between CAMCO and the
investment subadvisor, Atlanta Capital Management Company, L.L.C.
Proposal 4 CSIF Balanced Page [#]
CSIF Equity
CWVF International Equity
To authorize CSIF or CWVF and/or CAMCO to enter into a new and/or materially
amending an existing investment subadvisory agreement in the future without
having to first obtain shareholder approval.
Proposal 5 CSIF Balanced Page [#]
To approve a revised investment objective which is more reflective of current
economic times.
Proposal 6 CSIF Bond Page [#]
To change CSIF Bond from a diversified to a nondiversified fund and to change
the concentration policy to allow it to concentrate in one or more industries.
Proposal 7 All Portfolios Page [#]
To approve amended fundamental investment restrictions to (a) delete
restrictions that are no longer required to be fundamental due to changes in
state laws; (b) change some of the fundamental policies and restrictions to
non-fundamental operating policies; and (c) to revise the language of those
restrictions that are still required to be fundamental.
Proposal 8 All Portfolios Page [#]
To ratify the Board's selection of CSIF and CWVF auditors,
PricewaterhouseCoopers, L.L.P.
<PAGE>
Calvert Social Investment Fund
Money Market Portfolio
Bond Portfolio
Balanced Portfolio
Equity Portfolio
Managed Index Portfolio
Calvert World Values Fund, Inc.
International Equity Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on February 24, 1999
NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders of the Calvert
Social Investment Fund ("CSIF") and Calvert World Values Fund, Inc. ("CWVF")
International Equity will be held in the Tenth Floor Conference Room of
Calvert Group, Ltd., Air Rights North Tower, 4550 Montgomery Avenue, Suite
1000N, Bethesda, Maryland at 9:00 a.m. on Wednesday, February 24, 1999 for the
following purposes:
I. For each Portfolio: to approve a new investment advisory agreement
with the investment advisor, Calvert Asset Management Company, Inc.
("CAMCO"), identical to the current investment advisory agreements in
all material respects, except that it reflects a reduced advisory fee
(for all Portfolios except CSIF Managed Index) and does not provide
for a performance fee adjustment for CSIF Balanced or Equity.
II. CSIF Balanced: to approve a new investment subadvisory agreement
between CAMCO and the investment subadvisor, NCM Capital Management
Group, Inc. This agreement is identical to the current investment
subadvisory agreement in all material respects, except that it does
not provide for a performance fee adjustment.
III. CSIF Equity: to approve a new investment subadvisory agreement with
the new investment subadvisor, Atlanta Capital Management Company,
L.L.C., otherwise identical to the current investment subadvisory
agreement in all material respects, except that it reflects a reduced
subadvisory fee and does not provide for a performance fee adjustment.
IV. CSIF Balanced and Equity and CWVF International Equity: to authorize
CSIF or CWVF and/or CAMCO to enter into a new and/or materially
amending an existing investment subadvisory agreement in the future
without having to first obtain shareholder approval.
V. CSIF Balanced: to approve a revised investment objective which is
more reflective of current economic times.
VI. CSIF Bond only: to change CSIF Bond from a diversified to a
nondiversified fund and to change the concentration policy to allow
it to concentrate in one or more industries.
VII. For each Portfolio: to approve amended fundamental investment
restrictions to (a) delete restrictions that are no longer required
to be fundamental due to changes in state laws; (b) change some of
the fundamental policies and restrictions to non-fundamental
operating policies; and (c) to revise the language of those
restrictions that are still required to be fundamental.
VIII. For each Portfolio: to ratify the Board's selection of CSIF and CWVF
auditors, PricewaterhouseCoopers, L.L.P.
IX. To transact any other business that may properly come before the
Special Meeting or any adjournment or adjournments thereof.
By Order of the Trustees/Directors,
/s/
William M. Tartikoff, Esq.
Vice President
The approximate date on which this proxy statement and form of proxy are first
being mailed to shareholders is December 31, 1998.
Investment Advisor
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Administrator
Calvert Administrative Services Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
<PAGE>
Calvert Social Investment Fund
Money Market Portfolio
Balanced Portfolio
Bond Portfolio
Equity Portfolio
Managed Index Portfolio
Calvert World Values Fund, Inc.
International Equity Fund
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
PROXY STATEMENT
December 31, 1998
We are sending this proxy statement to you to ask you to approve several
important changes. You may vote by mail, by telephone, by facsimile, through a
secure internet website, or in person. Your vote is important. Please call
800-368-2745 if you have questions about this proxy.
This statement is furnished in connection with the solicitation of proxies by
the Board of Trustees of the Calvert Social Investment Fund and the Board of
Directors of Calvert World Values Fund, Inc. (the "Boards") to be used at the
Special Meeting of Shareholders. The Special Meeting will be held in the Tenth
Floor Conference Room of Calvert Group, Ltd., Air Rights North Tower, 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland at 9:00 a.m. on Wednesday,
February 24, 1999, or at such later time or date made necessary by adjournment
for the purpose set forth in the Notice of Meeting.
Each of the Money Market, Balanced (formerly known as Managed Growth), Bond,
Equity, and Managed Index Portfolios is a series of the Calvert Social
Investment Fund, an open-end management investment company that was organized
as a Massachusetts business trust on December 14, 1981. The International
Equity Fund is a series of Calvert World Values Fund, Inc., an open-end
management investment company that was organized as a Maryland corporation on
February 14, 1992.
PROPOSALS
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Proposal 1
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- --------------------------------------------------------------------------------
For each Portfolio: To approve a new investment advisory agreement with the
investment advisor, CAMCO.
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Discussion
The following circumstances affect the terms of the current investment
advisory agreements (the "Current Advisory Agreements"); therefore, Management
proposes that a new advisory agreement be executed:
CAMCO is an indirectly wholly-owned subsidiary of Acacia Mutual Life
Insurance Company ("Acacia"), which subject to certain conditions, plans
to merge with Ameritas Insurance Holding Company ("Ameritas") (such
planned transaction is hereafter referred to as the "Merger"). The
surviving company will be named Ameritas Acacia Mutual Holding Company.
Although the Merger could be considered a change in control of CAMCO,
terminating the Current Advisory Agreements, the Boards have received
assurances that it does not cause such a change. Nonetheless, in order to
remove any possible doubt as to the status of the Current Advisory
Agreements, the Boards have approved, and recommends that shareholders
approve, one standard investment advisory agreement between CSIF and
CAMCO for each of the CSIF Portfolios and one standard investment
advisory agreement between CWVF and CAMCO (the "New Advisory Agreements").
CSIF Money Market, Balanced, Bond and Equity: Management has determined
that the administrative services, and the provision of compensation for
such services, are best provided for in a separate administrative
services agreement. Accordingly, it is proposed to remove the provision
of these services from the advisory agreement.
CSIF Balanced and Equity: Management proposes to eliminate the
performance fee adjustment so that compensation is based on a flat fee
arrangement.
CSIF Balanced: Management proposes to eliminate the expense limitation
with respect to fund expenses. However, Management agrees to maintain the
expense limitation until such time in the future that Management and the
Board agree otherwise.
Despite the importance of the proposed changes, CAMCO anticipates there will
be no effect the actual investment management operations with respect to CSIF
or CWVF.
The Current Advisory Agreements
Under the Current Advisory Agreements, CAMCO provides a continuous investment
program for CSIF and CWVF, subject to the control of the Boards. The Current
Advisory Agreement for CSIF Money Market and Bond was executed on January 3,
1984, pursuant to shareholder approval. The Current Advisory Agreement for
CSIF Equity and Balanced was executed on May 24, 1994, pursuant to shareholder
approval. The Current Advisory Agreement for the Managed Index Portfolio was
executed on February 24, 1998, pursuant to shareholder approval, while the
Current Advisory Agreement for International Equity was executed on May 5,
1992, pursuant to shareholder approval. The Boards, including a majority of
the Independent Directors, most recently approved the continuance of the
Current Advisory Agreements on December 1, 1998, as part of its annual review.
The Current Advisory Agreements provide that absent willful misfeasance, bad
faith, gross negligence, or reckless disregard, CAMCO shall not be subject to
liability to CSIF or to any shareholder of CSIF for any act or omission in the
course of performing its duties thereunder.
The Current Advisory Agreements provide for automatic termination unless their
continuance is approved by January 1, 2000, and at least annually thereafter
by (i) a majority of the Boards, including those who are not parties to the
Agreement or interested persons, within the meaning of the Investment Company
Act of 1940 (the "1940 Act"), of any such party ("Independent Directors"), and
(ii) the holders of a majority of the outstanding shares of CSIF or CWVF, as
the case may be. The Current Advisory Agreements terminate automatically upon
their assignment and are terminable at any time, without penalty, by the
Boards, CAMCO, or the holders of a majority of the outstanding shares of CSIF
or CWVF, upon 60 days' prior written notice.
The New Advisory Agreement
The terms and conditions of the New Advisory Agreements are identical to the
terms and conditions of the Current Advisory Agreements, except as to
effective and termination dates, deletion of the provision of administrative
services as discussed under B., below, elimination of the performance fee
adjustment as discussed under C., and elimination of the expense limitation as
discussed under D.
If approved by shareholders, the New Advisory Agreements will continue until
January 1, 2001 unless terminated earlier by either party, and provided that
at least annually thereafter its continuance is approved in the same manner as
prescribed in the Current Advisory Agreements.
The description of the New Advisory Agreements is qualified in its entirety by
reference to the New Advisory Agreements, attached hereto as Appendix 1 for
CSIF and Appendix 2 for CWVF.
Calvert Asset Management Company, Inc.
CAMCO has investment advisory contracts with eight investment companies: First
Variable Rate Fund for Government Income, Calvert Tax-Free Reserves, Calvert
Cash Reserves, Calvert Social Investment Fund, The Calvert Fund, Calvert
Municipal Fund, Inc., Calvert World Values Fund, Inc., and Calvert Variable
Series, Inc. Each has a substantially similar investment advisory contract
with CAMCO, though the actual fees and breakpoints may vary.
Reno J. Martini, Senior Vice President and Chief Investment Officer for CAMCO,
has primary responsibility for rendering advisory services to CSIF and CWVF.
Mr. Martini oversees the management of all Calvert Funds. It is anticipated
that each of the directors and officers of CAMCO will hold the same position
with CAMCO after the Merger. The address of the directors and officers is 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland, 20814, unless otherwise
noted. The directors and executive officers of CAMCO are listed below:
*Charles T. Nason, Director. Chairman, President and Chief Executive
Officer of The Acacia Group, 7315 Wisconsin Avenue, Bethesda, Maryland
20814.
*Barbara J. Krumsiek, Director. President of CAMCO and President, Chief
Executive Officer and Vice Chairman of Calvert Group, Ltd.
David R. Rochat, Director and Senior Vice President.
Robert-John H. Sands, Director. Senior Vice President and General
Counsel, The Acacia Group, 7315 Wisconsin Avenue, Bethesda, Maryland
20814.
*Reno J. Martini, Senior Vice President and Chief Investment Officer.
*Ronald M. Wolfsheimer, Senior Vice President and Chief Financial
Officer.
*William M. Tartikoff, Senior Vice President, Secretary, and General
Counsel.
Matthew D. Gelfand, Senior Vice President.
*Daniel K. Hayes, Vice President.
John Nichols, Vice President.
Persons marked with a *, above, are also Trustees/Directors and/or officers of
CSIF and/or CWVF.
A. The Merger of CAMCO's parent company
CAMCO is an indirect, wholly-owned subsidiary of Acacia. On September 14,
1998, seeking a strategic affiliation to create a stronger, more diversified
insurance and financial services enterprise, Acacia and Ameritas entered into
an agreement of merger which provides for the merger of their respective
mutual holding companies.
Acacia and its related subsidiaries offer traditional life insurance and
annuity products, as well as variable products, special banking products and
services, and a variety of mutual funds, and operate a full service financial
planning broker dealer, while Ameritas and its subsidiaries specialize in
variable life, fixed and variable annuities, group dental, low-load insurance
products and 401(k) and other investment products. This strategic affiliation
is expected to create a stronger, more diversified insurance and financial
services enterprise, with almost $11 billion in assets under management,
insurance assets of $6 billion, $21 billion life insurance in-force, over $750
million in revenues and approximately $750 million in equity/capital.
The Merger is subject to the approval of the members of both Acacia and
Ameritas and is further conditioned upon approval by the appropriate federal
and state regulatory authorities.
CAMCO will not be directly affected by the Merger and will remain a
wholly-owned subsidiary of Calvert Group, Ltd. As a result of the Merger,
however, CAMCO will become an indirect, wholly-owned subsidiary of Ameritas
Acacia Mutual Holding Company.
Acacia's current address is 7315 Wisconsin Avenue, Bethesda, Maryland 20814.
After consummation of the Merger, Ameritas Acacia Mutual Holding Company's
principal place of business will be 5900 "O" Street, Lincoln, Nebraska
68501-1889.
B. CSIF Money Market, Balanced, Bond and Equity: Administrative Services
Management has taken the opportunity to re-examine the specific provisions for
services under the Current Advisory Agreements. In doing so, management has
determined that it is better to delete the provision of administrative duties
and leave intact the investment advisory services to be provided by CAMCO.
Administrative services are not currently provided by CAMCO, but are provided
by CSIF's Administrator, Calvert Administrative Services Company, ("CASC").
Thus, this change will more accurately reflect the services which CAMCO
provides. As a result of administrative services being provided to CSIF under
a separate agreement, the investment advisory fees will be reduced so that the
proposed advisory fee and the new administrative fee will equal the current
advisory fees. The Managed Index Portfolio already has a separate
administrative services agreement with CASC.
CSIF Money Market
Current Proposed New Administrative
Advisory Fee Advisory Fee Fee
0.50% 0.30% 0.20%
For the fiscal year ended September 30, 1998, CSIF Money Market paid [$______]
in fees to CAMCO. Under the New Advisory Agreement (excluding the
administrative services costs as discussed above) CAMCO would have received
[$______] in advisory fees for that same time period.
CSIF Bond
Current Proposed New Administrative
Advisory Fee Advisory Fee Fee
0.65% 0.35% 0.30%
For the fiscal year ended September 30, 1998, CSIF Bond paid [$______] in fees
to CAMCO. Under the New Advisory Agreement (excluding the administrative
services costs as discussed above) CAMCO would have received [$______] in
advisory fees for that same time period.
CSIF Balanced
Current Proposed New Administrative
Advisory Fee Advisory Fee Fee
0.70%* 0.425%** 0.275%
*0.675% above $500M **0.35% above $500M
0.65% above $1B 0.325% above $1B
For the fiscal year ended September 30, 1998, CSIF Balanced paid [$______] in
fees to CAMCO. Under the New Advisory Agreement (excluding the administrative
services costs as discussed above and any performance fee adjustment as
discussed below) CAMCO would have received [$______] in advisory fees for that
same time period.
CSIF Equity
Current Proposed New Administrative
Advisory Fee Advisory Fee Fee
0.70% 0.50% 0.20%
For the fiscal year ended September 30, 1998, CSIF Equity paid [$______] in
fees to CAMCO. Under the New Advisory Agreement (excluding the administrative
services costs as discussed above and any performance fee adjustment as
discussed below) CAMCO would have received [$______] in advisory fees for that
same time period.
C. CSIF Balanced and Equity: Performance Fees
Management has reviewed the effect of performance fees and found that a
performance fee does not effectively serve its intended goals. The performance
fee structure does not improve the capacity to manage the investment process
nor does it serve as an effective incentive tool for investment management. In
fact, there is a low level of current demand for this feature from investment
professionals. Thus, Management recommends the elimination of the performance
fee and adoption of a flat fee for compensating investment advisors and
investment subadvisors.
CSIF Balanced
With respect to CSIF Balanced, under the Current Advisory Agreement, CAMCO is
paid a base fee at an annual rate of the average daily net assets of CSIF
Balanced. The base fee is subject to adjustment, based on the extent to which
performance exceeded or trailed the Lehman Aggregate Bond Index as follows:
Performance versus Performance Fee
the Lehman Aggregate Adjustment
Bond Index
6% to < 12% +/- 0.05%
12% to < 18% +/- 0.10%
18% or more +/- 0.15%
As no performance fee adjustment was paid during the fiscal year ended
September 30, 1998, CAMCO would have received the same advisory fees had the
performance fee not been in effect for that time period.
CSIF Equity
With respect to CSIF Equity, under the Current Advisory Agreement, CAMCO is
paid a base fee at an annual rate of the average daily net assets of CSIF. The
fee is subject to adjustment, based on the extent to which performance
exceeded or trailed the Standard & Poor's ("S&P's) 500 Composite Index as
follows:
Performance versus Performance Fee
the S&P's 500 Adjustment
Composite Index
6% to < 12% +/- 0.07%
12% to < 18% +/- 0.14%
18% or more +/- 0.20%
For the fiscal year ended September 30, 1998, the base fee was decreased by
([$_____]) because the performance of the Portfolio trailed S&P's 500
Composite Index. Including the administrative services costs, CAMCO would have
received $[______] in advisory fees had the performance fee not been in effect
for that same time period.
D. CSIF Balanced: Expense Limitation
Upon initially entering into the Current Advisory Agreement, CAMCO agreed to
limit the expenses of CSIF Balanced to 1.25% of average daily net assets. At
that time, certain states also imposed limits on fund expenses so that if
expenses exceeded a certain amount, the investment advisor would have to
reimburse a fund for the excess. The recent passage of reformed federal
securities laws now preempts the states from imposing substantive requirements
on investment companies. Therefore, the state-imposed expense limitation is no
longer applicable to CSIF Balanced.
Accordingly, Management recommends that this provision not be included in the
New Advisory Agreement. The removal of the contractual expense limitation will
not affect the management of CSIF Balanced nor its accrual of expenses.
Management has agreed to maintain the expense limitation until such time in
the future that Management and the Board agree otherwise.
Recommendation
Based on evaluation of the materials presented, the Boards have determined
that the changes reflected in the proposed New Advisory Agreement are in the
best interests of the shareholders of CSIF and CWVF. The Boards based this
determination primarily upon the following:
(a) After a review of all materials related to the Merger, the Boards
determined that they were satisfied that CAMCO's services to CSIF and
CWVF would not be affected by the Merger and that such Merger would not
impose an unfair burden on CSIF or CWVF;
(b) In evaluating the materials presented concerning administrative
services, the Boards carefully considered the corporate structure and
advisory expenses, and reviewed the proposed form of New Investment
Advisory Agreements and form of Administrative Services Agreement;
(c) In recommending the elimination of the performance adjustment structure,
the Trustees/Directors considered the nature and quality of the advisory
services rendered, giving due consideration to the negligible impact of
the performance adjustment on portfolio performance; and
(d) In evaluating the deletion of the expense limitation, the
Trustees/Directors considered the applicable securities laws and the
current fund expenses, and Management's agreement to continue the
limitation.
Thus, the Boards, including a majority of the Independent Trustees/Directors,
approved the New Advisory Agreements (subject to approval by shareholders) and
authorized submission of the New Advisory Agreements to shareholders for
approval. Accordingly, the Boards recommend that shareholders vote FOR the
appropriate proposed New Advisory Agreement.
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Proposal 2
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CSIF Balanced Only: To approve a new investment subadvisory agreement between
CAMCO and CSIF Balanced's investment subadvisor, NCM Capital Management Group,
Inc. ("NCM Capital").
Discussion
NCM Capital serves as CSIF Balanced's investment subadvisor, pursuant to an
Investment Subadvisory Agreement with CSIF Balanced's investment advisor,
CAMCO. NCM Capital is a subsidiary of Sloan Financial Group, Inc. ("Sloan
Financial"). As discussed further below, pursuant to ongoing negotiations, the
ownership interests in Sloan Financial are expected to be redistributed (such
redistribution is referred to herein as the "Transaction").
The Boards have been advised that the contemplated Transaction is anticipated
to have no effect on NCM Capital's investment management operations. For
purposes of the 1940 Act, the Transaction would cause a change of control in
NCM Capital that would constitute an assignment of the Current Subadvisory
Agreement and thereby cause its automatic termination. The Boards have
approved, and recommends that the shareholders of CSIF Balanced approve, a New
Subadvisory Agreement between CAMCO and NCM Capital (the "New Subadvisory
Agreement") that eliminates the performance fee adjustment as discussed below.
The Current Subadvisory Agreement
Under the Current Subadvisory Agreement, NCM Capital provides a continuous
investment program for CSIF Balanced, pursuant to the directions of CAMCO,
which is subject to the control of the Board.
As compensation for NCM Capital's services under the Current Subadvisory
Agreement, CAMCO pays NCM Capital a subadvisory fee consisting of an annual
base fee of 0.25% of CSIF Balanced's average daily net assets, plus or minus a
performance adjustment of up to 0.15%. The performance adjustment is added to
or subtracted from the base fee based on the extent to which performance
exceeded or trailed the Russell 3000 Index.
The Current Subadvisory Agreement provides that absent willful misfeasance,
bad faith, gross negligence, or reckless disregard, the Subadvisor shall not
be subject to liability to CAMCO, CSIF Balanced or to any shareholder of CSIF
Balanced for any act or omission in the course of performing its duties
thereunder. The Current Subadvisory Agreement provides for automatic
termination unless by January 1, 1999, and at least annually thereafter, its
continuance is approved by (i) a majority of the Board, including a majority
of those who are not parties to the Agreement or interested persons, within
the meaning of the 1940 Act, of any such party ("Independent Trustees"), and
(ii) the holders of a majority of the outstanding shares of CSIF Balanced. The
Current Subadvisory Agreement terminates automatically upon its assignment and
is terminable at any time, without penalty, by the Board, CAMCO, or the
holders of a majority of the outstanding shares of CSIF Balanced upon not less
than 60 days' written notice. The Current Subadvisory Agreement may also be
terminated without penalty upon not less than 90 days' written notice by NCM
Capital.
The Current Subadvisory Agreement was executed on July 1, 1995, pursuant to
shareholder approval. The Board, including a majority of the Independent
Trustees, most recently approved the continuance of the Current Subadvisory
Agreement on December 1, 1998 as part of its annual review.
The New Subadvisory Agreement
The terms and conditions of the New Subadvisory Agreement are identical to the
terms and conditions of the Current Subadvisory Agreement, except as to
effective and termination dates and the elimination of the performance fee
adjustment as discussed below. If approved by shareholders, the New
Subadvisory Agreement will continue until January 1, 2001 unless terminated
earlier by either party, and provided that its continuance is approved at
least annually in the same manner as prescribed in the Current Subadvisory
Agreement.
The description of the New Subadvisory Agreement is qualified in its entirety
by reference to the New Subadvisory Agreement, attached hereto as Appendix 3.
NCM Capital Management Group, Inc.
NCM Capital was founded by Maceo K. Sloan in 1986 as a subsidiary of North
Carolina Mutual Life Insurance Company, which was established by his ancestors
in 1898. NCM Capital is one of the oldest and largest minority-owned financial
institutions in the country and provides products in equity, fixed income and
balanced portfolio management. NCM Capital has been an employee-owned
subsidiary of Sloan Financial since 1991, with 60 percent co-owned by Mr.
Sloan and Justin E. Beckett, Executive Vice President and a Director of NCM
Capital.
[NCM Capital currently provides investment subadvisory services to [#1?] other
mutual fund with an investment objective similar to that of CSIF Balanced:
Mutual Fund Assets Under Management
Management Fees
[insert info]
[With respect to this mutual fund, NCM Capital has not waived, reduced, or
otherwise agreed to reduce its compensation under its investment management
contract.]
It is anticipated that each of the directors and officers of NCM Capital will
hold the same position after consummation of the Transaction. The address of
the directors and officers is 103 West Main Street, Fourth Floor, Durham,
North Carolina 27701, unless otherwise noted. The directors and executive
officers of NCM Capital are listed below:
Maceo K. Sloan, CFA, Chairman, President and Chief Executive Officer.
Justin F. Beckett, Executive Vice President.
Edith H. Noel, Senior Vice President, Corporate Secretary/Treasurer.
Clifford D. Mpare, Executive Vice President, Co-Chief Investment Officer.
Benjamin Blakney, Executive Vice President, Chief Operating Officer.
Tammie F. Coley, Senior Vice President, Chief Financial Officer.
Victoria A. Treadwell, Senior Vice President, Director of Client
Services.
Michael J. Ferraro, Vice President, Director of Trading.
Reginald V. Weaver, Assistant Vice President.
Deborah P. Lane, Vice President.
Linda J. Jordan, Vice President.
Leander Baker, Vice President.
Betty L. Bynum, Assistant Vice President.
Change in Control of NCM Capital
Sloan Financial is the parent company of NCM Capital. In 1991, American
Express Asset Management Group Inc. (formerly, IDS Advisory Group) ("American
Express") purchased a 40% interest in Sloan Financial. At present, the equity
distribution profile of Sloan Financial is 43% owned by Mr. Sloan, 40% owned
by American Express, and 17% owned by Mr. Beckett.
Sloan Financial, also headquartered in Durham, North Carolina, is the nation's
largest minority-owned financial services firm. Presently, Sloan Financial
contains two investment management subsidiaries, NCM Capital and New Africa
Advisers, Inc. Within its family of companies, Sloan Financial has managed
assets of approximately $3 billion, and the firm's client base includes many
of the nation's largest employee benefit, foundation, and endowment plans.
Pursuant to ongoing negotiations, Messrs. Sloan and Beckett plan to purchase
American Express's 40% interest in Sloan Financial in a transaction that will
be implemented in two separate phases. Phase I will consist of a 14.9%
assignment of American Express's interest to Messrs. Sloan and Beckett. This
assignment will adjust the equity distribution profile of Sloan Financial so
that Mr. Sloan will hold a 53.7% interest, American Express will hold a 25.1%
interest and Mr. Beckett will hold a 21.2% interest.
In Phase I, the assignment preserves American Express's position as a
controlling person of Sloan Financial. Phase I is expected to be completed
prior to year-end 1998. In Phase II, American Express will sell its remaining
25.1% interest to Messrs. Sloan and Beckett so that Mr. Sloan will hold a 72%
interest and Mr. Beckett will hold 28% in Sloan Financial. Phase II is
expected to be completed immediately following shareholder approval of the New
Subadvisory Agreement.
Since American Express will no longer have a controlling interest in Sloan
Financial at the completion of Phase II, shareholder approval ratifying the
Transaction is required before it is finalized.
Elimination of Performance Fees
After review, Management has found that the performance fee structure does not
effectively serve its intended goals. The performance fee does not improve the
capacity to manage the investment process nor does it serve as an effective
incentive tool for investment management. In fact, there is a low level of
current demand for this feature from investment professionals. Thus,
Management recommends the elimination of the performance fee and adoption of a
flat fee for compensating investment advisors and subadvisors.
For the fiscal year ended September 30, 1998, $602,141 in fees (without any
performance adjustment) were paid by CSIF Balanced to NCM Capital. As
proposed, the new subadvisory fee will be a base rate of 0.25% of CSIF
Balanced's average daily net assets. NCM Capital would have received the same
fees had the proposed fee been in effect for that time period.
Recommendation
Based on evaluation of the materials presented, the Board determined that they
were satisfied that services to CSIF Balanced would not be adversely affected
by the proposed Transaction and that the Transaction would not impose an
unfair burden on CSIF Balanced. The Board also considered the nature and
quality of the advisory services rendered, giving due consideration to the
negligible impact of the performance adjustment on fund performance, and
determining that the proposed elimination of the performance fee is in the
best interest of CSIF Balanced and its shareholders.
Thus, the Board, including a majority of the Independent Trustees, approved
the New Subadvisory Agreement, (subject to approval by CSIF Balanced
shareholders) and authorized submission of the New Subadvisory Agreement to
shareholders for approval. Accordingly, the Board recommends that shareholders
vote FOR the proposed New Subadvisory Agreement.
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Proposal 3
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CSIF Equity Portfolio only: To approve a new investment subadvisory agreement
between CAMCO and the investment subadvisor, Atlanta Capital Management
Company, L.L.C. ("Atlanta Capital").
Discussion
As the advisor, CAMCO has traditionally contracted out subadvisory services
for CSIF Equity. Loomis, Sayles & Company, L.P. ("Loomis, Sayles") served as
CSIF Equity's investment subadvisor pursuant to an investment subadvisory
agreement executed on February 1, 1994, pursuant to shareholder approval (the
"Prior Subadvisory Agreement"). Loomis, Sayles is organized as a limited
partnership and controlled by New England Mutual Life Insurance Company. Their
principal business address is One Financial Center, Boston, Massachusetts
02111.
At a September 16, 1998, meeting of the Board of Trustees, the Board directed
CAMCO to terminate Loomis, Sayles as the subadvisor to CSIF Equity effective
September 21, 1998. In this connection, the Board determined that shareholders
may benefit from the services of a different investment subadvisor whose
management style might better achieve CSIF Equity's objective of growth of
capital. After careful consideration by CAMCO of several candidates, CAMCO
recommended, and the Board approved the selection (subject to shareholder
approval) of Atlanta Capital as subadvisor for CSIF Equity. Atlanta Capital
assumed management responsibility for CSIF Equity as of September 21, 1998.
In reaching its decision, the Board reviewed information about Atlanta
Capital, as well as information about CAMCO's evaluation of other potential
investment subadvisors. This information included details about Atlanta
Capital in general, and copies of regulatory disclosure materials filed with
the SEC. Management met with Atlanta Capital, and Atlanta Capital made a
presentation to the Board and responded to questions at the Board meeting.
Atlanta Capital Management, L.L.C.
Atlanta Capital was founded in 1969 and is owned and operated by six partners.
Atlanta Capital is located at Two Midtown Plaza, Suite 1600, 1360 Peachtree
Street, Atlanta, Georgia 30309. As of December 1, 1998, Atlanta Capital had
approximately $[__] billion in assets under management. The firm performs
investment management services for various clients, including pension, profit
sharing and other employee benefit plans as well as other mutual funds,
institutions and individuals.
Atlanta Capital currently provides investment subadvisory services to one
other mutual fund with an investment objective similar to that of CSIF Equity:
Mutual Fund Assets Under Management
Management Fees
PB Series Trust, High
Quality Stock Fund $11.0 million 0.50% of average
daily net assets
With respect to this mutual fund, Atlanta Capital has not waived, reduced, or
otherwise agreed to reduce its compensation under its investment management
contract.
Atlanta Capital's Investment Professionals
Daniel W. Boone, III, CFA, is a Senior Partner of Atlanta Capital. Mr. Boone's
primary responsibilities are in equity portfolio management and research.
Before joining Atlanta Capital in 1976, he was with the international firm of
Lazard Freres in New York. Prior to that he was an analyst with the Wellington
Management Company. Mr. Boone has earned an MBA from the Wharton School of The
University of Pennsylvania, where he graduated with distinction, and a B.A.
from Davidson College. He is a Chartered Financial Analyst and a Chartered
Investment Counselor. Mr. Boone is a past president of the Atlanta Society of
Financial Analysts.
William R. Hackney, III, CFA, is Managing Partner of Atlanta Capital. Mr.
Hackney joined Atlanta Capital in 1995 and has responsibilities in equity
portfolio management and research as well as day-to-day administration. Prior
to joining Atlanta Capital, he was Senior Vice President and Chief Investment
Officer of First Union Corporation's Capital Management Group. Mr. Hackney has
earned an MBA from The Citadel and a B.A. from The University of North
Carolina at Chapel Hill.
Marilyn Robinson, CFA, is Senior Vice President and Principal, serves as
Director of Equity Research and is a member of the Portfolio Management team .
Ms. Robinson has 15 years investment experience, nine years with Atlanta
Capital. Prior to joining Atlanta Capital, she was a Treasury Analyst for
Consolidated Health Care in Richmond, Virginia. Ms. Robinson has earned a M.S.
and B.B.A. from Georgia State University. She is a Chartered Financial Analyst
and serves on the Board of Examiners for the Association of Investment
Management and Research. She is also a Certified Cash Manager.
Atlanta Capital's Investment Strategy
Atlanta Capital investment strategy is to combine a comprehensive top-down
analysis with rigorous fundamental research. The top-down process is used to
identify industry sectors that will be positively affected by macroeconomic,
demographic and political trends. The objective is to find investment "themes"
or "patterns" that have long-term growth potential. Atlanta Capital's Research
Group applies systematic fundamental analysis techniques to these themes to
pinpoint those companies with the greatest potential for sustainable growth,
strong earnings momentum and valuation "staying power."
Atlanta Capital's Partners
Name of Company and Principal Business Address:
Atlanta Capital Management Company
Two Midtown Plaza, Suite 1600
1360 Peachtree Street
Atlanta, Georgia 30309
Name Title
Daniel W. Boone, III Senior Partner
Gregory L. Coleman Partner
Jerry D. DeVore Partner
William R. Hackney, III Managing Partner
Dallas Lundy Partner
Walter F. Reames, Jr. Senior Partner
The New Subadvisory Agreement
The new investment subadvisory agreement between CAMCO and Atlanta Capital
(the "New Subadvisory Agreement") contains substantially the same terms as
governed CAMCO's arrangement with Loomis, Sayles, except as described below.
If approved by CSIF Equity shareholders, the New Subadvisory Agreement will
continue to January 1, 2001 unless terminated earlier by either party, and
will continue thereafter on an annual basis if approved by the Trustees or
shareholders and a majority of the Trustees who are not interested persons of
CSIF, CAMCO or Atlanta Capital. Until shareholders approve the New Subadvisory
Agreement, CAMCO will compensate Atlanta Capital pursuant to [an Exemptive
Order (in process at this time)] Rule 15a-4 under the 1940 Act, and such
compensation paid will not exceed the amount that would have been payable to
Loomis, Sayles under the prior arrangement.(Footnote)] If shareholders do not
approve the New Subadvisory Agreement at the upcoming Special Meeting or any
adjournment hereof, the Board will meet to consider what action to take,
including but not limited to, seeking the services of an alternate investment
subadvisor.
(Footnote: Pursuant to Rule 15a-4, an investment advisor may provide services
to a portfolio and be paid for those services pursuant to a contract not yet
approved by shareholders for a maximum period of 120 days, provided that (a)
the Board of Trustees of the Fund has approved the contract, and (b) the
compensation does not exceed the amount payable to the preceding portfolio
manager under its contract with the Fund.)
The description of the New Subadvisory Agreement is qualified in its entirety
by reference to the New Subadvisory Agreement, attached hereto as Appendix 4.
As with the arrangement between CAMCO and Loomis, Sayles, Atlanta Capital's
fee for investment subadvisory services is paid by CAMCO. However, whereas
CAMCO paid Loomis, Sayles an annual subadvisory fee based upon CSIF Equity's
average daily net assets plus or minus a performance adjustment, under the New
Subadvisory Agreement, CAMCO pays Atlanta Capital a subadvisory fee with no
performance adjustment. Specifically, under the New Subadvisory Agreement,
CAMCO will pay Atlanta Capital a fee, payable monthly, at the annual rate of
0.30% of CSIF Equity's average daily net assets.
Under the Prior Subadvisory Agreement, CAMCO paid Loomis, Sayles a subadvisory
fee at the annual rate of 0.25% of average daily net assets, and CAMCO
adjusted this fee based on the extent to which performance of CSIF Equity
exceeded or trailed the Standard & Poor's 500 Composite Index:
Performance versus Performance
S&P's 500 Composite Index Fee Adjustment
6% to < 12% +/- 0.07%
12% to < 18% +/- 0.14%
18% or more +/- 0.20%
Comparison of Subadvisory Fees
Prior Subadvisory Current Subadvisory
Agreement with Agreement with
Loomis, Sayles Atlanta Capital
0.25% on all Portfolio assets 0.30% on all Portfolio
and a performance adjustment assets.
of up to plus/minus 0.20%*
*Loomis, Sayles also received a 0.05% annual fee, paid by CAMCO, for its
assistance with the distribution of CSIF Equity. Atlanta Capital does not
receive such a fee.
For the fiscal year ended September 30, 1998, Loomis, Sayles received from
CAMCO $249,207 in fees (including the 0.05% distribution fee and a performance
adjustment decrease of $229,896). As proposed, the new subadvisory fee will be
a base rate of 0.30% of CSIF Equity's average daily net assets. Under the New
Subadvisory Agreement, Atlanta Capital would have received $479,103 in fees,
the same amount (absent any performance adjustment) had the new subadvisory
fees been in effect for that time period.
The Board reviewed Management's proposal and reasons for recommending the new
subadvisory arrangements, as summarized above. The Board took into account:
(1) the nature and quality of the services to be rendered by Atlanta Capital,
(2) an analysis of CSIF Equity's investment subadvisory fee, investment
performance, expense ratios and expenses of CSIF Equity as compared to
comparable mutual funds, (3) the investment performance of the other mutual
fund for which Atlanta Capital acts as investment adviser, (4) investment
management staffing and the portfolio managers' respective experience and
qualifications, and (5) the financial condition and resources of Atlanta
Capital. The Board considered all of the above matters and all of the factors
together in arriving at its decision to approve the Investment Subadvisory
Agreement, not focusing on any one factor or group of factors as more
important than any other factor.
Based on its evaluation of the materials presented and assisted by the advice
of independent counsel, the Board concluded that the New Subadvisory Agreement
with Atlanta Capital is in the best interest of CSIF Equity's shareholders.
Recommendation
Thus, the Board, including a majority of the Independent Trustees, approved
the New Investment Subadvisory Agreement between CAMCO and Atlanta Capital
(subject to approval by CSIF Equity shareholders) and authorized submission of
the New Subadvisory Agreement to shareholders for approval. Accordingly, the
Board recommends that shareholders vote FOR the New Subadvisory Agreement.
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Proposal 4
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CSIF Balanced and Equity and CWVF International Equity only: To authorize CSIF
or CWVF and/or CAMCO to enter into a new and/or materially amending an
existing investment subadvisory agreement in the future without having to
first obtain shareholder approval.
Discussion
The SEC has issued an Order to CSIF and CWVF permitting them to enter into a
new and/or to materially amend an investment subadvisory agreement without
shareholder approval. Management believes that CAMCO's continuous supervision
of the subadvisor will permit the proportion of shareholders' assets subject
to particular subadvisor styles to be reallocated (or a new subadvisor
introduced) in response to changing market conditions or subadvisor
performance, in an attempt to improve performance.
Management believes that your interests as a shareholder are adequately
protected by your voting rights with respect to the advisory agreement and the
responsibilities assumed by CAMCO and the Boards. It has found that requiring
shareholder approval of a subadvisor and the subadvisory agreement imposes
costs on the affected Portfolio without advancing shareholder interests.
Further, there is the concern that requiring shareholder approval of changes
to the existing subadvisory arrangements would prevent CSIF or CWVF from
promptly and timely employing the subadvisor best suited to the needs of the
affected Portfolio. Therefore, Management is seeking to streamline the process
so that an affected Portfolio can more efficiently continue toward achieving
its investment objective with a subadvisor recommended by CAMCO and approved
by the Boards.
If CAMCO and/or CSIF or CWVF are authorized to make changes to the existing
subadvisory arrangements outside of the proxy solicitation process,
shareholders will continue to benefit by knowing that CAMCO has applied the
same safeguards and criteria in making its selection while continuing to
fulfill its same duties to shareholders and to CSIF or CWVF. Although
Management would be authorized to make a subadvisory change without a
shareholder vote, as shareholders, you are entitled to and would continue to
receive the same disclosure and details about the selection process and the
background of the newly selected manager as you have received in this
solicitation, but in the form of an information statement instead of a proxy
statement. This information would be delivered to shareholders within 90 days
of the subadvisory change.
Recommendation
The Boards have approved Management's recommendation to implement the Order
and seek the authority to enter into a new and/or to materially amend an
existing investment subadvisory agreement without shareholder approval and
recommends that shareholders vote FOR the Proposal.
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Proposal 5
- --------------------------------------------------------------------------------
CSIF Balanced only: To approve a revised investment objective which is more
reflective of current economic times.
Discussion
After reviewing the current investment objective of CSIF Balanced, and
recognizing that the investment objective, when written in 1982, reflected a
very different economic time than today, Management determined that the
investment objective should be updated.
Thus, Management has revised the current investment objective and has
recommended that a new investment objective be adopted. The revised investment
objective will not have an effect on the investment style or practices of CSIF
Balanced and will remain fundamental.
The current investment objective provides that CSIF Balanced "seeks to achieve
a total return above the rate of inflation through an actively managed,
diversified portfolio of common and preferred stocks, bonds and money market
instruments which offer income and capital growth opportunity and which
satisfy the investment and social concern criteria."
The revised investment objective eliminates the reference linking total return
to the rate of inflation. Thus the investment objective, as proposed to be
revised, states that CSIF Balanced "seeks to achieve a competitive total
return through an actively managed portfolio of stocks, bonds and money market
instruments which offer income and capital growth opportunity and which
satisfy the investment and social concern criteria."
Recommendation
After reviewing the current investment objective, and comparing it to the
revised investment objective, the Board found that there will be no effect in
the application of the revised investment objective upon the management of
CSIF Balanced. Therefore, the Board, including a majority of the Independent
Trustees, approved the new investment objective for CSIF Balanced, subject to
approval by its shareholders. The Board recommends that shareholders vote FOR
the revised investment objective.
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Proposal 6
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CSIF Bond only: To change the CSIF Bond Portfolio from a diversified to a
nondiversified fund and to change the concentration policy to allow it to
concentrate in one or more industries.
Discussion
The 1940 Act reflects many of the requirements with which a registered
investment company must comply. Each fund is required to state whether it will
have a diversified portfolio or a nondiversified portfolio. This not only
means that a fund must invest in several different companies; it also means
that a fund must adhere to the federal diversification rule. The
diversification rule is that "at least 75% of the value of total assets is
represented by cash and cash items (including receivables), Government
securities, securities of other investment companies, and other securities for
this calculation limited in respect of any one issuer to an amount not greater
in value than 5% of the value of total assets of such management company and
to not more than 10% of the outstanding voting securities of such issuer."
CSIF Bond's concentration policy is currently that it may not "invest 25% or
more of its total assets in any particular industry or industries, except that
it may invest more than 25% of its assets in obligations issued or guaranteed
by the U.S. Government, its agencies or instrumentalities. Industrial
development bonds, where the payment of principal and interest is the
responsibility of companies within the same industry, are grouped together as
an industry." At this time, CSIF Bond is diversified and does not concentrate
in any industry.
CSIF Bond's investment advisor, CAMCO, believes that CSIF Bond will have
greater investment flexibility if it becomes nondiversified and is allowed to
concentrate in one or more industries. This will permit CSIF Bond to acquire
larger positions in the securities of individual issuers, such as hospitals,
housing bonds, or utilities. This increased flexibility may provide
opportunities to enhance the investment performance. In fact, CAMCO may be
able to more efficiently invest CSIF Bond's assets if allowed to concentrate
in one industry, and therefore may become more competitive in purchasing
securities for CSIF Bond.
Theoretically, investing a larger percentage of a fund's assets in a single
issuer's securities increases its exposure to credit and other risks
associated with the single issuer's financial condition and business
operations. The value of shares of a fund may be more susceptible to any
single economic, political or regulatory event than the shares of a
diversified fund that does not concentrate in any industry. Because this is a
bond fund, however, CAMCO does not expect that being nondiversified or
concentrating in any one industry will bring more risk to CSIF Bond. CAMCO
expects to use this increased flexibility to acquire larger positions in the
securities of a single issuer only when it believes that the potential return
on the securities justifies the additional risk. CAMCO believes that these
risks are somewhat limited by portions of the Subchapter M test, below, which
must be performed on a quarterly basis.
In order to qualify as a registered investment company, CSIF Bond must
continue to comply with the Subchapter M test of the Internal Revenue Code.
The applicable portion of this test is that CSIF Bond must have, at the close
of each quarter of the taxable year, at least 50% of the value of its total
assets is represented by cash and cash items (including receivables),
Government securities and securities of other RICs, and not more than 5% of
its total assets will be invested in the securities of any one issuer and not
more than 10% of the outstanding voting securities of such issuer. Also, not
more than 25% of the total assets will be invested in the securities (other
than Government securities or the securities of other RICs) of any one issuer,
or of two or more issuers which CSIF Bond controls and which are determined to
be engaged in the same or similar trades or businesses or related trades or
businesses. Thus, at least quarterly, CSIF Bond will be limited in its
investments, and therefore, the diversification risks will be reduced for a
portion of the portfolio.
Recommendation
After reviewing the current concentration and diversification policies, and
considering the investment objective of the CSIF Bond Portfolio, the Board
concluded that a change to the diversification and concentration policies
could be beneficial to the shareholders of CSIF Bond. The Board voted to
approve the change from diversified to nondiversified and voted to allow CSIF
Bond to concentrate in any one or more industries, subject to the oversight of
the Board, and subject to shareholder approval. The Board recommends that CSIF
Bond shareholders vote FOR the proposed changes to CSIF Bond's concentration
and diversification policies.
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Proposal 7
For each Portfolio: To approve amended fundamental investment restrictions to
(a) delete restrictions that are no longer required to be fundamental due to
changes in state laws; (b) change some of the fundamental policies and
restrictions to non-fundamental operating policies; and (c) to revise the
language of those restrictions that are still required to be fundamental.
- --------------------------------------------------------------------------------
Discussion
CSIF came into existence over 15 years ago, while CWVF International Equity is
over 5 years old. The federal and state laws governing mutual funds have been
changed numerous times in the last several years. The Prospectus and Statement
of Additional Information ("SAI") for each Portfolio contain investment
restrictions that are more restrictive than the current law. For example,
federal Rule 2a-7 under the 1940 Act (the "Rule") states what types of money
market securities can be purchased for a money market fund. All money market
funds must comply with the Rule. However, the investment restrictions for the
CSIF Money Market Portfolio are currently even more stringent than the Rule.
This severely restricts the CSIF Money Market Portfolio's investments and
could potentially reduce its yield. The CSIF Money Market Portfolio does not
intend to change its investment style but plans to operate under Rule 2a-7, as
may be periodically amended.
Also in the past few years, many state securities laws have changed or have
been superseded by federal securities laws. Each Portfolio, however, must
still comply with the old fundamental restrictions, unless you vote to change
these restrictions to be in line with the changed regulatory landscape.
As explained above, federal law in many cases controls what a mutual fund can
purchase. Federal law also specifies certain investment restrictions that must
be fundamental and cannot be changed without a shareholder vote. The
policies/restrictions that are required by law to be fundamental are those
concerning diversification, borrowing money, the issuance of senior
securities, underwriting of securities issued by other persons, the purchase
and sale of real estate and commodities, the policy about making loans to
other persons, and the concentration of investments in a particular industry
or group of industries.
CAMCO has recommended to the Board that the investment restrictions of the
Portfolios be changed to conform to, but not be more restrictive than, the
federal law. That way, if the federal law changes, the Portfolio restrictions
can change accordingly. This gives each of the Portfolios more flexibility and
may help each Portfolio to more easily adapt to different investment
environments. This is expected to enhance a subadvisor's ability to manage a
non-money market Portfolio in a changing investment environment and will
increase investment management opportunities. Further, it is not anticipated
that these proposed changes will substantially affect the way any of the
Portfolios are currently managed.
The current investment restrictions for Money Market, Balanced, Bond and
Equity Portfolios, excerpted from their SAI, are shown below. After careful
consideration, and with the advice of outside counsel, the Board has approved
several changes, subject to shareholder approval. Please note that the Board
recommends the deletion of any language in [brackets] and italicized. Any new
language has been underlined and made bold. Restrictions that the Board
believes should be nonfundamental operating policies are marked with ***NF***.
Investment Restrictions - Calvert Social Investment Fund Money Market,
Balanced, Bond and Equity Portfolios:
The Fund has adopted the following investment restrictions which, [together
with the foregoing investment objectives and fundamental policies of a
Portfolio,] cannot be changed without the approval of the holders of a
majority of the outstanding shares of the affected Portfolio. As defined in
the Investment Company Act of 1940, this means the lesser of the vote of (a)
67% of the shares of the Portfolio at a meeting where more than 50% of the
outstanding shares are present in person or by proxy or (b) more than 50% of
the outstanding shares of the Portfolio. Shares have equal rights as to
voting, except that only shares of a Portfolio are entitled to vote on matters
affecting only that Portfolio (such as changes in investment objective,
policies or restrictions). None of the Portfolios may:
[1. Purchase securities of any issuer (other than
obligations of, or guaranteed by, the United States
Government, its agencies or instrumentalities) if, as a
result, more than 5% of the value of that Portfolio's total
assets would be invested in securities of that issuer.]
2. Concentrate [more than] 25% or more of the value of
its assets in any one industry, or as permitted by law;
provided, however, that there is no limitation with respect
to investments in obligations issued or guaranteed by the
United States Government or its agencies and
instrumentalities, and repurchase agreements secured
thereby, and there is no limitation with respect to
investments in money market instruments of banks. (This
restriction may not apply to CSIF Bond - see Proposal 6,
above.)
[3. Purchase more than 10% of the outstanding voting
securities of any issuer. In addition, the Fund may not in
the aggregate purchase more than 10% of the outstanding
voting securities of any issuer.]
[4. Purchase the securities of any issuer with less
than three years' continuous operation if, as a result, more
than 5% of the value of that Portfolio's total assets would
be invested in securities of such issuers.]
5. Make loans of more than one-third of the total
assets of a Portfolio, or as permitted by law, other than
through the purchase of money market instruments and
repurchase agreements or by the purchase of bonds,
debentures or other debt securities. The purchase by a
Portfolio 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.
6. Underwrite the securities of other issuers, except
as permitted by the Board of Trustees/Directors within
applicable law, and except to the extent that in connection
with the disposition of its portfolio securities, a
Portfolio may be deemed to be an underwriter.
[7. Purchase from or sell to any of the Fund's officers
or Trustees, or firms of which any of them are members, any
securities (other than capital stock of the Fund), but such
persons or firms may act as brokers for the Fund for
customary commissions.]
8. Issue senior securities or Borrow money, except
from banks for temporary or emergency purposes and then only
in an amount up to [10%] 33 1/3% of the value of that
Portfolio's total assets or as permitted by law and except
by engaging in reverse repurchase agreements.[; provided,
however, that a Portfolio may only engage in reverse
repurchase agreements so long as, at the time a Portfolio
enters into a reverse repurchase agreement, the aggregate
proceeds from outstanding reverse repurchase agreements,
when added to other outstanding borrowings permitted by this
section, do not exceed 33 1/3% of the Portfolio's total
assets.] In order to secure any permitted borrowings and
reverse repurchase agreements under this section, each
Portfolio may pledge, mortgage or hypothecate its assets.
***NF***9. Make short sales of securities or purchase
any securities on margin except as provided for the Managed
Growth, Equity and Bond Portfolios with respect to options,
futures contracts and options on futures contracts. ***NF***
***NF***10. Write, purchase or sell puts, calls or
combinations thereof except as provided for the Managed
Growth, Equity and Bond Portfolios with respect to options,
futures contracts and options on futures contracts. ***NF***
[11. Invest for the purpose of exercising control or
management of another issuer.]
12. Invest directly in commodities, commodities futures
contracts, 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 and provided that the Managed Growth, Equity and
Bond Portfolios may purchase or sell stock index futures,
foreign currency futures, interest rate futures and options
thereon.
[13. Invest in interests in oil, gas, or other mineral
exploration or development programs, although it may invest
in securities of issuers which invest in or sponsor such
programs.]
[14. Purchase or retain securities issued by investment
companies except to the extent permitted by the Investment
Company Act of 1940, as amended, and in connection with a
trustee's/director's deferred compensation plan.]
The current investment restrictions for the Managed Index Portfolio, excerpted
from its SAI, are shown below. After careful consideration, and with the
advice of outside counsel, the Board has approved several changes, subject to
shareholder approval. Please note that the Board recommends the deletion of
any language in [brackets] and italicized. Any new language has been
underlined and made bold. Restrictions that the Board believes should be
nonfundamental operating policies are marked with ***NF***.
Investment Restrictions - Calvert Social Investment Fund Managed Index
Portfolio:
The Portfolio has adopted the following fundamental investment restrictions
which, cannot be changed without the approval of the holders of a majority of
the Portfolio's outstanding shares, that term is as defined in the Investment
Company Act of 1940, as amended ("1940 Act").
The Portfolio may not:
[1. With respect to 75% of its total assets, purchase
securities of any issuer (other than obligations of, or
guaranteed by, the United States Government, its agencies or
instrumentalities) if, as a result, more than 5% of the
value of the Portfolio's total assets would be invested in
securities of that issuer.]
2. Concentrate 25% or more of the value of its total
assets in any one industry, or as permitted by law;
provided, however, that there is no limitation with respect
to investments in obligations issued or guaranteed by the
United States Government or its agencies and
instrumentalities and repurchase agreements secured thereby,
and there is no limitation with respect to investments in
money market instruments of banks.
[3. With respect to 75% of its total assets, purchase
more than 10% of the outstanding voting securities of any
issuer.]
4. Make loans of more than one-third of the total
assets of a Portfolio, or as permitted by law, other than
through the purchase of money market instruments and
repurchase agreements or by the purchase of bonds,
debentures or other debt securities. [except that the
Portfolio may engage in securities lending (provided the
value of the securities loaned from the Portfolio will not
exceed 33 1/3% of the value of its total assets) and
repurchase transactions, and may purchase money market
instruments.]
5. Underwrite the securities of other issuers except
as permitted by the Board of Trustees/Directors, within
applicable law, and except to the extent that in connection
with the disposition of its portfolio securities, a
Portfolio may be deemed to be an underwriter.
6. 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 that 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, the Portfolio may pledge,
mortgage or hypothecate its assets.
***NF***7. Make short sales of securities or purchase
any securities on margin except with respect to options,
futures contracts and options on futures contracts. ***NF***
8. Invest directly in commodities or real estate,
although it may invest in securities which are secured by
real estate and securities of issuers which invest or deal
in commodities or real estate, and provided that the
Portfolio may invest in financial futures and options
thereon.
[9. Issue any senior securities.]
The current investment restrictions for CWVF International Equity, excerpted
from its SAI, are shown below. After careful consideration, and with the
advice of outside counsel, the Board has approved several changes, subject to
shareholder approval. Please note that the Board recommends the deletion of
any language in [brackets] and italicized. Any new language has been
underlined and made bold. Restrictions that the Board believes should be
nonfundamental operating policies are marked with ***NF***.
Investment Restrictions - CWVF International Equity:
The Fund has adopted the following investment restrictions which, together
with the foregoing investment objectives and fundamental policies of the Fund,
cannot be changed without the approval of the holders of a majority of the
outstanding shares of the Fund. As defined in the Investment Company Act of
1940, this means the lesser of the vote of (a) 67% of the shares of the Fund
at a meeting where more than 50% of the outstanding shares are present in
person or by proxy or (b) more than 50% of the outstanding shares of the Fund.
The Fund may not:
[1. With respect to 75% of its assets, purchase
securities of any issuer (other than obligations of, or
guaranteed by, the United States Government, its agencies or
instrumentalities) if, as a result, more than 5% of the
value of its total assets would be invested in securities of
that issuer.]
2. Concentrate 25% or more of the value of its assets
in any one industry, or as permitted by law; provided,
however, that there is no limitation with respect to
investments in obligations issued or guaranteed by the
United States Government or its agencies and
instrumentalities, and repurchase agreements secured
thereby, and there is no limitation with respect to
investments in money market instruments of banks.
[3. Purchase more than 10% of the outstanding voting
securities of any issuer.]
4. Make loans of more than one-third of the total
assets of a Portfolio, or as permitted by law, other than
through the purchase of money market instruments and
repurchase agreements or by the purchase of bonds,
debentures or other debt securities. The purchase by the
Fund of all or a portion of an issue of publicly or
privately distributed debt obligations in accordance with
its investment objective, policies and restrictions, shall
not constitute the making of a loan.
5. Underwrite the securities of other issuers, except
as permitted by the Board of Trustees/Directors, within
applicable law, and except to the extent that in connection
with the disposition of its portfolio securities, the Fund
may be deemed to be an underwriter.
[6. Purchase from or sell to any of the Fund's officers
or Directors, or firms of which any of them are members, any
securities (other than capital stock of the Fund), but such
persons or firms may act as brokers for the Fund for
customary commissions.]
7. Issue senior securities or Borrow money, except
from banks for temporary or emergency purposes and then only
in an amount up to [10%] 33 1/3% of the value of the Fund's
total assets or as permitted by law. [; provided, however,
that outstanding borrowings permitted by this section do not
exceed 33 1/3% of the Fund's total assets.] In order to
secure any permitted borrowings under this section, the Fund
may pledge, mortgage or hypothecate its assets.
***NF***8. Make short sales of securities or purchase
any securities on margin except that the Fund may obtain
such short-term credits as may be necessary for the
clearance of purchases and sales of securities. The deposit
or payment by the Fund of initial or maintenance margin in
connection with financial futures contracts or related
options transactions is not considered the purchase of a
security on margin. ***NF***
***NF***9. Write, purchase or sell puts, calls or
combinations thereof except that the Fund may (a) write
exchange-traded covered call options on portfolio securities
and enter into closing purchase transactions with respect to
such options, and the Fund may write exchange-traded covered
call options on foreign currencies and secured put options
on securities and foreign currencies and write covered call
and secured put options on securities and foreign currencies
traded over the counter, and enter into closing purchase
transactions with respect to such options, (b) purchase
exchange-traded call options and put options and purchase
call and put options traded over the counter, provided that
the premiums on all outstanding call and put options do not
exceed 5% of its total assets, and enter into closing sale
transaction with respect to such options, and (c) engage in
financial futures contracts and related options
transactions, provided that the sum of the initial margin
deposits on the Fund's existing futures and related options
positions and the premiums paid for related options would
not exceed 5% of its total assets. ***NF***
[10. Invest for the purpose of exercising control or
management of another issuer.]
11. Invest directly in commodities, commodities futures
contracts, 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 and provided that it may purchase or sell stock
index futures, foreign currency futures, interest rate
futures and options thereon.
[12. The Fund may invest in the shares of other
investment companies as permitted by the 1940 Act or other
applicable law; or in connection with a nonqualified
deferred compensation plan adopted by the Board of
Directors, as long as there is no duplication of advisory
fees.]
Thus, the revised fundamental investment restriction section of the SAI for
each of the above Portfolios would appear as shown below:
PROPOSED MODEL INVESTMENT RESTRICTIONS:
The Portfolios have adopted the following investment restrictions which cannot
be changed without the approval of the holders of a majority of the
outstanding shares of the affected Portfolio. As defined in the Investment
Company Act of 1940, this means the lesser of the vote of (a) 67% of the
shares of the Portfolio at a meeting where more than 50% of the outstanding
shares are present in person or by proxy or (b) more than 50% of the
outstanding shares of the Portfolio. Shares have equal rights as to voting,
except that only shares of a Portfolio are entitled to vote on matters
affecting only that Portfolio.
No Portfolio may:
1. Concentrate 25% or more of the value of its assets
in any one industry, or as permitted by law; provided,
however, that there is no limitation with respect to
investments in obligations issued or guaranteed by the
United States Government or its agencies and
instrumentalities, and repurchase agreements secured
thereby, and there is no limitation with respect to
investments in money market instruments of banks. (N/A to
CSIF Bond.)
2. Make loans of more than one-third of the total
assets of a Portfolio, or as permitted by law, other than
through the purchase of money market instruments and
repurchase agreements or by the purchase of bonds,
debentures or other debt securities. The purchase by a
Portfolio 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.
3. Underwrite the securities of other issuers, except
as permitted by the Board of Trustees within applicable law,
and except to the extent that in connection with the
disposition of its portfolio securities, a Portfolio may be
deemed to be an underwriter.
4. 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 that 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.
5. Invest directly in commodities, commodities futures
contracts, 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 and provided that the Managed Growth, Equity and
Bond Portfolios and CWVF International Equity may purchase
or sell stock index futures, foreign currency futures,
interest rate futures and options thereon.
Recommendation
The Boards have voted to change or delete each of these fundamental investment
restrictions as shown above and recommends that you vote FOR the changes or
deletions of each of these revised fundamental investment restrictions for the
Portfolios.
- --------------------------------------------------------------------------------
Proposal 8
- --------------------------------------------------------------------------------
For each Portfolio: To ratify the Board's selection of CSIF and CWVF
accountants, PricewaterhouseCoopers, L.L.P.
Discussion
Shareholders are requested to ratify the action of the Board in selecting the
firm of PricewaterhouseCoopers, L.L.P. as the independent accountants for CSIF
and CWVF during the current fiscal year. The Boards believe that the firm is
well qualified, and has accordingly selected PricewaterhouseCoopers to act as
independent accountants, subject to ratification by shareholders.
Coopers & Lybrand, L.L.P. has experience in accounting and auditing and has
served as independent accountants for CWVF since its inception (1992) and for
CSIF since 1994. On July 1, 1998, Coopers & Lybrand merged with Price
Waterhouse, L.L.P. to form PricewaterhouseCoopers, L.L.P.
Neither PricewaterhouseCoopers nor any of its partners has any direct or
indirect connection (other than as independent accountants) with CSIF or CWVF
or any of their affiliates. No representative of PricewaterhouseCoopers will
be present at the Special Meeting, but a representative will be available via
telephone to respond to appropriate questions from shareholders.
Recommendation
The Board recommends a vote FOR ratification of the selection of
PricewaterhouseCoopers, L.L.P. as independent accountants for CSIF and CWVF.
- --------------------------------------------------------------------------------
OTHER BUSINESS
- --------------------------------------------------------------------------------
The Board does not intend to present any other business at the meeting. If,
however, any other matters are properly brought before the meeting, William M.
Tartikoff, Esq., and Barbara J. Krumsiek will vote on the matters in
accordance with their judgment.
- --------------------------------------------------------------------------------
ANNUAL REPORTS
- --------------------------------------------------------------------------------
The audited Annual Report to Shareholders of CSIF is incorporated by reference
into this proxy statement. Copies of the most recent Annual Report may be
obtained without charge if you:
write to CSIF or CWVF at 4550 Montgomery Avenue, Suite 1000N, Bethesda,
Maryland 20814; or
call (800) 368-2745; or
visit Calvert's website at www.calvertgroup.com.
- --------------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
- --------------------------------------------------------------------------------
CSIF and CWVF are not required to hold annual shareholder meetings.
Shareholders who would like to submit proposals for consideration at future
shareholder meetings should send written proposals to the Calvert Group Legal
Department, 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland, 20814.
- --------------------------------------------------------------------------------
VOTING INFORMATION
- --------------------------------------------------------------------------------
Proxies are solicited initially by mail. Additional solicitations may be made
by telephone, computer communications, facsimile or other such means, or by
personal contact by officers or employees of Calvert Group and its affiliates
or by ADP, a proxy soliciting firm retained for this purpose. CSIF and/or CWVF
will bear solicitation costs. By voting as soon as possible, you can save your
Fund the expense of follow-up mailings and calls.
A proxy may be revoked at any time before the meeting or during the meeting by
oral or written notice to William M. Tartikoff, Esq., 4550 Montgomery Avenue,
Suite 1000N, Bethesda, Maryland 20814. Unless revoked, all valid proxies will
be voted in accordance with the specification thereon or, in the absence of
specification, for approval of the proposals.
Each proposal must be approved by a majority of the outstanding shares, which
is defined as the lesser of: (1) the vote of 67% or more of the shares of each
Portfolio at the Special Meeting if the holders of more than 50% of the
outstanding shares of each Portfolio are present in person or by proxy, or (2)
the vote of more than 50% of the outstanding shares of each Portfolio. All
classes of each Portfolio vote together.
Any abstentions and broker non-votes will be counted as shares present for
purposes of determining whether a quorum is present but will not be voted for
or against any adjournment or proposal. A broker non-vote is when a broker
holds the shares and the actual owner does not vote and the broker holding the
shares does not have the authority to vote the shares. This means that
abstentions and broker non-votes effectively will be a vote against
adjournment or against any proposal where the required vote is a percentage of
the shares present.
Shareholders of each Portfolio of record at the close of business on December
1, 1998 ("record date") are entitled to notice of and to vote at the Special
Meeting or any adjournment thereof. Shareholders are entitled to one vote for
each share held on that date. As of December 1, 1998, as shown on the books of
each respective Portfolio, there were issued and outstanding:
[#] shares of CSIF Money Market Portfolio
[#] shares of CSIF Balanced Portfolio
[#] shares of CSIF Bond Portfolio
[#] shares of CSIF Equity Portfolio
[#] shares of CSIF Managed Index Portfolio
[#] shares of CWVF International Equity Portfolio
As of the record date, the officers and Trustees/Directors of CSIF and CWVF as
a group beneficially owned less than 1% of the outstanding shares of any
Portfolio. The following shareholders, as of record date, owned more than 5%
of the Portfolio shown:
[insert info]
Name and Address % of Ownership
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
- --------------------------------------------------------------------------------
ADJOURNMENT
- --------------------------------------------------------------------------------
In the event that sufficient votes in favor of the proposals set forth in the
Notice of Meeting and Proxy Statement are not received by the time scheduled
for the meeting, William M. Tartikoff, Esq., or Barbara J. Krumsiek may move
one or more adjournments of the meeting to permit further solicitation of
proxies with respect to any such proposals. Any such adjournment will require
the affirmative vote of a majority of the shares present at the meeting. Mr.
Tartikoff and Ms. Krumsiek will vote in favor of such adjournment those shares
that they are entitled to vote which have voted in favor of such proposals.
They will vote against any such adjournment on behalf of those proxies that
have voted against any such proposals.
- --------------------------------------------------------------------------------
APPENDIX 1
PROPOSED INVESTMENT ADVISORY AGREEMENT
CALVERT SOCIAL INVESTMENT FUND
INVESTMENT ADVISORY AGREEMENT, made this 30th day of September, 1998,
by and between CALVERT ASSET MANAGEMENT COMPANY, INC., a Delaware corporation
having its principal place of business in Bethesda, Maryland (the "Advisor"),
and CALVERT SOCIAL INVESTMENT FUND, a Massachusetts business trust created
pursuant to a Declaration of Trust filed with the Secretary of State of the
Commonwealth of Massachusetts (the "Trust").
WHEREAS, the Trust is registered as an open-end investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), for the
purpose of investing and reinvesting its assets in securities, as set forth in
its Declaration of Trust, its By-laws and its registration statements under
the 1940 Act and the Securities Act of 1933 as amended (the "1933 Act"), the
Trust has registered separate series of shares of beneficial interest for sale
to the public; and the Trust desires to avail itself of the services,
information, advice, assistance and facilities of an investment advisor and to
have an investment advisor perform for it various investment advisory and
research services, and other management services; and
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisers Act of 1940, as amended, and is engaged in the business of
rendering management and investment advisory services to investment companies
and desires to provide such services to the Trust;
NOW, THEREFORE in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Advisor. The Trust hereby employs the
Advisor to manage the investment and reinvestment of the assets of those
separate series of the Trust specified in one or more Schedules attached
hereto and made a part of this Agreement (each a "Fund"), subject to the
control and direction of the Trust's Board of Trustees, for the period and on
the terms hereinafter set forth. The Advisor hereby accepts such employment
and agrees during such period to render the services and to assume the
obligations herein set forth for the compensation herein provided. The Advisor
shall for all purposes herein be deemed to be an independent contractor and
shall, except as expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
2. Obligations of and Services to be Provided by the Advisor.
The Advisor undertakes to provide the following services and to assume the
following obligations:
a. The Advisor shall manage the investment and
reinvestment of each Fund's assets, subject to and
in accordance with the investment objectives and
policies of the Fund, and the social investment
criteria, as stated in the then current prospectus
and statement of additional information for the Fund
and any directions which the Trust's Board of
Trustees may issue from time to time. In pursuance
of the foregoing, the Advisor shall make all
determinations with respect to the investment of
each Fund's assets and the purchase and sale of
portfolio securities and shall take such steps as
may be necessary to implement the same. Such
determination and services shall also include
determining the manner in which voting rights,
rights to consent to corporate action, any other
rights pertaining to a Fund's portfolio securities
shall be exercised. The Advisor shall render regular
reports to the Trust's Board of Trustees concerning
each Fund's investment activities.
b. The Advisor shall, in the name of the Trust on
behalf of each Fund, place orders for the execution
of the Fund's portfolio transactions in accordance
with the policies with respect thereto set forth in
the Trust's registration statement under the 1940
Act and the 1933 Act, as applicable to the Fund as
such registration statement may be amended from time
to time. In connection with the placement of orders
for the execution of each Fund's portfolio
transactions, the Advisor shall create and maintain
all necessary brokerage records of the Fund in
accordance with all applicable laws, rules and
regulations, including but not limited to records
required by Section 31(a) of the 1940 Act. All
records shall be the property of the Trust and shall
be available for inspection and use by the
Securities and Exchange Commission (the "SEC"), the
Trust or any person retained by the Trust. Where
applicable, such records shall be maintained by the
Advisor for the periods and the places required by
Rule 31a-2 under the 1940 Act.
c. The Advisor shall bear its expenses of providing
services to the Trust and each Fund pursuant to this
Agreement except such expenses as are undertaken by
the Trust or the Fund. In addition, the Advisor
shall pay the salaries and fees of all Trustees, and
executive officers who are employees of the Advisor
or its affiliates ("Advisor Employees").
d. In providing the services and assuming the obligations
set forth herein, the Advisor may, at its expense,
employ one or more Subadvisors. References herein to the
Advisor shall include any Subadvisor employed by the
Advisor. Any agreement between the Advisor and a
Subadvisor shall be subject to the Renewal, Termination
and Amendment provisions of paragraph 10 hereof.
e. The Advisor is responsible for screening investments to
determine that they meet the Fund's social investment
criteria, as may be amended from time to time by the
Trustees.
3. Expenses of each Fund. Each Fund shall pay all expenses
other than those expressly assumed by the Advisor. Expenses payable by the
Fund shall include, but are not limited to:
a. Fees to the Advisor as provided herein:
b. Legal and audit expenses;
c. Fees and expenses related to the registration and
qualification of the Fund and its shares for
distribution under federal and state securities
laws;
d. Expenses of the administrative service agent,
transfer agent, registrar, custodian, dividend
disbursing agent and shareholder servicing agent;
e. Any telephone charges associated with shareholder
servicing or the maintenance of the Funds or
Corporation;
f. Salaries, fees and expenses of Trustees and
executive officers of the Trust, other than Advisor
Employees;
g. Taxes and corporate fees levied against the Fund;
h. Brokerage commissions and other expenses
associated with the purchase and sale of portfolio
securities for the Fund;
i. Expenses, including interest, of borrowing money;
j. Expenses incidental to meetings of the Fund's
shareholders and the Fund's allocable portion of
the expenses incidental to the maintenance of the
Trust's organizational existence;
k. Expenses of printing stock certificates
representing shares of the Fund and expenses of
preparing, printing and mailing notices, proxy
material, reports to regulatory bodies and reports
to shareholders of the Fund;
l. Expenses of preparing and typesetting of
prospectuses of the Fund;
m. Expenses of printing and distributing prospectuses
to shareholders of the Fund;
n. The Fund's allocable portion of association
membership dues of the Trust;
o. Insurance premiums for fidelity and other
coverage; and
p. Distribution Plan expenses, as permitted by Rule
12b-1 under the 1940 Act and as authorized by the
Trustees.
4. Compensation of Advisor
a. As compensation for the services rendered and
obligations assumed hereunder by the Advisor, the
Trust, on behalf of each Fund, shall pay to the
Advisor advisory fees as specified in one or more
Schedules attached hereto and made part of this
Agreement. Such fees shall be payable within ten
(10) days after the last day of each calendar
month. Upon termination of this Agreement before
the end of any calendar month, the fee for such
period shall be prorated in the manner set forth in
one or more attached Schedules. The Schedules may
be amended from time to time, provided that
amendments thereto are made in conformity with
applicable laws and regulations and the Declaration
of Trust and By-laws of the Trust. Any amendment to
a Schedule pertaining to any new or existing Fund
shall not be deemed to affect the interest of any
other Fund and shall not require the approval of
the shareholders of any other Fund.
b. The Advisor reserves the right (i) to waive all or
part of its fee and assume expenses of the Fund and
(ii) to make payments to brokers and dealers in
consideration of their promotional or
administrative services.
5. Activities of the Advisor. The services of the Advisor to
the Trust and each Fund hereunder are not to be deemed exclusive, and the
Advisor shall be free to render similar services to others. It is understood
that Trustees and officers of the Trust are or may become interested in the
Advisor as stockholders, officers, or otherwise , and that stockholders and
officers of the Advisor are or may become similarly interested in the Trust,
and that the Advisor may become interested in the Trust as shareholder or
otherwise.
6. Use of Names. The Trust or any Fund shall not use the name
of the Advisor in any prospectus, sales literature or other material relating
to the Trust in any manner not approved prior thereto by the Advisor;
provided, however, that the Advisor shall approve all uses of its name which
merely refer in accurate terms to its appointment hereunder or which are
required by the SEC or a State Securities Commission; and, provided, further,
that in no event shall such approval be unreasonably withheld. The Advisor
shall not use the name of the Trust or any Fund in any material relating to
the Advisor in any manner not approved prior thereto by the Trust; provided,
however, that the Trust shall approve all uses of its name which merely refer
in accurate terms to the appointment of the Advisor hereunder or which are
required by the SEC or a State Securities Commission; and, provide, further,
that in no event shall such approval be unreasonably withheld.
The Trustees of the Trust acknowledge that, in consideration of the
Advisor's assumption of certain expenses of formation of the Trust, the
Advisor has reserved for itself the rights to the name "Calvert Social
Investment Fund" (or any similar name) and that use by the Trust of such name
shall continue only with the continuing consent of the Advisor, which consent
may be withdrawn at any time, effective immediately, upon written notice
thereof to the Trust.
7. Liability of the Advisor. Absent willful misfeasance, bad
faith, gross negligence, or reckless disregard of obligations or duties
hereunder on the part of the Advisor, the Advisor shall not be subject to
liability to the Trust or to any shareholder of the Trust for any act or
omission in the course of, or connected with, rendering services hereunder or
for any losses that may be sustained in the purchase, holding or sale of any
security.
8. Limitation of Trust's Liability. The Advisor acknowledges
that it has received notice of and accepts the limitations upon the Trust's
liability set forth in Article XI of its Declaration of Trust. The Advisor
agrees that the Trust's obligations hereunder in any case shall be limited to
the Trust and to its assets and that the Advisor shall not seek satisfaction
of any such obligation from the shareholders of the Trust nor from any
Trustees, officer, employee or agent of the Trust.
9. Force Majeure. The Advisor shall not be liable for delays or
errors occurring by reason of circumstances beyond its 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, the Advisor shall take reasonable steps to minimize
service interruptions but shall have no liability with respect thereto.
10. Renewal, Termination and Amendment. This Agreement shall
continue in effect with respect to each Fund, unless sooner terminated as
hereinafter provided for two years from the effective date as to that Fund,
and indefinitely thereafter if its continuance after such one year period
shall be specifically approved at least annually by vote of the holders of a
majority of the outstanding voting securities of the Fund or by vote of a
majority of the Trust's Board of Trustees; and further provided that such
continuance is also approved annually by the vote of a majority of the
Trustees who are not parties to this Agreement or interested persons of the
Advisor, cast in person at a meeting called for the purpose of voting on such
approval. This Agreement may be terminated at any time with respect to a Fund,
without payment of any penalty, by the Trust's Board of Trustees or by vote of
the majority of the outstanding voting securities of the Fund upon 60 days'
prior written notice to the Advisor and by the Advisor upon 60 days' prior
written notice to the Trust. This Agreement may be amended with respect to a
Fund at any time by the parties, subject to approval by the Trust's Board of
Trustees and, if required by applicable SEC rules and regulations, a vote of a
majority of the Fund's outstanding voting securities. This Agreement shall
terminate automatically in the event of its assignment. The terms
"assignment", "interested person", and "vote of a majority of the outstanding
voting securities" shall have the meaning set forth for such terms in the 1940
Act.
11. Severability. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
12. Miscellaneous. Each party agrees to perform such further
actions and execute such further documents as are necessary to effectuate the
purposes hereof. This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Maryland. The captions in this
Agreement are included for convenience only and in no way 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 first written above.
Calvert Social Investment Fund
By:______________________________
Calvert Asset Management Company, Inc.
By:______________________________
- --------------------------------------------------------------------------------
Fee Schedule to the Investment Advisory Agreement
between Calvert Asset Management Company, Inc. and
Calvert Social Investment Fund
As compensation pursuant to Section 4 of the Investment Advisory Agreement
between CAMCO and Calvert Social Investment Fund ("CSIF") dated _____________,
1999, with respect to each CSIF Portfolio, the Advisor is entitled to receive
from each Portfolio an annual advisory fee (the "Fee") as shown below. The Fee
shall be computed daily and payable monthly, based on the average daily net
assets of the appropriate Portfolio.
Calvert Social Investment Fund Money Market Portfolio: 0.30%
Calvert Social Investment Fund Balanced Portfolio:
0.425%
0.35% above $500 million
0.325% above $1 billion
Calvert Social Investment Fund Bond Portfolio: 0.35%
Calvert Social Investment Fund Equity Portfolio: 0.50%
Calvert Social Investment Fund Managed Index Portfolio: 0.60%
- --------------------------------------------------------------------------------
APPENDIX 2
PROPOSED INVESTMENT ADVISORY AGREEMENT
CALVERT WORLD VALUES FUND, INC.
INVESTMENT ADVISORY AGREEMENT, made this ___ day of ___________,
1999, by and between CALVERT ASSET MANAGEMENT COMPANY, INC., a Delaware
corporation having its principal place of business in Bethesda, Maryland (the
"Advisor"), and CALVERT WORLD VALUES FUND, INC., a Maryland corporation (the
"Corporation"), both having their principal place of business at 4550
Montgomery Avenue, Bethesda, Maryland.
WHEREAS, the Corporation has been organized to operate as an
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), for the purpose of investing and reinvesting its assets in
securities, as set forth in its Articles of Incorporation, its Bylaws and its
registration statements under the 1940 Act and the Securities Act of 1933 (the
"1933 Act"), as amended; and the Corporation desires to avail itself of the
services, information, advice, assistance and facilities of an investment
advisor and to have an investment advisor perform for it various investment
advisory, research services and other management services; and
WHEREAS, the Advisor has been organized to operate as an investment
advisor registered under the Investment Advisers Act of 1940, as amended, and
is engaged in the business of rendering management, and investment advisory
services to investment companies and desires to provide such services to the
Corporation;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Advisor. The Corporation hereby employs the Advisor
to manage the investment and reinvestment of the Corporation assets,
subject to the control and direction of the Corporation's Board of
Directors, for the period and on the terms hereinafter set forth. The
Advisor hereby accepts such employment and agrees during such period
to render the services and to assume the obligations herein set forth
for the compensation herein provided. The Advisor shall for all
purposes herein be deemed to be an independent contractor and shall,
except as expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the Corporation
in any way or otherwise be deemed an agent of the Corporation.
2. Obligations of and Services to be Provided by the Advisor. The
Advisor undertakes to provide the following services and to assume
the following obligations:
a. The Advisor shall manage the investment and reinvestment of
the Corporation's assets, subject to and in accordance with
the investment objectives and policies of the Corporation
and any directions which the Corporation's Board of
Directors may issue from time to time. In pursuance of the
foregoing, the Advisor shall make all determinations with
respect to the investment of the Corporation's assets and
the purchase and sale of portfolio securities and shall take
such steps as may be necessary to implement the same. Such
determination and services shall also include determining
the manner in which voting rights, rights to consent to
corporate action, any other rights pertaining to the
Corporation's portfolio securities shall be exercised. The
Advisor shall render regular reports to the Corporation's
Board of Directors concerning the Corporation's investment
activities.
b. The Advisor shall, in the name of the Corporation on behalf
of the Corporation, place orders for the execution of the
Corporation's portfolio transactions in accordance with the
policies with respect thereto set forth in the Corporation's
registration statements under the 1940 Act and the 1933 Act,
as such registration statements may be amended from time to
time. In connection with the placement of orders for the
execution of the Corporation's portfolio transactions the
Advisor shall create and maintain all necessary brokerage
records of the Corporation in accordance with all applicable
laws, rules and regulations, including but not limited to
records required by Section 31(a) of the 1940 Act. All
records shall be the property of the Corporation and shall
be available for inspection and use by the SEC, the
Corporation or any person retained by the Corporation. Where
applicable, such records shall be maintained by the Advisor
for the periods and the places required by Rule 31a-2 under
the 1940 Act.
c. The Advisor shall bear its expenses of providing services to
the Corporation pursuant to this Agreement except such
expenses as are undertaken by the Corporation. In addition,
the Advisor shall pay the salaries and fees of all Directors
and executive officers who are employees of the Advisor or
its affiliates ("Advisor Employees").
3. Expenses of The Corporation. The Corporation shall pay all expenses
other than those expressly assumed by the Advisor herein, which
expenses payable by the Corporation shall include, but are not
limited to:
a. Fees to the Advisor as provided herein;
b. Legal and audit expenses;
c. Fees and expenses related to the registration and
qualification of the Corporation and its shares for
distribution under federal and state securities laws;
d. Expenses of the transfer agent, registrar, custodian,
dividend disbursing agent and shareholder servicing agent;
e. Any telephone charges associated with shareholder servicing
or the maintenance of the Funds or Corporation;
f. Salaries, fees and expenses of Directors and executive
officers of the Corporation, other than Advisor Employees;
g. Taxes and corporate fees levied against the Corporation;
h. Brokerage commissions and other expenses associated with
the purchase and sale of portfolio securities for the
Corporation;
i. Expenses, including interest, of borrowing money;
j. Expenses incidental to meetings of the Corporation's
shareholders and the maintenance of the Corporation's
organizational existence;
k. Expenses of printing stock certificates representing shares
of the Corporation and expenses of preparing, printing and
mailing notices, proxy material, reports to regulatory
bodies and reports to shareholders of the Corporation;
l. Expenses of preparing and typesetting of prospectuses of
the Corporation;
m. Expenses of printing and distributing prospectuses to
shareholders of the Corporation;
n. Association membership dues;
o. Insurance premiums for fidelity and other coverage; and
p. Such other legitimate Corporation expenses as the Board of
Directors may from time to time determine are properly
chargeable to the Corporation.
4. Compensation of Advisor.
a. As compensation for the services rendered and obligations
assumed hereunder by the Advisor, the Corporation shall pay
to the Advisor within ten (10) days after the last day of
each calendar month a fee equal on an annualized basis as
shown on Schedule A.
Such fee shall be computed and accrued daily. Upon termination of
this Agreement before the end of any calendar month, the fee for such
period shall be prorated. For purposes of calculating the Advisor's
fee, the daily value of the Corporation's net assets shall be
computed by the same method as the Corporation uses to compute the
value of its net assets in connection with the determination of the
net asset value of Corporation shares.
b. The Advisor reserves the right (i) to waive all or part of
its fee and (ii) to make payments to brokers and dealers in
consideration of their promotional or administrative
services.
5. Activities of the Advisor. The services of the Advisor to the
Corporation hereunder are not to be deemed exclusive, and the Advisor
shall be free to render similar services to others. It is understood
that Directors and officers of the Corporation are or may become
interested in the Advisor as stockholders, officers, or otherwise,
and that stockholders and officers of the Advisor are or may become
similarly interested in the Corporation, and that the Advisor may
become interested in the Corporation as a shareholder or otherwise.
6. Use of Names. The Corporation shall not use the name of the Advisor
in any prospectus, sales literature or other material relating to the
Corporation in any manner not approved prior thereto by the Advisor;
provided, however, that the Advisor shall approve all uses of its
name which merely refer in accurate terms to its appointment
hereunder or which are required by the SEC; and, provided, further,
that in no event shall such approval be unreasonably withheld. The
Advisor shall not use the name of the Corporation or any Corporation
in any material relating to the Advisor in any manner not approved
prior thereto by the Corporation; provided, however, that the
Corporation shall approve all uses of its name which merely refer in
accurate terms to the appointment of the Advisor hereunder or which
are required by the SEC; and, provide, further, that in no event
shall such approval be unreasonably withheld.
7. Liability of the Advisor. Absent willful misfeasance, bad faith,
gross negligence, or reckless disregard of obligations or duties
hereunder on the part of the Advisor, the Advisor shall not be
subject to liability to the Corporation or to any shareholder of the
Corporation for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
8. Force Majeure. The Advisor shall not be liable for delays or errors
occurring by reason of circumstances beyond its 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, the Advisor
shall take reasonable steps to minimize service interruptions but
shall have no liability with respect thereto.
9. Renewal, Termination and Amendment. This Agreement shall continue in
effect with respect to the Corporation, unless sooner terminated as
hereinafter provided, through December 31, 1998, and indefinitely
thereafter if its continuance shall be specifically approved at least
annually by vote of the holders of a majority of the outstanding
voting securities of the Corporation or by vote of a majority of the
Corporation's Board of Directors; and further provided that such
continuance is also approved annually by the vote of a majority of
the Directors who are not parties to this Agreement or interested
persons of the Advisor, cast in person at a meeting called for the
purpose of voting on such approval, or as allowed by law. This
Agreement may be terminated at any time, without payment of any
penalty, by the Corporation's Board of Directors or by a vote of the
majority of the outstanding voting securities of the Corporation upon
60 days' prior written notice to the Advisor and by the Advisor upon
60 days' prior written notice to the Corporation. This Agreement may
be amended at any time by the parties, subject to approval by the
Corporation's Board of Directors and, if required by applicable SEC
rules and regulations, a vote of a majority of the Corporation's
outstanding voting securities. This Agreement shall terminate
automatically in the event of its assignment. The terms "assignment"
and "vote of a majority of the outstanding voting securities" shall
have the meaning set forth for such terms in the 1940 Act.
10. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
11. Miscellaneous. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the
purposes hereof. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Maryland.
The captions in this Agreement are included for convenience only and
in no way 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 first written above.
CALVERT WORLD VALUES FUND, INC.
By:
CALVERT ASSET MANAGEMENT COMPANY, INC.
By:
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Fee Schedule to the Investment Advisory Agreement
between Calvert Asset Management Company, Inc. and
Calvert World Values Fund, Inc.
As compensation pursuant to Section 4 of the Investment Advisory Agreement
between CAMCO and Calvert World Values Fund, Inc. ("CWVF") dated
_____________, 1999, with respect to each CWVF Portfolio, the Advisor is
entitled to receive from each Portfolio an annual advisory fee (the "Fee") as
shown below. The Fee shall be computed daily and payable monthly, based on the
average daily net assets of the appropriate Portfolio.
CWVF International Equity: 0.75%
0.675% above $250 million
0.65% above $500 million
CWVF Capital Accumulation 0.65%
- --------------------------------------------------------------------------------
APPENDIX 3
INVESTMENT SUBADVISORY AGREEMENT
NCM CAPITAL MANAGEMENT GROUP, INC.
INVESTMENT SUBADVISORY AGREEMENT, made this ___ day of ____________,
1999, by and between CALVERT ASSET MANAGEMENT COMPANY, INC., a Delaware
corporation registered as an investment advisor under the Investment Advisers
Act of 1940 (the "Advisor"), and NCM CAPITAL MANAGEMENT GROUP, INC., a North
Carolina corporation (the "Subadvisor").
WHEREAS, the Advisor is the investment advisor to Calvert Social
Investment Fund, an open-end, diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Advisor desires to retain the Subadvisor to furnish it
with certain investment advisory services in connection with the Advisor's
investment advisory activities on behalf of the Calvert Social Investment
Fund, Balanced Portfolio (the "Fund");
NOW, THEREFORE, in consideration of the promises and the terms and
conditions hereinafter set forth, it is agreed as follows:
1. Services to be Rendered by the Subadvisor to the Fund.
(a) Investment Program. Subject to the control of the
Calvert Social Investment Fund Board of Trustees
("Trustees") and the Advisor, the Subadvisor at its expense
continuously will furnish to the Fund an investment program
for such portion, if any, of Fund assets designated by the
Advisor from time to time. With respect to such assets, the
Subadvisor will make investment decisions, which is subject
to Section 1(g) of this Agreement, and will place all orders
for the purchase and sale of portfolio securities. The
Subadvisor will for all purposes herein be deemed to be an
independent contractor and shall, except as expressly
provided or authorized, have no authority to act for or
represent the Fund or the Advisor in any way or otherwise be
deemed an agent of the Fund or the Advisor. In the
performance of its duties, the Subadvisor will act in the
best interests of the Fund and will comply with (i)
applicable laws and regulations, including, but not limited
to, the 1940 Act, and Subchapter M of the Internal Revenue
Code of 1986, as amended, (ii) the terms of this Agreement,
(iii) the Fund's Articles of Incorporation, Bylaws and
Registration Statement as from time to time amended, (iv)
relevant undertakings provided to State securities
regulators, (v) the stated investment objective, policies
and restrictions of the Fund, and (vi) such other guidelines
as the Trustees or Advisor may establish. The Advisor shall
be responsible for providing the Subadvisor with current
copies of the materials specified in Subsections (a)(iii),
(iv), (v) and (vi) of this Section 1.
(b) Availability of Personnel. The Subadvisor at its expense
will make available to the Trustees and Advisor at
reasonable times its portfolio managers and other
appropriate personnel, either in person, or, at the mutual
convenience of the Advisor and the Subadvisor, by telephone,
in order to review the Fund's investment policies and to
consult with the Trustees and Advisor regarding the Fund's
investment affairs, including economic, statistical and
investment matters relevant to the Subadvisor's duties
hereunder, and will provide periodic reports to the Advisor
relating to the investment strategies it employs.
(c) Expenses, Salaries and Facilities. The Subadvisor will
pay all expenses incurred by it in connection with its
activities under this Agreement (other than the cost of
securities and other investments, including any brokerage
commissions), including but not limited to, all salaries of
personnel and facilities required for it to execute its
duties under this Agreement.
(d) Compliance Reports. The Subadvisor at its expense will
provide the Advisor with such compliance reports relating to
its duties under this Agreement as may be agreed upon by
such parties from time to time.
(e) Valuation. The Subadvisor will assist the Fund and its
agents in determining whether prices obtained for valuation
purposes accurately reflect market price information
relating to the assets of the Fund for which the Subadvisor
has responsibility on a daily basis (unless otherwise agreed
upon by the parties hereto) and at such other times as the
Advisor shall reasonably request.
(f) Executing Portfolio Transactions.
i) Brokerage In selecting brokers and dealers to
execute purchases and sales of investments for the
Fund, the Subadvisor will use its best efforts to
obtain the most favorable price and execution
available in accordance with this paragraph. The
Subadvisor agrees to provide the Advisor and the
Fund with copies of its policy with respect to
allocation of brokerage on trades for the Fund.
Subject to review by the Trustees of appropriate
policies and procedures, the Subadvisor may cause
the Fund to pay a broker a commission, for
effecting a portfolio transaction, in excess of the
commission another broker would have charged for
effecting the same transaction. If the first broker
provided brokerage and/or research services,
including statistical data, to the Subadvisor, the
Subadvisor shall not be deemed to have acted
unlawfully, or to have breached any duly created by
this Agreement, or otherwise, solely by reason of
acting according to such authorization.
ii) Aggregate Transactions In executing portfolio
transactions for the Fund, the Subadvisor may, but
will not be obligated to, aggregate the securities
to be sold or purchased with those of its other
clients where such aggregation is not inconsistent
with the policies of the Fund, to the extent
permitted by applicable laws and regulations. If
the Subadvisor chooses to aggregate sales or
purchases, it will allocate the securities as well
as the expenses incurred in the transaction in the
manner it considers to be the most equitable and
consistent with its fiduciary obligations to the
Fund and its other clients involved in the
transaction.
(g) Social Screening. The Advisor is responsible for
screening those investments subject to social screening
("Securities") to determine that the Securities investments
meet the Fund's social investment criteria, as may be
amended from time to time by the Trustees. The Subadvisor
will buy only those Securities which the Advisor determines
pass the Fund's social screens.
(h) Voting Proxies. The Subadvisor agrees to take
appropriate action (which may include voting) on all proxies
for the Fund's portfolio investments in a timely manner.
Such action is subject to the direction of the Trustees and
Advisor and will be consistent with the social screens and
criteria governing investment selection for the Fund.
(i) Furnishing Information for the Fund's Proxies. The
Subadvisor agrees to provide the Advisor in a timely manner
with all information necessary, including the Subadvisor's
certified balance sheet and information concerning the
Subadvisor's controlling persons, for preparation of the
Fund's proxy statements, as may be needed from time to time.
2. Books and Records.
a) In connection with the purchase and sale of the Fund's
portfolio securities, the Subadvisor shall arrange for the
transmission to the Fund's custodian, and/or the Advisor on
a daily basis, of such confirmations, trade tickets or other
documentation as may be necessary to enable the Advisor to
perform its accounting and administrative responsibilities
with respect to the management of the Fund.
b) Pursuant to Rule 31a-3 under the 1940 Act, Rule 204-2
under the Investment Advisers Act of 1940 and any other
laws, rules or regulations regarding recordkeeping, the
Subadvisor agrees that: (i) all records it maintains for the
Fund are the property of the Fund; (ii) it will surrender
promptly to the Fund or Advisor any such records upon the
Fund's or Advisor's request; (iii) it will maintain for the
Fund the records that the Fund is required to maintain under
Rule 31a-1(b) insofar as such records relate to the
investment affairs of the Fund for which the Subadvisor has
responsibility under this Agreement; and (iv) it will
preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records it maintains for the Fund.
c) The Subadvisor represents that it has adopted a suitable
Code of Ethics that covers its activities with respect to
its services to the Fund.
3. Exclusivity. Each party and its affiliates may have
advisory, management service or other agreements with other
organizations and persons, and may have other interests and
businesses; provided, however, that during the term of this
Agreement, the Subadvisor will not provide investment
advisory services ("Services") to any other investment
company registered under the 1940 Act ("Mutual Fund")
investing in socially screened securities.
4. Compensation. The Advisor will pay to the Subadvisor as
compensation for the Subadvisor's services rendered pursuant
to this Agreement an annual Subadvisory fee as specified in
one or more Schedules attached hereto and made part of this
Agreement. Such fees shall be paid by the Advisor (and not
by the Fund). Such fees shall be payable for each month
within 15 business days after the end of such month. If the
Subadvisor shall serve for less than the whole of a month,
the compensation as specified shall be prorated. The
Schedules may be amended from time to time, provided that
amendments are made in conformity with applicable laws and
regulations and the Declaration of Trust and Bylaws of the
Fund. Any change in the Schedule pertaining to any new or
existing series of Calvert Social Investment Fund shall not
be deemed to affect the interest of any other series and
shall not require the approval of shareholders of any other
series.
5. Assignment and Amendment of Agreement. This Agreement
automatically shall terminate without the payment of any
penalty in the event of its assignment or if the Investment
Advisory Agreement between the Advisor and the Fund shall
terminate for any reason. This Agreement shall not be
materially amended unless, if required by Securities and
Exchange Commission rules and regulations, such amendment is
approved by the affirmative vote of a majority of the
outstanding shares of the Fund, and by the vote, cast in
person at a meeting called for the purpose of voting on such
approval, of a majority of the Trustees of Calvert Social
Investment Fund who are not interested persons of the Fund,
the Advisor or the Subadvisor.
6. Duration and Termination of the Agreement. This Agreement
shall become effective upon its execution; provided,
however, that this Agreement shall not become effective with
respect to any series now existing or hereafter created
unless it has first been approved (a) by a vote of the
majority of those Trustees of Calvert Social Investment Fund
who are not parties to this Agreement or interested persons
of such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by a vote of a
majority of that series' outstanding voting securities. This
Agreement shall remain in full force and effect continuously
thereafter (unless terminated automatically as set forth in
Section 5) except as follows:
(a) Calvert Social Investment Fund may at any time terminate
this Agreement without penalty with respect to any or all
Funds by providing not less than 60 days' written notice
delivered or mailed by registered mail, postage prepaid, to
the Advisor and the Subadvisor. Such termination can be
authorized by the affirmative vote of a majority of the (i)
Trustees of Calvert Social Investment Fund or (ii)
outstanding voting securities of the applicable series.
(b) This Agreement will terminate automatically with respect
to a series unless, by January 1, 2000, and at least
annually thereafter, the continuance of the Agreement is
specifically approved by (i) the Trustees of Calvert Social
Investment Fund or the shareholders of such series by the
affirmative vote of a majority of the outstanding shares of
such series, and (ii) a majority of the Trustees of Calvert
Social Investment Fund, who are not interested persons of
the Fund, Advisor or Subadvisor, by vote cast in person at a
meeting called for the purpose of voting on such approval.
If the continuance of this Agreement is submitted to the
shareholders of any series for their approval and such
shareholders fail to approve such continuance as provided
herein, the Subadvisor may continue to serve hereunder in a
manner consistent with the 1940 Act and the rules and
regulations thereunder.
(c) The Advisor may at any time terminate this Agreement
with respect to any or all Funds by not less than 60 days'
written notice delivered or mailed by registered mail,
postage prepaid, to the Subadvisor, and the Subadvisor may
at any time terminate this Agreement with respect to any or
all series by not less than 90 days written notice delivered
or mailed by registered mail, postage prepaid, to the
Advisor, unless otherwise mutually agreed in writing.
Upon termination of this Agreement with respect to any Fund, the
duties of the Advisor delegated to the Subadvisor under this
Agreement with respect to such Fund automatically shall revert to the
Advisor.
7. Notification to the Advisor. The Subadvisor promptly shall
notify the Advisor in writing of the occurrence of any of
the following events:
(a) the Subadvisor shall fail to be registered as an
investment advisor under the Investment Advisers Act of
1940, as amended, and under the laws of any jurisdiction in
which the Subadvisor is required to be registered as an
investment advisor in order to perform its obligations under
this Agreement;
(b) the Subadvisor shall have been served or otherwise have
notice of any action, suit, proceeding, inquiry or
investigation, at law or in equity, before or by any court,
public board or body, involving the affairs of the Fund; or
(c) a violation of the Subadvisor's Code of Ethics is
discovered and, again, when action has been taken to rectify
such violation; or
(d) any other event that might affect the ability of the
Subadvisor to provide the services provided for under this
Agreement.
8. Definitions. For the purposes of this Agreement, the terms
"vote of a majority of the outstanding Shares," "affiliated
person," "control," "interested person" and "assignment"
shall have their respective meanings as defined in the 1940
Act and the rules and regulations thereunder subject,
however, to such exemptions as may be granted by the
Securities and Exchange Commission under said Act; and the
term "specifically approve at least annually" shall be
construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder.
9. Indemnification. The Subadvisor shall indemnify and hold
harmless the Advisor, the Fund and their respective
directors or trustees, officers and shareholders from any
and all claims, losses, expenses, obligation and liabilities
(including reasonable attorneys fees) arising or resulting
from the Subadvisor's willful misfeasance, bad faith, gross
negligence or reckless disregard of its duties hereunder.
The Advisor shall indemnify and hold harmless the
Subadvisor, the Fund, their respective directors or
trustees, officers and shareholders from any and all claims,
losses, expenses, obligation and liabilities (including
reasonable attorneys fees) arising or resulting from the
Advisor's willful misfeasance, bad faith, gross negligence
or reckless disregard of its duties hereunder or under its
Investment Advisory Agreement with the Fund.
10. Applicable Law and Jurisdiction. This Agreement shall be
governed by Maryland law, and any dispute arising from this
Agreement or the services rendered hereunder shall be
resolved through legal proceedings, whether state, federal,
or otherwise, conducted in the state of Maryland or in such
other manner or jurisdiction as shall be mutually agreed
upon by the parties hereto.
11. Miscellaneous. Notices of any kind to be given to a party
hereunder shall be in writing and shall be duly given if
mailed, delivered or communicated by answer back facsimile
transmission to such party at the address set forth below,
attention President, or at such other address or to such
other person as a party may from time to time specify.
Each party agrees to perform such further acts and execute
such further documents as are necessary to effectuate the
purposes hereof. The captions in this Agreement are included
for convenience only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction
or effect.
IN WITNESS WHEREOF, and have each caused this instrument to be signed
in duplicate on its behalf by its duly authorized representative, all as of
the day and year first above written.
CALVERT ASSET MANAGEMENT COMPANY, INC.
BY:______________________________________
Witness:
BY:_______________________
NCM CAPITAL MANAGEMENT GROUP, INC.
BY:_______________________________________
Witness:
BY:_______________________
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Schedule to the Investment Subadvisory Agreement
between Calvert Asset Management Company, Inc.
and NCM Capital Management Group, Inc.
As compensation pursuant to Section 4 of the Subadvisory Agreement
between Calvert Asset Management Company, Inc. (the "Advisor") and NCM Capital
Management Group, Inc. (the "Subadvisor"), the Advisor shall pay the
Subadvisor an annual subadvisory fee, computed daily and payable monthly, at
an annual rate of 25 basis points of the average daily net assets of the
Balanced Portfolio.
- --------------------------------------------------------------------------------
APPENDIX 4
PROPOSED INVESTMENT SUBADVISORY AGREEMENT
INVESTMENT SUBADVISORY AGREEMENT, effective September 30, 1998, by
and between Calvert Asset Management Company, Inc., a Delaware corporation
registered as an investment Advisor under the Investment Advisors Act of 1940
(the "Advisor"), and Atlanta Capital Management Company, LLC., a Georgia
corporation, (the "Subadvisor").
WHEREAS, the Advisor is the investment advisor to the Calvert Social
Investment Fund (the "Trust"), an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Advisor desires to retain the Subadvisor to furnish it
with certain investment advisory services in connection with the Advisor's
investment advisory activities on behalf of the Trust and any series of the
Trust, for which Schedules are attached hereto (each such series referred to
individually as the "Fund").
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is hereby agreed as follows:
1. Services to be Rendered by the Subadvisor to the Fund.
(a) Investment Program. Subject to the control of the
Trust's Board of Trustees and the Advisor, the Subadvisor at its
expense continuously will furnish to the Fund an investment program
for such portion, if any, of Fund assets designated by the Advisor
from time to time. With respect to such assets, the Subadvisor will
make investment decisions, subject to Section 1(g) of this Agreement,
and will place all orders for the purchase and sale of portfolio
securities. The Subadvisor is deemed to be an independent contractor
and, except as expressly provided or authorized by this Agreement,
has no authority to act for or represent the Trust or the Advisor in
any way or otherwise be deemed an agent of the Trust or the Advisor.
In the performance of its duties, the Subadvisor will act in the best
interests of the Fund and will comply with (i) applicable laws and
regulations, including, but not limited to, the 1940 Act and
Subchapter M of the Internal Revenue Code of 1986, as amended, (ii)
the terms of this Agreement, (iii) the Trust 's Declaration of Trust,
Bylaws and Registration Statement as from time to time amended, (iv)
relevant undertakings provided to State securities regulators, (v)
the stated investment objective, policies and restrictions of the
Fund, and (vi) such other guidelines as the Board of Trustees or
Advisor may establish. The Advisor is responsible for providing the
Subadvisor with current copies of the materials specified in
Subsections (a)(iii), (iv), (v) and (vi) of this Section 1.
(b) Availability of Personnel. The Subadvisor at its
expense will make available to the Trustees and Advisor at reasonable
times its portfolio managers and other appropriate personnel, either
in person or, at the mutual convenience of the Advisor and the
Subadvisor, by telephone, in order to review the Fund's investment
policies and to consult with the Trustees and Advisor regarding the
Fund's investment affairs, including economic, statistical and
investment matters relevant to the Subadvisor's duties hereunder, and
will provide periodic reports to the Advisor relating to the
investment strategies it employs.
(c) Expenses, Salaries and Facilities. The Subadvisor
will pay all expenses incurred by it in connection with its
activities under this Agreement (other than the cost of securities
and other investments, including any brokerage commissions and all
taxes, including any interest and penalties with respect thereto)
including, but not limited to, all salaries of personnel and
facilities required for it to execute its duties under this Agreement.
(d) Compliance Reports. The Subadvisor at its expense
will provide the Advisor with such compliance reports relating to its
duties under this Agreement as may be agreed on by such parties from
time to time.
(e) Valuation. The Subadvisor will assist the Fund and
its agents in determining whether prices obtained for valuation
purposes accurately reflect market price information relating to the
assets of the Fund for which the Subadvisor has responsibility on a
daily basis (unless otherwise agreed on by the parties hereto) and at
such other times as the Advisor shall reasonably request.
(f) Executing Portfolio Transactions.
(i) Brokerage. In selecting brokers and dealers to
execute purchases and sales of investments for the
Fund, the Subadvisor will use its best efforts to
obtain the most favorable price and execution
available in accordance with this paragraph. The
Subadvisor agrees to provide the Advisor and the
Fund with copies of its policy with respect to
allocation of brokerage on trades for the Fund.
Subject to review by the Trustees of appropriate
policies and procedures, the Subadvisor may cause
the Fund to pay a broker a commission for effecting
a portfolio transaction, in excess of the
commission another broker would have charged for
effecting the same transaction. If the broker
provided brokerage and/or research services,
including statistical data, to the Subadvisor, the
Subadvisor shall not be deemed to have acted
unlawfully, or to have breached any duty created by
this Agreement, or otherwise, solely by reason of
acting according to such authorization.
(ii) Aggregate Transactions. In executing portfolio
transactions for the Fund, the Subadvisor may, but
will not be obligated to, aggregate the securities
to be sold or purchased with those of its other
clients where such aggregation is not inconsistent
with the policies of the Fund, to the extent
permitted by applicable laws and regulations. If
the Subadvisor chooses to aggregate sales or
purchases, it will allocate the securities as well
as the expenses incurred in the transaction in the
manner it considers to be the most equitable and
consistent with its fiduciary obligations to the
Fund and its other clients involved in the
transaction.
(iii) Directed Brokerage. The Advisor may direct
the Subadvisor to use a particular broker or dealer
for one or more trades if, in the sole opinion of
the Advisor, it is in the best interest of the Fund
to do so.
(iv) Brokerage Accounts. The Advisor authorizes and
empowers the Subadvisor to direct the Fund's
custodian to open and maintain brokerage accounts
for securities and other property, including
financial and commodity futures and commodities and
options thereon (all such accounts hereinafter
called "brokerage accounts") for and in the name of
the Fund and to execute for the Fund as its agent
and attorney-in-fact standard customer agreements
with such broker or brokers as the Subadvisor shall
select as provided above. The Subadvisor may, using
such of the securities and other property in the
Fund as the Subadvisor deems necessary or
desirable, direct the Fund's custodian to deposit
for the Fund original and maintenance brokerage and
margin deposits and otherwise direct payments of
cash, cash equivalents and securities and other
property into such brokerage accounts and to such
brokers as the Subadvisor deems desirable or
appropriate.
(g) Social Screening. The Advisor is responsible for
screening those investments of the Fund subject to social screening
("Securities") to determine that the Securities investments meet the
Fund's social investment criteria, as may be amended from time to
time by the Trustees and for notifying the Subadvisor of its
determination. The Subadvisor will buy only those Securities
permitted by the Fund's investment program which the Advisor
determines pass the Fund's social screens and of which the Advisor
has notified the Subadvisor. In the event that the Advisor notifies
the Subadvisor that a security already in the Fund's portfolio no
longer passes the Fund's social screen, the Advisor shall instruct
the Subadvisor whether the Subadvisor should dispose of the security
immediately or at such time as the Subadvisor believes would be least
detrimental to the Fund. To the extent instructed by the Advisor, the
Subadvisor shall have no liability for the disposition of any
securities under this paragraph. With respect to this paragraph, the
form of notification shall be mutually agreed upon by the parties.
(h) Voting Proxies. The Subadvisor agrees to take
appropriate action (which includes voting) on all proxies for the
Fund's portfolio investments in a timely manner in accordance with
the Advisor's Proxy Voting Guidelines, a copy of which has been
provided to the Subadvisor.
(i) Furnishing Information for the Fund's Proxies and Other
Required Mailings. The Subadvisor agrees to provide the Advisor in a
timely manner with all information necessary, including information
concerning the Subadvisor's controlling persons, for preparation of
the Fund's proxy statements or other required mailings, as may be
needed from time to time.
2. Books and Records.
(a) In connection with the purchase and sale of the Fund's
portfolio securities, the Subadvisor shall arrange for the
transmission to the Fund's custodian, and/or the Advisor on a daily
basis, of such confirmations, trade tickets or other documentation as
may be necessary to enable the Advisor to perform its accounting and
administrative responsibilities with respect to the management of the
Fund.
(b) Pursuant to Rule 31a-3 under the 1940 Act, Rule 204-2
under the Investment Advisors Act of 1940, and any other applicable
laws, rules or regulations regarding recordkeeping, the Subadvisor
agrees that: (i) all records it maintains for the Fund are the
property of the Fund; (ii) it will surrender promptly to the Fund or
Advisor any such records upon the Fund's or Advisor's request; (iii)
it will maintain for the Fund the records that the Fund is required
to maintain under Rule 31a-1(b) or any other applicable rule insofar
as such records relate to the investment affairs of the Fund for
which the Subadvisor has responsibility under this Agreement; and
(iv) it will preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act the records it maintains for the Fund.
(c) The Subadvisor represents that it has adopted and will
maintain at all times a suitable Code of Ethics that covers its
activities with respect to its services to the Fund.
(d) The Subadvisor shall supply to the Trust's Board of
Trustees its policies on "soft dollars," trade allocations and
brokerage allocation procedures. The Subadvisor shall maintain
appropriate fidelity bond and errors and omission insurance policies.
3. Exclusivity. Each party and its affiliates may have advisory,
management service or other agreements with other organizations and persons,
and may have other interests and businesses; provided, however, that during
the term of the Agreement, the Subadvisor will not provide investment advisory
services ("Services") to any other investment company offered to the public
and registered under the 1940 Act which is "socially screened", as that term
is commonly understood. Additionally, the Subadvisor agrees not to manage
another registered investment company with a similar investment objective,
whether sponsored by the Subadvisor or others, for a period of twelve (12)
months from the effective date of this Agreement.
4. Compensation. The Advisor will pay to the Subadvisor as
compensation for the Subadvisor's services rendered pursuant to this Agreement
an annual Subadvisory fee as specified in one or more Schedules attached
hereto and made part of this Agreement. Such fees shall be paid by the Advisor
(and not by the Fund). Such fees shall be payable for each month within 15
business days after the end of such month. If the Subadvisor shall serve for
less than the whole of a month, the compensation as specified shall be
prorated based on the portion of the month for which services were provided.
The Schedules may be amended from time to time, in writing agreed to by the
Advisor and the Subadvisor, provided that amendments are made in conformity
with applicable laws and regulations and the Declaration of Trust and Bylaws
of the Trust. Any change in the Schedule pertaining to any new or existing
series of the Trust shall not be deemed to affect the interest of any other
series of the Trust and shall not require the approval of shareholders of any
other series of the Trust.
5. Assignment and Amendment of Agreement. This Agreement
automatically shall terminate without the payment of any penalty in the event
of its assignment (as defined under the 1940 Act) or if the Investment
Advisory Agreement between the Advisor and the Trust relating to the Fund
shall terminate for any reason. This Agreement constitutes the entire
agreement between the parties, and may not be amended except in a writing
signed by both parties. This Agreement shall not be materially amended unless,
if required by Securities and Exchange Commission rules and regulations, such
amendment is approved by the affirmative vote of a majority of the outstanding
shares of the Fund, and by the vote, cast in person at a meeting called for
the purpose of voting on such approval, of a majority of the Trustees of the
Trust who are not interested persons of the Trust, the Advisor or the
Subadvisor.
6. Duration and Termination of the Agreement. This Agreement shall
become effective upon its execution; provided, however, that this Agreement
shall not become effective with respect to any Fund now existing or hereafter
created unless it has first been approved (a) by a vote of the majority of
those Trustees of the Trust who are not parties to this Agreement or
interested persons of such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by a vote of a majority of that
Fund's outstanding voting securities or pursuant to the Fund's exemptive order
governing the requirement of such a vote. This Agreement shall remain in full
force and effect with respect to a Fund continuously thereafter (unless
terminated automatically as set forth in Section 5.) except as follows:
(a) The Trust may at any time terminate this Agreement
without penalty with respect to any or all Funds by providing not
less than 60 days written notice delivered or mailed by registered
mail, postage prepaid, to the Advisor and the Subadvisor. Such
termination can be authorized by the affirmative vote of a majority
of the (i) Trustees of the Trust or (ii) outstanding voting
securities of the applicable Fund.
(b) This Agreement will terminate automatically with respect
to a Fund unless, within two years of the effective date of this
Agreement, and at least annually thereafter, the continuance of the
Agreement is specifically approved by (i) the Trustees of the Trust
or the shareholders of such Fund by the affirmative vote of a
majority of the outstanding shares of such Fund, and (ii) a majority
of the Trustees of the Trust who are not interested persons of the
Trust, Advisor or Subadvisor, by vote cast in person at a meeting
called for the purpose of voting on such approval. If the continuance
of this Agreement is submitted to the shareholders of any Fund for
their approval and such shareholders fail to approve such continuance
as provided herein, the Subadvisor may continue to serve hereunder in
a manner consistent with the 1940 Act and the rules and regulations
thereunder.
(c) The Advisor may at any time terminate this Agreement
with respect to any or all Funds by not less than 60 days written
notice delivered or mailed by registered mail, postage prepaid, to
the Subadvisor, and the Subadvisor may at any time terminate this
Agreement with respect to any or all Funds by not less than 90 days
written notice delivered or mailed by registered mail, postage
prepaid, to the Advisor, unless otherwise mutually agreed in writing.
Upon termination of this Agreement with respect to any Fund:
(a) the duties of the Advisor delegated to the Subadvisor
under this Agreement with respect to such Fund
automatically shall revert to the Advisor, and
(b) both parties agree to use reasonable efforts to jointly
issue public statements, other than those public
statements required by law, regarding the termination.
7. Notification to the Advisor. The Subadvisor promptly shall notify
the Advisor in writing of the occurrence of any of the following events:
(a) the Subadvisor shall fail to be registered as an
investment Adviser under the Investment Advisers Act of 1940, as
amended, and under the laws of any jurisdiction in which the
Subadvisor is required to be registered as an investment Adviser in
order to perform its obligations under this Agreement;
(b) the Subadvisor shall have been served or otherwise have
notice of any action, suit, proceeding, inquiry or investigation, at
law or in equity, before or by any court, public board or body,
directly involving the affairs of the Fund;
(c) a material violation of the Subadvisor's Code of Ethics
is discovered and, again, when action has been taken to rectify such
violations; or
(d) any other event, including but not limited to, a change
in executive personnel or the addition or loss of major clients of
the Subadvisor that might affect the ability of the Subadvisor to
provide the Services provided for under this Agreement.
8. Definitions. For the purposes of this Agreement, the terms "vote
of a majority of the outstanding Shares," "affiliated person," "control,"
"interested person" and "assignment" shall have their respective meanings as
defined in the 1940 Act and the rules and regulations thereunder subject,
however, to such exemptions as may be granted by the Securities and Exchange
Commission under said Act; and the term "specifically approve at least
annually" shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder.
9. Indemnification. The Subadvisor shall indemnify and hold harmless
the Advisor, the Trust and their respective trustees, directors, officers and
shareholders from any and all claims, losses, expenses, obligations and
liabilities (including reasonable attorneys fees) arising or resulting from
the Subadvisor's willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties hereunder.
The Advisor shall indemnify and hold harmless the Subadvisor, the
Trust and their respective Trustees, directors, officers, employees and agents
and shareholders from any and all claims, losses, expenses, obligations and
liabilities (including reasonable attorneys fees) arising or resulting from
the Advisor's willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties hereunder or under its Investment Advisory Agreement
with the Trust.
10. Applicable Law and Jurisdiction. This Agreement shall be governed
by Maryland law, and any dispute arising from this Agreement or the services
rendered hereunder shall be resolved through legal proceedings, whether state,
federal, or otherwise, conducted in the state of Maryland or in such other
manner or jurisdiction as shall be mutually agreed upon by the parties hereto.
11. Miscellaneous. Notices of any kind to be given to a party
hereunder shall be in writing and shall be duly given if mailed, delivered or
communicated by answer back facsimile transmission to such party at the
address set forth below, attention President, or at such other address or to
such other person as a party may from time to time specify.
Subadvisor agrees that for a period of two (2) years from the date of
termination of this Agreement, it shall not directly or indirectly, hire,
employ or engage, or attempt to hire, employ or engage any employee of the
Advisor or any affiliate thereof without the prior written permission of the
Advisor.
Each party agrees to perform such further acts and execute such
further documents as are necessary to effectuate the purposes hereof. The
captions in this Agreement are included for convenience only and in no way
define or delimit any of the provisions hereof or otherwise affect their
construction or effect.
Each party represents and warrants that it has all requisite
authority to enter into and carry out its responsibilities under this
Agreement.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
signed in duplicate on its behalf by its duly authorized representative, all
as of the day and year first written above.
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
By:______________________________
Witness
By:______________________________
Atlanta Capital Management Company, L.L.C.
Two Midtown Plaza, Suite 1600
1360 Peachtree Street
Atlanta, GA 30309
By:______________________________
Witness
By:______________________________
Fee Schedule to the Investment Subadvisory Agreement
between Calvert Asset Management Company, Inc.
and Atlanta Capital Management Company, L.L.C.
As compensation pursuant to Section 4 of the Investment Subadvisory Agreement
between Calvert Asset Management Company, Inc. (the "Advisor") and Atlanta
Capital Management Company, L.L.C. (the "Subadvisor") dated September 30,
1998, with respect to the Calvert Social Investment Fund Equity Portfolio, the
Advisor shall pay the Subadvisor a subadvisory fee, computed daily and payable
monthly, at an annual rate of 30 basis points of the average daily net assets
of the Equity Portfolio.
<PAGE>
PROXY CARD
The undersigned, revoking previous proxies, hereby appoint(s) William M.
Tartikoff, Esq. and Barbara J. Krumsiek, attorneys, with full power of
substitution, to vote all shares that the undersigned is entitled to vote at
the Special Meeting of Shareholders to be held in the Tenth Floor Conference
Room of Calvert Group, 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland
20814 on Wednesday, February 24, 1999 at 9:00 a.m. and at any adjournment
thereof. All powers may be exercised by a majority of the proxy holders or
substitutes voting or acting or, if only one votes and acts, then by that one.
This Proxy shall be voted on the proposals described in the Proxy Statement.
Receipt of the Notice of the Meeting and the accompanying Proxy Statement is
hereby acknowledged.
You may cast your vote using one of the following methods:
1. By internet (through a secure internet site): www.calvertgroup.com
2. By telephone (through a secure telephone system): call 1-800-368-2745
3. By facsimile: fax to ______________
4. By mail: postage-paid envelope enclosed
5. In person: Wednesday, February 24, 1999
NOTE: If you plan to vote by mail or by facsimile, please sign the proxy card
exactly as your name appears on the card. If you have a joint account, either
person may sign the proxy card. When signing in a fiduciary capacity, such as
executor, administrator, trustee, guardian, etc., please sign your name and
indicate your title. Corporate and partnership proxies should be signed by an
authorized person indicating the person's title.
Date: ________________________, 1999
__________________________________
__________________________________
Signature(s) (and Title(s), if applicable)
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, the attorneys shall vote in accordance with their best
judgment.
THE BOARDS OF TRUSTEES/DIRECTORS RECOMMEND A VOTE FOR THE FOLLOWING:
1. For each Portfolio: to approve a new investment advisory agreement
with the investment advisor, Calvert Asset Management Company, Inc.
("CAMCO").
For [ ] Against [ ] Abstain [ ]
2. CSIF Balanced: to approve a new investment subadvisory agreement
between CAMCO and the investment subadvisor, NCM Capital Management
Group, Inc.
For [ ] Against [ ] Abstain [ ]
3. CSIF Equity: to approve a new investment subadvisory agreement with
the new investment subadvisor, Atlanta Capital Management Company,
L.L.C.
For [ ] Against [ ] Abstain [ ]
4. CSIF Balanced and Equity: to authorize CSIF and/or CAMCO to enter
into a new and/or materially amending an existing investment
subadvisory agreement in the future without having to first obtain
shareholder approval.
For [ ] Against [ ] Abstain [ ]
5. CSIF Balanced: to approve a revised investment objective which is
more reflective of current economic times.
For [ ] Against [ ] Abstain [ ]
6. CSIF Bond only: To change the CSIF Bond Portfolio from a diversified
to a nondiversified fund and to change the concentration policy to
allow it to concentrate in one or more industries.
For [ ] Against [ ] Abstain [ ]
7. To approve amended fundamental investment restrictions to (a) delete
restrictions that are no longer required to be fundamental due to
changes in state laws; (b) change some of the fundamental policies
and restrictions to non-fundamental operating policies; and (c) to
revise the language of those restrictions that are still required to
be fundamental.
For [ ] Against [ ] Abstain [ ]
[ ]To vote against the proposed changes to one or more of the specific
fundamental investment restrictions, but to approve the others, place
an "x" in the box at left and indicate the number(s) (as set forth in
the proxy statement) of the investment restriction(s) you do not want
to change on this line:
8. For each Portfolio: to ratify the Board's selection of CSIF and CWVF
auditors, PricewaterhouseCoopers, L.L.P.
For [ ] Against [ ] Abstain [ ]
