5
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
The Calvert 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)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total Fee Paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee was paid
previously. Identify previous filing by statement number, or the Form or
Schedule and the date its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
December 28, 1998
Dear Shareholder:
I am writing to inform you of the upcoming special meeting for shareholders of
Calvert Income Fund and Calvert New Vision Small Cap Fund, the portfolios of
The Calvert Fund.
An overview of the proposals and the formal Notice of Meeting appears on the
next few pages, followed by the detailed proxy statement. Please take a few
minutes to read the enclosed material and vote on these important issues. The
Board of Trustees, including myself, believe these changes are in your best
interest and that of your Fund.
Regardless of the number of shares you own, it is important that you take the
time to read the enclosed proxy materials, and vote on the issues as soon as
you can. You may vote by mail, by telephone, through the internet, by
facsimile machine, or in person. If you do not cast your vote, you may be
contacted by our proxy solicitation service, Shareholder Communications
Corporation, or by a Calvert Group employee. All shareholders benefit from the
speedy return of proxy votes.
I appreciate the time you will take to review these important matters. If we
may be of any assistance or if you have any questions about the proxy issues,
please call us at (800) 368-2748. Our hearing-impaired shareholders may call
(800) 541-1524 for a TDD connection.
Sincerely,
Barbara J. Krumsiek
President and Chief Executive Officer
Calvert Group, Ltd.
<PAGE>
The Calvert Fund
Calvert Income Fund
Calvert New Vision Small Cap Fund
Quick Overview
................................................................................
Proposal 1
Calvert Income Fund ("Income") and Calvert New Vision Small Cap Fund ("New
Vision"): To elect the Board of Trustees.
Reason for the Proposal
It has been several years since the Board members have been voted on by
shareholders. Recently, some new members have been added; thus, it is
appropriate for the shareholders to vote on the complete slate.
................................................................................
Proposal 2
Income only: To approve amended fundamental investment restrictions to (a)
delete restrictions that are no longer required to be fundamental due to
changes in state laws or which otherwise need not be fundamental; and (b) to
revise the language of those restrictions that are still required to be
fundamental.
Reason for the Proposal
Current investment restrictions (and policies, for some of the Funds) are more
restrictive than Federal law. A shareholder vote is required to change the
restrictions and policies because they are considered fundamental. Calvert
Asset Management Company, Inc. ("CAMCO") has recommended to the Board that the
investment restrictions of the Portfolios be changed to conform to, but not be
more restrictive than, federal law, and changing the policies so that they can
be altered by the Board without a shareholder vote (nonfundamental policies or
restrictions). This would give each of the Portfolios more flexibility and may
help each Portfolio to more easily adapt to different investment environments.
................................................................................
Proposal 3
Income and New Vision: To approve a new investment advisory agreement with the
investment advisor, CAMCO.
Reason for the Proposal
CAMCO is a subsidiary of Calvert Group, Ltd. which is owned by Acacia Mutual
Life Insurance Company ("Acacia"). Acacia plans to merge with another
insurance company, Ameritas Insurance Holding Company. Because of the merger
of the ultimate parent company, the investment advisory contract should be
approved by shareholders. CAMCO is also proposing the elimination of fees
based on the performance of a fund compared to a particular index, and the
deletion of references to administrative services, which, because they are
performed by a different subsidiary, should be covered in a separate contract.
................................................................................
Proposal 4
Income and New Vision: To ratify the Board's selection of auditors,
PricewaterhouseCoopers, L.L.P.
Reason for the Proposal
Periodically, shareholders will be asked to approve independent auditors for
Calvert Funds. The auditors review reports, documents filed with federal and
state governments, and help to ensure that the Funds are complying with
generally accepted accounting principles.
<PAGE>
The Calvert Fund
Calvert Income Fund
Calvert New Vision Small Cap 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
Fund 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 10:30 a.m. on Wednesday, February 24, 1999 for the following
purposes:
I. Income and New Vision: To elect the Board of Trustees.
II. Income only: To approve amended fundamental investment restrictions
to: (a) delete restrictions that are no longer required to be
fundamental due to changes in state laws or which otherwise need not
be fundamental; and (b) to revise the language of those restrictions
that are still required to be fundamental.
III. Income and New Vision: 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 does not provide
for administrative services for Calvert Income Fund.
IV. Income and New Vision: To ratify the Board's selection of auditors,
PricewaterhouseCoopers, L.L.P.
V. To transact any other business that may properly come before the
Special Meeting or any adjournment or adjournments thereof.
By Order of the Trustees,
William M. Tartikoff, Esq.
Vice President
<PAGE>
The Calvert Fund
Calvert Income Fund
Calvert New Vision Small Cap 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
800-368-2748 if you have questions about this proxy.
This statement is furnished in connection with the solicitation of proxies by
the Board of Trustees of The Calvert Fund (the "Board") to be used at the
Special Meeting of Shareholders. The Special Meeting will be held in the Tenth
Floor Conference Room of Calvert Group, Ltd., Air Rights North Tower, 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland at 10:30 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.
The approximate date on which this proxy statement and form of proxy are first
being mailed to shareholders is December 31, 1998.
Calvert Income Fund ("Income") and Calvert New Vision Small Cap Fund ("New
Vision") are the portfolios of The Calvert Fund, an open-end management
investment company that was organized as a Massachusetts business trust on
March 15, 1982.
Summary of Proposals
1. Income and New Vision: To elect the Board of Trustees.
2. Income only: To approve amended fundamental investment restrictions to:
(a) delete restrictions that are no longer required to be fundamental due
to changes in state laws or which otherwise need not be fundamental; and
(b) to revise the language of those restrictions that are still required
to be fundamental.
3. Income and New Vision: to approve a new investment advisory agreement
with the investment advisor, Calvert Asset Management Company, Inc.
("CAMCO").
4. Income and New Vision: to ratify the Board's selection of auditors,
PricewaterhouseCoopers, L.L.P.
PROPOSALS
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Proposal 1
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Income and New Vision: To elect the Board of Trustees.
Discussion
The purpose of this proposal is to elect the currently serving members of the
Board of Trustees. All of the nominees listed below have served as Trustees
continuously since originally elected or appointed. Each of the nominees
elected will serve as a Trustee until the next meeting called for the purpose
of electing a Board of Trustees and until a successor is elected and
qualified, or until death, retirement, resignation or removal.
{This will be formatted in tabular format by the typesetter}
Name
Date of Birth, Principal Occupation
& Year Elected During Last Five Years
Richard L. Baird, Jr.
DOB: 05/09/48
1976
Mr. Baird is Executive Vice President for the Family Health Council, Inc. in
Pittsburgh, Pennsylvania, a non-profit corporation which provides family
planning services, nutrition, maternal/child health care, and various health
screening services. Mr. Baird is a trustee/director of each of the investment
companies in the Calvert Group of Funds, except for Calvert Variable Series,
Inc., Calvert New World Fund, Inc. and Calvert World Values Fund, Inc.
Frank H. Blatz, Jr., Esq.
DOB: 10/29/35
1982
Mr. Blatz is a partner in the law firm of Snevily, Ely, Williams & Blatz. He
was formerly a partner with Abrams, Blatz, Gran, Hendricks & Reina, P.A. He
is also a director of Calvert Variable Series, Inc.
Frederick T. Borts, M.D.
DOB: 7/23/49
1976
Dr. Borts is a radiologist with Kaiser Permanente. Prior to that, he was a
radiologist at Bethlehem Medical Imaging in Allentown, Pennsylvania.
Charles E. Diehl
DOB: 10/13/22
1983
Mr. Diehl is a self-employed consultant and is Vice President and Treasurer
Emeritus of the George Washington University. He has retired from University
Support Services, Inc. of Herndon, Virginia. Formerly, he was a Director of
Acacia Mutual Life Insurance Company, and is currently a Director of Servus
Financial Corporation.
Douglas E. Feldman, M.D.
DOB: 5/23/48
1982
Dr. Feldman is managing partner of Feldman Otolaryngology, Head and Neck
Surgery in Washington, D.C. A graduate of Harvard Medical School, he is
Associate Professor of Otolaryngology, Head and Neck Surgery at Georgetown
University and George Washington University Medical School, and past Chairman
of the Department of Otolaryngology, Head and Neck Surgery at the Washington
Hospital Center. He is included in The Best Doctors in America.
Peter W. Gavian, CFA
DOB: 12/8/32
1980
Mr. Gavian is President of Corporate Finance of Washington, Inc. Formerly, he
was a principal of Gavian De Vaux Associates, an investment banking firm. He
is also a Chartered Financial Analyst and an accredited senior business
appraiser.
<PAGE>
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Name
Date of Birth, Principal Occupation
& Year Elected During Last Five Years
John G. Guffey, Jr.
DOB: 5/15/48
1976
Mr. Guffey is chairman of the Calvert Social Investment Foundation, organizing
director of the Community Capital Bank in Brooklyn, New York, and a financial
consultant to various organizations. In addition, he is a director of Ariel
Funds, and the Treasurer and Director of Silby, Guffey, and Co., Inc., a
venture capital firm. Mr. Guffey is a trustee/director of each of the other
investment companies in the Calvert Group of Funds, except for Calvert
Variable Series, Inc. and Calvert New World Fund, Inc.
Mr. Guffey has been advised that the Securities and Exchange Commission
("SEC") expects to enter an order against him relating to his former service
as a director of Community Bankers Mutual Fund, Inc. This fund is not
connected with any Calvert Fund or the Calvert Group and ceased operations in
September, 1994. Mr. Guffey consented to the entry of the order without
admitting or denying the findings in the order. The order is expected to
contain findings (1) that the Community Bankers Mutual Fund's prospectus and
statement of additional information were materially false and misleading
because they misstated or failed to state material facts concerning the
pricing of fund shares and the percentage of illiquid securities in the fund's
portfolio and that Mr. Guffey, as a member of the fund's board, should have
known of these misstatements and therefore violated the Securities Act of
1933; (2) that the price of the fund's shares sold to the public was not based
on the current net asset value of the shares, in violation of the Investment
Company Act of 1940 (the "Investment Company Act"); and (3) that the board of
the fund, including Mr. Guffey, violated the Investment Company Act by
directing the filing of a materially false registration statement. It is
expected that the order will direct Mr. Guffey to cease and desist from
committing or causing future violations and to pay a civil penalty of $5,000.
The SEC placed no restrictions on Mr. Guffey's continuing to serve as a
Trustee or Director of mutual funds.
*Barbara J. Krumsiek
DOB: 8/9/52
1997
Ms. Krumsiek serves as President, Chief Executive Officer and Vice Chairman
of Calvert Group, Ltd. and as an officer and director of each of its
affiliated companies. She is a director of Calvert-Sloan Advisers, L.L.C.,
and a trustee/director of each of the investment companies in the Calvert
Group of Funds. Ms. Krumsiek is the President of each of the investment
companies, except for Calvert Social Investment Fund, of which she is the
Senior Vice President. Prior to joining Calvert Group, Ms. Krumsiek served as
a Managing Director of Alliance Fund Distributors, Inc.
M. Charito Kruvant
DOB: 12/8/45
1996
Ms. Kruvant is President and CEO of Creative Associates International, Inc.,
a firm that specializes in human resources development, information
management, public affairs and private enterprise development. She is also a
director of Acacia Federal Savings Bank.
Arthur J. Pugh
DOB: 9/24/37
1983
Mr. Pugh is a Director of Calvert Variable Series, Inc., and serves as a
director of Acacia Federal Savings Bank.
<PAGE>
{This will be formatted in tabular format by the typesetter}
Name
Date of Birth, Principal Occupation
& Year Elected During Last Five Years
*David R. Rochat
DOB: 10/7/37
1982
Mr. Rochat is Executive Vice President of Calvert Asset Management Company,
Inc., Director and Secretary of Grady, Berwald and Co., Inc., and Director
and President of Chelsea Securities, Inc. He is the Senior Vice President of
First Variable Rate Fund, Calvert Tax-Free Reserves, Calvert Municipal Fund,
Inc., Calvert Cash Reserves, and The Calvert Fund.
*D. Wayne Silby, Esq.
DOB: 7/20/48
1976
Mr. Silby is a trustee/director of each of the investment companies in the
Calvert Group of Funds, except for Calvert Variable Series, Inc. and Calvert
New World Fund. Mr. Silby is Executive Chairman of Group Serve, Inc., an
internet company focused on community building collaborative tools, and an
officer, director and shareholder of Silby, Guffey & Company, Inc., which
serves as general partner of Calvert Social Venture Partners ("CSVP"). CSVP
is a venture capital firm investing in socially responsible small companies.
He is also a Director of Acacia Mutual Life Insurance Company.
Executive officers of the Fund not mentioned above include William Tartikoff,
Esq., age 51, Vice President and Secretary, Ronald Wolfsheimer, age 51,
Treasurer, Reno J. Martini, age 48, Senior Vice President, and Daniel Hayes,
age 48, Vice President. Each has been an executive officer for more than five
years.
Trustees marked with an *, above, are "interested persons" of the Funds, under
the Investment Company Act of 1940, because of their affiliation with the
Funds, the investment advisor, or the parent company. As a group, the Trustees
and officers own less than 1% of each Fund's outstanding shares.
The Audit Committee of the Board is composed of Messrs. Baird, Blatz, Feldman,
Guffey and Pugh. The Board's Investment Policy Committee is composed of
Messrs. Borts, Diehl, Gavian, Rochat and Silby and Ms. Krumsiek. The
committees meet four (4) times per year. All Trustees attended at least 75% of
the meetings held. Trustees of the Fund not affiliated with the Advisor
presently receive an annual fee of $20,500 for service as a member of the
Board of Trustees of the Calvert Group of Funds, and a fee of $750 to $1,500
for each regular Board or Committee meeting attended.
Trustees of the Fund who are not affiliated with the Fund's Advisor may elect
to defer receipt of all or a percentage of their fees and invest them in any
fund in the Calvert Family of Funds through the Trustees Deferred Compensation
Plan (shown as "Pension or Retirement Benefits Accrued as part of Fund
Expenses," below). Deferral of the fees is designed to maintain the parties in
the same position as if the fees were paid on a current basis.
Fiscal Year 1998 Aggregate Pension or Total Compensation
Compensation Retirement from Benefits
(unaudited numbers) from Registrant Accrued as Registrant and Fund
for Service part of Complex paid to
as Trustee of Registrant Trustee**
Expenses*
Name of Trustee
Richard L. Baird, Jr. $795 $0 $35,800
Frank H. Blatz, Jr. $1,054 $1,054 $40,600
Frederick T. Borts $997 $0 $32,500
Charles E. Diehl $1,035 $1,035 $38,500
Douglas E. Feldman $967 $0 $30,250
Peter W. Gavian $1,034 $517 $35,502
John G. Guffey, Jr. $1,005 $0 $54,715
M. Charito Kruvant $1,026 $536 $34,000
Arthur J. Pugh $1,054 $0 $40,000
D. Wayne Silby $997 $0 $60,831
*Messrs. Blatz, Diehl, Gavian and Pugh and Ms. Kruvant have chosen to defer a
portion of their compensation. As of September 30, 1998, total deferred
compensation, including dividends and capital appreciation, was $576,605.22,
$544,960.81, $138,513.72, $175,791.63, and $13,006.15, for each trustee,
respectively.
**For the fiscal year ended September 30, 1998. The Fund Complex consists of
nine (9) registered investment companies.
Recommendation
The Board recommends that you vote FOR each of the Trustees listed above.
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Proposal 2
Income only: To approve amended fundamental investment restrictions to: (a)
delete restrictions that are no longer required to be fundamental due to
changes in state laws or those which otherwise need not be fundamental; and
(b) to revise the language of those restrictions that are still required to be
fundamental.
- --------------------------------------------------------------------------------
Discussion
The federal and state laws governing mutual funds have been changed numerous
times in the last several years. The Prospectus and Statement of Additional
Information ("SAI") for Income contain investment restrictions that are more
restrictive than the current law.
Also in the past few years, many state securities laws have changed or have
been superseded by federal securities laws. Income 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 Income
be changed to conform to, but not be more restrictive than, the federal law.
That way, if the federal law changes, the restrictions can change accordingly.
This gives Income more flexibility and may help it to more easily adapt to
different investment environments. It is not anticipated that these proposed
changes will substantially affect the way Income is currently managed; Income
does not intend to change its investment style.
The current investment restrictions for Income 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.
Calvert Income Fund
...............................................................................
Current Fundamental Restriction
1. The Fund may not concentrate 25% or more of the value of its assets
in any one industry; 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.
Recommended Change
Management recommends that this be changed to a standard policy concerning
concentration as shown immediately below.
Proposed Fundamental Investment Restriction
The Fund may not concentrate its investments in the securities of issuers
primarily engaged in any particular industry (other than securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities).
...............................................................................
Current Fundamental Restriction
2. The Fund may not, with respect to 75% of the Fund's assets, purchase
more than 10% of the outstanding voting securities of any issuer. In addition,
all series of the Calvert Fund may not together purchase more than 10% of the
outstanding voting securities of any issuer.
Recommended Change
Management recommends that this investment restriction be changed to a
standard policy concerning the Fund's nondiversification policy. The Fund is
classified as a nondiversified Fund; meaning that it can invest significant
amounts in one particular security. This fundamental investment restriction,
however, restricts the Fund to 10% in one issuer. Because the investment
restriction is written as fundamental, a shareholder vote is required to
delete it. This would give the Fund more flexibility and would bring the
restrictions in line with the intended investment strategies previously
approved by shareholders. The investment restriction would be revised as shown
immediately below.
Proposed Fundamental Investment Restriction
The Fund may not make any investment inconsistent with its classification as
a nondiversified investment company under the 1940 Act.
...............................................................................
Current Fundamental Restriction
3. The Fund may not underwrite the securities of other issuers.
Recommended Change
Management proposes to modify this restriction by adding standard language
used in other Calvert SAIs, as shown immediately below.
Proposed Fundamental Investment Restriction (with the above change)
The Fund may not 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,
the Fund may be deemed to be an underwriter.
...............................................................................
Current Fundamental Restriction
4. Purchase from or sell to any of the Fund 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.
Recommended Change
Management recommends that this investment restriction be deleted. It was
originally required by one or more states, but no longer applies due to
changes in federal laws which supersede such state-imposed restrictions.
...............................................................................
Current Fundamental Restriction
5. The Fund may not issue senior securities or borrow money except from
banks as a temporary measure for extraordinary or emergency purposes and then
only in an amount up to 10% of the value of its total assets in order to meet
redemption requests without immediately selling portfolio securities. The
writing of covered call options is not considered issuing a senior security.
In order to secure any such borrowing under this section, the Fund may pledge,
mortgage or hypothecate its assets and then in an amount not greater than 15%
of the value of its total assets. The Fund will not borrow for leverage
purposes and investment securities will not be purchased while any borrowings
are outstanding.
Recommended Change
Management recommends that the 10% limitation be changed to 33 1/3% for
maximum flexibility. The Board also recommends the use of the standard
borrowing policy recited in other Calvert SAIs. As part of the
standardization, the last sentence above will be replaced by a new
nonfundamental operating policy: The Fund does not intend to make any
purchases of securities if bank borrowing exceeds 5% of total assets.
Proposed Fundamental Investment Restriction (with the above changes)
The Fund may not issue senior securities or borrow money, except from banks
for temporary or emergency purposes and then only in an amount up to 33 1/3%
of the value of the Fund's total assets or as permitted by law and except by
engaging in reverse repurchase agreements, where allowed. In order to secure
any permitted borrowings and reverse repurchase agreements under this section,
the Fund may pledge, mortgage or hypothecate its assets.
...............................................................................
Current Fundamental Restriction
6. The Fund may not purchase or retain the securities of any issuer if
any Officer or Trustee of the Fund or its Investment Adviser owns beneficially
more than 1/2 of 1% of the securities of such issuer or if together such
individuals own more than 5% of the securities of such issuer.
Recommended Change
Management recommends that this investment restriction be deleted. It was
originally required by one or more states, but no longer applies due to
changes in federal laws which supersede such state-imposed restrictions.
...............................................................................
Current Fundamental Restriction
7. The Fund may not 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.
Recommended Change
Management recommends that this investment restriction be deleted. It was
originally required by one or more states, but no longer applies due to
changes in federal laws which supersede such state-imposed restrictions.
...............................................................................
Current Fundamental Restriction
8. The Fund may not purchase the securities of other investment
companies, except as they may be acquired as part of a merger, consolidation
or acquisition of assets, or in connection with a trustee's/director's
deferred compensation plan, as long as there is no duplication of advisory
fees.
Recommended Change
Management recommends that this investment restriction be deleted. It was
originally required by one or more states, but no longer applies due to
changes in federal laws which supersede such state-imposed restrictions.
...............................................................................
Current Fundamental Restriction
9. The Fund may not purchase the securities of companies which have a
record of less than three years' continuous operation if, as a result, more
than 5% of the value of the Fund's total assets would be invested in
securities of such issuer.
Recommended Change
Management recommends that this investment restriction be deleted. It was
originally required by one or more states, but no longer applies due to
changes in federal laws which supersede such state-imposed restrictions.
...............................................................................
Current Fundamental Restriction
10. The Fund may not purchase or sell physical commodities except that it
may enter into futures contracts and options thereon.
Recommended Change
Management recommends that this be changed to the standard policy concerning
commodities for other Calvert SAIs. The standard fundamental investment
restriction combines commodities and real estate into one restriction.
Proposed Fundamental Investment Restriction
The Fund may not invest directly in commodities or real estate, although it
may invest in securities which are secured by real estate or real estate
mortgages and securities of issuers which invest or deal in commodities,
commodity futures, real estate or real estate mortgages and provided that the
Income Fund may purchase or sell stock index futures, foreign currency
futures, interest rate futures and options thereon.
...............................................................................
Current Fundamental Restriction
11. The Fund may not invest in real estate, although it may invest in
securities which are secured by real estate or real estate mortgages and may
invest in the securities of issuers which invest or deal in real estate or
real estate mortgages.
Recommended Change
Management recommends that this be changed to the standard policy concerning
real estate for other Calvert SAIs. The standard fundamental investment
restriction combines commodities and real estate into one restriction.
Proposed Fundamental Investment Restriction
The Fund may not invest directly in commodities or real estate, although it
may invest in securities which are secured by real estate or real estate
mortgages and securities of issuers which invest or deal in commodities,
commodity futures, real estate or real estate mortgages and provided that the
Income Fund may purchase or sell stock index futures, foreign currency
futures, interest rate futures and options thereon.
Recommendation
The Board has voted to change or delete each of these fundamental investment
restrictions as shown above and recommends that you vote FOR the changes or
deletions of each of these revised fundamental investment restrictions for
Income.
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Proposal 3
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- --------------------------------------------------------------------------------
Income and New Vision: 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 agreement (the "Current Advisory Agreement"); therefore, Management
proposes that a new advisory agreement be executed:
CAMCO is an indirectly wholly-owned subsidiary of Acacia Mutual Life
Insurance Company ("Acacia"), which subject to certain conditions, plans
to merge with Ameritas Insurance Holding Company ("Ameritas") (such
planned transaction is hereafter referred to as the "Merger"). The
surviving company will be named Ameritas Acacia Mutual Holding Company.
Although the Merger could be considered a change in control of CAMCO,
terminating the Current Advisory Agreement, the Board has received
assurances that it does not cause such a change. Nonetheless, in order to
remove any possible doubt as to the status of the Current Advisory
Agreement, the Board has approved, and recommends that shareholders
approve, one standard investment advisory agreement between TCF and CAMCO
(the "New Advisory Agreement").
Income only: 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.
Despite the importance of the proposed changes, CAMCO anticipates there will
be no effect on the actual investment management operations with respect to
TCF.
The Current Advisory Agreement
Under the Current Advisory Agreement, CAMCO provides a continuous investment
program for TCF, subject to the control of the Board. The Current Advisory
Agreement for Income was executed on January 3, 1984, pursuant to shareholder
approval, while the Current Advisory Agreement for New Vision was executed on
May 4, 1994, also pursuant to shareholder approval. Since then, the Board,
including a majority of the Independent Trustees, has approved the continuance
of the Current Advisory Agreements on an annual basis as part of its annual
contract review.
The terms of the Current Advisory Agreements between CAMCO and Income and New
Vision (the "Funds") include:
1. The services to be provided (manage assets, place orders for securities
trades and perform other services);
2. General obligations of CAMCO (manage each of the Funds in accordance
with Fund guidelines and restrictions, under the direction of the Board);
3. Expenses (advisory, legal, audit, registration, taxes, printing and
postage, mailing prospectuses);
4. Liability issues (CAMCO is not liable for actions unless it is grossly
negligent, acts in bad faith, or in reckless disregard of its duties); and
5. The fees to be paid to CAMCO (0.70% and 0.90% of average net assets for
Income and New Vision, respectively).
The Current Advisory Agreements provide for automatic termination unless their
continuance is approved at least annually by (i) a majority of the Board,
including those who are not parties to the Agreement or interested persons,
within the meaning of the Investment Company Act of 1940 (the "1940 Act"), of
any such party ("Independent Trustees"), and (ii) the holders of a majority of
the outstanding shares of TCF. The Current Advisory Agreements terminate
automatically upon assignment and are terminable at any time, without penalty,
by the Board, CAMCO, or the holders of a majority of the outstanding shares of
each portfolio of TCF, upon 60 days' prior written notice.
The New Advisory Agreement
The terms and conditions of the New Advisory Agreement (one Agreement for both
Income and New Vision) are identical to the terms and conditions of the
Current Advisory Agreements, except as to effective and termination dates and
the elimination of the administrative services provisions as discussed below.
If approved by shareholders, the New Advisory Agreement will continue until
January 1, 2000 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.
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 investment advisory services to TCF.
Mr. Martini oversees the investment management of all Calvert Funds. It is
anticipated that each of the directors and officers of CAMCO will hold the
same position with CAMCO after the Merger. The address of the directors and
officers is 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland, 20814,
unless otherwise noted. The directors and executive officers of CAMCO are
listed below:
Charles T. Nason, Director. Chairman, President and Chief Executive
Officer of The Acacia Group, 7315 Wisconsin Avenue, Bethesda, Maryland
20814.
*Barbara J. Krumsiek, Director. President of CAMCO and President, Chief
Executive Officer and Vice Chairman of Calvert Group, Ltd.
*David R. Rochat, Director and Senior Vice President.
Robert-John H. Sands, Director. Senior Vice President and General
Counsel, The Acacia Group, 7315 Wisconsin Avenue, Bethesda, Maryland
20814.
*Reno J. Martini, Senior Vice President and Chief Investment Officer.
*Ronald M. Wolfsheimer, Senior Vice President and Chief Financial
Officer.
*William M. Tartikoff, Senior Vice President, Secretary, and General
Counsel.
Matthew D. Gelfand, Senior Vice President.
*Daniel K. Hayes, Vice President.
John Nichols, Vice President.
Persons marked with a *, above, are also Trustees and/or officers of TCF.
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.
Income only: Administrative Services
Management has taken the opportunity to re-examine the specific provisions for
services under the Current Advisory Agreement for Income. 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 TCF'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 TCF 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 Board has approved a new Administrative Services contract
with CASC. No shareholder approval is required for that contract, and the fees
may be changed by the Board without shareholder approval. New Vision already
has a separate Administrative Services contract with CASC.
Income
Current Advisory Fee 0.70%
Proposed Advisory Fee 0.35%
New Administrative Fee 0.35%
For the fiscal year ended September 30, 1998, Income paid $278,234 in advisory
fees to CAMCO. For that same time period, under the New Advisory Agreement,
CAMCO would have received $139,117 in advisory fees, while CASC would have
received $139,117 in administrative services fees.
Accounting Fees
CAMCO recently proposed to the Board that each Calvert Fund be responsible for
its accounting fees with the Custodian, State Street Bank & Trust Company
("State Street"). Under the Current Advisory Agreement, the accounting fees
have been paid by CAMCO to State Street. In the past, the Fund has not paid
these fees directly, though that is the normal procedure in the mutual fund
industry. If the Fund continues to pay CAMCO the same fees, and then the Fund
pays State Street separately for the accounting fees, it is, in essence, an
increase, though minimal, in the Fund's expenses. The accounting fees are not
included as part of the administrative services provided by CASC, above. The
Board reviewed the materials presented concerning the fees, the general
industry practices, and the minimal effect upon the Fund expenses. The Board,
emphasizing the net effect upon the expenses of the Fund, approved the change;
finding it to be in the best interests of the shareholders.
Recommendation
Based on evaluation of the materials presented, the Board has determined that
the changes reflected in the proposed New Advisory Agreement are in the best
interests of the shareholders of TCF. The Board based this determination
primarily upon the following, giving equal weights to the factors:
(a) After a review of all materials related to the Merger, the Board
determined that they were satisfied that CAMCO's services to TCF would
not be adversely affected by the Merger and that such Merger would not
impose an unfair burden on TCF; and
(b) In evaluating the materials presented concerning administrative
services, the Board carefully considered the corporate structure,
advisory expenses, and anticipated overall expenses, and reviewed the
proposed form of New Investment Advisory Agreement and form of
Administrative Services Agreement;
Thus, the Board, including a majority of the Independent Trustees, approved
the New Advisory Agreement (subject to approval by shareholders) and
authorized submission of the New Advisory Agreement to shareholders for
approval. Accordingly, the Board recommends that shareholders vote FOR the
appropriate proposed New Advisory Agreement.
- --------------------------------------------------------------------------------
Proposal 4
- --------------------------------------------------------------------------------
Income and New Vision: To ratify the Board's selection of auditors,
PricewaterhouseCoopers, L.L.P.
Discussion
Shareholders are requested to ratify the action of the Board in selecting the
firm of PricewaterhouseCoopers, L.L.P. as the independent auditors for TCF
during the current fiscal year. The Board believe that the firm is well
qualified, and has accordingly selected PricewaterhouseCoopers to act as
independent auditors, subject to ratification by shareholders.
Coopers & Lybrand, L.L.P. has experience in accounting and auditing and has
served as independent auditors for TCF 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 auditors) with TCF or any of
its 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 auditors for TCF.
- --------------------------------------------------------------------------------
OTHER BUSINESS
- --------------------------------------------------------------------------------
The Board does not intend to present any other business at the meeting. If,
however, any other matters are properly brought before the meeting, William M.
Tartikoff, Esq., and Barbara J. Krumsiek will vote on the matters in
accordance with their judgment.
- --------------------------------------------------------------------------------
ANNUAL REPORTS
- --------------------------------------------------------------------------------
The audited Annual Reports to Shareholders of Income and New Vision are
incorporated by reference into this proxy statement. Copies of the most recent
Annual Report may be obtained without charge if you:
write to
TCF
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
call (800) 368-2745
visit Calvert's website at www.calvertgroup.com
- --------------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
- --------------------------------------------------------------------------------
TCF is not required to hold annual shareholder meetings. Shareholders who
would like to submit proposals for consideration at future shareholder
meetings should send written proposals to the Calvert Group Legal Department,
4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland, 20814.
- --------------------------------------------------------------------------------
VOTING INFORMATION
- --------------------------------------------------------------------------------
Proxies are solicited initially by mail. Additional solicitations may be made
by telephone, computer communications, facsimile or other such means, or by
personal contact by officers or employees of Calvert Group and its affiliates
or by Shareholder Communications Corporation, a proxy soliciting firm retained
for this purpose. TCF may 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 Income and New Vision are present in person or by proxy,
or (2) the vote of more than 50% of the outstanding shares of Income and New
Vision. All classes of a fund 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 Income and New Vision of record at the close of business on
December 7, 1998 ("record date") are entitled to notice of and to vote at the
Special Meeting or any adjournment thereof. Shareholders are entitled to one
vote for each share held on that date. As of December 7, 1998, as shown on the
books of Income and New Vision, there were issued and outstanding:
2,507,380.961 shares of Income
5,723,458.834 shares of New Vision
As of the record date, the officers and Trustees of TCF as a group
beneficially owned less than 1% of the outstanding shares of Income or New
Vision. The following shareholders, as of record date, owned more than 5% of
any class of the Portfolio shown:
Income
Name and Address % of Ownership
State of Tennessee 401(k) Plan 6.84%
Nashville, TN 37242
New Vision
Name and Address % of Ownership
National Securities Corp. 8.33%, Class B
FBO J. Weisfeld
Seattle, WA 98154
Litchconn 5.41%, Class B
Litchfield, CT 06759
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ADJOURNMENT
- --------------------------------------------------------------------------------
In the event that sufficient votes in favor of the proposals set forth in the
Notice of Meeting and Proxy Statement are not received by the time scheduled
for the meeting, William M. Tartikoff, Esq., or Barbara J. Krumsiek may move
one or more adjournments of the meeting to permit further solicitation of
proxies with respect to any such proposals. Any such adjournment will require
the affirmative vote of a majority of the shares present at the meeting. Mr.
Tartikoff and Ms. Krumsiek will vote in favor of such adjournment those shares
that they are entitled to vote which have voted in favor of such proposals.
They will vote against any such adjournment on behalf of those proxies that
have voted against any such proposals.
Investment Advisor
Calvert Asset Management
Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Administrator
Calvert Administrative Services Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
<PAGE>
THE CALVERT FUND
CALVERT INCOME FUND
CALVERT NEW VISION SMALL CAP FUND
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 10:30 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 BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE FOLLOWING:
1. To approve the Board of Trustees:
1) Richard L. Baird, Jr.
2) Frank H. Blatz, Jr., Esq.
3) Frederick T. Borts, M.D.
4) Charles E. Diehl
5) Douglas E. Feldman, M.D.
6) Peter W. Gavian, CFA
7) John G. Guffey, Jr.
8) Barbara J. Krumsiek
9) M. Charito Kruvant
10) Arthur J. Pugh
11) David R. Rochat
12) D. Wayne Silby, Esq.
For all [ ] Against all [ ] Abstain on all [ ]
[ ] To abstain from voting on or to vote against one or more of the
proposed Trustees listed above, but to approve the others, place an "x"
in the box at left and indicate the number(s) of the person on the
appropriate line: I vote against _____________. I abstain on
_____________.
2. Income only: To approve amended fundamental investment restrictions
to (a) delete restrictions that are no longer required to be
fundamental due to changes in state laws or which otherwise need not
be fundamental; and (b) to revise the language of those restrictions
that are still required to be fundamental.
Income:
1) Concentration policy
2) Diversification policy
3) Loan policy
4) Underwriting policy
5) Securities and Fund officers or Trustees
6) Borrowing policy
7) Officer or Trustee security ownership
8) Oil and gas
9) Investment company securities
10) New companies
11) Commodities
12) Real estate
For all [ ] Against all [ ] Abstain on all [ ]
[ ] To abstain from voting on or to vote against the proposed changes to
one or more of the specific fundamental investment restrictions, but to
approve the others, place an "x" in the box at left and indicate the
number(s) (as set forth in the proxy statement) of the affected
investment restriction(s) on the appropriate
line: I vote against _____________. I abstain on _____________.
3. Income and New Vision: to approve a new investment advisory agreement
with the investment advisor, Calvert Asset Management Company, Inc.
("CAMCO").
For [ ] Against [ ] Abstain [ ]
5. Income and New Vision: to ratify the Board's selection of auditors,
PricewaterhouseCoopers, L.L.P.
For [ ] Against [ ] Abstain [ ]
