ACACIA CAPITAL CORPORATION
--CALVERT RESPONSIBLY INVESTED
EQUITY PORTFOLIO
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON February 16, 1996
Notice is hereby given that a Special Meeting (the "Meeting") of
Shareholders of the Calvert Responsibly Invested ("CRI") Equity Portfolio
(the "Equity Portfolio") of Acacia Capital Corporation (the "Company") will
be held at the offices of the Company, 4550 Montgomery Avenue, Suite 1000N,
Bethesda, Maryland 20814 on February 16, 1996 at 10:00 a.m., Eastern Time,
for the following purposes: 1. To consider and act upon an amendment to the
Company's Articles of Incorporation to, in effect, combine the Equity Portfolio
into the company's existing CRI Capital Accumulation Fund (the "Capital
Accumulation Fund") by a reclassification of Equity Portfolio shares.
A vote in favor of the proposed amendment is a vote in favor of the elimination
of the Equity Portfolio; and
2. To transact any other business which may properly come before the
Meeting or any adjournments thereof.
The Directors of the Company have fixed the close of business on December 18,
1995 as the record date for the determination of shareholders of the Equity
Portfolio entitled to notice of and to vote at the Meeting and any adjournment
thereof.
IT IS IMPORTANT THAT VOTING INSTRUCTIONS BE RETURNED PROMPTLY. SHAREHOLDERS WHO
DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED WITHOUT DELAY TO SIGN
AND RETURN THE ENCLOSED VOTING INSTRUCTION FORM IN THE ENCLOSED ENVELOPE, WHICH
REQUIRES NO POSTAGE, SO THAT THEIR SHARES MAY BE REPRESENTED AND VOTED AT THE
MEETING. YOUR PROMPT ATTENTION TO THE ENCLOSED VOTING INSTRUCTION FORM WILL HELP
TO AVOID THE EXPENSE OF FURTHER SOLICITATION.
By Order of the Board of Directors
William M. Tartikoff, Esq.
Secretary
December 30, 1995
INSTRUCTIONS FOR EXECUTING VOTING INSTRUCTION FORM
The following general rules for signing voting instruction forms may
be of assistance to you and may help to avoid the time and expense involved
in validating your vote if you fail to sign your voting instruction form
properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears in the
registration on the voting instruction form.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party
signing should conform exactly to a name shown in the registration on the
voting instruction form.
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the voting
instruction form should be indicated unless it is reflected in the form of
registration. For example:
REGISTRATION VALID SIGNATURE
CORPORATE
ACCOUNTS
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp.
c/o John Doe, Treasurer John Doe, Treasurer
(4) ABC Corp. Profit
Sharing Plan John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee Jane B. Doe
u/t/d 12/28/78
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust. John B. Smith
f/b/o John B. Smith, Jr. UGMA
(2) John B. Smith, Jr. John B. Smith, Jr., Executor
<PAGE>
PROSPECTUS/PROXY STATEMENT DATED December 30, 1995
THE CALVERT RESPONSIBLY INVESTED
EQUITY PORTFOLIO OF ACACIA
CAPITAL CORPORATION
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
This Prospectus/Proxy Statement is being furnished to shareholders of the
Calvert Responsibly Invested ("CRI") Equity Portfolio (the "Equity Portfolio")
of Acacia Capital Corporation (the "Company"), in connection with a proposed
amendment to the Company's Articles of Incorporation that would, in effect,
combine the Equity Portfolio into the Company's existing CRI Capital
Accumulation Portfolio (the "Capital Accumulation Portfolio") (the "Proposed
Merger"). The Proposed Merger would be accomplished by a reclassification of
shares and tax-free transfer of all assets and liabilities of the Equity
Portfolio in exchange for shares of the Capital Accumulation Portfolio. As a
result of the Proposed Merger, shareholders of the Equity Portfolio would
exchange their shares and become shareholders of the Capital Accumulation
Portfolio and the Equity Portfolio would be eliminated. Each Portfolio will pay
its respective expenses attributable to the Proposed Merger.
The Company is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act"). The Company
currently consists of 7 portfolios, each with a different investment objective.
The Capital Accumulation Portfolio seeks to provide long-term capital
appreciation by investing primarily in a non-diversified portfolio of the equity
securities of small-to mid-sized companies that are undervalued but demonstrate
a potential for growth. The Portfolio relies on its proprietary research to
identify stocks that may have been overlooked by analysts, investors and the
media, and which generally have a market value between $100 million and $5
billion, but which may be larger or smaller as deemed appropriate.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about the Capital
Accumulation Portfolio that shareholders of the Equity Portfolio should
know before voting on the Proposed Merger. Certain relevant documents
listed below, which have been filed with the Securities and Exchange
Commission (the "SEC"), are incorporated in whole or in part by reference.
A Statement of Additional Information dated May 1, 1995, relating to this
Prospectus/Proxy Statement and the Proposed Merger, incorporating by
reference the financial statements of the Capital Accumulation Portfolio
and the Equity Portfolio (each a "Portfolio" and together, the
"Portfolios"), dated December 31, 1994 has been filed with the SEC and is
incorporated by reference in its entirety into this Prospectus/Proxy
Statement. A copy of such Statement of Additional Information is available
upon request and without charge by writing to the Company at 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814 or by calling
toll-free 1-800-368-2748.
The Prospectus of the CRI portfolios of the Company, including the
Portfolios, dated May 1, 1995, the Company's Annual Report for such CRI
portfolios for the fiscal year ended December 31, 1994 and the Company's
CRI Capital Accumulation Portfolio's unaudited balance sheet dated June
30, 1995 and unaudited income statement for the six months ended June 30,
1995 are incorporated herein by reference in their entirety, insofar as
they relate to the Capital Accumulation Portfolio and the Equity Portfolio
only, and not to any other portfolios described therein.
Included as Exhibit A to this Prospectus/Proxy Statement is a copy of
the Plan of Reclassification (the "Plan") and included as Exhibit B to this
Prospectus/Proxy Statement is the form of amendment to the Company's
Articles of Incorporation to be filed with the State of Maryland if
shareholders of the Equity Portfolio approve the Plan.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS
OR OBLIGATIONS OF OR ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT
INSURED OR OTHERWISE PROTECTED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY.
INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS. WHEN INVESTORS SELL
SHARES OF THE FUND, THE VALUE MAY BE HIGHER OR LOWER THAN THE AMOUNT
ORIGINALLY PAID.
<PAGE>
TABLE OF CONTENTS
VOTING INFORMATION..............................
SUMMARY.........................................
THE COMPANY.............................
PROPOSED MERGER
TAX CONSEQUENCES..........................
INVESTMENT OBJECTIVES AND POLICIES OF THE
CAPITAL ACCUMULATION PORTFOLIO AND
THE EQUITY PORTFOLIO...............
MANAGEMENT OF THE FUNDS.................
INVESTMENT ADVISERS, SUB-ADVISERS AND ADMINISTRATOR
PORTFOLIO MANAGEMENT........
DISTRIBUTION OF SHARES......
PURCHASE AND REDEMPTION PROCEDURES.........
DIVIDENDS AND DISTRIBUTIONS............
FINANCIAL HIGHLIGHTS.........................
PRINCIPAL RISKS......................
INFORMATION ABOUT THE PROPOSED MERGER.........
DESCRIPTION OF THE MERGER...............
REASONS FOR THE PROPOSED MERGER.........
PRO-FORMA CAPITALIZATION...............
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES......................
PERFORMANCE INFORMATION
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS.......
FORM OF ORGANIZATION.......................
CAPITALIZATION.......................
SHAREHOLDER MEETINGS AND VOTING RIGHTS.....
LIQUIDATION OR DISSOLUTION............
RIGHTS OF INSPECTION..................
ADDITIONAL INFORMATION......................
FINANCIAL STATEMENTS AND EXPERTS.............
LEGAL MATTERS................................
OTHER BUSINESS................................
<PAGE>
VOTING INFORMATION
This Prospectus/Proxy Statement solicits the accompanying voting
instructions ("Proxy") on behalf of the Board of Directors of the
Company for use at the Special Meeting of Shareholders of the Equity
Portfolio to be held February 16, 1996 at 10:00 a.m.,
Eastern Time, and any adjournments thereof (the "Meeting"). The
Equity Portfolio will bear all expenses in connection with the
solicitation of Proxies. Employees of Calvert Asset Management Company, Inc.
("CAMCO"), the Portfolio's investment adviser, and Providian Life and Health
Insurance Company ("Providian"), will solicit Proxies. The solicitation will
be by mail and may also be by telephone, telegram or personal interview.
Outstanding Shares and Voting Requirements
The Board of Directors of the Company has fixed the close of
business on December 18, 1995 as the record date (the "Record
Date") for determination of shareholders entitled to notice of and to
vote at the Meeting and any adjournments thereof. All outstanding
shares of the Equity Portfolio are owned of record by Providian Separate
Account V, which is registered with the Securities and Exchange Commission
(the "SEC"), (the "Separate Account") to fund variable annuity contracts
(the "contracts") issued by Providian.
Approval of the Proposed Merger requires the affirmative vote of
the holders of at least a majority (as defined in the 1940 Act) of the
interest in the Equity Portfolio shares entitled to vote.
Providian holds through its Separate Account, all of the
Equity Portfolio shares entitled to vote. Providian will attend
the Meeting and vote the Equity Portfolio shares held by its
Separate Account in accordance with instructions received
from contract owners having values allocated to the Equity Portfolio,
as provided in the contracts. Providian will vote Equity
Portfolio shares for which no instructions are received in the same
proportion as to which instructions are received with respect to
the Separate Account.
Each contract participant (other than participants under
contracts issued in connection with non-qualified and unfunded
deferred compensation plans or contracts issued in connection with a
deferred compensation plan) has the right to give instructions as to
how shares of the Equity Portfolio attributable to the participant's
account should be voted, notwithstanding that the contract owner may
be the participant's employer. Contract owners will instruct the
Separate Accounts in accordance with such instructions. Fractional
shares also will be voted in accordance with instructions received. A
contract owner or participant who has given voting instructions may
revoke such voting instructions only through the Separate Account
prior to the Meeting date. There are no appraisal rights.
The number of Equity Portfolio shares deemed attributable to a
participant's account prior to the annuity date and during the
lifetime of the annuitant will be determined on the basis of the value
of accumulation units credited to the participant's account as of the
Record Date. On or after the annuity date or after the death of the
participant, the number of Equity Portfolio shares deemed attributable
to the participant's account will be based on the liability for future
variable annuity payments to the payee under the contract as of the
Record Date. Such liability for future payments will be calculated on
the basis of the mortality assumptions and the assumed investment rate
used in determining the number of annuity units credited to the
participant's account and the applicable annuity unit value on the
Record Date.
As of the close of business on the Record Date, there were
outstanding 234,843.126 shares of common stock of the Equity Portfolio.
Each share is entitled to one vote. To the Company's knowledge no person
owns annuity contracts or interests therein entitling that person to give
voting instructions regarding five percent or more of the total outstanding
shares of the Equity Portfolio.
Directors and officers of the Company as a group own annuity
contracts or interests therein entitling them to give voting
instructions regarding less than one percent of the total outstanding
shares of the Equity Portfolio.
The cost of this proxy solicitation, including the printing and
mailing of the proxy materials, will be borne by the Equity
Portfolio. A proxy may be revoked at anythime before or during the
meeting by oral or written notice to William M. Tartikoff, Esq., Secretary
of the Company, 4550 Montgomery Ave., Suite 1000N, Bethesda, MD 20814.
This Prospectus/Proxy Statement was first mailed to contract owners on or
about December 30, 1995. If you have any questions about the proposed merger,
please call 1-800-866-6007.
<PAGE>
SUMMARY
THE COMPANY
The Equity Portfolio and the Capital Accumulation Portfolio are
each a series of the Company, an open-end management investment
company organized as a Maryland corporation on December 22, 1982. The
Company currently consists of seven separate investment portfolios,
each of which is, in effect, a separate mutual fund issuing its own
separate class of common stock. By investing in a portfolio, an
investor becomes entitled to a pro-rata share of all dividends and
distributions arising from the net income and capital gains on the
investments of that portfolio. Each portfolio is governed by the
Company's Articles of Incorporation, its Bylaws and applicable
Maryland law.
THE PROPOSED MERGER
The Board of Directors of the Company has approved a Plan of
Reclassification (the "Plan") providing for the Company to amend its
Articles of Incorporation, subject to the approval of the shareholders
of the Equity Portfolio, to reclassify the issued and unissued shares
of the class of the Company's common stock currently designated as CRI
Equity Portfolio into the class of the Company's common stock
currently designated as CRI Capital Accumulation Portfolio. In
effect, shareholders of the Equity Portfolio would exchange their
shares for shares of the Capital Accumulation Portfolio and the Equity
Portfolio would be eliminated.
The Plan contemplates a Proposed Merger in which shares of the
Equity Portfolio will be reclassified and the Equity Portfolio will
transfer all of its assets and liabilities to the Capital Accumulation
Portfolio in exchange for shares of the Capital Accumulation
Portfolio. The number of shares of the Capital Accumulation Portfolio
to be issued to the Equity Portfolio will be determined on the basis
of the relative net asset values of the Equity Portfolio and the
Capital Accumulation Portfolio calculated as of the close of business
on the business day immediately preceding the effective date of the
Proposed Merger, currently scheduled for February 26, 1996. The Equity
Portfolio will then distribute the Capital Accumulation Portfolio
shares it receives to Equity Portfolio shareholders in exchange for
their Equity Portfolio shares, on a pro-rata basis.
The Directors of the Company, including the Directors who are not
"interested persons," as such term is defined in the 1940 Act (the
"Independent Directors"), have concluded that the Proposed Merger
would be in the best interests of shareholders of the Equity Portfolio
and that the interests of the shareholders of the Equity Portfolio and
the Capital Accumulation Portfolio will not be economically diluted as
a result of the transactions contemplated by the Reorganization.
Accordingly, the Directors have submitted the Plan for the approval of
the Equity Portfolio's shareholders. THE DIRECTORS OF THE COMPANY
RECOMMEND APPROVAL BY SHAREHOLDERS OF THE EQUITY PORTFOLIO OF THE PLAN
EFFECTING THE PROPOSED MERGER.
If the shareholders of the Equity Portfolio do not vote to
approve the Proposed Merger, the Directors of the Company will
consider other possible courses of action in the best interests of
shareholders.
TAX CONSEQUENCES
The completion of the Proposed Merger is contingent upon the
receipt by the Company of an opinion of outside tax counsel to the
effect that the Proposed Merger will qualify as a tax-free
reorganization under Section 368 of the Internal Revenue Code of 1986,
as amended (the "Code"). As such, the Proposed Merger will not result
in the recognition, for federal income tax purposes, of any gain or
loss to the Equity Portfolio or its shareholders, the aggregate tax
basis of the shares of the Capital Accumulation Portfolio received by
shareholders of the Equity Portfolio will be the same as the tax basis
of those shareholders' Equity Portfolio shares and the aggregate tax
basis of the assets of the Equity Portfolio in the hands of the
Capital Accumulation Portfolio will be the same as the tax basis of
such assets in the hands of the Equity Portfolio prior to the Proposed
Merger. In addition, the Proposed Merger will not result in the
recognition of any gain or loss to contract owners.
INVESTMENT OBJECTIVES AND POLICIES OF THE CAPITAL ACCUMULATION
PORTFOLIO AND THE EQUITY PORTFOLIO
The Capital Accumulation Portfolio. The Capital Accumulation
Portfolio seeks to provide long-term capital appreciation by investing
primarily in a nondiversified portfolio of the equity securities of
small- to mid-sized companies that are undervalued but demonstrate a
potential for growth. The Portfolio relies on its proprietary
research to identify stocks that may have been overlooked by analysts,
investors, and the media, and which generally have a market value
between $100 million and $5 billion, but which may be larger or
smaller as deemed appropriate. Investments may also include, but are
not limited to, preferred stocks, foreign securities, convertible
securities, bonds, notes and other debt securities. The Portfolio may
use certain futures and options, invest in repurchase agreements, and
lend its portfolio securities. The Portfolio takes reasonable risks
in seeking to achieve its investment objective. There is, of course,
no assurance that the Portfolio will be successful in meeting its
objective since there is risk involved in the ownership of all equity
securities. The Portfolio's investment objective is not fundamental
and may be changed without shareholder approval. The Portfolio will
notify shareholders at least thirty days in advance of a change in the
investment objective of the Portfolio so that shareholders may
determine whether the Portfolio's goals continue to meet their own.
The Equity Portfolio. The Equity Portfolio seeks growth of
capital through investment in the equity securities of issuers within
industries perceived to offer opportunities for potential capital
appreciation and which satisfy the Portfolio's investment and social
criteria. The Portfolio is neither speculative nor conservative in
its investment policies and takes reasonable risks in seeking to
achieve its investment objective of growth of capital. The Portfolio
normally invests at least 80% of the value of its net assets in equity
securities. Such securities include common stocks, convertible
securities and preferred stocks. The Portfolio does not currently
hold or intend to invest more than 5% of its assets in non-investment
grade debt securities. For liquidity purposes or pending the
investment of the proceeds of the sale of its shares, the Equity
Portfolio may invest up to 20% of the value of its assets in money
market instruments, including: obligations of the U.S. Government, its
agencies and instrumentalities; certificates of deposit of banks
having total assets of at least $1 billion; and commercial paper or
other corporate notes of investment grade quality. Such securities
may be purchased subject to repurchase agreements with recognized
securities dealers and banks. If the Equity Portfolio assumed a
temporary defensive posture, there is no limitation on the percentage
of its assets which may be invested in money market instruments. The
Portfolio may invest in foreign securities, including emerging
markets, to a limited extent. See "Comparison of Investment
Objectives and Policies" below.
MANAGEMENT OF THE FUNDS
The overall management of the Company and the Portfolios is the
responsibility of, and is supervised by, the Board of Directors of the
Company.
INVESTMENT ADVISERS, SUB-ADVISERS AND ADMINISTRATOR
Calvert Asset Management Company, Inc. ("CAMCO"), 4550 Montgomery
Avenue, Suite 1000N, Bethesda, Maryland 20814, is the investment
adviser to both Portfolios. CAMCO is a wholly-owned subsidiary of
Calvert Group, Ltd., of the same address, which is in turn an indirect
wholly-owned subsidiary of Acacia Mutual Life Insurance Company, 51
Louisiana Avenue, N.W., Washington, D.C. 20001. As of August 31,
1995, CAMCO had assets under management and administration in excess of
$4.8 billion. Pursuant to its investment advisory agreement with the
Company, CAMCO manages the investment and reinvestment of the assets of
each Portfolio and is responsible for the overall management of the
business affairs of each Portfolio, subject to the direction and
authority of the Company's Board of Directors. CAMCO also serves as
investment adviser to seven other registered investment companies in
the Calvert Group of Funds: First Variable Rate Fund for Government
Income, Calvert Cash Reserves (doing business as Money Management
Plus), Calvert Social Investment Fund, Calvert Tax-Free Reserves, The
Calvert Fund, Calvert Municipal Fund, Inc., and Calvert World Values
Fund, Inc. CAMCO has retained certain investment subadvisers
("Subadvisers") for the Portfolios.
The Capital Accumulation Portfolio
The Capital Accumulation Portfolio has a pool of six investment
subadvisers ready to manage the Portfolio's assets. The Subadvisers
along with their investment style and ownership characteristics, are
listed below, the asterisks indicating those comprising the current
portfolio management team who have managed the Portfolio since
December 8, 1994:
Subadviser Investment Style Ownership
*Apodaca-
Johnston Small-Cap Growt Hispanic American
*Brown
Capital Mid-/Large-Cap African American
Growth
*Fortalez
Asset
Management Small-Cap Growth Hispanic/Women
New
Amsterdam Mid-Cap Value
Growth Women
Seneca,Inc. Large-Cap Value Women
Sturdivant Large-Cap Value African Americans
CAMCO selects which Subadvisers will manage the Capital Accumulation
Portfolio's assets at any given time and the allocation of assets
among the managers. CAMCO retains a consultant, Progress Investment
Management Company ("Progress"), to aid it in making these
determinations. Progress is a California state-certified minority
business enterprise, registered as an investment adviser with the SEC,
that evaluates and monitors emerging minority/women-owned investment
management firms. Each firm has selected a performance index against
which the performance fee adjustment, if any, will be calculated, as
explained below.
Apodaca-Johnston Capital Management, Inc. Apodaca-Johnston Capital
Management, Inc., 580 California Street, Suite 200, San Francisco,
California 94104, is a small-cap growth manager that seeks to discover
compelling investment ideas by focusing on those entrepreneurial
companies that identify and capitalize on positive trends. It looks
for companies that are experiencing a powerful acceleration in
earnings, exhibit a strong, high quality balance sheet or decidedly
improving financial statements and demonstrate strong price strength.
Its performance index is the Russell 2000.
Mr. Scott is President and Chief Investment Officer of
Apodaca-Johnston. In 1985 Mr. Johnston founded Sterling Financial
Group, an independent SEC-registered investment advisory firm, which
was merged into Apodaca-Johnston Capital Management.
Brown Capital Management, Inc. Brown Capital Management, Inc.,
809 Cathedral Street, Baltimore, Maryland 21201, uses a bottom-up
approach that incorporates growth-adjusted price earnings. Stocks
purchased are generally undervalued and have momentum, have EPS growth
rates greater than the market, are more profitable than the market,
and have relatively low price-earnings ratios. Its performance index
is a blend: 60% Russell 1000 Growth and 40% Russell 2000.
Mr. Eddie Brown is founder and President of Brown Capital Management.
He has over 22 years of investment experience, having served as Vice
President and Portfolio Manager for 10 years at T. Rowe Price
Associates immediately prior to starting his own firm.
Fortaleza Asset Management, Inc., 200 West Adams, Suite 1900,
Chicago, Illinois 60606, is a small-cap growth manager that bases
its investment principles on: (1) a proprietary stock valuation
system that incorporates technical and market sentiment
indicators to determine optimal buy points; (2) an emphasis on
the preservation of capital through the implementation of a
strict selling discipline to lock in capital gains and reduce
losses; and (3) a discipline that does not force equity
commitment in overvalued markets. The investment approach is
based on a bottom-up stock selection process (selecting the
individual companies first, rather than the industry sector). Its
performance index is the Russell 2000.
Ms. Margarita Perez is the founder, President and Portfolio Manager of
Fortaleza, and has over 13 years of investment experience. Prior to
forming Fortaleza, Ms. Perez was Vice president and Portfolio Manager
for Monetta Financial Services, Inc., where she was directly involved
in the management of equity accounts totalling in excess of $100
million.
New Amsterdam Partners, L.P. is a mid-cap value investment manager
located at 475 Park Avenue , New York, New York 10016. New Amsterdam
Partners is a quantitative investment firm, evaluating investment
opportunities by comparing expected investment returns. The firm believes
that the disciplined use of their valuation techniques, in conjunction with
fundamental analysis of companies, is the key to understanding and maximizing
investment returns.
Michelle Clayman, General Partner of New Amsterdam, was a
founding partner of the company, which was started in 1986. Prior to
co-founding New Amsterdam, Ms. Clayman was a Vice President of Salomon
Brothers in charge of STOCKFACTS, an on-line computer system that
combines analytical tools for equity analysis and databases and was
designed and developed by Ms. Clayman.
Seneca, Inc., 100 Campus Drive, Second Floor West, Flovham Park,
Basking Ridge, New Jersey 07932, is a value-oriented, medium-to-large
capitalization equity manager with a twelve-year performance record.
The firm is majority-owned by six women employees and a female director.
The company employs a traditional low price/earnings value approach enhanced
by portfolio risk controls and selection of only those securities experiencing
upward revisions in analysts' earnings estimates.
Susan Saltus and Sandi Sweeney direct the investment effort,
drawing on more than 28 years of investment experience. Ms. Saltus,
CFA, is Chief Investment Officer and has 16 years' investment
experience. Ms. Sweeney is a Portfolio Manager and has 12 years
investment experience.
Sturdivant & Co., Inc. Sturdivant & Co., Inc., 223 Gibbsboro Road,
Clementon, New Jersey 08021, seeks to identify undervalued companies or
companies undergoing significant changes that will enhance shareholder value.
The company utilizes a conservative, disciplined and consistently-applied
decision making process designed to achieve lower risk than the market.
Ralph Sturdivant is Chairman and CEO who, prior to founding the
firm, was a Vice President at Prudential-Bache Securities and an
Account Executive with Merrill Lynch.
Albert Sturdivant is President and CIO, and was a principal and
manager of the capital markets division of Grigsby, Brandford &
Company prior to co-founding Sturdivant & Co.
The Equity Portfolio
The Subadviser to the Equity Portfolio is Loomis, Sayles and
Company ("Loomis Sayles") 2001 Pennsylvania Avenue, N.W., Washington,
D.c. 20006, which replaced United States Trust Company as of February 1, 1994
upon shareholder approval. The individual portfolio manager responsible for
the Equity Portfolio is Philip J. Schettewi, Managing Partner, Vice President,
and Chief Portfolio Strategist of Loomis, Sayles. Mr. Schettewi is a Chartered
Financial Analyst and has 12 years' experience in the investment business.
For its services, CAMCO, as the Portfolios' investment adviser, is
entitled to receive a fee based on a percentage of the average daily
net assets of each of the Portfolios. CAMCO is currently entitled to
receive a base fee of 0.70% of average daily net assets of the Equity
Portfolio and 0.80% of the average daily net assets of the Capital
Accumulation Portfolio.
CAMCO will pay the Subadvisers of the Portfolios a base fee of 0.25%
of average net assets. In addition, under the circumstances described
below, for each Portfolio, the investment advisers to the Capital
Accumulation Portfolios and the investment subadvisers to the
Portfolios may earn (or have their fees reduced by) performance fee
adjustments based on the extent to which performance of the Portfolios
exceeds or trails the index against which they are measured. In the
case of the Equity Portfolio, payment consistent with the performance
fee adjustment began June 1, 1995. In the case of the Capital
Accumulation Portfolio, the performance fee adjustment will begin on
January 1, 1997. The specific adjustments are as follows:
The Equity Portfolio Subadviser's Performance Fee Adjustment
Performance
versus the Performance
S&P 500 Stock Fee
Composite Index Adjustment
6% to less
than 12% 0.07%
12% to less
than 18% 0.14%
18% or more 0.20%
The performance fee adjustment for the Equity Portfolio is collected from or
disbursed by the Portfolio directly to the investment adviser, which acts as a
conduit to the investment subadviser, but which does not retain any of
in the performance fee adjustment.
The Capital Accumulation Portfolio: CAMCO's Performance Fee Adjustment
Performance
versus the Performance
S&P 400 Mid- Fee
Cap Index Adjustment
10% to less
than 25% 0.01%
25% to less
than 40% 0.03%
40% or more 0.05%
CAMCO's performance fee adjustment will be paid directly from the Portfolio
to CAMCO.
The Capital Accumulation Portfolio: Each Subadviser's Performance Fee Adjustment
Performance Performance
versus the Fee
the Index Adjustment
10% to less
than 25% 0.02%
25% to less
than 40% 0.05%
40% or more 0.10%
Payment of an upward performance fee adjustment to a Subadviser
will be paid from the Capital Accumulation Portfolio to CAMCO and
not out of CAMCO's own fee, and CAMCO will pass on the
appropriate amount to the particular Subadviser; fees adjusted
downward from the base fee as a result of under performance will
be retained by the Portfolio. Payment of an upward performance
adjustment will be conditioned on: (1) the performance of the
Portfolio as a whole having exceeded the S&P 400 Mid-Cap Index;
and (2) payment of the performance adjustment not causing the
Portfolio's performance to fall below the S&P 400 Mid-Cap Index.
Calvert Administrative Services Company ("CASC"), an affiliate of
CAM, has been retained by the Capital Accumulation Portfolio to
provide certain administrative services necessary to the conduct
of its affairs, including the preparation of regulatory filings
and shareholder reports, the daily determination of net asset
value per share and dividends, and the maintenance of portfolio
and general accounting records. For providing such services, CASC
is entitled to receive a fee from the Portfolio of 0.10% of net
assets per year.
PORTFOLIO MANAGEMENT
See "Investment Adviser, Sub-Advisers and Administrator" above.
FUND EXPENSE COMPARISON
Annual Fund operating expenses of the Equity Portfolio and the Capital
Accumulation Portfolio are shown below. Expenses are unaudited and are based
on year-to-date actual expenses through November 30, 1995, expressed as a
percentage of average net assets.
Equity Capital Pro Forma
Portfolio Accumulation Combined
Portfolio After Merger
Management
fees 0.62% 0.80% 0.80%
Other
expenses 0.09% 0.38% 0.38%
Total Fund
operating
expenses 0.71% 1.18% 1.18%
(after expense reimbursement/fee waiver)
Management fees for the Equity Portfolio reflects the negative performance fee
adjustment due to the Equity Portfolio's below average performance.
Management fees for Capital Accumulation Portfolio do not include the 0.10%
annual administrative service fee which was voluntarily waived. If this fee
had been charged, the Management fees would have been 0.90% and the total fund
operating expenses would have been 1.28%, for both the Capital Accumulation
Portfolio and the Pro Forma Combined. Management fees include sub-advisor
fees.
Although the fees in the Capital Accumulation Portfolio are higher than those
in the Equity Portfolio, the Fund's Board of Directors believes that the
proposed merger is in the best interests of the shareholders of both the
Equity Portfolio and the Capital Accumulation Portfolio, particularly in terms
of the comparative performance records of each of the Portfolios; relative
compatibility of their investment objectives and policies; the relative size
of the portfolios in terms of assets; and the investment experience, expertise
and resources of the Advisor and Subadvisors.
DISTRIBUTION OF SHARES
With regard to the Portfolios, the Company's shares are sold to
Providian for allocation to the Separate Account to fund the
benefits under certain variable annuity and variable life insurance
policies (the "Variable Accounts"). Shares of the Portfolios may also
be sold to other insurance companies for the same purpose. In this
Prospectus/Proxy Statement, Providian and the other applicable
companies may be referred to as the "Insurance Companies," and the
variable annuity and variable life insurance policies may be referred
to as the "Policies."
Shares of the Portfolios may only be sold to the Insurance
Companies for their Separate Accounts, and not to individual
investors. As such, the "shareholders" referred to in this prospectus
are the Insurance Companies. Nevertheless, as a policyholder you have
an opportunity to choose among the various Portfolios in order to fund
the benefits under any Policies you purchase, subject to any
limitations described in the Insurance Companies' prospectuses.
Shares are purchased by the Variable Accounts at the net asset
value of a Portfolio next determined after the Insurance Company
receives the premium payment. The Company continuously offers its
shares in the Portfolios at a price equal to the net asset value per
share. Initial and subsequent payments allocated to a Portfolio are
subject to the limits applicable in the Policies issued by the
Insurance Companies.
It is conceivable that in the future it may be disadvantageous
for both annuity Variable Accounts and life insurance Variable
Accounts, or for Variable Accounts of different Insurance Companies,
to invest simultaneously in a Portfolio, although currently neither
the Insurance Companies nor the Company foresees any such
disadvantages to either variable annuity or variable life insurance
policyholders of any Insurance Company. The Company's Directors
intend to monitor events in order to identify any material conflict
between such policyholders and to determine what action, if any,
should be taken in response to the problem.
PURCHASE AND REDEMPTION PROCEDURES
Information concerning the purchase of shares is described above.
The Insurance Companies redeem shares of the Portfolios to make
benefit and surrender payments under the terms of their Policies.
Redemptions are processed on any day on which the Company is open for
business (each day the New York Stock Exchange is open), and are made
at a Portfolio's net asset value next determined after the appropriate
Insurance Company receives a surrender request in acceptable form.
Payment for redeemed shares will be made promptly, and in no
event later than seven days. However, the right of redemption may be
suspended or the date of payment postponed in accordance with the
Rules under the 1940 Act. The amount received on redemption of the
shares of a Portfolio may be more or less than the amount paid for the
shares, depending on the fluctuations in the market value of the
assets owned by the Portfolio. The Company redeems all full and
fractional shares of the Portfolios for cash.
The net asset value of the shares of each Portfolio is determined
once daily as of the close of business of the New York Stock Exchange,
on days when the Exchange is open for business, or for any other day
when there is a sufficient degree of trading in the investments of a
Portfolio to affect materially its asset value per share (except on
days when no orders to purchase or redeem shares of the Portfolio have
been received). The net asset value is determined by adding the
values of all securities and other assets of a Portfolio, subtracting
liabilities and expenses, and dividing by the number of outstanding
shares of the Portfolio.
Except for money market instruments maturing in 60 days or less,
securities held by the Portfolios are valued at their market value if
market quotations are readily available. Otherwise, securities are
valued at fair value as determined in good faith by the Board of
Directors, although the actual calculations may be made by persons
acting pursuant to the direction of the Board of Directors of the
Company. All money market instruments with a remaining maturity of 60
days or less held by a Portfolio, are valued on an amortized cost
basis.
DIVIDENDS AND DISTRIBUTIONS
It is the Company's intention to distribute substantially all
of the net investment income, if any, of the Portfolios. Net
investment income consists of all payments of dividends or interest
received by a Portfolio less estimated expenses, including the
investment advisory fee. All net realized capital gains, if any, are
declared and distributed periodically, at least annually. All
dividends and distributions are reinvested in additional shares of the
Portfolio at net asset value.
FINANCIAL HIGHLIGHTS
The following tables provide information about the Capital
Accumulation Portfolio's financial history. They express the
information in terms of a single share outstanding throughout
each period. The tables have been audited by those independent
accountants whose reports are included in the Fund's Annual
Report to Shareholders, for each of the respective periods
presented. The tables should be read in conjunction with the
financial statements and their related notes. The current Annual
Report to Shareholders is incorporated by reference into the
Statement of Additional Information.
<TABLE>
<CAPTION>
CRI Capital Accumulation
Portfolio Six months
ended
June 30, 1995
(Unaudited) Year Ended
December 31,
1995 1994
<S> <C> <C>
$ 16.97 $ 18.95
Net asset value, beginning of period
Income from investment operations
Net investment income (.05) .10
Net realized and unrealized gain
(loss) on investments 4.30 (1.98)
Total from investment
operations 4.25 (1.88)
Distributions to shareholders
Dividends from net investment
income -- (.10)
--
Distribution from capital gains -- --
Total distributions -- (.10)
Total increase (decrease) in net 4.25 (1.98)
asset value
Net asset value, end of period $ 21.22 $ 16.97
Total return<F1> 25.04% (9.92)%
Ratio of expenses to average net assets 98%(a) .79%
Ratio of net income to average net (.53%)(a) .68%
assets
Increase reflected in net income ratio
due to expense reimbursement -- --
Portfolio turnover 65% 79%
Net assets, end of period $$6,808,661 %$5,688,821
Number of shares outstanding at end
of period (in thousands) 321 335
<FN>
<F1>Total return is for the Portfolio only and does not reflect sales charges
and expenses deducted by the Insurance Companies.
(a) = Annualized
</FN>
</TABLE>
<TABLE>
<CAPTION>
CRI Capital Accumulation
Portfolio
Year Ended December 31,
1993 1992
<S> <C> <C>
$ 17.87 $ 15.82
Net asset value, beginning of period
Income from investment operations
Net investment income .08 .09
Net realized and unrealized gain
(loss) on investments 1.27 2.09
Total from investment
operations 1.35 2.18
Distributions to shareholders
Dividends from net investment
income (.08) (.09)
Distribution from capital gains (.19) (.04)
Total distributions (.27) (.13)
Total increase (decrease) in net 1.08 2.05
asset value
Net asset value, end of period $ 18.95 17.87
Total return<F2> 7.56% 13.73%
Ratio of expenses to average net assets .80% .39%
Ratio of net income to average net .66% 1.19%
assets
Increase reflected in net income ratio
due to expense reimbursement -- .87%
Portfolio turnover 26% 2%
Net assets, end of period $$4,986,223 $$870,066
Number of shares outstanding at end
of period (in thousands) 263 49
<FN>
<F2>Total return is for the Portfolio only and does not reflect sales charges
and expenses deducted by the Insurance Companies.
(a) = Annualized
</FN>
</TABLE>
<TABLE>
<CAPTION>
CRI Capital Accumulation
Portfolio From
inception
July 16,
1991 through
December 31,
1991
<S> <C>
$ 15.00
Net asset value, beginning of period
Income from investment operations
Net investment income .26
Net realized and unrealized gain
(loss) on investments .82
Total from investment
operations 1.08
Distributions to shareholders
Dividends from net investment
income (.26)
Distribution from capital gains --
Total distributions (.26)
Total increase (decrease) in net .82
asset value
Net asset value, end of period 15.82
Total return<F3> 7.25%
Ratio of expenses to average net assets --
Ratio of net income to average net .84%(a)
assets
Increase reflected in net income ratio
due to expense reimbursement 4.23%(a)
Portfolio turnover 5%
Net assets, end of period $268,040
Number of shares outstanding at end 17
of period (in thousands)
<FN>
<F3>Total return is for the Portfolio only and does not reflect sales charges
and expenses deducted by the Insurance Companies.
(a) = Annualized
</FN>
</TABLE>
PRINCIPAL RISKS
The Equity Portfolio and the Capital Accumulation Portfolio have
distinct investment objectives that they pursue through their separate
investment policies, as stated above. There can be no assurance that the
objectives of either the Equity Portfolio or the Capital Accumulation
Portfolio will be achieved. The differences in objectives and policies
between the Equity Portfolio and the Capital Accumulation Portfolio can be
expected to affect the return of each. As described below under "Comparison
of Investment Objectives and Policies", the Capital Accumulation
Portfolio may be viewed as more aggressive and concomitantly more
volatile than the Equity Portfolio for five principal reasons.
First, the Capital Accumulation Portfolio is "non-diversified" which
means that, as opposed to the "diversified" Equity Portfolio, a higher
percentage of its assets may be invested in a more limited number of issues,
with the result that its shares are more susceptible to any single economic,
political or regulatory event than the shares of the Equity Portfolio.
Second, The Capital Accumulation Portfolio invests in small-cap issuers.
The securities of small-cap issuers tend to be less actively traded than the
securities of larger issuers, may trade in a more limited volume, and may
change in value more abruptly than securities of larger companies. Information
concerning these securities may not be readily available so that the companies
may be less actively followed by stock analysts. Small-cap issuers do not
usually participate in market rallies to the same extent as more widely-known
securities, and they tend to have a relatively higher percentage of insider
ownership. There is no limit on the percentage of
assets that may be invested in small-cap issuers.
Third, the Capital Accumulation Portfolio may borrow up to one-third of
its total assets while the Equity Portfolio may only borrow up to 10% of its
total assets. This allows the Capital Accumulation Portfolio to use
potentially more leverage than the Equity Portfolio, although in any event, the
Capital Accumulation Portfolio will only borrow from banks and then only for
temporary or emergency purposes.
Fourth, the Capital Accumulation Portfolio may invest up to 3% (while the
Equity Portfolio may invest up to 1%) of its total assets in investments that
offer a below market return but that further the Portfolio's social criteria.
Finally, the Capital Accumulation Portfolio may invest up to 15% of its
net assets in illiquid securities while the Equity Portfolio may invest up to
10% of its net assets in such securities.
INFORMATION ABOUT THE PROPOSED MERGER
DESCRIPTION ABOUT THE PROPOSED MERGER
The Plan provides that after the Effective Time on the Closing Date the
Equity Portfolio will transfer all of its assets and liabilities to the
Capital Accumulation Portfolio if all of the conditions of the Plan are
fulfilled and are not waived and the Closing Date is not extended. In
exchange for the Equity Portfolio assets and liabilities, the Capital
Accumulation Portfolio will issue to the Equity Portfolio a number of
Capital Accumulation Portfolio shares having a value equal to the aggregate
net assets of the Equity Portfolio acquired. The Closing Date is currently
scheduled for February 26, 1996 and may be changed as determined by officers
of the Company. As part of the Plan, the Company's shareholders are being
asked to approve a proposed amendment to the Company's Articles of
Incorporation to reclassify the issued and unissued shares of the class of the
Company's common stock currently designated as the Equity Portfolio into the
class of common stock currently designated as the Capital Accumulation
Portfolio. Copies of the Plan and the proposed amendment to the Company's
Articles of Incorporation are attached as Exhibits A and B, respectively,
to this Prospectus/Proxy Statement.
The number of shares of the Capital Accumulation Portfolio to be issued
in the Proposed Merger will be determined on the basis of the relative net
asset values of the Equity Portfolio and the Capital Accumulation Portfolio
calculated as of the Valuation Date. The net asset value of each Portfolio
will be determined by dividing the value of that Portfolio's portfolio
securities, cash and other assets (including accrued but uncollected interest
and dividends), less all liabilities (including accrued expenses but excluding
capital and surplus) by the number of shares of that Portfolio outstanding.
Capital Accumulation Portfolio shares will be distributed to Equity
Portfolio shareholders in exchange for their Equity Portfolio shares, on a pro
rata basis. The number of such full and fractional Capital Accumulation
shares issued to each Equity Portfolio shareholder will be determined by
multiplying the number of Equity Portfolio shares to be exchanged by a
fraction, the numerator of which is the net asset value per share of the
Equity Portfolio and the denominator of which is the net asset value per share
of the Capital Accumulation Portfolio. Thus, the Equity Portfolio shares of
each Equity Portfolio shareholder will be exchanged for the number of full and
fractional shares of the Capital Accumulation Portfolio which, when multiplied
by the net asset value per share of the Capital Accumulation Portfolio, will
have a value equal to the aggregate net asset value of that shareholder's
shares in the Equity Portfolio at the Effective Time on the Closing Date. The
aggregate value of the Capital Accumulation Portfolio shares attributable to
shareholders previously holding Equity Portfolio shares will be the same
immediately after the Proposed Merger as the aggregate value of the Equity
Portfolio shares attributable to such shareholders immediately before the
Proposed Merger.
The Proposed Merger as provided in the Plan is subject to approval of the
shareholders of the Equity Portfolio. Approval requires the affirmative vote
of at least a majority of the Equity Portfolio shares entitled to vote. The
Plan is also conditioned on: (i) acceptance of the amendment to the Company's
Articles of Incorporation by the Maryland Department of Assessments and
Taxation and the amendment's having become effective; (ii) receipt of any
necessary regulatory approvals from the SEC; (iii) receipt of an opinion of
outside counsel that the Proposed Merger qualifies as a tax-free
reorganization under the Code; and (iv) receipt of any necessary regulatory
approvals by relevant state insurance authorities.
REASONS FOR THE PROPOSED MERGER
The Directors of the Company have considered and approved the Proposed
Merger, as recommended by CAM, including entry by the Company on behalf of
each Portfolio into the Plan, as in the best interests of the shareholders.
In making their recommendation to the Directors, the representatives of
CAM reviewed with the Directors various factors about the Company and its
Portfolios and the Proposed Merger. There are certain similarities between
the Capital Accumulation Portfolio and the Equity Portfolio. Specifically,
the Capital Accumulation Portfolio and the Equity Portfolio have certain
similar investment objectives and policies, and relatively comparable risk
profiles. See, "Comparison of Investment Objectives and Policies" below. In
terms of total net assets the Equity Portfolio at August 31, 1995 had net
assets of only approximately $2.8 million. The Capital Accumulation
Portfolio's net assets at such date were approximately $7.6 million. The
Equity Portfolio has not, since its inception in 1992 achieved asset levels on
a continuing basis that would permit it to operate economically and generate a
competitive return. Given the relative similarities between the Portfolios
and the fact that the Portfolios are offered through common distribution
channels and are both managed by CAM, CAM believes that the Equity Portfolio
will not be able to achieve significant increases in asset levels in the
foreseeable future.
The Directors of the Company met on August 2, 1995 and considered the
recommendation of CAM, and, in addition, considered among other things in
general, (i) the terms and conditions of the Proposed Merger; (ii) whether the
Proposed Merger would result in the economic dilution of shareholder
interests; (iii) the comparative performance records of each of the Portfolios;
compatibility of their investment objectives and policies; the investment
experience, expertise and resources of CAM and the Subadvisers; and the
personnel and financial resources of CAM and the Subadvisers; (iv) the fact that
the Capital Accumulation Portfolio will assume certain identified liabilities
of the Equity Portfolio; and (v) the expected federal income tax consequences
of the Proposed Merger.
The Directors also considered the benefits to be derived by shareholders
of the Equity Portfolio from the transfer of its assets to the Capital
Accumulation Portfolio. In this regard, the Directors considered the
economies of scale that could be realized by the participation by shareholders
of the Equity Portfolio in the combined portfolio.
During their consideration of the Proposed Merger, the Directors met with
members of the legal staff at CAM, as well as counsel to the Independent
Directors, regarding the legal issues involved. The Directors also concluded
at a meeting on August 2, 1995 that the Proposed Merger would be in the best
interests of shareholders of the Capital Accumulation Portfolio and that the
interests of the shareholders of the Capital Accumulation Portfolio will not
be diluted as a result of the transactions contemplated by the Proposed Merger.
THE DIRECTORS OF THE COMPANY RECOMMEND THAT THE SHAREHOLDERS OF THE
EQUITY PORTFOLIO APPROVE THE PROPOSED MERGER.
PRO-FORMA CAPITALIZATION
The following tables show the capitalization of the Capital Accumulation
Portfolio and the Equity Portfolio as of August 31, 1995 individually and on a
pro forma basis as of that date, giving effect to the proposed acquisition of
assets and liabilities of the Equity Portfolio at the then net asset value:
CAPITALIZATION OF THE EQUITY PORTFOLIO
AND THE CAPITAL ACCUMULATION PORTFOLIO
CAPITAL PRO FORMA FOR
EQUITY ACCUMULATION CAPITAL ACCUMULATION
PORTFOLIO PORTFOLIO PORTFOLIO
Net Assets............ $2,754,925 $7,612,117 $10,367,042
Shares Outstanding.... 154,804 328,606 447,532
Net Asset Value per
Share................. $17.80 $23.16 $23.16
The table above should be read in conjunction with the Funds' Annual
Report for the fiscal year ended December 31, 1994 and the unaudited statement
of assets and liabilities and statement of operations for June 30, 1995 and the
periods then ended, and the unaudited proforma statement of assets and
liabilities and statement of operations for December 31, 1994 and
August 31, 1995, and the periods then ended, each of which is hereby
incorporated herein by reference.
On the Record Date, there were 234,843.126 and 368,096.669 shares of the
Equity Portfolio and the Capital Accumulation Portfolio, respectively,
outstanding.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES OF INVESTMENT OBJECTIVES
The following discussion is based upon the descriptions of the respective
investment objectives, policies and restrictions set forth in the Company's
CRI Prospectus and Statement of Additional Information for the CRI portfolios.
The Company's CRI Prospectus also offers additional portfolios managed by CAM.
These additional portfolios are not involved in the Proposed Merger, their
investment objectives, policies and restrictions are not discussed in this
Prospectus/Proxy Statement and their shares are not offered hereby.
Although the Capital Accumulation Portfolio invests primarily in
equity securities, it may invest in debt securities. These debt securities
may consist of investment-grade and noninvestment-grade obligations.
Both the Capital Accumulation and Equity Portfolios may, in pursuit of
their investment objectives, purchase put and call options and engage in the
writing of covered call options and secured put options on securities of
issuers that meet their social criteria, and employ a variety of other
investment techniques, including the purchase and sale of market index futures
contracts, financial futures contracts and options on such futures. Both
Portfolios may engage in futures contracts and related options only to protect
against market declines. Neither Portfolio engages in such transactions for
speculation or leverage. It is an operating policy of the Company that
neither Portfolio may invest in options and futures contracts if as a result
more than 5% of its assets would be so invested.
Each Portfolio may engage in repurchase agreements and reverse
repurchase agreements. No more than 10% of either Portfolio's assets may be
invested in repurchase agreements not terminable within seven days.
The Equity Portfolio may borrow no more than 10% of the value of its
assets from banks (and pledge its assets to secure such borrowing) for
temporary or emergency purposes, but not for leverage, while the Capital
Accumulation Portfolio may borrow up to one-third of the value of its assets.
Each Portfolio may also make loans of the securities it holds.
Each Portfolio may lend its securities to New York Stock Exchange
member firms and to commercial banks with assets of $1 billion or more. The
Equity Portfolio may only make loans if the value of the securities loaned
does not exceed 10% of the Portfolio's assets and the Capital Accumulation
Portfolio may lend no more than 5% of its securities.
Each Portfolio may invest up to 25% of its assets in the securities of
foreign issuers. The Portfolios may write exchange-traded call options on
their securities. Call options may be written on portfolio securities,
securities indices, or foreign currencies. With respect to securities and
foreign currencies, each Portfolio may write call and put options on an
exchange or over-the-counter. Neither Portfolio may write options on more
than 50% of its total assets. Management presently intends to cease writing
options if and as long as 25% of such total assets are subject to
outstanding options contracts or if required under regulations of state
securities administrators.
Each Portfolio may write call and put options in order to obtain a
return on its investments from the premiums received and will retain the
premiums whether or not the options are exercised.
The Portfolios may invest up to an aggregate of 5% of their total
assets in exchange-traded or over-the-counter call and put options on
securities and securities indices and foreign currencies. Purchases of such
options may be made for the purpose of hedging against changes in the market
value of the underlying securities or foreign currencies. The Portfolios may
sell a call option or a put option which they have previously purchased prior
to the purchase (in the case of a call) or the sale (in the case of a put) of
the underlying security or foreign currency.
Each Portfolio may invest up to 5% of its net assets in warrants and
stock rights, but no more than 2% of its net assets in warrants and stock
rights not listed on the New York Stock Exchange.
A Portfolio may enter into financial futures contracts and related
options as a hedge against anticipated changes in the market value of its
portfolio securities or securities which it intends to purchase or in the
exchange rate of foreign currencies.
A Portfolio may purchase and sell financial futures contracts which
are traded on a recognized exchange or board of trade and may purchase
exchange or board-traded put and call options in financial futures contracts.
Each Portfolio may engage in transactions in financial futures contracts and
related options only for hedging purposes and not for speculation. In
addition, a Portfolio will not purchase or sell any financial futures contract
or related option if, immediately thereafter, the sum of the cash or U.S.
Treasury bills committed with respect to a Portfolio's existing futures and
related options positions and the premiums paid for related options would
exceed 5% of the market value of its total assets.
The value of a Portfolio's assets as measured in Untied States dollars
may be affected favorably or unfavorably by changes in foreign currency
exchange rates and exchange control regulations, and the Portfolios may
incur costs in connection with conversions between various currencies. The
Portfolios conduct their foreign currency exchange transactions either on a
spot (i.e., cash) basis at the spot rate prevailing in the foreign currency
exchange market, or through forward contracts to purchase or sell foreign
currencies.
The Portfolios may also hedge their foreign currency exchange rate
risk by engaging in currency financial futures and options transactions.
When CAM or a Subadviser believes that the currency of a particular
foreign country may suffer a substantial decline against the United States
dollar, it may enter into a forward contract to sell an amount of foreign
currency approximating the value of some or all of a Portfolio's portfolio
securities denominated in such foreign currency.
The Equity Portfolio may invest up to less than 1% and the Capital
Accumulation Portfolio up to 3% of its assets in investments in securities
that offer a rate of return below the then prevailing market rate and that
present attractive opportunities for furthering the Portfolios' social
criteria.
The Equity Portfolio may not purchase illiquid securities if more than
10%, and the Capital Accumulation Portfolio may not purchase illiquid
securities if more than 15%, of the value of its net assets would be
invested in such securities.
The Capital Accumulation Portfolio and the Equity Portfolio are
subject to different investment screens.
1. The Capital Accumulation Portfolio avoids investing in
companies that, in CAM's opinion, have significant or
historical patterns of violating environmental regulations,
or otherwise have an egregious environmental record.
Additionally, the Portfolio avoids investing in nuclear power
plant operators and owners, or manufacturers of key
components in the nuclear power process.
2. The Capital Accumulation Portfolio will not invest in
companies that are significantly engaged in weapons
production.
3. The Capital Accumulation Portfolio will not invest in
companies that, in CAM's opinion, have significant or
historical patterns of discrimination against employees on
the basis of race, gender, religion, age, disability or
sexual orientation, or that have major labor-management
disputes.
4. The Capital Accumulation Portfolio will not invest in
companies that are significantly involved in the manufacture
of tobacco or alcohol products. The Capital Accumulation
Portfolio will not invest in companies that make products or
offer services that, under proper use, in the Advisor's
opinion, are considered harmful.
The Equity Portfolio seeks to invest in producers or service providers that:
1. deliver safe products and services in ways that sustain our natural
environment.
2. Are managed with particpation throughout the organization in defining
and achieving objectives.
3. Negotiate fairly with their workers, provide an enviornment
supportive of their wellness, do not discriminate on the basis of
race, gender, religion, age, disability, ethnic origin, or sexual
orientation, do not consistently violate regulations of the Equal
Employment Opportunity Commission, and provide opportunities for
women, disadvantaged minorities, and others for whome equal
opportunities have often been denied.
4. Foster awareness of a commitment to human goals, such as creativity,
productivity ,self-respect and responsiblility, within the
organization and the world, and continually recreate a context
within which these goals can be realized.
The Equity Portfolio will not invest in an issuer primarily engaged in:
1. The production of nuclear energy or the manufacture of equipment
to produce nuclear energy.
2. Business activities in support of repressive regimes.
3. The manufacture of weapons systems.
In addition, the Portfolio will not, as a matter of operating policy which
may be changed without the approval of a majority of the outstanding shares,
invest in an issuer primarily engaged in the manufacture of alcoholic
beverages or tobacco products, or the operation of gambling casinos.
The characteristics of each investment policy and the associated risks
are described in the Company's CRI Prospectus and Statement of Additional
Information. Both Portfolios have other investment policies and restrictions
which are also set forth in the Company's CRI Prospectus and Statement of
Additional Information, which are hereby incorporated herein by reference and
available upon request.
PERFORMANCE INFORMATION
The current sub-advisers, Apodaca-Johnston, Brown Capital Management and
Fortaleza Asset Management, assumed the investment management of the Capital
Accumulation Portfolio effective December 8, 1994. Prior to then, it had been
managed by Ariel Capital Management. For the 12 months ended December 31, 1994,
which reflects management by Ariel Capital Management until December 8, and the
new investment managers after that, the Portfolio returned -9.92%. Annual
performance was behind that of the Lipper Growth Funds Average, which returned
- -2.15% for the year.
For the six months ended June 30, 1995, the Portfolio's return was 24.12%,
well ahead of the 17.47% return for the Lipper Growth Funds Average. Each of
the Portfolio's investment managers contributed positive returns that were
ahead of their individual benchmarks. Concentrations in the better performing
sectors, including technology, health care and specialty retailers boosted
performance. Within the technology sector, the Portfolio's investments in
semi-conductor/silicon-related issues experienced enormous growth.
The line graph below is comparing a hypothetical $10,000 investment of the
Capital Accumulation Portfolio to the S&P 400, Russell 2000, and S&P 500:
CALVERT RESPONSIBLY INVESTED
CAPITAL ACCUMULATION PORTFOLIO
Comparison of change in value of a
hypothetical $10,000 investment.
$28,000
====================================
$15,000
==================================== (not able to show graph)
$10,000
====================================
7/91 8/92 6/93 8/94 8/95
......Calvert Responsibly Invested Capital Accumualtion
------S&P 400
======Russell 2000
++++++S&P 500
___________________________________________________________________
Average Annual Total Returns
Period Ending
12/31/94 6/30/95
One Year -9.92% 18.06%
Life of Portfolio (7/91) 4.88% 10.37%
Performance information is for the Capital Accumulation Portfolio only
and does not reflect chganges and expenses of the variable annuity.
Past performance does not indicate future results. The current Adviser
and Sub-Advisers have managed the Portfolio since December 8, 1994.
COMPARATIVE INFORMATION ON SHAREHOLDERS' RIGHTS
FORM OF ORGANIZATION
The Company was incorporated in Maryland on September 27, 1982, and is an
open-end management investment company registered under the 1940 Act. The
Company has seven CRI portfolios, including the Portfolios, designed to
provide opportunities for investing in enterprises that make a significant
contribution to society through their products and services and through the
way they do business.
CAPITALIZATION
The total number of shares of stock of all classes which the Company is
currently authorized to issue is 100 million shares. The par value of each
share is $1.00. The Capital Accumulation Portfolio currently has 4,000,000
authorized shares and the Equity Portfolio currently has 2,000,000 authorized
shares. Fractional shares may be issued. Each Portfolio's shares have equal
voting rights and represent equal proportionate interests in the assets
belonging to the Portfolio. Shareholders of each Portfolio are entitled to
receive dividends and other amounts as determined by the Directors of the
Company. Shareholders of each Portfolio vote separately as to matters that
affect only their particular Portfolio such as approval or amendments of
investment advisory agreements or proposed reclassifications, that affect only
their particular portfolio.
SHAREHOLDER MEETINGS AND VOTING RIGHTS
The Company is not required to hold annual meetings of shareholders. The
Company does not permit cumulative voting. A majority of shares entitled to
vote on a matter constitutes a quorum for consideration of such matter. In
either case, a majority of the shares voting is sufficient to act on a matter
(unless otherwise specifically required by the applicable governing documents
or other law, including the 1940 Act).
LIQUIDATION OR DISSOLUTION
In the event of the liquidation of a Portfolio the shareholders are
entitled to receive, when, and as declared by the Directors, the excess of the
assets belonging to such portfolio over the liabilities belonging to the
Portfolio. The assets so distributable to shareholders of a Portfolio will be
distributed among the shareholders in proportion to the number of shares of
the Portfolio held by them and recorded on the books of the Company.
RIGHTS OF INSPECTION
Shareholders of the respective Funds have the same right to inspect in
Maryland the governing documents, records of meetings of shareholders,
shareholder lists, share transfer records, accounts and books of the Company
as are permitted shareholders of a corporation under the Maryland corporation
law. The purpose of inspection must be for interests of shareholders relative
to the affairs of the Portfolios.
The foregoing is only a summary of certain characteristics of the
operations of the Company's Articles of Incorporation, its By-Laws and
Maryland law and is not a complete description of those documents or the law.
Shareholders should refer to the provisions of such respective Articles of
Incorporation, By-Laws, and Maryland law directly for more complete
information.
ADDITIONAL INFORMATION
Information concerning the operation and management of the Company and
the Portfolios is incorporated herein by reference from the Prospectus dated
May 1, 1995, a copy of which is enclosed, and the Statement of Additional
Information dated as of the same date. A copy of such Statement of Additional
Information is available upon request and without charge by writing to the
Company, at the address listed on the cover page of this Prospectus/Proxy
Statement or by calling toll-free 1-800-368-2748.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended and the 1940 Act, and in
accordance therewith files reports and other information including proxy
material, and charter documents with the SEC. These items can be inspected and
copies obtained at the Public Reference Facilities maintained by the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549.
FINANCIAL STATEMENTS AND EXPERTS
The Statement of Additional Information relating to this
Prospectus/Proxy Statement includes the following financial statements: (i)
financial statements for the fiscal year ended December 31, 1994, included in
the Company's Annual Report for that period; (ii) unaudited financial
statements for the six-months ended June 30, 1995, and (iii) unaudited
pro-forma financial statements combining the Equity Portfolios and the Capital
Accumulation Portfolio's statement of net assets and statement of operations
for December 31, 1994 and August 31, 1995. The financial statements included
in the Company's Annual and Semi-Annual Reports are incorporated by reference
into the Statement of Additional Information. The financial statements for the
year ended December 31, 1994 included in the Company's Annual Report have been
audited by Coopers & Lybrand LLP, independent accountants, and have been
included in the Statement of Additional Information in reliance upon the report
of Coopers & Lybrand LLP given upon the authority of such firm as experts in
accounting and auditing.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of the Company
will be passed upon by William M. Tartikoff, Esq., General Counsel of The
Calvert Group, Ltd. Sullivan & Worcester, Washington, D.C., has advised the
Company on certain federal income tax matters.
OTHER BUSINESS
The Directors of the Company do not intend to present any other business
at the Meeting. If, however, any other matters are properly brought before the
Meeting, the persons named in the accompanying form of proxy will vote thereon
in accordance with their judgment.
THE BOARD OF DIRECTORS OF THE COMPANY, INCLUDING THE INDEPENDENT
DIRECTORS, RECOMMENDS APPROVAL OF THE PROPOSED MERGER AND ANY UNMARKED PROXIES
WITHOUT INSTRUCTIONS TO THE CONTRARY WILL BE VOTED IN FAVOR OF APPROVAL OF THE
PROPOSED MERGER.
December 30, 1995
<PAGE>
EXHIBIT A
Ex-99.17
ACACIA CAPITAL CORPORATION
(the "Company")
PLAN OF RECLASSIFICATION
(the "Plan")
I. RECITALS
The Company is a Maryland corporation whose shares of common stock
are currently classified into seven classes or series ("Portfolios"),
including the Calvert Responsibly Invested ("CRI") Equity Portfolio (the
"Equity Portfolio") and the CRI Capital Accumulation Portfolio (the
"Capital Accumulation Portfolio").
The Company is registered under the Investment Company Act of 1940,
as amended ("1940 Act") as an open-end management investment
company, and its shares of common stock are registered under the
Securities Act of 1933, as amended (the "1933 Act").
The Company offers shares of certain Portfolios to Providian Life and
Health Insurance Company ("Providian") and its Separate Accounts and other
insurance companies and their separate accounts.
Providian issues, or intends to issue, variable annuity contracts
("contracts") through its Separate Account or Accounts. The Company
understands that Providian votes the shares of the Equity Portfolio
held by its Separate Account that are attributable to contracts in
accordance with instructions received from holders of interests in the
contracts (hereinafter, "shareholders"). The Company further understands
that Providian votes shares of the Equity Portfolio as to which no
instructions have been received in the same proportion as the shares of
the relevant Separate Account as to which instructions have been received.
The Directors of the Company have determined that it is advisable to
amend the Articles of Incorporation of the Company to reclassify the
issued and unissued shares of common stock currently designated as the
Equity Portfolio into the class of common stock currently designated as
the Capital Accumulation Portfolio (the "Reclassification") and have
directed that the proposed amendment be submitted for consideration at a
special meeting of shareholders.
The Directors of the Company have determined - independently for the
Equity Portfolio and for the Capital Accumulation Portfolio - that the
Reclassification, including the consideration, is reasonable and fair,
does not involve overreaching on the part of any person concerned, and
will not dilute the interests of shareholders. In addition, the Directors
have determined that the investment objectives of the Equity Portfolio and
the Capital Accumulation Portfolio are compatible so that the
Reclassification will be compatible with the investment objectives and
policies recited in the registration statement and reports relating to
each. Furthermore, the Directors have determined that the
Reclassification would be in the best interests of shareholders and is
consistent with the general purposes of the 1940 Act, the protection of
investors, and the purposes fairly intended by the policy and provisions
of the 1940 Act.
It is intended that the Reclassification shall qualify as a tax-free
reorganization under Section 368 of the Internal Revenue Code of 1986, as
amended (the "Code").
II. MECHANICS OF RECLASSIFICATION
A. Approval of Shareholders.
1. Meeting Date. In accordance with Section 2-604 of the Maryland
General Corporation Law (the "Maryland Law") and the Company's Articles of
Incorporation, the Reclassification shall be submitted to the shareholders
of the Equity Portfolio for their approval at a special meeting (the
"Meeting") to be held on or about February 16, 1996 at 10:00 a.m., Eastern
Time, at the offices of the Company, 4550 Montgomery Avenue, Suite 1000N,
Bethesda, Maryland 20814.
2. Record Date. The close of business on December 18, 1995, shall
be the record date (the "Record Date") for the Meeting and only
shareholders of record of the Equity Portfolio on such date shall be
entitled to notice of and be permitted to give voting instructions at the
Meeting.
3. Required Vote. The Reclassification shall not become effective
without the affirmative vote of the holders of a majority (as defined in the
1940 Act) of the interests of the total number of Equity Portfolio shares
outstanding and entitled to vote thereon.
4. Form N-14 Registration Statement/Proxy Materials. The
appropriate officers of the Company shall take all actions necessary or
appropriate to solicit the approval of the shareholders of the Equity
Portfolio, including the preparation and execution of a registration
statement on Form N-14 of the Securities and Exchange Commission (the
"SEC"), and any amendments thereto, containing a
notice of meeting, proxy statement, and voting instruction forms
(collectively, the "proxy materials"), and the filing of such proxy
materials with the SEC.
5. Mailing of Proxy Materials. The appropriate officers of the
Company shall cause the proxy materials to be mailed on or about
December 30, 1995, as appropriate, to each shareholder of the Equity
Portfolio of record on the Record Date.
B. Amendment of Articles of Incorporation.
In accordance with Maryland Law, the Company shall effect the
Reclassification by amending its Articles of Incorporation.
1. Form of Amendment. The amendment to the Company's Articles of
Incorporation (the "Amendment") shall be in the form of Articles Supplementary
with such modifications as the officers executing the same deem necessary
or appropriate, consistent with the purposes of this Plan.
2. Date of Filing. The appropriate officers of the Company shall
execute, acknowledge, verify and file the Amendment with the Maryland
State Department of Assessments and Taxation (the "Maryland State
Department") on or about Feburary 19, 1996, following shareholder approval,
for effectiveness at 12:01 a.m. or Feburary 26, 1996.
C. Transfer of Assets.
In connection with the Reclassification of shares, the Equity
Portfolio shall transfer all of its assets and liabilities to the Capital
Accumulation Portfolio, in exchange for which the Capital Accumulation
Portfolio shall issue to the Equity Portfolio a number of the Capital
Accumulation Portfolio shares having a value equal to the aggregate net
assets of the Equity Portfolio acquired.
1. Time of Transfer. The above-described transfer shall occur on
February 26, 1996 (the "Closing Date"), or such other time and date
as determined by the appropriate officers of the Company.
2. Issuance of Capital Accumulation Portfolio Shares to the Equity
Portfolio. The number of shares of the Capital Accumulation Portfolio to
be issued to the Equity Portfolio shall be determined on the basis of the
relative net asset values of the Capital Accumulation Portfolio and the
Equity Portfolio calculated as of the close of business on the business
day immediately preceding the Closing Date. The net asset value of each
Portfolio shall be determined by dividing the value of that Portfolio's
securities, cash, and other assets (including accrued but uncollected
interest and dividends), less all liabilities (including accrued expenses
but excluding capital and surplus) by the number of shares of that
Portfolio outstanding.
3. Distribution of Capital Accumulation Portfolio Shares to Equity
Portfolio Shareholders. Upon effectiveness of the Amendment, the Equity
Portfolio shall distribute the Capital Accumulation Portfolio shares it
receives to the Equity Portfolio shareholders in exchange for their Equity
Portfolio shares, on a pro rata basis. The number of such full and
fractional Capital Accumulation Portfolio shares issued to each Equity
Portfolio shareholder shall be determined by multiplying the number of
Equity Portfolio shares to be exchanged by a fraction, the numerator of
which is the net asset value per share of the Equity Portfolio and the
denominator of which is the net asset value per share of the Equity
Portfolio. Thus, the Equity Portfolio shares of each Equity Portfolio
shareholder shall be exchanged for the number of full and fractional
shares of the Capital Accumulation Portfolio which, when multiplied by the
net asset value per share of the Capital Accumulation Portfolio, will have
a value equal to the aggregate net asset value of that shareholder's
shares in the Equity Portfolio on the Closing Date.
D. Costs of Effecting the Reclassification.
The Equity Portfolio and the Capital Accumulation Portfolio shall
each pay its portion of the expenses attributable to the Reclassification.
E. Miscellaneous.
1. Termination of Agreements. The appropriate officers of the
Company shall cause all agreements with the Equity Portfolio or the
Company to be terminated as they relate to the Equity Portfolio.
2. General Authority. The appropriate officers of the Company
shall, in the name and on behalf of the Company or either of the
Portfolios, do and perform such further acts and things, modify any dates
or deadlines, and execute and deliver or file such other instruments,
certificates, and documents as they shall determine to be necessary,
appropriate, or desirable to carry out the foregoing, any such
determination to be conclusively evidenced by the doing or performing of
any such act or thing or the execution and delivery or filing of any such
instrument, certificate, or document.
III. CONDITIONS PRECEDENT
The Reclassification shall not become effective unless each of the
following has occurred:
A. The Amendment shall have been approved by the affirmative vote of
the holders of a majority (as defined in the 1940 Act) in interests of the
total number of Equity Portfolio shares outstanding and entitled to vote
thereon;
B. The Articles Supplementary shall have been accepted for filing by the
Maryland Department of Assessments and Taxation and become effective;
C. The Company shall have received any necessary regulatory
approvals of the proposed Reclassification by the SEC;
D. The Company shall have received an opinion of counsel reasonably
satisfactory to it that the Reclassification shall qualify as a tax-free
reorganization under Section 368 of the Code; and
E. The Insurance Companies shall have received any necessary
regulatory approvals of the proposed Reclassification by relevant state
insurance authorities.
At the Closing Date, the Capital Accumulation Portfolio shall
succeed, without any transfer other than that contemplated in Section II.C
above, to all the assets belonging to the Equity Portfolio (or allocated
to the Equity Portfolio by the Board of Directors of the Company pursuant
to Article Ninth of the Company's Restated Articles of Incorporation) and
shall be subject to all the liabilities of the Equity Portfolio in the same
manneras if the liabilities had been incurred by, or allocated to, the Capital
Accumulation Portfolio in the first instance.
Upon effectiveness of the Amendment, all of the Shares of the Equity
Portfolio shall be reclassified as Capital Accumulation Portfolio shares,
and the Equity Portfolio shall cease to be a separate class of stock of
the Company.
Acacia Capital Corporation
By:
William M. Tartikoff
Vice President
<PAGE>
EXHIBIT B
Ex-3.(i)
RESTATED
ARTICLES OF INCORPORATION
ACACIA CAPITAL CORPORATION
FIRST: The name of the Corporation is Acacia Capital
Corporation.
SECOND: The Corporation desires to restate its charter as
currently in effect.
THIRD: The provisions set forth in the Articles of Restatement
are all the provisions of the charter currently in effect.
FOURTH: These Articles of Restatement have been approved by a
majority of the entire Board of Directors.
FIFTH: The charter is not amended by the Articles of
Restatement.
SIXTH: The nature of the business or purposes to be conducted
or promoted are as follows:
(A) To conduct and carry on the business of an investment
trust or investment company of the general management
type.
(B) To invest and reinvest the property and assets of the
corporation in securities of different types and
classes, including, without in any way limiting the
generality thereof, stocks, bonds, notes, debentures,
and certificates of interest or participation, and in
other personal property without limitation or
restriction except for the specific restrictions
hereinafter set forth.
(C) To act as financial or fiscal agent for any person,
firm, or corporation and as such to manage, control,
and deal with, in any and every way whatsoever, the
property, holdings, investments, and business interests
thereof.
(D) To endorse, guarantee, or undertake the performance of
any obligation, contract, or engagement of any other
corporation, or other party, if the Corporation is
interested in such obligation, contract or engagement.
(E) To purchase, retire, redeem, hold, sell, reissue,
transfer, and otherwise deal in, shares of its own
capital stock; and to apply to such purchase,
retirement, or acquisition any funds or property of the
Corporation, whether capital or surplus or otherwise,
as may be permitted by law.
(F) To engage in any lawful act or activity for which
corporations may be organized under the General
Corporation Law of Maryland.
(G) To do and all of the acts herein set forth or implied
and such other acts as are incidental or conducive to
the attainment of the objectives and purposes of the
Corporation; and to do any and all such acts either as
principal or in the capacity of agent, broker, factor,
contractor, or otherwise.
SEVENTH: The current address of the principal office of the
Corporation is 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland
20814.
EIGHTH: The Corporation's current resident agent is William M.
Tartikoff, Calvert Group, 4550 Montgomery Avenue, Suite 1000N, Bethesda,
Maryland 20814.
NINTH: The total number of shares of stock of all classes
which the Corporation is authorized to issue is One Hundred Million
(100,000,000) shares of stock. The par value of each share shall be One
Cent ($0.01). The shares shall be allocated as follows for each series:
No. of Shares per Series
CRI Balanced Growth Portfolio 75,000,000
CRI Money Market Portfolio 9,000,000
CRI Global Equity Portfolio 4,000,000
CRI Capital Accumulation Portfolio 6,000,000
CRI Bond Portfolio 1,000,000
CRI Strategic Growth Portfolio 5,000,000
Total Shares Authorized 100,000,000
The Board of Directors is hereby expressly granted the authority to
issue any remaining unissued shares and to establish additional series.
The Board of Directors is also expressly granted the authority to
increase or decrease the number of shares of any series, subject to the
provisions that the aggregate number of shares, and the number of shares
allocated to all series cannot exceed the total authorized number of
shares, and that the number of shares allocated to any series may not be
decreased below the number of shares issued and outstanding for such
series.
TENTH: The powers, preferences and rights of each series and
the qualifications, limitations and restrictions on each such series
shall be as follows:
(A) (1) The assets of the Corporation received as
consideration for the issue of stock of each
series, together with all income, earnings and
profits on such assets, and proceeds derived
from the sale, exchange or liquidation of such
assets, and any assets derived from the
reinvestment of such income, earnings and
profits, and proceeds in whatever form
received, shall for all purposes, subject only
to the rights of creditors, be irrevocably
allocated to the series for which such assets
were received by the Corporation, and be so
entered upon the books of account and referred
to in these Articles as "the assigned assets"
of such series.
(2) Each series will be managed in accordance with
the investment policy for such series.
(3) The assigned assets of each series shall be
charged with the specific liabilities
(including accrued expenses and reserves as
conclusively determined from time to time by
the Board of Directors) of such series and the
general liabilities of the Corporation in
proportion to the net asset values of the
respective series. Any liability applicable
to more than one series, but not to all
series, shall be allocated to each series to
which it is applicable in proportion to the
net asset values of such series. The
allocation of any liability to a series by the
Board of Directors shall be conclusive.
(B) Each share of stock of a series shall have the same rights,
privileges and preferences with respect to the
assigned assets of such series as each of the
other shares of stock of that series. Each
share of stock of a series shall be entitled
to participate equally in such dividends as
may be declared from time to time by the Board
of Directors. Each fractional share of stock
of a series shall have proportionately the
same rights, privileges and preferences with
respect to the assigned assets of such series
as a whole share, and shall participate
proportionately in dividends as declared.
(C) (1) "Shareholder" as used in these Articles shall
mean a shareholder of record as defined in the
By-Laws.
(2) Each shareholder of the Corporation shall have
one vote for each share held by the
shareholder, and shall have a fractional vote
for each fraction of a share held by the
shareholder.
(3) Whenever the vote of shareholders is required
or permitted to be taken in connection with
any matter affecting the Corporation or any
series, such vote shall be taken, and
effective action shall be determined in
accordance with the General Laws of the State
of Maryland or the Investment Company Act of
1940, whichever is more strict.
ELEVENTH: The number of directors of the Corporation
shall be five (5), which number may be increased or decreased pursuant
to the By-Laws of the Corporation but shall not be less than three (3).
The names of the Directors are Clifton S. Sorrell, Jr., Frank H. Blatz,
Jr., Charles E. Diehl, Arthur J. Pugh, and South Trimble III.
TWELFTH: The following provisions are hereby adopted for the
purpose of defining, limiting and regulating the powers of the
Corporation and of the Directors and shareholders.
(A) No holder of shares of stock shall be entitled as a matter
of right to subscribe for or purchase or
receive any part of any treasury shares held
by the Corporation, or of any new or
additional issues of shares of stock or
securities convertible into shares of stock of
the Corporation, whether now or hereafter
authorized, or whether issued for money, for a
consideration other than money, or by way of
dividends.
(B) Upon the request of any shareholder, the Corporation shall
repurchase shares owned by such shareholder on
the terms and conditions specified in the
By-Laws.
(C) With respect to the issuance and sale of shares of the
Corporation's stock, or securities convertible
into shares of stock, the Corporation shall
receive not less than the net asset value per
share determined in accordance with the
By-Laws.
(D) Assets of this Corporation may be held or deposited with a
bank or trust company or other organization as
custodian and, except as provided below, the
Corporation may employ any agency or
instrumentality, incorporated or
unincorporated, to render management services
of any nature with respect to the conduct of
the business of the Corporation, and to manage
and direct the business and activities of the
Corporation to such extent as the Board of
Directors may determine from time to time,
whether or not such employment involves
delegation of functions usually or customarily
performed by the Board of Directors or
officers of the Corporation. However, this
Corporation shall contract with a professional
investment manager which is registered under
the Investment Advisers Act of 1940 to provide
investment advice to the Corporation and to
manage the investments of the Corporation's
assets.
(E) The Corporation reserves the right from time to time to
make any amendment of its Articles, now or
hereafter authorized by law, including any
amendment which alters the contract rights of
any outstanding stock.
(F) The original By-Laws of the Corporation have been adopted
by the Directors. The Board of
Directors shall have the power to make, alter
or repeal any By-Law, except those By-Laws
which by statute or By-Law provision must be
submitted to shareholders for a vote.
(G) The use of the Corporation of the name "Acacia" and all
trademarks now or hereafter associated with
Acacia Mutual Life Insurance Company are
subject to and conditioned upon the continuing
consent of Acacia Mutual Life Insurance
Company, a Washington, D.C. Corporation, which
consent may be withdrawn at any time.
(H) The Corporation shall have the power and authority to
indemnify its directors, officers and
employees to the fullest extent permitted by
law.
THIRTEENTH:The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, the undersigned hereby execute these Articles of
Restatement and acknowledge the same to be their act and further
acknowledge that, to the best of their knowledge, the matters and facts
set forth herein are true in all materials respects, under the penalties
of perjury.
Dated this 3 rd day of November, 1995.
Acknowledgement:___________________________
Clifton S. Sorrell, Jr.
Chairman of the Board
and Director
ATTEST:_____________________________________
William M. Tartikoff
Secretary
