SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF
1934
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[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
Calvert Municipal Fund, Inc.
(Name of Registrant as Specified in Its Charter)
William M. Tartikoff, Esq.
Secretary
(Name of Person Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
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{Tentative Shareholder Letter from President}
[DATE - Approximately December 31, 1998]
Dear Shareholder:
I am writing to inform you of the upcoming special meeting for shareholders of
the Calvert Municipal Fund, Inc..
A summary of the proposals and the formal Notice of Meeting appears on the
next few pages, followed by the detailed proxy statement. Please take a few
minutes to read the enclosed material and vote on these important issues. The
Board of Trustees/Directors, including myself, believes these changes are in
your best interest and that of your Fund.
Regardless of the number of shares you own, it is important that you take the
time to read the enclosed proxy materials, and vote on the issues as soon as
you can. You may vote by mail, by telephone, through the internet, by
facsimile machine, or in person. If you do not cast your vote, you may be
contacted by our proxy solicitation service, Shareholder Communications, Inc.,
or by a Calvert employee. Calvert Municipal will have to incur the expense of
additional solicitations. All shareholders benefit from the speedy return of
proxy votes.
I appreciate the time you will take to review this important matter. If we may
be of any assistance or if you have any questions about the proxy issues,
please call us at (800) 368-2745. Our hearing-impaired shareholders may call
(800) 541-1524 for a TDD connection.
Sincerely,
/s/
Barbara J. Krumsiek
President and Chief Executive Officer
Calvert Group, Ltd.
<PAGE>
Calvert Municipal Fund, Inc.
Calvert National Municipal Intermediate Fund
Calvert California Municipal Intermediate Fund
Calvert Maryland Municipal Intermediate Fund
Calvert Virginia Municipal Intermediate Fund
Overview
The table below lists the proposals and gives a brief reason the proposal
should be changed or approved. Each proposal is to be voted on by all the
Portfolios of Calvert Municipal Fund, Inc., as listed above. Please be sure to
read this entire proxy statement and cast your votes as soon as possible.
{This table will be formatted by the typesetter in tabular format}
Proposal Number 1
Proposal
To approve a new investment advisory agreement with the investment advisor,
Calvert Asset Management Company, Inc. ("CAMCO").
Reason
CAMCO is a subsidiary of Calvert Group, Ltd. which is owned by Acacia Mutual
Life Insurance Company ("Acacia"). Acacia plans to merge with another
insurance company, Ameritas Insurance Holding Company. Because of the merger
of the ultimate parent company, the investment advisory contract should be
approved by shareholders.
Proposal Number 2
Proposal
To elect the Board of Trustees/Directors.
Reason
It has been several years since the Board members have been voted on by
shareholders. Recently, some new members have been added; thus, it is
appropriate for the shareholders to vote on the complete slate.
Proposal Number 3
Proposal
To change the concentration policy to allow each Portfolio of CMF to
concentrate in one or more industries.
Reason
The investment advisor, CAMCO, believes that the Portfolios shown to the left
will have greater investment flexibility if it becomes nondiversified and is
allowed to concentrate in one or more industries. This will permit the Fund to
acquire larger positions in the securities of individual issuers, such as
hospitals, housing bonds, or utilities, and may provide opportunities to
enhance the investment performance. In fact, CAMCO may be able to more
efficiently invest Fund assets if allowed to concentrate in one industry, and
therefore may become more competitive in purchasing securities.
Proposal Number 4
Proposal
To approve amended fundamental investment restrictions to (a) delete
restrictions that are no longer required to be fundamental due to changes in
state laws; (b) change some of the fundamental policies and restrictions to
non-fundamental operating policies; and (c) to revise the language of those
restrictions that are still required to be fundamental.
Reason
Current investment restrictions (and policies, for some of the Funds) are more
restrictive than Federal law. A shareholder vote is required to change the
restrictions and policies because they are considered fundamental. CAMCO has
recommended to the Board that the investment restrictions of the Portfolios be
changed to conform to, but not be more restrictive than, federal law, and
changing the policies so that they can be altered by the Board without a
shareholder vote (nonfundamental policies or restrictions). This would give
each of the Portfolios more flexibility and may help each Portfolio to more
easily adapt to different investment environments.
Proposal Number 4
Proposal
To ratify the Board's selection of auditors, PricewaterhouseCoopers, L.L.P.
Reason
Periodically, shareholders will be asked to approve independent auditors for
Calvert Funds. The auditors review reports, documents filed with federal and
state governments, and help to ensure that the Funds are complying with
generally accepted accounting principles.
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Calvert Municipal Fund, Inc.
Calvert National Municipal Intermediate Fund
Calvert California Municipal Intermediate Fund
Calvert Maryland Municipal Intermediate Fund
Calvert Virginia Municipal Intermediate Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on February 24, 1999
NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders of the Calvert
Municipal Fund, Inc. ("CMF" or the "Fund") will be held in the Tenth Floor
Conference Room of Calvert Group, Ltd., Air Rights North Tower, 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland at 9:00 a.m. on Wednesday,
February 24, 1999 for the following purposes:
I. To approve a new investment advisory agreement with the investment
advisor, Calvert Asset Management Company, Inc. ("CAMCO"), identical
to the current investment advisory agreements in all material
respects.
II. To elect the Board of Trustees/Directors.
III. To change the concentration policy to allow each Portfolio of CMF to
concentrate in one or more industries.
IV. To approve amended fundamental investment restrictions to (a) delete
restrictions that are no longer required to be fundamental due to
changes in state laws; (b) change some of the fundamental policies
and restrictions to non-fundamental operating policies; and (c) to
revise the language of those restrictions that are still required to
be fundamental.
V. To ratify the Board's selection of auditors, PricewaterhouseCoopers,
L.L.P.
VI. To transact any other business that may properly come before the
Special Meeting or any adjournment or adjournments thereof.
By Order of the Trustees/Directors,
/s/
William M. Tartikoff, Esq.
Vice President
The approximate date on which this proxy statement and form of proxy are first
being mailed to shareholders is December 31, 1998.
<PAGE>
Calvert Municipal Fund, Inc.
Calvert National Municipal Intermediate Fund
Calvert California Municipal Intermediate Fund
Calvert Maryland Municipal Intermediate Fund
Calvert Virginia Municipal Intermediate Fund
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
PROXY STATEMENT
December 31, 1998
We are sending this proxy statement to you to ask you to approve several
important changes. You may vote by mail, by telephone, by facsimile, through a
secure internet website, or in person. Your vote is important. Please call
800-368-2745 if you have questions about this proxy.
This statement is furnished in connection with the solicitation of proxies by
the Board of Trustees of the Calvert Municipal Fund, Inc. (the "Board") to be
used at the Special Meeting of Shareholders. The Special Meeting will be held
in the Tenth Floor Conference Room of Calvert Group, Ltd., Air Rights North
Tower, 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland at 9:00 a.m. on
Wednesday, February 24, 1999, or at such later time or date made necessary by
adjournment for the purpose set forth in the Notice of Meeting.
Calvert Municipal Fund, Inc. is an open-end management investment company that
was first incorporated in Maryland in 1992. It has four Portfolios: Calvert
National Municipal Intermediate Fund, Calvert California Municipal
Intermediate Fund, Calvert Maryland Municipal Intermediate Fund, and Calvert
Virginia Municipal Intermediate Fund.
PROPOSALS
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Proposal 1
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To approve a new investment advisory agreement with the investment advisor,
CAMCO.
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Discussion
The following circumstances affect the terms of the current investment
advisory agreement (the "Current Advisory Agreement"); therefore, Management
proposes that a new advisory agreement be executed:
CAMCO is an indirectly wholly-owned subsidiary of Acacia Mutual Life
Insurance Company ("Acacia"), which subject to certain conditions, plans
to merge with Ameritas Insurance Holding Company ("Ameritas") (such
planned transaction is hereafter referred to as the "Merger"). The
surviving company will be named Ameritas Acacia Mutual Holding Company.
Although the Merger could be considered a change in control of CAMCO,
terminating the Current Advisory Agreement, the Board has received
assurances that it does not cause such a change. Nonetheless, in order to
remove any possible doubt as to the status of the Current Advisory
Agreement, the Board has approved, and recommends that shareholders
approve, a standard investment advisory agreement between CMF and CAMCO
(the "New Advisory Agreement").
Despite the importance of the proposed changes, CAMCO anticipates there will
be no effect the actual investment management operations with respect to CMF.
The Current Advisory Agreement
Under the Current Advisory Agreement, CAMCO provides a continuous investment
program for CMF, subject to the control of the Board. The Current Advisory
Agreement was last submitted to shareholders in 1992 at the inception of the
Fund. Since then, the Contract has been approved by the Fund's Directors on an
annual basis, in accordance with the requirements of the Investment Company
Act of 1940.
The terms of the Current Advisory Agreement between CAMCO and CMF include the
services to be provided to the Fund, general obligations of CAMCO, expenses of
the Fund, liability issues, and fees. The Current Advisory Agreement provides
for automatic termination unless its continuance is approved at least annually
by (i) a majority of the Board, including those who are not parties to the
Agreement or interested persons, within the meaning of the Investment Company
Act of 1940 (the "1940 Act"), of any such party ("Independent Directors"), and
(ii) the holders of a majority of the outstanding shares of CMF. The Current
Advisory Agreement terminates automatically upon its assignment and is
terminable at any time, without penalty, by the Board, CAMCO, or the holders
of a majority of the outstanding shares of each CMF Portfolio, upon 60 days'
prior written notice.
The New Advisory Agreement
The terms and conditions of the New Advisory Agreement are identical to the
terms and conditions of the Current Advisory Agreement, except as to effective
and termination dates. If approved by shareholders, the New Advisory
Agreements will continue until January 1, 2001 unless terminated earlier by
either party, and provided that at least annually thereafter its continuance
is approved in the same manner as prescribed in the Current Advisory Agreement.
The description of the New Advisory Agreements is qualified in its entirety by
reference to the New Advisory Agreement, attached hereto as Appendix 1.
Calvert Asset Management Company, Inc.
CAMCO has investment advisory contracts with eight investment companies: First
Variable Rate Fund for Government Income, Calvert Tax-Free Reserves, Calvert
Cash Reserves, Calvert Social Investment Fund, The Calvert Fund, Calvert
Municipal Fund, Inc., Calvert World Values Fund, Inc., and Calvert Variable
Series, Inc. Each has a substantially similar investment advisory contract
with CAMCO, though the actual fees and breakpoints may vary.
Reno J. Martini, Senior Vice President and Chief Investment Officer for CAMCO,
has primary responsibility for rendering advisory services to CMF. Mr. Martini
oversees the management of all Calvert Funds. It is anticipated that each of
the directors and officers of CAMCO will hold the same position with CAMCO
after the Merger. The address of the directors and officers is 4550 Montgomery
Avenue, Suite 1000N, Bethesda, Maryland, 20814, unless otherwise noted. The
directors and executive officers of CAMCO are listed below:
Charles T. Nason, Director. Chairman, President and Chief Executive
Officer of The Acacia Group, 7315 Wisconsin Avenue, Bethesda, Maryland
20814.
*Barbara J. Krumsiek, Director. President of CAMCO and President, Chief
Executive Officer and Vice Chairman of Calvert Group, Ltd.
*David R. Rochat, Director and Senior Vice President.
Robert-John H. Sands, Director. Senior Vice President and General
Counsel, The Acacia Group, 7315 Wisconsin Avenue, Bethesda, Maryland
20814.
*Reno J. Martini, Senior Vice President and Chief Investment Officer.
*Ronald M. Wolfsheimer, Senior Vice President and Chief Financial
Officer.
*William M. Tartikoff, Senior Vice President, Secretary, and General
Counsel.
Matthew D. Gelfand, Senior Vice President.
*Daniel K. Hayes, Vice President.
John Nichols, Vice President.
Persons marked with a *, above, are also Trustees/Directors and/or officers of
CMF.
A. The Merger of CAMCO's parent company
CAMCO is an indirect, wholly-owned subsidiary of Acacia. On September 14,
1998, seeking a strategic affiliation to create a stronger, more diversified
insurance and financial services enterprise, Acacia and Ameritas entered into
an agreement of merger which provides for the merger of their respective
mutual holding companies.
Acacia and its related subsidiaries offer traditional life insurance and
annuity products, as well as variable products, special banking products and
services, and a variety of mutual funds, and operate a full service financial
planning broker dealer, while Ameritas and its subsidiaries specialize in
variable life, fixed and variable annuities, group dental, low-load insurance
products and 401(k) and other investment products. This strategic affiliation
is expected to create a stronger, more diversified insurance and financial
services enterprise, with almost $11 billion in assets under management,
insurance assets of $6 billion, $21 billion life insurance in-force, over $750
million in revenues and approximately $750 million in equity/capital.
The Merger is subject to the approval of the members of both Acacia and
Ameritas and is further conditioned upon approval by the appropriate federal
and state regulatory authorities.
CAMCO will not be directly affected by the Merger and will remain a
wholly-owned subsidiary of Calvert Group, Ltd. As a result of the Merger,
however, CAMCO will become an indirect, wholly-owned subsidiary of Ameritas
Acacia Mutual Holding Company.
Acacia's current address is 7315 Wisconsin Avenue, Bethesda, Maryland 20814.
After consummation of the Merger, Ameritas Acacia Mutual Holding Company's
principal place of business will be 5900 "O" Street, Lincoln, Nebraska
68501-1889.
Recommendation
Based on its evaluation of the information presented, the Board has determined
that the changes reflected in the proposed New Advisory Agreement are in the
best interests of the shareholders of CMF. The Board based this determination
primarily upon a review of all materials related to the Merger. The Board
concluded that they were satisfied that CAMCO's services to CMF would not be
affected by the Merger and that such Merger would not impose an unfair burden
on CMF;
Thus, the Board, including a majority of the Independent Trustees/Directors,
approved the New Advisory Agreement (subject to approval by shareholders) and
authorized submission of the New Advisory Agreement to shareholders for
approval. Accordingly, the Board recommends that shareholders vote FOR the
proposed New Advisory Agreement.
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Proposal 2
To elect the Board of Trustees.
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Discussion
The purpose of this proposal is to elect the currently serving members of the
Board of Trustees. All of the nominees listed below have served as Trustees
continuously since originally elected or appointed. Each of the nominees
elected will serve as a Trustee until the next meeting called for the purpose
of electing a Board of Trustees and until a successor is elected and
qualified, or until death, retirement, resignation or removal.
{This will be formatted in tabular format by the typesetter}
Name
Date of Birth, Principal Occupation
& Year Elected During Last Five Years
or Appointed and Other Directorships
Richard L. Baird, Jr.
DOB: 05/09/48
1986
Mr. Baird is Executive Vice President for the Family Health Council, Inc. in
Pittsburgh, Pennsylvania, a non-profit corporation which provides family
planning services, nutrition, maternal/child health care, and various health
screening services. Mr. Baird is a trustee/director of each of the investment
companies in the Calvert Group of Funds, except for Calvert Variable Series,
Inc., Calvert New World Fund, Inc. and Calvert World Values Fund, Inc.
Frank H. Blatz, Jr., Esq.
DOB: 10/29/35
1982
Mr. Blatz is a partner in the law firm of Snevily, Ely, Williams & Blatz. He
was formerly a partner with Abrams, Blatz, Gran, Hendricks & Reina, P.A. He is
also a director of Calvert Variable Series, Inc.
Frederick T. Borts, M.D.
DOB: 7/23/49
1976
Dr. Borts is a radiologist with Kaiser Permanente. Prior to that, he was a
radiologist at Bethlehem Medical Imaging in Allentown, Pennsylvania.
Charles E. Diehl
DOB: 10/13/22
1983
Mr. Diehl is a self-employed consultant and is Vice President and Treasurer
Emeritus of the George Washington University. He has retired from University
Support Services, Inc. of Herndon, Virginia. Formerly, he was a Director of
Acacia Mutual Life Insurance Company, and is currently a Director of Servus
Financial Corporation.
Douglas E. Feldman, M.D.
DOB: 5/23/48
1982
Dr. Feldman practices head and neck reconstructive surgery in the Washington,
D.C., metropolitan area.
Peter W. Gavian, CFA
DOB: 12/8/32
1980
Mr. Gavian is President of Corporate Finance of Washington, Inc. Formerly, he
was a principal of Gavian De Vaux Associates, an investment banking firm. He
is also a CFA and an accredited senior business appraiser.
John G. Guffey, Jr.
DOB: 5/15/48
1976
Mr. Guffey is chairman of the Calvert Social Investment Foundation, organizing
director of the Community Capital Bank in Brooklyn, New York, and a financial
consultant to various organizations. In addition, he is a director of the
Community Bankers Mutual Fund of Denver, Colorado, a director of Ariel Funds,
and the Treasurer and Director of Silby, Guffey, and Co., Inc., a venture
capital firm. Mr. Guffey is a trustee/director of each of the other investment
companies in the Calvert Group of Funds, except for Calvert Variable Series,
Inc. and Calvert New World Fund, Inc.
*Barbara J. Krumsiek
DOB: 8/9/52
1997
Ms. Krumsiek serves as President, Chief Executive Officer and Vice Chairman of
Calvert Group, Ltd. and as an officer and director of each of its affiliated
companies. She is a director of Calvert-Sloan Advisers, L.L.C., and a
trustee/director of each of the investment companies in the Calvert Group of
Funds. Ms. Krumsiek is the President of each of the investment companies,
except for Calvert Social Investment Fund, of which she is the Senior Vice
President. Prior to joining Calvert Group, Ms. Krumsiek served as a Managing
Director of Alliance Fund Distributors, Inc.
M. Charito Kruvant
DOB: 12/8/45
1996
Ms. Kruvant is President and CEO of Creative Associates International, Inc., a
firm that specializes in human resources development, information management,
public affairs and private enterprise development. She is also a director of
Acacia Federal Savings Bank.
Arthur J. Pugh
DOB: 9/24/37
1983
Mr. Pugh is a Director of Calvert Variable Series, Inc., and serves as a
director of Acacia Federal Savings Bank.
*David R. Rochat
DOB: 10/7/37
1982
Mr. Rochat is Executive Vice President of Calvert Asset Management Company,
Inc., Director and Secretary of Grady, Berwald and Co., Inc., and Director and
President of Chelsea Securities, Inc. He is the Senior Vice President of First
Variable Rate Fund, Calvert Tax-Free Reserves, Calvert Municipal Fund, Inc.,
Calvert Cash Reserves, and The Calvert Fund.
*D. Wayne Silby, Esq.
DOB: 7/20/48
1976
Mr. Silby is a trustee/director of each of the investment companies in the
Calvert Group of Funds, except for Calvert Variable Series, Inc. and Calvert
New World Fund. Mr. Silby is Executive Chairman of Group Serve, Inc., an
internet company focused on community building collaborative tools, and an
officer, director and shareholder of Silby, Guffey & Company, Inc., which
serves as general partner of Calvert Social Venture Partners ("CSVP"). CSVP is
a venture capital firm investing in socially responsible small companies. He
is also a Director of Acacia Mutual Life Insurance Company.
Executive officers of the Fund not mentioned above include William Tartikoff,
Esq., age 51, Vice President and Secretary, Ronald Wolfsheimer, age 51,
Treasurer, Reno J. Martini, age 48, Senior Vice President, and Daniel Hayes,
age 48, Vice President. Each has been an executive officer for more than five
years.
Trustees marked with an *, above, are "interested persons" of the Funds, under
the Investment Company Act of 1940, because of their affiliation with the
Funds, the investment advisor, or the parent company. As a group, the Trustees
and officers own less than 1% of each Fund's outstanding shares.
The Audit Committee of the Board is composed of Messrs. Baird, Blatz, Feldman,
Guffey and Pugh. The Board's Investment Policy Committee is composed of
Messrs. Borts, Diehl, Gavian, Rochat and Silby and Ms. Krumsiek. The
committees meet four (4) times per year. All Trustees attended at least 75% of
the meetings held. Trustees of the Fund not affiliated with the Advisor
presently receive an annual fee of $20,500 for service as a member of the
Board of Trustees of the Calvert Group of Funds, and a fee of $750 to $1,500
for each regular Board or Committee meeting attended.
Trustees of the Fund who are not affiliated with the Fund's Advisor may elect
to defer receipt of all or a percentage of their fees and invest them in any
fund in the Calvert Family of Funds through the Trustees Deferred Compensation
Plan (shown as "Pension or Retirement Benefits Accrued as part of Fund
Expenses," below). Deferral of the fees is designed to maintain the parties in
the same position as if the fees were paid on a current basis.
Trustees Compensation Table
Fiscal Year 1997 Aggregate Pension or Total Compensation
Compensation Retirement from Benefits
(unaudited numbers) from Registrant Accrued as Registrant and Fund
for Service part of Complex paid to
as Director of Registrant Director **
Expenses*
Name of Director
Richard L. Baird, Jr. $1,174 $0 $34,450
Frank H. Blatz, Jr. $1,552 $1,552 $46,000
Frederick T. Borts $1,171 $0 $32,500
Charles E. Diehl $1,494 $1,494 $44,500
Douglas E. Feldman $1,122 $0 $32,500
Peter W. Gavian $1,361 $637 $38,500
John G. Guffey, Jr. $1,524 $0 $61,615
M. Charito Kruvant $1,256 $0 $36,250
Arthur J. Pugh $1,573 $53 $48,250
D. Wayne Silby $1,203 $0 $62,830
*Messrs. Blatz, Diehl, Gavian and Pugh have chosen to defer a portion of their
compensation. As of December 31, 1997, total deferred compensation, including
dividends and capital appreciation, was $555,901.79, $545,259.10, $137,436.70
and $187,735.55, for each director, respectively.
**As of December 31, 1997. The Fund Complex consists of nine (9) registered
investment companies.
Recommendation
The Board recommends that you vote FOR each of the Trustees listed above.
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Proposal 3
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To change the concentration policy to allow each Portfolio of CMF to
concentrate in one or more industries.
Discussion
The 1940 Act reflects many of the requirements with which a registered
investment company must comply. Each fund is required to state its
concentration policy; that is, whether it will focus its investments in one or
more industries. CMF's concentration policy is currently that each Portfolio
may not "invest 25% or more of its total assets in any particular industry or
industries, except that it may invest more than 25% of its assets in
obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Industrial development bonds, where the payment of
principal and interest is the responsibility of companies within the same
industry, are grouped together as an industry." At this time, CMF does not
concentrate in any particular industry.
CAMCO believes that CMF will have greater investment flexibility if it is
allowed to concentrate in one or more industries. This will permit CMF to
acquire larger positions in the securities of individual issuers, such as
hospitals, housing bonds, or utilities. This increased flexibility may provide
opportunities to enhance the investment performance. In fact, CAMCO may be
able to more efficiently invest CMF's assets if allowed to concentrate in one
industry, and therefore may become more competitive in purchasing securities
for each Portfolio of CMF.
Theoretically, investing a larger percentage of a fund's assets in a single
issuer's securities increases its exposure to credit and other risks
associated with the single issuer's financial condition and business
operations. The value of shares of a fund may be more susceptible to any
single economic, political or regulatory event than the shares of a
diversified fund that does not concentrate in any industry. Because this is a
bond fund, however, CAMCO does not expect that concentrating in any one
industry will bring more risk to each Portfolio of CMF. CAMCO expects to use
this increased flexibility to acquire larger positions in the securities of a
single issuer only when it believes that the potential return on the
securities justifies the additional risk. CAMCO believes that these risks are
somewhat limited by portions of the Subchapter M test, below, which must be
performed on a quarterly basis.
In order to qualify as a registered investment company, each Portfolio of CMF
must continue to comply with the Subchapter M test of the Internal Revenue
Code. The applicable portion of this test is that each Portfolio of CMF must
have, at the close of each quarter of the taxable year, at least 50% of the
value of its total assets is represented by cash and cash items (including
receivables), Government securities and securities of other RICs, and not more
than 5% of its total assets will be invested in the securities of any one
issuer and not more than 10% of the outstanding voting securities of such
issuer. Also, not more than 25% of the total assets will be invested in the
securities (other than Government securities or the securities of other RICs)
of any one issuer, or of two or more issuers which each Portfolio of CMF
controls and which are determined to be engaged in the same or similar trades
or businesses or related trades or businesses. Thus, at least quarterly, each
Portfolio of CMF will be limited in its investments, and therefore, the
diversification risks will be reduced for a portion of the portfolio.
Recommendation
After reviewing the current concentration policies, and considering the
investment objective of each Portfolio of CMF, the Board concluded that a
change to the concentration policies could be beneficial to the shareholders.
The Board voted to allow each Portfolio of CMF to concentrate in any one or
more industries, subject to the oversight of the Board, and subject to
shareholder approval. The Board recommends that CMF shareholders vote FOR the
proposed changes to the concentration policies.
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Proposal 4
To approve amended fundamental investment restrictions to (a) delete
restrictions that are no longer required to be fundamental due to changes in
state laws; (b) change some of the fundamental policies and restrictions to
non-fundamental operating policies; and (c) to revise the language of those
restrictions that are still required to be fundamental.
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Discussion
The federal and state laws governing mutual funds have been changed several
times in the last few years. The CMF Prospectus and Statements of Additional
Information ("SAIs") contain investment policies and restrictions that are
more restrictive than the current law. This could potentially reduce the yield
for each Portfolio of CMF. The fundamental policies concern the investment
strategies, credit quality, and other investment techniques and risks. CMF
does not intend to change its investment style but plans to operate under the
federal law, as may be periodically amended.
Also in the past few years, many state securities laws have changed or have
been superseded by federal securities laws. CMF, however, must still comply
with the old fundamental restrictions, unless you vote to change these
restrictions to be in line with the changed regulatory landscape.
As explained above, federal law in many cases controls what a mutual fund can
purchase. Federal law also specifies certain investment restrictions that must
be fundamental and cannot be changed without a shareholder vote. The
policies/restrictions that are required by law to be fundamental are those
concerning diversification, borrowing money, the issuance of senior
securities, underwriting of securities issued by other persons, the purchase
and sale of real estate and commodities, the policy about making loans to
other persons, and the concentration of investments in a particular industry
or group of industries, as discussed above.
CAMCO has recommended to the Board that the investment restrictions be changed
to conform to, but not be more restrictive than, the federal law. That way, if
the federal law changes, the restrictions can change accordingly. This gives
CMF more flexibility and may help it to more easily adapt to different
investment environments. This is expected to increase investment management
opportunities. Further, it is not anticipated that these proposed changes will
substantially affect the way CMF is currently managed.
The current investment restrictions, excerpted from their SAI, are shown
below. After careful consideration, and with the advice of outside counsel, the
Board has approved several changes, subject to shareholder approval. Please
note that the Board recommends the deletion of any language in [brackets] and
italicized. Any new language has been underlined and made bold. Restrictions
that the Board believes should be nonfundamental operating policies are marked
with ***NF***.
Investment Restrictions - Calvert National Municipal Intermediate Fund
The [foregoing investment objective and policies and the] following
investment restrictions [and fundamental policies] may not be changed without
the consent of the holders of a majority of National Municipal's outstanding
shares. Shares have equal rights as to voting. A majority of the shares means
the lesser of (i) 67% of the shares represented at a meeting at which more
than 50% of the outstanding shares are represented or (ii) more than 50% of
the outstanding shares.
National Municipal may not:
1) ***NF*** Purchase common stocks, preferred stocks,
warrants, or other equity securities;***NF***
2) Issue senior securities, borrow money, or pledge,
mortgage, or hypothecate its assets, except as may be
necessary to secure borrowings from banks for temporary
or emergency (not leveraging) purposes and then in an
amount not greater than [10%] 33 1/3% of the value of
the [Series'] total assets at the time of the borrowing.
[Investment securities will not be purchased while any
borrowings are outstanding;]
3) Make loans of more than one-third of the total assets
of the Fund, or as permitted by law, other than through
the purchase of money market instruments and repurchase
agreements or by the purchase of bonds, debentures or
other debt securities. The purchase by a Portfolio of
all or a portion of an issue of publicly or privately
distributed debt obligations in accordance with its
investment objective, policies and restrictions, shall
not constitute the making of a loan.
4) Underwrite the securities of other issuers, except to
the extent that in connection with the disposition of
its portfolio securities, the Fund may be deemed to be
an underwriter. [the purchase of municipal obligations
in accordance with the Series' investment objective and
policies, either directly from the issuer, or from an
underwriter for an issuer, may be deemed an
underwriting;]
5) Purchase or sell in real estate or real estate
investment trust securities, [or oil and gas interests,]
but this shall not prevent National Municipal from
investing in municipal obligations secured by real
estate or interests therein;
6) Purchase or sell physical commodities except that it
may enter into futures contracts and options thereon;
Note: 5 and 6 will be combined.
7) [Purchase or retain securities of an issuer if those
directors of the Fund, each of whom owns more than 1/2
of 1% of the outstanding securities of such issuer,
together own more than 5% of such outstanding
securities;]
8) [Invest in companies for the purpose of exercising
control; or invest in securities of other investment
companies, except as they may be acquired as part of a
merger, consolidation or acquisition of assets, or in
connection with a trustee's/director's deferred
compensation plan, as long as there is no duplication of
advisory fees;]
9) CMF National MAY invest 25% or more of the value of its
assets in any [particular] one industry [or industries]
, or as permitted by law; provided, however, that there
is no limitation with respect to investments in
obligations issued or guaranteed by the United States
Government or its agencies and instrumentalities, and
repurchase agreements secured thereby, and there is no
limitation with respect to investments in money market
instruments of banks. Industrial development bonds,
where the payment of principal and interest is the
responsibility of companies within the same industry,
are grouped together as an "industry."
Investment Restrictions - Calvert California Municipal Intermediate Fund
The [foregoing investment objective and policies and the] following
investment restrictions [and fundamental policies] may not be changed without
the consent of the holders of a majority of California Municipal's outstanding
shares. Shares have equal rights as to voting. A majority of the shares means
the lesser of (i) 67% of the shares represented at a meeting at which more
than 50% of the outstanding shares are represented or (ii) more than 50% of
the outstanding shares.
California Municipal may not:
1) ***NF*** Purchase common stocks, preferred stocks,
warrants, or other equity securities;***NF***
2) Issue senior securities, borrow money, or pledge,
mortgage, or hypothecate its assets, except as may be
necessary to secure borrowings from banks for temporary
or emergency (not leveraging) purposes and then in an
amount not greater than [10%] 33 1/3% of the value of
the Fund's total assets at the time of the borrowing.
Investment securities will not be purchased while any
borrowings are outstanding;
3) Underwrite the securities of other issuers, except to
the extent that in connection with the disposition of
its portfolio securities, the Fund may be deemed to be
an underwriter. [the purchase of municipal obligations
in accordance with the Fund's investment objective and
policies, either directly from the issuer, or from an
underwriter for an issuer, may be deemed an
underwriting;]
4) Purchase or sell real estate, or real estate investment
trust securities, [or oil and gas interests,] but this
shall not prevent the Fund from investing in municipal
obligations secured by real estate or interests therein;
5) [Purchase or retain securities of an issuer if those
directors of the Fund, each of whom owns more than 1/2
of 1% of the outstanding securities of such issuer,
together own more than 5% of such outstanding
securities;]
6) Purchase or sell physical commodities except that it
may enter into futures contracts and options thereon;
Note: 4 and 6 will be combined.
7) [Invest in companies for the purpose of exercising
control; or invest in securities of other investment
companies, except as they may be acquired as part of a
merger, consolidation or acquisition of assets, or in
connection with a trustee's/director's deferred
compensation plan, as long as there is no duplication of
advisory fees;]
8) [Invest 25% or more of its assets in the securities of
any one issuer. The Fund may invest more than 25% of its
assets in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities but will
invest in more than 20% of such obligations only during
abnormal market conditions. For purposes of this
limitation, the entity which has the ultimate
responsibility for the payment of principal and interest
on a particular security will be treated as its issuer;]
9) CMF California Municipal MAY invest 25% or more of the
value of its assets in any [particular] one industry [or
industries] , or as permitted by law; provided, however,
that there is no limitation with respect to investments
in obligations issued or guaranteed by the United States
Government or its agencies and instrumentalities, and
repurchase agreements secured thereby, and there is no
limitation with respect to investments in money market
instruments of banks. [The Fund may invest more than 25%
of its assets in obligations issued or guaranteed by the
U.S. Government, its agencies or instrumentalities but
will invest in more than 20% of such obligations only
during abnormal market conditions.] Industrial
development bonds, where the payment of principal and
interest is the responsibility of companies within the
same industry, are grouped together as an "industry";
10) Make loans of more than one-third of the total assets
of the Fund, or as permitted by law, other than through
the purchase of money market instruments and repurchase
agreements or by the purchase of bonds, debentures or
other debt securities. The purchase by the Fund of all
or a portion of an issue of publicly or privately
distributed debt obligations in accordance with its
investment objective, policies and restrictions, shall
not constitute the making of a loan. [to others, except
in accordance with the Fund's investment objective and
policies or pursuant to contracts providing for the
compensation of service providers by compensating
balances.]
Investment Restrictions - Calvert Virginia and Maryland Municipal Intermediate
Funds
The following investment restrictions [and fundamental policies] may
not be changed without the consent of the holders of a majority of a Fund's
outstanding shares. Shares have equal rights as to voting. A majority of the
shares means the lesser of (i) 67% of the shares represented at a meeting at
which more than 50% of the outstanding shares are represented or (ii) more
than 50% of the outstanding shares.
Calvert Virginia and Maryland Municipal Intermediate Funds may not:
(1) ***NF*** Purchase common stocks, preferred stocks,
warrants, or other equity securities;***NF***
(2) Issue senior securities, borrow money, or pledge,
mortgage, or hypothecate its assets, except as may be
necessary to secure borrowings from banks for temporary or
emergency (not leveraging) purposes and then in an amount
not greater than [10%] 33 1/3% of the value of the Fund's
total assets at the time of the borrowing. [Investment
securities will not be purchased while any borrowings are
outstanding;]
(3) ***NF*** Sell securities short, purchase securities on
margin, or write put or call options, except to the extent
permitted under "Transactions in Futures Contracts" or
elsewhere in the Prospectus or SAI. The Funds reserve the
right to purchase securities with puts attached. See
"Obligations with Puts Attached";***NF***
(4) Underwrite the securities of other issuers, except as
permitted by the Board of Trustees/Directors within
applicable law, and except to the extent that in connection
with the disposition of its portfolio securities, the Fund
may be deemed to be an underwriter. [the purchase of
municipal obligations in accordance with the Fund's
investment objective and policies, either directly from the
issuer, or from an underwriter for an issuer, may be deemed
an underwriting;]
(5) Make loans of more than one-third of the total assets of
the Fund, or as permitted by law, other than through the
purchase of money market instruments and repurchase
agreements or by the purchase of bonds, debentures or other
debt securities. The purchase by the Fund of all or a
portion of an issue of publicly or privately distributed
debt obligations in accordance with its investment
objective, policies and restrictions, shall not constitute
the making of a loan. [to others, except in accordance with
the Fund's investment objective and policies or pursuant to
contracts providing for the compensation of service
providers by compensating balances;]
(6) Purchase or sell real estate, real estate investment
trust securities, commodities, or commodity contracts, [or
oil and gas interests,] but this shall not prevent a Fund
from investing in municipal obligations secured by real
estate or interests therein;
(7) [Invest 25% or more of its assets in the securities of
any one issuer. Each Funds may invest more than 25% of its
assets in obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities but will
invest in more than 20% of such obligations only during
abnormal market conditions. For purposes of this limitation,
the entity which has the ultimate responsibility for the
payment of principal and interest on a particular security
will be treated as its issuer;]
(8) CMF Virginia and Maryland Municipal MAY Invest 25% or
more of the value of its assets in any [particular] one
industry [or industries] , or as permitted by law; provided,
however, that there is no limitation with respect to
investments in obligations issued or guaranteed by the
United States Government or its agencies and
instrumentalities, and repurchase agreements secured
thereby, and there is no limitation with respect to
investments in money market instruments of banks. [Each Fund
may invest more than 25% of its assets in obligations issued
or guaranteed by the U.S. Government, its agencies or
instrumentalities but will invest in more than 20% of such
obligations only during abnormal market conditions.]
Industrial development bonds, where the payment of principal
and interest is the responsibility of companies within the
same industry, are grouped together as an "industry."
Thus, the revised fundamental investment restriction section of the SAI for
each of the above CMF Portfolios would appear as shown below:
PROPOSED MODEL INVESTMENT RESTRICTIONS:
CMF has adopted the following investment restrictions which cannot be changed
without the approval of the holders of a majority of the outstanding shares.
As defined in the Investment Company Act of 1940, this means the lesser of the
vote of (a) 67% of the shares at a meeting where more than 50% of the
outstanding shares are present in person or by proxy or (b) more than 50% of
the outstanding shares. Shares have equal rights as to voting.
Each Portfolio of CMF may not:
1. Make loans of more than one-third of the total
assets of the Fund, or as permitted by law, other than
through the purchase of money market instruments and
repurchase agreements or by the purchase of bonds,
debentures or other debt securities. The purchase by the
Fund of all or a portion of an issue of publicly or
privately distributed debt obligations in accordance with
its investment objective, policies and restrictions, shall
not constitute the making of a loan.
2. Underwrite the securities of other issuers, except
as permitted by the Board of Trustees/Directors within
applicable law, and except to the extent that in connection
with the disposition of its portfolio securities, the Fund
may be deemed to be an underwriter.
3. Issue senior securities or borrow money, except
from banks for temporary or emergency purposes and then only
in an amount up to 33 1/3% of the value of the Fund's total
assets or as permitted by law and except by engaging in
reverse repurchase agreements, where allowed. In order to
secure any permitted borrowings and reverse repurchase
agreements under this section, the Fund may pledge, mortgage
or hypothecate its assets.
4. Invest directly in commodities, commodities futures
contracts, or real estate, although it may invest in
securities which are secured by real estate or real estate
mortgages and securities of issuers which invest or deal in
commodities, commodity futures, real estate or real estate
mortgages.
5. CMF MAY concentrate 25% or more of the value of its
assets in any one industry, or as permitted by law;
provided, however, that there is no limitation with respect
to investments in obligations issued or guaranteed by the
United States Government or its agencies and
instrumentalities, and repurchase agreements secured
thereby, and there is no limitation with respect to
investments in money market instruments of banks.
Recommendation
The Board has voted to change or delete each of these fundamental investment
restrictions as shown above and recommends that you vote FOR the changes or
deletions of each of these revised fundamental investment restrictions for the
Fund.
- --------------------------------------------------------------------------------
Proposal 5
- --------------------------------------------------------------------------------
To ratify the Board's selection of accountants, PricewaterhouseCoopers, L.L.P.
Discussion
Shareholders are requested to ratify the action of the Board in selecting the
firm of PricewaterhouseCoopers, L.L.P. as the independent accountants for CMF
during the current fiscal year. The Board believe that the firm is well
qualified, and has accordingly selected PricewaterhouseCoopers to act as
independent accountants, subject to ratification by shareholders.
Coopers & Lybrand, L.L.P. has experience in accounting and auditing and has
served as independent accountants for CMF since its inception in 1992. On July
1, 1998, Coopers & Lybrand merged with Price Waterhouse, L.L.P. to form
PricewaterhouseCoopers, L.L.P.
Neither PricewaterhouseCoopers nor any of its partners has any direct or
indirect connection (other than as independent accountants) with CMF or any of
their affiliates. No representative of PricewaterhouseCoopers will be present
at the Special Meeting, but a representative will be available via telephone
to respond to appropriate questions from shareholders.
Recommendation
The Board recommends a vote FOR ratification of the selection of
PricewaterhouseCoopers, L.L.P. as independent accountants for CMF.
- --------------------------------------------------------------------------------
OTHER BUSINESS
- --------------------------------------------------------------------------------
The Board does not intend to present any other business at the meeting. If,
however, any other matters are properly brought before the meeting, William M.
Tartikoff, Esq., and Barbara J. Krumsiek will vote on the matters in
accordance with their judgment.
- --------------------------------------------------------------------------------
ANNUAL REPORTS
- --------------------------------------------------------------------------------
The audited Annual Report to Shareholders of CMF is incorporated by reference
into this proxy statement. Copies of the most recent Annual Report may be
obtained without charge if you:
write to CMF at 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland
20814; or
call (800) 368-2745; or
visit Calvert's website at www.calvertgroup.com.
- --------------------------------------------------------------------------------
SHAREHOLDER PROPOSALS
- --------------------------------------------------------------------------------
CMF is not required to hold annual shareholder meetings. Shareholders who
would like to submit proposals for consideration at future shareholder
meetings should send written proposals to the Calvert Group Legal Department,
4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland, 20814.
- --------------------------------------------------------------------------------
VOTING INFORMATION
- --------------------------------------------------------------------------------
Proxies are solicited initially by mail. Additional solicitations may be made
by telephone, computer communications, facsimile or other such means, or by
personal contact by officers or employees of Calvert Group and its affiliates
or by ADP/Shareholder communications, Inc., a proxy soliciting firm retained
for this purpose. CMF will bear solicitation costs. By voting as soon as
possible, you can save the Fund the expense of follow-up mailings and calls.
A proxy may be revoked at any time before the meeting or during the meeting by
oral or written notice to William M. Tartikoff, Esq., 4550 Montgomery Avenue,
Suite 1000N, Bethesda, Maryland 20814. Unless revoked, all valid proxies will
be voted in accordance with the specification thereon or, in the absence of
specification, for approval of the proposals.
Each proposal must be approved by a majority of the outstanding shares, which
is defined as the lesser of: (1) the vote of 67% or more of the shares of the
Fund at the Special Meeting if the holders of more than 50% of the outstanding
shares of the Fund o are present in person or by proxy, or (2) the vote of
more than 50% of the outstanding shares of the Fund. All classes of the Fund
vote together.
Any abstentions and broker non-votes will be counted as shares present for
purposes of determining whether a quorum is present but will not be voted for
or against any adjournment or proposal. A broker non-vote is when a broker
holds the shares and the actual owner does not vote and the broker holding the
shares does not have the authority to vote the shares. This means that
abstentions and broker non-votes effectively will be a vote against
adjournment or against any proposal where the required vote is a percentage of
the shares present.
Shareholders of CMF on record at the close of business on December 7, 1998
("record date") are entitled to notice of and to vote at the Special Meeting
or any adjournment thereof. Shareholders are entitled to one vote for each
share held on that date. As of December 1, 1998, as shown on the books of CMF,
there were issued and outstanding:
[#] shares of CMF National Municipal Intermediate Fund
[#] shares of CMF California Municipal Intermediate Fund
[#] shares of CMF Maryland Municipal Intermediate Fund
[#] shares of CMF Virginia Municipal Intermediate Fund
As of the record date, the officers and Trustees/Directors of CMF as a group
beneficially owned less than 1% of the outstanding shares of any Portfolio.
The following shareholders, as of record date, owned more than 5% of the
Portfolio shown, as of December 1, 1998:
[insert info]
Name and Address % of Ownership
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
Acct Registration x%
Street Address
City, State, ZIP
- --------------------------------------------------------------------------------
ADJOURNMENT
- --------------------------------------------------------------------------------
In the event that sufficient votes in favor of the proposals set forth in the
Notice of Meeting and Proxy Statement are not received by the time scheduled
for the meeting, William M. Tartikoff, Esq., or Barbara J. Krumsiek may move
one or more adjournments of the meeting to permit further solicitation of
proxies with respect to any such proposals. Any such adjournment will require
the affirmative vote of a majority of the shares present at the meeting. Mr.
Tartikoff and Ms. Krumsiek will vote in favor of such adjournment those shares
that they are entitled to vote which have voted in favor of such proposals.
They will vote against any such adjournment on behalf of those proxies that
have voted against any such proposals.
- --------------------------------------------------------------------------------
APPENDIX 1
PROPOSED INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, made this ___ day of ___________,
1998, by and between CALVERT ASSET MANAGEMENT COMPANY, INC., a Delaware
corporation having its principal place of business in Bethesda, Maryland (the
"Advisor"), and CALVERT MUNICIPAL FUND, INC., a Maryland corporation, (the
"Corporation"), both having their principal place of business at 4550
Montgomery Avenue, Bethesda, Maryland.
WHEREAS, the Corporation has been organized to operate as an
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), for the purpose of investing and reinvesting its assets in
securities, as set forth in its Articles of Incorporation, its By-laws and its
registration statements under the 1940 Act and the Securities Act of 1933 (the
"1933 Act"), as amended; and the Corporation desires to avail itself of the
services, information, advice, assistance and facilities of an investment
advisor and to have an investment advisor perform for it various investment
advisory, research services and other management services; and
WHEREAS, the Advisor has been organized to operate as an investment
advisor registered under the Investment Advisers Act of 1940, as amended, and
is engaged in the business of rendering management, and investment advisory
services to investment companies and desires to provide such services to the
Corporation;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Advisor. The Corporation hereby employs the Advisor
to manage the investment and reinvestment of the Corporation assets,
subject to the control and direction of the Corporation's Board of
Directors, for the period and on the terms hereinafter set forth. The
Advisor hereby accepts such employment and agrees during such period
to render the services and to assume the obligations herein set forth
for the compensation herein provided. The Advisor shall for all
purposes herein be deemed to be an independent contractor and shall,
except as expressly provided or authorized (whether herein or
otherwise), have no authority to act for or represent the Corporation
in any way or otherwise be deemed an agent of the Corporation.
2. Obligations of and Services to be Provided by the Advisor. The
Advisor undertakes to provide the following services and to assume
the following obligations:
a. The Advisor shall manage the investment and reinvestment of
the Corporation's assets, subject to and in accordance with
the investment objectives and policies of the Corporation
and any directions which the Corporation's Board of
Directors may issue from time to time. In pursuance of the
foregoing, the Advisor shall make all determinations with
respect to the investment of the Corporation's assets and
the purchase and sale of portfolio securities and shall take
such steps as may be necessary to implement the same. Such
determination and services shall also include determining
the manner in which voting rights, rights to consent to
corporate action, any other rights pertaining to the
Corporation's portfolio securities shall be exercised. The
Advisor shall render regular reports to the Corporation's
Board of Directors concerning the Corporation's investment
activities.
b. The Advisor shall, in the name of the Corporation on behalf
of the Corporation, place orders for the execution of the
Corporation's portfolio transactions in accordance with the
policies with respect thereto set forth in the Corporation's
registration statements under the 1940 Act and the 1933 Act,
as such registration statements may be amended from time to
time. In connection with the placement of orders for the
execution of the Corporation's portfolio transactions the
Advisor shall create and maintain all necessary brokerage
records of the Corporation in accordance with all applicable
laws, rules and regulations, including but not limited to
records required by Section 31(a) of the 1940 Act. All
records shall be the property of the Corporation and shall
be available for inspection and use by the SEC, the
Corporation or any person retained by the Corporation. Where
applicable, such records shall be maintained by the Advisor
for the periods and the places required by Rule 31a-2 under
the 1940 Act.
c. The Advisor shall bear its expenses of providing services
to the Corporation pursuant to this Agreement except such
expenses as are undertaken by the Corporation. In addition,
the Advisor shall pay the salaries and fees of all Directors
and executive officers who are employees of the Advisor or
its affiliates ("Advisor Employees").
3. Expenses of The Corporation. The Corporation shall pay all expenses
other than those expressly assumed by the Advisor herein, which
expenses payable by the Corporation shall include, but are not
limited to:
a. Fees to the Advisor as provided herein;
b. Legal and audit expenses;
c. Fees and expenses related to the registration and
qualification of the Corporation and its shares for
distribution under federal and state securities laws;
d. Expenses of the transfer agent, registrar, custodian,
dividend disbursing agent and shareholder servicing agent;
e. Any telephone charges associated with shareholder servicing
or the maintenance of the Funds or Corporation;
f. Salaries, fees and expenses of Directors and executive
officers of the Corporation, other than Advisor Employees;
g. Taxes and corporate fees levied against the Corporation;
h. Brokerage commissions and other expenses associated with
the purchase and sale of portfolio securities for the
Corporation;
i. Expenses, including interest, of borrowing money;
j. Expenses incidental to meetings of the Corporation's
shareholders and the maintenance of the Corporation's
organizational existence;
k. Expenses of printing stock certificates representing shares
of the Corporation and expenses of preparing, printing and
mailing notices, proxy material, reports to regulatory
bodies and reports to shareholders of the Corporation;
l. Expenses of preparing and typesetting of prospectuses of
the Corporation;
m. Expenses of printing and distributing prospectuses to
shareholders of the Corporation;
m. Association membership dues;
n. Insurance premiums for fidelity and other coverage; and
o. Such other legitimate Corporation expenses as the Board of
Directors may from time to time determine are properly
chargeable to the Corporation.
4. Compensation of Advisor.
a. As compensation for the services rendered and obligations
assumed hereunder by the Advisor, the Corporation shall pay
to the Advisor within ten (10) days after the last day of
each calendar month a fee equal on an annualized basis as
attached in a Schedule to this Agreement.
Such fee shall be computed and accrued daily. Upon termination of
this Agreement before the end of any calendar month, the fee for such
period shall be prorated. For purposes of calculating the Advisor's
fee, the daily value of the individual Fund's net assets shall be
computed by the same method as the individual Fund uses to compute
the value of its net assets in connection with the determination of
the net asset value of the individual Fund's shares.
b. The Advisor reserves the right (i) to waive all or part of
its fee and (ii) to make payments to brokers and dealers in
consideration of their promotional or administrative
services.
5. Activities of the Advisor. The services of the Advisor to the
Corporation hereunder are not to be deemed exclusive, and the Advisor
shall be free to render similar services to others. It is understood
that Directors and officers of the Corporation are or may become
interested in the Advisor as stockholders, officers, or otherwise,
and that stockholders and officers of the Advisor are or may become
similarly interested in the Corporation, and that the Advisor may
become interested in the Corporation as a shareholder or otherwise.
6. Use of Names. The Corporation shall not use the name of the Advisor
in any prospectus, sales literature or other material relating to the
Corporation in any manner not approved prior thereto by the Advisor;
provided, however, that the Advisor shall approve all uses of its
name which merely refer in accurate terms to its appointment
hereunder or which are required by the SEC; and, provided, further,
that in no event shall such approval be unreasonably withheld. The
Advisor shall not use the name of the Corporation or any Corporation
in any material relating to the Advisor in any manner not approved
prior thereto by the Corporation; provided, however, that the
Corporation shall approve all uses of its name which merely refer in
accurate terms to the appointment of the Advisor hereunder or which
are required by the SEC; and, provide, further, that in no event
shall such approval be unreasonably withheld.
7. Liability of the Advisor. Absent willful misfeasance, bad faith,
gross negligence, or reckless disregard of obligations or duties
hereunder on the part of the Advisor, the Advisor shall not be
subject to liability to the Corporation or to any shareholder of the
Corporation for any act or omission in the course of, or connected
with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
8. Force Majeure. The Advisor shall not be liable for delays or errors
occurring by reason of circumstances beyond its control, including
but not limited to acts of civil or military authority, national
emergencies, work stoppages, fire, flood, catastrophe, acts of God,
insurrection, war, riot, or failure of communication or power supply.
In the event of equipment breakdowns beyond its control, the Advisor
shall take reasonable steps to minimize service interruptions but
shall have no liability with respect thereto.
9. Renewal, Termination and Amendment. This Agreement shall continue in
effect with respect to the Corporation, unless sooner terminated as
hereinafter provided, through December 31, 1999, and indefinitely
thereafter if its continuance shall be specifically approved at least
annually by vote of the holders of a majority of the outstanding
voting securities of the Corporation or by vote of a majority of the
Corporation's Board of Directors; and further provided that such
continuance is also approved annually by the vote of a majority of
the Directors who are not parties to this Agreement or interested
persons of the Advisor, cast in person at a meeting called for the
purpose of voting on such approval, or as allowed by law. This
Agreement may be terminated at any time, without payment of any
penalty, by the Corporation's Board of Directors or by a vote of the
majority of the outstanding voting securities of the Corporation upon
60 days' prior written notice to the Advisor and by the Advisor upon
60 days' prior written notice to the Corporation. This Agreement may
be amended at any time by the parties, subject to approval by the
Corporation's Board of Directors and, if required by applicable SEC
rules and regulations, a vote of a majority of the Corporation's
outstanding voting securities. This Agreement shall terminate
automatically in the event of its assignment. The terms "assignment"
and "vote of a majority of the outstanding voting securities" shall
have the meaning set forth for such terms in the 1940 Act.
10. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
11. Miscellaneous. Each party agrees to perform such further actions and
execute such further documents as are necessary to effectuate the
purposes hereof. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Maryland.
The captions in this Agreement are included for convenience only and
in no way define or delimit any of the provisions hereof or otherwise
affect their construction or effect.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the date first written above.
CALVERT MUNICIPAL FUND, INC.
CALVERT ASSET MANAGEMENT COMPANY, INC.
- -------------------------------------------------------------------------
Fee Schedule to the Investment Advisory Agreement
between Calvert Asset Management Company, Inc. and
Calvert Municipal Fund, Inc.
As compensation pursuant to Section 4 of the Investment Advisory Agreement
between CAMCO and Calvert Municipal Fund, Inc. ("CMF") dated _____________,
1999, with respect to each CMF Portfolio, the Advisor is entitled to receive
from each Portfolio an annual advisory fee (the "Fee") as shown below. The Fee
shall be computed daily and payable monthly, based on the average daily net
assets of the appropriate Portfolio.
Calvert National Municipal Intermediate Fund:
0.60% of the first $500 million
0.50% above $500 million
0.40% above $1 billion
Calvert California Municipal Intermediate Fund:
0.60% of the first $500 million
0.50% above $500 million
0.40% above $1 billion
Calvert Maryland Municipal Intermediate Fund:
0.60% of the first $500 million
0.50% above $500 million
0.40% above $1 billion
Calvert Virginia Municipal Intermediate Fund:
0.60% of the first $500 million
0.50% above $500 million
0.40% above $1 billion
<PAGE>
PROXY CARD
The undersigned, revoking previous proxies, hereby appoint(s) William M.
Tartikoff, Esq. and Barbara J. Krumsiek, attorneys, with full power of
substitution, to vote all shares that the undersigned is entitled to vote at
the Special Meeting of Shareholders to be held in the Tenth Floor Conference
Room of Calvert Group, 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland
20814 on Wednesday, February 24, 1999 at 9:00 a.m. and at any adjournment
thereof. All powers may be exercised by a majority of the proxy holders or
substitutes voting or acting or, if only one votes and acts, then by that one.
This Proxy shall be voted on the proposals described in the Proxy Statement.
Receipt of the Notice of the Meeting and the accompanying Proxy Statement is
hereby acknowledged.
You may cast your vote using one of the following methods:
1. By internet (through a secure internet site): www.calvertgroup.com
2. By telephone (through a secure telephone system): call 1-800-368-2745
3. By facsimile: fax to ______________
4. By mail: postage-paid envelope enclosed
5. In person: Wednesday, February 24, 1999
NOTE: If you plan to vote by mail or by facsimile, please sign the proxy card
exactly as your name appears on the card. If you have a joint account, either
person may sign the proxy card. When signing in a fiduciary capacity, such as
executor, administrator, trustee, guardian, etc., please sign your name and
indicate your title. Corporate and partnership proxies should be signed by an
authorized person indicating the person's title.
Date: ________________________, 1999
__________________________________
__________________________________
Signature(s) (and Title(s), if applicable)
IF NO SPECIFICATION IS MADE, THE PROXY SHALL BE VOTED FOR THE PROPOSALS.
As to any other matter, the attorneys shall vote in accordance with their best
judgment.
THE BOARD OF TRUSTEES/DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING:
1. To approve a new investment advisory agreement with the investment
advisor, Calvert Asset Management Company, Inc. ("CAMCO").
For [ ] Against [ ] Abstain [ ]
2. To approve the Board of Trustees for CMF:
1. Richard L. Baird, Jr.
2. Frank H. Blatz, Jr., Esq.
3. Frederick T. Borts, M.D.
4. Charles E. Diehl
5. Douglas E. Feldman, M.D.
6. Peter W. Gavian, CFA
7. John G. Guffey, Jr.
8. Barbara J. Krumsiek
9. M. Charito Kruvant
10. Arthur J. Pugh
11. David R. Rochat
12. D. Wayne Silby, Esq.
For all [ ] Against all [ ] Abstain [ ]
|_| To vote against one or more of the proposed Trustees listed above,
but to approve the others, place an "x" in the box at left and indicate the
number(s) of the person you are voting against on this line:_______________.
For [ ] Against [ ] Abstain [ ]
3. To change the CMF concentration policy to allow each Portfolio of CMF
to concentrate in one or more industries.
For [ ] Against [ ] Abstain [ ]
4. To approve amended fundamental investment restrictions to (a) delete
restrictions that are no longer required to be fundamental due to changes in
state laws; (b) change some of the fundamental policies and restrictions to
non-fundamental operating policies; and (c) to revise the language of those
restrictions that are still required to be fundamental.
For [ ] Against [ ] Abstain [ ]
|_| To vote against the proposed changes to one or more of the specific
fundamental investment restrictions, but to approve the others, place
an "x" in the box at left and indicate the number(s) (as set forth in
the proxy statement) of the investment restriction(s) you do not want
to change on this line:
5. For each Portfolio: to ratify the Board's selection of auditors,
PricewaterhouseCoopers, L.L.P.
For [ ] Against [ ] Abstain [ ]
<PAGE>
Inside Back Cover:
Investment Advisor
Calvert Asset Management
Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Principal Underwriter
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Administrator
Calvert Administrative Services Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
