SEC Registration Nos.
811-6525 and 33-44968
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
Post-Effective Amendment No. 16 XX
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 16 XX
Calvert Municipal Fund, Inc.
(Exact Name of Registrant as Specified in Charter)
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Address of Principal Executive Offices)
Registrant's Telephone Number:
(301) 951-4881
William M. Tartikoff, Esq.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
(Name and Address of Agent for Service)
It is proposed that this filing will become effective
__ Immediately upon filing __ on (date)
pursuant to paragraph (b) pursuant to paragraph (b)
XX 60 days after filing __ on (date)
pursuant to paragraph (a) pursuant to paragraph (a)
of Rule 485.
<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
PROSPECTUS
April 30, 1999
About the Funds
2 Investment objective, strategy, past performance
18 Fees and Expenses
22 Principal Investment Practices and Risks
About Your Investment
32 Calvert Group and the Portfolio Management Team
34 Advisory Fees
36 How to Buy Shares
36 Getting Started
36 Choosing a Share Class
38 Calculation of CDSC/Waiver
39 Distribution and Service Fees
40 Account Application
41 Important - How Shares are Priced
41 When Your Account Will be Credited
42 Other Calvert Group Features
(Exchanges, Minimum Account Balance, etc.)
45 Dividends, Capital Gains and Taxes
46 How to Sell Shares
48 Financial Highlights
57 Exhibit A- Reduced Sales Charges (Class A)
59 Exhibit B- Service Fees and
Other Arrangements with Dealers
These securities have not been approved or disapproved by the Securities and
Exchange Commission (SEC) or any State Securities Commission, nor has the
SEC or any State Securities Commission passed on the accuracy or adequacy of
this prospectus. Any representation to the contrary is a criminal offense.
<PAGE>
Calvert National Municipal Intermediate Fund
Objective
Calvert National Municipal Intermediate Fund ("National") seeks to earn the
highest level of interest income exempt from federal income taxes as is
consistent with prudent investment management, preservation of capital, and
certain quality and maturity characteristics.
Calvert California, Maryland and Virginia Municipal Intermediate Funds (the
"State Funds") seek to earn the highest level of interest income exempt from
federal and specific state income taxes as is consistent with prudent
investment management, preservation of capital, and the quality and maturity
objectives of each Fund.
Principal investment strategies
National and the State Funds ("each Fund" or the "Funds") are each
nondiversified mutual funds. Each Fund typically invests at least 65% of
its net assets in investment grade debt securities. The Advisor looks for
securities with strong credit quality within their rating category that are
attractively priced. This may include investments with unusual features or
privately placed issues, that are not widely followed in the fixed income
marketplace. The average dollar-weighted maturity will be between 3 and 10
years.
Types of investments. The tax-exempt obligations in which the Fund may
invest include, but are not limited to, tax-supported debt (general
obligation bonds of state and local issuers), various types of revenue debt
(transportation, housing utilities, hospital), special tax obligations, and
qualified private activity bonds and other state and local government
authorities, municipal leases, certificates of participation in such
investments. The obligations may be structured as variable rate or
adjustable rate obligations and are often supported by a third party letter
of credit.
Under normal market conditions, each Fund will invest at least 65% of its
total assets in municipal obligations whose interest is exempt from federal,
and, if a State Fund, that specific state's income tax. The Fund will also
attempt to invest the remaining 35% of its total assets in such obligations,
but may invest it in municipal obligations of other states, territories and
possessions of the United States, the District of Columbia and their
respective authorities, agencies, instrumentalities and political
subdivisions or in short-term taxable money market-type instruments.
Dividends paid by the State Funds which are derived from interest
attributable to state municipal obligations will be exempt from federal and
that specific state's personal income taxes. Dividends derived from
interest on tax-exempt obligations of other governmental issuers will be
exempt from federal income tax, but may be subject to state income taxes.
Because the State Funds invest primarily in California, Maryland, and
Virginia municipal obligations, respectively, the economy and political
climate in those states have a great impact on the State Funds.
The Funds may purchase unrated securities, so long as the Advisor determines
they are of comparable credit quality. Unrated securities may be less
liquid than those that are rated.
Principal risks
You could lose money on your investment in the Funds, or the Funds could
underperform, most likely for any of the following reasons:
The bond market goes down
The individual bonds in the Funds do not perform as well as expected
The Advisor's forecast as to interest rates is not correct
The Advisor's allocation among different sectors of the bond market
does not perform as well as expected
The Funds are non-diversified. Compared to other funds, the Funds may
invest more of its assets in a smaller number of bonds. Gains or losses
on a single bond may have greater impact on the Funds.
An investment in the Funds is not a bank deposit and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency.
Performance Charts
The bar charts and tables below show each Fund's annual returns and its
long-term performance. The chart shows how the performance of the Class A
shares has varied from year to year. The table compares each Fund's
performance over time to that of the Lehman Municipal 10 year Bond Index TR.
This is a widely recognized, unmanaged index of bond prices. It also shows the
Fund's returns compared to the Lipper Other States Municipal Debt Funds Index,
a composite index of the annual return of mutual funds that have an investment
goal similar to that of the Fund. Past performance does not necessarily
indicate how any Fund will perform in the future.
The return for the Fund's other Classes of shares offered by this prospectus
will differ from the Class A returns shown in the bar chart, depending upon
the expenses of that Class. The bar chart does not reflect any sales charge
that you may be required to pay upon purchase or redemption of the Fund's
shares. Any sales charge will reduce your return. The average total return
table shows returns with the maximum sales charge deducted. No sales charge
has been applied to the index used for comparison in the table.
Bar Chart with Year-by-Year Total Return
(Class A return at NAV)
1989 ____% 1994 ____%
1990 ____% 1995 ____%
1991 ____% 1996 ____%
1992 ____% 1997 ____%
1993 ____% 1998 ____%
Best Quarter (of periods shown) Q__'__ ____%
Worst Quarter (of periods shown) Q__'__ ____%
Average Annual Total Returns (as of 12-31-98)
(with maximum sales charge deducted)
1 year 5 years 10 years
National, Class A ____% ____% N/A
National, Class B N/A N/A N/A
National, Class C N/A N/A N/A
Lehman Municipal Bond 10 year
Index TR ____% ____% ____%
Lipper Other States Municipal Debt
Funds Index ____% ____% ____%
1 year 5 years 10 years
California, Class A ____% ____% N/A
California, Class B N/A N/A N/A
California, Class C N/A N/A N/A
Lehman Municipal Bond 10 year
Index TR ____% ____% ____%
Lipper Other States Municipal Debt
Funds Index ____% ____% ____%
1 year 5 years 10 years
Maryland, Class A ____% ____% N/A
Maryland, Class B N/A N/A N/A
Maryland, Class C N/A N/A N/A
Lehman Municipal Bond 10 year
Index TR ____% ____% ____%
Lipper Other States Municipal Debt
Funds Index ____% ____% ____%
1 year 5 years 10 years
Virginia, Class A ____% ____% N/A
Virginia, Class B N/A N/A N/A
Virginia, Class C N/A N/A N/A
Lehman Municipal Bond 10 year
Index TR ____% ____% ____%%
Lipper Other States Municipal Debt
Funds Index ____% ____% ____%
<PAGE>
Fees and expenses
This table describes the fees and expenses that you may pay if you buy and
hold shares of a Fund. Shareholder fees are paid directly from your account;
annual Fund operating expenses are deducted from Fund assets.
National Class A Class B Class C
Maximum sales charge (load) 2.75% None None
imposed on purchases
(as a percentage of offering price)
Maximum deferred sales charge (load) None1 3% 2 1% 3
(as a percentage of purchase or redemption
proceeds, whichever is lower)
Annual fund operating expenses
Management fees 0.70% 0.70% 0.70%
Distribution and service (12b-1) fees 0.00% 1.00% 1.00%
Other expenses _.__% _.__% _.__%
Total annual fund operating expenses _.__% _.__% _.__%
California Class A Class B Class C
Maximum sales charge (load) 2.75% None None
imposed on purchases
(as a percentage of offering price)
Maximum deferred sales charge (load) None1 3% 2 1% 3
(as a percentage of purchase or redemption
proceeds, whichever is lower)
Annual fund operating expenses
Management fees 0.70% 0.70% 0.70%
Distribution and service (12b-1) fees 0.00% 1.00% 1.00%
Other expenses _.__% _.__% _.__%
Total annual fund operating expenses _.__% _.__% _.__%
Maryland Class A Class B Class C
Maximum sales charge (load) 2.75% None None
imposed on purchases
(as a percentage of offering price)
Maximum deferred sales charge (load) None1 3% 2 1% 3
(as a percentage of purchase or redemption
proceeds, whichever is lower)
Annual fund operating expenses
Management fees 0.70% 0.70% 0.70%
Distribution and service (12b-1) fees 0.00% 1.00% 1.00%
Other expenses _.__% _.__% _.__%
Total annual fund operating expenses _.__% _.__% _.__%
Virginia Class A Class B Class C
Maximum sales charge (load) 2.75% None None
imposed on purchases
(as a percentage of offering price)
Maximum deferred sales charge (load) None1 3% 2 1% 3
(as a percentage of purchase or redemption
proceeds, whichever is lower)
Annual fund operating expenses
Management fees 0.70% 0.70% 0.70%
Distribution and service (12b-1) fees 0.00% 1.00% 1.00%
Other expenses _.__% _.__% _.__%
Total annual fund operating expenses _.__% _.__% _.__%
Explanation of Fees and Expenses Table
1 Purchases of Class A shares for accounts with $1 million or more are not
subject to front-end sales charges, but may be subject to a 1.0% contingent
deferred sales charge on shares redeemed within 1 year of purchase. (See
"How to Buy Shares - Class A)
2 A contingent deferred sales charge is imposed on the proceeds of Class B
shares of the Fund redeemed within 4 years, subject to certain exceptions.
The charge is a percentage of net asset value at the time of purchase or
redemption, whichever is less, and declines from 3% in the first year that
shares are held, to 2% in the second, 2% in the third year, and 1% in the
fourth year. There is no charge on redemptions of Class B shares held for
more than four years. See "Calculation of Contingent Deferred Sales Charge"
3 A contingent deferred sales charge is imposed on the proceeds of Class C
shares redeemed within one year. The charge is a percentage of net asset
value at the time of purchase or redemption, whichever is less. See
"Calculation of Contingent Deferred Sales Charge"
Annual Fund Operating Expenses
Expenses are based on expenses for each Fund's most recent fiscal year,
unless otherwise indicated. Management fees include the administrative fee
paid by the Fund to Calvert Administrative Services Company, an affiliate of
the Advisor, Calvert Asset Management Company, Inc. ("CAMCO").
Rule 12b-1 fees include an asset-based sales charge. Thus, long-term
shareholders in those Funds with such fees may pay more in total sales
charges than the economic equivalent of the maximum front-end sales charge
permitted by rules of the National Association of Securities Dealers, Inc.
(the "NASD").
<PAGE>
Example
This example is intended to help you compare the cost of investing in a Fund
with the cost of investing in other mutual funds. The example assumes that:
You invest $10,000 in a Fund for the time periods indicated;
Your investment has a 5% return each year; and
The Fund's operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions
your costs would be:
National
Number of Years Investment is Held
Class 1 year 3 years 5 years 10 years
A $__ $__ $__ $__
B w/redemption $__ $__ $__ $__
B w/o redemption $__ $__ $__ $__
C w/ redemption $__ $__ $__ $__
C w/o redemption $__ $__ $__ $__
California
Number of Years Investment is Held
Class 1 year 3 years 5 years 10 years
A $__ $__ $__ $__
B w/redemption $__ $__ $__ $__
B w/o redemption $__ $__ $__ $__
C w/ redemption $__ $__ $__ $__
C w/o redemption $__ $__ $__ $__
Maryland
Number of Years Investment is Held
Class 1 year 3 years 5 years 10 years
A $__ $__ $__ $__
B w/redemption $__ $__ $__ $__
B w/o redemption $__ $__ $__ $__
C w/ redemption $__ $__ $__ $__
C w/o redemption $__ $__ $__ $__
Virginia
Number of Years Investment is Held
Class 1 year 3 years 5 years 10 years
A $__ $__ $__ $__
B w/redemption $__ $__ $__ $__
B w/o redemption $__ $__ $__ $__
C w/ redemption $__ $__ $__ $__
C w/o redemption $__ $__ $__ $__
<PAGE>
Principal Investment Practices and Risks
The most concise description of each Fund's principal investment strategies
and associated risks is under the risk-return summary for each Fund. The
Funds are also permitted to invest in certain other investments and to use
certain investment techniques that have higher risks associated with them.
On the following pages are brief descriptions of the investments and
techniques, summarized in the risk-return summary along with certain
additional investment techniques and their risks.
For each of the investment practices listed, the table below shows each
Fund's limitations as a percentage of its assets and the principal types of
risk involved. (See the pages following the table for a description of the
types of risks). Numbers in this table show maximum allowable amount only;
for actual usage, consult the Fund's annual/semi-annual reports.
Key to Table
@ Fund currently uses
0 Permitted, but not typically used
(% of assets allowable, if restricted)
- -- Not permitted
xN Allowed up to x% of fund's net assets
xT Allowed up to x% of Fund's total assets
NA Not applicable to this type of fund
Nat'l. CA MD VA
- ------------------------------------------ -------- -------- -------- -------
Conventional Securities:
Investment grade bonds. Bonds rated @ @ @ @
BBB/Baa or higher or comparable unrated
bonds. Risks: Interest Rate, Market ,
Credit and Information.
- ------------------------------------------ -------- -------- -------- -------
- ------------------------------------------ -------- -------- -------- -------
Below-investment grade bonds. Bonds @ @ @ @
rated below BBB/Baa or comparable (35N) (35N) (35N) (35N)
unrated bonds, also known as high-yield
bonds. They are subject to greater
credit risk than investment grade bonds.
Risks: Credit, Market, Interest Rate,
Liquidity and Information.
Unrated debt securities. Bonds that have @ @ @ @
not been rated by a recognized rating
agency; the Advisor has determined the
credit quality based on its own
research. Risks: Credit, Market,
Interest Rate, Liquidity and Information.
- ------------------------------------------ -------- -------- -------- -------
- ------------------------------------------ -------- -------- -------- -------
Illiquid securities. Securities which 15N 15N 15N 15N
cannot be readily sold because there is
no active market. Risks: Liquidity,
Market and Transaction.
- ------------------------------------------ -------- -------- -------- -------
- ------------------------------------------ -------- -------- -------- -------
Unleveraged derivative securities
Asset-backed securities. Securities are @ @ @ @
issued by a special purpose entity and
are backed by fixed-income or other
interest bearing assets. Risks: Credit,
Interest Rate and Liquidity.
- ------------------------------------------ -------- -------- -------- -------
- ------------------------------------------ -------- -------- -------- -------
Mortgage-backed securities (typically,
single-family mortgage bonds). @ @ @ @
Securities are backed by pools of
mortgages, including passthrough
certificates. Risks: Credit, Extension,
Prepayment, Liquidity and Interest Rate.
- ------------------------------------------ -------- -------- -------- -------
- ------------------------------------------ -------- -------- -------- -------
Leveraged derivative instruments
- ------------------------------------------ -------- -------- -------- -------
- ------------------------------------------ -------- -------- -------- -------
Options on securities and indices. 5N 5N 5N 5N
Contracts giving the holder the right
but not the obligation to purchase or
sell a security (or the cash value, in
the case of an option on an index) at a
specified price within a specified time.
Any options written by the Fund must be
"covered". Risks: Interest Rate,
Currency, Market, Leverage, Correlation,
Liquidity, Credit and Opportunity.
- ------------------------------------------ -------- -------- -------- -------
- ------------------------------------------ -------- -------- -------- -------
Futures contract. Agreement to buy or
sell a specific amount of a commodity or 5N 5N 5N 5N
financial instrument at a particular
price on a specific future date. Risks:
Interest Rate, Currency, Market,
Leverage, Correlation, Liquidity and
Opportunity.
- ------------------------------------------ -------- -------- -------- -------
- ------------------------------------------ -------- -------- -------- -------
Structured securities
Inverse floating rate municipal notes
and bonds. These securities tend to be @ @ @ @
highly sensitive to interest rate
movements. Risks: Credit, Interest
Rate, Market, Leverage, Liquidity and
Correlation.
- ------------------------------------------ -------- -------- -------- -------
- ------------------------------------------ -------- -------- -------- -------
Investment Practices:
Temporary Defensive Positions. 0 0 0 0
During adverse market, economic or (20T) (20T) (35T) (35T)
political conditions, the Fund may
depart from its principal investment
strategies by increasing its investment
in U.S. government securities and other
short-term interest-bearing securities.
During times of any temporary defensive
positions, a Fund may not be able to
achieve its investment objective Risks:
Opportunity.
- ------------------------------------------ -------- -------- -------- -------
The Funds have additional investment policies and restrictions that are not
principal to their investment strategies (for example, repurchase
agreements, borrowing, pledging, and securities lending, and when-issued
securities.) These policies and restrictions are discussed in the SAI.
Correlation risk
This occurs when a Fund "hedges"- uses one investment to offset the Fund's
position in another. If the two investments do not behave in relation to one
another the way Fund managers expect them to, then unexpected or undesired
results may occur. For example, a hedge may eliminate or reduce gains as
well as offset losses.
Credit risk
The risk that the issuer of a security or the counterparty to an investment
contract may default or become unable to pay its obligations when due.
Extension risk
The risk that an unexpected rise in interest rates will extend the life of a
mortgage-backed security beyond the expected prepayment time, typically
reducing the security's value.
Information risk
The risk that information about a security or issuer or the market might not
be available, complete, accurate or comparable.
Interest rate risk
The risk that changes in interest rates will adversely affect the value of
an investor's securities. When interest rates rise, the value of
fixed-income securities will generally fall. Conversely, a drop in interest
rates will generally cause an increase in the value of fixed-income
securities. Longer-term securities and zero coupon/"stripped" coupon
securities ("strips") are subject to greater interest rate risk.
Leverage risk
The risk that occurs in some securities or techniques which tend to magnify
the effect of small changes in an index or a market. This can result in a
loss that exceeds the amount actually invested.
Liquidity risk
The risk that occurs when investments cannot be readily sold. A Fund may
have to accept a less-than-desirable price to complete the sale of an
illiquid security or may not be able to sell it at all.
Management risk
This risk exists in all mutual funds and means that a Fund's portfolio
management practices might not work to achieve their desired result.
Market risk
The risk that exists in all mutual funds and means the risk that securities
prices in a market, a sector or an industry will fluctuate, and that such
movements might reduce an investment's value.
Opportunity risk
The risk of missing out on an investment opportunity because the assets
needed to take advantage of it are committed to less advantageous
investments or strategies.
Political risk
The risk that may occur with foreign investments, and means that the value
of an investment may be adversely affected by nationalization, taxation,
war, government instability or other economic or political actions or
factors.
Prepayment risk
The risk that unanticipated prepayments may occur, reducing the value of a
mortgage-backed security. The Fund must then reinvest those assets at the
current, market rate which may be lower.
Transaction risk
The risk that a Fund may be delayed or unable to settle a transaction or
that commissions and settlement expenses may be higher than usual.
About Calvert Group
Calvert Asset Management Company, Inc. (4550 Montgomery Avenue, Suite 1000N,
Bethesda, MD 20814) ("CAMCO") is the Funds' investment advisor and provides
day-to-day investment management services to the Funds. It has been managing
mutual funds since 1976. CAMCO is the investment advisor for over 25 mutual
funds. As of December 31, 1998, CAMCO had $6 billion in assets under
management.
CAMCO uses a team approach to its management of the Fund. Since inception,
investment selections for the Fund have been made by Reno J. Martini and
Daniel K. Hayes. Mr. Martini, Senior Vice President and Chief Investment
Officer of CAMCO, oversees the investment management of all Calvert Funds
for CAMCO. Mr. Martini has over 18 years of experience in evaluating and
purchasing municipal securities and has been the head of CAMCO's asset
management team since 1985. Mr. Hayes serves as head of Portfolio Research
and has been a portfolio manager for CAMCO since 1984. He is a Vice
President of CAMCO, and is an officer of each of the other investment
companies in the Calvert Group of Funds, except for Calvert New World Fund,
Inc.
Advisory Fees
The aggregate annual advisory fee paid to CAMCO by the Fund for the most
recent fiscal year as a percentage of that Fund's average daily net assets
was 0.60%.
A Word About the Year 2000 (Y2K) and Our Computer Systems
Like other mutual funds, CAMCO and its service providers use computer
systems for all aspects of our business -- processing shareholder and fund
transactions, fund accounting, executing trades, and pricing securities just
to name a few. Many current software programs cannot distinguish between the
year 2000 and the year 1900. This can cause problems with retirement plan
distributions, dividend payment software, transaction software, and numerous
other areas that could impact the Funds. Calvert Group has been reviewing
all of its computer systems for Y2K compliance. Although, at this time,
there can be no assurance that there will be no negative impact on the
Funds, the Advisor, the underwriter, transfer agent and custodian have
advised the Funds that they have been actively working on any necessary
changes to their computer systems to prepare for Y2K and expect that their
systems, and those of their outside service providers, will be adapted in
time for that event. For more information, please visit our website at
www.calvertgroup.com.
HOW TO BUY SHARES
Getting Started - Before You Open an Account
You have a few decisions to make before you open an account in a mutual fund.
First, decide which fund or funds best suits your needs and your goals.
Second, decide what kind of account you want to open. Calvert offers
individual, joint, trust, Uniform Gift/Transfer to Minor Accounts, and
several other types of accounts. Minimum investments are lower for the
retirement plans.
Then decide which class of shares is best for you.
You should make this decision carefully, based on:
the amount you wish to invest;
the length of time you plan to keep the investment; and
the Class expenses.
Choosing a Share Class
Each Fund offers three different Classes (Class A, B, or C). This chart
shows the difference in the Classes and the general types of investors who
may be interested in each Class:
Class A: Front-End Class B: Deferred Class C: Deferred
Sales Charge Sales Charge for 4 Sales Charge for 1 year
years
For all investors, For investors who For investors who are
particularly those plan to hold the investing for at least
investing a substantial shares at least 4 one year, but less
amount who plan to hold years. The expenses than four years. The
the shares for a long of this class are expenses of this Class
period of time. higher than Class A, are higher than Class
because of the 12b-1 A, because of the
fee. 12b-1 fee.
Sales charge on each No sales charge on No sales charge on
purchase of 3.75% or each purchase, but if each purchase, but if
less, depending on the you sell your shares you sell shares within
amount you invest. within 4 years, you 1 year, then you will
will pay a deferred pay a deferred sales
sales charge of 3% or charge of 1% at that
less on shares you time.
sell.
Class A shares have Class B shares have Class C shares have an
an annual 12b-1 fee an annual 12b-1 fee annual 12b-1 fee of
of 0.25%. of 1.00%. 1.00%.
Your shares will Class C shares have
automatically convert higher annual expenses
to Class A shares than Class A and there
after 4 years, is no automatic
reducing your future conversion to Class A.
annual expenses.
Purchases of Class A If you are investing If you are investing
shares at NAV for more than $250,000, more than $100,000,
accounts with you should consider you should invest in
$1,000,000 or more will investing in Class A. Class A.
be subject to a 1.0%
deferred sales charge
for 1 year.
Class A
If you choose Class A, you will pay a sales charge at the time of each
purchase. This table shows the charges both as a percentage of offering
price and as a percentage of the amount you invest. The term "offering
price" includes the front-end sales charge. If you invest more, the sales
charge will be lower. For example, if you invest more than $50,000, or if
your cumulative purchases or the value in your account is more than
$50,000,4 then the sales charge is reduced to 2.25%.
Your investment in Sales Charge % % of Amt.
Class A shares of offering price Invested
Less than $50,000 2.75% 2.83%
$50,000 but not less than $100,000 2.25% 2.30%
$100,000 but not less than $250,000 1.75% 1.78%
$250,000 but not less than $500,000 1.25% 1.27%
$500,000 but not less than $1,000,000 1.00% 1.01%
$1,000,000 and over None* None*
4 This is called "Rights of Accumulation." The sales charge is calculated by
taking into account not only the dollar amount of the new purchase of
shares, but also the higher of cost or current value of shares you have
previously purchased in Calvert Group Funds that impose sales charges. This
automatically applies to your account for each new purchase of Class A
shares.
* Purchases of Class A shares at NAV for accounts with $1,000,000 or more
are subject to a one year CDSC of 1.00%. See the "Calculation of Contingent
Deferred Sales Charge and Waiver of Sales Charges."
The Class A front-end sales charge may be waived for certain purchases or
investors, such as participants in certain group retirement plans or other
qualified groups and clients of registered investment advisers. For details
on these and other purchases that may qualify for a reduced sales charge,
see Exhibit A.
Class B
If you choose Class B, there is no front-end sales charge like Class A, but
if you sell the shares within the first 4 years, you will have to pay a
"contingent deferred" sales charge ("CDSC"). This means that you do not have
to pay the sales charge unless you sell your shares within the first 4 years
after purchase. Keep in mind that the longer you hold the shares, the less
you will have to pay in deferred sales charges.
Time Since Purchase CDSC %
- ------------------------------ -----------
- ------------------------------ -----------
1st year 3%
- ------------------------------ -----------
- ------------------------------ -----------
2nd year 2%
- ------------------------------ -----------
- ------------------------------ -----------
3rd year 2%
- ------------------------------ -----------
- ------------------------------ -----------
4th year 1%
- ------------------------------ -----------
- ------------------------------ -----------
5th year None
- ------------------------------ -----------
- ------------------------------ -----------
6th year None
- ------------------------------ -----------
- ------------------------------ -----------
After 6 years None
Calculation of Contingent Deferred Sales Charge and Waiver of Sales Charges
The CDSC will not be charged on shares you received as dividends or from
capital gains distributions or on any capital appreciation (gain in the
value) of shares that are sold.
Shares that are not subject to the CDSC will be redeemed first, followed by
shares you have held the longest. The CDSC is calculated by determining the
share value at both the time of purchase and redemption and then multiplying
whichever value is less by the percentage that applies as shown above. If
you choose to sell only part of your shares, the capital appreciation for
those shares only is included in the calculation, rather than the capital
appreciation for the entire account.
The CDSC on Class B Shares will be waived in the following circumstances:
Redemption upon the death or disability of the shareholder, plan
participant, or beneficiary.1
Minimum required distributions from retirement plan accounts for
shareholders 70 1/2 and older.2
The return of an excess contribution or deferral amounts, pursuant to
sections 408(d)(4) or (5), 401(k)(8), 402(g)(2), or 401(m)(6) of the
Internal Revenue Code.
Involuntary redemptions of accounts under procedures set forth by the Fund's
Board of Trustees/Directors.
A single annual withdrawal under a systematic withdrawal plan of up to 10%
per year of the shareholder's account balance.3
1 "Disability" means a total disability as evidenced by a determination by
the federal Social Security Administration.
2 The maximum amount subject to this waiver is based only upon the
shareholder's Calvert Group retirement accounts.
3 This systematic withdrawal plan requires a minimum account balance of
$50,000 to be established.
Class C
If you choose Class C, there is no front-end sales charge like Class A, but
if you sell the shares within the first year, you will have to pay a 1%
CDSC. Class C may be a good choice for you if you plan to buy shares and
hold them for at least 1 year, but not more than four years.
Distribution and Service Fees
The Funds have adopted a plan under Rule 12b-1 of the Investment Company Act
of 1940 that allows each Fund to pay distribution fees for the sale and
distribution of its shares. The distribution plan also pays service fees to
persons (such as your financial professional) for services provided to
shareholders. Because these fees are paid out of a Fund's assets on an
ongoing basis, over time, these fees will increase the cost of your
investment and may cost you more than paying other types of sales charges.
Please see Exhibit B for more service fee information.
The maximum annual percentage payable under the distribution plan totals 0.25%
for Class A and 1.00% for Class B and C, based on average daily net assets of
the particular Class.
Next Step - Account Application
Complete and sign an application for each new account. When multiple classes
of shares are offered, please specify which class you wish to purchase. For
more information, contact your broker or our shareholder services department
at 800-368-2748.
Minimum To Open an Account Minimum additional
$2,000 investments -$250
Please make your check payable
to the Fund and mail it to:
New Accounts Subsequent Investments
(include application) (include investment slip)
Calvert Group Calvert Group
P.O. Box 419544 P.O. Box 419739
Kansas, City MO Kansas City, MO
64141-6544 64141-6739
By Registered, Calvert Group
Certified, or c/o NFDS,
Overnight Mail 330 West 9th St.,
Kansas City, MO 64105-1807
At the Calvert Office Visit the Calvert Office to make
investments by check. See the back
cover page for the address.
Important - How Shares are Priced
The price of shares is based on each Fund's net asset value ("NAV"). NAV is
computed by adding the value of a Fund's holdings plus other assets,
subtracting liabilities, and then dividing the result by the number of
shares outstanding. If a Fund has more than one class of shares, the NAV of
each class will be different, depending on the number of shares outstanding
for each class.
Portfolio securities and other assets are valued based on market quotations,
except that securities maturing within 60 days are valued at amortized cost.
If market quotations are not readily available, securities are valued by a
method that the Fund's Board of Trustees/Directors believes accurately
reflects fair value.
The NAV is calculated as of the close of each business day, which coincides
with the closing of the regular session of the New York Stock Exchange
("NYSE") (normally 4 p.m. ET). Each Fund is open for business each day the
NYSE is open. Please note that there are some federal holidays, however,
such as Columbus Day and Veterans' Day, when the NYSE is open and the Fund
is open but purchases cannot be made due to the closure of the banking
system.
When Your Account Will Be Credited
Before you buy shares, please read the following information to make sure
your investment is credited properly and in a timely manner.
Your purchase will be processed at the NAV next calculated after your
order is received.
All of your purchases must be made in US dollars and checks must be
drawn on US banks.
No cash will be accepted.
No credit card or credit loan checks will be accepted.
Each Fund reserves the right to suspend the offering of shares for a
period of time or to reject any specific purchase order.
As a convenience, check purchases received at Calvert's office in
Bethesda, Maryland will be sent by overnight delivery to the Transfer
Agent and will be credited the next business day upon receipt.
Any check purchase received without an investment slip may cause
delayed crediting.
If your check does not clear your bank, your purchase will be canceled
and you will be charged a $10 fee plus any costs incurred.
Check or electronic funds transfer purchases will be on hold for up to
10 business days.
All purchases will be confirmed and credited to your account in full
and fractional shares (rounded to the nearest 1/100th of a share).
Monthly statements may be sent in lieu of confirmations of purchases
and redemptions.
Earning Dividends
If the Transfer Agent receives your wire purchase by 5 p.m. ET, your account
will begin earning dividends on the next business day. Exchanges begin
earning dividends the next business day after the exchange request is
received by mail or telephone. Purchases received by check will begin
earning dividends the next business day after they are credited to the
account.
OTHER CALVERT GROUP FEATURES
CALVERT INFORMATION NETWORK
For 24 hour performance and account information call 800-368-2745 or visit
http://www.calvertgroup.com
You can obtain current performance and pricing information, verify account
balances, and authorize certain transactions with the convenience of one
phone call, 24 hours a day.
ACCOUNT SERVICES
By signing up for services when you open your account, you avoid having to
obtain a signature guarantee. If you wish to add services at a later date, a
signature guarantee to verify your signature may be obtained from any bank,
trust company and savings and loan association, credit union, broker-dealer
firm or member of a domestic stock exchange. A notary public cannot provide
a signature guarantee.
CALVERT MONEY CONTROLLER
Calvert Money Controller allows you to purchase or sell shares by electronic
funds transfer without the time delay of mailing a check or the added
expense of a wire. Use this service to transfer up to $300,000
electronically. Allow one or two business days after you place your request
for the transfer to take place. Money transferred to purchase new shares
will be subject to a hold of up to 10 business days before redemption
requests will be honored. Transaction requests must be received by 4 p.m.
ET. You may request this service on your initial account application.
Calvert Money Controller transactions returned for insufficient funds will
incur a $25 charge.
TELEPHONE TRANSACTIONS
You may purchase, redeem, or exchange shares, wire funds and use Calvert
Money Controller by telephone if you have pre-authorized service
instructions. You receive telephone privileges automatically when you open
your account unless you elect otherwise. For our mutual protection, the
Fund, the shareholder servicing agent and their affiliates use precautions
such as verifying shareholder identity and recording telephone calls to
confirm instructions given by phone. A confirmation statement is sent for
most transactions; please review this statement and verify the accuracy of
your transaction immediately.
EXCHANGES
Calvert Group offers a wide variety of investment options that includes
common stock funds, tax-exempt and corporate bond funds, and money market
funds (call your broker or Calvert representative for more information). We
make it easy for you to purchase shares in other Calvert funds if your
investment goals change. The exchange privilege offers flexibility by
allowing you to exchange shares on which you have already paid a sales
charge from one mutual fund to another at no additional charge.
Complete and sign an account application, taking care to register your new
account in the same name and taxpayer identification number as your existing
Calvert account(s). Exchange instructions may then be given by telephone if
telephone redemptions have been authorized and the shares are not in
certificate form.
Before you make an exchange, please note the following:
Each exchange represents the sale of shares of one Fund and the purchase of
shares of another. Therefore, you could realize a taxable gain or loss.
You may exchange shares acquired by reinvestment of dividends or
distributions into another Calvert Fund at no additional charge.
Shares may only be exchanged for shares of the same class of another Calvert
Fund.
No CDSC is imposed on exchanges of shares subject to a CDSC at the time of
the exchange. The applicable CDSC is imposed at the time the shares acquired
by the exchange are redeemed.
Shareholders (and those managing multiple accounts) who make two purchases
and two exchange redemptions of shares of the same Fund during any six-month
period will be given written notice and may be prohibited from placing
additional investments. This policy does not prohibit a shareholder from
redeeming shares of any Fund, and does not apply to trades solely between
money market funds.
Each Fund reserves the right to terminate or modify the exchange privilege
with 60 days' written notice.
COMBINED GENERAL MAILINGS (Householding)
Multiple accounts with the same social security number will receive one
mailing per household of information such as prospectuses and semi-annual
and annual reports. You may request further grouping of accounts to receive
fewer mailings. Separate statements will be generated for each separate
account and will be mailed in one envelope for each combination above.
Special Services and Charges
Each Fund pays for shareholder services but not for special services that
are required by a few shareholders, such as a request for a historical
transcript of an account. You may be required to pay a fee for these special
services.
If you are purchasing shares through a program of services offered by a
broker/dealer or financial institution, you should read the program
materials together with this Prospectus. Certain features may be modified in
these programs. Investors may be charged a fee if they effect transactions
in Fund shares through a broker or agent.
MINIMUM ACCOUNT BALANCE
Please maintain a balance in each of your accounts of at least $1,000 per
class. If the balance in any of your accounts falls below the minimum during
a month, your account may be closed and the proceeds mailed to the address
of record. You will receive notice that your account is below the minimum,
and will be closed or charged if the balance is not brought up to the
required minimum amount within 30 days.
DIVIDENDS, CAPITAL GAINS AND TAXES
The Fund pays dividends from its net investment income monthly. Net
investment income consists of interest income, net short-term capital gains,
if any, and dividends declared and paid on investments, less expenses.
Distributions of net short-term capital gains (treated as dividends for tax
purposes) and net long-term capital gains, if any, are normally paid once a
year; however, the Fund does not anticipate making any such distributions
unless available capital loss carryovers have been used or have expired.
Dividend and distribution payments will vary between classes; dividend
payments are anticipated to be generally higher for Class A shares.
Dividend payment options
Dividends and any distributions are automatically reinvested in the same
Fund at NAV (without sales charge), unless you elect to have amounts of $10
or more paid in cash (by check or by Calvert Money Controller). Dividends
and distributions from any Calvert Group Fund may be automatically invested
in an identically registered account in any other Calvert Group Fund at NAV.
If reinvested in the same account, new shares will be purchased at NAV on
the reinvestment date, which is generally 1 to 3 days prior to the payment
date. You must notify the Fund in writing to change your payment options. If
you elect to have dividends and/or distributions paid in cash, and the US
Postal Service returns the check as undeliverable, it, as well as future
dividends and distributions, will be reinvested in additional shares. No
dividends will accrue on amounts represented by uncashed distribution or
redemption checks.
Buying a Dividend
At the time of purchase, the share price of each class may reflect
undistributed income, capital gains or unrealized appreciation of
securities. Any income or capital gains from these amounts which are later
distributed to you are fully taxable. On the record date for a distribution,
share value is reduced by the amount of the distribution. If you buy shares
just before the record date ("buying a dividend") you will pay the full
price for the shares and then receive a portion of the price back as a
taxable distribution.
Federal Taxes
Dividends derived from interest on municipal obligations constitute
exempt-interest dividends, on which you are not subject to federal income
tax. However, dividends which are from taxable interest and any
distributions of short term capital gain are taxable to you as ordinary
income. If the Fund makes any distributions of long-term capital gains, then
these are taxable to you as long-term capital gains, regardless of how long
you held your shares of the Fund. Dividends attributable to interest on
certain private activity bonds must be included in federal alternative
minimum tax for individuals and for corporations. Each Fund may invest in
and derive income from taxable short-term money market investments, for
liquidity purposes or pending investment of the new assets (20% for National
and California, 35% for Maryland and Virginia). Interest earned from taxable
investments will be taxable as ordinary income.
If any taxable income or gains are paid, in January, your Fund will mail you
Form 1099-DIV indicating the federal tax status of dividends and any capital
gain distributions paid to you during the past year. Generally, dividends
and distributions are taxable in the year they are paid. However, any
dividends and distributions paid in January but declared during the prior
three months are taxable in the year declared. Dividends and distributions
are taxable to you regardless of whether they are taken in cash or
reinvested.
You may realize a capital gain or loss when you sell or exchange shares.
This capital gain or loss will be short- or long-term, depending on how long
you have owned the shares which were sold. In January, your Fund will mail
you Form 1099-B indicating the total amount of all sales, including
exchanges. You should keep your annual year-end account statements to
determine the cost (basis) of the shares to report on your tax returns.
Other Tax Information - State Funds
Dividends derived from interest on specific state or local obligations are
exempt from that state's personal income tax, as are dividends from
obligations issued by certain territories, such as Puerto Rico. Your State
Fund will advise you each January of the percent of dividends qualifying for
this exemption. You should consult your tax advisor with regard to how
certain dividends affect you.
Taxpayer Identification Number
If we do not have your correct Social Security or Taxpayer Identification
Number ("TIN") and a signed certified application or Form W-9, Federal law
requires us to withhold 31% of your reportable dividends, and possibly 31%
of certain redemptions. In addition, you may be subject to a fine by the
Internal Revenue Service. You will also be prohibited from opening another
account by exchange. If this TIN information is not received within 60 days
after your account is established, your account may be redeemed (closed) at
the current NAV on the date of redemption. Calvert Group reserves the right
to reject any new account or any purchase order for failure to supply a
certified TIN.
HOW TO SELL SHARES
Your shares will be redeemed at the next NAV calculated after your
redemption request is received and accepted (less any applicable CDSC). The
proceeds will normally be sent to you on the next business day, but if
making immediate payment could adversely affect the Fund, it may take up to
seven (7) days to make payment. Calvert Money Controller redemptions
generally will be credited to your bank account on the second business day
after your phone call. When the NYSE is closed (or when trading is
restricted) for any reason other than its customary weekend or holiday
closings, or under any emergency circumstances as determined by the
Securities and Exchange Commission, redemptions may be suspended or payment
dates postponed. Please note that there are some federal holidays, however,
such as Columbus Day and Veterans' Day, when the NYSE is open and the Fund
is open but redemptions cannot be made due to the closure of the banking
system.
The Fund has the right to redeem shares in assets other than cash for
redemption amounts exceeding, in any 90-day period, $250,000 or 1% of the
net asset value of the Fund, whichever is less.
Follow these suggestions to ensure timely processing of your redemption
request:
By Telephone
You may redeem shares from your account by telephone and have your money
mailed to your address of record or electronically transferred or wired to a
bank you have previously authorized. A charge of $5 may be imposed on wire
transfers of less than $1,000.
Written Requests
Calvert Group, P.O. Box 419544, Kansas City, MO 64141-6544
Your letter should include your account number and fund and the number of
shares or the dollar amount you are redeeming. Please provide a daytime
telephone number, if possible, for us to call if we have questions. If the
money is being sent to a new bank, person, or address other than the address
of record, your letter must be signature guaranteed.
Systematic Check Redemptions
If you maintain an account with a balance of $10,000 or more, you may have
up to two (2) redemption checks for a fixed amount sent to you on the 15th
of the month, simply by sending a letter with all information, including
your account number, and the dollar amount ($100 minimum). If you would like
a regular check mailed to another person or place, your letter must be
signature guaranteed. Unless they otherwise qualify for a waiver, Class B or
Class C shares redeemed by Systematic Check Redemption will be subject to
the Contingent Deferred Sales Charge.
Corporations and Associations
Your letter of instruction and corporate resolution should be signed by
person(s) authorized to act on the account, accompanied by signature
guarantee(s).
Trusts
Your letter of instruction should be signed by the Trustee(s) (as
Trustee(s)), with a signature guarantee. (If the Trustee's name is not
registered on your account, please provide a copy of the trust document,
certified within the last 60 days.)
Through your Dealer
Your dealer must receive your request before the close of regular trading on
the NYSE to receive that day's NAV. Your dealer will be responsible for
furnishing all necessary documentation to Calvert Group and may charge you
for services provided.
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years. Certain information reflects
financial results for a single share, by Fund and Class. The total returns
in the table represent the rate that an investor would have earned (or lost)
on an investment in a Fund (assuming reinvestment of all dividends and
distributions), and does not reflect any applicable front- or back-end sales
charge. This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with a Fund's financial statements, are included in the
Fund's annual report, which is available upon request.
Financial Highlights
[insert financial highlights for the last five years here]
<PAGE>
EXHIBIT A
REDUCED SALES CHARGES (CLASS A ONLY)
You may qualify for a reduced sales charge through several purchase plans
available. You must notify the Fund at the time of purchase to take
advantage of the reduced sales charge.
Rights of Accumulation can be applied to several accounts
Class A sales charge breakpoints are automatically calculated for each
account based on the higher of cost or current value of shares previously
purchased. This privilege can be applied to a family group or other
qualified group* upon request. Shares could then be purchased at the reduced
sales charge which applies to the entire group; that is, based on the higher
of cost or current value of shares previously purchased and currently held
by all the members of the group.
* A "qualified group" is one which:
has been in existence for more than six months, and
has a purpose other than acquiring shares at a discount, and
satisfies uniform criteria which enable CDI and brokers offering shares to
realize economies of scale in distributing such shares.
A qualified group must have more than 10 members, must be available to
arrange for group meetings between representatives of CDI or brokers
distributing shares, must agree to include sales and other materials related
to the Funds in its publications and mailings to members at reduced or no
cost to CDI or brokers. A pension plan is not a qualified group for rights
of accumulation.
Letter of Intent
If you (or your group, as described above) plan to purchase $50,000 or more
of Calvert Fund shares over the next 13 months, your sales charge may be
reduced through a "Letter of Intent." You pay the lower sales charge
applicable to the total amount you plan to invest over the 13-month period,
excluding any money market portfolio purchases. Part of your shares will be
held in escrow, so that if you do not invest the amount indicated, you will
have to pay the sales charge applicable to the smaller investment actually
made. For more information, see the SAI.
Neither the Funds, nor Calvert Distributors, Inc. ("CDI"), nor any affiliate
thereof will reimburse a plan or participant for any sales charges paid
prior to receipt of such written communication and confirmation by Calvert
Group. Plan administrators should send requests for the waiver of sales
charges based on the above conditions to: Calvert Group Retirement Plans,
4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814.
Other Circumstances
There is no sales charge on shares of any Fund of the Calvert Group of Funds
sold to (i) current or retired Directors, Trustees, or Officers of the
Calvert Group of Funds, employees of Calvert Group, Ltd. and its affiliates,
or their family members; (ii) CSIF Advisory Council Members, directors,
officers, and employees of any subadvisor for the Calvert Group of Funds,
employees of broker/dealers distributing the Fund's shares and immediate
family members of the Council, subadvisor, or broker/dealer; (iii) Purchases
made through a Registered Investment Advisor; (iv) Trust departments of
banks or savings institutions for trust clients of such bank or institution,
(v) Purchases through a broker maintaining an omnibus account with the Fund,
provided the purchases are made by (a) investment advisors or financial
planners placing trades for their own accounts (or the accounts of their
clients) and who charge a management, consulting, or other fee for their
services; or (b) clients of such investment advisors or financial planners
who place trades for their own accounts if such accounts are linked to the
master account of such investment advisor or financial planner on the books
and records of the broker or agent; or (c) retirement and deferred
compensation plans and trusts, including, but not limited to, those defined
in section 401(a) or section 403(b) of the I.R.C., and "rabbi trusts."
Dividends and Capital Gain Distributions from other Calvert Group Funds
You may prearrange to have your dividends and capital gain distributions
from another Calvert Group Fund automatically invested in another account
with no additional sales charge.
Purchases made at NAV
Except for money market funds, if you make a purchase at NAV, you may
exchange that amount to another Calvert Group Fund at no additional sales
charge.
Reinstatement Privilege
If you redeem shares and then within 30 days decide to reinvest in the same
Fund, you may do so at the net asset value next computed after the
reinvestment order is received, without a sales charge. You may use the
reinstatement privilege only once. The Funds reserve the right to modify or
eliminate this privilege.
EXHIBIT B
Service Fees and Arrangements with Dealers
Calvert Distributors, Inc., the Fund's underwriter, pays dealers a
commission, or reallowance (expressed as a percentage of the offering price
for Class A, and a percentage of amount invested for Class B and C) when you
purchase shares of non-money market portfolios. CDI also pays dealers an
ongoing service fee while you own shares of a Fund (expressed as an annual
percentage rate of average daily net assets held in Calvert accounts by that
dealer). The table below shows the amount of payment which differs depending
on the Class.
Maximum Commission/Service Fees
Class A Class B Class C*
National 2.25%/0.15% 2.25%/0.25% 1.00%/1.00%
California 2.25%/0.15% 2.25%/0.25% 1.00%/1.00%
Maryland 2.25%/0.15% 2.25%/0.25% 1.00%/1.00%
Virginia 2.25%/0.15% 2.25%/0.25% 1.00%/1.00%
*Class C pays dealers a service fee of 0.25% and additional compensation of
0.75% for a total of 1.00%.
Occasionally, CDI may reallow to dealers the full Class A front-end sales
charge. CDI may also pay additional concessions, including non-cash
promotional incentives, such as merchandise or trips, to brokers employing
registered representatives who have sold or are expected to sell a minimum
dollar amount of shares of the Funds and/or shares of other Funds
underwritten by CDI. CDI may make expense reimbursements for special
training of a broker's registered representatives, advertising or equipment,
or to defray the expenses of sales contests. CAMCO, CDI, or their affiliates
may pay certain broker-dealers and/or other persons, for the sale and
distribution of the securities or for services to the Fund. Payments may
include additional compensation based on assets held through that firm
beyond the regularly scheduled rates, and finder's fees. CDI pays dealers a
finder's fee on Class A shares purchased at NAV in accounts with $1 million
or more. The finder's fee is 1% of the NAV purchase amount on the first $2
million, .80% on $2 to $3 million, .50% on $3 to $50 million, .25% on $50 to
$100 million, and .15 over $1 million. All payments will be in compliance
with the rules of the National Association of Securities Dealers, Inc.
To Open an Account:
800-368-2748
Performance and Prices:
Calvert Information Network
24 hours, 7 days a week
800-368-2745
Service for Existing Accounts:
Shareholders 800-368-2745
Brokers 800-368-2746
TDD for Hearing-Impaired:
800-541-1524
Branch Office:
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
Registered, Certified or
Overnight Mail:
Calvert Group
c/o NFDS
330 West 9th Street
Kansas City, MO 64105
Calvert Group Web-Site
Address: http://www.calvertgroup.com
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
<PAGE>
Outside Back Cover Page
The Statement of Additional Information ("SAI") (dated April 30, 1999) for
the Funds has been filed with the Securities and Exchange Commission and is
incorporated by reference. Additional information about the Funds'
investments is available in the Funds' annual and semi-annual reports to
shareholders. The SAI and the Funds' annual and semi-annual reports are
available, without charge and upon request, from the Fund at 800-368-2748.
Information about the Funds (including the SAI) can be reviewed at the
Commission's Public Reference Room in Washington, D.C. Information on the
operation of the public reference room may be obtained by calling the
Commission at 1-800-SEC-0330. Reports and other information about the Fund
are available on the Commission's internet site at http://www.sec.gov.
Copies of this information may be obtained, by payment of a duplicating fee,
by writing the Public Reference Section of the Commission, Washington, D.C.
20549-6009.
811-6525 Calvert Municipal Fund, Inc.
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION - April 30, 1999
Calvert Municipal Fund, Inc.
Calvert National Municipal Intermediate Fund
Calvert California Municipal Intermediate Fund
Calvert Maryland Municipal Intermediate Fund
Calvert Virginia Municipal Intermediate Fund
4550 Montgomery Avenue, Bethesda, Maryland 20814
New Account Information
(800) 368-2748
(301) 951-4820
Shareholder Services
(800) 368-2745
Broker Services
(800) 368-2746
(301) 951-4850
TDD for the Hearing- Impaired
(800) 541-1524
This Statement of Additional Information is not a prospectus.
Investors should read the Statement of Additional Information in conjunction
with the Prospectus of Calvert Municipal Fund (the "Fund"), dated April 30,
1999, which may be obtained free of charge by writing or calling the Fund.
The audited financial statements included in the Annual Report to
Shareholders dated December 31, 1998, are expressly incorporated by
reference and made a part of this Statement of Additional Information.
Copies of this Report may be obtained free of charge by writing or calling
the Fund.
TABLE OF CONTENTS
Investment Policies and Risks 1
Investment Restrictions 6
Purchases and Redemptions of Shares 7
Dividends and Distributions 8
Tax Matters 8
Valuation of Shares 9
Calculation of Yield and Total Return 10
Advertising 11
Directors and Officers 11
Investment Advisor 14
Administrative Services 15
Method of Distribution 15
Transfer and Shareholder Servicing Agent 16
Independent Accountants and Custodians 16
Portfolio Transactions 16
General Information 16
Financial Statements 17
Control Persons and Principal Holders of Securities 17
Appendix 17
<PAGE>
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INVESTMENT POLICIES AND RISKS
- ------------------------------------------------------------------------------
Calvert National Municipal Intermediate Fund ("National") invests
primarily in a nondiversified portfolio of municipal obligations, including
some with interest that may be subject to alternative minimum tax. The
average dollar-weighted maturity of investments is between 3 and 10 years.
Fixed rate investments normally have remaining maturities of 12 years or
less; variable rate investments may have longer maturities. A complete
explanation of municipal obligations and municipal bond and note ratings
appears in the Appendix.
Calvert California Municipal Intermediate Fund ("California")
invests primarily in a nondiversified portfolio of municipal obligations,
including some with interest that may be subject to alternative minimum tax.
Fixed rate investments normally have remaining maturities of 12 years or
less; variable rate investments may have longer maturities. A complete
explanation of municipal obligations and municipal bond and note ratings
appears in the Appendix.
Calvert Maryland and Virginia Municipal Intermediate Funds
("Maryland" and/or "Virginia") invest primarily in a nondiversified
portfolio of municipal obligations, including some with interest that may be
subject to alternative minimum tax. A complete explanation of municipal
obligations and municipal bond and note ratings appears in the Appendix.
Under normal market conditions, each Fund will attempt to invest at
least 65% of its total assets in municipal obligations with interest that is
exempt from federal and, for California, Maryland, and Virginia, specific
state income tax, including those issued by or on behalf of the state for
which the Fund is named and the state's political subdivisions. California,
Maryland, and Virginia will also attempt to invest the remaining 35% of
total assets in these obligations, but may invest assets in municipal
obligations of other states, territories and possessions of the United
States, the District of Columbia, and their respective authorities,
agencies, instrumentalities and political subdivisions. Dividends you
receive from the Fund that are derived from interest on tax-exempt
obligations of other states will be exempt from federal income tax, but will
be subject to your state's income taxes. For National, to the extent the
obligations are issued by your state of residence, you may also be exempt
from certain state and local income taxes.
Variable Rate Demand Notes
The Board of Directors of the Fund has approved investments in
floating and variable rate demand notes upon the following conditions:
National, California, Maryland, and Virginia ("each Portfolio" or "the
Portfolios") each have the right of demand, upon notice not to exceed thirty
days, against the issuer to receive payment; the issuer will be able to make
payment upon such demand, either from its own resources or through an
unqualified commitment from a third party; and the rate of interest payable
is calculated to ensure that the market value of such notes will approximate
par value on the adjustment dates. The remaining maturity of such demand
notes is deemed the period remaining until such time as the Portfolios have
the right to dispose of the notes at a price which approximates par and
market value. Notes with a right of demand exceeding seven days are
considered illiquid and are subject to purchase restrictions.
Municipal Leases
Each Portfolio may invest in municipal leases, or structured
instruments where the underlying security is a municipal lease. A municipal
lease is an obligation of a government or governmental authority, not
subject to voter approval, used to finance capital projects or equipment
acquisitions and payable through periodic rental payments. Each Portfolio
may purchase unrated leases. The Fund's Advisor, under the supervision of
the Board of Trustees/Directors, is responsible for determining the credit
quality of such leases on an ongoing basis, including an assessment of the
likelihood that the lease will not be canceled. Certain municipal leases may
be considered illiquid and subject to each Portfolio's limit on illiquid
securities. The Board of Trustees/Directors has directed the Advisor to
treat a municipal lease as a liquid security if it satisfies the following
conditions: (A) such treatment must be consistent with each Portfolio's
investment restrictions; (B) the Advisor should be able to conclude that the
obligation will maintain its liquidity throughout the time it is held by a
Portfolio, based on the following factors: (1) whether the lease may be
terminated by the lessee; (2) the potential recovery, if any, from a sale of
the leased property upon termination of the lease; (3) the lessee's general
credit strength (e.g., its debt, administrative, economic and financial
characteristics and prospects); (4) the likelihood that the lessee will
discontinue appropriating funding for the leased property because the
property is no longer deemed essential to its operations (e.g., the
potential for an "event of nonappropriation"), and (5) any credit
enhancement or legal recourse provided upon an event of nonappropriation or
other termination of the lease; (C) the Advisor should determine whether the
obligation can be disposed of within seven days in the ordinary course of
business at approximately the amount at which a Portfolio has valued it for
purposes of calculating net asset value, taking into account the following
factors: (1) the frequency of trades and quotes; (2) the volatility of
quotations and trade prices; (3) the number of dealers willing to purchase
or sell the security and the number of potential purchasers; (4) dealer
undertakings to make a market in the security; (5) the nature of the
security and the nature of the marketplace trades (e.g., the time needed to
dispose of the security, the method of soliciting offers, and the mechanics
of the transfer); (6) the rating of the security and the financial condition
and prospects of the issuer; and (7) other factors relevant to the
Portfolio's ability to dispose of the security; and (D) the Advisor should
have reasonable expectations that the municipal lease obligation will
maintain its liquidity throughout the time the instrument is held by a
Portfolio.
Temporary Investments
Short-term money market type investments consist of: obligations of
the U.S. Government, its agencies and instrumentalities; certificates of
deposit of banks with assets of one billion dollars or more; commercial
paper or other corporate notes of investment-grade quality; and any of such
items subject to short-term repurchase agreements.
When-Issued Purchases
New issues of municipal obligations are offered on a when-issued
basis; that is, delivery and payment for the securities normally take place
15 to 45 days after the date of the transaction. The payment obligation and
the yield that will be received on the securities are each fixed at the time
the buyer enters into the commitment. The Portfolios will only make
commitments to purchase these securities with the intention of actually
acquiring them, but may sell these securities before the settlement date if
it is deemed advisable as a matter of investment strategy.
Securities purchased on a when-issued basis and the securities held
in a Portfolio are subject to changes in market value based upon the
public's perception of the creditworthiness of the issuer and changes in the
level of interest rates (which will generally result in both changing in
value in the same way, i.e., both experiencing appreciation when interest
rates decline and depreciation when interest rates rise). Therefore, if in
order to achieve higher interest income, a Portfolio remains substantially
fully invested at the same time that it has purchased securities on a
when-issued basis, there will be a greater possibility that the market value
of the Portfolio's assets may vary.
When the time comes to pay for when-issued securities, a Portfolio
will meet its obligations from then available cash flow, sale of securities
or, although it would not normally expect to do so, from sale of the
when-issued securities themselves (which may have a market value greater or
less than the Portfolio's payment obligation). Sale of securities to meet
such obligations carries with it a greater potential for the realization of
capital losses and capital gains which are not exempt from federal income
tax. When-issued securities do not earn income until they have in fact been
issued.
When a Portfolio purchases a when-issued security, it will maintain
an amount of cash, cash equivalents (for example, commercial paper and daily
tender adjustable notes) or short-term high-grade fixed income securities in
a segregated account with the Portfolio's custodian, so that the amount so
segregated plus the amount of initial and variation margin held in the
account of its broker equals the market value of the when-issued purchase,
thereby ensuring the transaction is unleveraged.
Transactions in Futures Contracts
Each Portfolio may engage in the purchase and sale of futures
contracts on an index of municipal bonds or on U.S. Treasury securities, or
options on such futures contracts, for hedging and substitution purposes
only. Each Portfolio may sell such futures contracts in anticipation of a
decline in the cost of municipal bonds it holds or may purchase such futures
contracts in anticipation of an increase in the value of municipal bonds the
Portfolio intends to acquire. Each Portfolio also is authorized to purchase
and sell other financial futures contracts which in the opinion of the
Investment Advisor provide an appropriate hedge for some or all of its
securities.
Because of low initial margin deposits made upon the opening of a
futures position, futures transactions involve substantial leverage. As a
result, relatively small movements in the price of the futures contract can
result in substantial unrealized gains or losses. Because each Portfolio
will engage in the purchase and sale of financial futures contracts solely
for hedging and substitution purposes, however, any losses incurred in
connection therewith should, if the strategy is successful, be offset in
whole or in part by increases in the value of securities held by a Portfolio
or decreases in the price of securities a Portfolio intends to acquire.
Municipal bond index futures contracts commenced trading in June
1985, and it is possible that trading in such futures contracts will be less
liquid than that in other futures contracts. The trading of futures
contracts and options thereon is subject to certain market risks, such as
trading halts, suspensions, exchange or clearing house equipment failures,
government intervention or other disruptions of normal trading activity,
which could at times make it difficult or impossible to liquidate existing
positions.
The liquidity of a secondary market in futures contracts may be
further adversely affected by "daily price fluctuation limits" established
by contract markets, which limit the amount of fluctuation in the price of a
futures contract or option thereon during a single trading day. Once the
daily limit has been reached in the contract, no trades may be entered into
at a price beyond the limit, thus preventing the liquidation of open
positions. Prices of existing contracts have in the past moved the daily
limit on a number of consecutive trading days. Each Portfolio will enter
into a futures position only if, in the judgment of the Investment Advisor,
there appears to be an actively traded secondary market for such futures
contracts.
The successful use of transactions in futures contracts and options
thereon depends on the ability of the Investment Advisor to correctly
forecast the direction and extent of price movements of these instruments,
as well as price movements of the securities held by each Portfolio within a
given time frame. To the extent these prices remain stable during the period
in which a futures or option contract is held by a Portfolio, or move in a
direction opposite to that anticipated, a Portfolio may realize a loss on
the hedging transaction which is not fully or partially offset by an
increase in the value of its securities. As a result, a Portfolio's total
return for such period may be less than if it had not engaged in the hedging
transaction.
Description of Financial Futures Contracts
Futures Contracts. A futures contract obligates the seller of a
contract to deliver and the purchaser of a contract to take delivery of the
type of financial instrument called for in the contract or, in some
instances, to make a cash settlement, at a specified future time for a
specified price. Although the terms of a contract call for actual delivery
or acceptance of securities, or for a cash settlement, in most cases the
contracts are closed out before the delivery date without the delivery or
acceptance taking place. Each Portfolio intends to close out any futures
contracts prior to the delivery date of such contracts.
Each Portfolio may sell futures contracts in anticipation of a
decline in the value of its investments in municipal bonds. The loss
associated with any such decline could be reduced without employing futures
as a hedge by selling long-term securities and either reinvesting the
proceeds in securities with shorter maturities or by holding assets in cash.
This strategy, however, entails increased transaction costs in the form of
brokerage commissions and dealer spreads and will typically reduce each
Portfolio's average yields as a result of the shortening of maturities.
The purchase or sale of a futures contract differs from the
purchase or sale of a security, in that no price or premium is paid or
received. Instead, an amount of cash or securities acceptable to each
Portfolio's futures commission merchant and the relevant contract market,
which varies but is generally about 5% or less of the contract amount, must
be deposited with the broker. This amount is known as "initial margin," and
represents a "good faith" deposit assuring the performance of both the
purchaser and the seller under the futures contract. Subsequent payments to
and from the broker, known as "variation margin," are required to be made on
a daily basis as the price of the futures contract fluctuates, making the
long or short positions in the futures contract more or less valuable, a
process known as "marking to the market." Prior to the settlement date of
the futures contract, the position may be closed out by taking an opposite
position which will operate to terminate the position in the futures
contract. A final determination of variation margin is then made, additional
cash is required to be paid to or released by the broker, and the purchaser
realizes a loss or gain. In addition, a commission is paid on each completed
purchase and sale transaction.
The sale of financial futures contracts provides an alternative
means of hedging a Portfolio against declines in the value of its
investments in municipal bonds. As such values decline, the value of a
Portfolio's position in the futures contracts will tend to increase, thus
offsetting all or a portion of the depreciation in the market value of the
Portfolio's fixed income investments which are being hedged. While a
Portfolio will incur commission expenses in establishing and closing out
futures positions, commissions on futures transactions may be significantly
lower than transaction costs incurred in the purchase and sale of fixed
income securities. In addition, the ability of a Portfolio to trade in the
standardized contracts available in the futures market may offer a more
effective hedging strategy than a program to reduce the average maturing of
portfolio securities, due to the unique and varied credit and technical
characteristics of the municipal debt instruments available to the
Portfolio. Employing futures as a hedge may also permit each Portfolio to
assume a hedging posture without reducing the yield on its investments,
beyond any amounts required to engage in futures trading.
Each Portfolio may engage in the purchase and sale of futures
contracts on an index of municipal securities. These instruments provide for
the purchase or sale of a hypothetical portfolio of municipal bonds at a
fixed price in a stated delivery month. Unlike most other futures contracts,
however, a municipal bond index futures contract does not require actual
delivery of securities but results in a cash settlement based upon the
difference in value of the index between the time the contract was entered
into and the time it is liquidated.
The municipal bond index underlying the futures contracts traded by
each Portfolio is The Bond Buyer Municipal Bond Index, developed by The Bond
Buyer and the Chicago Board of Trade ("CBT"), the contract market on which
the futures contracts are traded. As currently structured, the index is
comprised of 40 tax-exempt term municipal revenue and general obligation
bonds. Each bond included in the index must be rated either A- or higher by
Standard & Poor's or A or higher by Moody's Investors Service and must have
a remaining maturity of 19 years or more. Twice a month new issues
satisfying the eligibility requirements are added to, and an equal number of
old issues will be deleted from, the index. The value of the index is
computed daily according to a formula based upon the price of each bond in
the index, as evaluated by four dealer-to-dealers brokers.
Each Portfolio may also purchase and sell futures contracts on U.S.
Treasury bills, notes and bonds for the same types of hedging and
substitution purposes. Such futures contracts provide for delivery of the
underlying security at a specified future time for a fixed price, and the
value of the futures contract therefore generally fluctuates with movements
in interest rates.
The municipal bond index futures contract, futures contracts on
U.S. Treasury securities and options on such futures contracts are traded on
the CBT, which, like other contract markets, assures the performance of the
parties to each futures contract through a clearing corporation, a nonprofit
organization managed by the exchange membership, which is also responsible
for handling daily accounting of deposits or withdrawals of margin.
Each Portfolio may also purchase financial futures contracts when
not fully invested in municipal bonds, in anticipation of an increase in the
cost of securities a Portfolio intends to purchase. As such securities are
purchased, an equivalent amount of futures contracts will be closed out. In
a substantial majority of these transactions, a Portfolio will purchase
municipal bonds upon termination of the futures contracts. Due to changing
market conditions and interest rate forecasts, however, a futures position
may be terminated without a corresponding purchase of securities.
Nevertheless, all purchases of futures contracts by a Portfolio will be
subject to certain restrictions, described below.
Options on Futures Contracts. An option on a futures contract
provides the purchaser with the right, but not the obligation, to enter into
a long position in the underlying futures contract (that is, purchase the
futures contract), in the case of a "call" option, or a short position (sell
the futures contract), in the case of a "put" option, for a fixed price up
to a stated expiration date. The option is purchased for a non-refundable
fee, known as the "premium." Upon exercise of the option, the contract
market clearing house assigns each party to the option an opposite position
in the underlying futures contract. In the event of exercise, therefore, the
parties are subject to all of the risks of futures trading, such as payment
of initial and variation margin. In addition, the seller, or "writer," of
the option is subject to margin requirements on the option position. Options
on futures contracts are traded on the same contract markets as the
underlying futures contracts.
Each Portfolio may purchase options on futures contracts for the
same types of purposes described above in connection with futures contracts.
For example, in order to protect against an anticipated decline in the value
of securities it holds, a Portfolio could purchase put options on futures
contracts, instead of selling the underlying futures contracts. Conversely,
in order to protect against the adverse effects of anticipated increases in
the costs of securities to be acquired, a Portfolio could purchase call
options on futures contracts, instead of purchasing the underlying futures
contracts. Each Portfolio generally will sell options on futures contracts
only to close out an existing position.
Each Portfolio will not engage in transactions in such instruments
unless and until the Investment Advisor determines that market conditions
and the circumstances of the Portfolio warrant such trading. To the extent
that a Portfolio engages in the purchase and sale of futures contracts or
options thereon, it will do so only at a level which is reflective of the
Investment Advisor's view of the Portfolio's hedging needs, the liquidity of
the market for futures contracts and the anticipated correlation between
movements in the value of the futures or option contract and the value of
securities held by the Portfolio.
Restrictions on the Use of Futures Contracts and Options on Futures
Contracts. Under regulations of the Commodity Futures Trading Commission
("CFTC"), the futures trading activities described herein will not result in
a Portfolio being deemed to be a "commodity pool," as defined under such
regulations, provided that certain trading restrictions are adhered to. In
particular, CFTC regulations require that all futures and option positions
entered into by a Portfolio qualify as bona fide hedge transactions, as
defined under CFTC regulations, or, in the case of long positions, that the
value of such positions not exceed an amount of segregated funds determined
by reference to certain cash and securities positions maintained by a
Portfolio and accrued profits on such positions. In addition, as a matter of
operating policy, a Portfolio may not purchase or sell a futures contract or
an option thereon if, immediately thereafter, the sum of the amount of
initial margin deposits on the Portfolio's existing futures positions and
premiums on such options would exceed 5% of its net assets.
When a Portfolio purchases a futures contract, it will maintain an
amount of cash, cash equivalents (for example, commercial paper and daily
tender adjustable notes) or short-term high-grade fixed income securities in
a segregated account with the Portfolio's custodian, so that the amount so
segregated plus the amount of initial and variation margin held in the
account of its broker equals the market value of the futures contract,
thereby ensuring that the use of such futures is unleveraged.
Risk Factors in Transactions in Futures Contracts. The particular
municipal bonds comprising the index underlying the municipal bond index
futures contract may vary from the bonds held by the Portfolio. In addition,
the securities underlying futures contracts on U.S. Treasury securities will
not be the same as securities held by the Portfolios. As a result, each
Portfolio's ability effectively to hedge all or a portion of the value of
its municipal bonds through the use of futures contracts will depend in part
on the degree to which price movements in the index underlying the municipal
bond index futures contract, or the U.S. Treasury securities underlying
other futures contracts trade, correlate with price movements of the
municipal bonds held by the Portfolio.
For example, where prices of securities in a Portfolio do not move
in the same direction or to the same extent as the values of the securities
or index underlying a futures contract, the trading of such futures
contracts may not effectively hedge the Portfolio's investments and may
result in trading losses. The correlation may be affected by disparities in
the average maturity, ratings, geographical mix or structure of the
Portfolio's investments as compared to those comprising the index, and
general economic or political factors. In addition, the correlation between
movements in the value of the index underlying a futures contract may be
subject to change over time, as additions to and deletions from the index
alter its structure. In the case of futures contracts on U.S. Treasury
securities and options thereon, the anticipated correlation of price
movements between the U.S. Treasury securities underlying the futures or
options and municipal bonds may be adversely affected by economic,
political, legislative or other developments that have a disparate impact on
the respective markets for such securities. In the event that the Investment
Advisor determines to enter into transactions in financial futures contracts
other than the municipal bond index futures contract or futures on U.S.
Treasury securities, the risk of imperfect correlation between movements in
the prices of such futures contracts and the prices of municipal bonds held
by a Portfolio may be greater.
The trading of futures contracts on an index also entails the risk
of imperfect correlation between movements in the price of the futures
contract and the value of the underlying index. The anticipated spread
between the prices may be distorted due to differences in the nature of the
markets, such as margin requirements, liquidity and the participation of
speculators in the futures markets. The risk of imperfect correlation,
however, generally diminishes as the delivery month specified in the futures
contract approaches.
Prior to exercise or expiration, a position in futures contracts or
options thereon may be terminated only by entering into a closing purchase
or sale transaction. This requires a secondary market on the relevant
contract market. Each Portfolio will enter into a futures or option position
only if there appears to be a liquid secondary market therefor, although
there can be no assurance that such a liquid secondary market will exist for
any particular contract at any specific time. Thus, it may not be possible
to close out a position once it has been established. Under such
circumstances, a Portfolio could be required to make continuing daily cash
payments of variation margin in the event of adverse price movements. In
such situation, if a Portfolio has insufficient cash, it may be required to
sell portfolio securities to meet daily variation margin requirements at a
time when it may be disadvantageous to do so. In addition, a Portfolio may
be required to perform under the terms of the futures or option contracts it
holds. The inability to close out futures or options positions also could
have an adverse impact on a Portfolio's ability effectively to hedge its
portfolio.
When a Portfolio purchases an option on a futures contract, its
risk is limited to the amount of the premium, plus related transaction
costs, although this entire amount may be lost. In addition, in order to
profit from the purchase of an option on a futures contract, a Portfolio may
be required to exercise the option and liquidate the underlying futures
contract, subject to the availability of a liquid secondary market. The
trading of options on futures contracts also entails the risk that changes
in the value of the underlying futures contract will not be fully reflected
in the value of the option, although the risk of imperfect correlation
generally tends to diminish as the maturity date of the futures contract or
expiration date of the option approaches.
"Trading Limits" or "Position Limits" may also be imposed on the
maximum number of contracts which any person may hold at a given time. A
contract market may order the liquidation of positions found to be in
violation of these limits and it may impose other sanctions or restrictions.
The Investment Advisor does not believe that trading limits will have any
adverse impact on the strategies for hedging a Portfolio's investments.
Further, the trading of futures contracts is subject to the risk of
the insolvency of a brokerage firm or clearing corporation, which could make
it difficult or impossible to liquidate existing positions or to recover
excess variation margin payments.
In addition to the risks of imperfect correlation and lack of a
liquid secondary market for such instruments, transactions in futures
contracts involve risks related to leveraging and the potential for
incorrect forecasts of the direction and extent of interest rate movements
within a given time frame.
Credit Quality
As an operating policy, each Portfolio may not invest more than 35%
of its net assets in non-investment grade municipal obligations. As has been
the industry practice, this determination of credit quality is made at the
time a Portfolio acquires the obligation. However, because it is possible
that subsequent downgrades could occur, if an obligation held by a Portfolio
is later downgraded, the Advisor, under the supervision of the Fund's Board
of Directors, will consider whether it is in the best interest of the
shareholders to hold or to dispose of the obligation. Among the criteria
that may be considered by the Advisor and the Board are the probability that
the obligations will be able to make scheduled interest and principal
payments in the future, the extent to which any devaluation of the
obligation has already been reflected in the Portfolio' net asset value, and
the total percentage, if any, of obligations currently rated below
investment-grade held by a Portfolio.
Noninvestment-grade securities have moderate to poor protection of
principal and interest payments and have speculative characteristics. They
involve greater risk of default or price declines due to changes in the
issuer's creditworthiness than investment-grade debt securities. Because the
market for lower-rated securities may be thinner and less active than for
higher-rated securities, there may be market price volatility for these
securities and limited liquidity in the resale market. Market prices for
these securities may decline significantly in periods of general economic
difficulty or rising interest rates.
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INVESTMENT RESTRICTIONS
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Fundamental Investment Restrictions
The Portfolios have adopted the following fundamental investment
restrictions. These restrictions cannot be changed without the approval of
the holders of a majority of the outstanding shares of each Portfolio.
(1) Each Portfolio may not make any investment
inconsistent with its classification as a nondiversified
investment company under the 1940 Act.
(2) Each Portfolio may not concentrate its investments in
the securities of issuers primarily engaged in any
particular industry (other than securities issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities and repurchase agreements secured
thereby).
(3) Each Portfolio may not issue senior securities or
borrow money, except from banks for temporary or emergency
purposes and then only in an amount up to 33 1/3% of the
value of its total assets or as permitted by law and
except by engaging in reverse repurchase agreements, where
allowed. In order to secure any permitted borrowings and
reverse repurchase agreements under this section, a
Portfolio may pledge, mortgage or hypothecate its assets.
(4) The Portfolios may not underwrite the securities of
other issuers, except as allowed by law or to the extent
that the purchase of obligations in accordance with a
Portfolio's investment objective and policies, either
directly from the issuer, or from an underwriter for an
issuer, may be deemed an underwriting.
(5) Each Portfolio may not invest directly in commodities
or real estate, although it may invest in securities which
are secured by real estate or real estate mortgages and
securities of issuers which invest or deal in commodities,
commodity futures, real estate or real estate mortgages.
(6) The Portfolios may not make loans, other than through
the purchase of money market instruments and repurchase
agreements or by the purchase of bonds, debentures or
other debt securities, or as permitted by law. The
purchase of all or a portion of an issue of publicly or
privately distributed debt obligations in accordance with
a Portfolio's investment objective, policies and
restrictions, shall not constitute the making of a loan.
Nonfundamental Investment Restrictions
The Board of Trustees/Directors has adopted the following
nonfundamental investment restrictions. A nonfundamental investment
restriction can be changed by the Board at any time without a shareholder
vote.
(1) Each Portfolio may not purchase common stocks,
preferred stocks, warrants, or other equity securities.
(2) Each Portfolio does not intend to make any purchases
of securities if borrowing exceeds 5% of a portfolio's
total assets.
(3) Each Portfolio may not purchase illiquid securities
if more than 15% of the value of net assets would be
invested in such securities;
(4) Each Portfolio may not sell securities short,
purchase securities on margin, or write put and call
options, except to the extent permitted under
"Transactions in Futures Contracts" or elsewhere in
the Prospectus or SAI. The Portfolios reserve the
right to purchase securities with puts attached.
(5) National and California each may not purchase or sell
a futures contract or an option thereon if immediately
thereafter, the sum of the amount of initial margin
deposits on futures and premiums on such options would
exceed 5% of the Portfolio's net assets;
(6) National and California each may not invest in puts
or calls on a security, including straddles, spreads,
or any combination, if the value of that option
premium, when aggregated with the premiums on all
other options on securities held by the Portfolio,
exceeds 5% of the Portfolio's total assets.
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PURCHASES AND REDEMPTIONS OF SHARES
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Share certificates will be issued at no charge if requested in
writing by the investor. No certificates will be issued for fractional
shares (see Prospectus, "How to Sell Your Shares").
To change redemption instructions already given, shareholders must
send a written notice to Calvert Group, c/o NFDS, 330 W. 9th, Kansas City,
MO 64105, with a voided copy of a check for the bank wiring instructions to
be added. If a voided check does not accompany the request, then the request
must be signature guaranteed by a commercial bank, savings and loan
association, trust company, member firm of any national securities exchange,
or certain credit unions. Further documentation may be required from
corporations, fiduciaries, and institutional investors.
The right of redemption may be suspended or the date of payment
postponed for any period during which the New York Stock Exchange is closed
(other than customary weekend and holiday closings), when trading on the New
York Stock Exchange is restricted, or an emergency exists, as determined by
the SEC, or if the Commission has ordered such a suspension for the
protection of shareholders. Redemption proceeds are normally mailed or wired
the next business day after a proper redemption request has been received,
unless redemptions have been suspended or postponed as described above.
Certain Class B shares may be subject to a contingent deferred
sales charge which is subtracted from the redemption proceeds (see
Prospectus, "Calculation of Contingent Deferred Sales Charges and Waiver of
Sales Charges").
Redemption proceeds are normally paid in cash. However, each
Portfolio has the right to redeem shares in assets other than cash for
redemption amounts exceeding, in any 90-day period, $250,000 or 1% of the
net asset value of a Portfolio, whichever is less.
Reduced Sales Charges
Each Portfolio imposes reduced sales charges in certain situations
in which the Principal Underwriter (which offers the Portfolio' shares
continuously and on a "best efforts" basis) and the dealers selling each
Portfolio's shares may expect to realize significant economies of scale with
respect to such sales. Generally, sales costs do not increase in proportion
to the dollar amount of the shares sold; for example, the per-dollar
transaction cost for a sale to an investor of shares worth $5,000 is
generally much higher than the per-dollar cost for a sale of shares worth
$1,000,000. Thus, the applicable sales charge declines as a percentage of
the dollar amount of shares sold as the dollar amount increases.
When a shareholder agrees to make purchases of shares over a period
of time totaling a certain dollar amount pursuant to a Letter of Intent, the
Underwriter and selling dealers can expect to realize the economies of scale
applicable to that stated goal amount. Thus the Portfolio imposes the sales
charge applicable to the goal amount. Similarly, the Underwriter and selling
dealers also experience cost savings when dealing with existing
shareholders, enabling the Portfolio to afford existing shareholders the
Right of Accumulation. The Underwriter and selling dealers can also expect
to realize economies of scale when making sales to the members of certain
qualified groups which agree to facilitate distribution of the Portfolio'
shares to their members. See "Exhibit A - Reduced Sales Charges" in the
Prospectus.
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DIVIDENDS AND DISTRIBUTIONS
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Each Portfolio declares and pays monthly dividends of its net
income to shareholders of record as of the close of business on each
designated monthly record date. Dividends and distributions will differ
among the classes. Net investment income consists of the interest income
earned on investments (adjusted for amortization of original issue discounts
or premiums or market premiums), less estimated expenses. Capital gains, if
any, are normally paid once a year and will be automatically reinvested at
net asset value in additional shares. Dividends and any distributions are
automatically reinvested in additional shares of the Fund, unless you elect
to have the dividends of $10 or more paid in cash (by check or by Calvert
Money Controller). You may also request to have your dividends and
distributions from the Portfolio invested in shares of any other Calvert
Group Fund, at no additional charge. If you elect to have dividends and/or
distributions paid in cash, and the U.S. Postal Service returns the check as
undeliverable, it, as well as future dividends and distributions, will be
reinvested in additional shares.
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TAX MATTERS
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Each Portfolio intends to continue to qualify as regulated
investment companies under Subchapter M of the Internal Revenue Code. If for
any reason a Portfolio should fail to qualify, it would be taxed as a
corporation at the Portfolio level, rather than passing through its income
and gains to shareholders.
Each Portfolio's dividends of net investment income constitute
exempt-interest dividends on which shareholders are not generally subject to
federal income tax; however under the Act, dividends attributable to
interest on certain private activity bonds must be included in federal
alternative minimum taxable income for the purpose of determining liability
(if any) for individuals and for corporations. Each Portfolio's dividends
derived from taxable interest and distributions of net short-term capital
gains, whether taken in cash or reinvested in additional shares, are taxable
to shareholders as ordinary income and do not qualify for the dividends
received deduction for corporations. If you held shares for six months or
less, losses must be offset by the amount of exempt-interest dividends you
received, and, to the extent of capital gain distributions you received, the
loss amount not offset (disallowed) must be treated as long-term capital
loss.
A shareholder may also be subject to some state and local taxes on
dividends and distributions. Each Portfolio will notify its shareholders
annually about the tax status of dividends and distributions paid and the
amount of dividends withheld, if any, during the previous year.
The Code provides that interest on indebtedness incurred or
continued in order to purchase or carry shares of a regulated investment
company which distributes exempt-interest dividends during the year is not
deductible. Furthermore, entities or persons who are "substantial users" (or
persons related to "substantial users") of facilities financed by private
activity bonds should consult their tax advisors before purchasing shares of
a Portfolio. "Substantial user" is generally defined as including a
"nonexempt person" who regularly uses in trade or business a part of a
facility financed from the proceeds of private activity bonds.
Each Portfolio may be required to withhold 31% of any long-term
capital gain dividends and 31% of each redemption transaction if: (a) the
shareholder's social security number or other taxpayer identification number
("TIN") is not provided or an obviously incorrect TIN is provided; (b) the
shareholder does not certify under penalties of perjury that the TIN
provided is the shareholder's correct TIN and that the shareholder is not
subject to backup withholding under section 3406(a)(1)(C) of the Code
because of underreporting (however, failure to provide certification as to
the application of section 3406(a)(1)(C) will result only in backup
withholding on capital gain dividends, not on redemptions); or (c) a
Portfolio is notified by the Internal Revenue Service that the TIN provided
by the shareholder is incorrect or that there has been underreporting of
interest or dividends by the shareholder. Affected shareholders will receive
statements at least annually specifying the amount withheld.
In addition, each Portfolio is required to report to the Internal
Revenue Service the following information with respect to redemption
transactions: (a) the shareholder's name, address, account number and
taxpayer identification number; (b) the total dollar value of the
redemptions; and (c) the identifying CUSIP number.
Certain shareholders are, however, exempt from the backup
withholding and broker reporting requirements. Exempt shareholders include:
corporations; financial institutions; tax-exempt organizations; individual
retirement plans; the U.S., a State, the District of Columbia, a U.S.
possession, a foreign government, an international organization, or any
political subdivision, agency, or instrumentality of any of the foregoing;
U.S. registered commodities or securities dealers; real estate investment
trusts; registered investment companies; bank common trust funds; certain
charitable trusts; and foreign central banks of issue. Nonresident aliens
also are generally not subject to either requirement but, along with certain
foreign partnerships and foreign corporations, may instead be subject to
withholding under section 1441 of the Code. Shareholders claiming exemption
from backup withholding and broker reporting should call or write for
further information.
- ------------------------------------------------------------------------------
VALUATION OF SHARES
- ------------------------------------------------------------------------------
Each Portfolio's assets are valued utilizing the average bid dealer
market quotation as furnished by an independent pricing service. Securities
and other assets for which market quotations are not readily available are
valued based on the current market for similar securities or assets, as
determined in good faith by the Fund's Advisor under the supervision of the
Board of Directors.
Valuations, market quotations and market equivalents are provided
by Kenny S&P Evaluation Services, a subsidiary of McGraw-Hill. The use of
Kenny as a pricing service by the Fund has been approved by the Board of
Directors. Valuations provided by Kenny are determined without exclusive
reliance on quoted prices and take into consideration appropriate factors
such as institution-size trading in similar groups of securities, yield,
quality, coupon rate, maturity, type of issue, trading characteristics, and
other market data.
Each Portfolio determines the net asset value for its shares every
business day at the close of the regular session of the New York Stock
Exchange (generally, 4:00 p.m. Eastern time), and at such other times as may
be necessary or appropriate. The Portfolios do not determine net asset value
on certain national holidays or other days on which the New York Stock
Exchange is closed: New Year's Day, Martin Luther King Day, Presidents' Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.
Net Asset Value and Offering Price Per Share
National
Net asset value per share
($________/________ shares) $__.__
Maximum sales charge
(2.75% of offering price) __.__
Offering price per share $__.__
California
Net asset value per share
($________/________ shares) $__.__
Maximum sales charge
(2.75% of offering price) __.__
Offering price per share $__.__
Maryland
Net asset value per share
($________/________ shares) $__.__
Maximum sales charge
(2.75% of offering price) __.__
Offering price per share $__.__
Virginia
Net asset value per share
($________/________ shares) $__.__
Maximum sales charge
(2.75% of offering price) __.__
Offering price per share $__.__
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CALCULATION OF YIELD AND TOTAL RETURN
- ------------------------------------------------------------------------------
Each Portfolio may advertise its "total return." Total return is
historical in nature and is not intended to indicate future performance.
Total return will be quoted for the most recent one-year period, five-year
period, and period from inception of the Portfolio's offering of shares.
Return quotations for periods in excess of one year represent the average
annual total return for the period included in the particular quotation.
Total return is a computation of the Portfolio's dividend yield, plus or
minus realized or unrealized capital appreciation or depreciation, less fees
and expenses. Total return quotations reflect the deduction of the
Portfolio's maximum sales charge ("return with maximum load"), except
quotations of "return without maximum load" which do not deduct the sales
charge. Note: "Total Return" as quoted in the Financial Highlights section
of the Prospectus and Annual Report to Shareholders, however, per SEC
instructions, does not reflect deduction of the sales charge, and
corresponds to "return without maximum load" as referred to herein. Return
without maximum load should be considered only by investors, such as
participants in certain pension plans, to whom the sales charge does not
apply, or for purposes of comparison only with comparable figures which also
do not reflect sales charges, such as Lipper averages. Total return is
computed according to the following formula:
P(1 + T)n = ERV
where P = a hypothetical initial payment of $1,000; T = total return; n =
number of years; and ERV = the ending redeemable value of a hypothetical
$1,000 payment made at the beginning of the 1, 5 or 10 year periods at the
end of such periods (or portions thereof, if applicable). Returns for the
periods from inception through December 31, 1998 are as follows:
National National
With Without
Max. Load Max. Load
One Year 4.15% 7.11%
Five Year 5.89% 6.48%
From Inception 5.87% 6.43%
(9/30/92)
California California
With Without
Max. Load Max. Load
One Year 4.15% 7.11%
Five Year 5.89% 6.48%
From Inception 5.87% 6.43%
(5/29/92)
Maryland Maryland
With Without
Max. Load Max. Load
One Year 4.15% 7.11%
Five Year 5.89% 6.48%
From Inception 5.87% 6.43%
(9/30/93)
Virginia Virginia
With Without
Max. Load Max. Load
One Year 4.15% 7.11%
Five Year 5.89% 6.48%
From Inception 5.87% 6.43%
(9/30/93)
Each Portfolio may also advertise its "yield" and "taxable
equivalent yield." As with total return, both yield figures are historical
and are not intended to indicate future performance. "Yield" quotations
refer to the aggregate imputed yield-to-maturity of investments based on the
market value as of the last day of a given thirty-day or one-month period
less accrued expenses (net of reimbursement), divided by the average daily
number of outstanding shares entitled to receive dividends times the maximum
offering price on the last day of the period (so that the effect of the
sales charge is included in the calculation), compounded on a "bond
equivalent," or semi-annual, basis. Yield is computed according to the
following formula:
Yield = 2[(a-b/cd)+1)6 - 1]
where a = dividends and interest earned during the period; b = expenses
accrued for the period (net of reimbursement); c = the average daily number
of shares outstanding during the period that were entitled to receive
dividends; and d = the maximum offering price per share on the last day of
the period.
The taxable equivalent yield is the yield an investor would be
required to obtain from taxable investments to equal a Portfolio's yield,
all or a portion of which may be exempt from federal income taxes. The
taxable equivalent yield is computed by taking the portion of the yield
exempt from federal income taxes and multiplying the exempt yield by a
factor based on a stated income tax rate, then adding the portion of the
yield that is not exempt from federal income taxes. The factor which is used
to calculate the tax equivalent yield is the reciprocal of the difference
between 1 and the applicable income tax rate, which will be stated in the
advertisement.
For the thirty-day period ended December 31, 1998, the yield and
federal tax equivalent yields were as follows:
December 31 36% federal 39.6% federal
1998 tax equivalent tax equivalent
yield yield yield
- ------------------------------------------------------------------------------
National _.__% _.__% _.__%
California _.__% _.__% _.__%
Virginia _.__% _.__% _.__%
Maryland _.__% _.__% _.__%
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ADVERTISING
- ------------------------------------------------------------------------------
The Fund or its affiliates may provide information such as, but not
limited to, the economy, investment climate, investment principles,
sociological conditions and political ambiance. Discussion may include
hypothetical scenarios or lists of relevant factors designed to aid the
investor in determining whether the Portfolio is compatible with the
investor's goals. The Fund may list portfolio holdings or give examples or
securities that may have been considered for inclusion in the Portfolio,
whether held or not.
The Fund or its affiliates may supply comparative performance data
and rankings from independent sources such as Donoghue's Money Fund Report,
Bank Rate Monitor, Money, Forbes, Lipper Analytical Services, Inc., CDA
Investment Technologies, Inc., Wiesenberger Investment Companies Service,
Russell 2000/Small Stock Index, Mutual Fund Values Morningstar Ratings,
Mutual Fund Forecaster, Barron's, The Wall Street Journal, and Schabacker
Investment Management, Inc. Such averages generally do not reflect any
front- or back-end sales charges that may be charged by Funds in that
grouping. The Fund may also cite to any source, whether in print or on-line,
such as Bloomberg, in order to acknowledge origin of information. The
Portfolio may compare itself or its portfolio holdings to other investments,
whether or not issued or regulated by the securities industry, including,
but not limited to, certificates of deposit and Treasury notes. The Fund,
its Advisor, and its affiliates reserve the right to update performance
rankings as new rankings become available.
Calvert Group is the nation's leading family of socially
responsible mutual funds, both in terms of socially responsible mutual fund
assets under management, and number of socially responsible mutual fund
portfolios offered (source: Social Investment Forum, December 31, 1998).
Calvert Group was also the first to offer a family of socially responsible
mutual fund portfolios.
- ------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
- ------------------------------------------------------------------------------
Each Portfolio's Board of Trustees/Directors supervises the
Portfolio's activities and reviews its contracts with companies that provide
it with services.
RICHARD L. BAIRD, JR., Trustee. Mr. Baird is Executive Vice
President for the Family Health Council, Inc. in Pittsburgh, Pennsylvania, a
non-profit corporation which provides family planning services, nutrition,
maternal/child health care, and various health screening services. Mr. Baird
is a trustee/director of each of the investment companies in the Calvert
Group of Funds, except for Calvert Variable Series, Inc., Calvert New World
Fund, Inc. and Calvert World Values Fund, Inc. DOB: 05/09/48. Address: 211
Overlook Drive, Pittsburgh, Pennsylvania 15216.
FRANK H. BLATZ, JR., Esq., Trustee. Mr. Blatz is a partner in the
law firm of Snevily, Ely, Williams & Blatz. He was formerly a partner with
Abrams, Blatz, Gran, Hendricks & Reina, P.A. He is also a director of
Calvert Variable Series, Inc. DOB: 10/29/35. Address: 308 East Broad Street,
Westfield, New Jersey 07091.
FREDERICK T. BORTS, M.D., Trustee. Dr. Borts is a radiologist with
Kaiser Permanente. Prior to that, he was a radiologist at Bethlehem Medical
Imaging in Allentown, Pennsylvania. DOB: 07/23/49. Address: 16 Iliahi
Street, Honolulu, Hawaii, 96817.
CHARLES E. DIEHL, Trustee. Mr. Diehl is a self-employed consultant
and is Vice President and Treasurer Emeritus of the George Washington
University. He has retired from University Support Services, Inc. of
Herndon, Virginia. Formerly, he was a Director of Acacia Mutual Life
Insurance Company, and is currently a Director of Servus Financial
Corporation. DOB: 10/13/22. Address: 1658 Quail Hollow Court, McLean,
Virginia 22101.
DOUGLAS E. FELDMAN, M.D., Trustee. Dr. Feldman is managing partner
of Feldman Otolaryngology, Head and Neck Surgery in Washington, D.C. A
graduate of Harvard Medical School, he is Associate Professor of
Otolaryngology, Head and Neck Surgery at Georgetown University and George
Washington University Medical School, and past Chairman of the Department of
Otolaryngology, Head and Neck Surgery at the Washington Hospital Center. He
is included in The Best Doctors in America. DOB: 05/23/48. Address: 7536
Pepperell Drive, Bethesda, Maryland 20817.
PETER W. GAVIAN, CFA, Trustee. Mr. Gavian is President of Corporate
Finance of Washington, Inc. Formerly, he was a principal of Gavian De Vaux
Associates, an investment banking firm. He is also a Chartered Financial
Analyst and an accredited senior business appraiser. DOB: 12/08/32. Address:
3005 Franklin Road North, Arlington, Virginia 22201.
JOHN G. GUFFEY, JR., Trustee. Mr. Guffey is 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.
Mr. Guffey has been advised that the Securities and Exchange
Commission ("SEC") has entered an order against him relating to his former
service as a director of Community Bankers Mutual Fund, Inc. This fund is
not connected with any Calvert Fund or the Calvert Group and ceased
operations in September, 1994. Mr. Guffey consented to the entry of the
order without admitting or denying the findings in the order. The order
contains findings (1) that the Community Bankers Mutual Fund's prospectus
and statement of additional information were materially false and misleading
because they misstated or failed to state material facts concerning the
pricing of fund shares and the percentage of illiquid securities in the
fund's portfolio and that Mr. Guffey, as a member of the fund's board,
should have known of these misstatements and therefore violated the
Securities Act of 1933; (2) that the price of the fund's shares sold to the
public was not based on the current net asset value of the shares, in
violation of the Investment Company Act of 1940 (the "Investment Company
Act"); and (3) that the board of the fund, including Mr. Guffey, violated
the Investment Company Act by directing the filing of a materially false
registration statement. The order directed Mr. Guffey to cease and desist
from committing or causing future violations and to pay a civil penalty of
$5,000. The SEC placed no restrictions on Mr. Guffey's continuing to serve
as a Trustee or Director of mutual funds. DOB: 05/15/48. Address: 388 Calli
Calina, Santa Fe, New Mexico 87501.
*BARBARA J. KRUMSIEK, President and Trustee. Ms. Krumsiek serves as
President, Chief Executive Officer and Vice Chairman of Calvert Group, Ltd.
and as an officer and director of each of its affiliated companies. She is a
director of Calvert-Sloan Advisers, L.L.C., and a trustee/director of each
of the investment companies in the Calvert Group of Funds. Ms. Krumsiek is
the President of each of the investment companies, except for Calvert Social
Investment Fund, of which she is the Senior Vice President. Prior to joining
Calvert Group, Ms. Krumsiek served as a Managing Director of Alliance Fund
Distributors, Inc. DOB: 08/09/52.
M. CHARITO KRUVANT, Trustee. Ms. Kruvant is President and CEO of
Creative Associates International, Inc., a firm that specializes in human
resources development, information management, public affairs and private
enterprise development. She is also a director of Acacia Federal Savings
Bank. DOB: 12/08/45. Address: 5301 Wisconsin Avenue, N.W., Washington, D.C.
20015.
ARTHUR J. PUGH, Trustee. Mr. Pugh is a Director of Calvert Variable
Series, Inc., and serves as a director of Acacia Federal Savings Bank. DOB:
09/24/37. Address: 4823 Prestwick Drive, Fairfax, Virginia 22030.
*DAVID R. ROCHAT, Senior Vice President and Trustee. Mr. Rochat is
Executive Vice President of Calvert Asset Management Company, Inc., Director
and Secretary of Grady, Berwald and Co., Inc., and Director and President of
Chelsea Securities, Inc. He is the Senior Vice President of First Variable
Rate Fund, Calvert Tax-Free Reserves, Calvert Municipal Fund, Inc., Calvert
Cash Reserves, and The Calvert Fund. DOB: 10/07/37. Address: Box 93,
Chelsea, Vermont 05038.
*D. WAYNE SILBY, Esq., Trustee. Mr. Silby is a trustee/director of
each of the investment companies in the Calvert Group of Funds, except for
Calvert Variable Series, Inc. and Calvert New World Fund. Mr. Silby is
Executive Chairman of Group Serve, Inc., an internet company focused on
community building collaborative tools, and an officer, director and
shareholder of Silby, Guffey & Company, Inc., which serves as general
partner of Calvert Social Venture Partners ("CSVP"). CSVP is a venture
capital firm investing in socially responsible small companies. He is also a
Director of Acacia Mutual Life Insurance Company. DOB: 07/20/48. Address:
1715 18th Street, N.W., Washington, D.C. 20009.
RENO J. MARTINI, Senior Vice President. Mr. Martini is a director
and Senior Vice President of Calvert Group, Ltd., and Senior Vice President
and Chief Investment Officer of Calvert Asset Management Company, Inc. Mr.
Martini is also a director and President of Calvert-Sloan Advisers, L.L.C.,
and a director and officer of Calvert New World Fund. DOB: 1/13/50.
RONALD M. WOLFSHEIMER, CPA, Treasurer. Mr. Wolfsheimer is Senior
Vice President and Chief Financial Officer of Calvert Group, Ltd. and its
subsidiaries and an officer of each of the other investment companies in the
Calvert Group of Funds. Mr. Wolfsheimer is Vice President and Treasurer of
Calvert-Sloan Advisers, L.L.C., and a director of Calvert Distributors, Inc.
DOB: 07/24/47.
WILLIAM M. TARTIKOFF, Esq., Vice President and Secretary. Mr.
Tartikoff is an officer of each of the investment companies in the Calvert
Group of Funds, and is Senior Vice President, Secretary, and General Counsel
of Calvert Group, Ltd., and each of its subsidiaries. Mr. Tartikoff is also
Vice President and Secretary of Calvert-Sloan Advisers, L.L.C., a director
of Calvert Distributors, Inc., and is an officer of Acacia National Life
Insurance Company. DOB: 08/12/47.
DANIEL K. HAYES, Vice President. Mr. Hayes is Vice President of
Calvert Asset Management Company, Inc., and is an officer of each of the
other investment companies in the Calvert Group of Funds, except for Calvert
New World Fund, Inc. DOB: 09/09/50.
SUSAN WALKER BENDER, Esq., Assistant Secretary. Ms. Bender is
Associate General Counsel of Calvert Group, Ltd. and an officer of each of
its subsidiaries and Calvert-Sloan Advisers, L.L.C. She is also an officer
of each of the other investment companies in the Calvert Group of Funds.
DOB: 01/29/59.
KATHERINE STONER, Esq., Assistant Secretary. Ms. Stoner is
Associate General Counsel of Calvert Group and an officer of each of its
subsidiaries and Calvert-Sloan Advisers, L.L.C. She is also an officer of
each of the other investment companies in the Calvert Group of Funds. DOB:
10/21/56.
IVY WAFFORD DUKE, Esq., Assistant Secretary. Ms. Duke is Associate
General Counsel of Calvert Group and an officer of each of its subsidiaries
and Calvert-Sloan Advisers, L.L.C. She is also an officer of each of the
other investment companies in the Calvert Group of Funds and Secretary and
provides counsel to the Calvert Social Investment Foundation. Prior to
working at Calvert Group, Ms. Duke was an Associate in the Investment
Management Group of the Business and Finance Department at Drinker Biddle &
Reath. DOB: 09/07/68.
The address of directors and officers, unless otherwise noted, is
4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814. Trustees and
officers of the Fund as a group own less than 1% of the Fund's outstanding
shares. Trustees marked with an *, above, are "interested persons" of the
Fund, under the Investment Company Act of 1940. Directors and officers of
the Fund as a group own less than 1% of each Portfolio's outstanding shares.
Each of the above directors and officers is a trustee or officer of
other investment companies in the Calvert Group of Funds except Calvert
Social Investment Fund, and Calvert World Values Fund, Inc., of which only
Messrs. Baird, Guffey, and Silby and Ms. Krumsiek are among the
trustees/directors; Calvert Variable Series, Inc., of which only Messrs.
Blatz, Diehl, and Pugh and Ms. Krumsiek and Ms. Kruvant are among the
directors, and Calvert New World Fund, Inc., of which only and Ms. Krumsiek
and Mr. Martini are among the directors.
The Audit Committee of the Board of Directors is composed of
Messrs. Baird, Blatz, Feldman, Guffey and Pugh, and Ms. Kruvant. The Board's
Investment Policy Committee is composed of Messrs. Borts, Diehl, Gavian,
Rochat, and Silby, and Ms. Krumsiek.
During fiscal 1998, directors of the Fund not affiliated with the
Fund's Advisor were paid $______. Directors of the Fund not affiliated with
the Advisor currently receive an annual fee of $20,500 for service as a
member of the Board of Trustees/Directors of the Calvert Group of Funds plus
a fee of $750 to $1,500 for each Board and Committee meeting attended; such
fees are allocated among the Funds on the basis of their net assets.
Directors not affiliated with the Advisor may elect to defer
receipt of all or a percentage of their fees and invest them in any fund in
the Calvert of Funds through the Trustees/Directors Deferred Compensation
Plan (shown as "Pension or Retirement Benefits Accrued as part of Fund
Expenses," below). Deferral of the fees is designed to maintain the parties
in the same position as if the fees were paid on a current basis. Management
believes this will have a negligible effect on the Fund's assets,
liabilities, net assets, and net income per share, and will ensure that
there is no duplication of advisory fees.
Director Compensation Table
Fiscal Year 1998 Aggregate Pension or Total Compensation
Compensation Retirement from Benefits
(unaudited numbers) from Registrant Accrued as Registrant and Fund
for Service part of Complex paid to
as Director of Registrant Director **
Expenses*
Name of Director
Richard L. Baird, Jr. $____ $0 $39,550
Frank H. Blatz, Jr. $____ $$____ $42,100
Frederick T. Borts $____ $0 $33,250
Charles E. Diehl $____ $____ $41,500
Douglas E. Feldman $____ $0 $36,250
Peter W. Gavian $____ $____ $36,250
John G. Guffey, Jr. $____ $0 $62,665
M. Charito Kruvant $____ $____ $36,250
Arthur J. Pugh $____ $0 $41,500
D. Wayne Silby $____ $0 $67,780
*Messrs. Blatz, Diehl, Gavian and Pugh and Ms. Kruvant have chosen to defer
a portion of their compensation. As of December 31, 1998, total deferred
compensation, including dividends and capital appreciation, was $644,247.37,
$672,374.09, $172,445.85, $216,322.53, and $23,295.55, for each trustee,
respectively.
**As of December 31, 1997. The Fund Complex consists of nine (9) registered
investment companies.
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INVESTMENT ADVISOR
- ------------------------------------------------------------------------------
The Fund's Investment Advisor is Calvert Asset Management Company,
Inc., 4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814, a
subsidiary of Calvert Group, Ltd., which is a controlled subsidiary of
Ameritas Acacia Mutual Holding Company of Lincoln, Nebraska.
The Advisory Contract between the Fund and the Advisor will remain
in effect indefinitely, provided continuance is approved at least annually
by the vote of the holders of a majority of the outstanding shares of the
Fund, or by the directors of the Fund; and further provided that such
continuance is also approved annually by the vote of a majority of the
directors of the Fund who are not parties to the Contract or interested
persons of such parties, cast in person at a meeting called for the purpose
of voting on such approval. The Contract may be terminated without penalty
by either party on 60 days' prior written notice; it automatically
terminates in the event of its assignment.
Under the Contract, the Advisor manages the investment and
reinvestment of the Fund's assets, subject to the direction and control of
the Fund's Board of Directors. For its services, the Advisor receives an
annual fee of 0.60% of the first $500 million of each Portfolio's average
daily net assets, 0.50% of the next $500 million of such assets, and 0.40%
of all assets over $1 billion.
The advisory fee is payable monthly. The Advisor reserves the right
(i) to waive all or a part of its fee and (ii) to compensate, at its
expense, broker-dealers in consideration of their promotional and
administrative services. During fiscal years 1996, 1997, and 1998, the Fund
paid advisory fees of $275,574, $285,023, and $________, respectively.
The Advisor provides the Fund with investment advice and research,
pays the salaries and fees of all directors and executive officers of the
Fund who are principals of the Advisor, and pays certain Fund advertising
and promotional expenses. The Fund pays other administrative and operating
expenses, including: custodial fees; shareholder servicing, dividend
disbursing and transfer agency fees; administrative service fees; federal
and state securities registration fees; insurance premiums; trade
association dues; interest, taxes and other business fees; legal and audit
fees; and brokerage commissions and other costs associated with the purchase
and sale of portfolio securities.
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ADMINISTRATIVE SERVICES
- ------------------------------------------------------------------------------
Calvert Administrative Services Company, a wholly-owned subsidiary
of Calvert Group, Ltd., has been retained by the Fund to provide certain
administrative services necessary to the conduct of each Portfolio's
affairs. Such services include the preparation of corporate and regulatory
reports and filings, and the oversight of portfolio accounting and the daily
determination of net investment income and net asset value per share.
Calvert Administrative Services Company is entitled to receive an annual fee
of 0.10% of each Portfolio's average net assets for providing such services.
The fees paid by each Portfolio to Calvert Administrative Services Company,
Inc. for fiscal years 1996, 1997, and 1998 are shown below:
1996 1997 1998
National $____ $____ $____
California $____ $____ $____
Maryland $____ $____ $____
Virginia $____ $____ $____
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METHOD OF DISTRIBUTION
- ------------------------------------------------------------------------------
The Fund has entered into an agreement with Calvert Distributors,
Inc. ("CDI"), whereby CDI, acting as principal underwriter, makes a
continuous offering of each Portfolio's securities on a "best efforts"
basis. Prior to April 1, 1995, the principal underwriter was Calvert
Securities Corporation ("CSC"). Under the terms of the agreement, CDI bears
all its expenses of providing services pursuant to the agreement, including
payment of any commissions and service fees. CDI receives all sales charges
imposed on the Portfolios' shares and compensates broker-dealer firms for
sales of such shares. CDI is entitled to receive a distribution fee pursuant
to the Distribution Plans (see below). For Class B shares, CDI receives any
CDSC paid. For fiscal years 1996, 1997, and 1998, CDI received sales charges
in excess of the dealer reallowance as shown below:
1996 1997 1998
National $13,952 $11,597 $____
California $14,066 $15,411 $____
Maryland $4,214 $7,100 $____
Virginia $9,039 $7,697 $____
Pursuant to Rule 12b-1 under the Investment Company Act of 1940
("1940 Act"), the Fund has adopted a Class A and B Distribution Plan (the
"Plan") which permit it to pay certain expenses associated with the
distribution of its shares. Such expenses may not exceed, on an annual
basis, 0.25% and 1.00% of the Portfolio average Class A and B daily net
assets, respectively. No Distribution Plan expenses were paid in fiscal
1996, 1997, and 1998.
The Plan was approved by the Board of Directors/Trustees, including
the Directors/Trustees who are not "interested persons" of the Funds (as
that term is defined in the 1940 Act) and who have no direct or indirect
financial interest in the operation of the Plan or in any agreements related
to the Plan. The selection and nomination of the Directors/Trustees who are
not interested persons of the Fund is committed to the discretion of such
disinterested Directors/Trustees. In establishing the Plan, the
Directors/Trustees considered various factors including the amount of the
distribution fee. The Directors/Trustees determined that there is a
reasonable likelihood that the Plan will benefit the Funds and their
shareholders.
The Plan may be terminated by vote of a majority of the
non-interested Directors/Trustees who have no direct or indirect financial
interest in the Plan, or by vote of a majority of the outstanding shares of
the Portfolio. Any change in the Plan that would materially increase the
distribution cost to the Portfolio requires approval of the shareholders;
otherwise, the Plan may be amended by the Directors/Trustees, including a
majority of the non-interested Directors/Trustees as described above.
The Plan will continue in effect successive one-year terms,
provided that such continuance is specifically approved by (i) the vote of a
majority of the Directors/Trustees who are not parties to the Plan or
interested persons of any such party and who have no direct or indirect
financial interest in the Plan, and (ii) the vote of a majority of the
entire Board of Directors/Trustees.
Apart from the Plan, the Advisor, at its expense, may incur costs
and pay expenses associated with the distribution of shares of the Fund.
Certain broker/dealers, and/or other persons may receive
compensation from the investment advisor, underwriter, or their affiliates
for the sale and distribution of the securities or for services to the Fund.
Such compensation may include additional compensation based on assets held
through that firm beyond the regularly scheduled rates, and finders' fee
payments to firms whose representatives are responsible for soliciting a new
account where the accountholder does not choose to purchase through that
firm.
- ------------------------------------------------------------------------------
TRANSFER AND SHAREHOLDER SERVICING AGENT
- ------------------------------------------------------------------------------
National Financial Data Services, Inc. ("NFDS"), a subsidiary of
State Street Bank & Trust, has been retained by the Fund to act as transfer
agent and dividend disbursing agent. These responsibilities include:
responding to certain shareholder inquiries and instructions, crediting and
debiting shareholder accounts for purchases and redemptions of Fund shares
and confirming such transactions, and daily updating of shareholder accounts
to reflect declaration and payment of dividends.
Calvert Shareholder Services, Inc. ("CSSI"), a subsidiary of
Calvert Group, Ltd., has been retained by the Fund to act as shareholder
servicing agent. Shareholder servicing responsibilities include responding
to shareholder inquiries and instructions concerning their accounts,
entering any telephoned purchases or redemptions into the NFDS system,
maintenance of broker-dealer data, and preparing and distributing statements
to shareholders regarding their accounts. Calvert Shareholder Services, Inc.
was the sole transfer agent prior to January 1, 1998.
For these services, NFDS and Calvert Shareholder Services, Inc.
receive a total fee of $14.00 per shareholder account and $1.60 per
shareholder transaction.
- ------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
- ------------------------------------------------------------------------------
PricewaterhouseCoopers LLP has been selected by the Board of
Directors to serve as independent accountants of the Fund for fiscal year
1999. State Street Bank & Trust Company, N.A., 225 Franklin Street, Boston,
MA 02110, serves as custodian of the Portfolio' investments. First National
Bank of Maryland, 25 South Charles Street, Baltimore, Maryland 21203 acts as
custodian of certain of cash assets. Neither custodian has any part in
deciding the Fund's investment policies or the choice of securities that are
to be purchased or sold by each Portfolio.
- ------------------------------------------------------------------------------
PORTFOLIO TRANSACTIONS
- ------------------------------------------------------------------------------
Portfolio transactions are undertaken on the basis of their
desirability from an investment standpoint. Investment decisions and the
choice of brokers and dealers are made by the Advisor under the direction
and supervision of the Board of Directors.
Broker-dealers who execute portfolio transactions on behalf of each
Portfolio are selected on the basis of their professional capability and the
value and quality of their services. The Advisor reserves the right to place
orders for the purchase or sale of portfolio securities with broker-dealers
who have sold shares of each Portfolio or who provide it with statistical,
research, or other information and services. Although any statistical
research or other information and services provided by broker-dealers may be
useful to the Advisor, the dollar value of such information and services is
generally indeterminable, and its availability or receipt does not serve to
materially reduce the Advisor's normal research activities or expenses.
The Advisor may also execute portfolio transactions with or through
broker-dealers who have sold shares of each Portfolio. However, such sales
will not be a qualifying or disqualifying factor in a broker-dealer's
selection nor will the selection of any broker-dealer be based on the volume
of shares sold. The Advisor or its affiliate may compensate, at its expense,
broker-dealers in consideration of their promotional and administrative
services.
The portfolio turnover is shown below for fiscal years 1997 and
1998:
1997 1998
National 29% __%
California 48% __%
Maryland 8% __%
Virginia 4% __%
- ------------------------------------------------------------------------------
GENERAL INFORMATION
- ------------------------------------------------------------------------------
The Fund was organized as a corporation under the General
Corporation Law of the State of Maryland on February 4, 1992. The Fund has
four Portfolios: Calvert National Municipal Intermediate Fund, Calvert
California Municipal Intermediate Fund, Calvert Maryland Municipal
Intermediate Fund, and Calvert Virginia Municipal Intermediate Fund. Prior
to March 1, 1994, Calvert National Municipal Intermediate Fund was known as
Calvert Intermediate Municipal Fund.
Each Portfolio will send its shareholders unaudited semi-annual and
audited annual reports that will include the Portfolio' net asset value per
share, portfolio securities, income and expenses, and other financial
information.
The Fund offers two separate classes of shares: Class A and Class
B. Each class represents interests in the same portfolio of investments but,
as further described in the prospectus, each class is subject to differing
sales charges and expenses, which differences will result in differing net
asset values and distributions. Upon any liquidation of the Fund,
shareholders of each class are entitled to share pro rata in the net assets
belonging to that Portfolio available for distribution.
Each share of the Portfolio represents an equal proportionate
interest in that Portfolio with each other share and is entitled to such
dividends and distributions out of the income belonging to the Portfolio as
declared by the Board. Upon any liquidation of the Portfolio, shareholders
are entitled to share pro rata in the net assets available for distribution.
This Statement of Additional Information does not contain all the
information in the Fund's registration statement. The registration statement
is on file with the Securities and Exchange Commission and is available to
the public.
- ------------------------------------------------------------------------------
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
- ------------------------------------------------------------------------------
As of ________, 1999, the following shareholder(s) owned of record
5% of shares as shown below:
Name and Address % of Ownership
[insert info]
- ------------------------------------------------------------------------------
APPENDIX
- ------------------------------------------------------------------------------
Municipal Obligations
Municipal obligations are debt obligations issued by states,
cities, municipalities, and their agencies to obtain funds for various
public purposes. Such purposes include the construction of a wide range of
public facilities, the refunding of outstanding obligations, the obtaining
of funds for general operating expenses, and the lending of funds to other
public institutions and facilities. In addition, certain types of industrial
development bonds are issued by or on behalf of public authorities to obtain
funds for many types of local, privately operated facilities. Such debt
instruments are considered municipal obligations if the interest paid on
them is exempt from federal income tax in the opinion of bond counsel to the
issuer. Although the interest paid on the proceeds from private activity
bonds used for the construction, equipment, repair or improvement of
privately operated industrial or commercial facilities may be exempt from
federal income tax, current federal tax law places substantial limitations
on the size of such issues.
Municipal obligations are generally classified as either "general
obligation" or "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable from the revenues derived
from a particular facility or class of facilities or, in some cases, from
the proceeds of a special excise tax or other specific revenue source, but
not from the general taxing power. Tax-exempt industrial development bonds
are in most cases revenue bonds and do not generally carry the pledge of the
credit of the issuing municipality. There are, of course, variations in the
security of municipal obligations, both within a particular classification
and among classifications.
Municipal obligations are generally traded on the basis of a quoted
yield to maturity, and the price of the security is adjusted so that
relative to the stated rate of interest it will return the quoted rate to
the purchaser.
Short-term and limited-term municipal obligations include Tax
Anticipation Notes, Revenue Anticipation Notes, Bond Anticipation Notes,
Construction Loan Notes, and Discount Notes. The maturities of these
instruments at the time of issue generally will range between three months
and one year. Pre-Refunded Bonds with longer nominal maturities that are due
to be retired with the proceeds of an escrowed subsequent issue at a date
within one year and three years of the time of acquisition are also
considered short-term and limited-term municipal obligations.
Municipal Bond and Note Ratings
Description of Moody's Investors Service, Inc.'s ratings of state and
municipal notes:
Moody's ratings for state and municipal notes and other short-term
obligations are designated Moody's Investment Grade ("MIG"). This
distinction is in recognition of the differences between short-term credit
risk and long-term risk.
MIG 1: Notes bearing this designation are of the best quality,
enjoying strong protection from established cash flows of funds for their
servicing or from established and broad-based access to the market for
refinancing, or both.
MIG2: Notes bearing this designation are of high quality, with
margins of protection ample although not so large as in the preceding group.
MIG3: Notes bearing this designation are of favorable quality, with
all security elements accounted for but lacking the undeniable strength of
the preceding grades. Market access for refinancing, in particular, is
likely to be less well established.
MIG4: Notes bearing this designation are of adequate quality,
carrying specific risk but having protection commonly regarded as required
of an investment security and not distinctly or predominantly speculative.
Description of Moody's Investors Service Inc.'s/Standard & Poor's municipal
bond ratings:
Aaa/AAA: Best quality. These bonds carry the smallest degree of
investment risk and are generally referred to as "gilt edge." Interest
payments are protected by a large or by an exceptionally stable margin and
principal is secure. This rating indicates an extremely strong capacity to
pay principal and interest.
Aa/AA: Bonds rated AA also qualify as high-quality debt
obligations. Capacity to pay principal and interest is very strong, and in
the majority of instances they differ from AAA issues only in small degree.
They are rated lower than the best bonds because margins of protection may
not be as large as in Aaa securities, fluctuation of protective elements may
be of greater amplitude, or there may be other elements present which make
long-term risks appear somewhat larger than in Aaa securities.
A/A: Upper-medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which make the bond somewhat more susceptible to the adverse effects of
circumstances and economic conditions.
Baa/BBB: Medium grade obligations; adequate capacity to pay
principal and interest. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay principal and interest for
bonds in this category than for bonds in the A category.
Ba/BB, B/B, Caa/CCC, Ca/CC: Debt rated in these categories is
regarded as predominantly speculative with respect to capacity to pay
interest and repay principal. There may be some large uncertainties and
major risk exposure to adverse conditions. The higher the degree of
speculation, the lower the rating.
C/C: This rating is only for no-interest income bonds.
D: Debt in default; payment of interest and/or principal is in
arrears.
<PAGE>
LETTER OF INTENT
Date
Calvert Distributors, Inc.
4550 Montgomery Avenue
Bethesda, MD 20814
Ladies and Gentlemen:
By signing this Letter of Intent, or affirmatively marking the
Letter of Intent option on my Fund Account Application Form, I agree to be
bound by the terms and conditions applicable to Letters of Intent appearing
in the Prospectus and the Statement of Additional Information for the Fund
and the provisions described below as they may be amended from time to time
by the Fund. Such amendments will apply automatically to existing Letters of
Intent.
I intend to invest in the shares of:________________ (Fund or
Portfolio name) during the thirteen (13) month period from the date of my
first purchase pursuant to this Letter (which cannot be more than ninety
(90) days prior to the date of this Letter or my Fund Account Application
Form, whichever is applicable), an aggregate amount (excluding any
reinvestments of distributions) of at least fifty thousand dollars ($50,000)
which, together with my current holdings of the Fund (at public offering
price on date of this Letter or my Fund Account Application Form, whichever
is applicable), will equal or exceed the amount checked below:
__ $50,000 __ $100,000 __ $250,000 __ $500,000 __ $1,000,000
Subject to the conditions specified below, including the terms of
escrow, to which I hereby agree, each purchase occurring after the date of
this Letter will be made at the public offering price applicable to a single
transaction of the dollar amount specified above, as described in the Fund's
prospectus. "Fund" in this Letter of Intent shall refer to the Fund or
Portfolio, as the case may be, here indicated. No portion of the sales
charge imposed on purchases made prior to the date of this Letter will be
refunded.
I am making no commitment to purchase shares, but if my purchases
within thirteen months from the date of my first purchase do not aggregate
the minimum amount specified above, I will pay the increased amount of sales
charges prescribed in the terms of escrow described below. I understand that
4.75% of the minimum dollar amount specified above will be held in escrow in
the form of shares (computed to the nearest full share). These shares will
be held subject to the terms of escrow described below.
From the initial purchase (or subsequent purchases if necessary),
4.75% of the dollar amount specified in this Letter shall be held in escrow
in shares of the Fund by the Fund's transfer agent. For example, if the
minimum amount specified under the Letter is $50,000, the escrow shall be
shares valued in the amount of $2,375 (computed at the public offering price
adjusted for a $50,000 purchase). All dividends and any capital gains
distribution on the escrowed shares will be credited to my account.
If the total minimum investment specified under the Letter is
completed within a thirteen month period, escrowed shares will be promptly
released to me. However, shares disposed of prior to completion of the
purchase requirement under the Letter will be deducted from the amount
required to complete the investment commitment.
Upon expiration of this Letter, the total purchases pursuant to the
Letter are less than the amount specified in the Letter as the intended
aggregate purchases, Calvert Distributors, Inc. ("CDI") will bill me for an
amount equal to the difference between the lower load I paid and the dollar
amount of sales charges which I would have paid if the total amount
purchased had been made at a single time. If not paid by the investor within
20 days, CDI will debit the difference from my account. Full shares, if any,
remaining in escrow after the aforementioned adjustment will be released
and, upon request, remitted to me.
I irrevocably constitute and appoint CDI as my attorney-in-fact,
with full power of substitution, to surrender for redemption any or all
escrowed shares on the books of the Fund. This power of attorney is coupled
with an interest.
The commission allowed by Calvert Distributors, Inc. to the
broker-dealer named herein shall be at the rate applicable to the minimum
amount of my specified intended purchases.
The Letter may be revised upward by me at any time during the
thirteen-month period, and such a revision will be treated as a new Letter,
except that the thirteen-month period during which the purchase must be made
will remain unchanged and there will be no retroactive reduction of the
sales charges paid on prior purchases.
In determining the total amount of purchases made hereunder, shares
disposed of prior to termination of this Letter will be deducted. My
broker-dealer shall refer to this Letter of Intent in placing any future
purchase orders for me while this Letter is in effect.
Dealer
Name of Investor(s)
By
Authorized Signer
Address
Signature of Investor(s)
Date
Signature of Investor(s)
Date
<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
Statement of Additional Information
April 30, 1999
INVESTMENT ADVISOR
Calvert Asset Management Company, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
SHAREHOLDER SERVICE
Calvert Shareholder Services, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
PRINCIPAL UNDERWRITER
Calvert Distributors, Inc.
4550 Montgomery Avenue
Suite 1000N
Bethesda, Maryland 20814
TRANSFER AGENT
National Financial Data Services, Inc.
330 W. 9th Street
Kansas City, Missouri 64105
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
250 West Pratt Street
Baltimore, Maryland 21201
<PAGE>
PART C. OTHER INFORMATION
Item 23. Exhibits
1. Articles of Incorporation, (incorporated by reference to
Registrant's Pre-Effective Amendment No. 2, April 27, 1992, and as amended,
incorporated by reference to Registrant's Pre-Effective Amendment No. 3, May
21, 1992).
2. By-Laws (incorporated by reference to Registrant's
Pre-Effective Amendment No. 2, April 27, 1992).
4. Specimen Stock Certificate for Calvert California Municipal
Intermediate Fund, (incorporated by reference to Registrant's Post-Effective
Amendment No. 1, filed July 27, 1992).
5. Investment Advisory Contract (incorporated by reference to
Registrant's Pre-Effective Amendment No. 2, April 27, 1992).
6. Underwriting Agreement, (incorporated by reference to
Registrant's Post-Effective Amendment No. 15, filed April 30, 1998).
7. Directors' Deferred Compensation Agreement (incorporated by
reference to Registrant's Pre-Effective Amendment No. 2, April 27, 1992).
8. Custodial Contract (incorporated by reference to Registrant's
Pre-Effective Amendment No. 2, April 27, 1992).
9.a. Transfer Agency Contract and Shareholder Servicing Contract,
(incorporated by reference to Registrant's Post-Effective Amendment No. 15,
filed April 30, 1998).
9.b. Administrative Services Agreement (incorporated by reference
to Registrant's Pre-Effective Amendment No. 2, April 27, 1992).
10. Opinion and Consent of Counsel as to Legality of Shares Being
Registered (filed herewith).
15. Plan of Distribution for Class A Shares, incorporated by
reference to Registrant's Post-Effective Amendment No. 13, January 25, 1996;
for Class B and C Shares, (incorporated by reference to Registrant's
Post-Effective Amendment No. 15, filed April 30, 1998).
17. Rule 414 Statement of Successor Entity (incorporated by
reference to Registrant's Pre-Effective Amendment No. 3, May 21, 1992).
(ii) Multiple-class Plan pursuant to Investment Company Act of
1940 Rule 18f-3, (incorporated by reference to Registrant's Post-Effective
Amendment No. 15, filed April 30, 1998).
Item 24. Persons Controlled By or Under Common Control With Registrant
Not applicable.
Item 25. Indemnification
Registrant's Bylaws, Exhibit 2 to this Registration Statement,
provide that officers and directors will be indemnified by the Fund against
liabilities and expenses incurred by such persons in connection with
actions, suits, or proceedings arising out of their offices or duties of
employment, except that no indemnification can be made to a person who has
been adjudged liable of willful misfeasance, bad faith, gross negligence, or
reckless disregard of duties. In the absence of such an adjudication, the
determination of eligibility for indemnification shall be made by
independent counsel in a written opinion or by the vote of a majority of a
quorum of directors who are neither "interested persons" of Registrant, as
that term is defined in Section 2(a)(19) of the Investment Company Act of
1940, nor parties to the proceeding.
Registrant's Articles of Incorporation also provides that
Registrant may purchase and maintain liability insurance on behalf of any
officer, trustee, employee or agent against any liabilities arising from
such status. In this regard, Registrant maintains a Directors & Officers
(Partners) Liability Insurance Policy with Chubb Group of Insurance
Companies, 15 Mountain View Road, Warren, New Jersey 07061, providing
Registrant with $5 million in directors and officers liability coverage,
plus $5 million in excess directors and officers liability coverage for the
independent trustees/directors only. Registrant also maintains an $8 million
Investment Company Blanket Bond issued by ICI Mutual Insurance Company, P.O.
Box 730, Burlington, Vermont, 05402.
Item 26. Business and Other Connections of Investment Adviser
Name of Company, Principal
Name Business and Address Capacity
Barbara J. Krumsiek Calvert Variable Series, Inc. Officer
Calvert Municipal Fund, Inc. and
Calvert World Values Fund, Inc. Director
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income and
Calvert Tax-Free Reserves Trustee
Calvert Social Investment Fund
Calvert Cash Reserves
The Calvert Fund
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
----------------
Calvert Group, Ltd. Officer
Holding Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Distributors, Inc. Officer
Broker-Dealer and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert New World Fund, Inc. Director
Investment Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
--------------
Alliance Capital Mgmt. L.P. Sr. Vice President
Mutual Fund Division Director
1345 Avenue of the Americas
New York, NY 10105
--------------
Ronald M. Wolfsheimer First Variable Rate Fund Officer
for Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
--------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Distributors, Inc. Officer
Broker-Dealer and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
David R. Rochat First Variable Rate Fund Officer
for Government Income and
Calvert Tax-Free Reserves Trustee
Calvert Cash Reserves
The Calvert Fund
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Municipal Fund, Inc. Officer
Investment Company and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor and
4550 Montgomery Avenue Director
Bethesda, Maryland 20814
---------------
Chelsea Securities, Inc. Officer
Securities Firm and
Post Office Box 93 Director
Chelsea, Vermont 05038
---------------
Grady, Berwald & Co. Officer
Holding Company and
43A South Finley Avenue Director
Basking Ridge, NJ 07920
---------------
Reno J. Martini Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
First Variable Rate Fund Officer
for Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert New World Fund, Inc. Director
Investment Company and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
---------------
Calvert-Sloan Advisers, LLC Director
Investment Advisor and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
---------------
Charles T. Nason Ameritas Acacia Mutual Holding Co. Officer
Acacia National Life Insurance and
Director
Insurance Companies
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Financial Corporation Officer
Holding Company and
7315 Wisconsin Avenue Director
Bethesda, Maryland 20814
---------------
Acacia Federal Savings Bank Director
Savings Bank
7600-B Leesburg Pike
Falls Church, Virginia 22043
---------------
Enterprise Resources, Inc. Director
Business Support Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Realty Square, L.L.C. Director
Realty Investments
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Gardner Montgomery Company Director
Tax Return Preparation Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Director
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Director
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Services, Inc. Director
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Social Investment Fund Trustee
Investment Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
-----------------
The Advisors Group, Inc. Director
Broker-Dealer and
Investment Advisor
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Robert-John H. Acacia National Life Insurance Officer
Sands Insurance Company and
7315 Wisconsin Avenue Director
Bethesda, Maryland 20814
----------------
Ameritas Acacia Mutual Holding Co. Officer
Insurance Company
7315 Wisconsin Avenue
Bethesda, Maryland 20814
----------------
Acacia Financial Corporation Officer
Holding Company and
7315 Wisconsin Avenue Director
Bethesda, Maryland 20814
----------------
Acacia Federal Savings Bank Officer
Savings Bank
7600-B Leesburg Pike
Falls Church, Virginia 22043
---------------
Enterprise Resources, Inc. Director
Business Support Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Acacia Realty Square, L.L.C. Director
Realty Investments
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
The Advisors Group, Inc. Director
Broker-Dealer and
Investment Advisor
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Gardner Montgomery Company Director
Tax Return Preparation Services
7315 Wisconsin Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Director
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Director
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management, Co., Inc. Director
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Shareholder Services, Inc. Director
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
William M. Tartikoff Acacia National Life Insurance Officer
Insurance Company
7315 Wisconsin Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Officer
Services Company
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co. Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Director
Broker-Dealer and
4550 Montgomery Avenue Officer
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Susan Walker Bender Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Katherine Stoner Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Ivy Wafford Duke Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert-Sloan Advisers, LLC Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Calvert New World Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Victor Frye Calvert Group, Ltd. Officer
Holding Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Administrative Services Co. Officer
Service Company
4550 Montgomery Avenue
Bethesda, Maryland 20814
---------------
Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Shareholder Services, Inc. Officer
Transfer Agent
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
Calvert Distributors, Inc. Officer
Broker-Dealer
4550 Montgomery Avenue
Bethesda, Maryland 20814
----------------
The Advisors Group, Inc. Counsel
Broker-Dealer and and
Investment Advisor Compliance
7315 Wisconsin Avenue Manager
Bethesda, Maryland 20814
---------------
Daniel K. Hayes Calvert Asset Management Co., Inc. Officer
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
First Variable Rate Fund for Officer
Government Income
Calvert Tax-Free Reserves
Calvert Cash Reserves
Calvert Social Investment Fund
The Calvert Fund
Calvert Variable Series, Inc.
Calvert Municipal Fund, Inc.
Calvert World Values Fund, Inc.
Investment Companies
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
Steve Van Order Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
John Nichols Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
David Leach Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
Matthew D. Gelfand Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
Strategic Investment Management Officer
Investment Advisor
1001 19th Street North
Arlington, Virginia 20009
------------------
Item 27. Principal Underwriters
(a) Registrant's principal underwriter underwrites shares of
First Variable Rate Fund for Government Income, Calvert Tax-Free Reserves,
Calvert Social Investment Fund, Calvert Cash Reserves, The Calvert Fund,
Calvert Municipal Fund, Inc., Calvert World Values Fund, Inc., Calvert New
World Fund, Inc., and Calvert Variable Series, Inc. (formerly named Acacia
Capital Corporation).
(b) Positions of Underwriter's Officers and Directors
Name and Principal Position(s) with Position(s) with
Business Address Underwriter Registrant
Barbara J. Krumsiek Director and President President and
Trustee
Ronald M. Wolfsheimer Director, Senior Vice Treasurer
President and Chief Financial Officer
William M. Tartikoff Director, Senior Vice Vice President and
President and Secretary Secretary
Craig Cloyed Senior Vice President None
Karen Becker Vice President, Operations None
Steve Cohen Vice President None
Geoffrey Ashton Regional Vice President None
Martin Brown Regional Vice President None
Bill Hairgrove Regional Vice President None
Janet Haley Regional Vice President None
Steve Himber Regional Vice President None
Ben Ogbogu Regional Vice President None
Tom Stanton Regional Vice President None
Christine Teske Regional Vice President None
Susan Walker Bender Assistant Secretary Assistant Secretary
Katherine Stoner Assistant Secretary Assistant Secretary
Ivy Wafford Duke Assistant Secretary Assistant Secretary
Victor Frye Assistant Secretary None
and Compliance Officer
(c) Inapplicable.
Item 28. Location of Accounts and Records
Ronald M. Wolfsheimer, Treasurer
and
William M. Tartikoff, Secretary
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
Item 29. Management Services
Not Applicable
Item 30. Undertakings
Not Applicable
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly
caused this registration statement to be signed on its behalf by the
undersigned, duly authorized, in the City of Bethesda, and State of
Maryland, on the 1st day of March, 1999.
CALVERT MUNICIPAL FUND, INC.
By:
_______________**__________________
Barbara J. Krumsiek
President and Director
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated.
Signature Title Date
__________**____________ President and 3/1/99
Barbara J. Krumsiek Trustee (Principal Executive Officer)
__________**____________ Principal Accounting 3/1/99
Ronald M. Wolfsheimer Officer
__________**____________ Trustee 3/1/99
Richard L. Baird, Jr.
__________**____________ Trustee 3/1/99
Frank H. Blatz, Jr., Esq.
__________**____________ Trustee 3/1/99
Frederick T. Borts, M.D.
__________**____________ Trustee 3/1/99
Charles E. Diehl
__________**____________ Trustee 3/1/99
Douglas E. Feldman
__________**____________ Trustee 3/1/99
Peter W. Gavian
__________**____________ Trustee 3/1/99
John G. Guffey, Jr.
__________**____________ Trustee 3/1/99
M. Charito Kruvant
__________**____________ Trustee 3/1/99
Arthur J. Pugh
__________**____________ Trustee 3/1/99
David R. Rochat
__________**____________ Trustee 3/1/99
D. Wayne Silby
**By Katherine Stoner as Attorney-in-fact, pursuant to Power of Attorney
Forms on file.
Exhibit 10
March 1, 1999
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Exhibit 10, Form N-1A
Calvert Municipal Fund, Inc.
File Numbers 811-6525 and 33-44968
Ladies and Gentlemen:
As counsel to Calvert Group, Ltd., it is my opinion that the securities
being registered by this Post-Effective Amendment No. 16 will be legally
issued, fully paid and non-assessable when sold. My opinion is based on an
examination of documents related to Calvert Municipal Fund, Inc. (the
"Fund"), including its Articles of Incorporation, other original or
photostatic copies of Fund records, certificates of public officials,
documents, papers, statutes, or authorities as I deemed necessary to form
the basis of this opinion.
I therefore consent to filing this opinion of counsel with the Securities
and Exchange Commission as an Exhibit to the Fund's Post-Effective Amendment
No. 16 to its Registration Statement.
Sincerely,
/s/ Katherine Stoner
Katherine Stoner
Associate General Counsel
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the "Funds"),
hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker
Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and
lawful attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and amendments
filed by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining registration
or exemptions from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 7, 1997
Date /Signature/
Edwidge Saint-Felix Barbara Krumsiek
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the "Funds"),
hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker
Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and
lawful attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and amendments
filed by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining registration
or exemptions from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 7, 1997
Date /Signature/
Edwidge Saint-Felix Richard L. Baird, Jr.
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the "Funds"),
hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker
Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and
lawful attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and amendments
filed by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining registration
or exemptions from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 7, 1997
Date /Signature/
Charles E. Diehl Frank H. Blatz, Jr.
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the "Funds"),
hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker
Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and
lawful attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and amendments
filed by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining registration
or exemptions from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 7, 1997
Date /Signature/
Edwidge Saint-Felix Douglas E. Feldman
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the "Funds"),
hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker
Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and
lawful attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and amendments
filed by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining registration
or exemptions from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 7, 1997
Date /Signature/
Frank H. Blatz, Jr. Charles E. Diehl
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the "Funds"),
hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker
Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and
lawful attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and amendments
filed by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining registration
or exemptions from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 7, 1997
Date /Signature/
Edwidge Saint-Felix Peter W. Gavian
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the "Funds"),
hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker
Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and
lawful attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and amendments
filed by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining registration
or exemptions from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 7, 1997
Date /Signature/
M. Charito Kruvant John G. Guffey, Jr.
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the "Funds"),
hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker
Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and
lawful attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and amendments
filed by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining registration
or exemptions from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 7, 1997
Date /Signature/
Edwidge Saint-Felix M. Charito Kruvant
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the "Funds"),
hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker
Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and
lawful attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and amendments
filed by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining registration
or exemptions from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 7, 1997
Date /Signature/
Charles E. Diehl Arthur J. Pugh
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the "Funds"),
hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker
Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and
lawful attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and amendments
filed by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining registration
or exemptions from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 7, 1997
Date /Signature/
Katherine Stoner David R. Rochat
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the "Funds"),
hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker
Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and
lawful attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and amendments
filed by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining registration
or exemptions from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
May 7, 1997
Date /Signature/
Edwidge Saint-Felix D. Wayne Silby
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund, and Calvert Municipal Fund, Inc. (collectively, the "Funds"),
hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker
Bender, Katherine Stoner, Lisa Crossley, and Ivy Wafford Duke my true and
lawful attorneys, with full power to each of them, to sign for me and in my
name in the appropriate capacities, all registration statements and amendments
filed by the Funds with any federal or state agency, and to do all such things
in my name and behalf necessary for registering and maintaining registration
or exemptions from registration of the Funds with any government agency in any
jurisdiction, domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
January 16, 1998
Date /Signature/
Roger Wilkins Frederick Borts, M.D.
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned officer of Calvert Social Investment Fund, Calvert
World Values Fund, Acacia Capital Corporation, Calvert New World Fund, First
Variable Rate Fund, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund and Calvert Municipal Fund (each, respectively, the "Fund"),
hereby constitute William M. Tartikoff, Susan Walker Bender, Katherine Stoner,
Lisa Crossley, and Ivy Wafford Duke my true and lawful attorneys, with full
power to each of them, to sign for me and in my name in the appropriate
capacities, all registration statements and amendments filed by the Fund with
any federal or state agency, and to do all such things in my name and behalf
necessary for registering and maintaining registration or exemptions from
registration of the Fund with any government agency in any jurisdiction,
domestic or foreign.
The same persons are authorized generally to do all such things in my
name and behalf to comply with the provisions of all federal, state and
foreign laws, regulations, and policy pronouncements affecting the Funds,
including, but not limited to, the Securities Act of 1933, the Securities
Exchange Act of 1934, the Investment Company Act of 1940, the Investment
Advisers Act of 1940, and all state laws regulating the securities industry.
The same persons are further authorized to sign my name to any
document needed to maintain the lawful operation of the Funds in connection
with any transaction approved by the Board of Trustee/Directors.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Funds, the
signing is automatically ratified and confirmed by me by virtue of this Power
of Attorney.
WITNESS my hand on the date set forth below.
December 16, 1997
Date /Signature/
William M. Tartikoff Ronald M. Wolfsheimer
Witness Name of Officer
