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. 17 XX
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
Amendment No. 17 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 XX on April 30, 1999
pursuant to paragraph (b) pursuant to paragraph (b)
__ 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
8 Fees and Expenses
9 Principal Investment Practices and Risks
About Your Investment
14 Calvert Group and the Portfolio Management Team
14 Advisory Fees
15 How to Buy Shares
15 Getting Started
16 Distribution and Service Fees
16 Account Application
17 Important - How Shares are Priced
17 When Your Account Will be Credited
18 Other Calvert Group Features
(Exchanges, Minimum Account Balance, etc.)
20 Dividends, Capital Gains and Taxes
22 How to Sell Shares
24 Financial Highlights
28 Exhibit A- Reduced Sales Charges
30 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>
Objectives
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 Fund invests in 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.
The interest of certain obligations may be subject to the federal
alternative minimum tax.
<PAGE>
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:
o The bond market goes down
o The individual bonds in the Funds do not perform as well as expected
o The Advisor's forecast as to interest rates is not correct
o The Advisor's allocation among different sectors of the bond market
does not perform as well as expected
o Because the State Funds invest primarily in California, Maryland,
and Virginia municipal obligations, respectively, the economy and political
climate in those states will have a great impact on the State Funds
o 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 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 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.
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National
Year-by-Year Total Return (at NAV)
Bar Chart
1993 9.47% 1996 4.32%
1994 -1.18% 1997 7.11%
1995 13.64% 1998 5.46%
Best Quarter (of periods shown) Q1 '95 5.19%
Worst Quarter (of periods shown) Q1 '94 -2.40%
Average Annual Total Returns (as of 12-31-98)
(with maximum sales charge deducted)
1 year 5 years Since Inception
National 2.52% 5.10% 5.80%
(inception 9/30/92)
Lehman Municipal Bond 10 year
Index TR 6.11% 6.22% 7.31%
Lipper Intermediate Municipal Debt
Funds Index 5.62% 5.13% 5.95%
<PAGE>
California
Year-by-Year Total Return (at NAV)
Bar Chart
1993 8.88% 1996 4.04%
1994 -2.57% 1997 6.61%
1995 11.95% 1998 5.51%
Best Quarter (of periods shown) Q1 '95 4.64%
Worst Quarter (of periods shown) Q1 '94 -2.87%
Average Annual Total Returns (as of 12-31-98)
(with maximum sales charge deducted)
1 year 5 years Since Inception
California 2.61% 4.34% 5.46%
(inception 5/29/92)
Lehman Municipal Bond 10 year
Index TR 6.11% 6.22% 7.68%
Lipper California Intermediate Municipal
Debt Funds Average 5.33% 5.43% 7.02%
The month end date of 5/31/92 is used for comparison purposes only, actual
inception is 5/29/92
<PAGE>
Maryland
Year-by-Year Total Return (at NAV)
Bar Chart
1994 -2.94% 1997 7.68%
1995 13.66% 1998 4.88%
1996 3.96%
Best Quarter (of periods shown) Q1 '95 5.40%
Worst Quarter (of periods shown) Q1 '94 -3.51%
Average Annual Total Returns (as of 12-31-98)
(with maximum sales charge deducted)
1 year 5 years Since Inception
Maryland 1.93% 4.65% 4.79%
(inception 9/30/93)
Lehman Municipal Bond 10 year
Index TR 6.11% 6.22% 6.21%
Lipper Other States Municipal Debt
Funds Average 5.08% 4.72% 4.69%
<PAGE>
Virginia
Year-by-Year Total Return (at NAV)
Bar Chart
1994 -2.04% 1997 6.71%
1995 13.78% 1998 4.88%
1996 3.82%
Best Quarter (of periods shown) Q1 '95 5.80%
Worst Quarter (of periods shown) Q1 '94 -2.95%
Average Annual Total Returns (as of 12-31-98)
(with maximum sales charge deducted)
1 year 5 years Since Inception
Virginia 1.94% 4.65% 4.84%
(inception 10/1/93)
Lehman Municipal Bond 10 year
Index TR 6.11% 6.22% 6.21%
Lipper Other States Municipal Debt
Funds Average 5.05% 4.61% 4.69%
<PAGE>
FEES AND EXPENSES
Shareholder Fees
(fees paid directly from your investment)
National
Maximum sales charge (load) 2.75%
imposed on purchases
(as a percentage of offering price)
Maximum deferred sales charge (load) None1
(as a percentage of purchase or redemption
proceeds, whichever is lower)
Annual fund operating expenses
(expenses that are deducted from Fund assets)
Management fees 0.70%
Distribution and service (12b-1) fees 0.00%
Other expenses2 0.29%
Total annual fund operating expenses 0.99%
Shareholder Fees
(fees paid directly from your investment)
California
Maximum sales charge (load) 2.75%
imposed on purchases
(as a percentage of offering price)
Maximum deferred sales charge (load) None1
(as a percentage of purchase or redemption
proceeds, whichever is lower)
Annual fund operating expenses
(expenses that are deducted from Fund assets)
Management fees 0.70%
Distribution and service (12b-1) fees 0.00%
Other expenses2 0.22%
Total annual fund operating expenses 0.92%
Shareholder Fees
(fees paid directly from your investment)
Maryland
Maximum sales charge (load) 2.75%
imposed on purchases
(as a percentage of offering price)
Maximum deferred sales charge (load) None1
(as a percentage of purchase or redemption
proceeds, whichever is lower)
Annual fund operating expenses
(expenses that are deducted from Fund assets)
Management fees 0.70%
Distribution and service (12b-1) fees 0.00%
Other expenses2 0.29%
Total annual fund operating expenses 0.99%
Shareholder Fees
(fees paid directly from your investment)
Virginia
Maximum sales charge (load) 2.75%
imposed on purchases
(as a percentage of offering price)
Maximum deferred sales charge (load) None1
(as a percentage of purchase or redemption
proceeds, whichever is lower)
Annual fund operating expenses
(expenses that are deducted from Fund assets)
Management fees 0.70%
Distribution and service (12b-1) fees 0.00%
Other expenses2 0.29%
Total annual fund operating expenses 0.99%
Explanation of Fees and Expenses Table
1 Purchases of 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)
2 Expenses have been restated to reflect expenses expected to be incurred in
1999.
<PAGE>
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.
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.
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:
Number of Years Investment is Held
Fund 1 year 3 years 5 years 10 years
National $373 $582 $807 $1,455
California $366 $560 $770 $1,375
Maryland $373 $582 $807 $1,455
Virginia $373 $582 $807 $1,455
Principal Investment Practices and Risks
The most concise description of each Fund's principal investment strategies
and associated risks is under the earlier 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 earlier 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.
<PAGE>
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.
- ------------------------------------------ -------- -------- -------- -------
<PAGE>
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. 5T 5T 5T 5T
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". The limitation is based on
net premium payments. Risks: Interest
Rate, Market, Leverage, Correlation,
Liquidity, Credit and Opportunity.
- ------------------------------------------ -------- -------- -------- -------
- ------------------------------------------ -------- -------- -------- -------
Futures contract. Agreement to buy or 5N 5N 5N 5N
sell a specific amount of a commodity or
financial instrument at a particular
price on a specific future date. Risks:
Interest Rate, 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.
- ------------------------------------------ -------- -------- -------- -------
<PAGE>
- ------------------------------------------ -------- -------- -------- -------
Temporary Defensive Positions. @ @ @ @
During adverse market, economic or
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.
<PAGE>
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 means that a Fund's portfolio management practices might not work to
achieve their desired result.
Market risk
This 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.
<PAGE>
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 Funds for the most
recent fiscal year as a percentage of each 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.
<PAGE>
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.
Sales Charges
Each Fund has a front-end sales charge. 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" means the net asset value plus 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 $50,000,3 then the sales charge is reduced to
2.25%.
Your investment Sales Charge % % of Amt.
in shares of offering price invested
Less than $50,000 2.75% 2.83%
$50,000 but less than $100,000 2.25% 2.30%
$100,000 but less than $250,000 1.75% 1.78%
$250,000 but less than $500,000 1.25% 1.27%
$500,000 but less than $1,000,000 1.00% 1.01%
$1,000,000 and over None* None*
3 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 shares.
* Purchases of shares at net asset value for accounts with $1,000,000 or
more are subject to a one year contingent deferred sales charge ("CDSC") of
1.00%. See the "Calculation of Contingent Deferred Sales Charge and Waiver
of Sales Charges."
The 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.
<PAGE>
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.
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 each Fund's distribution plan
totals 0.25%, based on average daily net assets of each Fund.
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
<PAGE>
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 because the post offices and banks are
closed.
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.
o Your purchase will be processed at the NAV next calculated after
your order is received.
o All of your purchases must be made in US dollars.
o No cash will be accepted.
o No credit card or credit loan checks will be accepted.
o Each Fund reserves the right to suspend the offering of shares for
a period of time or to reject any specific purchase order.
o 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.
<PAGE>
o Any check purchase received without an investment slip may cause
delayed crediting.
o 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.
o All purchases will be confirmed and credited to your account in
full and fractional shares (rounded to the nearest 1/100th of a share).
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. 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.
<PAGE>
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 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.
<PAGE>
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. 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 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 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
<PAGE>
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 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.
<PAGE>
Other Tax Information - State Funds Only
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
You may redeem all or a portion of your shares on any day each Fund is open
for business, provided the amount requested is not on hold. When you
purchase by check or with Calvert Money Controller (electronic funds
transfer), the purchase will be on hold for up to 10 business days from the
date of receipt. During the hold period, redemption proceeds will not be
sent until the Transfer Agent is reasonably satisfied that the purchase
payment has been collected.
Your shares will be redeemed at the NAV next 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 by 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 because the post offices and banks
are closed.
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.
<PAGE>
Follow these suggestions to ensure timely processing of your redemption
request:
By Telephone - Call 800.368.2745
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. Shares subject to the one-year CDSC which are redeemed
by Systematic Check Redemption will be charged the CDSC.
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.
<PAGE>
FINANCIAL HIGHLIGHTS
The financial highlights table is intended to help you understand the Funds'
financial performance for the past 5 years. Information reflects financial
results for a single share, by Fund. 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.
NATIONAL
Years Ended
December 31, December 31, December 31,
1998 1997 1996
Net asset value, beginning $10.79 $10.56 $10.62
Income from investment operations
Net investment income .45 .50 .50
Net realized and unrealized
gain (loss) .13 .23 (.06)
Total from investment operations .58 .73 .44
Distributions from
Net investment income (.46) (.50) (.50)
Net realized gains (.09) -- --
Total distributions (.55) (.50) (.50)
Total increase (decrease) in
net asset value .03 .23 (.06)
Net asset value, ending $10.82 $10.79 $10.56
Total return * 5.46% 7.11% 4.32%
Ratios to average net assets:
Net investment income 4.17% 4.71% 4.83%
Total expenses + .97% .97% 1.04%
Net expenses .94% .94% 1.01%
Portfolio turnover 44% 29% 23%
Net assets, ending
(in thousands) $71,065 $48,933 $45,612
Number of shares outstanding,
ending (in thousands) 6,570 4,535 4,319
Years Ended
December 31, December 31,
1995 1994
Net asset value, beginning $9.81 $10.42
Income from investment operations
Net investment income .51 .50
Net realized and unrealized gain (loss) .80 (.62)
Total from investment operations 1.31 (.12)
Distributions from
Net investment income (.50) (.49)
Net realized gains -- --
Total distributions (.50) (.49)
Total increase (decrease) in net asset value .81 (.61)
Net asset value, ending $10.62 $9.81
Total return * 13.64% (1.18%)
Ratios to average net assets:
Net investment income 4.97% 4.88%
Total expenses + .96% --
Net expenses .94% .69%
Expenses reimbursed -- .32%
Portfolio turnover 57% 122%
Net assets, ending (in thousands) $40,146 $36,159
Number of shares outstanding,
ending (in thousands) 3,780 3,686
<PAGE>
CALIFORNIA
Years Ended
December 31, December 31, December 31,
1998 1997 1996
Net asset value, beginning $10.63 $10.44 $10.51
Income from investment operations
Net investment income .45 .49 .48
Net realized and unrealized
gain (loss) .12 .18 (.07)
Total from investment operations .57 .67 .41
Distributions from
Net investment income (.46) (.48) (.48)
Total increase (decrease) in
net asset value .11 .19 (.07)
Net asset value, ending $10.74 $10.63 $10.44
Total return * 5.51% 6.61% 4.04%
Ratios to average net assets:
Net investment income 4.23% 4.64% 4.59%
Total expenses + .90% .91% .97%
Net expenses .88% .88% .94%
Portfolio turnover 12% 48% 25%
Net assets, ending
(in thousands) $36,963 $35,085 $35,693
Number of shares outstanding,
ending (in thousands) 3,442 3,300 3,419
Years Ended
December 31, December 31,
1995 1994
Net asset value, beginning $9.81 $10.56
Income from investment operations
Net investment income .47 .48
Net realized and unrealized gain (loss) .69 (.76)
Total from investment operations 1.16 (.28)
Distributions from
Net investment income (.46) (.47)
Net realized gains -- --
Total distributions (.46) (.47)
Total increase (decrease) in net asset value .70 (.75)
Net asset value, ending $10.51 $9.81
Total return * 12.07% (2.57%)
Ratios to average net assets:
Net investment income 4.59% 4.67%
Total expenses + .91% --
Net expenses .89% .76%
Expenses reimbursed -- .13%
Portfolio turnover 47% 68%
Net assets, ending (in thousands) $34,424 $34,111
Number of shares outstanding,
ending (in thousands) 3,276 3,476
<PAGE>
MARYLAND
Years Ended
December 31, December 31, December 31,
1998 1997 1996
Net asset value, beginning $5.18 $5.03 $5.06
Income from investment operations
Net investment income .21 .23 .23
Net realized and unrealized
gain (loss) .04 .15 (.04)
Total from investment operations .25 .38 .19
Distributions from
Net investment income (.22) (.23) (.22)
Total increase (decrease) in
net asset value .03 .15 (.03)
Net asset value, ending $5.21 $5.18 $5.03
Total return * 4.88% 7.68% 3.96%
Ratios to average net assets:
Net investment income 4.13% 4.48% 4.59%
Total expenses + .97% .99% 1.00%
Net expenses .93% .92% .94%
Expenses reimbursed -- -- .04%
Portfolio turnover 24% 13% 8%
Net assets, ending
(in thousands) $12,165 $12,437 $12,023
Number of shares outstanding,
ending (in thousands) 2,336 2,400 2,338
Years Ended
December 31, December 31,
1995 1994
Net asset value, beginning $4.67 $5.05
Income from investment operations
Net investment income .24 .24
Net realized and unrealized gain (loss) .39 (.39)
Total from investment operations .63 (.15)
Distributions from
Net investment income (.24) (.23)
Total increase (decrease) in net asset value .39 (.38)
Net asset value, ending $5.06 $4.67
Total return * 13.66% (2.94%)
Ratios to average net assets:
Net investment income 4.87% 5.01%
Total expenses + .51% --
Net expenses .48% .17%
Expenses reimbursed .43% .86%
Portfolio turnover 11% 77%
Net assets, ending (in thousands) $9,411 $7,429
Number of shares outstanding,
ending (in thousands) 1,860 1,589
<PAGE>
VIRGINIA
Periods Ended
December 31, December 31, December 31,
1998 1997 1996
Net asset value, beginning $5.21 $5.10 $5.13
Income from investment operations
Net investment income .21 .22 .22
Net realized and unrealized
gain (loss) .04 .11 (.03)
Total from investment operations .25 .33 .19
Distributions from
Net investment income (.21) (.22) (.22)
Total increase (decrease) in
net asset value .04 .11 (.03)
Net asset value, ending $5.25 $5.21 $5.10
Total return* 4.88% 6.71% 3.82%
Ratios to average net assets:
Net investment income 4.03% 4.38% 4.35%
Total expenses + .97% .96% 1.00%
Net expenses .93% .88% .92%
Expenses reimbursed -- -- .03%
Portfolio turnover 36% 8% 4%
Net assets, ending
(in thousands) $14,439 $13,542 $12,618
Number of shares outstanding,
ending (in thousands) 2,748 2,602 2,475
Years Ended
December 31, December 31,
1995 1994
Net asset value, beginning $4.74 $5.06
Income from investment operations
Net investment income .24 .23
Net realized and unrealized gain (loss) .39 (.32)
Total from investment operations .63 (.09)
Distributions from
Net investment income (.24) (.23)
Total increase (decrease) in net asset value .39 (.32)
Net asset value, ending $5.13 $4.74
Total return* 13.54% (2.04%)
Ratios to average net assets:
Net investment income 4.86% 4.87%
Total expenses + .54% --
Net expenses .51% .19%
Expenses reimbursed .38% .86%
Portfolio turnover 11% 65%%
Net assets, ending (in thousands) $7,295 $5,866
Number of shares outstanding,
ending (in thousands) 1,423 1,239
* Total return does not reflect deduction of front-end sales charge.
+ Effective December 31, 1995, this ratio reflects total expenses
before reduction for fees paid indirectly; such reductions are included in
the ratio of net expenses. Total expenses are presented net of expense
waivers and reimbursements.
<PAGE>
EXHIBIT A
REDUCED SALES CHARGES
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
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.
Footnote:
* 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.
<PAGE>
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.
<PAGE>
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)
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.
Maximum Commission/Service Fees
National 2.25%/0.15%
California 2.25%/0.15%
Maryland 2.25%/0.15%
Virginia 2.25%/0.15%
Occasionally, CDI may reallow to dealers the full 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
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 $100 million. If a finder's fee is paid, then the service fee begins in
the 13th month after purchase. All payments will be in compliance with the
rules of the National Association of Securities Dealers, Inc.
<PAGE>
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
For investors who want more information about the Funds, the following
documents are available free upon request:
Annual/Semi-Annual Reports: Additional information about each Fund's
investments is available in the Fund's Annual and Semi-Annual reports to
shareholders. In the Fund's annual report, you will find a discussion of the
market conditions and investment strategies that significantly affected the
Fund's performance during its last fiscal year.
Statement of Additional Information (SAI): The SAI for each Fund provides
more detailed information about the Fund and is incorporated into this
prospectus by reference.
You can get free copies of reports and the SAI, request other information
and discuss your questions about the Funds by contacting your broker, or the
Funds at:
Calvert Group
4550 Montgomery Ave, Suite 1000N
Bethesda, Md. 20814
Telephone: 1-800-368-2745
Calvert Group Web-Site
Address: http://www.calvertgroup.com
You can review the Funds' reports and SAIs at the public Reference Room of
the Securities and Exchange Commission. You can get text-only copies:
For a fee, by writing to or calling the Public Reference Room of the
Commission, Washington, D.C. 20549-6009, Telephone: 1-800-SEC-0330.
Free from the Commission's Internet website at http://www.sec.gov.
Investment Company Act File No.: 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
TABLE OF CONTENTS
Investment Policies and Risks 2
Investment Restrictions 7
Purchases and Redemptions of Shares 8
Dividends and Distributions 9
Tax Matters 9
Valuation of Shares 10
Calculation of Yield and Total Return 10
Advertising 12
Directors and Officers 12
Investment Advisor 15
Administrative Services 16
Method of Distribution 16
Transfer and Shareholder Servicing Agent 17
Independent Accountants and Custodians 17
Portfolio Transactions 18
General Information 18
Control Persons and Principal Holders of Securities 19
Appendix 19
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.
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; and (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.
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. The segregated account
equals the market value of the when-issued purchase, thereby ensuring the
transaction is unleveraged.
Derivatives
The Portfolios can use various techniques to increase or decrease
exposure to changing security prices, interest rates, or other factors that
affect security values. These techniques may involve derivative transactions
such as buying and selling options and futures contracts and leveraged
notes, entering into swap agreements, and purchasing indexed securities. The
Portfolios can use these practices either as substitution or as protection
against an adverse move in the Portfolios to adjust the risk and return
characteristics of the Portfolios. If the Advisor judges market conditions
incorrectly or employs a strategy that does not correlate well with a
Portfolio's investments, or if the counterparty to the transaction does not
perform as promised, these techniques could result in a loss. These
techniques may increase the volatility of a Portfolio and may involve a
small investment of cash relative to the magnitude of the risk assumed.
Derivatives are often illiquid.
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,
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 intermediate-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 total assets, based on net
premium payments.
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 ("junk bonds") have moderate to poor
protection of principal and interest payments and are predominately
speculative. 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.
INVESTMENT RESTRICTIONS
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) Each Portfolio 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) Each Portfolio 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) Each 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 futures and premiums on such options would
exceed 5% of the Portfolio's total assets, based on
net premium payments.
(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.
PURCHASES AND REDEMPTIONS OF SHARES
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 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.
DIVIDENDS AND DISTRIBUTIONS
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. 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.
TAX MATTERS
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
($71,064,503/6,570,474 shares) $10.82
Maximum sales charge
(2.75% of offering price) 0.30
Offering price per share $11.12
California
Net asset value per share
($36,963,400/3,442,156 shares) $10.74
Maximum sales charge
(2.75% of offering price) 0.30
Offering price per share $11.04
Maryland
Net asset value per share
($12,164,979/2,335,912 shares) $5.21
Maximum sales charge
(2.75% of offering price) 0.14
Offering price per share $5.35
Virginia
Net asset value per share
($14,438,800/2,747,881 shares) $5.25
Maximum sales charge
(2.75% of offering price) 0.14
Offering price per share $5.39
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 2.52% 5.46%
Five Year 5.10% 5.68%
From Inception 5.80% 6.27%
(9/30/92)
California California
With Without
Max. Load Max. Load
One Year 2.61% 5.51%
Five Year 4.34% 4.93%
From Inception 5.45% 5.89%
(5/29/92)
Maryland Maryland
With Without
Max. Load Max. Load
One Year 1.94% 4.88%
Five Year 4.65% 5.23%
From Inception 4.79% 5.34%
(9/30/93)
Virginia Virginia
With Without
Max. Load Max. Load
One Year 1.94% 4.88%
Five Year 4.65% 5.22%
From Inception 4.84% 5.39%
(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 3.67% 5.73% 6.08%
California 3.56% 5.56% 5.89%
Virginia 3.39% 5.30% 5.61%
Maryland 3.46% 5.41% 5.73%
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/Director. 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/Director. 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/Director. 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/Director. 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/Director. 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/Director. 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/Director. 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 former 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/Director. 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/Director. 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 Calvert Variable
Series, Inc., and Acacia Federal Savings Bank. DOB: 12/08/45. Address: 5301
Wisconsin Avenue, N.W., Washington, D.C. 20015.
ARTHUR J. PUGH, Trustee/Director. 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/Director. 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/Director. 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, 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: 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.
VICTOR FRYE, Esq., Assistant Secretary and Compliance Officer. Mr.
Frye is Counsel and Compliance Officer of Calvert Group and an officer of
each of its subsidiaries and Calvert-Sloan Advisers, L.L.C. He is also an
officer of each of the other investment companies in the Calvert Group of
Funds. Prior to working at Calvert Group, Mr. Frye was Counsel and Manager
of the Compliance Department at The Advisors Group. DOB: 10/15/58.
The address of directors and officers, unless otherwise noted, is
4550 Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814.
Trustee/Directors and officers of the Fund as a group own less than 1% of
the Fund's outstanding shares. Trustee/Directors 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 persons is a Trustee/Director 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 Mmes. Krumsiek and 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, trustee/directors of the Portfolios not
affiliated with the Fund's Advisor were paid $8,377, $4,299, $1,578, and
$1,796, from the National, California, Maryland, and Virginia Portfolios,
respectively. Trustees/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.
Trustees/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.
Trustee/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 Trustee/Director
Richard L. Baird, Jr. $1,496 $0 $39,550
Frank H. Blatz, Jr. $1,327 $1,327 $42,100
Frederick T. Borts $1,220 $0 $33,250
Charles E. Diehl $1,327 $1,327 $41,500
Douglas E. Feldman $1,327 $0 $36,250
Peter W. Gavian $1,326 $663 $36,250
John G. Guffey, Jr. $1,272 $0 $62,665
M. Charito Kruvant $1,328 $532 $36,250
Arthur J. Pugh $1,327 $0 $41,500
D. Wayne Silby $1,274 $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/Director, respectively.
**The Fund Complex consists of nine (9) registered investment companies.
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
Portfolios paid advisory fees as shown:
1996 1997 1998
National $275,574 $285,023 $396,802
California $217,159 $204,019 $205,130
Maryland $72,423 $70,899 $74,404
Virginia $72,322 $79,695 $84,448
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.
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 $45,929 $47,504 $66,134
California $36,193 $34,003 $34,188
Maryland $12,071 $11,816 $12,401
Virginia $12,054 $13,283 $14,075
METHOD OF DISTRIBUTION
The Fund has entered into an agreement with Calvert Distributors,
Inc. ("CDI"), 4550 Montgomery Avenue, Bethesda. Maryland 20814, whereby CDI,
acting as principal underwriter, makes a continuous offering of each
Portfolio's securities on a "best efforts" basis. 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 Plan (see below). For fiscal
years 1996, 1997, and 1998, CDI received aggregate sales charges (gross) and
sales charges in excess of the dealer reallowance (net) as shown below:
1996 1997 1998
Gross/Net Gross/Net Gross/Net
National $45,813/$13,952 $40,981/$11,597 $49,679/$8,864
California $50,884/$14,066 $49,851/$15,411 $37,645/$7,762
Maryland $12,032/$4,214 $18,892/$7,100 $15,037/$6,053
Virginia $20,776/$9,039 $20,163/$7,697 $12,662/($30)
Pursuant to Rule 12b-1 under the Investment Company Act of 1940
("1940 Act"), the Fund has adopted a Distribution Plan (the "Plan") which
permit it to pay certain expenses associated with the distribution of its
shares, based on each Portfolio's average daily net assets. Such expenses
may not exceed, on an annual basis, 0.25% of the National and California
Portfolios, and 0.15% for the Maryland and Virginia Portfolios. No
Distribution Plan expenses were paid by any of the Portfolios in fiscal
1996, 1997, and 1998.
The Plan was approved by the Board of Trustees/Directors, including
the Trustees/Directors 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 Trustees/Directors who are
not interested persons of the Fund is committed to the discretion of such
disinterested Trustees/Directors. In establishing the Plan, the
Trustees/Directors considered various factors including the amount of the
distribution fee. The Trustees/Directors 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 Trustees/Directors 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 Trustees/Directors, including a
majority of the non-interested Trustees/Directors as described above.
The Plan will continue in effect for successive one-year terms,
provided that such continuance is specifically approved by (i) the vote of a
majority of the Trustees/Directors 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 Trustees/Directors.
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"), 330 W. 9th Street,
Kansas City, Missouri 64105, 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"), 4550 Montgomery
Avenue, Bethesda, Maryland 20814, 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 fee based on the number of shareholder accounts and shareholder
transactions, per Portfolio.
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
PricewaterhouseCoopers LLP, 250 West Pratt Street, Baltimore,
Maryland 21201, 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 Portfolios' 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
Portfolio 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 Trustees/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.
While the Advisor selects brokers primarily on the basis of best
execution, in some cases the Advisor may direct transactions to brokers
based on the quality and amount of the research and research-related
services which the brokers provide to them. These services are of the type
described in Section 28(e) of the Securities Exchange Act of 1934 and may
include analyses of the business or prospects of a company, industry or
economic sector, or statistical and pricing services.
If, in the judgment of the Advisor, the Fund or other accounts
managed by them will be benefited by supplemental research services, they
are authorized to pay brokerage commissions to a broker furnishing such
services which are in excess of commissions which another broker may have
charged for effecting the same transaction. These research services include
advice, either directly or through publications or writings, as to the value
of securities, the advisability of investing in, purchasing or selling
securities, and the availability of securities or purchasers or sellers of
securities; furnishing of analyses and reports concerning issuers,
securities or industries; providing information on economic factors and
trends; assisting in determining portfolio strategy; providing computer
software used in security analyses; providing portfolio performance
evaluation and technical market analyses; and providing other services
relevant to the investment decision making process. It is the policy of the
Advisor that such research services will be used for the benefit of the Fund
as well as other Calvert Group funds and managed accounts.
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% 44%
California 48% 12%
Maryland 13% 24%
Virginia 8% 36%
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's net asset value per
share, portfolio securities, income and expenses, and other financial
information.
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 April 20, 1999, the following shareholder(s) owned of record
5% or more of shares as shown below:
Name and Address % of Ownership
National
Robert Taishoff, Trustee 7.14%
L. Taishoff Flint Trust
Annapolis, Maryland
John Swanson 8.93%
McMurray, Pennsylvania
California
Catalyst Productions 13.43%
Oakland, California
National City Bank Kentucky 7.31%
Trustee Anchorage Trust
Cleveland, Ohio
James Bochnowski 5.47%
Atherton, California
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.
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, if 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>
PART C. OTHER INFORMATION
Item 23. Exhibits
1. Underwriting Agreement, incorporated by reference to
Registrant's Post-Effective Amendment No. 15, filed April 30, 1998,
accession number 0000882671-98-000012.
3.(i) 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).
3.(ii) By-Laws (incorporated by reference to Registrant's
Pre-Effective Amendment No. 2, April 27, 1992).
23. Opinion and Consent of Counsel as to Legality of Shares Being
Registered, filed herewith.
23A. Consent of Independent Accountants to use of report, filed
herewith.
99.B5. Investment Advisory Contract, filed herewith.
99.B7. Directors' Deferred Compensation Agreement (incorporated by
reference to Registrant's Pre-Effective Amendment No. 2, April 27, 1992).
99.B8. Custodial Contract (incorporated by reference to
Registrant's Pre-Effective Amendment No. 2, April 27, 1992).
99.B9.a. Transfer Agency Contract and Shareholder Servicing
Contract, incorporated by reference to Registrant's Post-Effective Amendment
No. 15, filed April 30, 1998, accession number 0000882671-98-000012.
99.B9.b. Administrative Services Agreement (incorporated by
reference to Registrant's Pre-Effective Amendment No. 2, April 27, 1992).
99.B9.c. 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, accession number
0000882671-98-000012.
99.B15. Plan of Distribution for Class A Shares, incorporated by
reference to Registrant's Post-Effective Amendment No. 13, April 30, 1996
accession number 0000882671-98-000010; for Class B and C Shares,
incorporated by reference to Registrant's Post-Effective Amendment No. 15,
filed April 30, 1998, accession number 0000882671-98-000012.
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. Director
Holding Company and
4550 Montgomery Avenue Officer
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 Manager
Compliance
7315 Wisconsin Avenue
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
------------------
Andrea Hagans Calvert Asset Management Officer
Company, Inc.
Investment Advisor
4550 Montgomery Avenue
Bethesda, Maryland 20814
------------------
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 Assistant Secretary
& Compliance Officer & Compliance Ofcr.
(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 meets all
of the requirements for effectiveness of this registration statement under
Rule 485(b) under the Securities Act and 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 27th day of April, 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 4/27/99
Barbara J. Krumsiek Trustee (Principal Executive Officer)
__________**____________ Principal Accounting 4/27/99
Ronald M. Wolfsheimer Officer
__________**____________ Trustee 4/27/99
Richard L. Baird, Jr.
__________**____________ Trustee 4/27/99
Frank H. Blatz, Jr., Esq.
__________**____________ Trustee 4/27/99
Frederick T. Borts, M.D.
__________**____________ Trustee 4/27/99
Charles E. Diehl
__________**____________ Trustee 4/27/99
Douglas E. Feldman
__________**____________ Trustee 4/27/99
Peter W. Gavian
__________**____________ Trustee 4/27/99
John G. Guffey, Jr.
__________**____________ Trustee 4/27/99
M. Charito Kruvant
__________**____________ Trustee 4/27/99
Arthur J. Pugh
__________**____________ Trustee 4/27/99
David R. Rochat
__________**____________ Trustee 4/27/99
D. Wayne Silby
**By Katherine Stoner as Attorney-in-fact, pursuant to Power of Attorney
Forms on file.
EXHIBIT INDEX
Form N-1A
Item No.
Ex-23 Form of Opinion and Consent of Counsel
Ex-23a Auditors' Consent to file
Ex-24 Power of Attorney
Ex-27 Financial Data Schedules (4)
Ex-99.B5. Investment Advisory Agreement
POWER OF ATTORNEY
I, the undersigned Trustee/Director of Calvert Social Investment
Fund, Calvert World Values Fund, Inc., Calvert Variable Series, Inc.,
Calvert New World Fund, Inc., First Variable Rate Fund for Government
Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The Calvert Fund
and Calvert Municipal Fund, Inc. (each, respectively, the "Fund"), hereby
constitute Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker Bender,
Katherine Stoner, Lisa Crossley Newton, 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 Fund,
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, the Internal Revenue Code of 1986, 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 Fund.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund,
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.
June 2, 1998
Date /Signature/
Katherine Stoner Barbara J. Krumsiek
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of Calvert Social Investment
Fund, First Variable Rate Fund for Government Income, Calvert Tax-Free
Reserves, Calvert Cash Reserves, The Calvert Fund and Calvert Municipal
Fund, Inc. (each, respectively, the "Fund"), hereby constitute Ronald M.
Wolfsheimer, William M. Tartikoff, Susan Walker Bender, Katherine Stoner,
Lisa Crossley Newton, 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 Fund,
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, the Internal Revenue Code of 1986, 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 Fund.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund,
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.
June 2, 1998
Date /Signature/
Susan Walker Bender Richard L. Baird, Jr.
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of Calvert Variable Series,
Inc., First Variable Rate Fund for Government Income, Calvert Tax-Free
Reserves, Calvert Cash Reserves, The Calvert Fund and Calvert Municipal
Fund, Inc. (each, respectively, the "Fund"), hereby constitute Ronald M.
Wolfsheimer, William M. Tartikoff, Susan Walker Bender, Katherine Stoner,
Lisa Crossley Newton, 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 Fund,
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, the Internal Revenue Code of 1986, 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 Fund.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund,
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.
June 3, 1998
Date /Signature/
Frank H. Blatz, Jr. Charles E. Diehl
Witness Name of 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/
Edwidge Saint-Felix Peter W. Gavian
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of Calvert Social Investment
Fund, Calvert World Values Fund, Inc., First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund and Calvert Municipal Fund, Inc. (each, respectively, the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Katherine Stoner, Lisa Crossley Newton, 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 Fund,
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, the Internal Revenue Code of 1986, 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 Fund.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund,
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.
June 2, 1998
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 Calvert Variable Series,
Inc., First Variable Rate Fund for Government Income, Calvert Tax-Free
Reserves, Calvert Cash Reserves, The Calvert Fund and Calvert Municipal
Fund, Inc. (each, respectively, the "Fund"), hereby constitute Ronald M.
Wolfsheimer, William M. Tartikoff, Susan Walker Bender, Katherine Stoner,
Lisa Crossley Newton, 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 Fund,
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, the Internal Revenue Code of 1986, 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 Fund.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund,
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.
June 3, 1998
Date /Signature/
Frank H. Blatz, Jr. Arthur James 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 Calvert Social Investment
Fund, Calvert World Values Fund, Inc., First Variable Rate Fund for
Government Income, Calvert Tax-Free Reserves, Calvert Cash Reserves, The
Calvert Fund and Calvert Municipal Fund, Inc. (each, respectively, the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Katherine Stoner, Lisa Crossley Newton, 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 Fund,
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, the Internal Revenue Code of 1986, 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 Fund.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund,
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.
June 2, 1998
Date /Signature/
Barbara J. Krumsiek 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. (each, respectively, the
"Fund"), hereby constitute Ronald M. Wolfsheimer, William M. Tartikoff,
Susan Walker Bender, Katherine Stoner, Lisa Crossley Newton, 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 Fund,
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, the Internal Revenue Code of 1986, 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 Fund.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund,
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.
September 16, 1998
Date /Signature/
John E. Dudley Frederick Borts, M.D.
Witness Name of Trustee/Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned Trustee/Director of Calvert Variable Series,
Inc., First Variable Rate Fund for Government Income, Calvert Tax-Free
Reserves, Calvert Cash Reserves, The Calvert Fund and Calvert Municipal
Fund, Inc. (each, respectively, the "Fund"), hereby constitute Ronald M.
Wolfsheimer, William M. Tartikoff, Susan Walker Bender, Katherine Stoner,
Lisa Crossley Newton, 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 Fund,
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, the Internal Revenue Code of 1986, 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 Fund.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund,
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.
June 3, 1998
Date /Signature/
Elizabeth G. Murray Frank H. Blatz, Jr.
Witness Name of Director
<PAGE>
POWER OF ATTORNEY
I, the undersigned officer of Calvert Social Investment Fund,
Calvert World Values Fund, Inc., Calvert Variable Series, Inc., Calvert New
World Fund, Inc., First Variable Rate Fund for Government Income, Calvert
Tax-Free Reserves, Calvert Cash Reserves, The Calvert Fund and Calvert
Municipal Fund, Inc. (each, respectively, the "Fund"), hereby constitute
Ronald M. Wolfsheimer, William M. Tartikoff, Susan Walker Bender, Katherine
Stoner, Lisa Crossley Newton, 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 Fund,
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, the Internal Revenue Code of 1986, 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 Fund.
When any of the above-referenced attorneys signs my name to any
document in connection with maintaining the lawful operation of the Fund,
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.
June 2, 1998
Date /Signature/
Edwidge Saint-Felix Ronald M. Wolfsheimer
Witness Name of Officer
Exhibit 23
April 27, 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. 17 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. 17 to its Registration Statement.
Sincerely,
/s/ Katherine Stoner
Katherine Stoner
Associate General Counsel
PricewaterhouseCoopers logo
PricewaterhouseCoopers LLP
250 West Pratt Street
Suite 2100
Baltimore MD 21201-2304
Telephone (410) 783 7600
Facsimile (410) 783 7680
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in Post-Effective Amendment No.
17 to the Registration Statement of Calvert National, California, Maryland
Virginia (four portfolios comprising Calvert Municipal Fund, Inc., hereafter
referred to as the :Funds") on Form N-1A (File Number 33-44968 and 811-6525)
of our reports dated February 10, 1999, on our audit of the financial
statements and financial highlights of the Funds, which report is included in
the Annual Report to Shareholders for the year ended December 31, 1998, which
is incorporated by reference in the Registration Statement. We also consent to
the reference to our firm under the caption "Financial Highlights" in the
Prospectus and "Independent Accountants" in the Statement of Additional
Information.
/s/
PricewaterhouseCoopers LLP
Baltimore, Maryland
April 27, 1999
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Investment Advisory Agreement
Calvert Municipal Fund, Inc.
INVESTMENT ADVISORY AGREEMENT, made this 1st day of March, 1999, by
and between CALVERT ASSET MANAGEMENT COMPANY, INC., a Delaware corporation
(the "Advisor"), and Calvert Municipal Fund, Inc., a Maryland corporation
(the "Corporation"), both having their principal place of business at 4550
Montgomery Avenue, Bethesda, Maryland.
WHEREAS, the Corporation is registered as an investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), for
the purpose of investing and reinvesting its assets in securities, offering
separate series ("Fund(s)"), as set forth in its Articles of Incorporation,
its Bylaws and its registration statements under the 1940 Act and the
Securities Act of 1933 (the "1933 Act"), as amended, and the Corporation
desires to avail itself of the services, information, advice, assistance and
facilities of an investment advisor and to have an investment advisor
perform for it various investment advisory, research services and other
management services; and
WHEREAS, the Advisor is an investment advisor registered under the
Investment Advisers Act of 1940, as amended, and is engaged in the business
of rendering management and investment advisory services to investment
companies and desires to provide such services to the Corporation;
NOW, THEREFORE, in consideration of the terms and conditions
hereinafter set forth, it is agreed as follows:
1. Employment of the Advisor. The Corporation hereby employs the
Advisor to manage the investment and reinvestment of the Corporation assets,
subject to the control and direction of the Corporation's Board of
Directors, for the period and on the terms hereinafter set forth. The
Advisor hereby accepts such employment and agrees during such period to
render the services and to assume the obligations in return for the
compensation herein provided. The Advisor shall for all purposes herein be
deemed to be an independent contractor and shall, except as expressly
provided or authorized (whether herein or otherwise), have no authority to
act for or represent the Corporation in any way or otherwise be deemed an
agent of the Corporation.
2. Obligations of and Services to be Provided by the Advisor. The
Advisor undertakes to provide the following services and to assume the
following obligations:
a. The Advisor shall manage the investment and reinvestment of the
Corporation's assets, subject to and in accordance with the investment
objectives and policies of each Fund, and any directions which the
Corporation's Board of Directors may issue from time to time. In pursuance
of the foregoing, the Advisor shall make all determinations with respect to
the investment of the Corporation's assets and the purchase and sale of
portfolio securities and shall take such steps as may be necessary to
implement the same. Such determination and services shall also include
determining the manner in which voting rights, rights to consent to
corporate action, any other rights pertaining to the Corporation's portfolio
securities shall be exercised. The Advisor shall render regular reports to
the Corporation's Board of Directors concerning the Corporation's investment
activities.
b. The Advisor shall, in the name of the Corporation, on behalf of
each Fund, place orders for the execution of portfolio transactions in
accordance with the policies with respect thereto set forth in the
Corporation's current registration statement under the 1940 Act and the 1933
Act. In connection with the placement of orders for the execution of
portfolio transactions the Advisor shall create and maintain all necessary
brokerage records of the Corporation in accordance with all applicable laws,
rules and regulations, including but not limited to records required by
Section 31(a) of the 1940 Act. All records shall be the property of the
Corporation and shall be available for inspection and use by the SEC, the
Corporation or any person retained by the Corporation. Where applicable,
such records shall be maintained by the Advisor for the periods and the
places required by Rule 31a-2 under the 1940 Act.
c. The Advisor shall bear its expenses of providing services to the
Corporation pursuant to this Agreement except such expenses as are
undertaken by the Corporation. In addition, the Advisor shall pay the
salaries and fees of all Directors and executive officers who are employees
of the Advisor or its affiliates ("Advisor Employees").
3. Expenses of each Fund. Each Fund shall pay all expenses other than
those expressly assumed by the Advisor. Expenses payable by the Fund shall
include, but are not limited to:
Fees to the Advisor as provided herein;
Legal and audit expenses;
Fees and expenses related to the registration and qualification of the
Corporation and its shares for distribution under federal and state
securities laws;
Expenses of the administrative services agent, transfer agent, registrar,
custodian, dividend disbursing agent and shareholder servicing agent;
Any telephone charges associated with shareholder servicing or the
maintenance of the Funds or Corporation;
Salaries, fees and expenses of Directors and executive officers of the
Corporation, other than Advisor Employees;
Taxes and corporate fees levied against the Corporation;
Brokerage commissions and other expenses associated with the purchase and
sale of portfolio securities for the Corporation;
Expenses, including interest, of borrowing money;
Expenses incidental to meetings of the Corporation's shareholders and the
maintenance of the Corporation's organizational existence;
Expenses of printing stock certificates representing shares of the
Corporation and expenses of preparing, printing and mailing notices, proxy
material, reports to regulatory bodies and reports to shareholders of the
Corporation;
Expenses of preparing and typesetting of prospectuses of the Corporation;
Expenses of printing and distributing prospectuses to shareholders of the
Corporation;
Association membership dues;
Insurance premiums for fidelity and other coverage;
Distribution Plan expenses, as permitted by Rule 12b-1 under the 1940 Act
and as approved by the Board; and
Such other legitimate Corporation expenses as the Board of Directors may
from time to time determine are properly chargeable to the Corporation.
4. Compensation of Advisor.
As compensation for the services rendered and obligations assumed hereunder
by the Advisor, the Trust shall pay to the Advisor within ten (10) days
after the last day of each calendar month a fee equal on an annualized basis
as shown on Schedule A. Any amendment to the Schedule pertaining to any new
or existing Fund shall not be deemed to affect the interest of any other
Fund and shall not require the approval of the shareholders of any other
Fund.
Such fee shall be computed and accrued daily. Upon termination of this
Agreement before the end of any calendar month, the fee for such period
shall be prorated. For purposes of calculating the Advisor's fee, the daily
value of a Fund's net assets shall be computed by the same method as the
Fund uses to compute the value of its net assets in connection with the
determination of the net asset value of its shares.
The Advisor reserves the right (i) to waive all or part of its fee and
assume expenses of a Fund and (ii) to make payments to brokers and dealers
in consideration of their promotional or administrative services.
5. Activities of the Advisor. The services of the Advisor to the
Corporation hereunder are not to be deemed exclusive, and the Advisor shall
be free to render similar services to others. It is understood that
Directors and officers of the Corporation are or may become interested in
the Advisor as stockholders, officers, or otherwise, and that stockholders
and officers of the Advisor are or may become similarly interested in the
Corporation, and that the Advisor may become interested in the Corporation
as a shareholder or otherwise.
6. Use of Names. The Corporation shall not use the name of the Advisor
in any prospectus, sales literature or other material relating to the
Corporation in any manner not approved prior thereto by the Advisor;
provided, however, that the Advisor shall approve all uses of its name which
merely refer in accurate terms to its appointment hereunder or which are
required by the SEC; and, provided, further, that in no event shall such
approval be unreasonably withheld. The Advisor shall not use the name of the
Corporation or any Corporation in any material relating to the Advisor in
any manner not approved prior thereto by the Corporation; provided, however,
that the Corporation shall approve all uses of its name which merely refer
in accurate terms to the appointment of the Advisor hereunder or which are
required by the SEC; and, provide, further, that in no event shall such
approval be unreasonably withheld.
7. Liability of the Advisor. Absent willful misfeasance, bad faith,
gross negligence, or reckless disregard of obligations or duties hereunder
on the part of the Advisor, the Advisor shall not be subject to liability to
the Corporation or to any shareholder of the Corporation for any act or
omission in the course of, or connected with, rendering services hereunder
or for any losses that may be sustained in the purchase, holding or sale of
any security.
8. Force Majeure. The Advisor shall not be liable for delays or errors
occurring by reason of circumstances beyond its control, including but not
limited to acts of civil or military authority, national emergencies, work
stoppages, fire, flood, catastrophe, acts of God, insurrection, war, riot,
or failure of communication or power supply. In the event of equipment
breakdowns beyond its control, the Advisor shall take reasonable steps to
minimize service interruptions but shall have no liability with respect
thereto.
9. Renewal, Termination and Amendment. This Agreement shall continue
in effect with respect to the Corporation, unless sooner terminated as
hereinafter provided, through December 31, 1999, and indefinitely thereafter
if its continuance shall be specifically approved at least annually by vote
of the holders of a majority of the outstanding voting securities of the
Corporation or by vote of a majority of the Corporation's Board of
Directors; and further provided that such continuance is also approved
annually by the vote of a majority of the Directors who are not parties to
this Agreement or interested persons of the Advisor, cast in person at a
meeting called for the purpose of voting on such approval, or as allowed by
law. This Agreement may be terminated at any time, without payment of any
penalty, by the Corporation's Board of Directors or by a vote of the
majority of the outstanding voting securities of the Corporation upon 60
days' prior written notice to the Advisor and by the Advisor upon 60 days'
prior written notice to the Corporation. This Agreement may be amended at
any time by the parties, subject to approval by the Corporation's Board of
Directors and, if required by applicable SEC rules and regulations, a vote
of a majority of the Corporation's outstanding voting securities. This
Agreement shall terminate automatically in the event of its assignment. The
terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meaning set forth for such terms in the 1940 Act.
10. Severability. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby.
11. Miscellaneous. Each party agrees to perform such further actions
and execute such further documents as are necessary to effectuate the
purposes hereof. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Maryland. The
captions in this Agreement are included for convenience only and in no way
define or delimit any of the provisions hereof or otherwise affect their
construction or effect.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first written above.
Calvert Municipal Fund, Inc.
By: /s/ Ron Wolfsheimer
Title: Treasurer
Calvert Asset Management Company, INC.
By: /s/ Reno Martini
Title: Senior Vice President
Investment Advisory Agreement
Calvert Asset Management Company, Inc.
Calvert Municipal Fund, Inc.
Schedule A
As compensation pursuant to Section 4 of the Investment Advisory Agreement
between Calvert Asset management company, Inc. (the "Advisor") and Calvert
Municipal Fund, Inc. ("CMF") dated March 1, 1999, with respect to each CMF
Portfolio, the Advisor is entitled to receive from each Portfolio an annual
advisory fee (the "Fee") as shown below. The Fee shall be computed daily and
payable monthly, based on the average daily net assets of the appropriate
Portfolio.
Calvert National Municipal Intermediate Fund: 0.60% of the first $500
million
0.50% above $500 million
0.40% above $1 billion
Calvert California Municipal Intermediate Fund: 0.60% of the first $500
million
0.50% above $500 million
0.40% above $1 billion
Calvert Maryland Municipal Intermediate Fund: 0.60% of the first $500
million
0.50% above $500 million
0.40% above $1 billion
Calvert Virginia Municipal Intermediate Fund: 0.60% of the first $500
million
0.50% above $500 million
0.40% above $1 billion
