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. 18 XX
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 18 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, 2000
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.
CALVERT
MUNICIPAL INTERMEDIATE FUNDS
PROSPECTUS
- - CALIFORNIA
- - MARYLAND
- - VIRGINIA
APRIL 30, 2000
PROSPECTUS
APRIL 30, 2000
CALVERT MUNICIPAL FUND, INC.
CALVERT CALIFORNIA MUNICIPAL INTERMEDIATE FUND
CALVERT MARYLAND MUNICIPAL INTERMEDIATE FUND
CALVERT VIRGINIA MUNICIPAL INTERMEDIATE FUND
ABOUT THE FUND
2 INVESTMENT OBJECTIVE, STRATEGY, PAST PERFORMANCE
7 FEES AND EXPENSES
8 INVESTMENT PRACTICES AND RISKS
ABOUT YOUR INVESTMENT
12 CALVERT GROUP AND THE PORTFOLIO MANAGEMENT TEAM
13 ADVISORY FEES
13 HOW TO BUY SHARES
13 GETTING STARTED
14 DISTRIBUTION AND SERVICE FEES
14 ACCOUNT APPLICATION
15 IMPORTANT - HOW SHARES ARE PRICED
16 WHEN YOUR ACCOUNT WILL BE CREDITED
16 OTHER CALVERT GROUP FEATURES
(EXCHANGES, MINIMUM ACCOUNT BALANCE, ETC.)
19 DIVIDENDS, CAPITAL GAINS AND TAXES
20 HOW TO SELL SHARES
22 FINANCIAL HIGHLIGHTS
26 EXHIBIT A- REDUCED SALES CHARGES
28 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 UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
INVESTMENT OBJECTIVES
CALVERT CALIFORNIA, MARYLAND AND VIRGINIA MUNICIPAL INTERMEDIATE FUNDS (THE
"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
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 THAT ARE
ATTRACTIVELY PRICED. THE AVERAGE DOLLAR-WEIGHTED MATURITY WILL BE BETWEEN 3
AND 10 YEARS.
TYPES OF INVESTMENTS
THE FUNDS MAY INVEST IN TAX-EXEMPT OBLIGATIONS, SUCH AS 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, AND CERTIFICATES OF PARTICIPATION
IN SUCH INVESTMENTS.
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
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
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.
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUNDS, OR THE FUNDS COULD
UNDERPERFORM, MOST LIKELY FOR ANY OF THE FOLLOWING REASONS:
- - THE BOND MARKET GOES DOWN
- - THE INDIVIDUAL BONDS IN THE FUNDS DO NOT PERFORM AS WELL AS EXPECTED, DUE TO
CREDIT, POLITICAL OR OTHER RISKS
- - THE ADVISOR'S FORECAST AS TO INTEREST RATES IS NOT CORRECT. INCREASES IN
MARKET INTEREST RATES CAN CAUSE THE PRICE OF A DEBT SECURITY TO
DECREASE.
- - THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE BOND MARKET DOES NOT
PERFORM AS WELL AS EXPECTED
- - BECAUSE THE FUNDS INVEST PRIMARILY IN CALIFORNIA, MARYLAND, OR VIRGINIA
MUNICIPAL OBLIGATIONS, THE ECONOMY AND POLITICAL CLIMATE IN THOSE STATES
WILL HAVE A GREAT IMPACT ON THE FUNDS.
- - 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.
BAR CHART AND PERFORMANCE TABLE THE BAR CHARTS AND TABLES BELOW SHO
EACH FUND'S ANNUAL RETURNS AND ITS LONG-TERM PERFORMANCE. THE INFORMATION
PROVIDES SOME INDICATION OF THE RISKS OF INVESTING IN EACH FUND BY SHOWING
CHANGES IN EACH FUND'S PERFORMANCE FROM YEAR-TO-YEAR AND BY SHOWING HOW
AVERAGE ANNUAL RETURNS COMPARE WITH THOSE OF A BROAD MEASURE OF MARKET
PERFORMANCE. 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 EACH FUND'S RETURNS COMPARED
TO COMPARABLE LIPPER MUNICIPAL DEBT FUNDS AVERAGES, A COMPOSITE OF THE ANNUAL
RETURN OF MUTUAL FUNDS THAT HAVE AN INVESTMENT GOAL SIMILAR TO THAT OF
THE RESPECTIVE 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 OR AVERAGE USED FOR COMPARISON IN THE TABLE.
CALIFORNIA
YEAR-BY-YEAR TOTAL RETURN (AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '95 4.64%
WORST QUARTER (OF PERIODS SHOWN) Q1 '94 -2.87%
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR SINCE
INCEPTION
CALIFORNIA (INCEPTION 5/31/92) (4.40%) 4.59% 4.53%
LEHMAN MUNICIPAL BOND
10 YEAR INDEX TR (1.25%) 7.12% 6.55%
LIPPER CALIFORNIA INTERMEDIATE
MUNICIPAL DEBT FUNDS AVERAGE (1.32%) 5.85% 5.08%
THE MONTH END DATE OF 5/31/92 IS USED FOR COMPARISON PURPOSES ONLY,
ACTUAL INCEPTION IS 5/29/92.
MARYLAND
YEAR-BY-YEAR TOTAL RETURN (AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '95 5.40%
WORST QUARTER (OF PERIODS SHOWN) Q1 '94 -3.51%
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR SINCE
INCEPTION
MARYLAND (INCEPTION 9/30/93) (4.57%) 4.97% 3.77%
LEHMAN MUNICIPAL BOND
10 YEAR INDEX TR (1.25%) 7.12% 5.08%
LIPPER OTHER STATES INTERMEDIATE
MUNICIPAL DEBT FUNDS AVERAGE (2.06%) 5.19% 3.68%
VIRGINIA
YEAR-BY-YEAR TOTAL RETURN (AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '95 5.80%
WORST QUARTER (OF PERIODS SHOWN) Q1 '94 -2.95%
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR SINCE
INCEPTION
VIRGINIA (INCEPTION 9/30/93) (4.56%) 4.78% 3.81%
LEHMAN MUNICIPAL BOND
10 YEAR INDEX TR (1.25%) 7.12% 5.08%
LIPPER VIRGINIA INTERMEDIATE
MUNICIPAL DEBT FUNDS AVERAGE (1.81%) 5.26% 3.56%
FEES AND EXPENSES
CALIFORNIA MARYLAND VIRGINIA
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM
YOUR INVESTMENT)
MAXIMUM SALES CHARGE (LOAD)
IMPOSED ON PURCHASES 2.75% 2.75% 2.75%
(AS A PERCENTAGE OF
OFFERING PRICE)
MAXIMUM DEFERRED SALES
CHARGE (LOAD)
(AS A PERCENTAGE OF PURCHASE NONE1 NONE1 NONE1
OR REDEMPTION PROCEEDS,
WHICHEVER IS LOWER)
ANNUAL FUND OPERATING
EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)2
MANAGEMENT FEES .70% .70% .70%
DISTRIBUTION AND SERVICE
(12B-1) FEES 0.00% 0.00% 0.00%
OTHER EXPENSES .21% .33% .34%
TOTAL ANNUAL FUND
OPERATING EXPENSES .91% 1.03% 1.04%
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 ARE BASED ON EXPENSES FOR EACH FUND'S MOST RECENT FISCAL YEAR.
MANAGEMENT FEES INCLUDE THE ADMINISTRATIVE FEE PAID BY THE FUND TO CALVERT
ADMINISTRATIVE SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR.
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 5YEARS 10 YEARS
CALIFORNIA $365 $557 $765 $1,364
MARYLAND $377 $594 $828 $1,500
VIRGINIA $378 $597 $833 $1,511
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 FUNDS' INVESTMENT
PRACTICES AND TECHNIQUES.
FOR EACH OF THE INVESTMENT PRACTICES LISTED, THE TABLE BELOW SHOWS EACH FUND'S
LIMITATIONS AS A PERCENTAGE OF ITS ASSETS AND THE PRINCIPAL TYPES OF RISK
INVOLVED. (SEE THE PAGES FOLLOWING THE TABLE FOR A DESCRIPTION OF
THE TYPES OF RISKS.) NUMBERS IN THIS TABLE SHOW MAXIMUM ALLOWABLE AMOUNT ONLY;
FOR ACTUAL USAGE, CONSULT THE FUND'S ANNUAL/SEMI-ANNUAL REPORTS.
KEY TO TABLE
@ PORTFOLIO CURRENTLY USES AS A PRINCIPAL INVESTMENT PRACTICE
0 PERMITTED, BUT NOT TYPICALLY USED AS A PRINCIPAL INVESTMENT PRACTICE
(% OF ASSETS ALLOWABLE, IF RESTRICTED)
8 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
CA MD VA
- ------------------------------------------ -------- -------- -------- ---
CONVENTIONAL SECURITIES:
INVESTMENT GRADE BONDS. BONDS RATED @ @ @
BBB/BAA OR HIGHER OR COMPARABLE UNRATED
BONDS. RISKS: INTEREST RATE, MARKET ,
POLITICAL AND CREDIT.
- ------------------------------------------ -------- -------- -------- ----
- ------------------------------------------ -------- -------- -------- ----
BELOW-INVESTMENT GRADE BONDS. BONDS 0 0 0
RATED BELOW BBB/BAA OR COMPARABLE 35N 35N 35N
UNRATED BONDS, ALSO KNOWN AS HIGH-YIELD OR
JUNK BONDS. THEY ARE SUBJECT TO GREATER
CREDIT RISK THAN INVESTMENT GRADE BONDS.
RISKS: CREDIT, MARKET, INTEREST RATE,
LIQUIDITY, POLITICAL AND INFORMATION.
- ------------------------------------------ -------- -------- -------- ----
- ------------------------------------------ -------- -------- -------- ----
UNRATED DEBT SECURITIES. BONDS THAT HAVE 0 0 0
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, POLITICAL AND
INFORMATION.
- ------------------------------------------ -------- -------- -------- ----
- ------------------------------------------ -------- -------- -------- ----
ILLIQUID SECURITIES. SECURITIES WHICH 0 0 0
CANNOT BE READILY SOLD BECAUSE THERE IS 15N 15N 15N
NO ACTIVE MARKET. RISKS: LIQUIDITY,
MARKET AND TRANSACTION.
- ------------------------------------------ -------- -------- -------- ----
UNLEVERAGED DERIVATIVE SECURITIES
- ------------------------------------------ -------- -------- -------- ----
ASSET-BACKED SECURITIES. SECURITIES ARE 0 0 0
ISSUED BY A SPECIAL PURPOSE ENTITY AND
ARE BACKED BY FIXED-INCOME OR OTHER
INTEREST BEARING ASSETS. RISKS: CREDIT,
INTEREST RATE, POLITICAL AND LIQUIDITY.
- ------------------------------------------ -------- -------- -------- ----
- ------------------------------------------ -------- -------- -------- ----
MORTGAGE-BACKED SECURITIES (TYPICALLY,
SINGLE-FAMILY MORTGAGE BONDS). 0 0 0
SECURITIES ARE BACKED BY POOLS OF
MORTGAGES, INCLUDING PASSTHROUGH
CERTIFICATES. RISKS: CREDIT, EXTENSION,
PREPAYMENT, LIQUIDITY, POLITICAL AND INTEREST RATE.
- ------------------------------------------ -------- -------- -------- -------
LEVERAGED DERIVATIVE INSTRUMENTS
- ------------------------------------------ -------- -------- -------- -------
OPTIONS ON SECURITIES AND INDICES. 0 0 0
CONTRACTS GIVING THE HOLDER THE RIGHT 5N 5N 5N
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 0 0 0
SELL A SPECIFIC AMOUNT OF A COMMODITY OR 5N 5N 5N
FINANCIAL INSTRUMENT AT A PARTICULAR
PRICE ON A SPECIFIC FUTURE DATE. RISKS:
INTEREST RATE, MARKET, LEVERAGE,
CORRELATION, LIQUIDITY AND OPPORTUNITY.
- ------------------------------------------ -------- -------- -------- -------
- ------------------------------------------ -------- -------- -------- -------
STRUCTURED SECURITIES. INVERSE FLOATING 0 0 0
RATE MUNICIPAL NOTES AND BONDS. THESE
SECURITIES TEND TO BE HIGHLY SENSITIVE
TO INTEREST RATE MOVEMENTS. RISKS:
CREDIT, INTEREST RATE, MARKET, LEVERAGE,
LIQUIDITY, POLITICAL AND CORRELATION.
- ------------------------------------------ -------- -------- -------- -------
- ------------------------------------------ -------- -------- -------- -------
TEMPORARY DEFENSIVE POSITIONS. 0 0 0
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 (FOR EXAMPLE,
REPURCHASE AGREEMENTS, BORROWING, PLEDGING, AND SECURITIES LENDING, AND WHEN-
ISSUED SECURITIES.) THESE POLICIES AND RESTRICTIONS ARE DISCUSSED IN THE
STATEMENT OF ADDITIONAL INFORMATION ("SAI").
TYPES OF INVESTMENT RISK
CORRELATION RISK
THIS OCCURS WHEN A FUND "HEDGES"- USES ONE INVESTMENT TO OFFSET THE FUND'S
POSITION IN ANOTHER. IF THE TWO INVESTMENTS DO NOT BEHAVE IN RELATION
TO ONE ANOTHER THE WAY FUND MANAGERS EXPECT THEM TO, THEN UNEXPECTED
OR UNDESIRED RESULTS MAY OCCUR. FOR EXAMPLE, A HEDGE MAY ELIMINATE OR REDUCE
GAINS AS WELL AS OFFSET LOSSES.
CREDIT RISK
THE RISK THAT THE ISSUER OF A SECURITY OR THE COUNTERPARTY TO AN INVESTMENT
CONTRACT MAY DEFAULT OR BECOME UNABLE TO PAY ITS OBLIGATIONS WHEN DUE.
EXTENSION RISK
THE RISK THAT AN UNEXPECTED RISE IN INTEREST RATES WILL EXTEND THE LIFE OF A
MORTGAGE-BACKED SECURITY BEYOND THE EXPECTED PREPAYMENT TIME, TYPICALLY
REDUCING THE SECURITY'S VALUE.
INFORMATION RISK
THE RISK THAT INFORMATION ABOUT A SECURITY OR ISSUER OR THE MARKET MIGHT NOT BE
AVAILABLE, COMPLETE, ACCURATE OR COMPARABLE.
INTEREST RATE RISK
THE RISK THAT CHANGES IN INTEREST RATES WILL ADVERSELY AFFECT THE VALUE OF AN
INVESTOR'S SECURITIES. WHEN INTEREST RATES RISE, THE VALUE OF FIXED-INCOME
SECURITIES WILL GENERALLY FALL. CONVERSELY, A DROP IN INTEREST
RATES WILL GENERALLY CAUSE AN INCREASE IN THE VALUE OF FIXED-INCOME SECURITIES.
LONGER-TERM SECURITIES AND ZERO COUPON/"STRIPPED" COUPON SECURITIES
("STRIPS") ARE SUBJECT TO GREATER INTEREST RATE RISK.
LEVERAGE RISK
THE RISK THAT OCCURS IN SOME SECURITIES OR TECHNIQUES WHICH TEND TO MAGNIFY THE
EFFECT OF SMALL CHANGES IN AN INDEX OR A MARKET. THIS CAN RESULT IN A
LOSS THAT EXCEEDS THE AMOUNT ACTUALLY INVESTED.
LIQUIDITY RISK
THE RISK THAT OCCURS WHEN INVESTMENTS CANNOT BE READILY SOLD. A FUND MAY HAVE TO
ACCEPT A LESS-THAN-DESIRABLE PRICE TO COMPLETE THE SALE OF AN ILLIQUIDSECURITY
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 (MUNICIPAL BONDS)
THE RISK THAT DIFFERENT TYPES OF MUNICIPAL BONDS MAY BE ADVERSELY AFFECTED BY
CHANGES OR PROPOSED CHANGES IN THE FEDERAL OR STATE TAX STRUCTURE,
ECONOMIC
AND REGULATORY DEVELOPMENT, JUDICIAL OPINIONS, AND OTHER FACTORS.
PREPAYMENT RISK
THE RISK THAT UNANTICIPATED PREPAYMENTS MAY OCCUR, REDUCING THE VALUE OF A
MORTGAGE-BACKED SECURITY. THE FUND MUST THEN REINVEST THOSE ASSETS AT THE
CURRENT,
MARKET RATE WHICH MAY BE LOWER.
TRANSACTION RISK
THE RISK THAT A FUND MAY BE DELAYED OR UNABLE TO SETTLE A TRANSACTION OR THAT
COMMISSIONS AND SETTLEMENT EXPENSES MAY BE HIGHER THAN USUAL.
ABOUT CALVERT GROUP
CALVERT ASSET MANAGEMENT COMPANY, INC. ("CAMCO"), 4550 MONTGOMERY AVENUE, SUITE
1000N, BETHESDA, MD 20814, IS THE FUNDS' INVESTMENT ADVISOR. CAMCO
PROVIDES THE FUNDS WITH INVESTMENT SUPERVISION AND MANAGEMENT AND OFFICE
SPACE, FURNISHES EXECUTIVE AND OTHER PERSONNEL TO THE FUNDS AND PAYS THE
SALARIES AND FEES OF ALL TRUSTEES/DIRECTORS WHO ARE AFFILIATED PERSONS
OF THE ADVISOR. IT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1976. CAMCO IS
THE INVESTMENT ADVISOR FOR OVER 25 MUTUAL FUND PORTFOLIOS, INCLUDING THE FIRST
AND LARGEST FAMILY OF SOCIALLY SCREENED FUNDS. AS OF DECEMBER 31, 1999, CAMCO
HAD OVER $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%.
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 A 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 AS A % OF AMOUNT
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 ON
WHICH A FINDER'S FEE HAS BEEN PAID 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.
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
THANTHE 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 IS
0.25%, BASED ON AVERAGE DAILY NET ASSETS OF EACH FUND; HOWEVER, NONE OF
THE FUNDS HAS PAID ANY DISTRIBUTION PLAN EXPENSES TO DATE.
NEXT STEP - ACCOUNT APPLICATION
COMPLETE AND SIGN AN APPLICATION FOR EACH NEW ACCOUNT. FOR MORE INFORMATION,
CONTACT YOUR BROKER OR OUR SHAREHOLDER SERVICES DEPARTMENT AT 800-368-
2745.
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 219544 P.O. BOX 219739
KANSAS, CITY MO KANSAS CITY, MO
64121-9544 64121-9739
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.
PORTFOLIO SECURITIES AND OTHER ASSETS ARE VALUED BASED ON MARKET QUOTATIONS. 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 RECEIVED 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.
- - YOUR PURCHASE WILL BE PROCESSED AT THE NAV NEXT CALCULATED AFTER YOUR ORDER IS
RECEIVED.
- - ALL OF YOUR PURCHASES MUST BE MADE IN US DOLLARS.
- - NO CASH WILL BE ACCEPTED.
- - NO CREDIT CARD OR CREDIT LOAN CHECKS WILL BE ACCEPTED.
- - EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES FOR A PERIOD
OF TIME OR TO REJECT ANY SPECIFIC PURCHASE ORDER.
- - AS A CONVENIENCE, CHECK PURCHASES RECEIVED AT CALVERT'S OFFICE IN BETHESDA,
MARYLAND WILL BE SENT BY OVERNIGHT DELIVERY TO THE TRANSFER AGENT AND
WILL BE CREDITED THE NEXT BUSINESS DAY UPON RECEIPT.
- - ANY CHECK PURCHASE RECEIVED WITHOUT AN INVESTMENT SLIP MAY CAUSE DELAYED
CREDITING.
- - IF YOUR CHECK DOES NOT CLEAR YOUR BANK, YOUR PURCHASE WILL BE CANCELED AND
YOu WILL BE CHARGED A $25 FEE PLUS ANY COSTS INCURRED.
- - 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
WWW.CALVERT.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.
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.
EXCHANGE REQUESTS WILL NOT BE ACCEPTED ON ANY DAY WHEN CALVERT IS OPEN BUT THE
FUND'S CUSTODIAN BANK IS CLOSED (E.G., COLUMBUS DAY AND VETERAN'S DAY);
THESE EXCHANGE REQUESTS WILL BE PROCESSED THE NEXT DAY THE FUND'S
CUSTODIAN BANK IS OPEN.
EACH FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR CANCEL
ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR
CONDITIONS OF PURCHASE OF SHARES OF ANY FUND; OR WITHDRAW ALL OR ANY PART
OF THE OFFERING MADE BY THIS PROSPECTUS. TO PROTECT THE INTERESTS OF
INVESTORS, EACH FUND AND THE DISTRIBUTOR MAY REJECT ANY ORDER CONSIDERED
MARKET-TIMING ACTIVITY.
EACH FUND RESERVES THE RIGHT TO TERMINATE OR MODIFY THE EXCHANGE PRIVILEGE WITH
60 DAYS' WRITTEN NOTICE.
ELECTRONIC DELIVERY OF PROSPECTUSES AND SHAREHOLDER REPORTS
YOU MAY REQUEST TO RECEIVE ELECTRONIC DELIVERY OF PROSPECTUSES AND ANNUAL AND
SEMI-ANNUAL REPORTS.
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 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
COME. 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 CALIFORNIA, AND 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
YOUHAVE 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.
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. THE 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 (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 MAILED OR WIRED 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.
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 219544, KANSAS CITY, MO 64121-9544
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.
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUNDS'
FINANCIAL PERFORMANCE FOR THE PAST FIVE (5) FISCAL YEARS. THE FUNDS'
FISCAL
YEAR END IS DECEMBER 31. 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.
CALIFORNIA PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31,DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $10.74 $10.63 $10.44
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .43 .45 .49
NET REALIZED AND UNREALIZED GAIN (LOSS) (.61) .12 .18
TOTAL FROM INVESTMENT OPERATIONS (.18) .57 .67
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.43) (.46) (.48)
TOTAL INCREASE (DECREASE)
IN NET ASSET VALUE (.61) .11 .19
NET ASSET VALUE, ENDING $10.13 $10.74 $10.63
TOTAL RETURN * (1.73%) 5.51% 6.61%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.07% 4.23% 4.64%
TOTAL EXPENSES .91% .90% .91%
EXPENSES BEFORE OFFSETS .91% .90% .91%
NET EXPENSES .89% .88% .88%
PORTFOLIO TURNOVER 11% 12% 48%
NET ASSETS, ENDING (IN THOUSANDS) $30,385 $36,963 $35,085
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $10.51 $9.81
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .48 .47
NET REALIZED AND UNREALIZED GAIN (LOSS) (.07) .69
TOTAL FROM INVESTMENT OPERATIONS .41 1.16
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.48) (.46)
NET REALIZED GAINS -- -
TOTAL DISTRIBUTIONS -- (.46)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE (.07) .70
NET ASSET VALUE, ENDING $10.44 $10.51
TOTAL RETURN * 4.04% 12.07%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.59% 4.59%
TOTAL EXPENSES .97% .91%
EXPENSES BEFORE OFFSETS .97% .91%
NET EXPENSES .94% .89%
PORTFOLIO TURNOVER 25% 47%
NET ASSETS, ENDING (IN THOUSANDS) $35,693 $34,424
MARYLAND PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31,DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $5.21 $5.18 $5.03
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .21 .21 .23
NET REALIZED AND UNREALIZED
GAIN (LOSS) (.30) .04 .15
TOTAL FROM INVESTMENT OPERATIONS (.09) .25 .38
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.21) (.22) (.23)
TOTAL INCREASE (DECREASE)
IN NET ASSET VALUE (.30) .03 .15
NET ASSET VALUE, ENDING $4.91 $5.21 $5.18
TOTAL RETURN * (1.82%) 4.88% 7.68%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.08% 4.13% 4.48%
TOTAL EXPENSES 1.03% .97% .99%
EXPENSES BEFORE OFFSETS 1.03% .97% .99%
NET EXPENSES .98% .93% .92%
PORTFOLIO TURNOVER 0% 24% 13%
NET ASSETS, ENDING (IN THOUSANDS) $10,711 $12,165 $12,437
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $5.06 $4.67
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .23 .24
NET REALIZED AND UNREALIZED GAIN
(LOSS) (.04) .39
TOTAL FROM INVESTMENT OPERATIONS .19 .63
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.22) (.24)
TOTAL INCREASE (DECREASE)
IN NET ASSET VALUE (.03) .39
NET ASSET VALUE, ENDING $5.03 $5.06
TOTAL RETURN * 3.96% 13.66%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.59% 4.87%
TOTAL EXPENSES 1.04% .94%
EXPENSES BEFORE OFFSETS 1.00% .51%
NET EXPENSES .94% .48%
PORTFOLIO TURNOVER 8% 11%
NET ASSETS, ENDING (IN THOUSANDS) $12,023 $9,411
VIRGINIA PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $5.25 $5.21 $5.10
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .20 .21 .22
NET REALIZED AND UNREALIZED
GAIN (LOSS) (.29) .04 .11
TOTAL FROM INVESTMENT OPERATIONS (.09) .25 .33
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.20) (.21) (.22)
TOTAL INCREASE (DECREASE)
IN NET ASSET VALUE (.29) .04 .11
NET ASSET VALUE, ENDING $4.96 $5.25 $5.21
TOTAL RETURN* (1.84%) 4.88% 6.71%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 3.85% 4.03% 4.38%
TOTAL EXPENSES 1.04% .97% .96%
EXPENSES BEFORE OFFSETS 1.04% .97% .96%
NET EXPENSES 1.00% .93% .88%
PORTFOLIO TURNOVER 12% 36% 8%
NET ASSETS, ENDING (IN THOUSANDS) $14,317 $14,439 $13,542
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $5.13 $4.74
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .22 .24
NET REALIZED AND UNREALIZED GAIN (LOSS) (.03) .39
TOTAL FROM INVESTMENT OPERATIONS .19 .63
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.22) (.24)
TOTAL INCREASE (DECREASE)
IN NET ASSET VALUE (.03) .39
NET ASSET VALUE, ENDING $5.10 $5.13
TOTAL RETURN* 3.82% 13.54%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.35% 4.86%
TOTAL EXPENSES 1.03% .92%
EXPENSES BEFORE OFFSETS 1.00% .54%
NET EXPENSES .92% .51%
PORTFOLIO TURNOVER 4% 11%
NET ASSETS, ENDING (IN THOUSANDS) $12,618 $7,295
*TOTAL RETURN DOES NOT REFLECT DEDUCTION OF CLASS A FRONT-END SALES CHARGE.
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.
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, 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.
* 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.
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 ALVERT 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 60 DAYS DECIDE TO REINVEST IN THE SAME
FUND, YOU MAY DO SO AT THE NET ASSET VALUE NEXT COMPUTED AFTER THE
REINVESTMENT ORDER IS RECEIVED, WITHOUT A SALES CHARGE. YOU MAY USE THE
REINSTATEMENT PRIVILEGE ONLY ONCE. THE FUNDS RESERVE THE RIGHT TO MODIFY OR
ELIMINATE THIS PRIVILEGE.
EXHIBIT B
SERVICE FEES AND ARRANGEMENTS WITH DEALERS
CALVERT DISTRIBUTORS, INC., THE FUND'S UNDERWRITER, PAYS DEALERS A COMMISSION,
OR REALLOWANCE (EXPRESSED AS A PERCENTAGE OF THE OFFERING PRICE) 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
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, FROM THEIR OWN
RESOURCES,
CERTAIN BROKER-DEALERS AND/OR OTHER PERSONS, FOR THE SALE AND
DISTRIBUTION
OF THE SECURITIES OR FOR SERVICES TO THE FUND. THESE AMOUNTS MAY BE
SIGNIFICANT.
PAYMENTS MAY INCLUDE ADDITIONAL COMPENSATION 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, 0.80% ON $2 TO $3 MILLION,
0.50% ON $3 TO $50 MILLION, .25% ON $50 TO $100 MILLION, AND 0.15%
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.
TO OPEN AN ACCOUNT:
800-368-2748
PERFORMANCE AND PRICES:
WWW.CALVERT.COM
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, MD 20814
REGISTERED, CERTIFIED OR
OVERNIGHT MAIL:
CALVERT GROUP
C/O NFDS
330 WEST 9TH STREET
KANSAS CITY, MO 64105
CALVERT GROUP WEB-SITE
WWW.CALVERT.COM
PRINCIPAL UNDERWRITER
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
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 EACH 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 SAIS, REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING YOUR FINANCIAL
PROFESSIONAL, OR THE FUNDS AT:
CALVERT GROUP, LTD.
4550 MONTGOMERY AVE.
SUITE 1000N
BETHESDA, MD 20814
TELEPHONE: 1-800-368-2745
CALVERT GROUP WEB-SITE
WWW.CALVERT.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 SECTION OF THE
COMMISSION, WASHINGTON, D.C. 20549-0102, TELEPHONE: 202-942-8090.
- -FREE FROM THE COMMISSION'S INTERNET WEBSITE AT HTTP://WWW.SEC.GOV.
INVESTMENT COMPANY ACT FILE: NO. 811-6525 (CALVERT MUNICIPAL FUND, INC.)
APRIL 30, 2000
CALVERT TAX-FREE RESERVES
MONEY MARKET PORTFOLIO
LIMITED-TERM PORTFOLIO
LONG-TERM PORTFOLIO
CALVERT NATIONAL MUNICIPAL INTERMEDIATE FUND
<PAGE>
PROSPECTUS
APRIL 30, 2000
CALVERT TAX-FREE RESERVES FUND
CTFR MONEY MARKET PORTFOLIO
CTFR LIMITED-TERM PORTFOLIO
CTFR LONG-TERM PORTFOLIO
CALVERT NATIONAL MUNICIPAL INTERMEDIATE FUND
ABOUT THE FUND
2 INVESTMENT OBJECTIVE, STRATEGY, PAST PERFORMANCE
11 FEES AND EXPENSES
13 INVESTMENT PRACTICES AND RISKS
ABOUT YOUR INVESTMENT
18 CALVERT GROUP AND THE PORTFOLIO MANAGEMENT TEAM
18 ADVISORY FEES
19 HOW TO BUY SHARES (SALES CHARGES, ETC.)
22 IMPORTANT - HOW SHARES ARE PRICED
23 OTHER CALVERT GROUP FEATURES
(EXCHANGES, MINIMUM ACCOUNT BALANCE, ETC.)
26 DIVIDENDS, CAPITAL GAINS AND TAXES
28 HOW TO SELL SHARES
30 FINANCIAL HIGHLIGHTS
35 EXHIBIT A - REDUCED SALES CHARGES
37 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 UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<PAGE>
CTFR MONEY MARKET
OBJECTIVE
CTFR MONEY MARKET (THE "FUND") 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 THE QUALITY AND MATURITY
CHARACTERISTICS OF THE FUND.
PRINCIPAL INVESTMENT STRATEGIES AND RELATED RISKS
CTFR MONEY MARKET INVESTS IN FIXED AND FLOATING RATE MUNICIPAL BONDS AND NOTES,
VARIABLE RATE DEMAND NOTES, TAX-EXEMPT COMMERCIAL PAPER, AND OTHER HIGH
QUALITY, SHORT-TERM MUNICIPAL OBLIGATIONS. THE ADVISOR LOOKS FOR SECURITIES
WITH STRONG CREDIT QUALITY 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. ALL INVESTMENTS MUST COMPLY
WITH THE SEC MONEY MARKET FUND REQUIREMENTS.
MANY OF THE INSTRUMENTS HELD BY THE FUND ARE SUPPORTED BY A CREDIT FACILITY (TO
IMPROVE THE CREDIT QUALITY) OR LIQUIDITY FACILITY (TO SHORTEN THE
MATURITY) PROVIDED BY BANKS; THUS, THE FUND HAS AN EXPOSURE TO THE BANKING
INDUSTRY.
THE FUND MAY PURCHASE SECURITIES THAT HAVE NOT BEEN RATED BY A RATING AGENCY, SO
LONG AS THE ADVISOR DETERMINES THEY ARE OF COMPARABLE CREDIT QUALITY TO
RATED SECURITIES PERMISSIBLE FOR THE FUND.
UNRATED AND PRIVATELY PLACED SECURITIES MAY BE LESS LIQUID THAN THOSE THAT ARE
RATED OR HAVE AN ACTIVE TRADING MARKET.
CTFR MONEY MARKET'S YIELD WILL CHANGE IN RESPONSE TO MARKET INTEREST RATES. IN
GENERAL, AS MARKET RATES GO UP SO WILL THE FUND'S YIELD, AND VICE VERSA.
ALTHOUGH THE FUND TRIES TO KEEP THE VALUE OF ITS SHARES CONSTANT AT $1.00
PER SHARE, EXTREME CHANGES IN MARKET RATES, AND OR SUDDEN CREDIT
DETERIORATION OF A HOLDING COULD CAUSE THE VALUE TO DECREASE. THE FUND
LIMITS THE AMOUNT IT INVESTS IN ANY ONE ISSUER TO TRY TO LESSEN ITS
EXPOSURE.
IN ADDITION TO INTEREST RATE RISK AND CREDIT RISK, DIFFERENT TYPES OF MUNICIPAL
BONDS MAY BE AFFECTED DIFFERENTLY, BASED ON MANY FACTORS, INCLUDING
ECONOMIC AND REGULATORY DEVELOPMENTS, CHANGES OR PROPOSED CHANGES IN THE
FEDERAL AND STATE TAX STRUCTURE, DEREGULATION, AND COURT RULINGS, AMONG
OTHER FACTORS.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00
PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUND.
<PAGE>
CTFR MONEY MARKET PERFORMANCE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S CLASS O ANNUAL RETURNS AND ITS
LONG-TERM PERFORMANCE. THE CHART AND TABLE PROVIDE SOME INDICATION OF THE
RISKS OF INVESTING IN THE FUND. THE CHART SHOWS HOW THE PERFORMANCE HAS
VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE FUND'S RETURNS OVER TIME TO THE
LIPPER TAX-EXEMPT MONEY MARKET INDEX, A COMPOSITE INDEX OF THE ANNUAL RETURN
OF MUTUAL FUNDS THAT HAVE AN INVESTMENT GOAL SIMILAR TO THAT OF THE FUND.
THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE HOW THE FUND WILL
PERFORM IN THE FUTURE.
CTFR MONEY MARKET
YEAR-BY-YEAR TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q4 '90 1.53%
WORST QUARTER (OF PERIODS SHOWN) Q1 '93 0.56%
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
1 YEAR 5 YEAR 10 YEAR
CTFR MONEY MARKET (CLASS O) 3.04% 3.40% 3.63%
LIPPER TAX-EXEMPT
MONEY MARKET INDEX 2.81% 3.13% 3.27%
FOR CURRENT YIELD INFORMATION CALL 800-368-2745, OR VISIT CALVERT GROUP'S
WEBSITE AT WWW.CALVERT.COM
<PAGE>
CTFR LIMITED-TERM
OBJECTIVE
CTFR LIMITED-TERM (THE "FUND") 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 THE QUALITY AND MATURITY
CHARACTERISTICS OF THE FUND.
PRINCIPAL INVESTMENT STRATEGIES
WHILE SEEKING TO ACHIEVE ITS OBJECTIVE, CTFR LIMITED-TERM STRIVES TO MINIMIZE
VOLATILITY IN THE NET ASSET VALUE (NAV) PER SHARE. THE ADVISOR INTENDS
UNDER NORMAL CIRCUMSTANCES TO MAINTAIN AN AVERAGE PORTFOLIO MATURITY OF
THREE YEARS OR LESS. THE FUND TYPICALLY INVESTS AT LEAST 85% OF ITS NET ASSETS
IN INVESTMENT GRADE DEBT SECURITIES. THE ADVISOR LOOKS FOR SECURITIES
WITH STRONG CREDIT QUALITY 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 FUND MAY INVEST IN A VARIETY OF TAX-EXEMPT OBLIGATIONS INCLUDING
TAX-SUPPORTED DEBT (GENERAL OBLIGATION BONDS AND NOTES 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, TAX AND REVENUE
ANTICIPATION NOTES AND BOND ANTICIPATION NOTES, MUNICIPAL LEASES, AND
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.
MANY OF THE INSTRUMENTS HELD BY THE FUND ARE SUPPORTED BY A CREDIT FACILITY (TO
IMPROVE THE CREDIT QUALITY) OR LIQUIDITY FACILITY (TO SHORTEN THE
MATURITY) PROVIDED BY BANKS; THUS, THE FUND HAS AN EXPOSURE TO THE BANKING
INDUSTRY.
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM, MOST LIKELY FOR ANY OF THE FOLLOWING REASONS:
- - THE BOND MARKET GOES DOWN
- - THE INDIVIDUAL BONDS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED, DUE TO
CREDIT, POLITICAL OR OTHER RISKS
- - THE ADVISOR'S FORECAST AS TO INTEREST RATES IS NOT CORRECT. INCREASES IN
MARKET INTEREST RATES CAN CAUSE THE
PRICE OF A DEBT SECURITY TO DECREASE.
- - THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE BOND MARKET DOES NOT
PERFORM AS WELL AS EXPECTED
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
<PAGE>
CTFR LIMITED-TERM PERFORMANCE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. THE CHART AND TABLE PROVIDE SOME INDICATION OF THE RISKS OF
INVESTING IN THE FUND. THE CHART SHOWS HOW THE PERFORMANCE HAS VARIED FROM
YEAR TO YEAR. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER TIME TO THAT OF
THE LEHMAN MUNICIPAL BOND INDEX. THIS IS A WIDELY RECOGNIZED, UNMANAGED
INDEX OF BOND PRICES. IT ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE
LIPPER SHORT MUNICIPAL DEBT FUND INDEX, A COMPOSITE INDEX OF THE ANNUAL
RETURN OF MUTUAL FUNDS THAT HAVE AN INVESTMENT GOAL SIMILAR TO THAT OF
THE FUND. THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE HOW
THE 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.
CTFR LIMITED-TERM
YEAR-BY-YEAR TOTAL RETURN (AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q4 '90 1.98%
WORST QUARTER (OF PERIODS SHOWN) Q1 '94 0.45%
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR 10 YEAR
CTFR LIMITED-TERM 1.81% 3.84% 4.35%
LEHMAN MUNICIPAL BOND INDEX TR (2.06%) 6.91% 6.89%
LIPPER SHORT MUNICIPAL DEBT
FUND INDEX 2.07% 4.38% N/A
<PAGE>
CMF INTERMEDIATE
OBJECTIVE
CALVERT NATIONAL MUNICIPAL INTERMEDIATE FUND (THE "FUND") 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.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND TYPICALLY INVESTS AT LEAST 65% OF ITS NET ASSETS IN INVESTMENT GRADE
DEBT SECURITIES. THE ADVISOR LOOKS FOR SECURITIES WITH STRONG CREDIT
QUALITY THAT ARE ATTRACTIVELY PRICED. THE AVERAGE DOLLAR-WEIGHTED MATURITY
WILL BE BETWEEN 3 AND 10 YEARS.
TYPES OF INVESTMENTS
THE FUND MAY INVEST IN TAX-EXEMPT OBLIGATIONS, SUCH AS 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, AND CERTIFICATES OF PARTICIPATION
IN SUCH INVESTMENTS.
UNDER NORMAL MARKET CONDITIONS, THE FUND WILL INVEST AT LEAST 65% OF ITS TOTAL
ASSETS IN MUNICIPAL OBLIGATIONS WHOSE INTEREST IS EXEMPT FROM FEDERAL 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 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>
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM, MOST LIKELY FOR ANY OF THE FOLLOWING REASONS:
- - THE BOND MARKET GOES DOWN
- - THE INDIVIDUAL BONDS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED, DUE TO
CREDIT, POLITICAL OR OTHER RISKS
- - THE ADVISOR'S FORECAST AS TO INTEREST RATES IS NOT CORRECT. INCREASES IN
MARKET INTEREST RATES CAN CAUSE THE PRICE OF A DEBT SECURITY TO
DECREASE.
- - THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE BOND MARKET DOES NOT
PERFORM AS WELL AS EXPECTED
- - THE FUND IS NON-DIVERSIFIED. COMPARED TO OTHER FUNDS, THE FUND 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 FUND.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
CMF INTERMEDIATE PERFORMANCE
THE FOLLOWING BAR CHART AND TABLE SHOW THE FUND'S ANNUAL RETURNS AND ITS
LONG-TERM PERFORMANCE. THE INFORMATION PROVIDES SOME INDICATION OF THE RISKS
OF INVESTING IN THE FUND. THE CHART SHOWS HOW THE PERFORMANCE OF THE SHARES
HAS VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE 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 INTERMEDIATE MUNICIPAL FUND INDEX, A
COMPOSITE OF THE ANNUAL RETURN OF MUTUAL FUNDS THAT HAVE AN INVESTMENT GOAL
SIMILAR TO THAT OF THE FUND. THE FUND'S PAST PERFORMANCE DOES NOT
NECESSARILY INDICATE HOW THE 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 OR
AVERAGE USED FOR COMPARISON IN THE TABLE.
<PAGE>
CMF INTERMEDIATE
YEAR-BY-YEAR TOTAL RETURN (AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '95 5.19%
WORST QUARTER (OF PERIODS SHOWN) Q1 '94 (2.40%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR SINCE
INCEPTION
CMF INTERMEDIATE (INCEPTION 9/30/92) (4.74%) 4.99% 4.75%
LEHMAN MUNICIPAL BOND
10 YEAR INDEX TR (1.25%) 7.12% 7.10%
LIPPER INTERMEDIATE MUNICIPAL
FUND INDEX (1.37%) 5.59% 5.90%
<PAGE>
CTFR LONG-TERM
OBJECTIVE
CTFR LONG-TERM (THE "FUND") 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 THE QUALITY AND MATURITY
CHARACTERISTICS OF THE FUND.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND TYPICALLY INVESTS AT LEAST 65% OF ITS NET ASSETS IN INVESTMENT GRADE
DEBT SECURITIES. THE ADVISOR LOOKS FOR SECURITIES WITH STRONG CREDIT QUALITY
THAT ARE ATTRACTIVELY PRICED IN VARIOUS MATURITY RANGES. TO THE EXTENT IT
MAY DO SO CONSISTENT WITH ITS INVESTMENT OBJECTIVE, THE FUND FOLLOWS A STRATEGY
TO ALSO SEEK TO PROVIDE A COMPETITIVE RATE OF TOTAL RETURN. THERE IS NO
LIMIT ON THE FUND'S AVERAGE PORTFOLIO MATURITY.
THE FUND MAY INVEST IN A VARIETY OF TAX-EXEMPT OBLIGATIONS INCLUDING
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, AND
CERTIFICATES OF PARTICIPATION IN SUCH INVESTMENTS.
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM, MOST LIKELY FOR ANY OF THE FOLLOWING REASONS:
- - THE BOND MARKET GOES DOWN
- - THE INDIVIDUAL BONDS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED, DUE TO
CREDIT, POLITICAL OR OTHER RISKS
- - THE ADVISOR'S FORECAST AS TO INTEREST RATES IS NOT CORRECT. INCREASES IN
MARKET INTEREST RATES CAN CAUSE THE PRICE OF A DEBT SECURITY TO
DECREASE.
- - THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE BOND MARKET DOES NOT
PERFORM AS WELL AS EXPECTED
- - THE FUND IS NON-DIVERSIFIED. COMPARED TO OTHER FUNDS, THE FUND 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 FUND.
AN INVESTMENT IN THE FUND IS NOT A BANK DEPOSIT AND IS NOT INSURED OR GUARANTEED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
<PAGE>
CTFR LONG-TERM PERFORMANCE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. THE CHART AND TABLE PROVIDE SOME INDICATION OF THE RISKS OF
INVESTING IN THE FUND. THE CHART SHOWS HOW THE PERFORMANCE OF THE SHARES
HAS VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE FUND'S
PERFORMANCE OVER TIME TO THAT OF THE LEHMAN MUNICIPAL BOND INDEX. THIS IS A
WIDELY RECOGNIZED, UNMANAGED INDEX OF BOND PRICES. IT ALSO SHOWS THE FUND'S
RETURNS COMPARED TO THE LIPPER GENERAL MUNICIPAL DEBT INDEX, A COMPOSITE
INDEX OF THE ANNUAL RETURN OF MUTUAL FUNDS THAT HAVE AN INVESTMENT GOAL
SIMILAR TO THAT OF THE FUND. THE FUND'S PAST PERFORMANCE DOES NOT
NECESSARILY INDICATE HOW THE 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.
CTFR LONG-TERM
YEAR-BY-YEAR TOTAL RETURN (AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '95 5.99%
WORST QUARTER (OF PERIODS SHOWN) Q1 '94 (3.59%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12.31.99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR 10 YEAR
CTFR LONG-TERM (8.07%) 4.55% 5.50%
LEHMAN MUNICIPAL BOND INDEX TR (2.06%) 6.91% 6.89%
LIPPER GENERAL MUNICIPAL DEBT INDEX (4.07%) 6.14% 6.29%
<PAGE>
FEES AND EXPENSES
MONEY LIMITED- INTER- LONG-
MARKET TERM MEDIATE TERM
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM
YOUR INVESTMENT)
MAXIMUM SALES CHARGE (LOAD)
IMPOSED ON PURCHASES NONE 1.00% 2.75% 3.75%
(AS A PERCENTAGE OF
OFFERING PRICE)
MAXIMUM DEFERRED SALES
CHARGE (LOAD)
(AS A PERCENTAGE OF PURCHASE NONE NONE1 NONE2 NONE2
OR REDEMPTION PROCEEDS,
WHICHEVER IS LOWER)
MAXIMUM ACCOUNT FEE 3 NONE NONE NONE
ANNUAL FUND OPERATING
EXPENSES (EXPENSES THAT ARE
DEDUCTED FROM FUND ASSETS)4
MANAGEMENT FEES .46% .60% .70% .60%
DISTRIBUTION AND SERVICE
(12B-1) FEES NONE NONE .00% .09%
OTHER EXPENSES .19% .11% .23% .19%
TOTAL ANNUAL FUND
OPERATING EXPENSES .65% .71% .93% .88%
1 PURCHASES OF LIMITED-TERM SHARES FOR ACCOUNTS WITH $250,000 OR MORE ARE NOT
SUBJECT TO FRONT-END SALES CHARGES, BUT MAY BE SUBJECT TO A 0.10%
CONTINGENT DEFERRED SALES CHARGE ON SHARES REDEEMED WITHIN 9 MONTHS OF
PURCHASE. (SEE "HOW TO BUY SHARES")
2 PURCHASES OF INTERMEDIATE AND LONG-TERM 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")
3 FOR EACH ACCOUNT WITH A BALANCE OF LESS THAN $1,000, THE FUND CHARGES A
MONTHLY ACCOUNT MAINTENANCE FEE OF $3.
4 EXPENSES ARE BASED ON THE FUND'S MOST RECENT FISCAL YEAR. MANAGEMENT FEES
INCLUDE THE ADMINISTRATIVE FEE PAID BY THE FUND TO CALVERT ADMINISTRATIVE
SERVICES COMPANY, AN AFFILIATE OF THE ADVISOR, CALVERT ASSET MANAGEMENT
COMPANY, INC. ("CAMCO").
<PAGE>
EXAMPLE
THIS EXAMPLE IS INTENDED TO HELP YOU COMPARE THE COST OF INVESTING IN A FUND
WITH THE COST OF INVESTING IN OTHER MUTUAL FUNDS. THE EXAMPLE ASSUMES
THAT:
- - YOU INVEST $10,000 IN THE 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:
PORTFOLIO NUMBER OF YEARS INVESTMENT IS HELD
1 YEAR 3 YEARS 5 YEARS 10YEARS
MONEY MARKET $66 $208 $362 $810
LIMITED-TERM $172 $325 $491 $974
INTERMEDIATE $367 $563 $776 $1,387
LONG-TERM $461 $645 $844 $1,419
<PAGE>
INVESTMENT PRACTICES AND RISKS
THE MOST CONCISE DESCRIPTION OF THE PRINCIPAL INVESTMENT STRATEGIES AND
ASSOCIATED RISKS IS UNDER THEEARLIER SUMMARY FOR EACH FUND. LIMITED
TERM, INTERMEDIATE, AND LONG-TERM 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 FUND'S INVESTMENT PRACTICES AND TECHNIQUES.
FOR EACH OF THE INVESTMENT PRACTICES LISTED, THE TABLE BELOW SHOWS THE
LIMITATIONS FOR LIMITED -TERM, INTERMEDIATE AND LONG-TERM AS A PERCENTAGE OF
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 ANNUAL/SEMI
ANNUAL REPORTS.
KEY TO TABLE
J FUND CURRENTLY USES AS A PRINCIPAL INVESTMENT PRACTICE
Q PERMITTED, BUT NOT TYPICALLY USED AS A PRINCIPAL INVESTMENT PRACTICE
(% OF ASSETS ALLOWABLE, IF RESTRICTED)
8 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
INVESTMENT PRACTICES
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.
LTD.-TERM INTER-MEDIATE LONG-TERM
Q Q Q
<PAGE>
INVESTMENT PRACTICES AND RISKS (CONT'D)
INVESTMENT PRACTICES
CONVENTIONAL SECURITIES
INVESTMENT GRADE BONDS. BONDS RATED BBB/BAA OR HIGHER OR COMPARABLE UNRATED
BONDS. RISKS: INTEREST RATE, MARKET, POLITICAL AND CREDIT.
J J J
BELOW-INVESTMENT GRADE BONDS. BONDS RATED BELOW BBB/BAA OR COMPARABLE 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, POLITICAL AND INFORMATION.
Q Q Q
15N 35N 35N
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, POLITICAL AND
INFORMATION.
Q Q Q
ILLIQUID SECURITIES. SECURITIES WHICH CANNOT BE READILY SOLD BECAUSE THERE IS NO
ACTIVE MARKET.
RISKS: LIQUIDITY, MARKET AND TRANSACTION.
Q Q Q
15N 15N 15N
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, POLITICAL AND LIQUIDITY.
Q Q Q
MORTGAGE-BACKED SECURITIES. (TYPICALLY, SINGLE-FAMILY MORTGAGE BONDS).
SECURITIES ARE BACKED BY POOLS OF MORTGAGES, INCLUDING PASSTHROUGH
CERTIFICATES. RISKS: CREDIT, EXTENSION, PREPAYMENT, LIQUIDITY, POLITICAL AND
INTEREST RATE.
Q Q Q
<PAGE>
INVESTMENT PRACTICES AND RISKS (CONT'D)
INVESTMENT PRACTICES
LEVERAGED DERIVATIVE INSTRUMENTS
OPTIONS ON SECURITIES AND INDICES. 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 FUNDS MUST BE COVERED. RISKS: INTEREST
RATE, MARKET, LEVERAGE, CORRELATION, LIQUIDITY, CREDIT AND OPPORTUNITY.
NA Q Q
5N 5N
FUTURES CONTRACT. AGREEMENT TO BUY OR 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.
NA Q Q
5N 5N
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, POLITICAL AND CORRELATION.
Q Q Q
THE FUNDS HAVE ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS (FOR EXAMPLE,
REPURCHASE AGREEMENTS, REVERSE REPURCHASE AGREEMENTS, BORROWING, PLEDGING, AND
SECURITIES LENDING, AND WHEN-ISSUED SECURITIES.) THESE POLICIES AND
RESTRICTIONS ARE DISCUSSED IN THE STATEMENT OF ADDITIONAL INFORMATION ("SAI.")
TYPES OF INVESTMENT RISK
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.
<PAGE>
EXTENSION RISK
THE RISK THAT AN UNEXPECTED RISE IN INTEREST RATES WILL EXTEND THE LIFE OF A
MORTGAGE-BACKED SECURITY BEYOND THE EXPECTED PREPAYMENT TIME, TYPICALLY
REDUCING THE SECURITY'S VALUE.
INFORMATION RISK
THE RISK THAT INFORMATION ABOUT A SECURITY OR ISSUER OR THE MARKET MIGHT NOT BE
AVAILABLE, COMPLETE, ACCURATE OR COMPARABLE.
INTEREST RATE RISK
THE RISK THAT CHANGES IN INTEREST RATES WILL ADVERSELY AFFECT THE VALUE OF AN
INVESTOR'S SECURITIES. WHEN INTEREST RATES RISE, THE VALUE OF FIXED-INCOME
SECURITIES WILL GENERALLY FALL. CONVERSELY, A DROP IN INTEREST RATES WILL
GENERALLY CAUSE AN INCREASE IN THE VALUE OF FIXED-INCOME SECURITIES. LONGER-
TERM SECURITIES AND ZERO COUPON/"STRIPPED" COUPON SECURITIES ("STRIPS") ARE
SUBJECT TO GREATER INTEREST RATE RISK.
LEVERAGE RISK
THE RISK THAT OCCURS IN SOME SECURITIES OR TECHNIQUES WHICH TEND TO MAGNIFY THE
EFFECT OF SMALL CHANGES
IN AN INDEX OR A MARKET. THIS CAN RESULT IN A LOSS THAT EXCEEDS THE AMOUNT
ACTUALLY INVESTED.
LIQUIDITY RISK
THE RISK THAT OCCURS WHEN INVESTMENTS CANNOT BE READILY SOLD. A FUND MAY HAVE TO
ACCEPT A LESS-THAN-DESIRABLE PRICE TO COMPLETE THE SALE OF AN ILLIQUID
SECURITY OR MAY NOT BE ABLE TO SELL IT AT ALL.
MANAGEMENT RISK
THE RISK THAT A FUND'S PORTFOLIO MANAGEMENT PRACTICES MIGHT NOT WORK TO ACHIEVE
THEIR DESIRED RESULT.
MARKET RISK
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 (MUNICIPAL BONDS)
THE RISK THAT DIFFERENT TYPES OF MUNICIPAL BONDS MAY BE ADVERSELY AFFECTED BY
CHANGES OR PROPOSED CHANGES IN THE FEDERAL OR STATE TAX STRUCTURE,
ECONOMIC AND REGULATORY DEVELOPMENT, JUDICIAL OPINIONS, AND OTHER FACTORS.
<PAGE>
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>
CALVERT GROUP AND THE PORTFOLIO MANAGEMENT TEAM
CALVERT ASSET MANAGEMENT COMPANY, INC. (4550 MONTGOMERY AVENUE, SUITE 1000N,
BETHESDA, MD 20814) ("CAMCO") IS THE FUNDS' INVESTMENT ADVISOR. CAMCO
PROVIDES THE FUNDS WITH INVESTMENT SUPERVISION AND MANAGEMENT AND OFFICE
SPACE; FURNISHES EXECUTIVE AND OTHER PERSONNEL TO THE FUNDS, AND PAYS THE
SALARIES AND FEES OF ALL TRUSTEES/DIRECTORS WHO ARE AFFILIATED PERSONS
OF THE ADVISOR. IT HAS BEEN MANAGING MUTUAL FUNDS SINCE 1976. CAMCO IS
THE INVESTMENT ADVISOR FOR OVER 25 MUTUAL FUND PORTFOLIOS, INCLUDING THE FIRST
AND LARGEST FAMILY OF SOCIALLY SCREENED FUNDS. AS OF DECEMBER 31, 1999,
CAMCO HAD OVER $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 A COMMITTEE OF THE
ADVISOR'S FIXED-INCOME PORTFOLIO MANAGERS. RENO J. MARTINI, SENIOR VICE
PRESIDENT AND CHIEF INVESTMENT OFFICER OF CAMCO, HEADS THIS TEAM AND
OVERSEES THE 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.
ADVISORY FEES
THE FOLLOWING TABLE SHOWS THE AGGREGATE ANNUAL ADVISORY FEE PAID TO CAMCO BY
EACH FUND FOR THE MOST RECENT FISCAL YEAR AS A PERCENTAGE OF THAT
FUND'S AVERAGE DAILY NET ASSETS.
FUND ADVISORY FEE
MONEY MARKET .20%
LIMITED-TERM .60%
INTERMEDIATE .60%
LONG-TERM .60%
<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 GIFTS/TRANSFERS TO MINOR ACCOUNTS, AND SEVERAL
OTHER TYPES OF ACCOUNTS.
MONEY MARKET OFFERS THREE CLASSES OF SHARES, ALL OF WHICH ARE SOLD WITHOUT A
SALES CHARGE. ONLY MONEY MARKET CLASS O IS OFFERED BY THIS PROSPECTUS.
SHARES OF LIMITED-TERM, INTERMEDIATE AND LONG-TERM ARE SOLD WITH A FRONT-END
SALES CHARGE.
INVESTORS PAY A SALES CHARGE AT THE TIME OF EACH PURCHASE. THIS TABLE SHOWS THE
CHARGES BOTH AS A PERCENTAGE OF OFFERING PRICE AND AS A PERCENTAGE OF THE
AMOUNT YOU INVEST. THE TERM "OFFERING PRICE" INCLUDES THE FRONT-END SALES
CHARGE. IF YOU INVEST MORE, THE SALES CHARGE WILL BE LOWER. FOR EXAMPLE,
IF YOU INVEST MORE THAN $50,000 IN LIMITED-TERM, OR IF YOUR CUMULATIVE PURCHASES
OR THE VALUE IN YOUR ACCOUNT IS MORE THAN $50,000,4 THEN THE SALES
CHARGE IS REDUCED TO .75%.
LIMITED-TERM
SALES CHARGE AS % OF AMOUNT
YOUR INVESTMENT % OF OFFERING PRICE INVESTED
LESS THAN $50,000 1.00% 1.01%
$50,000 BUT LESS THAN $100,000 0.75% 0.76%
$100,000 BUT LESS THAN $250,000 0.50% 0.50%
$250,000 AND OVER NONE5 NONE5
INTERMEDIATE
SALES CHARGE AS % OF AMOUNT
YOUR INVESTMENT % 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 NONE6 NONE6
<PAGE>
LONG-TERM
SALES CHARGE AS % OF AMOUNT
YOUR INVESTMENT % OF OFFERING PRICE INVESTED
LESS THAN $50,000 3.75% 3.90%
$50,000 BUT LESS THAN $100,000 3.00% 3.09%
$100,000 BUT LESS THAN $250,000 2.25% 2.30%
$250,000 BUT LESS THAN $500,000 1.75% 1.78%
$500,000 BUT LESS THAN $1,000,000 1.00% 1.01%
$1,000,000 AND OVER NONE6 NONE6
4 THIS IS CALLED "RIGHTS OF ACCUMULATION." THE SALES CHARGE IS CALCULATED BY
TAKING INTO ACCOUNT NOT ONLY THE DOLLAR AMOUNT OF THE NEW PURCHASE OF
SHARES, BUT ALSO THE HIGHER OF COST OR CURRENT VALUE OF SHARES YOU HAVE
PREVIOUSLY PURCHASED IN CALVERT GROUP FUNDS THAT IMPOSE SALES CHARGES. THIS
AUTOMATICALLY APPLIES TO YOUR ACCOUNT FOR EACH NEW PURCHASE OF SHARES.
5 PURCHASES OF LIMITED-TERM SHARES AT NAV FOR ACCOUNTS WITH $250,000 OR MORE ON
WHICH A FINDER'S FEE HAS
BEEN PAID ARE SUBJECT TO A NINE MONTH CONTINGENT DEFERRED SALES CHARGE ("CDSC")
OF 0.10%. SEE THE
"CALCULATION OF CONTINGENT DEFERRED SALES CHARGE AND WAIVER OF SALES CHARGES."
6 PURCHASES OF INTERMEDIATE AND CTFR LONG-TERM SHARES AT NAV FOR ACCOUNTS WITH
$1,000,000 OR MORE ON WHICH A FINDER'S FEE HAS BEEN PAID ARE SUBJECT TO A
ONE YEAR CDSC OF 1.00%. SEE THE "CALCULATION OF CONTINGENT DEFERRED SALES
CHARGE."
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.
CALCULATION OF CONTINGENT DEFERRED SALES CHARGE
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.
<PAGE>
DISTRIBUTION AND SERVICE FEES
INTERMEDIATE AND LONG-TERM HAVE EACH ADOPTED A PLAN UNDER RULE 12B-1 OF THE
INVESTMENT COMPANY ACT OF 1940 THAT ALLOWS THE 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 TABLE BELOW SHOWS THE MAXIMUM ANNUAL PERCENTAGE PAYABLE UNDER THE
DISTRIBUTION PLAN, AND THE AMOUNT ACTUALLY PAID BY EACH FUND FOR THE MOST
RECENT FISCAL YEAR. THE FEES ARE BASED ON AVERAGE DAILY NET ASSETS.
MAXIMUM PAYABLE UNDER PLAN/AMOUNT ACTUALLY PAID
MONEY MARKET NONE/NONE
LIMITED-TERM NONE/NONE
INTERMEDIATE 0.25%/NONE
LONG-TERM 0.35%/0.09%
NEXT STEP - ACCOUNT APPLICATION
COMPLETE AND SIGN AN APPLICATION FOR EACH NEW ACCOUNT. FOR MORE INFORMATION,
CONTACT YOUR FINANCIAL PROFESSIONAL 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 219544 P.O. BOX 219739
KANSAS, CITY MO KANSAS CITY, MO
64121-9544 64121-9739
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.
<PAGE>
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. 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. CTFR MONEY MARKET IS VALUED ACCORDING TO THE "AMORTIZED
COST" METHOD, WHICH IS INTENDED TO STABILIZE THE NAV AT $1 PER SHARE.
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 RECEIVED BECAUSE THE BANKS ARE CLOSED.
WHEN YOUR ACCOUNT WILL BE CREDITED
YOUR PURCHASE WILL BE PROCESSED AT THE NAV NEXT CALCULATED AFTER YOUR ORDER IS
RECEIVED IN GOOD ORDER. ALL OF YOUR PURCHASES MUST BE MADE IN US DOLLARS. NO
CASH OR THIRD PARTY CHECKS WILL BE ACCEPTED. NO CREDIT CARD OR CREDIT LOAN
CHECKS WILL BE ACCEPTED. EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING
OF SHARES FOR A PERIOD OF TIME OR TO REJECT ANY SPECIFIC PURCHASE ORDER. AS
A CONVENIENCE, CHECK PURCHASES RECEIVED AT CALVERT'S OFFICE IN BETHESDA,
MARYLAND WILL BE SENT BY OVERNIGHT DELIVERY TO THE TRANSFER AGENT AND WILL
BE CREDITED THE NEXT BUSINESS DAY UPON RECEIPT. ANY CHECK PURCHASE RECEIVED
WITHOUT AN INVESTMENT SLIP MAY CAUSE DELAYED CREDITING. ANY PURCHASE LESS THAN
THE $250 MINIMUM FOR SUBSEQUENT INVESTMENTS WILL BE CHARGED A SERVICE FEE
OF $3. IF YOUR CHECK DOES NOT CLEAR YOUR BANK, YOUR PURCHASE WILL BE
CANCELED AND YOU WILL BE CHARGED A $25 FEE PLUS ANY COSTS INCURRED. ALL
PURCHASES WILL BE CONFIRMED AND CREDITED TO YOUR ACCOUNT IN FULL AND
FRACTIONAL SHARES (ROUNDED TO THE NEAREST 1/1000TH OF A SHARE).
CTFR MONEY MARKET
YOUR PURCHASE WILL BE CREDITED AT THE NET ASSET VALUE CALCULATED AFTER YOUR
ORDER IS RECEIVED AND ACCEPTED. 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.
<PAGE>
OTHER CALVERT GROUP FEATURES
CALVERT INFORMATION NETWORK
FOR 24 HOUR PERFORMANCE AND ACCOUNT INFORMATION CALL 800-368-2745 OR VISIT
WWW.CALVERT.COM
YOU CAN OBTAIN CURRENT PERFORMANCE AND PRICING INFORMATION, VERIFY ACCOUNT
BALANCES, AND AUTHORIZE CERTAIN TRANSACTIONS WITH THE CONVENIENCE OF ONE
PHONE CALL, 24 HOURS A DAY.
ACCOUNT SERVICES
BY SIGNING UP FOR SERVICES WHEN YOU OPEN YOUR ACCOUNT, YOU AVOID HAVING TO
OBTAIN A SIGNATURE GUARANTEE. IF YOU WISH TO ADD SERVICES AT A LATER
DATE, A SIGNATURE GUARANTEE TO VERIFY YOUR SIGNATURE MAY BE OBTAINED FROM
ANY BANK, TRUST COMPANY AND SAVINGS AND LOAN ASSOCIATION, CREDIT UNION, BROKER-
DEALER FIRM OR MEMBER OF A DOMESTIC STOCK EXCHANGE. A NOTARY PUBLIC
CANNOT PROVIDE A SIGNATURE GUARANTEE.
CALVERT MONEY CONTROLLER
CALVERT MONEY CONTROLLER ALLOWS YOU TO PURCHASE OR SELL SHARES BY ELECTRONIC
FUNDS TRANSFER WITHOUT THE TIME DELAY OF MAILING A CHECK OR THE ADDED
EXPENSE OF A WIRE. USE THIS SERVICE TO TRANSFER UP TO $300,000
ELECTRONICALLY. ALLOW ONE OR TWO BUSINESS DAYS AFTER YOU PLACE YOUR REQUEST FOR
THE TRANSFER TO TAKE PLACE. MONEY TRANSFERRED TO PURCHASE NEW SHARES WILL
BE SUBJECT TO A HOLD OF UP TO 10 BUSINESS DAYS BEFORE REDEMPTION REQUESTS
WILL BE HONORED. TRANSACTION REQUESTS MUST BE RECEIVED BY 4 P.M. ET. YOU MAY
REQUEST THIS SERVICE ON YOUR INITIAL ACCOUNT APPLICATION. CALVERT MONEY
CONTROLLER TRANSACTIONS RETURNED FOR INSUFFICIENT FUNDS WILL INCUR A $25
CHARGE.
TELEPHONE TRANSACTIONS
YOU MAY PURCHASE, REDEEM, OR EXCHANGE SHARES, WIRE FUNDS AND USE CALVERT MONEY
CONTROLLER BY TELEPHONE IF YOU HAVE PRE-AUTHORIZED SERVICE INSTRUCTIONS.
YOU RECEIVE TELEPHONE PRIVILEGES AUTOMATICALLY WHEN YOU OPEN YOUR ACCOUNT
UNLESS YOU ELECT OTHERWISE. FOR OUR MUTUAL PROTECTION, THE FUND, THE
SHAREHOLDER SERVICING AGENT AND THEIR AFFILIATES USE PRECAUTIONS SUCH AS
VERIFYING SHAREHOLDER IDENTITY AND RECORDING TELEPHONE CALLS TO CONFIRM
INSTRUCTIONS GIVEN BY PHONE. A CONFIRMATION STATEMENT IS SENT FOR MOST
TRANSACTIONS; PLEASE REVIEW THIS STATEMENT AND VERIFY THE ACCURACY OF YOUR
TRANSACTION IMMEDIATELY.
EXCHANGES
CALVERT GROUP OFFERS A WIDE VARIETY OF INVESTMENT OPTIONS THAT INCLUDES COMMON
STOCK FUNDS, TAX-EXEMPT AND CORPORATE BOND FUNDS, AND MONEY MARKET
FUNDS (CALL YOUR FINANCIAL PROFESSIONAL OR CALVERT REPRESENTATIVE FOR MORE
INFORMATION). WE MAKE IT EASY FOR YOU TO PURCHASE SHARES IN OTHER CALVERT
FUNDS IF
<PAGE>
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.
EXCHANGE REQUESTS WILL NOT BE ACCEPTED ON ANY DAY WHEN CALVERT IS OPEN BUT THE
FUND'S CUSTODIAN BANK IS CLOSED (E.G., COLUMBUS DAY AND VETERAN'S DAY);
THESE EXCHANGE REQUESTS WILL BE PROCESSED THE NEXT DAY THE FUND'S CUSTODIAN
BANK IS OPEN.
EACH FUND AND THE DISTRIBUTOR RESERVE THE RIGHT AT ANY TIME TO REJECT OR CANCEL
ANY PART OF ANY PURCHASE OR EXCHANGE ORDER; MODIFY ANY TERMS OR CONDITIONS
OF PURCHASE OF SHARES OF ANY FUND; OR WITHDRAW ALL OR ANY PART OF THE
OFFERING MADE BY THIS PROSPECTUS. TO PROTECT THE INTERESTS OF INVESTORS, EACH
FUND AND THE DISTRIBUTOR MAY REJECT ANY ORDER CONSIDERED MARKET-TIMING
ACTIVITY.
EACH FUND RESERVES THE RIGHT TO TERMINATE OR MODIFY THE EXCHANGE PRIVILEGE WITH
60 DAYS' WRITTEN NOTICE.
ELECTRONIC DELIVERY OF PROSPECTUSES AND SHAREHOLDER REPORTS
YOU MAY REQUEST TO RECEIVE ELECTRONIC DELIVERY OF PROSPECTUSES AND ANNUAL AND
SEMI-ANNUAL REPORTS.
<PAGE>
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 OR A STOP PAYMENT ON A DRAFT. YOU MAY BE REQUIRED
TO PAY A FEE FOR THESE SPECIAL SERVICES; FOR EXAMPLE, THE FEE FOR STOP
PAYMENTS IS $25. CTFR MONEY MARKET WILL CHARGE A $25 SERVICE FEE FOR DRAFTS
RETURNED FOR INSUFFICIENT OR UNCOLLECTED FUNDS.
IF YOU ARE PURCHASING SHARES THROUGH A PROGRAM OF SERVICES OFFERED BY A
BROKER/DEALER OR FINANCIAL INSTITUTION, YOU SHOULD READ THE PROGRAM
MATERIALS TOGETHER WITH THIS PROSPECTUS. CERTAIN FEATURES MAY BE MODIFIED
IN THESE PROGRAMS. INVESTORS MAY BE CHARGED A FEE IF THEY EFFECT TRANSACTIONS
IN FUND SHARES THROUGH A BROKER OR AGENT.
MINIMUM ACCOUNT BALANCE
PLEASE MAINTAIN A BALANCE IN EACH OF YOUR ACCOUNTS OF AT LEAST $1,000 PER CLASS.
IF THE BALANCE IN YOUR CTFR MONEY MARKET ACCOUNT FALLS BELOW THE MINIMUM
DURING A MONTH, A $3 MONTHLY FEE MAY BE CHARGED TO YOUR ACCOUNT. 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 AMOUNTWITHIN 30 DAYS.
<PAGE>
DIVIDENDS, CAPITAL GAINS AND TAXES
EACH FUND PAYS DIVIDENDS FROM ITS NET INVESTMENT INCOME AS SHOWN BELOW. 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 FUNDS DO NOT ANTICIPATE MAKING ANY SUCH DISTRIBUTIONS
UNLESS AVAILABLE CAPITAL LOSS CARRYOVERS HAVE BEEN USED OR HAVE EXPIRED.
DIVIDEND AND DISTRIBUTION PAYMENTS WILL VARY BETWEEN CLASSES.
CTFR MONEY MARKET ACCRUED DAILY, PAID MONTHLY
CTFR LIMITED-TERM PAID MONTHLY
CMF INTERMEDIATE PAID MONTHLY
CTFR LONG-TERM PAID MONTHLY
DIVIDEND PAYMENT OPTIONS
DIVIDENDS AND ANY DISTRIBUTIONS ARE AUTOMATICALLY REINVESTED IN THE SAME FUND AT
NAV (WITHOUT SALES CHARGE), UNLESS YOU ELECT TO HAVE AMOUNTS OF $10 OR
MORE PAID IN CASH (BY CHECK OR BY CALVERT MONEY CONTROLLER). DIVIDENDS AND
DISTRIBUTIONS FROM ANY CALVERT GROUP FUND MAY BE AUTOMATICALLY INVESTED IN
AN IDENTICALLY REGISTERED ACCOUNT IN ANY OTHER CALVERT GROUP FUND AT NAV. IF
REINVESTED IN THE SAME ACCOUNT, NEW SHARES WILL BE PURCHASED AT NAV ON
THE REINVESTMENT DATE, WHICH IS GENERALLY 1 TO 3 DAYS PRIOR TO THE PAYMENT
DATE. YOU MUST NOTIFY THE FUNDS 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 (NOT APPLICABLE TO CTFR MONEY MARKET)
AT THE TIME OF PURCHASE, THE SHARE PRICE OF EACH CLASS MAY REFLECT UNDISTRIBUTED
INCOME, CAPITAL GAINS OR UNREALIZED APPRECIATION OF SECURITIES. ANY INCOME OR
CAPITAL GAINS FROM THESE AMOUNTS WHICH ARE LATER DISTRIBUTED TO YOU ARE
FULLY TAXABLE. ON THE RECORD DATE FOR A DISTRIBUTION, SHARE VALUE IS REDUCED
BY THE AMOUNT OF THE DISTRIBUTION. IF YOU BUY SHARES JUST BEFORE THE RECORD
DATE ("BUYING A DIVIDEND") YOU WILL PAY THE FULL PRICE FOR THE SHARES AND
THEN RECEIVE A PORTION OF THE PRICE BACK AS A TAXABLE DISTRIBUTION.
<PAGE>
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. THE FUND MAY DERIVE UP TO 20% OF
ITS INCOME FROM TAXABLE INVESTMENTS, FOR LIQUIDITY PURPOSES OR PENDING
INVESTMENT. INTEREST EARNED FROM TAXABLE INVESTMENTS WILL BE TAXABLE AS
ORDINARY INCOME.
IF ANY TAXABLE INCOME OR GAINS ARE PAID, IN JANUARY, THE 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.
CTFR LIMITED-TERM, LONG-TERM AND CMF INTERMEDIATE ONLY:
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, THESE FUNDS WILL MAIL
YOU FORM 1099-B INDICATING THE TOTAL AMOUNT OF ALL SALES, INCLUDING EXCHANGES.
YOU SHOULD KEEP YOUR ANNUAL YEAR-END ACCOUNT STATEMENTS TO DETERMINE THE COST
(BASIS) OF THE SHARES TO REPORT ON YOUR TAX RETURNS.
OTHER TAX INFORMATION
YOU MAY BE SUBJECT TO STATE OR LOCAL TAXES ON YOUR INVESTMENT, DEPENDING ON THE
LAWS IN YOUR AREA. A LETTER WILL BE MAILED TO YOU IN JANUARY DETAILING THE
PERCENTAGE INVESTED IN YOUR STATE THE PREVIOUS TAX YEAR. SUCH DIVIDENDS
MAY BE EXEMPT FROM CERTAIN STATE INCOME TAXES.
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.
<PAGE>
HOW TO SELL SHARES
YOU MAY REDEEM ALL OR A PORTION OF YOUR SHARES ON ANY DAY YOUR 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, REDEMPTIONS PROCEEDS WILL NOT BE SENT UNTIL THE
TRANSFER AGENT IS REASONABLY SATISFIED THAT THE PURCHASE PAYMENT HAS
BEEN COLLECTED. DRAFTS WRITTEN ON CTFR MONEY MARKET DURING THE HOLD
PERIOD WILL BE RETURNED FOR UNCOLLECTED FUNDS.
YOUR SHARES WILL BE REDEEMED AT THE NEXT NAV CALCULATED AFTER YOUR REDEMPTION
REQUEST IS RECEIVED (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. THE FUNDS
HAVE 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 AFFECTED FUND, WHICHEVER IS LESS. 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 MAILED OR WIRED BECAUSE THE POST OFFICES AND BANKS ARE CLOSED.
FOLLOW THESE SUGGESTIONS TO ENSURE TIMELY PROCESSING OF YOUR REDEMPTION REQUEST:
BY TELEPHONE
YOU MAY REDEEM SHARES FROM YOUR ACCOUNT BY TELEPHONE AND HAVE YOUR MONEY MAILED
TO YOUR ADDRESS OF RECORD OR ELECTRONICALLY TRANSFERRED OR WIRED TO A
BANK YOU HAVE PREVIOUSLY AUTHORIZED. A CHARGE OF $5 MAY BE IMPOSED ON
WIRE TRANSFERS OF LESS THAN $1,000.
WRITTEN REQUESTS
CALVERT GROUP, P.O. BOX 219544, KANSAS CITY, MO 64121-9544
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.
<PAGE>
DRAFTWRITING (CTFR MONEY MARKET ONLY)
YOU MAY REDEEM SHARES IN YOUR CTFR MONEY MARKET ACCOUNT BY WRITING A DRAFT FOR
AT LEAST $250. IF YOU COMPLETE AND RETURN THE SIGNATURE CARD FOR
DRAFTWRITING, THE FUND WILL MAIL BANK DRAFTS TO YOU, PRINTED WITH YOUR NAME
AND ADDRESS. DRAFTS MAY NOT BE ORDERED UNTIL YOUR INITIAL PURCHASE HAS
CLEARED. CALVERT WILL PROVIDE PRINTED DRAFTS (CHECKS). YOU MAY NOT
PRINT YOUR OWN. ANY CUSTOMER-PRINTED CHECKS WILL NOT BE HONORED AND WILL
BE RETURNED WITHOUT NOTICE. THE FUND WILL CHARGE A SERVICE FEE FOR DRAFTS
RETURNED FOR INSUFFICIENT FUNDS. THE FUND WILL CHARGE $25 FOR ANY STOP PAYMENT
ON DRAFTS. THE FUND WILL CHARGE A $25 FEE ON DRAFTS RETURNED FOR ANY
REASON. AS A SERVICE TO SHAREHOLDERS, SHARES MAY BE AUTOMATICALLY TRANSFERRED
BETWEEN YOUR CALVERT ACCOUNTS TO COVER DRAFTS YOU HAVE WRITTEN. THE SIGNATURE
OF ONLY ONE AUTHORIZED SIGNER IS REQUIRED TO HONOR A DRAFT.
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 A 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 FISCAL YEARS (OR IF SHORTER, THE
PERIOD OF THE FUND'S OPERATIONS). THE FUND'S FISCAL YEAR END IS DECEMBER 31.
CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS FOR A SINGLE SHARE, BY FUND
AND CLASS. THE TOTAL RETURNS IN THE TABLE REPRESENT THE RATE THAT AN
INVESTOR WOULD HAVE EARNED (OR LOST) ON AN INVESTMENT IN A FUND (ASSUMING
REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS), AND DOES NOT REFLECT ANY
APPLICABLE FRONT- OR BACK-END SALES CHARGE. THIS INFORMATION HAS BEEN
AUDITED BY PRICEWATERHOUSECOOPERS LLP WHOSE REPORT, ALONG WITH A FUND'S
FINANCIAL STATEMENTS, ARE INCLUDED IN THE FUND'S ANNUAL REPORT, WHICH IS
AVAILABLE UPON REQUEST.
<PAGE>
MONEY MARKET PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
CLASS 0 SHARES 1999 1998 1997
NET ASSET VALUE, BEGINNING $1.00 $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .030 .032 .033
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.030) (.032) (.033)
NET ASSET VALUE, ENDING $1.00 $1.00 $1.00
TOTAL RETURN 3.04% 3.22% 3.38%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 2.97% 3.17% 3.32%
TOTAL EXPENSES .65% .65% .65%
EXPENSES BEFORE OFFSETS .65% .65% .65%
NET EXPENSES .64% .64% .64%
NET ASSETS, ENDING (IN THOUSANDS)
$1,277,935 $1,355,322 $1,405,350
YEARS ENDED
DECEMBER 31, DECEMBER 31,
CLASS O SHARES 1996 1995
NET ASSET VALUE, BEGINNING $1.00 $1.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .033 .040
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.033) (.040)
NET ASSET VALUE, ENDING $1.00 $1.00
TOTAL RETURN 3.33% 4.02%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 3.28% 3.93%
TOTAL EXPENSES .65% .62%
EXPENSES BEFORE OFFSETS .65% .62%
NET EXPENSES .64% .61%
NET ASSETS, ENDING (IN THOUSANDS) $1,550,731 $1,740,839
<PAGE>
LIMITED-TERM PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $10.71 $10.70 $10.69
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .37 .40 .42
NET REALIZED AND UNREALIZED GAIN (LOSS)
(.07) .01 .01
TOTAL FROM INVESTMENT OPERATIONS
.30 .41 .43
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.37) (.40) (.42)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(.07) .01 .01
NET ASSET VALUE, ENDING $10.64 $10.71 $10.70
TOTAL RETURN* 2.86% 3.87% 4.07%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 3.47% 3.70% 3.91%
TOTAL EXPENSES .71% .71% .70%
EXPENSES BEFORE OFFSETS .71% .71% .70%
NET EXPENSES .70% .70% .69%
PORTFOLIO TURNOVER 78% 45% 52%
NET ASSETS, ENDING (IN THOUSANDS)
$523,743 $547,212 $490,180
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $10.72 $10.59
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .44 .45
NET REALIZED AND UNREALIZED GAIN (LOSS) (.03) .13
TOTAL FROM INVESTMENT OPERATIONS .41 .58
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.44) (.45)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(.03) .13
NET ASSET VALUE, ENDING $10.69 $10.72
TOTAL RETURN* 3.94% 5.55%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.12% 4.21%
TOTAL EXPENSES .71% .71%
EXPENSES BEFORE OFFSETS .71% .71%
NET EXPENSES .70% .70%
PORTFOLIO TURNOVER 45% 33%
NET ASSETS, ENDING (IN THOUSANDS) $512,342 $457,707
<PAGE>
INTERMEDIATE PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $10.82 $10.79 $10.56
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .43 .45 .50
NET REALIZED AND UNREALIZED GAIN (LOSS)
(.64) .13 .23
TOTAL FROM INVESTMENT OPERATIONS
(.21) .58 .73
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.43) (.46) (.50)
NET REALIZED GAINS (.06) (.09) -
TOTAL DISTRIBUTIONS (.49) (.55) (.50)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(.70) .03 .23
NET ASSET VALUE, ENDING $10.12 $10.82 $10.79
TOTAL RETURN * (2.01%) 5.46% 7.11%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.12% 4.17% 4.71%
TOTAL EXPENSES .93% .97% .97%
EXPENSES BEFORE OFFSETS .93% .97% .97%
NET EXPENSES .90% .94% .94%
PORTFOLIO TURNOVER 38% 44% 29%
NET ASSETS, ENDING (IN THOUSANDS)
$58,093 $71,065 $48,933
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $10.62 $9.81
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .50 .51
NET REALIZED AND UNREALIZED GAIN (LOSS) (.06) .80
TOTAL FROM INVESTMENT OPERATIONS .44 1.31
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.50) (.50)
TOTAL DISTRIBUTIONS (.50) (.50)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE (.06) .81
NET ASSET VALUE, ENDING $10.56 $10.62
TOTAL RETURN * 4.32% 13.64%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.83% 4.97%
TOTAL EXPENSES 1.04% .96%
EXPENSES BEFORE OFFSETS 1.04% .96%
NET EXPENSES 1.01% .94%
PORTFOLIO TURNOVER 23% 57%
NET ASSETS, ENDING (IN THOUSANDS) $45,612 $40,146
<PAGE>
LONG-TERM PORTFOLIO
FINANCIAL HIGHLIGHTS
YEARS ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1997
NET ASSET VALUE, BEGINNING $16.81 $17.28 $16.81
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .70 .78 .87
NET REALIZED AND UNREALIZED GAIN (LOSS)
(1.44) .06 .50
TOTAL FROM INVESTMENT OPERATIONS
(.74) .84 1.37
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.70) (.80) (.87)
NET REALIZED GAINS (.07) (.51) (.03)
TOTAL DISTRIBUTIONS (.77) (1.31) (.90)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE
(1.51) (.47) .47
NET ASSET VALUE, ENDING $15.30 $16.81 $17.28
TOTAL RETURN * (4.52%) 5.01% 8.41%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 4.35% 4.58% 5.16%
TOTAL EXPENSES .88% .87% .87%
EXPENSES BEFORE OFFSETS .88% .87% .87%
NET EXPENSES .84% .84% .85%
PORTFOLIO TURNOVER 80% 72% 41%
NET ASSETS, ENDING (IN THOUSANDS)
$51,146 $57,677 $50,966
YEARS ENDED
DECEMBER 31, DECEMBER 31,
1996 1995
NET ASSET VALUE, BEGINNING $17.31 $15.83
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME .93 .95
NET REALIZED AND UNREALIZED GAIN (LOSS) (.46) 1.53
TOTAL FROM INVESTMENTS .47 2.48
DISTRIBUTIONS FROM
NET INVESTMENT INCOME (.95) (.91)
NET REALIZED GAINS (.02) (.09)
TOTAL DISTRIBUTIONS (.97) (1.00)
TOTAL INCREASE (DECREASE) IN NET ASSET VALUE (.50) 1.48
NET ASSET VALUE, ENDING $16.81 $17.31
TOTAL RETURN * 2.89% 16.05%
RATIOS TO AVERAGE NET ASSETS:
NET INVESTMENT INCOME 5.50% 5.71%
TOTAL EXPENSES .89% .87%
EXPENSES BEFORE OFFSETS .89% .87%
NET EXPENSES .86% .85%
PORTFOLIO TURNOVER 41% 58%
NET ASSETS, ENDING (IN THOUSANDS) $52,945 $57,359
(A) ANNUALIZED
* TOTAL RETURN IS NOT ANNUALIZED FOR PERIODS LESS THAN ONE YEAR AND DOES NOT
REFLECT DEDUCTION OF CLASS A FRONT-END SALES CHARGE.
<PAGE>
EXHIBIT A
REDUCED SALES CHARGES -- (CTFR LIMITED-TERM, CMF INTERMEDIATE AND CTFR
LONG-TERM)
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
THE 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.
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.
* A "QUALIFIED GROUP" IS ONE WHICH:
1. HAS BEEN IN EXISTENCE FOR MORE THAN SIX MONTHS, AND
2. HAS A PURPOSE OTHER THAN ACQUIRING SHARES AT A DISCOUNT, AND
3. 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.
<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."
ESTABLISHED ACCOUNTS
SHARES OF THE LONG-TERM PORTFOLIO MAY BE SOLD AT NET ASSET VALUE TO YOU IF YOUR
ACCOUNT WAS ESTABLISHED ON OR BEFORE SEPTEMBER 15, 1987, OR APRIL 30, 1988, FOR
THE LIMITED-TERM PORTFOLIO.
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 60 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., EACH FUND'S UNDERWRITER, PAYS DEALERS A COMMISSION,
OR REALLOWANCE (EXPRESSED AS A PERCENTAGE OF THE OFFERING PRICE) WHEN YOU
PURCHASE SHARES. CDI ALSO PAYS DEALERS AN ONGOING SERVICE FEE WHILE YOU OWN
SHARES OF A FUND (EXPRESSED AS AN ANNUAL PERCENTAGE RATE OF AVERAGE DAILY NET
ASSETS HELD IN CALVERT ACCOUNTS BY THAT DEALER). THE TABLE BELOW SHOWS THE
AMOUNT OF PAYMENT WHICH DIFFERS DEPENDING ON THE CLASS.
MAXIMUM COMMISSION/SERVICE FEES
CTFR MONEY MARKET (CLASS O) NONE/0.25%
CTFR LIMITED-TERM 1.00%/0.15%
CMF INTERMEDIATE 2.25%/0.15%**
CTFR LONG-TERM 3.00%/0.25%**
**IF FINDER'S FEE IS PAID (SEE BELOW), CMF INTERMEDIATE AND CTFR LONG-TERM
SERVICE FEE BEGINS 13TH MONTH AFTER PURCHASE.
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, FROM THEIR OWN RESOURCES, CERTAIN
BROKER-DEALERS AND/OR OTHER PERSONS, FOR THE SALE AND DISTRIBUTION OF THE
SECURITIES OR FOR SERVICES TO THE FUND. THESE AMOUNTS MAY BE SIGNIFICANT.
PAYMENTS MAY INCLUDE ADDITIONAL COMPENSATION BEYOND THE REGULARLY SCHEDULED
RATES, AND FINDER'S FEES. CDI PAYS DEALERS A FINDER'S FEE ON CTFR LONG-TERM
SHARES PURCHASED AT NAV IN ACCOUNTS WITH $1 MILLION OR MORE. THE CTFR LONG-TERM
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. CDI ALSO PAYS DEALERS A FINDER'S FEE ON CTFR LIMITED-TERM
SHARES PURCHASED AT NAV IN ACCOUNTS WITH $250,000 OR MORE. THE CTFR LIMITED-TERM
FINDER'S FEE IS 0.10% OF THE NAV PURCHASE AMOUNT. CDI RESERVES THE RIGHT TO
RECOUP ANY PORTION OF THE AMOUNT PAID TO THE DEALER IF THE INVESTOR REDEEMS SOME
OR ALL OF THE SHARES FROM THE FUNDS WITHIN 12 MONTHS OF THE DATE OF 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:
WWW.CALVERT.COM
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, MD 20814
REGISTERED, CERTIFIED OR
OVERNIGHT MAIL:
CALVERT GROUP
C/O NFDS
330 WEST 9TH STREET
KANSAS CITY, MO 64105
CALVERT GROUP WEB-SITE:
WWW.CALVERT.COM
PRINCIPAL UNDERWRITER
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MD 20814
<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
EACH 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 SAIS, REQUEST OTHER INFORMATION AND
DISCUSS YOUR QUESTIONS ABOUT THE FUNDS BY CONTACTING YOUR FINANCIAL
PROFESSIONAL, OR THE FUNDS AT:
CALVERT GROUP
4550 MONTGOMERY AVE., SUITE 1000N
BETHESDA, MD 20814
TELEPHONE: 1-800-368-2745
CALVERT GROUP WEB-SITE:
WWW.CALVERT.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 SECTION OF THE
COMMISSION, WASHINGTON, D.C. 20549-0102, TELEPHONE: 202-942-8090.
- - FREE FROM THE COMMISSION'S INTERNET WEBSITE AT HTTP://WWW.SEC.GOV.
INVESTMENT COMPANY ACT FILE: NO. 811-3101 (CTFR)
NO. 811-6525 (CMF)
CALVERT TAX-FREE RESERVES
LONG-TERM PORTFOLIO
VERMONT MUNICIPAL PORTFOLIO
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
STATEMENT OF ADDITIONAL INFORMATION
APRIL 30, 2000
NEW ACCOUNT (800) 368-2748 SHAREHOLDER
INFORMATION: (301) 951-4820 SERVICES: (800) 368-2745
BROKER (800) 368-2746 TDD FOR THE HEARING-
SERVICES: (301) 951-4850 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
APPROPRIATE FIRST VARIABLE RATE FUND CALVERT FIRST GOVERNMENT MONEY MARKET FUND
(THE "FUND") PROSPECTUS, DATED APRIL 30, 2000 (ONE PROSPECTUS IS ISSUED FOR
CLASSES O, B, AND C, ONE PROSPECTUS FOR CLASS T, AND ONE PROSPECTUS FOR THE
INSTITUTIONAL CLASS). THE FUND'S AUDITED FINANCIAL STATEMENT INCLUDED IN ITS
MOST RECENT ANNUAL REPORT TO SHAREHOLDERS, ARE EXPRESSLY INCORPORATED BY
REFERENCE, AND MADE A PART OF THIS SAI. THE PROSPECTUS AND THE MOST RECENT
SHAREHOLDER REPORT MAY BE OBTAINED FREE OF CHARGE BY WRITING THE FUND AT THE
ABOVE ADDRESS OR CALLING THE FUND, OR BY VISITING OUR WEBSITE AT
WWW.CALVERT.COM.
TABLE OF CONTENTS
INVESTMENT POLICIES AND RISKS 2
INVESTMENT RESTRICTIONS 10
PURCHASES AND REDEMPTIONS OF SHARES 10
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS 11
VALUATION OF SHARES 12
CALCULATION OF YIELD AND TOTAL RETURN 13
ADVERTISING 14
TRUSTEES/DIRECTORS AND OFFICERS 15
INVESTMENT ADVISOR 19
ADMINISTRATIVE SERVICES AGENT 19
TRANSFER AND SHAREHOLDER SERVICING AGENTS 20
INDEPENDENT ACCOUNTANTS AND CUSTODIANS 20
METHOD OF DISTRIBUTION 20
PORTFOLIO TRANSACTIONS 22
PERSONAL SECURITIES TRANSACTIONS 23
GENERAL INFORMATION 23
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES 24
APPENDIX 24
INVESTMENT POLICIES AND RISKS
-----------------------------
A COMPLETE EXPLANATION OF MUNICIPAL OBLIGATIONS AND MUNICIPAL BOND AND NOTE
RATINGS IS SET FORTH IN THE APPENDIX.
THE CREDIT RATING OF EACH PORTFOLIO'S ASSETS AS OF ITS MOST RECENT FISCAL
YEAR-END APPEARS IN THE ANNUAL REPORT TO SHAREHOLDERS, INCORPORATED BY REFERENCE
HEREIN.
VARIABLE RATE OBLIGATIONS AND DEMAND NOTES
THE PORTFOLIOS MAY INVEST IN VARIABLE RATE OBLIGATIONS. VARIABLE RATE
OBLIGATIONS HAVE A YIELD THAT IS ADJUSTED PERIODICALLY BASED ON CHANGES IN THE
LEVEL OF PREVAILING INTEREST RATES. FLOATING RATE OBLIGATIONS HAVE AN INTEREST
RATE FIXED TO A KNOWN LENDING RATE, SUCH AS THE PRIME RATE, AND ARE
AUTOMATICALLY ADJUSTED WHEN THE KNOWN RATE CHANGES. VARIABLE RATE OBLIGATIONS
LESSEN THE CAPITAL FLUCTUATIONS USUALLY INHERENT IN FIXED INCOME INVESTMENTS.
THIS DIMINISHES THE RISK OF CAPITAL DEPRECIATION OF INVESTMENT SECURITIES IN A
PORTFOLIO AND, CONSEQUENTLY, OF PORTFOLIO SHARES. HOWEVER, IF INTEREST RATES
DECLINE, THE YIELD OF THE INVESTED PORTFOLIO WILL DECLINE, CAUSING THE PORTFOLIO
AND ITS SHAREHOLDERS TO FOREGO THE OPPORTUNITY FOR CAPITAL APPRECIATION OF THE
PORTFOLIO'S INVESTMENTS AND OF THEIR SHARES.
THE PORTFOLIOS MAY INVEST IN FLOATING RATE AND VARIABLE RATE DEMAND NOTES.
DEMAND NOTES PROVIDE THAT THE HOLDER MAY DEMAND PAYMENT OF THE NOTE AT ITS PAR
VALUE PLUS ACCRUED INTEREST BY GIVING NOTICE TO THE ISSUER. TO ENSURE THE
ABILITY OF THE ISSUER TO MAKE PAYMENT ON DEMAND, A BANK LETTER OF CREDIT OR
OTHER LIQUIDITY FACILITY MAY SUPPORT THE NOTE.
THE BOARD OF TRUSTEES/DIRECTORS HAS APPROVED INVESTMENTS IN FLOATING AND
VARIABLE RATE DEMAND NOTES UPON THE FOLLOWING CONDITIONS: THE PORTFOLIO HAS
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 PORTFOLIO CAN RECOVER THE PRINCIPAL THROUGH DEMAND.
MUNICIPAL LEASES
THE PORTFOLIOS 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. THE PORTFOLIOS MAY PURCHASE UNRATED LEASES.
THERE ARE ADDITIONAL RISKS INHERENT IN INVESTING IN THIS TYPE OF MUNICIPAL
SECURITY. UNLIKE MUNICIPAL NOTES AND BONDS, WHERE A MUNICIPALITY IS OBLIGATED BY
LAW TO MAKE INTEREST AND PRINCIPAL PAYMENTS WHEN DUE, FUNDING FOR LEASE PAYMENTS
NEEDS TO BE APPROPRIATED EACH FISCAL YEAR IN THE BUDGET. IT IS POSSIBLE THAT A
MUNICIPALITY WILL NOT APPROPRIATE FUNDS FOR LEASE PAYMENTS. THE ADVISOR
CONSIDERS RISK OF CANCELLATION IN ITS INVESTMENT ANALYSIS. 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 THE 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 THE 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 THE
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 THE
PORTFOLIO HAS VALUED IT FOR PURPOSES OF CALCULATING THE PORTFOLIO'S 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.
OBLIGATIONS WITH PUTS ATTACHED
THE PORTFOLIOS MAY PURCHASE SECURITIES AT A PRICE WHICH WOULD RESULT IN A
YIELD TO MATURITY LOWER THAN THAT GENERALLY OFFERED BY THE SELLER AT THE TIME OF
PURCHASE WHEN IT CAN ACQUIRE AT THE SAME TIME THE RIGHT TO SELL THE SECURITIES
BACK TO THE SELLER AT AN AGREED UPON PRICE AT ANY TIME DURING A STATED PERIOD OR
ON A CERTAIN DATE. SUCH A RIGHT IS GENERALLY DENOTED AS A "PUT." UNCONDITIONAL
PUTS ARE READILY EXERCISABLE IN THE EVENT OF A DEFAULT IN PAYMENT OF PRINCIPAL
OR INTEREST ON THE UNDERLYING SECURITIES.
TEMPORARY INVESTMENTS
FROM TIME TO TIME FOR LIQUIDITY PURPOSES OR PENDING THE INVESTMENT OF THE
PROCEEDS OF THE SALE OF PORTFOLIO SHARES, THE PORTFOLIOS MAY INVEST IN AND
DERIVE UP TO 20% OF ITS INCOME FROM TAXABLE OBLIGATIONS OF THE U.S. GOVERNMENT,
ITS AGENCIES AND INSTRUMENTALITIES. INTEREST EARNED FROM SUCH TAXABLE
INVESTMENTS WILL BE TAXABLE TO INVESTORS AS ORDINARY INCOME UNLESS THE INVESTORS
ARE OTHERWISE EXEMPT FORM TAXATION.
THE PORTFOLIO INTENDS TO MINIMIZE TAXABLE INCOME THROUGH INVESTMENT, WHEN
POSSIBLE, IN SHORT-TERM TAX-EXEMPT SECURITIES. TO MINIMIZE TAXABLE INCOME, THE
PORTFOLIO MAY ALSO HOLD CASH WHICH IS NOT EARNING INCOME.
REPURCHASE AGREEMENTS
THE PORTFOLIOS MAY PURCHASE DEBT SECURITIES SUBJECT TO REPURCHASE
AGREEMENTS, WHICH ARE ARRANGEMENTS UNDER WHICH THE PORTFOLIO BUYS A SECURITY,
AND THE SELLER SIMULTANEOUSLY AGREES TO REPURCHASE THE SECURITY AT A SPECIFIED
TIME AND PRICE REFLECTING A MARKET RATE OF INTEREST. THE PORTFOLIOS ENGAGE IN
REPURCHASE AGREEMENTS IN ORDER TO EARN A HIGHER RATE OF RETURN THAN THEY COULD
EARN SIMPLY BY INVESTING IN THE OBLIGATION WHICH IS THE SUBJECT OF THE
REPURCHASE AGREEMENT. REPURCHASE AGREEMENTS ARE NOT, HOWEVER, WITHOUT RISK. IN
THE EVENT OF THE BANKRUPTCY OF A SELLER DURING THE TERM OF A REPURCHASE
AGREEMENT, A LEGAL QUESTION EXISTS AS TO WHETHER THE PORTFOLIO WOULD BE DEEMED
THE OWNER OF THE UNDERLYING SECURITY OR WOULD BE DEEMED ONLY TO HAVE A SECURITY
INTEREST IN AND LIEN UPON SUCH SECURITY. THE PORTFOLIOS WILL ONLY ENGAGE IN
REPURCHASE AGREEMENTS WITH RECOGNIZED SECURITIES DEALERS AND BANKS DETERMINED TO
PRESENT MINIMAL CREDIT RISK BY THE ADVISOR. IN ADDITION, THE PORTFOLIO WILL ONLY
ENGAGE IN REPURCHASE AGREEMENTS REASONABLY DESIGNED TO SECURE FULLY DURING THE
TERM OF THE AGREEMENT THE SELLER'S OBLIGATION TO REPURCHASE THE UNDERLYING
SECURITY AND WILL MONITOR THE MARKET VALUE OF THE UNDERLYING SECURITY DURING THE
TERM OF THE AGREEMENT. IF THE VALUE OF THE UNDERLYING SECURITY DECLINES AND IS
NOT AT LEAST EQUAL TO THE REPURCHASE PRICE DUE THE PORTFOLIO PURSUANT TO THE
AGREEMENT, THE PORTFOLIO WILL REQUIRE THE SELLER TO PLEDGE ADDITIONAL SECURITIES
OR CASH TO SECURE THE SELLER'S OBLIGATIONS PURSUANT TO THE AGREEMENT. IF THE
SELLER DEFAULTS ON ITS OBLIGATION TO REPURCHASE AND THE VALUE OF THE UNDERLYING
SECURITY DECLINES, THE PORTFOLIO MAY INCUR A LOSS AND MAY INCUR EXPENSES IN
SELLING THE UNDERLYING SECURITY. REPURCHASE AGREEMENTS ARE ALWAYS FOR PERIODS OF
LESS THAN ONE YEAR. REPURCHASE AGREEMENTS NOT TERMINABLE WITHIN SEVEN DAYS ARE
CONSIDERED ILLIQUID.
REVERSE REPURCHASE AGREEMENTS
THE PORTFOLIOS MAY ALSO ENGAGE IN REVERSE REPURCHASE AGREEMENTS. UNDER A
REVERSE REPURCHASE AGREEMENT, THE PORTFOLIO SELLS SECURITIES TO A BANK OR
SECURITIES DEALER AND AGREES TO REPURCHASE THOSE SECURITIES FROM SUCH PARTY AT
AN AGREED UPON DATE AND PRICE REFLECTING A MARKET RATE OF INTEREST. THE
PORTFOLIO INVESTS THE PROCEEDS FROM EACH REVERSE REPURCHASE AGREEMENT IN
OBLIGATIONS IN WHICH IT IS AUTHORIZED TO INVEST. THE PORTFOLIO INTENDS TO ENTER
INTO A REVERSE REPURCHASE AGREEMENT ONLY WHEN THE INTEREST INCOME PROVIDED FOR
IN THE OBLIGATION IN WHICH THE PORTFOLIO INVESTS THE PROCEEDS IS EXPECTED TO
EXCEED THE AMOUNT THE PORTFOLIO WILL PAY IN INTEREST TO THE OTHER PARTY TO THE
AGREEMENT PLUS ALL COSTS ASSOCIATED WITH THE TRANSACTIONS. THE PORTFOLIO DOES
NOT INTEND TO BORROW FOR LEVERAGE PURPOSES. THE PORTFOLIO WILL ONLY BE PERMITTED
TO PLEDGE ASSETS TO THE EXTENT NECESSARY TO SECURE BORROWINGS AND REVERSE
REPURCHASE AGREEMENTS.
DURING THE TIME A REVERSE REPURCHASE AGREEMENT IS OUTSTANDING, THE
PORTFOLIO WILL MAINTAIN IN A SEGREGATED ACCOUNT AN AMOUNT OF CASH, US GOVERNMENT
SECURITIES OR OTHER LIQUID, HIGH-QUALITY DEBT SECURITIES EQUAL IN VALUE TO THE
REPURCHASE PRICE. THE PORTFOLIO WILL MARK TO MARKET THE VALUE OF ASSETS HELD IN
THE SEGREGATED ACCOUNT, AND WILL PLACE ADDITIONAL ASSETS IN THE ACCOUNT WHENEVER
THE TOTAL VALUE OF THE ACCOUNT FALLS BELOW THE AMOUNT REQUIRED UNDER APPLICABLE
REGULATIONS.
THE PORTFOLIO'S USE OF REVERSE REPURCHASE AGREEMENTS INVOLVES THE RISK THAT
THE OTHER PARTY TO THE AGREEMENTS COULD BECOME SUBJECT TO BANKRUPTCY OR
LIQUIDATION PROCEEDINGS DURING THE PERIOD THE AGREEMENTS ARE OUTSTANDING. IN
SUCH EVENT, THE PORTFOLIO MAY NOT BE ABLE TO REPURCHASE THE SECURITIES IT HAS
SOLD TO THAT OTHER PARTY. UNDER THOSE CIRCUMSTANCES, IF AT THE EXPIRATION OF THE
AGREEMENT SUCH SECURITIES ARE OF GREATER VALUE THAN THE PROCEEDS OBTAINED BY THE
PORTFOLIO UNDER THE AGREEMENTS, THE PORTFOLIO MAY HAVE BEEN BETTER OFF HAD IT
NOT ENTERED INTO THE AGREEMENT. HOWEVER, THE PORTFOLIO WILL ENTER INTO REVERSE
REPURCHASE AGREEMENTS ONLY WITH BANKS AND DEALERS WHICH THE ADVISOR BELIEVES
PRESENT MINIMAL CREDIT RISKS UNDER GUIDELINES ADOPTED BY THE PORTFOLIO'S BOARD
OF TRUSTEES/DIRECTORS. IN ADDITION, THE PORTFOLIO BEARS THE RISK THAT THE MARKET
VALUE OF THE SECURITIES IT SOLD MAY DECLINE BELOW THE AGREED-UPON REPURCHASE
PRICE, IN WHICH CASE THE DEALER MAY REQUEST THE PORTFOLIO TO POST ADDITIONAL
COLLATERAL.
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, THE 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, THE 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 THE 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 SO THAT THE AMOUNT SO SEGREGATED EQUALS THE MARKET VALUE OF
THE WHEN-ISSUED PURCHASE, THEREBY ENSURING THE TRANSACTION IS UNLEVERAGED.
NON-INVESTMENT GRADE DEBT SECURITIES
NON-INVESTMENT GRADE DEBT SECURITIES ARE LOWER QUALITY DEBT SECURITIES
(GENERALLY THOSE RATED BB OR LOWER BY S&P OR BA OR LOWER BY MOODY'S, KNOWN AS
"JUNK BONDS." THESE SECURITIES HAVE MODERATE TO POOR PROTECTION OF PRINCIPAL AND
INTEREST PAYMENTS AND HAVE SPECULATIVE CHARACTERISTICS. (SEE APPENDIX FOR A
DESCRIPTION OF THE RATINGS.) THESE SECURITIES 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.
THE QUALITY LIMITATION SET FORTH IN THE PORTFOLIO'S INVESTMENT POLICY IS
DETERMINED IMMEDIATELY AFTER THE PORTFOLIO'S ACQUISITION OF A GIVEN SECURITY.
ACCORDINGLY, ANY LATER CHANGE IN RATINGS WILL NOT BE CONSIDERED WHEN DETERMINING
WHETHER AN INVESTMENT COMPLIES WITH THE PORTFOLIO'S INVESTMENT POLICY.
WHEN PURCHASING NON-INVESTMENT GRADE DEBT SECURITIES, RATED OR UNRATED, THE
ADVISOR PREPARES ITS OWN CAREFUL CREDIT ANALYSIS TO ATTEMPT TO IDENTIFY THOSE
ISSUERS WHOSE FINANCIAL CONDITION IS ADEQUATE TO MEET FUTURE OBLIGATIONS OR IS
EXPECTED TO BE ADEQUATE IN THE FUTURE. THROUGH PORTFOLIO DIVERSIFICATION AND
CREDIT ANALYSIS, INVESTMENT RISK CAN BE REDUCED, ALTHOUGH THERE CAN BE NO
ASSURANCE THAT LOSSES WILL NOT OCCUR.
DERIVATIVES
THE PORTFOLIOS CAN USE VARIOUS TECHNIQUES TO INCREASE OR DECREASE THEIR
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 PORTFOLIO
CAN USE THESE PRACTICES EITHER AS SUBSTITUTION OR AS PROTECTION AGAINST AN
ADVERSE MOVE IN THE PORTFOLIO TO ADJUST THE RISK AND RETURN CHARACTERISTICS OF
THE PORTFOLIO. 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.
OPTIONS AND FUTURES CONTRACTS
THE PORTFOLIOS MAY, IN PURSUIT OF ITS RESPECTIVE INVESTMENT OBJECTIVES,
PURCHASE PUT AND CALL OPTIONS AND ENGAGE IN THE WRITING OF COVERED CALL OPTIONS
AND SECURED PUT OPTIONS ON SECURITIES AND EMPLOY A VARIETY OF OTHER INVESTMENT
TECHNIQUES SUCH AS INTEREST RATE FUTURES CONTRACTS, AND OPTIONS ON SUCH FUTURES,
AS DESCRIBED MORE FULLY BELOW.
THE PORTFOLIOS MAY ENGAGE IN SUCH TRANSACTIONS ONLY TO HEDGE THE EXISTING
POSITIONS IN THE PORTFOLIO. THEY WILL NOT ENGAGE IN SUCH TRANSACTIONS FOR THE
PURPOSES OF SPECULATION OR LEVERAGE. SUCH INVESTMENT POLICIES AND TECHNIQUES MAY
INVOLVE A GREATER DEGREE OF RISK THAN THOSE INHERENT IN MORE CONSERVATIVE
INVESTMENT APPROACHES.
THE PORTFOLIOS MAY WRITE "COVERED OPTIONS" ON SECURITIES IN STANDARD
CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES. THE PORTFOLIO MAY WRITE SUCH
OPTIONS IN ORDER TO RECEIVE THE PREMIUMS FROM OPTIONS THAT EXPIRE AND TO SEEK
NET GAINS FROM CLOSING PURCHASE TRANSACTIONS WITH RESPECT TO SUCH OPTIONS.
PUT AND CALL OPTIONS. THE PORTFOLIOS MAY PURCHASE PUT AND CALL OPTIONS, IN
STANDARD CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES. THE PORTFOLIO WILL
PURCHASE SUCH OPTIONS ONLY TO HEDGE AGAINST CHANGES IN THE VALUE OF SECURITIES
THE PORTFOLIO HOLD AND NOT FOR THE PURPOSES OF SPECULATION OR LEVERAGE. BY
BUYING A PUT, A PORTFOLIO HAS THE RIGHT TO SELL THE SECURITY AT THE EXERCISE
PRICE, THUS LIMITING ITS RISK OF LOSS THROUGH A DECLINE IN THE MARKET VALUE OF
THE SECURITY UNTIL THE PUT EXPIRES. THE AMOUNT OF ANY APPRECIATION IN THE VALUE
OF THE UNDERLYING SECURITY WILL BE PARTIALLY OFFSET BY THE AMOUNT OF THE PREMIUM
PAID FOR THE PUT OPTION AND ANY RELATED TRANSACTION COSTS. PRIOR TO ITS
EXPIRATION, A PUT OPTION MAY BE SOLD IN A CLOSING SALE TRANSACTION AND ANY
PROFIT OR LOSS FROM THE SALE WILL DEPEND ON WHETHER THE AMOUNT RECEIVED IS MORE
OR LESS THAN THE PREMIUM PAID FOR THE PUT OPTION PLUS THE RELATED TRANSACTION
COSTS.
THE PORTFOLIO MAY PURCHASE CALL OPTIONS ON SECURITIES WHICH IT MAY INTEND
TO PURCHASE OR AS AN INTEREST RATE HEDGE. SUCH TRANSACTIONS MAY BE ENTERED INTO
IN ORDER TO LIMIT THE RISK OF A SUBSTANTIAL INCREASE IN THE MARKET PRICE OF THE
SECURITY WHICH THE PORTFOLIO INTENDS TO PURCHASE OR IN THE LEVEL OF MARKET
INTEREST RATES. PRIOR TO ITS EXPIRATION, A CALL OPTION MAY BE SOLD IN A CLOSING
SALE TRANSACTION. ANY PROFIT OR LOSS FROM SUCH A SALE WILL DEPEND ON WHETHER THE
AMOUNT RECEIVED IS MORE OR LESS THAN THE PREMIUM PAID FOR THE CALL OPTION PLUS
THE RELATED TRANSACTION COSTS.
COVERED OPTIONS. THE PORTFOLIO MAY WRITE ONLY COVERED OPTIONS ON SECURITIES IN
STANDARD CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES. THIS MEANS THAT, IN
THE CASE OF CALL OPTIONS, SO LONG AS A PORTFOLIO IS OBLIGATED AS THE WRITER OF A
CALL OPTION, THAT PORTFOLIO WILL OWN THE UNDERLYING SECURITY SUBJECT TO THE
OPTION AND, IN THE CASE OF PUT OPTIONS, THAT PORTFOLIO WILL, THROUGH ITS
CUSTODIAN, DEPOSIT AND MAINTAIN EITHER CASH OR SECURITIES WITH A MARKET VALUE
EQUAL TO OR GREATER THAN THE EXERCISE PRICE OF THE OPTION.
WHEN A PORTFOLIO WRITES A COVERED CALL OPTION, THE PORTFOLIO GIVES THE
PURCHASER THE RIGHT TO PURCHASE THE SECURITY AT THE CALL OPTION PRICE AT ANY
TIME DURING THE LIFE OF THE OPTION. AS THE WRITER OF THE OPTION, THE PORTFOLIO
RECEIVES A PREMIUM, LESS A COMMISSION, AND IN EXCHANGE FOREGOES THE OPPORTUNITY
TO PROFIT FROM ANY INCREASE IN THE MARKET VALUE OF THE SECURITY EXCEEDING THE
CALL OPTION PRICE. THE PREMIUM SERVES TO MITIGATE THE EFFECT OF ANY DEPRECIATION
IN THE MARKET VALUE OF THE SECURITY. WRITING COVERED CALL OPTIONS CAN INCREASE
THE INCOME OF THE PORTFOLIO AND THUS REDUCE DECLINES IN THE NET ASSET VALUE PER
SHARE OF THE PORTFOLIO IF SECURITIES COVERED BY SUCH OPTIONS DECLINE IN VALUE.
EXERCISE OF A CALL OPTION BY THE PURCHASER HOWEVER WILL CAUSE THE PORTFOLIO TO
FOREGO FUTURE APPRECIATION OF THE SECURITIES COVERED BY THE OPTION.
WHEN A PORTFOLIO WRITES A COVERED PUT OPTION, IT WILL GAIN A PROFIT IN THE
AMOUNT OF THE PREMIUM, LESS A COMMISSION, SO LONG AS THE PRICE OF THE UNDERLYING
SECURITY REMAINS ABOVE THE EXERCISE PRICE. HOWEVER, THE PORTFOLIO REMAINS
OBLIGATED TO PURCHASE THE UNDERLYING SECURITY FROM THE BUYER OF THE PUT OPTION
(USUALLY IN THE EVENT THE PRICE OF THE SECURITY FALLS BELOW THE EXERCISE PRICE)
AT ANY TIME DURING THE OPTION PERIOD. IF THE PRICE OF THE UNDERLYING SECURITY
FALLS BELOW THE EXERCISE PRICE, THE PORTFOLIO MAY REALIZE A LOSS IN THE AMOUNT
OF THE DIFFERENCE BETWEEN THE EXERCISE PRICE AND THE SALE PRICE OF THE SECURITY,
LESS THE PREMIUM RECEIVED.
THE PORTFOLIO MAY PURCHASE SECURITIES WHICH MAY BE COVERED WITH CALL
OPTIONS SOLELY ON THE BASIS OF CONSIDERATIONS CONSISTENT WITH THE INVESTMENT
OBJECTIVES AND POLICIES OF THE PORTFOLIO. THE PORTFOLIO'S TURNOVER MAY INCREASE
THROUGH THE EXERCISE OF A CALL OPTION; THIS WILL GENERALLY OCCUR IF THE MARKET
VALUE OF A "COVERED" SECURITY INCREASES AND THE PORTFOLIO HAS NOT ENTERED INTO A
CLOSING PURCHASE TRANSACTION.
RISKS RELATED TO OPTIONS TRANSACTIONS. THE PORTFOLIO CAN CLOSE OUT ITS
RESPECTIVE POSITIONS IN EXCHANGE-TRADED OPTIONS ONLY ON AN EXCHANGE WHICH
PROVIDES A SECONDARY MARKET IN SUCH OPTIONS. ALTHOUGH THE PORTFOLIO INTENDS TO
ACQUIRE AND WRITE ONLY SUCH EXCHANGE-TRADED OPTIONS FOR WHICH AN ACTIVE
SECONDARY MARKET APPEARS TO EXIST, THERE CAN BE NO ASSURANCE THAT SUCH A MARKET
WILL EXIST FOR ANY PARTICULAR OPTION CONTRACT AT ANY PARTICULAR TIME. THIS MIGHT
PREVENT THE PORTFOLIO FROM CLOSING AN OPTIONS POSITION, WHICH COULD IMPAIR THE
PORTFOLIO'S ABILITY TO HEDGE EFFECTIVELY. THE INABILITY TO CLOSE OUT A CALL
POSITION MAY HAVE AN ADVERSE EFFECT ON LIQUIDITY BECAUSE THE PORTFOLIO MAY BE
REQUIRED TO HOLD THE SECURITIES UNDERLYING THE OPTION UNTIL THE OPTION EXPIRES
OR IS EXERCISED.
TRANSACTIONS IN FUTURES CONTRACTS
THE PORTFOLIOS 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 PURPOSES ONLY. THE 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. THE 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 THE PORTFOLIO'S 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 THE PORTFOLIO WILL ENGAGE IN THE
PURCHASE AND SALE OF FINANCIAL FUTURES CONTRACTS SOLELY FOR HEDGING PURPOSES,
HOWEVER, ANY LOSSES INCURRED IN CONNECTION THEREWITH SHOULD, IF THE HEDGING
STRATEGY IS SUCCESSFUL, BE OFFSET IN WHOLE OR IN PART BY INCREASES IN THE VALUE
OF SECURITIES HELD BY THE PORTFOLIO OR DECREASES IN THE PRICE OF SECURITIES THE
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. THE 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 THE 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 THE PORTFOLIO, OR MOVE IN A DIRECTION OPPOSITE TO
THAT ANTICIPATED, THE PORTFOLIO MAY REALIZE A LOSS ON THE HEDGING TRANSACTION
WHICH IS NOT FULLY OR PARTIALLY OFFSET BY AN INCREASE IN THE VALUE OF THE
PORTFOLIO'S SECURITIES. AS A RESULT, THE 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. THE PORTFOLIO
INTENDS TO CLOSE OUT ITS FUTURES CONTRACTS PRIOR TO THE DELIVERY DATE OF SUCH
CONTRACTS.
THE PORTFOLIOS 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 THE 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 THE PORTFOLIO'S FUTURES COMMISSION
MERCHANT AND THE RELEVANT CONTRACT MARKET, WHICH VARIES BUT IS GENERALLY ABOUT
5% OR LESS OF THE CONTRACT AMOUNT, MUST BE DEPOSITED WITH THE BROKER. THIS
AMOUNT IS KNOWN AS "INITIAL MARGIN," AND REPRESENTS A "GOOD FAITH" DEPOSIT
ASSURING THE PERFORMANCE OF BOTH THE PURCHASER AND THE SELLER UNDER THE FUTURES
CONTRACT. SUBSEQUENT PAYMENTS TO AND FROM THE BROKER, KNOWN AS "VARIATION
MARGIN," ARE REQUIRED TO BE MADE ON A DAILY BASIS AS THE PRICE OF THE FUTURES
CONTRACT FLUCTUATES, MAKING THE LONG OR SHORT POSITIONS IN THE FUTURES CONTRACT
MORE OR LESS VALUABLE, A PROCESS KNOWN AS "MARKING TO THE MARKET." PRIOR TO THE
SETTLEMENT DATE OF THE FUTURES CONTRACT, THE POSITION MAY BE CLOSED OUT BY
TAKING AN OPPOSITE POSITION WHICH WILL OPERATE TO TERMINATE THE POSITION IN THE
FUTURES CONTRACT. A FINAL DETERMINATION OF VARIATION MARGIN IS THEN MADE,
ADDITIONAL CASH IS REQUIRED TO BE PAID TO OR RELEASED BY THE BROKER, AND THE
PURCHASER REALIZES A LOSS OR GAIN. IN ADDITION, A COMMISSION IS PAID ON EACH
COMPLETED PURCHASE AND SALE TRANSACTION.
THE SALE OF FINANCIAL FUTURES CONTRACTS PROVIDES AN ALTERNATIVE MEANS OF
HEDGING THE PORTFOLIO AGAINST DECLINES IN THE VALUE OF ITS INVESTMENTS IN
MUNICIPAL BONDS. AS SUCH VALUES DECLINE, THE VALUE OF THE 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 THE 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
THE 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 THE PORTFOLIO TO ASSUME
A HEDGING POSTURE WITHOUT REDUCING THE YIELD ON ITS INVESTMENTS, BEYOND ANY
AMOUNTS REQUIRED TO ENGAGE IN FUTURES TRADING.
THE PORTFOLIOS 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 THE
PORTFOLIO IS THE BOND BUYER MUNICIPAL BOND INDEX, DEVELOPED BY THE BOND BUYER
AND THE CHICAGO BOARD OF TRADE ("CBT"), THE CONTRACT MARKET ON WHICH THE FUTURES
CONTRACTS ARE TRADED. AS CURRENTLY STRUCTURED, THE INDEX IS COMPRISED OF 40
TAX-EXEMPT TERM MUNICIPAL REVENUE AND GENERAL OBLIGATION BONDS. EACH BOND
INCLUDED IN THE INDEX MUST BE RATED EITHER A- OR HIGHER BY STANDARD & POOR'S OR
A OR HIGHER BY MOODY'S INVESTORS SERVICE AND MUST HAVE A REMAINING MATURITY OF
19 YEARS OR MORE. TWICE A MONTH NEW ISSUES SATISFYING THE ELIGIBILITY
REQUIREMENTS ARE ADDED TO, AND AN EQUAL NUMBER OF OLD ISSUES WILL BE DELETED
FROM, THE INDEX. THE VALUE OF THE INDEX IS COMPUTED DAILY ACCORDING TO A FORMULA
BASED UPON THE PRICE OF EACH BOND IN THE INDEX, AS EVALUATED BY FOUR
DEALER-TO-DEALERS BROKERS.
THE PORTFOLIO MAY ALSO PURCHASE AND SELL FUTURES CONTRACTS ON U.S. TREASURY
BILLS, NOTES AND BONDS FOR THE SAME TYPES OF HEDGING 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.
THE PORTFOLIO MAY ALSO PURCHASE FINANCIAL FUTURES CONTRACTS WHEN IT IS NOT
FULLY INVESTED IN MUNICIPAL BONDS IN ANTICIPATION OF AN INCREASE IN THE COST OF
SECURITIES THE 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, THE 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 THE 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.
THE PORTFOLIO MAY PURCHASE OPTIONS ON FUTURES CONTRACTS FOR THE SAME TYPES
OF HEDGING 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, THE 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, THE PORTFOLIO COULD PURCHASE CALL OPTIONS ON
FUTURES CONTRACTS, INSTEAD OF PURCHASING THE UNDERLYING FUTURES CONTRACTS. THE
PORTFOLIO GENERALLY WILL SELL OPTIONS ON FUTURES CONTRACTS ONLY TO CLOSE OUT AN
EXISTING POSITION.
THE 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 THE 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 HEDGING NEEDS OF THE PORTFOLIO, 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 THE
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 THE 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 THE PORTFOLIO
AND ACCRUED PROFITS ON SUCH POSITIONS. IN ADDITION, THE PORTFOLIO MAY NOT
PURCHASE OR SELL ANY SUCH INSTRUMENTS IF, IMMEDIATELY THEREAFTER, THE SUM OF THE
AMOUNT OF INITIAL MARGIN DEPOSITS ON THE PORTFOLIO'S EXISTING FUTURES POSITIONS
WOULD EXCEED 5% OF THE MARKET VALUE OF ITS NET ASSETS.
WHEN THE 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 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 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 PORTFOLIO. AS A RESULT, THE 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 THE 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 THE 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.
THE 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, THE PORTFOLIO COULD BE REQUIRED
TO MAKE CONTINUING DAILY CASH PAYMENTS OF VARIATION MARGIN IN THE EVENT OF
ADVERSE PRICE MOVEMENTS. IN SUCH SITUATION, IF THE 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, THE 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 THE PORTFOLIO'S ABILITY
EFFECTIVELY TO HEDGE ITS PORTFOLIO.
WHEN THE 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, THE 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 THE 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.
INVESTMENT RESTRICTIONS
-----------------------
FUNDAMENTAL INVESTMENT RESTRICTIONS
THE PORTFOLIOS HAS 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 THE PORTFOLIO. NO PORTFOLIO
MAY:
(1) MAKE ANY INVESTMENT INCONSISTENT WITH ITS CLASSIFICATION AS A NONDIVERSIFIED
INVESTMENT COMPANY UNDER THE 1940 ACT.
(2) 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 OR DOMESTIC BANK MONEY MARKET INSTRUMENTS).
(3) ISSUE SENIOR SECURITIES OR BORROW MONEY, EXCEPT FROM BANKS FOR TEMPORARY OR
EMERGENCY PURPOSES AND THEN ONLY IN AN AMOUNT UP TO 33 1/3% OF THE VALUE OF 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, THE PORTFOLIOS MAY PLEDGE,
MORTGAGE OR HYPOTHECATE ITS ASSETS.
(4) UNDERWRITE THE SECURITIES OF OTHER ISSUERS, EXCEPT AS ALLOWED BY LAW OR TO
THE EXTENT THAT THE PURCHASE OF MUNICIPAL OBLIGATIONS IN ACCORDANCE WITH ITS
INVESTMENT OBJECTIVE AND POLICIES, EITHER DIRECTLY FROM THE ISSUER, OR FROM AN
UNDERWRITER FOR AN ISSUER, MAY BE DEEMED AN UNDERWRITING.
(5) 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) 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 ITS
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 ITS TOTAL ASSETS.
(3) EACH PORTFOLIO MAY NOT SELL SECURITIES SHORT, PURCHASE SECURITIES ON MARGIN,
OR WRITE OR PURCHASE PUT OR CALL OPTIONS, EXCEPT AS PERMITTED IN CONNECTION WITH
TRANSACTIONS IN FUTURES CONTRACTS AND OPTIONS THEREON. THE PORTFOLIO RESERVE THE
RIGHT TO PURCHASE SECURITIES WITH PUTS ATTACHED OR WITH DEMAND FEATURES.
(4) THE PORTFOLIOS MAY NOT INVEST MORE THAN 35% OF NET ASSETS IN NON-INVESTMENT
GRADE DEBT SECURITIES. THE PORTFOLIOS DO NOT INTEND TO PURCHASE MORE THAN 15% OF
NON-INVESTMENT GRADE DEBT SECURITIES.
(5) THE PORTFOLIOS MAY NOT PURCHASE ILLIQUID SECURITIES IF MORE THAN 15% OF THE
VALUE OF THE PORTFOLIO'S NET ASSETS WOULD BE INVESTED IN SUCH SECURITIES.
(6) LONG-TERM ONLY: THOUGH NONDIVERSIFIED, THE PORTFOLIO DOES NOT INTEND TO
PURCHASE MORE THAN 15% OF ASSETS IN ANY ONE ISSUER.
(7) 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.
(8) EACH PORTFOLIO 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 NOT BE ISSUED UNLESS REQUESTED IN WRITING BY THE
INVESTOR. NO CHARGE WILL BE MADE FOR SHARE CERTIFICATE REQUESTS. NO CERTIFICATES
WILL BE ISSUED FOR FRACTIONAL SHARES. SEE THE PROSPECTUS FOR MORE DETAILS ON
PURCHASES AND REDEMPTIONS.
DIVIDENDS, DISTRIBUTIONS AND TAX MATTERS
----------------------------------------
THE PORTFOLIOS INTEND 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 RATHER THAN
PASSING THROUGH ITS INCOME AND GAINS TO SHAREHOLDERS.
THE PORTFOLIOS DECLARE AND PAY MONTHLY DIVIDENDS OF 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.
DIVIDENDS ARE AUTOMATICALLY REINVESTED AT NET ASSET VALUE IN ADDITIONAL
SHARES. CAPITAL GAINS, IF ANY, ARE NORMALLY PAID ONCE A YEAR AND WILL BE
AUTOMATICALLY REINVESTED AT NET ASSET VALUE IN ADDITIONAL SHARES, UNLESS YOU
CHOOSE OTHERWISE. THE PORTFOLIOS DO NOT INTEND TO MAKE ANY SUCH DISTRIBUTIONS
UNLESS AVAILABLE CAPITAL LOSS CARRYOVERS, IF ANY, HAVE BEEN USED OR HAVE
EXPIRED. THE CAPITAL LOSS CARRYFORWARDS AS OF DECEMBER 31, 1999 WERE AS
FOLLOWS:
1999
LONG- TERM $783,509
VERMONT $54,676
NATIONAL $607,240
CALIFORNIA $574,670
MARYLAND $135,440
VIRGINIA $88,301
YOU MAY ELECT TO HAVE THEIR DIVIDENDS AND DISTRIBUTIONS PAID OUT MONTHLY IN
CASH. YOU MAY ALSO REQUEST TO HAVE YOUR DIVIDENDS AND DISTRIBUTIONS FROM THE
PORTFOLIO INVESTED IN SHARES OF ANY OTHER CALVERT GROUP FUND, TO BE INVESTED IN
THAT FUND OR PORTFOLIO WITHOUT A SALES CHARGE.
THE PORTFOLIO'S DIVIDENDS OF NET INVESTMENT INCOME CONSTITUTE
EXEMPT-INTEREST DIVIDENDS ON WHICH SHAREHOLDERS ARE NOT GENERALLY SUBJECT TO
FEDERAL INCOME TAX; OR FOR THE STATE - SPECIFIC PORTFOLIOS, TO THEIR RESPECTIVE
STATE 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. THE 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.
A SHAREHOLDER MAY ALSO BE SUBJECT TO STATE AND LOCAL TAXES ON DIVIDENDS AND
DISTRIBUTIONS FROM THE PORTFOLIO. THE PORTFOLIO WILL NOTIFY SHAREHOLDERS
ANNUALLY ABOUT THE FEDERAL TAX STATUS OF DIVIDENDS AND DISTRIBUTIONS PAID BY THE
PORTFOLIO 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 ADVISERS BEFORE PURCHASING SHARES OF THE PORTFOLIO.
"SUBSTANTIAL USER" IS GENERALLY DEFINED AS INCLUDING A "NON-EXEMPT PERSON" WHO
REGULARLY USES IN TRADE OR BUSINESS A PART OF A FACILITY FINANCED FROM THE
PROCEEDS OF PRIVATE ACTIVITY BONDS.
THE PORTFOLIO IS REQUIRED TO WITHHOLD 31% OF ANY LONG-TERM CAPITAL GAIN
DIVIDENDS AND 31% OF EACH REDEMPTION TRANSACTION OCCURRING IN THE PORTFOLIO 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) THE FUND 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 THE PORTFOLIO IS REQUIRED TO REPORT TO THE INTERNAL REVENUE
SERVICE THE FOLLOWING INFORMATION WITH RESPECT TO REDEMPTION TRANSACTIONS IN THE
PORTFOLIO: (A) THE SHAREHOLDER'S NAME, ADDRESS, ACCOUNT NUMBER AND TAXPAYER
IDENTIFICATION NUMBER; (B) THE TOTAL DOLLAR VALUE OF THE REDEMPTIONS; AND (C)
THE PORTFOLIO'S 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. NON-RESIDENT 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 THE PORTFOLIO FOR FURTHER INFORMATION.
VALUATION OF SHARES
-------------------
EACH PORTFOLIO'S ASSETS ARE NORMALLY 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 PORTFOLIO'S ADVISOR UNDER THE
SUPERVISION OF THE BOARD OF TRUSTEES/DIRECTORS. THE PORTFOLIO DETERMINES THE NET
ASSET VALUE OF 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 PORTFOLIO DOES 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.
VALUATIONS, MARKET QUOTATIONS AND MARKET EQUIVALENTS ARE PROVIDED THE
PORTFOLIO BY KENNY S&P EVALUATION SERVICES, A SUBSIDIARY OF MCGRAW-HILL. THE USE
OF KENNY AS A PRICING SERVICE BY THE PORTFOLIO HAS BEEN APPROVED BY THE BOARD OF
TRUSTEES/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.
NET ASSET VALUE AND OFFERING PRICE PER SHARE AS OF DECEMBER 31, 1999:
LONG-TERM NET ASSET VALUE PER SHARE
$51,145,860/3,343,530 SHARES) $15.30
MAXIMUM SALES CHARGE
(3.75% OF OFFERING PRICE) .60
OFFERING PRICE PER SHARE $15.90
VERMONT NET ASSET VALUE PER SHARE
($46,451,792/3,116,675 SHARES) $14.90
MAXIMUM SALES CHARGE
(3.75% OF OFFERING PRICE) .58
OFFERING PRICE PER SHARE $15.48
NATIONAL
NET ASSET VALUE PER SHARE
($58,093,129,/5,738,547 SHARES) $10.12
MAXIMUM SALES CHARGE
(2.75% OF OFFERING PRICE .29
OFFERING PRICE PER SHARE $10.41
CALIFORNIA
NET ASSET VALUE PER SHARE
($30,385,024/2,998,527 SHARES) $10.13
MAXIMUM SALES CHARGE
(2.75% OF OFFERING PRICE) .29
OFFERING PRICE PER SHARE $10.42
MARYLAND
NET ASSET VALUE PER SHARE
($10,710,708/2,181,652 SHARES) $4.91
MAXIMUM SALES CHARGE
(2.75% OF OFFERING PRICE) .14
OFFERING PRICE PER SHARE $5.05
VIRGINIA
NET ASSET VALUE PER SHARE
($14,316,656/2,888,008 SHARES) $4.96
MAXIMUM SALES CHARGE
(2.75% OF OFFERING PRICE) .14
OFFERING PRICE PER SHARE $5.10
CALCULATION OF YIELD AND TOTAL RETURN
-------------------------------------
FROM TIME TO TIME, THE PORTFOLIOS ADVERTISE THEIR "TOTAL RETURN." TOTAL
RETURN IS CALCULATED SEPARATELY FOR EACH CLASS. 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 TEN-YEAR. TOTAL
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. ALL
TOTAL RETURN QUOTATIONS REFLECT THE DEDUCTION OF THE PORTFOLIO'S MAXIMUM SALES
CHARGE, EXCEPT QUOTATIONS OF "RETURN WITHOUT MAXIMUM LOAD," WHICH DO NOT DEDUCT
THE SALES CHARGE, AND "ACTUAL RETURN," WHICH REFLECT DEDUCTION OF THE SALES
CHARGE ONLY FOR THOSE PERIODS WHEN A SALES CHARGE WAS ACTUALLY IMPOSED. THUS, IN
THE FORMULA BELOW, FOR RETURN WITHOUT MAXIMUM LOAD, P = THE ENTIRE $1,000
HYPOTHETICAL INITIAL INVESTMENT AND DOES NOT REFLECT THE DEDUCTION OF ANY SALES
CHARGE; FOR ACTUAL RETURN, P = A HYPOTHETICAL INITIAL INVESTMENT OF $1,000 LESS
ANY SALES CHARGE ACTUALLY IMPOSED AT THE BEGINNING OF THE PERIOD FOR WHICH THE
PERFORMANCE IS BEING CALCULATED. NOTE: "TOTAL RETURN" AS QUOTED IN THE FINANCIAL
HIGHLIGHTS SECTION OF THE FUND'S 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" OR "AT NAV" 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 = AVERAGE ANNUAL 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 INDICATED AS OF DECEMBER 31, 1999 ARE AS FOLLOWS:
WITH MAX. LOAD W/O MAX. LOAD
LONG-TERM
ONE YEAR (8.07%) (4.52%)
FIVE YEARS 4.55% 5.36%
TEN YEARS 5.50% 5.91%
VERMONT
ONE YEAR (7.85%) (4.29%)
FIVE YEARS 4.44% 5.24%
FROM INCEPTION 5.18% 5.64%
(4/01/91)
NATIONAL
ONE YEAR (4.74%) (2.01%)
FIVE YEARS 4.99% 5.59%
FROM INCEPTION 4.75% 5.14%
(9/30/92)
CALIFORNIA
ONE YEAR (4.40%) (1.73%)
FIVE YEARS 4.59% 5.18%
FROM INCEPTION 4.53% 4.91%
(5/29/92)
MARYLAND
ONE YEAR (4.57%) (1.82%)
FIVE YEARS 4.97% 5.55%
FROM INCEPTION 3.77% 4.23%
(9/30/93)
VIRGINIA
ONE YEAR (4.56%) (1.84%)
FIVE YEARS 4.78% 5.35%
FROM INCEPTION 3.81% 4.27%
(9/30/93)
THE PORTFOLIO ALSO ADVERTISES, FROM TIME TO TIME, ITS "YIELD" AND "TAX
EQUIVALENT YIELD." AS WITH TOTAL RETURN, BOTH YIELD FIGURES ARE HISTORICAL AND
ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. "YIELD" QUOTATIONS FOR EACH
CLASS REFER TO THE AGGREGATE IMPUTED YIELD-TO-MATURITY OF EACH OF THE
PORTFOLIO'S INVESTMENTS BASED ON THE MARKET VALUE AS OF THE LAST DAY OF A GIVEN
THIRTY-DAY OR ONE-MONTH PERIOD, LESS 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. THE PORTFOLIO'S 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 TAX EQUIVALENT YIELD IS THE YIELD AN INVESTOR WOULD BE REQUIRED TO
OBTAIN FROM TAXABLE INVESTMENTS TO EQUAL THE PORTFOLIO'S YIELD, ALL OR A PORTION
OF WHICH MAY BE EXEMPT FROM FEDERAL INCOME TAXES. THE TAX EQUIVALENT YIELD IS
COMPUTED PER CLASS BY TAKING THE PORTION OF THE CLASS' YIELD EXEMPT FROM REGULAR
FEDERAL INCOME TAX AND MULTIPLYING THE EXEMPT YIELD BY A FACTOR BASED UPON A
STATED INCOME TAX RATE, THEN ADDING THE PORTION OF THE YIELD THAT IS NOT EXEMPT
FROM REGULAR FEDERAL INCOME TAX. 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, 1999, THE YIELDS WERE:
YIELD TAX-EQUIVALENT TAX-EQUIVALENT
YIELD YIELD
(ASSUMES 36% FEDERAL BRACKET) (ASSUME 39.6% BRACKET)
LONG-TERM 4.64% 7.25% 7.68%
VERMONT 4.46% 6.97% 7.38%
NATIONAL 4.48% 7.00% 7.42%
CALIFORNIA 4.24% 6.63% 7.02%
VIRGINIA 3.93% 6.14% 6.51%
MARYLAND 4.24% 6.63% 7.02%
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 FUND 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 FUND 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, 1999). CALVERT GROUP WAS ALSO THE
FIRST TO OFFER A FAMILY OF SOCIALLY RESPONSIBLE MUTUAL FUND PORTFOLIOS.
TRUSTEES/DIRECTORS AND OFFICERS
-------------------------------
THE FUND'S BOARD OF TRUSTEES/DIRECTORS SUPERVISES THE FUND'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: 282 SOUTH AVENUE, SUITE 201, P.O.
BOX 207, FANWOOD, NJ 07023.
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: 2610 NONOHE STREET,
WAHIAWA, HAWAII, 96786-2843.
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 EXECUTIVE VICE
PRESIDENT OF CALVERT SOCIAL INVESTMENT FUND. HE IS ON THE BOARD OF DIRECTORS OF
THE CALVERT SOCIAL INVESTMENT FOUNDATION, ORGANIZING DIRECTOR OF THE COMMUNITY
CAPITAL BANK IN BROOKLYN, NEW YORK, AND A FINANCIAL CONSULTANT TO VARIOUS
ORGANIZATIONS. IN ADDITION, HE IS A DIRECTOR OF THE COMMUNITY BANKERS MUTUAL
FUND OF DENVER, COLORADO, A DIRECTOR OF ARIEL FUNDS, AND THE TREASURER AND
DIRECTOR OF SILBY, GUFFEY, AND CO., INC., A VENTURE CAPITAL FIRM. MR. GUFFEY IS
A TRUSTEE/DIRECTOR OF EACH OF THE OTHER INVESTMENT COMPANIES IN THE CALVERT
GROUP OF FUNDS, EXCEPT FOR CALVERT VARIABLE SERIES, INC. AND CALVERT NEW WORLD
FUND, INC. DOB: 5/15/48. ADDRESS: 388 CALLI CALINA, SANTA FE, NM 87501.
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 THAT (1) 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) 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) 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.
*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. MS. KRUMSIEK IS ON
THE BOARD OF DIRECTORS OF CALVERT SOCIAL INVESTMENT FOUNDATION. 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 LIFE INSURANCE
COMPANY AND CHAIRMAN OF CALVERT SOCIAL INVESTMENT FOUNDATION. 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.
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. SHE ALSO SERVES AS 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.
JENNIFER STREAKS, ESQ., ASSISTANT SECRETARY. MS. STREAKS IS ASSISTANT
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 FUNDS. PRIOR TO WORKING AT CALVERT
GROUP, MS. STREAKS WAS A REGULATORY ANALYST IN THE MARKET REGULATIONS DEPARTMENT
OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS. DOB: 08/02/71.
MICHAEL V. YUHAS JR., CPA, CONTROLLER OF FUNDS. MR. YUHAS IS THE DIRECTOR
OF FUND ADMINISTRATION OF CALVERT GROUP, LTD., AND AN OFFICER OF EACH OF THE
OTHER INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. DOB: 08/04/61.
THE ADDRESS OF DIRECTORS AND OFFICERS, UNLESS OTHERWISE NOTED, IS 4550
MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND 20814. TRUSTEES/DIRECTORS AND
OFFICERS OF THE FUND AS A GROUP OWN LESS THAN 1% OF THE FUND'S OUTSTANDING
SHARES. TRUSTEES/DIRECTORS MARKED WITH AN *, ABOVE, ARE "INTERESTED PERSONS" OF
THE FUND, UNDER THE INVESTMENT COMPANY ACT OF 1940.
EACH OF THE ABOVE DIRECTORS/TRUSTEES AND OFFICERS IS A DIRECTOR/TRUSTEE OR
OFFICER OF EACH OF THE INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS WITH
THE EXCEPTION OF CALVERT SOCIAL INVESTMENT FUND, OF WHICH ONLY MESSRS. BAIRD,
GUFFEY AND SILBY AND MS. KRUMSIEK ARE AMONG THE TRUSTEES, CALVERT VARIABLE
SERIES, INC., OF WHICH ONLY MESSRS. BLATZ, DIEHL AND PUGH, MMES. KRUMSIEK AND
KRUVANT ARE AMONG THE DIRECTORS, CALVERT WORLD VALUES FUND, INC., OF WHICH ONLY
MESSRS. GUFFEY AND SILBY AND MS. KRUMSIEK ARE AMONG THE DIRECTORS, AND CALVERT
NEW WORLD FUND, INC., OF WHICH ONLY MS. KRUMSIEK AND MR. MARTINI ARE AMONG THE
DIRECTORS.
THE AUDIT COMMITTEE OF THE BOARD 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.
TRUSTEES 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 OF THE FUND NOT AFFILIATED WITH THE FUND'S ADVISOR MAY
ELECT TO DEFER RECEIPT OF ALL OR A PERCENTAGE OF THEIR FEES AND INVEST THEM IN
ANY FUND IN THE CALVERT FAMILY OF FUNDS THROUGH THE TRUSTEES/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.
TRUSTEE/DIRECTORS COMPENSATION TABLE
FISCAL YEAR 1999
(UNAUDITED NUMBERS)
Aggregate Pension or Total Compensation
Compensation Retirement Benefits from
from Registrant Accrued as Registrant and Fund
for Service part of Complex paid to
as Trustee/Directors Registrant Trustee/Directors**
Expenses*
CALVERT TAX-FREE RESERVES
RICHARD L. BAIRD, JR. $25,302 $0 $39,250
FRANK H. BLATZ, JR. $26,346 $26,346 $48,250
FREDERICK T. BORTS $24,781 $0 $35,500
CHARLES E. DIEHL $26,346 $0 $48,250
DOUGLAS E. FELDMAN $25,823 $0 $37,000
PETER W. GAVIAN $25,823 $0 $37,000
JOHN G. GUFFEY, JR. $25,303 $4,908 $56,365
M. CHARITO KRUVANT $24,781 $14,868 $45,250
ARTHUR J. PUGH $26,346 $0 $48,250
D. WAYNE SILBY $22,698 $0 $60,831
CALVERT MUNICIPAL FUND
RICHARD L. BAIRD, JR. $1140 $0 $39,250
FRANK H. BLATZ, JR. $1186 $1186 $48,250
FREDERICK T. BORTS $1118 $0 $35,500
CHARLES E. DIEHL $1186 $0 $48,250
DOUGLAS E. FELDMAN $1161 $0 $37,000
PETER W. GAVIAN $1161 $0 $37,000
JOHN G. GUFFEY, JR. $1138 $214 $56,365
M. CHARITO KRUVANT $1117 $670 $45,250
ARTHUR J. PUGH $1186 $0 $48,250
D. WAYNE SILBY $1028 $0 $60,831
* CERTAIN TRUSTEES HAVE CHOSEN TO DEFER THEIR COMPENSATION. AS OF DECEMBER 31,
1999, TOTAL DEFERRED COMPENSATION FROM THE FUND COMPLEX, INCLUDING DIVIDENDS AND
CAPITAL APPRECIATION FOR THE TRUSTEES SHOWN WAS: BLATZ, $784,000; DIEHL,
$760,650; GAVIAN, $194,300; GUFFEY, $11,100; KRUVANT, $58,700; AND PUGH,
$134,450.
** 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.
UNDER THE ADVISORY AGREEMENT, 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 TRUSTEES. FOR ITS SERVICES, THE ADVISOR RECEIVES FROM EACH
PORTFOLIO AN ANNUAL FEE OF 0.60% OF THE FIRST $500 MILLION OF THE PORTFOLIO'S
AVERAGE DAILY NET ASSETS, 0.50% OF THE NEXT $500 MILLION OF SUCH ASSETS, AND
0.40% OF ALL SUCH 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. THE ADVISOR PROVIDES THE FUND WITH INVESTMENT ADVICE AND RESEARCH,
PAYS THE SALARIES AND FEES OF ALL TRUSTEES AND EXECUTIVE OFFICERS OF THE FUND
WHO ARE EMPLOYEES OF THE ADVISOR, OR ITS AFFILIATES AND PAYS CERTAIN FUND
ADVERTISING AND PROMOTIONAL EXPENSES. THE FUND PAYS ALL 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.
THE ADVISOR MAY VOLUNTARILY REIMBURSE THE PORTFOLIO FOR EXPENSES. THE
FOLLOWING TABLE SHOWS THE ADVISORY FEES PAID BY EACH PORTFOLIO TO THE ADVISOR
FOR FISCAL YEARS 1997, 1998 AND 1999.
1997 1998 1999
LONG-TERM 307,550 331,988 337,132
VERMONT 296,024 305,695 302,238
NATIONAL 285,023 396,802 387,442
CALIFORNIA 204,019 205,130 201,388
MARYLAND 70,899 74,404 69,121
VIRGINIA 79,695 84,448 88,853
ADMINISTRATIVE SERVICES AGENT
-----------------------------
CALVERT ADMINISTRATIVE SERVICES COMPANY ("CASC"), AN AFFILIATE OF THE
ADVISOR, HAS BEEN RETAINED BY THE FUND TO PROVIDE CERTAIN ADMINISTRATIVE
SERVICES NECESSARY TO THE CONDUCT OF THE FUND'S AFFAIRS. PRIOR TO AUGUST 1,
1997, CASC RECEIVED AN AGGREGATED FEE FROM CALVERT TAX-FREE RESERVES (CTFR) OF
$200,000 PER YEAR FOR PROVIDING SUCH SERVICES, ALLOCATED AMONG THE FIVE CTFR
PORTFOLIOS BASED ON ASSETS. EFFECTIVE AUGUST 1, 1997, THE FEE STRUCTURE CHANGED.
EXCLUSIVE OF THE CTFR MONEY MARKET PORTFOLIO, CTFR PAYS AN ANNUAL FEE OF
$80,000, ALLOCATED BETWEEN THE REMAINING PORTFOLIOS BASED ON ASSETS. THE CALVERT
MUNICIPAL FUND PORTFOLIO (NATIONAL, CALIFORNIA, MARYLAND AND VIRGINIA) PAY A FEE
OF 0.10% OF THEIR RESPECTIVE AVERAGE ANNUAL NET ASSETS. THE SERVICE FEES PAID
BY THE PORTFOLIOS TO CALVERT ADMINISTRATIVE SERVICES COMPANY FOR THE PAST 3
FISCAL YEARS WERE:
1997 1998 1999
LONG-TERM $4,158 $4,476 $2,017
VERMONT $4,004 $4,127 $0
NATIONAL $47,504 $66,134 $62,430
CALIFORNIA $34,003 $34,188 $27,667
MARYLAND $11,816 $12,401 $6,807
VIRGINIA $13,283 $14,075 $9,329
TRANSFER AND SHAREHOLDER SERVICING AGENTS
-----------------------------------------
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.
FOR THESE SERVICES, NFDS AND CALVERT SHAREHOLDER SERVICES, INC. RECEIVE A
FEE BASED ON THE NUMBER OF SHAREHOLDER ACCOUNTS AND TRANSACTIONS.
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
--------------------------------------
PRICEWATERHOUSECOOPERS LLP, 250 WEST PRATT STREET, BALTIMORE MARYLAND
21201, HAS BEEN SELECTED BY THE BOARD OF TRUSTEES/DIRECTORS TO SERVE AS
INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR 2000. STATE STREET BANK & TRUST COMPANY,
N.A., 225 FRANKLIN STREET, BOSTON, MA 02110, CURRENTLY SERVES AS CUSTODIAN OF
THE PORTFOLIO'S INVESTMENTS. ALLFIRST FINANCIAL, INC. 25 SOUTH CHARLES STREET,
BALTIMORE, MARYLAND 21203 ALSO SERVES AS CUSTODIAN OF CERTAIN OF THE PORTFOLIO'S
CASH ASSETS. NEITHER CUSTODIAN HAS ANY PART IN DECIDING THE PORTFOLIO'S
INVESTMENT POLICIES OR THE CHOICE OF SECURITIES THAT ARE TO BE PURCHASED OR SOLD
FOR THE PORTFOLIO.
METHOD OF DISTRIBUTION
----------------------
CALVERT DISTRIBUTIONS, INC, ("CDI"), 4550 MONTGOMERY AVE., SUITE 1000N
BETHESDA, MARYLAND 20814, IS THE PRINCIPAL UNDERWRITER AND DISTRIBUTOR FOR THE
FUND. CDI IS AN AFFILIATE OF THE FUND'S ADVISOR. UNDER THE TERMS OF ITS
UNDERWRITING AGREEMENT WITH THE FUNDS, CDI MARKETS AND DISTRIBUTES THE FUND'S
SHARES AND IS RESPONSIBLE FOR PREPARING ADVERTISING AND SALES LITERATURE, AND
PRINTING AND MAILING PROSPECTUSES TO PROSPECTIVE INVESTORS.
CTFR LONG-TERM AND VERMONT
SHARES ARE OFFERED AT NET ASSET VALUE PLUS A FRONT-END SALES CHARGE AS FOLLOWS:
AS A % OF AS A % OF ALLOWED TO
AMOUNT OF OFFERING NET AMOUNT BROKERS AS A %
INVESTMENT PRICE INVESTED OFFERING PRICE
LESS THAN $50,000 3.75% 3.90% 3.00%
$50,000 BUT
LESS THAN $100,000 3.00% 3.09% 2.25%
$100,000 BUT
LESS THAN $250,000 2.25% 2.30% 1.75%
$250,000 BUT
LESS THAN $500,000 1.75% 1.78% 1.25%
$500,000 BUT
LESS THAN $1,000,000 1.00% 1.01% 0.80%
$1,000,000 AND OVER 0.00 0.00% 0.00%
NATIONAL, CALIFORNIA, MARYLAND AND VIRGINIA
SHARES ARE OFFERED AT NET ASSET VALUE PLUS A FRONT-END SALES CHARGE AS FOLLOWS:
AS A % OF AS A % OF ALLOWED TO
AMOUNT OF OFFERING NET AMOUNT BROKERS AS A %
INVESTMENT PRICE INVESTED OFFERING PRICE
LESS THAN $50,000 2.75% 2.83% 2.25%
$50,000 BUT
LESS THAN $100,000 2.25% 2.30% 1.75%
$100,000 BUT
LESS THAN $250,000 1.75% 1.78% 1.25%
$250,000 BUT
LESS THAN $500,000 1.25% 1.27% 0.95%
$500,000 BUT
LESS THAN $1,000,000 1.00% 1.01% 0.80%
$1,000,000 AND OVER 0.00 0.00% 0.00%
PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 LONG-TERM,
NATIONAL, CALIFORNIA, MARYLAND AND VIRGINIA HAVE EACH ADOPTED DISTRIBUTION PLANS
(THE "PLANS") WHICH PERMIT THE FUND TO PAY CERTAIN EXPENSES ASSOCIATED WITH THE
DISTRIBUTION AND SERVICING OF ITS SHARES (VERMONT HAS NOT ADOPTED A DISTRIBUTION
PLAN).
CDI RECEIVES ANY FRONT-END SALES CHARGE OR CDSC PAID. A PORTION OF THE
FRONT-END SALES CHARGE MAY BE REALLOWED TO DEALERS. THE AGGREGATE AMOUNT OF
SALES CHARGES (GROSS UNDERWRITING COMMISSIONS), AND FOR CLASS A ONLY, THE AMOUNT
RETAINED BY CDI (NET OF REALLOWANCE AND FINDERS FEES) FOR THE LAST THREE FISCAL
YEARS ARE:
FISCAL YEAR 1997 1998 1999
GROSS/NET GROSS/NET GROSS/NET
LONG-TERM $35,466/$11,017 $44,897/$(4,778) $40,239/$15,336
NATIONAL $62,546/$17,870 $51,922/$10,056 $38,952/$8,092
VERMONT $58,265/$25,819 $63,649/$28,472 $52,430/$31,429
CALIFORNIA $49,851/$15,411 $37,645/$6,053 $12,643/$3,637
VIRGINIA $20,163/$7,697 $12,662/$5,678 $9,491/$3,192
FUND TRUSTEES AND CERTAIN OTHER AFFILIATED PERSONS OF THE FUND ARE EXEMPT
FROM THE SALES CHARGE SINCE THE DISTRIBUTION COSTS ARE MINIMAL TO PERSONS
ALREADY FAMILIAR WITH THE FUND. OTHER GROUPS ARE EXEMPT DUE TO ECONOMIES OF
SCALE IN DISTRIBUTION. SEE EXHIBIT A TO THE PROSPECTUS.
THE DISTRIBUTION PLANS WERE APPROVED BY THE BOARD OF TRUSTEES/DIRECTORS,
INCLUDING THE TRUSTEES/DIRECTORS WHO ARE NOT "INTERESTED PERSONS" OF THE FUND
(AS THAT TERM IS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940) 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 PORTFOLIO AND ITS
SHAREHOLDERS, INCLUDING ECONOMICS OF SCALE AT HIGHER ASSETS LEVELS BETTER
INVESTMENT OPPORTUNITIES AND MORE FLEXIBILITY IN MANAGING A GROWING PORTFOLIO.
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 OF THE AFFECTED CLASS;
OTHERWISE, THE PLAN MAY BE AMENDED BY THE TRUSTEES/DIRECTORS, INCLUDING A
MAJORITY OF THE NON-INTERESTED TRUSTEES AS DESCRIBED ABOVE.
THE PLAN WILL CONTINUE IN EFFECT FOR SUCCESSIVE ONE-YEAR TERMS PROVIDED
THAT SUCH CONTINUANCE IS ANNUALLY 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.
APART FROM THE PLAN, THE ADVISOR AND CDI, AT THEIR OWN EXPENSE, MAY INCUR
COSTS AND PAY EXPENSES ASSOCIATED WITH THE DISTRIBUTION OF SHARES OF THE
PORTFOLIO. FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, THEY PAID TO
BROKER/DEALERS FROM THEIR OWN RESOURCES A TOTAL OF $1,026,100 FOR DISTRIBUTION
EXPENSES FOR ALL FUNDS IN THE CALVERT GROUP. THE ADVISOR AND/OR CDI HAS AGREED
TO PAY CERTAIN FIRMS COMPENSATION BASED ON SALES OF FUND SHARES OR ON ASSETS
HELD IN THOSE FIRM'S ACCOUNTS FOR THEIR MARKETING AND DISTRIBUTION OF FUND
SHARES, ABOVE THE USUAL SALES CHARGES AND SERVICE FEES. THIS LIST MAY BE CHANGED
FORM TIME TO TIME. AS OF DECEMBER 31, 1999, THE ADVISOR AND/OR CDI HAD SPECIAL
ARRANGEMENTS WITH THE FOLLOWING FIRMS: MORGAN STANLEY DEAN WITTER, PRUDENTIAL
SECURITIES, SALOMON SMITH BARNEY, AMERICAN EXPRESS FINANCIAL ADVISORS, MERRILL
LYNCH, AND THE ADVISORS GROUP.
CDI, MAKES A CONTINUOUS OFFERING OF THE FUND'S SECURITIES ON A "BEST
EFFORTS" BASIS. UNDER THE TERMS OF THE AGREEMENT, CDI IS ENTITLED TO RECEIVE,
PURSUANT TO THE DISTRIBUTION PLANS, A DISTRIBUTION FEE AND A SERVICE FEE FROM
THE FUND BASED ON THE AVERAGE DAILY NET ASSETS OF THE FUND. THESE FEES ARE PAID
PURSUANT TO THE FUND'S DISTRIBUTION PLAN. THE DISTRIBUTION PLAN EXPENSES PAID BY
LONG-TERM TO CDI FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, WERE SPENT FOR THE
FOLLOWING PURPOSES:
COMPENSATION TO BROKER-DEALERS $39,626
COMPENSATION TO SALES PERSONNEL 5,046
ADVERTISING 1,415
PRINTING AND MAILING OF PROSPECTUSES 4,501
TO OTHER THAN CURRENT SHAREHOLDERS
COMPENSATION TO UNDERWRITERS
INTEREST, FINANCIAL CHARGES
OTHER ______
TOTAL PAID TO CDI $50,588
NATIONAL, CALIFORNIA, MARYLAND AND VIRGINIA DID NOT PAY ANY DISTRIBUTION
PLAN EXPENSES DURING FISCAL YEAR 1999.
PORTFOLIO TRANSACTIONS
----------------------
PORTFOLIO TRANSACTIONS ARE UNDERTAKEN ON THE BASIS OF THEIR DESIRABILITY
FROM AN INVESTMENT STANDPOINT. THE FUND'S ADVISOR MAKES INVESTMENT DECISIONS AND
THE CHOICE OF BROKERS AND DEALERS UNDER THE DIRECTION AND SUPERVISION OF THE
FUND'S BOARD OF TRUSTEES/DIRECTORS.
BROKER-DEALERS WHO EXECUTE PORTFOLIO TRANSACTIONS ON BEHALF OF THE FUND ARE
SELECTED ON THE BASIS OF THEIR EXECUTION CAPABILITY AND TRADING EXPERTISE
CONSIDERING, AMONG OTHER FACTORS, THE OVERALL REASONABLENESS OF THE BROKERAGE
COMMISSIONS, CURRENT MARKET CONDITIONS, SIZE AND TIMING OF THE ORDER, DIFFICULTY
OF EXECUTION, PER SHARE PRICE, ETC., MARKET FAMILIARITY, RELIABILITY, INTEGRITY,
AND FINANCIAL CONDITION, SUBJECT TO THE ADVISOR'S OBLIGATION TO SEEK BEST
EXECUTION. THE ADVISOR MAY ALSO CONSIDER SALES FOR FUND SHARES AS A FACTOR IN
THE SELECTION OF BROKERS.
THE FUND DID NOT PAY ANY BROKERAGE COMMISSIONS DURING THE LAST THREE FISCAL
YEARS.
WHILE THE FUND'S ADVISOR SELECTS BROKERS PRIMARILY ON THE BASIS OF BEST
EXECUTION, IN SOME CASES IT MAY DIRECT TRANSACTIONS TO BROKERS BASED ON THE
QUALITY AND AMOUNT OF THE RESEARCH AND RESEARCH-RELATED SERVICES WHICH THE
BROKERS PROVIDE TO IT. 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. OTHER SUCH
SERVICES ARE DESIGNED PRIMARILY TO ASSIST THE ADVISOR IN MONITORING THE
INVESTMENT ACTIVITIES OF THE FUND. SUCH SERVICES INCLUDE PORTFOLIO ATTRIBUTION
SYSTEMS, RETURN-BASES STYLE ANALYSIS, AND TRADE-EXECUTION ANALYSIS.
THE ADVISOR MAY ALSO DIRECT SELLING CONCESSIONS AND/OR DISCOUNTS IN FIXED-PRICE
OFFERINGS FOR RESEARCH SERVICES.
IF, IN THE JUDGEMENT 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 COMMISSION WHICH ANOTHER BROKER MAY HAVE CHARGED FOR EFFECTING THE
SAME TRANSACTIONS. 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.
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999, THE FUND, PAID $0 IN
COMMISSIONS FOR DIRECTED BROKERAGE FOR RESEARCH SERVICES.
THE PORTFOLIO TURNOVER RATES FOR THE LAST TWO FISCAL YEARS ARE AS FOLLOWS:
1998 1999
LONG-TERM 72% 80%
VERMONT 32% 21%
NATIONAL 44% 38%
CALIFORNIA 12% 11%
MARYLAND 24% 0%
VIRGINIA 36% 12%
PERSONAL SECURITIES TRANSACTIONS
--------------------------------
THE FUND, ITS ADVISOR, AND PRINCIPAL UNDERWRITER HAVE ADOPTED A CODE OF
ETHICS PURSUANT TO RULE 17J-1 OF THE INVESTMENT COMPANY ACT OF 1940. THE CODE OF
ETHICS IS DESIGNED TO PROTECT THE PUBLIC FROM ABUSIVE TRADING PRACTICES AND TO
MAINTAIN ETHICAL STANDARDS FOR ACCESS PERSONS AS DEFINED IN THE RULE WHEN
DEALING WITH THE PUBLIC. THE CODE OF ETHICS PERMITS THE FUND'S INVESTMENT
PERSONNEL TO INVEST IN SECURITIES THAT MAYBE PURCHASED OR HELD BY THE FUND. THE
CODE OF ETHICS CONTAINS CERTAIN CONDITIONS SUCH AS PRECLEARANCE AND RESTRICTIONS
ON USE OF MATERIAL INFORMATION.
GENERAL INFORMATION
-------------------
THE PORTFOLIOS ARE OPEN-END, NON-DIVERSIFIED INVESTMENT MANAGEMENT
INVESTMENT COMPANIES. LONG-TERM AND VERMONT ARE SERIES OF CALVERT TAX-FREE
RESERVES, WHICH WAS ORGANIZED AS A MASSACHUSETTS BUSINESS TRUST ON OCTOBER 20,
1980. THE OTHER SERIES OF THE FUND INCLUDE THE MONEY MARKET PORTFOLIO,
LIMITED-TERM PORTFOLIO AND CALIFORNIA MONEY MARKET PORTFOLIO. THE CTFR
NATIONAL, CALIFORNIA, MARYLAND AND VIRGINIA ARE SERIES OF CALVERT MUNICIPAL
FUND, INC., A MARYLAND CORPORATION ORGANIZED ON FEBRUARY 4, 1992. CALVERT
TAX-FREE RESERVE'S DECLARATION OF TRUST CONTAINS AN EXPRESS DISCLAIMER OF
SHAREHOLDER LIABILITY FOR ACTS OR OBLIGATIONS OF THE FUND. THE SHAREHOLDERS OF A
MASSACHUSETTS BUSINESS TRUST MIGHT, HOWEVER, UNDER CERTAIN CIRCUMSTANCES, BE
HELD PERSONALLY LIABLE AS PARTNERS FOR ITS OBLIGATIONS. THE DECLARATION OF TRUST
PROVIDES FOR INDEMNIFICATION AND REIMBURSEMENT OF EXPENSES OUT OF FUND ASSETS
FOR ANY SHAREHOLDER HELD PERSONALLY LIABLE FOR OBLIGATIONS OF THE FUND. THE
DECLARATION OF TRUST PROVIDES THAT THE FUND SHALL, UPON REQUEST, ASSUME THE
DEFENSE OF ANY CLAIM MADE AGAINST ANY SHAREHOLDER FOR ANY ACT OR OBLIGATION OF
THE FUND AND SATISFY ANY JUDGMENT THEREON. THE DECLARATION OF TRUST FURTHER
PROVIDES THAT THE FUND MAY MAINTAIN APPROPRIATE INSURANCE (FOR EXAMPLE, FIDELITY
BONDING AND ERRORS AND OMISSIONS INSURANCE) FOR THE PROTECTION OF THE FUND, ITS
SHAREHOLDERS, TRUSTEES, OFFICERS, EMPLOYEES, AND AGENTS TO COVER POSSIBLE TORT
AND OTHER LIABILITIES. THUS, THE RISK OF A SHAREHOLDER INCURRING FINANCIAL LOSS
ON ACCOUNT OF SHAREHOLDER LIABILITY IS LIMITED TO CIRCUMSTANCES IN WHICH BOTH
INADEQUATE INSURANCE EXISTS AND THE FUND ITSELF IS UNABLE TO MEET ITS
OBLIGATIONS.
EACH SHARE OF EACH SERIES REPRESENTS AN EQUAL PROPORTIONATE INTEREST IN
THAT SERIES WITH EACH OTHER SHARE AND IS ENTITLED TO SUCH DIVIDENDS AND
DISTRIBUTIONS OUT OF THE INCOME BELONGING TO SUCH SERIES AS DECLARED BY THE
BOARD.
THE FUND IS NOT REQUIRED TO HOLD ANNUAL SHAREHOLDER MEETINGS, BUT SPECIAL
MEETINGS MAY BE CALLED FOR CERTAIN PURPOSES SUCH AS ELECTING TRUSTEES/DIRECTORS,
CHANGING FUNDAMENTAL POLICIES, OR APPROVING A MANAGEMENT CONTRACT. AS A
SHAREHOLDER, YOU RECEIVE ONE VOTE FOR EACH SHARE YOU OWN.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
---------------------------------------------------
AS OF APRIL 13, 2000 THE FOLLOWING SHAREHOLDERS OWNED OF RECORD 5% OR MORE
OF THE FUND:
NAME AND ADDRESS % OF OWNERSHIP
CALVERT CALIFORNIA MUNICIPAL INTERMEDIATE FUND
CATALYST PRODUCTIONS 15.54%
1431 CENTER STREET
OAKLAND, CA 94607-2054
NATIONAL CITY BANK KENTUCKY TTEE 8.21%
ANCHORAGE TR FBO S WHALEY
DTD 12-10-77
PO BOX 94984
CLEVELAND, OH 44101-4984
JAMES J BOCHNOWSKI 6.15%
JANET J BOCHNOWSKI COMM PROPERTY
28 CAMINO POR LOS ARBOLES
ATHERTON, CA 94027-5941
CALIFORNIA NATIONAL MUNICIPAL INTERMEDIATE FUND
JOHN A SWANSON 11.23%
113 WATERS EDGE LANE
MONETA, VA 24121-2938
ROBERT P. TAISHOFF TTEE 8.98%
U/A 06/02/98
LAWRENCE B TAISHOFF FLINT TRUST
1321 WASHINGTON DR.
ANNAPOLIS, MD 21403-4730
CALVERT MARYLAND MUNICIPAL INTERMEDIATE FUND
CHARLES SCHWAB & CO. INC. 6.24%
REINVEST ACCOUNT
ATTN: MUTUAL FUND DEPT
101 MONTGOMERY ST.
SAN FRANCISCO , CA 94104-4122
CALVERT VIRGINIA MUNICIPAL INTERMEDIATE FUND
CHARLES SCHWAB & CO. INC. 31.24%
REINVEST ACCOUNT
ATTN: MUTUAL FUND DEPARTMENT
101 MONTGOMERY ST.
SAN FRANCISCO, CA 94104-4122
CALVERT TAX-FREE RESERVES LONG-TERM PORTFOLIO
JOHN A SWANSON 8.70%
113 WATERS EDGE LANE
MONETA, VA 24121-2938
HAROLD LUSTIG 7.22%
OR LAURA LUSTIG JTWROS
47 DAVIS HILL RD
WESTON, CT 06883-1960
CALVERT TAX-FREE RESERVES VERMONT MUNICIPAL PORTFOLIO
MERFARM AND CO. 8.65%
C/O TRUST OPS
164 COLLEGE ST.
BURLINGTON, VT 05401-8417
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 PRIVATE ACTIVITY 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 PRIVATE ACTIVITY BONDS ARE IN MOST CASES
REVENUE BONDS AND DO NOT GENERALLY CARRY THE PLEDGE OF THE CREDIT OF THE ISSUING
MUNICIPALITY. THERE ARE, OF COURSE, VARIATIONS IN THE SECURITY OF MUNICIPAL
OBLIGATIONS BOTH WITHIN A PARTICULAR CLASSIFICATION AND AMONG CLASSIFICATIONS.
MUNICIPAL OBLIGATIONS ARE GENERALLY TRADED ON THE BASIS OF A QUOTED YIELD
TO MATURITY, AND THE PRICE OF THE SECURITY IS ADJUSTED SO THAT RELATIVE TO THE
STATED RATE OF INTEREST IT WILL RETURN THE QUOTED RATE TO THE PURCHASER.
SHORT-TERM AND LIMITED-TERM MUNICIPAL OBLIGATIONS INCLUDE TAX ANTICIPATION
NOTES, REVENUE ANTICIPATION NOTES BOND ANTICIPATION NOTES, CONSTRUCTION LOAN
NOTES, AND DISCOUNT NOTES. THE MATURITIES OF THESE INSTRUMENTS AT THE TIME OF
ISSUE GENERALLY WILL RANGE BETWEEN THREE MONTHS AND ONE YEAR. PRE-REFUNDED BONDS
WITH LONGER NOMINAL MATURITIES THAT ARE DUE TO BE RETIRED WITH THE PROCEEDS OF
AN ESCROWED SUBSEQUENT ISSUE AT A DATE WITHIN ONE YEAR AND THREE YEARS OF THE
TIME OF ACQUISITION ARE ALSO CONSIDERED SHORT-TERM AND LIMITED-TERM MUNICIPAL
OBLIGATIONS.
MUNICIPAL BOND AND NOTE RATINGS
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S RATINGS OF STATE AND MUNICIPAL
NOTES:
MOODY'S RATINGS FOR STATE AND MUNICIPAL NOTES AND OTHER SHORT-TERM
OBLIGATIONS ARE DESIGNATED MOODY'S INVESTMENT GRADE ("MIG"). THIS DISTINCTION IS
IN RECOGNITION OF THE DIFFERENCES BETWEEN SHORT-TERM CREDIT RISK AND LONG-TERM
RISK.
MIG 1: NOTES BEARING THIS DESIGNATION ARE OF THE BEST QUALITY, ENJOYING
STRONG PROTECTION FROM ESTABLISHED CASH FLOWS OF FUNDS FOR THEIR SERVICING OR
FROM ESTABLISHED AND BROAD-BASED ACCESS TO THE MARKET FOR REFINANCING, OR BOTH.
MIG2: NOTES BEARING THIS DESIGNATION ARE OF HIGH QUALITY, WITH MARGINS OF
PROTECTION AMPLE ALTHOUGH NOT SO LARGE AS IN THE PRECEDING GROUP.
MIG3: NOTES BEARING THIS DESIGNATION ARE OF FAVORABLE QUALITY, WITH ALL
SECURITY ELEMENTS ACCOUNTED FOR BUT LACKING THE UNDENIABLE STRENGTH OF THE
PRECEDING GRADES. MARKET ACCESS FOR REFINANCING, IN PARTICULAR, IS LIKELY TO BE
LESS WELL ESTABLISHED.
MIG4: NOTES BEARING THIS DESIGNATION ARE OF ADEQUATE QUALITY, CARRYING
SPECIFIC RISK BUT HAVING PROTECTION COMMONLY REGARDED AS REQUIRED OF AN
INVESTMENT SECURITY AND NOT DISTINCTLY OR PREDOMINANTLY SPECULATIVE.
DESCRIPTION OF MOODY'S INVESTORS SERVICE INC.'S/STANDARD & POOR'S MUNICIPAL BOND
RATINGS:
AAA/AAA: BEST QUALITY. THESE BONDS CARRY THE SMALLEST DEGREE OF INVESTMENT
RISK AND ARE GENERALLY REFERRED TO AS "GILT EDGE." INTEREST PAYMENTS ARE
PROTECTED BY A LARGE OR BY AN EXCEPTIONALLY STABLE MARGIN AND PRINCIPAL IS
SECURE. THIS RATING INDICATES AN EXTREMELY STRONG CAPACITY TO PAY PRINCIPAL AND
INTEREST.
AA/AA: BONDS RATED AA ALSO QUALIFY AS HIGH-QUALITY DEBT OBLIGATIONS.
CAPACITY TO PAY PRINCIPAL AND INTEREST IS VERY STRONG, AND IN THE MAJORITY OF
INSTANCES THEY DIFFER FROM AAA ISSUES ONLY IN SMALL DEGREE. THEY ARE RATED LOWER
THAN THE BEST BONDS BECAUSE MARGINS OF PROTECTION MAY NOT BE AS LARGE AS IN AAA
SECURITIES, FLUCTUATION OF PROTECTIVE ELEMENTS MAY BE OF GREATER AMPLITUDE, OR
THERE MAY BE OTHER ELEMENTS PRESENT WHICH MAKE LONG-TERM RISKS APPEAR SOMEWHAT
LARGER THAN IN AAA SECURITIES.
A/A: UPPER-MEDIUM GRADE OBLIGATIONS. FACTORS GIVING SECURITY TO PRINCIPAL
AND INTEREST ARE CONSIDERED ADEQUATE, BUT ELEMENTS MAY BE PRESENT WHICH MAKE THE
BOND SOMEWHAT MORE SUSCEPTIBLE TO THE ADVERSE EFFECTS OF CIRCUMSTANCES AND
ECONOMIC CONDITIONS.
BAA/BBB: MEDIUM GRADE OBLIGATIONS; ADEQUATE CAPACITY TO PAY PRINCIPAL AND
INTEREST. WHEREAS THEY NORMALLY EXHIBIT ADEQUATE PROTECTION PARAMETERS, ADVERSE
ECONOMIC CONDITIONS OR CHANGING CIRCUMSTANCES ARE MORE LIKELY TO LEAD TO A
WEAKENED CAPACITY TO PAY PRINCIPAL AND INTEREST FOR BONDS IN THIS CATEGORY THAN
FOR BONDS IN THE A CATEGORY.
BA/BB, B/B, CAA/CCC, CA/CC: DEBT RATED IN THESE CATEGORIES IS REGARDED AS
PREDOMINANTLY SPECULATIVE WITH RESPECT TO CAPACITY TO PAY INTEREST AND REPAY
PRINCIPAL. THERE MAY BE SOME LARGE UNCERTAINTIES AND MAJOR RISK EXPOSURE TO
ADVERSE CONDITIONS. THE HIGHER THE DEGREE OF SPECULATION, THE LOWER THE RATING.
C/C: THIS RATING IS ONLY FOR NO-INTEREST INCOME BONDS.
D: DEBT IN DEFAULT; PAYMENT OF INTEREST AND/OR PRINCIPAL IS IN ARREARS.
<PAGE>
LETTER OF INTENT
__________________
DATE
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE, SUITE 1000N
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. NO PORTION OF THE SALES CHARGE IMPOSED ON PURCHASES MADE PRIOR TO THE DATE
OF THIS LETTER WILL BE REFUNDED.
I AM MAKING NO COMMITMENT TO PURCHASE SHARES, BUT IF MY PURCHASES WITHIN
THIRTEEN MONTHS FROM THE DATE OF MY FIRST PURCHASE DO NOT AGGREGATE THE MINIMUM
AMOUNT SPECIFIED ABOVE, I WILL PAY THE INCREASED AMOUNT OF SALES CHARGES
PRESCRIBED IN THE TERMS OF ESCROW DESCRIBED BELOW. I UNDERSTAND THAT 4.75% OF
THE MINIMUM DOLLAR AMOUNT SPECIFIED ABOVE WILL BE HELD IN ESCROW IN THE FORM OF
SHARES (COMPUTED TO THE NEAREST FULL SHARE). THESE SHARES WILL BE HELD SUBJECT
TO THE TERMS OF ESCROW DESCRIBED BELOW.
FROM THE INITIAL PURCHASE (OR SUBSEQUENT PURCHASES IF NECESSARY), 4.75% OF
THE DOLLAR AMOUNT SPECIFIED IN THIS LETTER SHALL BE HELD IN ESCROW IN SHARES OF
THE FUND BY THE FUND'S TRANSFER AGENT. FOR EXAMPLE, IF THE MINIMUM AMOUNT
SPECIFIED UNDER THE LETTER IS $50,000, THE ESCROW SHALL BE SHARES VALUED IN THE
AMOUNT OF $2,375 (COMPUTED AT THE PUBLIC OFFERING PRICE ADJUSTED FOR A $50,000
PURCHASE). ALL DIVIDENDS AND ANY CAPITAL GAINS DISTRIBUTION ON THE ESCROWED
SHARES WILL BE CREDITED TO MY ACCOUNT.
IF THE TOTAL MINIMUM INVESTMENT SPECIFIED UNDER THE LETTER IS COMPLETED
WITHIN A THIRTEEN MONTH PERIOD, ESCROWED SHARES WILL BE PROMPTLY RELEASED TO ME.
HOWEVER, SHARES DISPOSED OF PRIOR TO COMPLETION OF THE PURCHASE REQUIREMENT
UNDER THE LETTER WILL BE DEDUCTED FROM THE AMOUNT REQUIRED TO COMPLETE THE
INVESTMENT COMMITMENT.
UPON EXPIRATION OF THIS LETTER, THE TOTAL PURCHASES PURSUANT TO THE LETTER
ARE LESS THAN THE AMOUNT SPECIFIED IN THE LETTER AS THE INTENDED AGGREGATE
PURCHASES, CALVERT DISTRIBUTORS, INC. ("CDI") WILL BILL ME FOR AN AMOUNT EQUAL
TO THE DIFFERENCE BETWEEN THE LOWER LOAD I PAID AND THE DOLLAR AMOUNT OF SALES
CHARGES WHICH I WOULD HAVE PAID IF THE TOTAL AMOUNT PURCHASED HAD BEEN MADE AT A
SINGLE TIME. IF NOT PAID BY THE INVESTOR WITHIN 20 DAYS, CDI WILL DEBIT THE
DIFFERENCE FROM MY ACCOUNT. FULL SHARES, IF ANY, REMAINING IN ESCROW AFTER THE
AFOREMENTIONED ADJUSTMENT WILL BE RELEASED AND, UPON REQUEST, REMITTED TO ME.
I IRREVOCABLY CONSTITUTE AND APPOINT CDI AS MY ATTORNEY-IN-FACT, WITH FULL
POWER OF SUBSTITUTION, TO SURRENDER FOR REDEMPTION ANY OR ALL ESCROWED SHARES ON
THE BOOKS OF THE FUND. THIS POWER OF ATTORNEY IS COUPLED WITH AN INTEREST.
THE COMMISSION ALLOWED BY CDI 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
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS:
99B.1 ARTICLES OF INCORPORATION FILED HEREWITH.
(A) ARTICLES SUPPLEMENTARY FILED HEREWITH.
(B) ARTICLES OF AMENDMENT FILED HEREWITH.
99B.2 BY-LAWS (INCORPORATED BY REFERENCE TO REGISTRANT'S PRE-EFFECTIVE
AMENDMENT NO. 2, APRIL 27, 1992) FILED HEREWITH.
99.B5. INVESTMENT ADVISORY AGREEMENT, INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 17, APRIL 28, 1999,
ACCESSION NUMBER 0000882671-99-000010
99.B6 UNDERWRITING AGREEMENT, INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 15, FILED
APRIL 30, 1998, ACCESSION NUMBER 0000882671-98-000012.
99.B7 . DEFERRED COMPENSATION AGREEMENT INCORPORATED BY REFERENCE TO
REGISTRANT'S PRE-EFFECTIVE AMENDMENT NO. 2, APRIL 27, 1992,
FILED HEREWITH.
99.B8. CUSTODIAL CONTRACT FILED HEREWITH.
99.B9A 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,
AMENDED IN 1999 FILED HEREWITH.
99.B10 OPINION AND CONSENT OF COUNSEL FILED HEREWITH.
99.B11 CONSENT OF INDEPENDENT ACCOUNTANTS TO USE OF REPORT FILED HEREWITH.
99.B15 PLAN OF DISTRIBUTION FOR CLASS A SHARES, INCORPORATED BY
REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 13, APRIL 30,
1996; FOR CLASS B AND C SHARES, INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 15, FILED HEREWITH.
99.B17.A MULTIPLE-CLASS PLAN PURSUANT TO INVESTMENT COMPANY ACT OF 1940 RULE
18F-3, AS AMENDED, FILED HEREWITH.
99.B17.B POWER OF ATTORNEY FORMS SIGNED BY EACH DIRECTOR, INCORPORATED BY
REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 29, DATED
JANUARY 28, 1999, ACCESSION NUMBER 0000356682-99-000001.
99.B18 CODE OF ETHICS FILED HEREWITH.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
NOT APPLICABLE.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
NOT APPLICABLE.
ITEM 25. INDEMNIFICATION
REGISTRANT'S DECLARATION OF TRUST, WHICH DECLARATION IS EXHIBIT 1 OF
THIS REGISTRATION STATEMENT, PROVIDES, IN SUMMARY, THAT OFFICERS, TRUSTEES,
EMPLOYEES, AND AGENTS SHALL BE INDEMNIFIED BY REGISTRANT 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 SUCH A PERSON IF HE HAS BEEN ADJUDGED LIABLE
OF WILLFUL MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE, OR RECKLESS DISREGARD OF
HIS 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 TRUSTEES 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 DECLARATION OF TRUST 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 $9 MILLION INVESTMENT COMPANY BLANKET BOND ISSUED
BY ICI MUTUAL INSURANCE COMPANY, P.O. BOX 730, BURLINGTON, VERMONT, 05402.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
NAME OF COMPANY, PRINCIPAL
NAME BUSINESS AND ADDRESS CAPACITY
BARBARA J. KRUMSIEK CALVERT VARIABLE SERIES, INC. OFFICER
CALVERT MUNICIPAL FUND, INC. AND
CALVERT WORLD VALUES FUND, INC. DIRECTOR
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME AND
CALVERT TAX-FREE RESERVES TRUSTEE
CALVERT SOCIAL INVESTMENT FUND
CALVERT CASH RESERVES
THE CALVERT FUND
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
----------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT-SLOAN ADVISERS, LLC DIRECTOR
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT NEW WORLD FUND, INC. DIRECTOR
INVESTMENT COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
--------------
ALLIANCE CAPITAL MGMT. L.P. SR. VICE PRESIDENT
MUTUAL FUND DIVISION DIRECTOR
1345 AVENUE OF THE AMERICAS
NEW YORK, NY 10105
--------------
RONALD M. WOLFSHEIMER FIRST VARIABLE RATE FUND OFFICER
FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
--------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT SHAREHOLDER SERVICES, INC. OFFICER
TRANSFER AGENT
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT ADMINISTRATIVE SERVICES CO. OFFICER
SERVICE COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT DISTRIBUTORS, INC. OFFICER
BROKER-DEALER AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT-SLOAN ADVISERS, LLC OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
DAVID R. ROCHAT FIRST VARIABLE RATE FUND OFFICER
FOR GOVERNMENT INCOME AND
CALVERT TAX-FREE RESERVES TRUSTEE
CALVERT CASH RESERVES
THE CALVERT FUND
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT MUNICIPAL FUND, INC. OFFICER
INVESTMENT COMPANY AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR AND
4550 MONTGOMERY AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
---------------
CHELSEA SECURITIES, INC. OFFICER
SECURITIES FIRM AND
POST OFFICE BOX 93 DIRECTOR
CHELSEA, VERMONT 05038
---------------
GRADY, BERWALD & CO. OFFICER
HOLDING COMPANY AND
43A SOUTH FINLEY AVENUE DIRECTOR
BASKING RIDGE, NJ 07920
---------------
RENO J. MARTINI CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT GROUP, LTD. OFFICER
HOLDING COMPANY
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
FIRST VARIABLE RATE FUND OFFICER
FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
---------------
CALVERT NEW WORLD FUND, INC. DIRECTOR
INVESTMENT COMPANY AND
4550 MONTGOMERY AVENUE OFFICER
BETHESDA, MARYLAND 20814
---------------
CALVERT-SLOAN ADVISERS, LLC DIRECTOR
INVESTMENT ADVISOR AND
4550 MONTGOMERY AVENUE OFFICER
BETHESDA, MARYLAND 20814
---------------
CHARLES T. NASON AMERITAS ACACIA MUTUAL HOLDING COMPANY OFFICER
ACACIA 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, LTD. DIRECTOR
BROKER-DEALER AND
INVESTMENT ADVISOR
7315 WISCONSIN AVENUE
BETHESDA, MARYLAND 20814
---------------
ROBERT-JOHN H. AMERITAS ACACIA MUTUAL HOLDING COMPANY OFFICER
ACACIA LIFE INSURANCE
ACACIA NATIONAL LIFE INSURANCE OFFICER
INSURANCE COMPANY AND
7315 WISCONSIN AVENUE DIRECTOR
BETHESDA, MARYLAND 20814
----------------
ACACIA LIFE INSURANCE 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, LTD. 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
---------------
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
---------------
JENNIFER STREAKS 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
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, LTD. COUNSEL
BROKER-DEALER AND AND
INVESTMENT ADVISOR COMPLIANCE
7315 WISCONSIN AVENUE MANAGER
BETHESDA, MARYLAND 20814
---------------
DANIEL K. HAYES CALVERT ASSET MANAGEMENT CO., INC. OFFICER
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
FIRST VARIABLE RATE FUND FOR OFFICER
GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT VARIABLE SERIES, INC.
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
INVESTMENT COMPANIES
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
JOHN NICHOLS CALVERT ASSET MANAGEMENT OFFICER
COMPANY, INC.
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
DAVID LEACH CALVERT ASSET MANAGEMENT OFFICER
COMPANY, INC.
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
MATTHEW D. GELFAND CALVERT ASSET MANAGEMENT OFFICER
COMPANY, INC.
INVESTMENT ADVISOR
4550 MONTGOMERY AVENUE
BETHESDA, MARYLAND 20814
------------------
STRATEGIC INVESTMENT MANAGEMENT OFFICER
INVESTMENT ADVISOR
1001 19TH STREET NORTH
ARLINGTON, VIRGINIA 20009
------------------
ITEM 27. PRINCIPAL UNDERWRITERS
(A) REGISTRANT'S PRINCIPAL UNDERWRITER UNDERWRITES SHARES OF
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME, CALVERT TAX-FREE RESERVES,
CALVERT SOCIAL INVESTMENT FUND, CALVERT CASH RESERVES, THE CALVERT FUND,
CALVERT MUNICIPAL FUND, INC., CALVERT WORLD VALUES FUND, INC., CALVERT NEW
WORLD FUND, INC., AND CALVERT VARIABLE SERIES, INC. (FORMERLY NAMED ACACIA
CAPITAL CORPORATION).
(B) POSITIONS OF UNDERWRITER'S OFFICERS AND DIRECTORS
NAME AND PRINCIPAL POSITION(S) WITH POSITION(S) WITH
BUSINESS ADDRESS UNDERWRITER REGISTRANT
BARBARA J. KRUMSIEK DIRECTOR AND PRESIDENT PRESIDENT AND TRUSTEE
RONALD M. WOLFSHEIMER DIRECTOR, SENIOR VICE TREASURER
PRESIDENT AND CHIEF FINANCIAL OFFICER
WILLIAM M. TARTIKOFF DIRECTOR, SENIOR VICE VICE PRESIDENT AND
PRESIDENT AND SECRETARY SECRETARY
CRAIG CLOYED SENIOR VICE PRESIDENT NONE
KAREN BECKER VICE PRESIDENT, OPERATIONS NONE
MATTHEW GELFAND VICE PRESIDENT NONE
GEOFFREY ASHTON REGIONAL VICE PRESIDENT NONE
MARTIN BROWN REGIONAL VICE PRESIDENT NONE
BILL HAIRGROVE REGIONAL VICE PRESIDENT NONE
ANTHONY EAMES REGIONAL VICE PRESIDENT NONE
STEVE HIMBER REGIONAL VICE PRESIDENT NONE
TANYA WILLIAMS REGIONAL VICE PRESIDENT NONE
BEN OGBOGU REGIONAL VICE PRESIDENT NONE
TOM STANTON REGIONAL VICE PRESIDENT NONE
CHRISTINE TESKE REGIONAL VICE PRESIDENT NONE
JENNIFER STREAKS ASSISTANT SECRETARY NONE
SUSAN WALKER BENDER ASSISTANT SECRETARY ASSISTANT SECRETARY
IVY WAFFORD DUKE ASSISTANT SECRETARY ASSISTANT SECRETARY
VICTOR FRYE ASSISTANT SECRETARY NONE
AND COMPLIANCE OFFICER
(C) INAPPLICABLE.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
RONALD M. WOLFSHEIMER, TREASURER
AND
WILLIAM M. TARTIKOFF, ASSISTANT 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, 2000.
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 4/27/00
BARBARA J. KRUMSIEK TRUSTEE (PRINCIPAL EXECUTIVE OFFICER)
__________**____________ PRINCIPAL ACCOUNTING 4/27/00
RONALD M. WOLFSHEIMER OFFICER
__________**____________ TRUSTEE 4/27/00
RICHARD L. BAIRD, JR.
__________**____________ TRUSTEE 4/27/00
FRANK H. BLATZ, JR., ESQ.
__________**____________ TRUSTEE 4/27/00
FREDERICK T. BORTS, M.D.
__________**____________ TRUSTEE 4/27/00
CHARLES E. DIEHL
__________**____________ TRUSTEE 4/27/00
DOUGLAS E. FELDMAN
__________**____________ TRUSTEE 4/27/00
PETER W. GAVIAN
__________**____________ TRUSTEE 4/27/00
JOHN G. GUFFEY, JR.
__________**____________ TRUSTEE 4/27/00
M. CHARITO KRUVANT
__________**____________ TRUSTEE 4/27/00
ARTHUR J. PUGH
__________**____________ TRUSTEE 4/27/00
DAVID R. ROCHAT
__________**____________ TRUSTEE 4/27/00
D. WAYNE SILBY
**BY SUSAN WALKER BENDER AS ATTORNEY-IN-FACT, PURSUANT TO POWER OF
ATTORNEY.
EXHIBIT 99B1
ARTICLES OF INCORPORATION
OF
CALVERT MUNICIPAL BOND FUND, INC.
ARTICLE I
THE UNDERSIGNED, WILLIAM M. TARTIKOFF, ESQ., WHOSE BUSINESS ADDRESS IS
4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND, 20814, AND WHO IS
AT LEAST 18 YEARS OF AGE, HEREBY ACTS AS AN INCORPORATOR UNDER AND BY
VIRTUE OF THE GENERAL CORPORATION LAW OF THE STATE OF MARYLAND
AUTHORIZING THE FORMATION OF CORPORATIONS.
ARTICLE II
NAME
THE NAME OF THE CORPORATION IS CALVERT MUNICIPAL BOND FUND, INC. (THE
"FUND" OR "CORPORATION").
ARTICLE III
PURPOSE AND POWERS
THE PURPOSE FOR WHICH THE CORPORATION IS FORMED AND THE BUSINESS TO BE
TRANSACTED, CARRIED ON AND PROMOTED BY IT ARE AS FOLLOWS:
1. TO CONDUCT AND CARRY ON THE BUSINESS OF AN INVESTMENT COMPANY OF THE
MANAGEMENT TYPE.
2. TO HOLD, INVEST AND REINVEST ITS ASSETS IN SECURITIES OR OTHER INVESTMENTS,
AND IN CONNECTION WITH THOSE INVESTMENTS TO HOLD PART OR ALL OF ITS
ASSETS IN CASH.
3. TO ISSUE AND SELL SHARES OF ITS OWN CAPITAL STOCK IN SUCH AMOUNTS AND ON SUCH
TERMS AND CONDITIONS, FOR SUCH PURPOSES AND FOR SUCH AMOUNT OR KIND OF
CONSIDERATION PERMITTED BY THE MARYLAND GENERAL CORPORATION LAW AND BY THESE
ARTICLES OF INCORPORATION, AS ITS BOARD OF DIRECTORS MAY DETERMINE.
4. TO REDEEM, PURCHASE OR OTHERWISE ACQUIRE, HOLD, DISPOSE OF, RESELL, TRANSFER,
REISSUE OR CANCEL (ALL WITHOUT THE VOTE OR CONSENT OF THE SHAREHOLDERS
OF THE CORPORATION) SHARES OF ITS CAPITAL STOCK, IN ANY MANNER AND TO THE
EXTENT PERMITTED BY THE MARYLAND GENERAL CORPORATION LAW AND BY THESE
ARTICLES OF INCORPORATION.
5. TO ENGAGE IN ANY OR ALL OTHER LAWFUL BUSINESS FOR WHICH CORPORATIONS MAY BE
INCORPORATED UNDER THE MARYLAND GENERAL CORPORATION LAW.
6. TO DO ANY AND ALL SUCH FURTHER ACTS OR THINGS TO EXERCISE ANY AND AIL SUCH
FURTHER POWERS OR RIGHTS AS MAY BE NECESSARY, INCIDENTAL, RELATIVE,
CONDUCIVE, APPROPRIATE OR DESIRABLE FOR, THE ACCOMPLISHMENT, CARRYING OUT OR
ATTAINMENT OF ANY OF THE FOREGOING PURPOSES OR OBJECTS.
THE CORPORATION IS AUTHORIZED TO EXERCISE AND ENJOY ALL THE POWERS, RIGHTS
AND PRIVILEGES GRANTED TO, OR CONFERRED ON, CORPORATIONS BY THE MARYLAND
GENERAL CORPORATION LAW, AND THE ENUMERATION OF THE FOREGOING DOES NOT EXCLUDE
ANY POWERS, RIGHTS OR PRIVILEGES SO GRANTED OR CONFERRED.
ARTICLE IV
PRINCIPAL OFFICE AND RESIDENT AGENT
THE ADDRESS OF THE PRINCIPAL OFFICE OF THE CORPORATION IN THE STATE OF
MARYLAND IS 4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND, 20814.
THE RESIDENT AGENT OF THE CORPORATION IS WILLIAM M. TARTIKOFF, ESQ., AT THE
SAME ADDRESS.
ARTICLE V
CAPITAL STOCK
THE TOTAL NUMBER OF SHARES OF CAPITAL STOCK THAT THE CORPORATION HAS
AUTHORITY TO ISSUE IS TWO BILLION SHARES OF THE PAR VALUE OF ONE CENT
($0.01) PER SHARE AND OF THE AGGREGATE PAR VALUE OF TWENTY MILLION DOLLARS
($20,000,000). TWO HUNDRED FIFTY MILLION (250,000,000) OF SUCH SHARES WILL BE
ISSUED AS COMMON STOCK OF THE SERIES DESIGNATED CALVERT CALIFORNIA
MUNICIPAL INTERMEDIATE PORTFOLIO. THE BALANCE OF ONE BILLION SEVEN HUNDRED
FIFTY MILLION (1,750,000,000) SHARES MAY BE ISSUED IN ANY SERIES OR
CLASS, EACH COMPRISING SUCH NUMBER OF SHARES AND HAVING SUCH PREFERENCES,
CONVERSION AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS, LIMITATIONS AS TO
DIVIDENDS, QUALIFICATIONS AND TERMS AND CONDITIONS OF REDEMPTION AS WILL BE
DETERMINED FROM TIME TO TIME BY RESOLUTION OF THE BOARD OF DIRECTORS, TO WHOM
AUTHORITY TO TAKE SUCH ACTION IS HEREBY EXPRESSLY GRANTED (ALL WITHOUT THE
VOTE OR CONSENT OF THE SHAREHOLDERS OF THE CORPORATION).
1. THE BOARD OF DIRECTORS IS HEREBY AUTHORIZED (SUBJECT TO APPLICABLE LAW) TO
CHANGE THE DESIGNATION OF ANY SERIES, AND TO INCREASE OR DECREASE THE
NUMBER OF SHARES OF ANY SERIES, EXCEPT THAT THE NUMBER OF SHARES MAY NOT BE
DECREASED BELOW THE NUMBER OF SHARES THEN OUTSTANDING. THE BOARD MAY CLASSIFY
OR RECLASSIFY ANY SERIES INTO ONE OR MORE CLASSES. AUTHORITY GRANTED TO
THE BOARD BY THESE ARTICLES TO ACT WITH RESPECT TO ANY SERIES OF THE FUND
SHALL BE EQUALLY APPLICABLE TO ANY CLASS OF SHARES OF ANY SERIES.
2. THE HOLDERS OF EACH SHARE OF STOCK OF THE CORPORATION ARE ENTITLED TO ONE
VOTE FOR EACH FULL SHARE, AND A FRACTIONAL VOTE FOR EACH FRACTIONAL
SHARE OF STOCK, IRRESPECTIVE OF SERIES, THEN RECORDED IN THE SHAREHOLDER'S NAME
ON THE BOOKS OF THE CORPORATION. ON ANY MATTER SUBMITTED TO A VOTE OF
THE SHAREHOLDERS, ALL SHARES OF THE CORPORATION THEN ISSUED AND
OUTSTANDING AND ENTITLED TO VOTE WILL BE VOTED IN THE AGGREGATE AND NOT BY
SERIES EXCEPT (I) WHEN OTHERWISE REQUIRED BY LAW; AND (II) IF THE BOARD OF
DIRECTORS, IN ITS SOLE DISCRETION, DETERMINES THAT ANY MATTER CONCERNS ONLY
ONE OR MORE PARTICULAR SERIES OR CLASS, IT MAY DIRECT THAT ONLY HOLDERS OF
THAT OR THOSE SERIES OR CLASSES MAY VOTE ON THE MATTER.
3. THE CORPORATION MAY ISSUE SHARES OF STOCK IN FRACTIONAL DENOMINATIONS TO THE
SAME EXTENT AS ITS WHOLE SHARES. FRACTIONAL SHARES HAVE PROPORTIONATE
RIGHTS INCLUDING, WITHOUT LIMITATION, THE RIGHT TO VOTE, RECEIVE DIVIDENDS
AND DISTRIBUTIONS AND THE RIGHT TO PARTICIPATE UPON LIQUIDATION OF THE
CORPORATION. NO STOCK CERTIFICATES WILL BE ISSUED TO REPRESENT FRACTIONAL
SHARES.
4. EACH SERIES HAS THE FOLLOWING POWERS, PREFERENCES OR OTHER SPECIAL RIGHTS,
WITH THE QUALIFICATIONS, RESTRICTIONS, AND LIMITATIONS THEREOF AS NOTED:
(A) EXCEPT AS MAY BE OTHERWISE PROVIDED IN THESE ARTICLES, ALL
CONSIDERATION THE CORPORATION RECEIVES FOR THE ISSUE OR SALE OF SHARES
OF A PARTICULAR SERIES BELONGS TO THAT SERIES ALONE, SUBJECT ONLY TO THE
RIGHTS OF CREDITORS. CONSIDERATION INCLUDES ALL ASSETS IN WHICH THE
CONSIDERATION IS INVESTED OR REINVESTED, ALL INCOME, EARNINGS, PROFITS, AND
PROCEEDS THEREOF, INCLUDING ANY PROCEEDS DERIVED FROM THE SALE, EXCHANGE OR
LIQUIDATION OF THE ASSETS, AND ANY FUNDS OR PAYMENTS DERIVED FROM ANY
REINVESTMENT OF THE PROCEEDS IN WHATEVER FORM.
(B) THE BOARD OF DIRECTORS IN ITS DISCRETION MAY PERIODICALLY DECLARE AND
PAY DIVIDENDS OR DISTRIBUTIONS, IN STOCK OR IN CASH, ON ANY OR ALL SERIES
OR CLASSES OF SHARES. THE BOARD WILL DETERMINE WHETHER TO MAKE A DISTRIBUTION
AND, IF SO, THE AMOUNT OF THE DISTRIBUTION, GIVING DUE CONSIDERATION TO THE
INTERESTS OF EACH SERIES AND THE CORPORATION AS A WHOLE.
(I) DIVIDENDS OR DISTRIBUTIONS ON SHARES OF ANY SERIES OF STOCK WILL
BE PAID ONLY OUT OF SURPLUS OR OTHER LAWFULLY AVAILABLE ASSETS
DETERMINED BY THE BOARD OF DIRECTORS AS BELONGING TO THAT SERIES.
(II) THE BOARD OF DIRECTORS HAS THE POWER IN ITS DISCRETION TO
DISTRIBUTE DIVIDENDS, INCLUDING DIVIDENDS IN AMOUNTS SUFFICIENT IN THE
BOARD'S OPINION TO ENABLE THE CORPORATION TO QUALIFY AS A "REGULATED
INVESTMENT COMPANY" UNDER THE FEDERAL TAX LAWS, AND ACCORDINGLY TO AVOID
LIABILITY FOR THE CORPORATION FOR FEDERAL INCOME TAX IN THAT YEAR. THE
DISTRIBUTION OF DIVIDENDS INCLUDES DIVIDENDS DESIGNATED IN WHOLE OR IN PART AS
CAPITAL GAINS DISTRIBUTIONS.
(C) THE ALLOCATION OF ASSETS AND LIABILITIES TO A GIVEN SERIES IS
DETERMINED BY THE BOARD OF DIRECTORS. ANY DECISION OF THE BOARD AS TO THE
ALLOCATION OF ASSETS AND LIABILITIES IS FINAL. THE ASSETS BELONGING TO ANY
SERIES OF STOCK WILL GENERALLY BE CHARGED WITH THE LIABILITIES OF THAT
SERIES AND WITH ITS ALLOCABLE PORTION OF THE OVERALL LIABILITIES OF THE
CORPORATION.
(D) IN THE EVENT OF THE LIQUIDATION OF THE CORPORATION, THE SHAREHOLDERS OF
EACH SERIES WILL BE ENTITLED TO RECEIVE, AS A SERIES, THE NET EXCESS OF
ASSETS OVER LIABILITIES AS ALLOCABLE TO THAT SERIES. SUCH ASSETS WILL BE
DISTRIBUTED TO SHAREHOLDERS IN PROPORTION TO THE NUMBER OF SHARES HELD AND
RECORDED ON THE BOOKS OF THE CORPORATION. ASSETS NOT READILY IDENTIFIABLE
AS BELONGING TO ANY PARTICULAR SERIES WILL BE ALLOCATED BY OR UNDER THE
SUPERVISION OF THE BOARD OF DIRECTORS, AND THE DECISION WITH REGARD TO THE
ALLOCATION WILL BE CONCLUSIVE AND BINDING FOR ALL PURPOSES.
(E) THE CORPORATION'S SHARES OF STOCK ARE ISSUED AND SOLD SUBJECT TO THE
PROVISIONS OF THESE ARTICLES OF INCORPORATION AND THE FUND'S BYLAWS.
ARTICLE VI
PROVISIONS FOR DEFINING, LIMITING, AND REGULATING
CERTAIN POWERS OF THE CORPORATION AND OF
THE DIRECTORS AND SHAREHOLDERS
1. THE CORPORATION WILL HAVE ONE DIRECTOR. THIS NUMBER MAY BE INCREASED PURSUANT
TO THE BYLAWS OF THE CORPORATION BUT WILL NEVER BE LESS THAN THE
MINIMUM NUMBER REQUIRED BY THE MARYLAND GENERAL CORPORATION LAW. CLIFTON S.
SORRELL, JR. WILL ACT AS DIRECTOR UNTIL THE FIRST MEETING OR UNTIL HIS
SUCCESSORS ARE DULY ELECTED AND QUALIFY.
2. THE BOARD OF DIRECTORS OF THE CORPORATION IS HEREBY EMPOWERED TO AUTHORIZE
THE PERIODIC ISSUANCE OF SHARES OF CAPITAL STOCK FOR CONSIDERATION IT
DEEMS ADVISABLE (WITHOUT THE VOTE OR CONSENT OF THE SHAREHOLDERS OF THE
CORPORATION).
3. NO HOLDER OF SHARES OF THE CORPORATION HAS ANY RIGHT TO PURCHASE OR SUBSCRIBE
FOR SHARES OF THE CAPITAL STOCK OF THE CORPORATION OR ANY OTHER SECURITY OF THE
CORPORATION WHICH IT MAY ISSUE OR SELL OTHER THAN WHAT THE BOARD OF DIRECTORS IN
ITS DISCRETION DETERMINES TO OFFER.
4. THE BOARD OF DIRECTORS WILL MANAGE THE BUSINESS AND AFFAIRS OF THE
CORPORATION, AND MAY EXERCISE ALL POWERS OF THE CORPORATION EXCEPT THOSE
POWERS WHICH ARE BY LAW, BY THESE ARTICLES OF INCORPORATION OR BY THE
BYLAWS CONFERRED ON OR RESERVED TO THE SHAREHOLDERS. IN FURTHERANCE AND
NOT IN LIMITATION OF THE POWERS CONFERRED BY LAW, THE BOARD OF DIRECTORS
HAS THE POWER:
(A) TO MAKE, ALTER AND REPEAL BYLAWS OF THE CORPORATION.
(B) TO SET APART, OUT OF ASSETS OF THE CORPORATION AVAILABLE FOR DIVIDENDS,
RESERVES FOR WORKING CAPITAL OR FOR ANY OTHER PROPER PURPOSE, AND TO
REDUCE, ABOLISH OR ADD TO ANY RESERVE AS THE BOARD OF DIRECTORS DEEMS IN
THE BEST INTEREST OF THE CORPORATION. THE BOARD WILL DETERMINE IN ITS
DISCRETION WHAT PART OF THE ASSETS OF THE CORPORATION, AVAILABLE FOR
DIVIDENDS IN EXCESS OF ANY RESERVE, WILL BE DECLARED IN DIVIDENDS AND
PAID TO THE SHAREHOLDERS OF THE CORPORATION.
5. NOTWITHSTANDING ANY PROVISION OF THE MARYLAND GENERAL CORPORATION LAW
REQUIRING A GREATER PROPORTION THAN A MAJORITY OF THE VOTES OF ALL
SERIES OR CLASS OF ANY SERIES OF THE CORPORATION'S STOCK ENTITLED TO BE
CAST IN ORDER TO TAKE OR AUTHORIZE ANY ACTION, ANY ACTION MAY BE TAKEN OR
AUTHORIZED UPON THE CONCURRENCE OF A MAJORITY OF THE AGGREGATE NUMBER OF
VOTES ENTITLED TO BE CAST SUBJECT TO APPLICABLE LAWS AND REGULATIONS, OR RULES
OR ORDERS OF THE SECURITIES AND EXCHANGE COMMISSION OR ANY SUCCESSOR
REGULATOR.
6. REGARDING THE FOLLOWING ITEMS, ANY DETERMINATION MADE BY OR PURSUANT TO THE
DIRECTION OF THE BOARD OF DIRECTORS WILL BE FINAL AND CONCLUSIVE AS LONG AS
IT IS MADE IN GOOD FAITH AND, SO FAR AS ACCOUNTING MATTERS ARE INVOLVED, IN
ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. SUCH DETERMINATIONS
INCLUDE:
- THE AMOUNT AND VALUE OF THE ASSETS, DEBTS, OBLIGATIONS, OR LIABILITIES
OF THE CORPORATION;
- THE AMOUNT OF ANY RESERVES OR CHARGES SET UP AND THE PROPRIETY
THEREOF;
- THE TIME OF OR PURPOSE FOR CREATING SUCH RESERVES OR
CHARGES;
- THE USE, ALTERATION OR CANCELLATION OF ANY RESERVES OR CHARGES
(WHETHER OR NOT ANY DEBT, OBLIGATION OR LIABILITY FOR WHICH SUCH RESERVES
OR CHARGES WILL HAVE BEEN CREATED HAVE BEEN PAID OR DISCHARGED OR WILL BE THEN
OR THEREAFTER REQUIRED TO BE PAID OR DISCHARGED);
- THE ESTABLISHMENT OR DESIGNATION OF PROCEDURES OR METHODS TO BE
EMPLOYED FOR VALUING ANY ASSET OF THE CORPORATION;
- THE ALLOCATION OF ANY ASSET OF THE CORPORATION TO A PARTICULAR
SERIES OR CLASS OF THE CORPORATION'S STOCK;
- THE FUNDS AVAILABLE FOR THE DECLARATION OF DIVIDENDS AND THE
DECLARATION OF DIVIDENDS;
- THE CHARGING OF ANY LIABILITY OF THE CORPORATION TO A PARTICULAR
SERIES OR CLASS OF THE CORPORATION'S STOCK;
- THE NUMBER OF SHARES OF ANY SERIES OR CLASS OF THE CORPORATION'S
OUTSTANDING STOCK;
- THE ESTIMATED EXPENSE TO THE CORPORATION IN CONNECTION WITH PURCHASES
OR REDEMPTIONS OF ITS SHARES;
- THE ABILITY TO LIQUIDATE INVESTMENTS IN AN ORDERLY FASHION; OR ANY
OTHER MATTERS RELATING TO THE ISSUE, SALE, PURCHASE OR REDEMPTION OR
OTHER ACQUISITION OR DISPOSITION OF INVESTMENTS OR SHARES OF THE CORPORATION,
OR THE DETERMINATION OF NET ASSET VALUE PER SHARE OF SHARES OF ANY SERIES OR
CLASS OF THE CORPORATION'S STOCK.
ARTICLE VII
REDEMPTION OF SHARES
1.EACH HOLDER OF SHARES OF CAPITAL STOCK OF THE CORPORATION WILL BE ENTITLED TO
REQUIRE THE CORPORATION TO REDEEM ALL OR ANY PART OF THE SHARES OF
CAPITAL STOCK OF THE CORPORATION STANDING IN THE NAME OF SUCH HOLDER ON THE
BOOKS OF THE CORPORATION, AT THE REDEMPTION PRICE OF SUCH SHARES AS IN EFFECT,
SUBJECT TO THE RIGHT OF THE BOARD OF DIRECTORS OF THE CORPORATION TO
SUSPEND THE RIGHT OF REDEMPTION OF SHARES OF CAPITAL STOCK OF THE CORPORATION OR
POSTPONE THE TIME OF PAYMENT OF THE REDEMPTION PRICE IN ACCORDANCE WITH
PROVISIONS OF APPLICABLE LAW. THE REDEMPTION PRICE OF SHARES OF CAPITAL
STOCK OF THE CORPORATION WILL BE ITS NET ASSET VALUE AS DETERMINED BY, OR
PURSUANT TO THE DIRECTION OF, THE BOARD OF DIRECTORS OF THE CORPORATION
IN ACCORDANCE WITH THE PROVISIONS OF APPLICABLE LAW, LESS ANY REDEMPTION FEE
OR OTHER CHARGE, IF ANY, AS FIXED BY RESOLUTION OF THE BOARD. REDEMPTION IS
CONDITIONED ON THE CORPORATION HAVING FUNDS LEGALLY AVAILABLE FOR THAT
PURPOSE. PAYMENT OF THE REDEMPTION PRICE WILL BE MADE BY THE CORPORATION IN
CASH OR BY CHECK ON CURRENT FUNDS, OR IN ASSETS OTHER THAN CASH, AT SUCH
TIME AND IN SUCH MANNER AS DETERMINED BY THE BOARD OF DIRECTORS OF THE
CORPORATION.
2. IF THE BOARD OF DIRECTORS DETERMINES THAT THE NET ASSET VALUE PER SHARE OF
ANY SERIES OR CLASS OF THE CORPORATION'S STOCK SHOULD REMAIN CONSTANT,
THE CORPORATION MAY DECLARE, PAY AND CREDIT AS DIVIDENDS DAILY THE NET INCOME
(WHICH MAY INCLUDE OR GIVE EFFECT TO REALIZED AND UNREALIZED GAINS AND
LOSSES, AS DETERMINED IN ACCORDANCE WITH THE CORPORATION'S ACCOUNTING AND
PORTFOLIO VALUATION POLICIES) OF THE CORPORATION ALLOCATED TO THAT SERIES OR
CLASS. IF THE AMOUNT SO DETERMINED FOR ANY DAY IS NEGATIVE, THE CORPORATION
MAY, WITHOUT THE PAYMENT OF MONETARY COMPENSATION BUT IN CONSIDERATION OF THE
INTEREST OF THE CORPORATION AND ITS SHAREHOLDERS IN MAINTAINING A CONSTANT
NET ASSET VALUE PER SHARE OF THE SERIES, REDEEM PRO RATA FROM ALL THE
SHAREHOLDERS OF RECORD OF SHARES OF THE SERIES OR CLASS AT THE TIME OF
THE REDEMPTION (IN PROPORTION TO THEIR RESPECTIVE HOLDINGS) THE NUMBER OF
OUTSTANDING SHARES OF THE SERIES OR CLASS, OR FRACTIONS THEREOF, AS IS
REQUIRED TO PERMIT THE NET ASSET VALUE PER SHARE OF THE SERIES TO REMAIN
CONSTANT.
3. IF, IN THE SOLE DETERMINATION OF THE BOARD OF DIRECTORS, THE CONTINUATION OF
THE OFFERING OF SHARES OF ANY ONE OR MORE SERIES OR CLASSES IS NO
LONGER IN THE BEST INTEREST OF THE CORPORATION, E.G., BECAUSE MARKET CONDITIONS
HAVE CHANGED, REGULATORY PROBLEMS HAVE DEVELOPED OR PARTICIPATION IN THE
SERIES OR CLASS IS LOW, THE CORPORATION MAY CEASE THE OFFERING OF SHARES
OF THE SERIES OR CLASS AND MAY, BY MAJORITY VOTE OF THE BOARD OF DIRECTORS,
REQUIRE THE REDEMPTION OF ALL OUTSTANDING SHARES OF THE SERIES OR CLASS
WITH THIRTY (30) DAYS PRIOR WRITTEN NOTICE TO THE SHAREHOLDERS, ALL SUBJECT
TO THE REQUIREMENTS OF APPLICABLE SECURITIES LAWS AND REGULATIONS AND THE
MARYLAND GENERAL CORPORATION LAW.
ARTICLE VIII
AMENDMENT
THE CORPORATION RESERVES THE RIGHT AT ANY TIME TO ALTER, AMEND OR REPEAL ANY
PROVISIONS CONTAINED IN THESE ARTICLES OF INCORPORATION, INCLUDING ANY
AMENDMENT THAT ALTERS THE CONTRACT RIGHTS OF ANY OUTSTANDING STOCK, AT ANY
TIME IN THE MANNER NOW OR HEREAFTER PRESCRIBED BY THE LAWS OF THE STATE OF
MARYLAND, AND ALL RIGHTS CONFERRED ON THE CORPORATION'S SHAREHOLDERS,
DIRECTORS AND OFFICERS BY THESE ARTICLES ARE GRANTED SUBJECT TO THIS
RESERVATION.
IN WITNESS WHEREOF, CALVERT MUNICIPAL BOND FUND HAS CAUSED THESE ARTICLES OF
INCORPORATION TO BE SIGNED IN ITS NAME AND ON ITS BEHALF BY ITS
SECRETARY ON THIS 23RD DAY OF JANUARY, 1992.
CALVERT MUNICIPAL BOND FUND
BY:_________________________
WILLIAM M. TARTIKOFF, SECRETARY
ATTEST:
SUSAN WALKER BENDER
ASSISTANT SECRETARY
EXHIBIT 99B1(A) CALVERT MUNICIPAL FUND, INC.
ARTICLES OF AMENDMENT
CALVERT MUNICIPAL FUND, INC. (FORMERLY KNOWN AS CALVERT MUNICIPAL BOND FUND,
INC.), A CORPORATION ESTABLISHED UNDER THE GENERAL CORPORATION LAW OF THE
STATE OF MARYLAND (THE "CORPORATION"), HEREBY CERTIFIES TO THE STATE
DEPARTMENT OF ASSESSMENTS AND TAXATION THAT:
FIRST: THE CHARTER OF THE CORPORATION IS HEREBY AMENDED BY
STRIKING THE WORD "BOND" FROM THE CORPORATION'S NAME, SO THAT THE
CORPORATION'S NAME IS NOW "CALVERT MUNICIPAL FUND, INC."
SECOND: THE BOARD OF DIRECTORS OF THE CORPORATION, BY UNANIMOUS
CONSENT, ADOPTED A RESOLUTION IN WHICH WAS SET FORTH THE AMENDMENT TO THE
CHARTER, DECLARING THAT THE AMENDMENT WAS ADVISABLE AND DIRECTING THAT IT
BE SUBMITTED TO THE SOLE SHAREHOLDER FOR ITS WRITTEN CONSENT.
THIRD: THE SOLE SHAREHOLDER HAS CONSENTED IN WRITING TO THE
AMENDMENT, AND HAS WAIVED ANY RIGHTS IT MAY HAVE TO DISSENT FROM THE
AMENDMENT. THE CONSENT AND WAIVER ARE FILED WITH THE RECORDS OF THE
CORPORATION.
IN WITNESS WHEREOF, CALVERT MUNICIPAL FUND, INC. HAS CAUSED THESE
ARTICLES OF AMENDMENT TO BE SIGNED IN ITS NAME AND ON ITS BEHALF BY ITS VICE
PRESIDENT AND SECRETARY, AND ITS CORPORATE SEAL TO BE AFFIXED BELOW AND ATTESTED
BY ITS ASSISTANT SECRETARY, ON MAY 21, 1992.
CALVERT MUNICIPAL FUND, INC.
BY:
WILLIAM M. TARTIKOFF
VICE PRESIDENT AND SECRETARY
ATTEST:
SUSAN WALKER BENDER
ASSISTANT SECRETARY
EXHIBIT 99B1(B)
ARTICLES SUPPLEMENTARY
CALVERT MUNICIPAL FUND, INC.
FIRST: CALVERT MUNICIPAL FUND, INC. (THE "CORPORATION"), WHOSE MAILING
ADDRESS IS 4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MD 20814, DOES HEREBY
INCREASE/DECREASE THE NUMBER OF AUTHORIZED SHARES OF STOCK OF THE CORPORATION'S
VARIOUS CLASSES IN ACCORDANCE WITH SECTIONS 2-105(C) AND 2-208.1 OF THE
CORPORATIONS AND ASSOCIATIONS ARTICLE OF THE LAWS OF THE STATE OF MARYLAND.
SECOND: THE CORPORATION IS REGISTERED AS AN OPEN-END COMPANY UNDER THE
INVESTMENT COMPANY ACT OF 1940.
THIRD: THE TOTAL NUMBER OF SHARES OF STOCK OF ALL CLASSES WHICH THE
CORPORATION IS AUTHORIZED TO ISSUE IS TWO BILLION (2,000,000,000) SHARES OF
STOCK. THE PAR VALUE OF EACH SHARE IS ONE CENT ($0.01). THE AGGREGATE PAR
VALUE OF ALL THE SHARES OF ALL THE CLASSES IS $20,000,000. IMMEDIATELY PRIOR TO
THE INCREASE/DECREASE, SHARES OF STOCK WERE ALLOCATED TO ONLY ONE CLASS,
REFERRED TO IN THESE ARTICLES AS "SERIES." THE SERIES DESIGNATED AS CALVERT
CALIFORNIA MUNICIPAL INTERMEDIATE PORTFOLIO WAS ALLOCATED 250,000,000 AUTHORIZED
SHARES.
FOURTH: THE BOARD OF DIRECTORS HAS EXPRESSLY AUTHORIZED THE REALLOCATION OF
SHARES AMONG THE CORPORATION'S CURRENT SERIES IN ACCORDANCE WITH SECTION
2-105(C) AND 2-208.1 OF THE CORPORATIONS AND ASSOCIATIONS ARTICLE OF THE LAWS OF
THE STATE OF MARYLAND. THE PAR VALUE OF EACH SHARE IS $0.01. AFTER THE
RESPECTIVE INCREASE/DECREASE OF SHARES, EACH OF THE SERIES BELOW HAS BEEN
ALLOCATED SHARES AS FOLLOWS:
CALVERT CALIFORNIA MUNICIPAL INTERMEDIATE FUND 250,000,000
CALVERT NATIONAL MUNICIPAL INTERMEDIATE FUND 250,000,000
CALVERT MARYLAND MUNICIPAL INTERMEDIATE FUND 250,000,000
CALVERT MICHIGAN MUNICIPAL INTERMEDIATE FUND 250,000,000
CALVERT NEW YORK MUNICIPAL INTERMEDIATE FUND 250,000,000
CALVERT VIRGINIA MUNICIPAL INTERMEDIATE FUND 250,000,000
CALVERT ARIZONA MUNICIPAL INTERMEDIATE FUND 250,000,000
CALVERT PENNSYLVANIA MUNICIPAL INTERMEDIATE FUND 250,000,000
TOTAL SHARES AUTHORIZED 2,000,000,000
IN WITNESS WHEREOF, CALVERT MUNICIPAL FUND, INC. HAS CAUSED THESE ARTICLES
SUPPLEMENTARY TO BE SIGNED IN ITS NAME AND ON ITS BEHALF BY ITS CHAIRMAN OF THE
BOARD OF DIRECTORS ON THIS 7TH DAY OF AUGUST, 1996. UNDER PENALTIES OF PERJURY,
THE MATTERS AND FACTS SET FORTH HEREIN ARE TRUE IN ALL MATERIAL RESPECTS.
CALVERT MUNICIPAL FUND, INC.
ACKNOWLEDGMENT:
CLIFTON S. SORRELL, JR.
CHAIRMAN OF THE BOARD OF DIRECTORS
ATTEST:
WILLIAM M. TARTIKOFF
SECRETARY
BY-LAWS
OF
CALVERT MUNICIPAL FUND, INC
MARCH 9, 2000
ARTICLE 1
ARTICLES OF INCORPORATION AND PRINCIPAL OFFICE
1.1 ARTICLES OF INCORPORATION. THESE BY-LAWS ARE SUBJECT TO THE
ARTICLES OF INCORPORATION, AS FROM TIME TO TIME IN EFFECT, OF CALVERT MUNICIPAL
FUND, INC. A CORPORATION ESTABLISHED UNDER THE GENERAL CORPORATION LAW OF THE
STATE OF MARYLAND.
1.2 PRINCIPAL OFFICE OF THE FUND. THE PRINCIPAL OFFICE OF THE FUND WILL
BE 4550 MONTGOMERY AVENUE, BETHESDA, MARYLAND, 20814.
ARTICLE 2
MEETINGS OF DIRECTORS
2.1 REGULAR MEETINGS. REGULAR MEETINGS OF THE DIRECTORS MAY BE HELD
WITHOUT CALL OR NOTICE AT SUCH PLACES AND AT SUCH TIMES AS THE DIRECTORS MAY
FROM TIME TO TIME DETERMINE, PROVIDED THAT NOTICE OF THE FIRST REGULAR MEETING
FOLLOWING ANY SUCH DETERMINATION WILL BE GIVEN TO ABSENT DIRECTORS.
2.2 SPECIAL MEETINGS. SPECIAL MEETINGS OF THE DIRECTORS MAY BE HELD AT
ANY TIME AND AT ANY PLACE DESIGNATED IN THE CALL OF THE MEETING WHEN CALLED BY
THE CHAIRMAN OF THE DIRECTORS, THE PRESIDENT OR THE CONTROLLER OR BY TWO OR MORE
DIRECTORS, SUFFICIENT NOTICE THEREOF BEING GIVEN TO EACH DIRECTOR BY THE
SECRETARY OR AN ASSISTANT SECRETARY OR BY THE OFFICER OF THE DIRECTORS CALLING
THE MEETING.
2.3 NOTICE. IT WILL BE SUFFICIENT NOTICE TO A DIRECTOR OF A SPECIAL
MEETING TO SEND NOTICE BY MAIL AT LEAST FORTY-EIGHT HOURS OR BY TELEGRAM OR
FACSIMILE AT LEAST TWENTY-FOUR HOURS BEFORE THE MEETING ADDRESSED TO THE
DIRECTOR AT HIS OR HER USUAL OR LAST KNOWN BUSINESS OR RESIDENCE ADDRESS OR TO
GIVE NOTICE TO HIM OR HER IN PERSON OR BY TELEPHONE AT LEAST TWENTY-FOUR HOURS
BEFORE THE MEETING. NOTICE OF A MEETING NEED NOT BE GIVEN TO ANY DIRECTOR IF A
WRITTEN WAIVER OF NOTICE, EXECUTED BY HIM OR HER BEFORE OR AFTER THE MEETING, IS
FILED WITH THE RECORDS OF THE MEETING, OR TO ANY DIRECTOR WHO ATTENDS THE
MEETING WITHOUT PROTESTING PRIOR THERETO OR AT ITS COMMENCEMENT THE LACK OF
NOTICE TO HIM OR HER. NEITHER NOTICE OF A MEETING NOR A WAIVER OF A NOTICE NEED
SPECIFY THE PURPOSES OF THE MEETING.
2.4 QUORUM. AT ANY MEETING OF THE DIRECTORS A MAJORITY OF THE DIRECTORS
THEN IN OFFICE WILL CONSTITUTE A QUORUM. ANY MEETING MAY BE ADJOURNED FROM TIME
TO TIME BY A MAJORITY OF THE VOTES CAST UPON THE QUESTION, WHETHER OR NOT A
QUORUM IS PRESENT, AND THE MEETING MAY BE HELD AS ADJOURNED WITHOUT FURTHER
NOTICE.
2.5 PARTICIPATION BY TELEPHONE. ONE OR MORE OF THE DIRECTORS MAY
PARTICIPATE IN A MEETING BY MEANS OF A CONFERENCE TELEPHONE OR SIMILAR
COMMUNICATIONS EQUIPMENT ALLOWING ALL PERSONS PARTICIPATING IN THE MEETING TO
HEAR EACH OTHER AT THE SAME TIME. PARTICIPATION BY SUCH MEANS WILL CONSTITUTE
PRESENCE IN PERSON AT A MEETING TO THE EXTENT PERMITTED BY THE INVESTMENT
COMPANY ACT OF 1940.
2.6 SPECIAL ACTION. WHEN ALL THE DIRECTORS WILL BE PRESENT AT ANY
MEETING, HOWEVER CALLED, OR FOR WHATEVER PURPOSE HELD, OR WILL ASSENT TO THE
HOLDING OF THE MEETING WITHOUT NOTICE, OR AFTER THE MEETING WILL SIGN A WRITTEN
ASSENT THERETO ON THE RECORD OF SUCH MEETING, THE ACTS OF SUCH MEETING WILL BE
VALID AS IF THE MEETING HAD BEEN REGULARLY HELD.
2.7 ACTION BY CONSENT. ANY ACTION BY THE DIRECTORS MAY BE TAKEN WITHOUT
A MEETING IF A WRITTEN CONSENT THERETO IS SIGNED BY ALL THE DIRECTORS AND FILED
WITH THE RECORDS OF THE DIRECTORS' MEETING, OR BY TELEPHONE CONSENT PROVIDED A
QUORUM OF DIRECTORS PARTICIPATE IN ANY SUCH TELEPHONE MEETING. SUCH CONSENT WILL
BE TREATED AS A VOTE OF THE DIRECTORS FOR ALL PURPOSES.
ARTICLE 3
OFFICERS
3.1 ENUMERATION; QUALIFICATION. THE OFFICERS OF THE FUND WILL BE A
CHAIRMAN OF THE DIRECTORS, A PRESIDENT, A CONTROLLER, A SECRETARY AND SUCH OTHER
OFFICERS, INCLUDING VICE PRESIDENTS AND ASSISTANT SECRETARIES, IF ANY, AS THE
DIRECTORS FROM TIME TO TIME MAY IN THEIR DISCRETION ELECT. THE FUND MAY ALSO
HAVE SUCH AGENTS AS THE DIRECTORS FROM TIME TO TIME IN THEIR DISCRETION MAY
APPOINT. THE CHAIRMAN OF THE DIRECTORS WILL BE A DIRECTOR AND MAY BUT NEED NOT
BE A SHAREHOLDER; AND ANY OTHER OFFICER MAY BE BUT NONE NEED BE A DIRECTOR OR
SHAREHOLDER. ANY TWO OR MORE OFFICES MAY BE HELD BY THE SAME PERSON.
3.2 ELECTION. THE CHAIRMAN OF THE DIRECTORS, THE PRESIDENT, THE
CONTROLLER AND THE SECRETARY WILL BE ELECTED ANNUALLY BY THE DIRECTORS. OTHER
OFFICERS, IF ANY, MAY BE ELECTED OR APPOINTED BY THE DIRECTORS AT ANY TIME.
VACANCIES IN ANY OFFICE MAY BE FILLED AT ANY TIME.
3.3 TENURE. THE CHAIRMAN OF THE DIRECTORS, THE PRESIDENT, THE
CONTROLLER AND THE SECRETARY WILL HOLD OFFICE UNTIL THEIR RESPECTIVE SUCCESSORS
ARE CHOSEN AND QUALIFIED, OR IN EACH CASE UNTIL HE OR SHE SOONER DIES, RESIGNS,
IS REMOVED OR BECOMES DISQUALIFIED. EACH OTHER OFFICER WILL HOLD OFFICE AND EACH
AGENT WILL RETAIN AUTHORITY AT THE PLEASURE OF THE DIRECTORS.
3.4 POWERS. SUBJECT TO THE OTHER PROVISIONS OF THESE BY-LAWS, EACH
OFFICER WILL HAVE, IN ADDITION TO THE DUTIES AND POWERS HEREIN AND IN THE
ARTICLES OF INCORPORATION SET FORTH, SUCH DUTIES AND POWERS AS ARE COMMONLY
INCIDENT TO THE OFFICE OCCUPIED BY HIM OR HER UNDER THE GENERAL CORPORATION LAW
OF THE STATE OF MARYLAND, AND SUCH OTHER DUTIES AND POWERS AS THE DIRECTORS MAY
FROM TIME TO TIME DESIGNATE.
3.5 CHAIRMAN; PRESIDENT. UNLESS THE DIRECTORS OTHERWISE PROVIDE, THE
CHAIRMAN OF THE DIRECTORS, OR, IF THERE IS NONE, OR IN THE ABSENCE OF THE
CHAIRMAN, THE PRESIDENT WILL PRESIDE AT ALL MEETINGS OF THE SHAREHOLDERS AND OF
THE DIRECTORS. THE PRESIDENT WILL BE THE CHIEF EXECUTIVE OFFICER OF THE FUND
AND, SUBJECT TO THE DIRECTORS, WILL HAVE GENERAL SUPERVISION OVER THE BUSINESS
AND POLICIES OF THE FUND.
3.6 CONTROLLER. THE CONTROLLER WILL BE THE CHIEF FINANCIAL AND
ACCOUNTING OFFICER OF THE FUND, AND WILL, SUBJECT TO THE PROVISIONS OF THE
ARTICLES OF INCORPORATION AND TO ANY ARRANGEMENT MADE BY THE DIRECTORS WITH A
CUSTODIAN, INVESTMENT ADVISOR OR MANAGER, OR TRANSFER, SHAREHOLDER SERVICING OR
SIMILAR AGENT, BE IN CHARGE OF THE VALUABLE PAPERS, BOOKS OF ACCOUNT AND
ACCOUNTING RECORDS OF THE FUND, AND WILL HAVE SUCH OTHER DUTIES AND POWERS AS
MAY BE DESIGNATED FROM TIME TO TIME BY THE DIRECTORS OR BY THE PRESIDENT.
3.7 SECRETARY. THE SECRETARY WILL RECORD ALL PROCEEDINGS OF THE
SHAREHOLDERS AND THE DIRECTORS IN BOOKS TO BE KEPT FOR THAT PURPOSE; THE BOOKS
OR COPIES OF THE BOOKS WILL BE KEPT AT THE PRINCIPAL OFFICE OF THE FUND. IN THE
ABSENCE OF THE SECRETARY FROM ANY MEETING OF THE SHAREHOLDERS OR DIRECTORS, AN
ASSISTANT SECRETARY, OR IF THERE IS NONE OR IF HE OR SHE IS ABSENT, A TEMPORARY
SECRETARY CHOSEN AT SUCH MEETING WILL RECORD THE PROCEEDINGS THEREOF IN THE
AFORESAID BOOKS.
3.8 RESIGNATIONS AND REMOVALS. ANY DIRECTOR OR OFFICER MAY RESIGN AT
ANY TIME BY WRITTEN INSTRUMENT SIGNED BY HIM OR HER AND DELIVERED TO THE
CHAIRMAN, THE PRESIDENT OR THE SECRETARY OR TO A MEETING OF THE DIRECTORS. THE
RESIGNATION WILL BE EFFECTIVE UPON RECEIPT UNLESS SPECIFIED TO BE EFFECTIVE AT
SOME OTHER TIME. THE DIRECTORS MAY REMOVE ANY OFFICER ELECTED BY THEM WITH OR
WITHOUT CAUSE. EXCEPT TO THE EXTENT EXPRESSLY PROVIDED IN A WRITTEN AGREEMENT
WITH THE FUND, NO DIRECTOR OR OFFICER RESIGNING AND NO OFFICER REMOVED WILL HAVE
ANY RIGHT TO ANY COMPENSATION FOR ANY PERIOD FOLLOWING HIS OR HER RESIGNATION OR
REMOVAL.
ARTICLE 4
COMMITTEES
4.1 GENERAL. THE DIRECTORS, BY VOTE OF A MAJORITY OF THE DIRECTORS THEN
IN OFFICE, MAY ELECT FROM THEIR NUMBER AN EXECUTIVE COMMITTEE OR OTHER
COMMITTEES AND MAY DELEGATE THERETO SOME OR ALL OF THEIR POWERS EXCEPT THOSE
WHICH BY LAW, BY THE ARTICLES OF INCORPORATION, OR BY THESE BY-LAWS MAY NOT BE
DELEGATED. EXCEPT AS THE DIRECTORS MAY OTHERWISE DETERMINE, ANY SUCH COMMITTEE
MAY MAKE RULES FOR THE CONDUCT OF ITS BUSINESS, BUT UNLESS OTHERWISE PROVIDED BY
THE DIRECTORS OR IN SUCH RULES, ITS BUSINESS WILL BE CONDUCTED SO FAR AS
POSSIBLE IN THE SAME MANNER AS IS PROVIDED BY THESE BY-LAWS FOR THE DIRECTORS
THEMSELVES. ALL MEMBERS OF SUCH COMMITTEES WILL HOLD THEIR OFFICES AT THE
DISCRETION OF THE DIRECTORS. THE DIRECTORS MAY ABOLISH ANY COMMITTEE AT ANY
TIME. ANY COMMITTEE TO WHICH THE DIRECTORS DELEGATE ANY OF THEIR POWERS OR
DUTIES WILL KEEP RECORDS OF ITS MEETINGS AND WILL REPORT ITS ACTION TO THE
DIRECTORS. THE DIRECTORS WILL HAVE POWER TO RESCIND ANY ACTION OF ANY COMMITTEE,
BUT NO SUCH RESCISSION WILL HAVE RETROACTIVE EFFECT.
ARTICLE 5
REPORTS
5.1 GENERAL. THE DIRECTORS AND OFFICERS WILL RENDER REPORTS AT THE TIME
AND IN THE MANNER REQUIRED BY THE ARTICLES OF INCORPORATION OR ANY APPLICABLE
LAW. OFFICERS AND COMMITTEES WILL RENDER SUCH ADDITIONAL REPORTS AS THEY MAY
DEEM DESIRABLE OR AS MAY FROM TIME TO TIME BE REQUIRED BY THE DIRECTORS.
ARTICLE 6
SEAL
6.1 GENERAL. THE SEAL OF THE FUND WILL CONSIST OF A FLAT-FACED DIE WITH
THE WORD "MARYLAND," TOGETHER WITH THE NAME OF THE FUND AND THE YEAR OF ITS
ORGANIZATION CUT OR ENGRAVED THEREON, BUT, UNLESS OTHERWISE REQUIRED BY THE
DIRECTORS, THE SEAL WILL NOT BE NECESSARY TO BE PLACED ON, AND ITS ABSENCE WILL
NOT IMPAIR THE VALIDITY OF, ANY DOCUMENT, INSTRUMENT OR OTHER PAPER EXECUTED AND
DELIVERED BY OR ON BEHALF OF THE FUND.
ARTICLE 7
EXECUTION OF PAPERS
7.1 GENERAL. EXCEPT AS THE DIRECTORS MAY GENERALLY OR IN PARTICULAR
CASES AUTHORIZE THE EXECUTION THEREOF IN SOME OTHER MANNER, ALL DEEDS, LEASES,
CONTRACTS, NOTES AND OTHER OBLIGATIONS MADE BY THE DIRECTORS WILL BE SIGNED BY
THE PRESIDENT, ANY VICE PRESIDENT OR ASSISTANT VICE PRESIDENT, OR BY THE
CONTROLLER, SECRETARY OR ASSISTANT SECRETARY AND NEED NOT BEAR THE SEAL OF THE
FUND.
ARTICLE 8
ISSUANCE OF SHARE CERTIFICATES
8.1 SHARE CERTIFICATES. IN LIEU OF ISSUING CERTIFICATES FOR SHARES, THE
DIRECTORS OR THE TRANSFER AGENT MAY EITHER ISSUE RECEIPTS THEREFOR OR MAY KEEP
ACCOUNTS UPON THE BOOKS OF THE FUND FOR THE RECORD HOLDERS OF SUCH SHARES, WHO
WILL IN EITHER CASE BE DEEMED, FOR ALL PURPOSES HEREUNDER, TO BE THE HOLDERS OF
CERTIFICATES FOR SUCH SHARES AS IF THEY HAD ACCEPTED SUCH CERTIFICATES AND WILL
BE HELD TO HAVE EXPRESSLY ASSENTED AND AGREED TO THE TERMS HEREOF.
THE DIRECTORS MAY AT ANY TIME AUTHORIZE THE ISSUANCE OF SHARE CERTIFICATES.
IN THAT EVENT, EACH SHAREHOLDER OF ANY SERIES WILL BE ENTITLED TO A CERTIFICATE
STATING THE NUMBER OF SHARES OF ANY SERIES OWNED BY HIM OR HER, IN SUCH FORM AS
WILL BE PRESCRIBED FROM TIME TO TIME BY THE DIRECTORS. SUCH CERTIFICATES WILL BE
SIGNED BY THE PRESIDENT OR A VICE PRESIDENT AND BY THE CONTROLLER OR ASSISTANT
CONTROLLER OF THE FUND. SUCH SIGNATURES MAY BE FACSIMILES IF THE CERTIFICATE IS
SIGNED BY A TRANSFER AGENT, OR BY A REGISTRAR, OTHER THAN A DIRECTOR, OFFICER OR
EMPLOYEE OF THE FUND. IN CASE ANY OFFICER WHO HAS SIGNED OR WHOSE FACSIMILE
SIGNATURE HAS BEEN PLACED ON SUCH CERTIFICATE WILL CEASE TO BE SUCH OFFICER
BEFORE SUCH CERTIFICATE IS ISSUED, IT MAY BE ISSUED BY THE FUND WITH THE SAME
EFFECT AS IF HE WERE SUCH OFFICER AT THE TIME OF ITS ISSUE.
8.2 LOSS OF CERTIFICATES. IN CASE OF THE ALLEGED LOSS OR DESTRUCTION OR
THE MUTILATION OF A SHARE CERTIFICATE, A DUPLICATE CERTIFICATE MAY BE ISSUED IN
PLACE THEREOF, UPON SUCH TERMS AS THE DIRECTORS WILL PRESCRIBE.
8.3 ISSUANCE OF NEW CERTIFICATE TO PLEDGEE. A PLEDGEE OF SHARES
TRANSFERRED AS COLLATERAL SECURITY WILL BE ENTITLED TO A NEW CERTIFICATE IF THE
INSTRUMENT OF TRANSFER SUBSTANTIALLY DESCRIBES THE DEBT OR DUTY THAT IS INTENDED
TO BE SECURED THEREBY. SUCH NEW CERTIFICATE WILL EXPRESS ON ITS FACE THAT IT IS
HELD AS COLLATERAL SECURITY, AND THE NAME OF THE PLEDGOR WILL BE STATED THEREON,
WHO ALONE WILL BE LIABLE AS A SHAREHOLDER, AND ENTITLED TO VOTE THEREON.
8.4 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. THE DIRECTORS MAY AT
ANY TIME DISCONTINUE THE ISSUANCE OF SHARE CERTIFICATES AND MAY, BY WRITTEN
NOTICE TO EACH SHAREHOLDER, REQUIRE THE SURRENDER OF SHARE CERTIFICATES TO THE
FUND FOR CANCELLATION. SUCH SURRENDER AND CANCELLATION WILL NOT AFFECT THE
OWNERSHIP OF SHARES IN THE FUND.
ARTICLE 9
CUSTODY OF SECURITIES AND CASH
9.1 EMPLOYMENT OF A CUSTODIAN. THE FUND WILL PLACE AND AT ALL TIMES
MAINTAIN IN THE CUSTODY OF A CUSTODIAN (INCLUDING ANY SUBCUSTODIAN FOR THE
CUSTODIAN) ALL FUNDS, SECURITIES, AND SIMILAR INVESTMENTS OWNED BY THE FUND FOR
THE BENEFIT OF ANY OF ITS SERIES. THE CUSTODIAN WILL BE A BANK HAVING AN
AGGREGATE CAPITAL, SURPLUS, AND UNDIVIDED PROFITS OF NOT LESS THAN $10,000,000.
SUBJECT TO SUCH RULES, REGULATIONS, AND ORDERS AS THE SECURITIES AND EXCHANGE
COMMISSION MAY ADOPT AS NECESSARY OR APPROPRIATE FOR THE PROTECTION OF
INVESTORS, THE FUND'S CUSTODIAN MAY DEPOSIT ALL OR A PART OF THE SECURITIES
OWNED BY THE FUND FOR THE BENEFIT OF ANY OF ITS SERIES IN A SUBCUSTODIAN OR
SUBCUSTODIANS SITUATED WITHIN OR WITHOUT THE UNITED STATES. THE CUSTODIAN WILL
BE APPOINTED AND ITS REMUNERATION FIXED BY THE BOARD OF DIRECTORS. [INVESTMENT
COMPANY ACT, SECTION 17(F)]
9.2 CENTRAL CERTIFICATE SERVICE. SUBJECT TO SUCH RULES, REGULATIONS,
AND ORDERS AS THE SECURITIES AND EXCHANGE COMMISSION MAY ADOPT AS NECESSARY OR
APPROPRIATE FOR THE PROTECTION OF INVESTORS, THE FUND'S CUSTODIAN MAY DEPOSIT
ALL OR ANY PART OF THE SECURITIES OWNED BY THE FUND FOR THE BENEFIT OF ANY OF
ITS SERIES IN A SYSTEM FOR THE CENTRAL HANDLING OF SECURITIES ESTABLISHED BY A
NATIONAL SECURITIES EXCHANGE OR NATIONAL SECURITIES ASSOCIATION REGISTERED WITH
THE COMMISSION UNDER THE SECURITIES EXCHANGE ACT OF 1934, OR SUCH OTHER PERSON
AS MAY BE PERMITTED BY THE COMMISSION, PURSUANT TO WHICH SYSTEM ALL SECURITIES
OF ANY PARTICULAR CLASS OR SERIES OF ANY ISSUER DEPOSITED WITHIN THE SYSTEM ARE
TREATED AS FUNGIBLE AND MAY BE TRANSFERRED OR PLEDGED BY BOOKKEEPING ENTRY
WITHOUT PHYSICAL DELIVERY OF SUCH SECURITIES. [INVESTMENT COMPANY ACT, SECTION
17(F)]
9.3 CASH ASSETS. THE CASH PROCEEDS FROM THE SALE OF SECURITIES AND
SIMILAR INVESTMENTS AND OTHER CASH ASSETS OF THE FUND FOR THE BENEFIT OF ANY OF
ITS SERIES WILL BE KEPT IN THE CUSTODY OF A BANK OR BANKS APPOINTED PURSUANT TO
SECTION 9.1 HEREOF, OR IN ACCORDANCE WITH SUCH RULES AND REGULATIONS OR ORDERS
AS THE SECURITIES AND EXCHANGE COMMISSION MAY FROM TIME TO TIME PRESCRIBE FOR
THE PROTECTION OF INVESTORS, EXCEPT THAT THE FUND MAY MAINTAIN A CHECKING
ACCOUNT OR ACCOUNTS IN A BANK OR BANKS, EACH HAVING AN AGGREGATE CAPITAL,
SURPLUS, AND UNDIVIDED PROFITS OF NOT LESS THAN $10,000,000, PROVIDED THAT THE
BALANCE OF SUCH ACCOUNT OR THE AGGREGATE BALANCES OF SUCH ACCOUNTS WILL AT NO
TIME EXCEED THE AMOUNT OF THE FIDELITY BOND, MAINTAINED PURSUANT TO THE
REQUIREMENTS OF THE INVESTMENT COMPANY ACT AND RULES AND REGULATIONS THEREUNDER,
COVERING THE OFFICERS OR EMPLOYEES AUTHORIZED TO DRAW ON SUCH ACCOUNT OR
ACCOUNTS. [INVESTMENT COMPANY ACT, SECTION 17(F)]
9.4 FREE CASH ACCOUNTS. THE FUND MAY, UPON RESOLUTION OF ITS BOARD OF
DIRECTORS, MAINTAIN A PETTY CASH ACCOUNT FREE OF THE FOREGOING REQUIREMENTS OF
THIS ARTICLE 9 IN AN AMOUNT NOT TO EXCEED $500, PROVIDED THAT SUCH ACCOUNT IS
OPERATED UNDER THE IMPREST SYSTEM AND IS MAINTAINED SUBJECT TO ADEQUATE CONTROLS
APPROVED BY THE BOARD OF DIRECTORS OVER DISBURSEMENTS AND REIMBURSEMENTS
INCLUDING, BUT NOT LIMITED TO, FIDELITY BOND COVERAGE FOR PERSONS HAVING ACCESS
TO SUCH FUNDS. [INVESTMENT COMPANY ACT, RULE 17F-3]
9.5 ACTION UPON TERMINATION OF CUSTODIAN AGREEMENT. UPON RESIGNATION OF
A CUSTODIAN OF THE FUND OR INABILITY OF A CUSTODIAN TO CONTINUE TO SERVE, THE
BOARD OF DIRECTORS WILL PROMPTLY APPOINT A SUCCESSOR CUSTODIAN, BUT IN THE EVENT
THAT NO SUCCESSOR CUSTODIAN CAN BE FOUND WHO HAS THE REQUIRED QUALIFICATIONS AND
IS WILLING TO SERVE, THE BOARD OF DIRECTORS WILL CALL AS PROMPTLY AS POSSIBLE A
SPECIAL MEETING OF THE SHAREHOLDERS TO DETERMINE WHETHER THE FUND WILL FUNCTION
WITHOUT A CUSTODIAN OR WILL BE LIQUIDATED. IF SO DIRECTED BY VOTE OF THE HOLDERS
OF A MAJORITY OF THE OUTSTANDING SHARES OF STOCK OF THE FUND, THE CUSTODIAN WILL
DELIVER AND PAY OVER ALL PROPERTY OF THE FUND HELD BY IT AS SPECIFIED IN SUCH
VOTE.
ARTICLE 10
DEALINGS WITH DIRECTORS AND OFFICERS
ANY DIRECTOR, OFFICER OR OTHER AGENT OF THE FUND MAY ACQUIRE, OWN AND
DISPOSE OF SHARES OF THE FUND TO THE SAME EXTENT AS IF HE WERE NOT A DIRECTOR,
OFFICER OR AGENT; AND THE DIRECTORS MAY ACCEPT SUBSCRIPTIONS TO SHARES OR
REPURCHASE SHARES FROM ANY FIRM OR COMPANY IN WHICH HE OR SHE IS INTERESTED.
ARTICLE 11
SHAREHOLDERS
11.1 MEETINGS. A MEETING OF THE SHAREHOLDERS OF THE FUND FOR THE
BENEFIT OF ANY OF ITS SERIES WILL BE HELD WHENEVER CALLED BY THE DIRECTORS AND
WHENEVER ELECTION OF A DIRECTOR OR DIRECTORS BY SHAREHOLDERS IS REQUIRED BY THE
PROVISIONS OF SECTION 16(A) OF THE INVESTMENT COMPANY ACT OF 1940 FOR THAT
PURPOSE. THE DIRECTORS WILL PROMPTLY CALL AND GIVE NOTICE OF A MEETING OF
SHAREHOLDERS FOR THE PURPOSE OF VOTING UPON REMOVAL OF ANY DIRECTOR OF THE FUND
WHEN REQUESTED TO DO SO IN WRITING BY SHAREHOLDERS HOLDING NOT LESS THAN 10% OF
THE SHARES THEN OUTSTANDING OF THE FUND PERTAINING TO ANY SERIES. MEETINGS OF
SHAREHOLDERS FOR ANY OTHER PURPOSE WILL ALSO BE CALLED BY THE DIRECTORS WHEN
REQUESTED IN WRITING BY SHAREHOLDERS HOLDING AT LEAST 10% OF THE SHARES THEN
OUTSTANDING OF THE FUND PERTAINING TO ANY SERIES, OR IF THE DIRECTORS WILL FAIL
TO CALL OR GIVE NOTICE OF ANY MEETING OF SHAREHOLDERS FOR A PERIOD OF 30 DAYS
AFTER SUCH APPLICATION, THEN SHAREHOLDERS HOLDING AT LEAST 10% OF THE SHARES
THEN OUTSTANDING OF THE FUND PERTAINING TO ANY SERIES MAY CALL AND GIVE NOTICE
OF SUCH MEETING. NOTICES OF ANY MEETING OF THE SHAREHOLDERS WILL BE GIVEN BY
DELIVERING OR MAILING, POSTAGE PREPAID, TO EACH SHAREHOLDER ENTITLED TO VOTE AT
SAID MEETING, A WRITTEN OR PRINTED NOTIFICATION OF SUCH MEETING, AT LEAST 15
DAYS BEFORE THE MEETING, TO SUCH ADDRESS AS MAY BE REGISTERED WITH THE FUND BY
THE SHAREHOLDER.
11.2 RECORD DATES. FOR THE PURPOSE OF DETERMINING THE SHAREHOLDERS WHO
ARE ENTITLED TO VOTE OR ACT AT ANY MEETING OR ANY ADJOURNMENT THEREOF, OR WHO
ARE ENTITLED TO RECEIVE PAYMENT OF ANY DIVIDEND OR OF ANY OTHER DISTRIBUTION,
THE DIRECTORS MAY FROM TIME TO TIME FIX A TIME, WHICH WILL NOT BE MORE THAN 90
DAYS BEFORE THE DATE OF ANY MEETING OF SHAREHOLDERS OR THE DATE FOR THE PAYMENT
OF ANY DIVIDEND OR OF ANY OTHER DISTRIBUTION, AS THE RECORD DATE FOR DETERMINING
THE SHAREHOLDERS HAVING THE RIGHT TO NOTICE OF AND TO VOTE AT SUCH MEETING AND
ANY ADJOURNMENT THEREOF OR THE RIGHT TO RECEIVE SUCH DIVIDEND OR DISTRIBUTION,
AND IN SUCH CASE ONLY SHAREHOLDERS OF RECORD ON SUCH RECORD DATE WILL HAVE SUCH
RIGHT, NOTWITHSTANDING ANY TRANSFER OF SHARES ON THE BOOKS OF THE FUND AFTER THE
RECORD DATE; OR WITHOUT FIXING SUCH RECORD DATE THE DIRECTORS MAY FOR ANY SUCH
PURPOSES CLOSE THE REGISTER OR TRANSFER BOOKS FOR ALL OR ANY PART OF SUCH
PERIOD.
ARTICLE 12
AMENDMENTS TO THE BY-LAWS
12.1 GENERAL. THESE BY-LAWS MAY BE AMENDED OR REPEALED, IN WHOLE OR IN
PART, BY A MAJORITY OF THE DIRECTORS THEN IN OFFICE AT ANY MEETING OF THE
DIRECTORS, OR BY ONE OR MORE WRITINGS SIGNED BY SUCH A MAJORITY.
ARTICLE 13
INDEMNIFICATION
13.1 THE FUND SHALL INDEMNIFY OR ADVANCE ANY EXPENSES TO DIRECTORS AND
OFFICERS TO THE EXTENT PERMITTED OR REQUIRED BY THE MARYLAND GENERAL CORPORATION
LAW, PROVIDED, HOWEVER, THAT THE FUND SHALL ONLY BE REQUIRED TO INDEMNIFY OR
ADVANCE EXPENSES TO ANY PERSON OTHER THAN A DIRECTOR, TO THE EXTENT SPECIFICALLY
APPROVED BY RESOLUTION ADOPTED BY THE BOARD OF DIRECTORS IN ACCORDANCE WITH
APPLICABLE LAW.
13.2 THE INDEMNIFICATION PROVIDED HEREUNDER SHALL CONTINUE AS TO A
PERSON WHO HAS CEASED TO BE A DIRECTOR OR OFFICER, AND SHALL INURE TO THE
BENEFIT OF THE HEIRS, EXECUTORS AND ADMINISTRATORS OF SUCH A PERSON.
13.3 NOTHING CONTAINED IN THE ARTICLES OF INCORPORATION OR THESE
BY-LAWS SHALL BE CONSTRUED TO PROTECT ANY DIRECTOR OR OFFICER OF THE FUND
AGAINST ANY LIABILITY TO THE FUND OR ITS SECURITY HOLDERS TO WHICH HE OR SHE
WOULD OTHERWISE BE SUBJECT BY REASON OF WILLFUL MISFEASANCE, BAD FAITH, GROSS
NEGLIGENCE OR RECKLESS DISREGARD OF DUTIES INVOLVED IN THE CONDUCT OF HIS OR HER
OFFICE ("DISABLING CONDUCT"). THE MEANS FOR DETERMINING WHETHER INDEMNIFICATION
SHALL BE MADE SHALL BE:
(I) A FINAL DECISION ON THE MERITS BY A COURT OR OTHER BODY BEFORE
WHOM THE PROCEEDING WAS BROUGHT THAT THE PERSON TO BE INDEMNIFIED ("INDEMNITEE")
WAS NOT LIABLE BY REASON OF DISABLING CONDUCT, OR
(II) IN THE ABSENCE OF SUCH A DECISION, A REASONABLE
DETERMINATION, BASED UPON A REVIEW OF THE FACTS, THAT THE INDEMNITEE WAS NOT
LIABLE BY REASON OF DISABLING CONDUCT, BY (A) THE VOTE OF A MAJORITY OF A QUORUM
OF DIRECTORS WHO ARE NEITHER "INTERESTED PERSONS" OF THE FUND NOR PARTIES TO THE
PROCEEDING ("DISINTERESTED NON-PARTY DIRECTORS"), OR (B) AN INDEPENDENT LEGAL
COUNSEL IN A WRITTEN OPINION.
13.4 NOTHING CONTAINED IN THE ARTICLE OF INCORPORATION OR THESE BY-LAWS
SHALL BE CONSTRUED TO PERMIT THE ADVANCEMENT OF LEGAL EXPENSES FOR THE DEFENSE
OF A PROCEEDING BROUGHT BY THE FUND OR ITS SECURITY HOLDERS AGAINST A DIRECTOR
OR OFFICER OF THE FUND UNLESS AN UNDERTAKING IS FURNISHED BY OR ON BEHALF OF THE
INDEMNITEE TO REPAY THE ADVANCE UNLESS IT IS ULTIMATELY DETERMINED THAT HE OR
SHE IS ENTITLED TO INDEMNIFICATION, AND THE INDEMNITEE COMPLIES WITH AT LEAST
ONE OF THE FOLLOWING CONDITIONS:
(I) THE INDEMNITEE SHALL PROVIDE A SECURITY FOR HIS OR HER
UNDERTAKING,
(II) THE FUND SHALL BE INSURED AGAINST LOSSES ARISING BY REASON OF
ANY LAWFUL ADVANCES, OR
(III) A MAJORITY OF A QUORUM OF THE DISINTERESTED NON-PARTY
DIRECTORS, OR AN INDEPENDENT LEGAL COUNSEL IN A WRITTEN OPINION, SHALL
DETERMINE, BASED ON A REVIEW OF READILY AVAILABLE FACTS (AS OPPOSED TO A FULL
TRIAL-TYPE INQUIRY), THAT THERE IS REASON TO BELIEVE THAT THE INDEMNITEE
ULTIMATELY WILL BE FOUND ENTITLED TO INDEMNIFICATION.
DEFERRED COMPENSATION AGREEMENT
AGREEMENT ENTERED INTO THIS _____ DAY OF ______________, 19___, BETWEEN CALVERT
VARIABLE SERIES, INC., FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME, CALVERT
TAX-FREE RESERVES, THE CALVERT FUND, CALVERT CASH RESERVES, CALVERT SOCIAL
INVESTMENT FUND, CALVERT MUNICIPAL FUND, INC., CALVERT NEW WORLD FUND, INC.,
AND/OR CALVERT WORLD VALUES FUND, INC.(HEREINAFTER REFERRED TO AS THE FUND OR
FUNDS), AND ______________ (DIRECTOR OR TRUSTEE, HEREINAFTER REFERRED TO AS THE
TRUSTEE).
WHEREAS, THE TRUSTEE WILL BE RENDERING VALUABLE SERVICES TO THE FUND OR FUNDS AS
A MEMBER OF THE BOARD OF TRUSTEES, AND THE FUND OR FUNDS IS WILLING TO
ACCOMMODATE THE TRUSTEE'S DESIRE TO BE COMPENSATED FOR SUCH SERVICES ON A
DEFERRED BASIS;
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
1. WITH RESPECT TO SERVICES PERFORMED BY THE TRUSTEE FOR THE FUND OR FUNDS
ON AND AFTER THE FIRST DAY OF , 19___, THE TRUSTEE SHALL DEFER % OF THE
AMOUNTS OTHERWISE PAYABLE TO THE TRUSTEE FOR SERVING AS A TRUSTEE. THE DEFERRED
COMPENSATION SHALL BE CREDITED TO A BOOK RESERVE MAINTAINED BY THE FUND OR FUNDS
IN THE TRUSTEE'S NAME TOGETHER WITH CREDITED AMOUNTS IN THE NATURE OF EARNINGS
("ACCOUNT(S)"). THE ACCOUNT MAINTAINED FOR THE TRUSTEE SHALL BE PAID TO THE
TRUSTEE ON A DEFERRED BASIS IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT.
2. THE FUND OR FUNDS SHALL CREDIT THE TRUSTEE'S ACCOUNT AS OF THE DAY SUCH
AMOUNT WOULD HAVE BEEN PAID TO THE TRUSTEE IF THIS AGREEMENT WERE NOT IN EFFECT.
SUCH ACCOUNTS SHALL BE VALUED AT FAIR MARKET VALUE AS OF THE LAST DAY OF THE
CALENDAR YEAR AND SUCH OTHER DATES AS ARE NECESSARY FOR THE PROPER
ADMINISTRATION OF THIS AGREEMENT, AND EACH TRUSTEE SHALL RECEIVE A WRITTEN
ACCOUNTING OF HIS ACCOUNT BALANCE(S) FOLLOWING SUCH VALUATION.
A TRUSTEE MAY REQUEST THAT HIS/HER DEFERRED COMPENSATION BE ALLOCATED AMONG
THE AVAILABLE FUNDS OR PLACED IN A MONEY MARKET DEPOSIT ACCOUNT. THE INITIAL
ALLOCATION REQUEST MAY BE MADE AT THE TIME OF ENROLLMENT. ONCE MADE, AN
INVESTMENT ALLOCATION REQUEST SHALL REMAIN IN EFFECT FOR ALL SUBSEQUENT DEFERRED
COMPENSATION UNTIL CHANGED BY THE TRUSTEE. A TRUSTEE MAY CHANGE HIS/HER
INVESTMENT ALLOCATION BY SUBMITTING A WRITTEN REQUEST TO THE ADMINISTRATOR ON
SUCH FORM AS MAY BE REQUIRED BY THE ADMINISTRATOR OR BY TELEPHONING THE
ADMINISTRATOR (OR HIS/HER DELEGATE). SUCH CHANGES SHALL BECOME EFFECTIVE AS SOON
AS ADMINISTRATIVELY FEASIBLE AFTER THE ADMINISTRATOR RECEIVES SUCH REQUEST.
ALTHOUGH THE FUND INTENDS TO INVEST THE DEFERRED COMPENSATION ACCORDING TO THE
TRUSTEE'S REQUESTS, IT RESERVES THE RIGHT TO INVEST THE DEFERRED COMPENSATION
WITHOUT REGARD TO SUCH REQUESTS. THE ADMINISTRATOR IS THE CALVERT GROUP, LTD.
CONTROLLER.
3. AS OF JANUARY 31 OF THE CALENDAR YEAR FOLLOWING THE CALENDAR YEAR THE
TRUSTEE DIES, RETIRES, RESIGNS OR OTHERWISE CEASES TO BE A MEMBER OF THE BOARD
OF TRUSTEES OF THE FUND OR FUNDS; THE FUND OR FUNDS SHALL: (CHECK ONE)
( ) PAY THE TRUSTEE (OR HIS OR HER BENEFICIARY) A LUMP SUM AMOUNT
EQUAL TO THE BALANCE IN THE TRUSTEE'S ACCOUNT ON THAT DATE OR
( ) COMMENCE MAKING ANNUAL PAYMENTS TO THE TRUSTEE (OR HIS OR HER
BENEFICIARY) FOR A PERIOD OF ____ (2 THROUGH 15) YEARS.
IF THE SECOND BOX IS SELECTED, SUCH PAYMENTS SHALL BE MADE ON JANUARY 31ST
OF EACH YEAR IN APPROXIMATELY EQUAL ANNUAL INSTALLMENTS AS ADJUSTED AND COMPUTED
BY THE FUND OR FUNDS, WITH THE FINAL PAYMENT EQUALING THE THEN REMAINING BALANCE
IN THE TRUSTEE'S ACCOUNT. IF THE BALANCE IN THE TRUSTEE'S ACCOUNT AS OF THE DATE
OF THE FIRST SCHEDULED PAYMENT IS LESS THAN $2,000, THE FUND OR FUNDS SHALL
INSTEAD PAY SUCH AMOUNT IN A LUMP SUM AS OF THAT DATE. THE TRUSTEE MAY NOT
SELECT A PERIOD OF TIME, WHICH WILL CAUSE AN ANNUAL PAYMENT TO BE LESS THAN
$1,000. NOTWITHSTANDING THE FOREGOING, IN THE EVENT THAT THE TRUSTEE CEASES TO
BE A TRUSTEE OF THE FUND OR FUNDS AND BECOMES A PROPRIETOR, OFFICER, PARTNER,
EMPLOYEE, OR OTHERWISE BECOMES AFFILIATED WITH ANY BUSINESS OR ENTITY THAT IS IN
COMPETITION WITH THE FUND OR FUNDS, OR BECOMES EMPLOYED BY ANY GOVERNMENTAL
AGENCY HAVING JURISDICTION OVER THE AFFAIRS OF THE FUND OR FUNDS, THE FUND OR
FUNDS RESERVES THE RIGHT AT THE SOLE DISCRETION OF THE BOARD OF TRUSTEES TO MAKE
AN IMMEDIATE LUMP SUM PAYMENT TO THE TRUSTEE IN AN AMOUNT EQUAL TO THE BALANCE
IN THE TRUSTEE'S ACCOUNT AT THAT TIME.
NOTWITHSTANDING THE PRECEDING PARAGRAPH, THE FUND OR FUNDS MAY AT ANY TIME
MAKE A LUMP SUM PAYMENT TO THE TRUSTEE (OR SURVIVING BENEFICIARY) EQUAL TO A
PART OR ALL OF THE BALANCE IN THE TRUSTEE'S ACCOUNT UPON A SHOWING OF A
FINANCIAL EMERGENCY CAUSED BY CIRCUMSTANCES BEYOND THE CONTROL OF THE TRUSTEE
(OR SURVIVING BENEFICIARY) WHICH WOULD RESULT IN SERIOUS FINANCIAL HARDSHIP IF
SUCH PAYMENTS WERE NOT MADE. THE DETERMINATION OF WHETHER SUCH EMERGENCY EXISTS
SHALL BE MADE AT THE SOLE DISCRETION OF THE BOARD OF TRUSTEES OF THE FUND OR
FUNDS. THE AMOUNT OF THE PAYMENT SHALL BE LIMITED TO THE AMOUNT NECESSARY TO
MEET THE FINANCIAL EMERGENCY, AND ANY REMAINING BALANCE IN THE TRUSTEE'S ACCOUNT
SHALL THEREAFTER BE PAID AT THE TIME AND IN THE MANNER OTHERWISE SET FORTH IN
THIS SECTION.
4. IN THE EVENT THAT THE TRUSTEE DIES BEFORE PAYMENTS HAVE COMMENCED OR BEEN
COMPLETED UNDER SECTION 3 HEREOF, THE FUND OR FUNDS SHALL MAKE PAYMENT IN
ACCORDANCE WITH SECTION 3 TO THE TRUSTEE'S DESIGNATED BENEFICIARY, WHO SHALL BE:
IN THE EVENT THAT BOTH THE TRUSTEE AND THE DESIGNATED BENEFICIARY HAVE DIED
BEFORE THE COMMENCEMENT OR COMPLETION OF PAYMENTS UNDER SECTION 3, AN AMOUNT
EQUAL TO THE THEN REMAINING BALANCE IN THE TRUSTEE'S ACCOUNT (OR THE PORTION
THEREOF THAT WOULD HAVE BEEN PAYABLE TO THE BENEFICIARY) SHALL BE PAID IN A LUMP
SUM. SUCH PAYMENT SHALL BE MADE TO THE ESTATE OF THE TRUSTEE UNLESS PAYMENTS TO
THE BENEFICIARY HAVE ALREADY COMMENCED, IN WHICH CASE THE LUMP SUM PAYMENT SHALL
BE MADE TO THE ESTATE OF THE BENEFICIARY.
5. THE AGREEMENT SHALL REMAIN IN EFFECT WITH RESPECT TO THE TRUSTEE'S
COMPENSATION FOR SERVICES PERFORMED AS A TRUSTEE OF THE FUND OR FUNDS IN ALL
FUTURE YEARS UNLESS TERMINATED ON A PROSPECTIVE BASIS IN ACCORDANCE WITH THIS
SECTION. EITHER THE TRUSTEE OR THE FUND OR FUNDS MAY TERMINATE THIS AGREEMENT BY
WRITTEN NOTICE DELIVERED OR MAILED TO THE OTHER PARTY NO LATER THAN DECEMBER 31
OF THE CALENDAR YEAR PRECEDING THE CALENDAR YEAR IN WHICH SUCH TERMINATION IS TO
TAKE EFFECT. IN ADDITION, THE TRUSTEE MAY ALTER THE AMOUNT OF DEFERRAL FOR ANY
FUTURE CALENDAR YEAR IF THE TRUSTEE AND THE FUND OR FUNDS ENTER INTO AN
AMENDMENT ON OR BEFORE DECEMBER 31ST OF THE CALENDAR YEAR PRECEDING THE CALENDAR
YEAR FOR WHICH THE AMENDMENT IS TO TAKE EFFECT. THE AMENDMENT WILL BE DEEMED TO
SUPERSEDE THE AMOUNT OF DEFERRAL FOR ALL FUTURE YEARS UNLESS OTHERWISE AMENDED
OR TERMINATED. ANY TERMINATION OR NEW AMENDMENT SHALL RELATE SOLELY TO
COMPENSATION FOR SERVICES PERFORMED AFTER THE TERMINATION OR AMENDMENT BECOMES
EFFECTIVE AND SHALL NOT ALTER THE TERMS OF THE AGREEMENT WITH RESPECT TO THE
DEFERRED PAYMENT OF COMPENSATION FOR SERVICES PERFORMED DURING ANY CALENDAR YEAR
IN WHICH THIS AGREEMENT WAS IN EFFECT. NOTWITHSTANDING THE FOREGOING, THE
TRUSTEE MAY AT ANY TIME AMEND THE BENEFICIARY DESIGNATION HEREUNDER BY WRITTEN
NOTICE TO THE FUND OR FUNDS.
6. NOTHING CONTAINED IN THIS AGREEMENT AND NO ACTION TAKEN PURSUANT TO THE
PROVISIONS OF THIS AGREEMENT SHALL CREATE OR BE CONSTRUED TO CREATE A TRUST OF
ANY KIND, OR A FIDUCIARY RELATIONSHIP BETWEEN THE FUND OR FUNDS AND THE TRUSTEE,
ANY DESIGNATED BENEFICIARY OR ANY OTHER PERSON. ANY COMPENSATION DEFERRED UNDER
THE PROVISIONS OF THIS AGREEMENT SHALL CONTINUE FOR ALL PURPOSES TO BE A PART OF
THE GENERAL FUNDS OF THE FUND OR FUNDS. TO THE EXTENT THAT ANY PERSON ACQUIRES A
RIGHT TO RECEIVE PAYMENTS FROM THE FUND OR FUNDS UNDER THIS AGREEMENT, SUCH
RIGHT SHALL BE NO GREATER THAN THE RIGHT OF ANY UNSECURED GENERAL CREDITOR OF
THE FUND OR FUNDS.
7. THE RIGHT OF THE TRUSTEE OR ANY OTHER PERSON TO RECEIVE PAYMENTS UNDER
THIS AGREEMENT SHALL NOT BE ASSIGNED, TRANSFERRED, PLEDGED OR ENCUMBERED EXCEPT
BY WILL OR BY THE LAWS OF DESCENT AND DISTRIBUTION.
8. IF THE FUND OR FUNDS SHALL FIND THAT ANY PERSON TO WHOM ANY PAYMENT IS
PAYABLE UNDER THIS AGREEMENT IS UNABLE TO CARE FOR HIS OR HER AFFAIRS BECAUSE OF
ILLNESS OR ACCIDENT, OR IS A MINOR, ANY PAYMENT DUE (UNLESS A PRIOR CLAIM
THEREFOR SHALL HAVE BEEN MADE BY A DULY APPOINTED GUARDIAN, COMMITTEE OR OTHER
LEGAL REPRESENTATIVE) MAY BE PAID TO THE SPOUSE, A PARENT, OR A BROTHER OR
SISTER, OR TO ANY PERSON DEEMED BY THE FUND OR FUNDS TO HAVE INCURRED EXPENSE
FOR THE PERSON WHO IS OTHERWISE ENTITLED TO PAYMENT, IN SUCH MANNER AND
PROPORTIONS AS THE FUND OR FUNDS MAY DETERMINE. ANY SUCH PAYMENT SHALL SERVE TO
DISCHARGE THE LIABILITY OF THE FUND OR FUNDS UNDER THIS AGREEMENT TO MAKE
PAYMENT TO THE PERSON WHO IS OTHERWISE ENTITLED TO PAYMENT.
9. ANY WRITTEN NOTICE TO THE FUND OR FUNDS REFERRED TO IN THIS AGREEMENT
SHALL BE MADE BY MAILING OR DELIVERING SUCH NOTICE TO THE FUND OR FUNDS AT 4550
MONTGOMERY AVENUE, BETHESDA, MD 20814, TO THE ATTENTION OF THE CONTROLLER,
CALVERT GROUP, LTD. ANY WRITTEN NOTICE TO THE TRUSTEE REFERRED TO IN THIS
AGREEMENT SHALL BE MADE BY DELIVERY TO THE TRUSTEE IN PERSON OR BY MAILING SUCH
NOTICE TO THE TRUSTEE AT HIS OR HER PLACE OF RESIDENCE OR BUSINESS ADDRESS.
10. TO THE EXTENT REQUIRED BY LAW, THE FUND OR FUNDS SHALL WITHHOLD FEDERAL
OR STATE INCOME TAXES FROM ANY PAYMENTS HEREUNDER AND SHALL FURNISH THE TRUSTEE
(OR BENEFICIARY) AND THE APPLICABLE GOVERNMENTAL AGENCY OR AGENCIES WITH SUCH
REPORTS, STATEMENTS OR INFORMATION AS MAY BE REQUIRED IN CONNECTION WITH SUCH
PAYMENTS.
11. THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE
FUND OR FUNDS AND ITS SUCCESSORS AND ASSIGNS AND THE TRUSTEE AND HIS OR HER
HEIRS, EXECUTORS, ADMINISTRATORS AND LEGAL REPRESENTATIVE.
12. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF MARYLAND.
<PAGE>
IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AGREEMENT TO BE EXECUTED AS OF
THE DATE FIRST ABOVE WRITTEN.
CALVERT VARIABLE SERIES, INC.
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
THE CALVERT FUND
CALVERT CASH RESERVES
CALVERT SOCIAL INVESTMENT FUND
CALVERT MUNICIPAL FUND, INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
BY
(PRINT NAME OF TRUSTEE)
(SIGNATURE OF TRUSTEE)
DATE
ACKNOWLEDGMENT:
BY RONALD M. WOLFSHEIMER
(PRINT NAME OF OFFICER)
TREASURER
(TITLE)
(SIGNATURE OF OFFICER)
DATE
<PAGE>
C:\temp\DCAGMT2.DOC
APPLICATION FOR CALVERT GROUP
TRUSTEE DEFERRED COMPENSATION PLAN
1. INSTRUCTIONS
PLEASE COMPLETE SECTIONS 2 THROUGH 4 BELOW. THIS APPLICATION SHOULD BE
SIGNED BY THE TRUSTEE AND RETURNED TO THE ADMINISTRATOR.
2. TRUSTEE INFORMATION (PLEASE PRINT)
NAME OF FUND:
NAME OF TRUSTEE:
ADDRESS OF FUND: 4550 MONTGOMERY AVE., STE. 1000N
BETHESDA, MD 20814
3. INVESTMENT OF CONTRIBUTIONS
CONTRIBUTIONS TO THE CALVERT GROUP TRUSTEE'S DEFERRED COMPENSATION PLAN
SHALL BE INVESTED IN THE CALVERT GROUP FUNDS:
CALVERT FIRST GOVERNMENT MONEY MARKET FUND %
CSIF MANAGED INDEX PORTFOLIO _________%
CSIF MONEY MARKET PORTFOLIO %
CSIF BALANCED PORTFOLIO %
CSIF BOND PORTFOLIO %
CSIF EQUITY PORTFOLIO %
CALVERT INCOME FUND %
CALVERT NEW VISION SMALL CAP FUND %
CALVERT INTERNATIONAL EQUITY PORTFOLIO %
CALVERT CAPITAL ACCUMULATION FUND %
CALVERT NEW AFRICA FUND %
TOTAL %
4. PURSUANT TO SECTION 3, I CHOOSE TO HAVE MY ANNUAL PAYMENTS BE MADE FOR:
A ____ LUMP SUM OR
B ____ YEARS (NO LESS THAN 2 NOR GREATER THAN 15).
5. ACCEPTANCE
TRUSTEE ACCEPTANCE: I HEREBY AGREE TO THE TERMS AND CONDITIONS OF THE
CALVERT GROUP TRUSTEE DEFERRED COMPENSATION PLAN. I HAVE READ THE PROSPECTUS(ES)
OF THE CHOSEN FUND(S).
NAME DATE
FOR OFFICE USE ONLY
FUND NUMBER(S): ACCOUNT NUMBER:
7
CUSTODIAN AGREEMENT
THIS AGREEMENT, DATED AS OF APRIL 1, 1991, IS BETWEEN STATE STREET BANK AND
TRUST COMPANY, A MASSACHUSETTS TRUST COMPANY, HAVING ITS PRINCIPAL PLACE OF
BUSINESS AT 225 FRANKLIN STREET, BOSTON, MASSACHUSETTS, 02110 ("STATE STREET" OR
THE "CUSTODIAN"), AND [FUND], ON BEHALF OF [PORTFOLIO], HAVING ITS PRINCIPAL
PLACE OF BUSINESS AT 4550 MONTGOMERY AVENUE, SUITE 1000N, BETHESDA, MARYLAND,
20814. IN CONSIDERATION OF THE MUTUAL COVENANTS AND AGREEMENTS CONTAINED IN
THIS AGREEMENT, THE PARTIES AGREE AS FOLLOWS:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
THE PORTFOLIO HEREBY EMPLOYS STATE STREET AS THE CUSTODIAN OF ITS ASSETS,
INCLUDING SECURITIES. THE PORTFOLIO AGREES TO DELIVER TO THE CUSTODIAN ALL
SECURITIES AND CASH NOW OR HEREAFTER OWNED OR ACQUIRED, AND ALL PAYMENTS OF
INCOME, PAYMENTS OF PRINCIPAL OR CAPITAL DISTRIBUTIONS RECEIVED BY IT ON
SECURITIES OWNED BY THE PORTFOLIO AT ANY GIVEN TIME, AND THE CASH CONSIDERATION
RECEIVED BY IT FOR SHARES OF THE PORTFOLIO. THE CUSTODIAN WILL NOT BE
RESPONSIBLE FOR ANY PROPERTY OF THE PORTFOLIO HELD OR RECEIVED BY THE PORTFOLIO
AND NOT DELIVERED TO THE CUSTODIAN.
UPON RECEIPT OF "PROPER INSTRUCTIONS" (AS DEFINED IN SECTION 4), THE
CUSTODIAN WILL EMPLOY ONE OR MORE SUBCUSTODIANS LOCATED IN THE UNITED STATES,
BUT ONLY IN ACCORDANCE WITH AN APPLICABLE VOTE BY THE BOARD OF
DIRECTORS/TRUSTEES OF THE FUND, AND PROVIDED THAT THE CUSTODIAN WILL HAVE NO
MORE OR LESS RESPONSIBILITY OR LIABILITY TO THE PORTFOLIO ON ACCOUNT OF ANY
ACTIONS OR OMISSIONS OF ANY SUB-CUSTODIAN SO EMPLOYED THAN ANY SUCH
SUB-CUSTODIAN HAS TO THE CUSTODIAN, AND FURTHER PROVIDED THAT THE CUSTODIAN WILL
NOT RELEASE THE SUB-CUSTODIAN FROM ANY RESPONSIBILITY OR LIABILITY UNLESS
MUTUALLY AGREED UPON BY THE PARTIES IN WRITING.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIO
2.1 HOLDING SECURITIES. THE CUSTODIAN WILL HOLD AND PHYSICALLY SEGREGATE
FOR THE ACCOUNT OF THE PORTFOLIO ALL NON-CASH PROPERTY OTHER THAN (A) SECURITIES
MAINTAINED IN A CLEARING AGENCY ACTING AS A SECURITIES DEPOSITORY OR IN A
BOOK-ENTRY SYSTEM AUTHORIZED BY THE U.S. DEPARTMENT OF THE TREASURY
(COLLECTIVELY REFERRED TO AS "SECURITIES SYSTEM;" SEE SECTION 2.10), AND (B)
COMMERCIAL PAPER OF AN ISSUER FOR WHICH THE CUSTODIAN ACTS AS ISSUING AND PAYING
AGENT ("DIRECT PAPER") WHICH IS DEPOSITED AND/OR MAINTAINED IN THE DIRECT PAPER
SYSTEM OF THE CUSTODIAN (SEE SECTION 2.11).
2.2 DELIVERY OF SECURITIES. THE CUSTODIAN WILL RELEASE AND DELIVER
PORTFOLIO SECURITIES HELD BY THE CUSTODIAN OR IN A SECURITIES SYSTEM ACCOUNT OF
THE CUSTODIAN OR IN THE CUSTODIAN'S DIRECT PAPER BOOK ENTRY SYSTEM ACCOUNT
("DIRECT PAPER SYSTEM ACCOUNT") ONLY UPON RECEIPT OF PROPER INSTRUCTIONS, WHICH
MAY BE CONTINUING INSTRUCTIONS WHEN DEEMED APPROPRIATE BY MUTUAL AGREEMENT OF
THE PARTIES, AND ONLY IN THE FOLLOWING CASES:
L) SALE. UPON THE SALE OF AND RECEIPT OF PAYMENT FOR PORTFOLIO SECURITIES;
2) SECURITIES SYSTEM. IN THE CASE OF A SALE EFFECTED THROUGH A SECURITIES
SYSTEM, IN ACCORDANCE WITH THE PROVISIONS OF SECTION 2.10;
3) TENDER OFFER. TO THE DEPOSITORY AGENT OR OTHER RECEIVING AGENT IN
CONNECTION WITH TENDER OR OTHER SIMILAR OFFERS FOR THE PORTFOLIO'S SECURITIES;
4) REDEMPTION BY ISSUER. TO THE ISSUER OR ITS AGENT WHEN PORTFOLIO
SECURITIES ARE CALLED, REDEEMED, RETIRED OR OTHERWISE BECOME PAYABLE; PROVIDED
THAT, IN ANY SUCH CASE, THE CASH OR OTHER CONSIDERATION IS TO BE DELIVERED TO
THE CUSTODIAN;
5) TRANSFER TO ISSUER, NOMINEE; EXCHANGE. TO THE ISSUER OR ITS AGENT FOR
TRANSFER INTO THE NAME OF THE PORTFOLIO OR INTO THE NAME OF ANY NOMINEE OR
NOMINEES OF THE CUSTODIAN OR INTO THE NAME OR NOMINEE NAME OF ANY AGENT
APPOINTED PURSUANT TO THIS AGREEMENT OR INTO THE NAME OR NOMINEE NAME OF ANY
SUB-CUSTODIAN APPOINTED PURSUANT TO SECTION L; OR FOR EXCHANGE FOR A DIFFERENT
NUMBER OF BONDS, CERTIFICATES OR OTHER EVIDENCE REPRESENTING THE SAME AGGREGATE
FACE AMOUNT OR NUMBER OF UNITS AND BEARING THE SAME INTEREST RATE, MATURITY DATE
AND CALL PROVISIONS, IF ANY; PROVIDED THAT, IN ANY SUCH CASE, THE NEW SECURITIES
ARE TO BE DELIVERED TO THE CUSTODIAN;
6) SALE TO BROKER OR DEALER. UPON THE SALE OF PORTFOLIO SECURITIES TO THE
BROKER OR ITS CLEARING AGENT OR DEALER, AGAINST A RECEIPT, FOR EXAMINATION IN
ACCORDANCE WITH "STREET DELIVERY" CUSTOM; PROVIDED THAT THE CUSTODIAN WILL HAVE
NO RESPONSIBILITY OR LIABILITY FOR ANY LOSS ARISING FROM THE DELIVERY OF SUCH
SECURITIES PRIOR TO RECEIVING PAYMENT FOR SUCH SECURITIES EXCEPT AS MAY ARISE
FROM THE CUSTODIAN'S FAILURE TO ACT IN ACCORDANCE WITH ITS DUTIES AS SET FORTH
IN THIS AGREEMENT.
7) EXCHANGE OR CONVERSION. FOR EXCHANGE OR CONVERSION PURSUANT TO ANY PLAN
OF MERGER, CONSOLIDATION, RECAPITALIZATION, REORGANIZATION, SPLIT-UP OF SHARES,
CHANGE OF PAR VALUE OR READJUSTMENT OF THE SECURITIES OF THE ISSUER OF SUCH
SECURITIES, OR PURSUANT TO PROVISIONS FOR CONVERSION CONTAINED IN SUCH
SECURITIES, OR PURSUANT TO ANY DEPOSIT AGREEMENT PROVIDED THAT, IN ANY SUCH
CASE, THE NEW SECURITIES AND CASH, IF ANY, ARE TO BE DELIVERED TO THE CUSTODIAN;
8) WARRANTS, RIGHTS. IN THE CASE OF WARRANTS, RIGHTS OR SIMILAR SECURITIES,
THE SURRENDER THEREOF IN THE EXERCISE OF SUCH WARRANTS, RIGHTS OR SIMILAR
SECURITIES OR THE SURRENDER OF INTERIM RECEIPTS OR TEMPORARY SECURITIES FOR
DEFINITIVE SECURITIES; PROVIDED THAT, IN ANY SUCH CASE, THE NEW SECURITIES AND
CASH, IF ANY, ARE TO BE DELIVERED TO THE CUSTODIAN;
9) LOANS OF SECURITIES. FOR DELIVERY IN CONNECTION WITH ANY LOANS OF
SECURITIES MADE BY THE PORTFOLIO, MADE ONLY AGAINST RECEIPT OF ADEQUATE
COLLATERAL AS AGREED ON FROM TIME TO TIME BY THE CUSTODIAN AND THE PORTFOLIO.
LOANS MAY BE IN THE FORM OF CASH, OBLIGATIONS ISSUED BY THE UNITED STATES
GOVERNMENT, ITS AGENCIES OR INSTRUMENTALITIES, OR SUCH OTHER PROPERTY AS
MUTUALLY AGREED BY THE PARTIES, EXCEPT THAT IN CONNECTION WITH ANY LOANS FOR
WHICH COLLATERAL IS TO BE CREDITED TO THE CUSTODIAN'S ACCOUNT IN THE BOOK-ENTRY
SYSTEM AUTHORIZED BY THE U.S. DEPARTMENT OF THE TREASURY, THE CUSTODIAN WILL NOT
BE HELD LIABLE OR RESPONSIBLE FOR THE DELIVERY OF SECURITIES OWNED BY THE
PORTFOLIO PRIOR TO THE RECEIPT OF SUCH COLLATERAL, UNLESS THE CUSTODIAN FAILS TO
ACT IN ACCORDANCE WITH ITS DUTIES SET FORTH IN THIS AGREEMENT;
10) BORROWINGS. FOR DELIVERY AS SECURITY IN CONNECTION WITH ANY BORROWINGS
BY THE PORTFOLIO REQUIRING A PLEDGE OF ASSETS BY THE PORTFOLIO, MADE ONLY
AGAINST RECEIPT OF AMOUNTS BORROWED; EXCEPT, WHERE ADDITIONAL COLLATERAL IS
REQUIRED TO SECURE A BORROWING ALREADY MADE, FURTHER SECURITIES MAY BE RELEASED
FOR THAT PURPOSE, SUBJECT TO PROPER INSTRUCTIONS;
11) OPTIONS. FOR DELIVERY IN ACCORDANCE WITH THE PROVISIONS OF ANY
AGREEMENT AMONG THE PORTFOLIO, THE CUSTODIAN AND A BROKER-DEALER REGISTERED
UNDER THE SECURITIES EXCHANGE ACT OF 1934 (THE "EXCHANGE ACT") AND A MEMBER OF
THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. ("NASD"), RELATING TO
COMPLIANCE WITH THE RULES OF THE OPTIONS CLEARING CORPORATION, ANY REGISTERED
NATIONAL SECURITIES EXCHANGE, ANY SIMILAR ORGANIZATION OR ORGANIZATIONS, OR THE
INVESTMENT COMPANY ACT OF 1940, REGARDING ESCROW OR OTHER ARRANGEMENTS IN
CONNECTION WITH TRANSACTIONS BY THE PORTFOLIO;
12) FUTURES. FOR DELIVERY IN ACCORDANCE WITH THE PROVISIONS OF ANY
AGREEMENT AMONG THE PORTFOLIO, THE CUSTODIAN, AND A FUTURES COMMISSION MERCHANT
REGISTERED UNDER THE COMMODITY EXCHANGE ACT, RELATING TO COMPLIANCE WITH THE
RULES OF THE COMMODITY FUTURES TRADING COMMISSION AND/OR ANY CONTRACT MARKET,
ANY SIMILAR ORGANIZATION OR ORGANIZATIONS, OR THE INVESTMENT COMPANY ACT OF
1940, REGARDING ACCOUNT DEPOSITS IN CONNECTION WITH TRANSACTIONS BY THE
PORTFOLIO;
13) IN-KIND DISTRIBUTIONS. UPON RECEIPT OF INSTRUCTIONS FROM THE
PORTFOLIO'S TRANSFER AGENT, FOR DELIVERY TO THE TRANSFER AGENT OR TO THE HOLDERS
OF SHARES IN CONNECTION WITH DISTRIBUTIONS IN KIND, AS MAY BE DESCRIBED FROM
TIME TO TIME IN THE PORTFOLIO'S CURRENTLY EFFECTIVE PROSPECTUS AND STATEMENT OF
ADDITIONAL INFORMATION, IN SATISFACTION OF SHAREHOLDER REQUESTS FOR REPURCHASE
OR REDEMPTION;
14) MISCELLANEOUS. FOR ANY OTHER PROPER CORPORATE PURPOSE, MADE ONLY UPON
RECEIPT OF A CERTIFIED COPY OF A RESOLUTION OF THE BOARD OF TRUSTEES SIGNED BY
AN OFFICER OF THE FUND AND CERTIFIED BY THE SECRETARY OR AN ASSISTANT SECRETARY,
SPECIFYING THE SECURITIES TO BE DELIVERED, SETTING FORTH THE PURPOSE FOR WHICH
SUCH DELIVERY IS TO BE MADE, DECLARING SUCH PURPOSE TO BE A PROPER CORPORATE
PURPOSE, AND NAMING THE PERSON OR PERSONS TO WHOM DELIVERY OF THE SECURITIES
WILL BE MADE.
IN ALL CASES, PAYMENTS TO THE PORTFOLIO WILL BE MADE IN CASH, BY A
CERTIFIED CHECK OR A TREASURER'S OR CASHIER'S CHECK OF A BANK, BY EFFECTIVE BANK
WIRE TRANSFER THROUGH THE FEDERAL RESERVE WIRE SYSTEM OR, IF APPROPRIATE,
OUTSIDE OF THE FEDERAL RESERVE WIRE SYSTEM AND SUBSEQUENT CREDIT TO THE
PORTFOLIO'S CUSTODIAN ACCOUNT, OR, IN CASE OF DELIVERY THROUGH A STOCK CLEARING
COMPANY, BY BOOK-ENTRY CREDIT BY THE STOCK CLEARING COMPANY IN ACCORDANCE WITH
THE THEN CURRENT STREET CUSTOM, OR SUCH OTHER FORM OF PAYMENT AS MAY BE MUTUALLY
AGREED ON BY THE PARTIES, IN ALL SUCH CASES COLLECTED FUNDS TO BE PROMPTLY
CREDITED TO THE PORTFOLIO.
2.3 REGISTRATION OF SECURITIES. SECURITIES HELD BY THE CUSTODIAN (OTHER
THAN BEARER SECURITIES) WILL BE REGISTERED (A) IN THE NAME OF THE PORTFOLIO OR
(B) IN THE NAME OF ANY NOMINEE OF THE PORTFOLIO OR OF ANY NOMINEE OF THE
CUSTODIAN ASSIGNED EXCLUSIVELY TO THE PORTFOLIO, UNLESS THE PORTFOLIO HAS
AUTHORIZED IN WRITING THE APPOINTMENT OF A NOMINEE TO BE USED IN COMMON WITH
OTHER REGISTERED INVESTMENT COMPANIES HAVING THE SAME INVESTMENT ADVISER AS THE
PORTFOLIO, OR IN THE NAME OR NOMINEE NAME OF ANY AGENT APPOINTED PURSUANT TO
SECTION 2.9 OR IN THE NAME OR NOMINEE NAME OF ANY SUB-CUSTODIAN APPOINTED
PURSUANT TO SECTION 1. ALL SECURITIES ACCEPTED BY THE CUSTODIAN ON BEHALF OF THE
PORTFOLIO UNDER THE TERMS OF THIS AGREEMENT WILL BE IN "STREET NAME" OR OTHER
GOOD DELIVERY FORM.
2.4 BANK ACCOUNTS. THE CUSTODIAN WILL OPEN AND MAINTAIN A SEPARATE BANK
ACCOUNT OR ACCOUNTS IN THE NAME OF THE PORTFOLIO, SUBJECT ONLY TO DRAFT OR ORDER
BY THE CUSTODIAN ACTING PURSUANT TO THE TERMS OF THIS AGREEMENT. THE CUSTODIAN
WILL HOLD IN THE ACCOUNT(S), IN ACCORDANCE WITH THE PROVISIONS OF THIS
AGREEMENT, ALL CASH RECEIVED BY IT FROM OR FOR THE ACCOUNT OF THE PORTFOLIO,
OTHER THAN CASH MAINTAINED BY THE PORTFOLIO IN A BANK ACCOUNT ESTABLISHED AND
USED IN ACCORDANCE WITH RULE 17F-3 UNDER THE INVESTMENT COMPANY ACT OF 1940.
FUNDS HELD BY THE CUSTODIAN FOR THE PORTFOLIO MAY BE DEPOSITED FOR THE
PORTFOLIO'S CREDIT IN THE BANK AFFILIATE OF THE CUSTODIAN OR IN SUCH OTHER BANKS
OR TRUST COMPANIES AS THE CUSTODIAN MAY IN ITS DISCRETION DEEM NECESSARY OR
DESIRABLE; PROVIDED, HOWEVER, THAT EVERY SUCH BANK OR TRUST COMPANY MUST BE
QUALIFIED TO ACT AS A CUSTODIAN UNDER THE INVESTMENT COMPANY ACT OF 1940. FUNDS
WILL BE DEPOSITED BY THE CUSTODIAN IN ITS CAPACITY AS CUSTODIAN AND WILL BE
WITHDRAWABLE BY THE CUSTODIAN ONLY IN THAT CAPACITY.
2.5 SALE OF SHARES AND AVAILABILITY OF FEDERAL FUNDS. UPON MUTUAL AGREEMENT
BETWEEN THE PORTFOLIO AND THE CUSTODIAN, THE CUSTODIAN WILL, UPON THE RECEIPT OF
PROPER INSTRUCTIONS, MAKE FEDERAL FUNDS AVAILABLE TO THE PORTFOLIO AS OF
SPECIFIED TIMES AGREED UPON FROM TIME TO TIME BY THE PORTFOLIO AND THE CUSTODIAN
IN THE AMOUNT OF CHECKS RECEIVED IN PAYMENT FOR SHARES OF THE PORTFOLIO WHICH
ARE DEPOSITED INTO THE PORTFOLIO'S ACCOUNT.
2.6 COLLECTION OF INCOME, DIVIDENDS. THE CUSTODIAN WILL COLLECT ON A TIMELY
BASIS ALL INCOME AND OTHER PAYMENTS WITH RESPECT TO REGISTERED SECURITIES HELD
TO WHICH THE PORTFOLIO IS ENTITLED EITHER BY LAW OR PURSUANT TO CUSTOM IN THE
SECURITIES BUSINESS. THE CUSTODIAN WILL ALSO COLLECT ON A TIMELY BASIS ALL
INCOME AND OTHER PAYMENTS WITH RESPECT TO BEARER SECURITIES IF, ON THE DATE OF
PAYMENT BY THE ISSUER, THE SECURITIES ARE HELD BY THE CUSTODIAN OR ITS AGENT.
THE CUSTODIAN WILL CREDIT ALL SUCH INCOME OR OTHER PAYMENTS, AS COLLECTED, TO
THE PORTFOLIO'S CUSTODIAN ACCOUNT. WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, THE CUSTODIAN WILL DETACH AND PRESENT FOR PAYMENT ALL COUPONS AND
OTHER INCOME ITEMS REQUIRING PRESENTATION AS AND WHEN THEY BECOME DUE AND WILL
COLLECT INTEREST WHEN DUE ON SECURITIES HELD PURSUANT TO THIS AGREEMENT. THE
CUSTODIAN WILL ALSO RECEIVE AND COLLECT ALL STOCK DIVIDENDS, RIGHTS AND OTHER
ITEMS OF LIKE NATURE AS AND WHEN THEY BECOME DUE OR PAYABLE. INCOME DUE THE
PORTFOLIO ON SECURITIES LOANED PURSUANT TO THE PROVISIONS OF SECTION 2.2(10)
WILL BE THE RESPONSIBILITY OF THE PORTFOLIO; THE CUSTODIAN WILL HAVE NO DUTY OR
RESPONSIBILITY IN CONNECTION WITH LOANED SECURITIES OTHER THAN TO PROVIDE THE
PORTFOLIO WITH SUCH INFORMATION OR DATA AS MAY BE NECESSARY TO ASSIST THE
PORTFOLIO IN ARRANGING FOR THE TIMELY DELIVERY TO THE CUSTODIAN OF THE INCOME TO
WHICH THE PORTFOLIO IS PROPERLY ENTITLED.
2.7 PAYMENT OF PORTFOLIO MONIES. UPON RECEIPT OF PROPER INSTRUCTIONS, WHICH
MAY BE CONTINUING INSTRUCTIONS WHEN DEEMED APPROPRIATE BY MUTUAL AGREEMENT OF
THE PARTIES, THE CUSTODIAN WILL PAY OUT MONIES OF THE PORTFOLIO IN THE FOLLOWING
CASES ONLY:
L) PURCHASES. UPON THE PURCHASE OF DOMESTIC SECURITIES, OPTIONS, FUTURES
CONTRACTS OR OPTIONS ON FUTURES CONTRACTS FOR THE ACCOUNT OF THE PORTFOLIO BUT
ONLY (A) AGAINST THE DELIVERY OF SUCH SECURITIES, OR EVIDENCE OF TITLE TO SUCH
OPTIONS, FUTURES CONTRACTS OR OPTIONS ON FUTURES CONTRACTS, TO THE CUSTODIAN (OR
ANY BANK, BANKING FIRM OR TRUST COMPANY DOING BUSINESS IN THE UNITED STATES OR
ABROAD WHICH IS QUALIFIED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED,
TO ACT AS A CUSTODIAN AND HAS BEEN DESIGNATED BY THE CUSTODIAN AS ITS AGENT FOR
THIS PURPOSE IN ACCORDANCE WITH SECTION 2.9 OF THIS AGREEMENT) REGISTERED IN THE
NAME OF THE PORTFOLIO OR IN THE NAME OF A NOMINEE OF THE PORTFOLIO OR OF THE
CUSTODIAN REFERRED TO IN SECTION 2.3 OF THIS AGREEMENT, OR IN OTHER PROPER FORM
FOR TRANSFER; (B) IN THE CASE OF A PURCHASE EFFECTED THROUGH A SECURITIES
SYSTEM, IN ACCORDANCE WITH THE CONDITIONS SET FORTH IN SECTION 2.10 OF THIS
AGREEMENT; (C) IN THE CASE OF A PURCHASE INVOLVING THE DIRECT PAPER SYSTEM, IN
ACCORDANCE WITH THE CONDITIONS SET FORTH IN SECTION 2.11; OR (D) IN THE CASE OF
REPURCHASE AGREEMENTS ENTERED INTO BETWEEN THE PORTFOLIO AND THE CUSTODIAN, OR
ANOTHER BANK, OR A BROKER-DEALER WHICH IS A MEMBER OF NASD, (I) AGAINST DELIVERY
OF THE SECURITIES EITHER IN CERTIFICATE FORM OR THROUGH AN ENTRY CREDITING THE
CUSTODIAN'S ACCOUNT AT THE FEDERAL RESERVE BANK WITH SUCH SECURITIES OR (II)
AGAINST DELIVERY OF THE RECEIPT EVIDENCING PURCHASE BY THE PORTFOLIO OF
SECURITIES OWNED BY THE CUSTODIAN ALONG WITH WRITTEN EVIDENCE OF THE AGREEMENT
BY THE CUSTODIAN TO REPURCHASE SUCH SECURITIES FROM THE PORTFOLIO. ALL COUPON
BONDS ACCEPTED BY THE CUSTODIAN MUST HAVE THE COUPONS ATTACHED OR MUST BE
ACCOMPANIED BY A CHECK PAYABLE ON COUPON PAYABLE DATE FOR THE INTEREST DUE ON
THAT DATE.
2) EXCHANGES. IN CONNECTION WITH CONVERSION, EXCHANGE OR SURRENDER OF
SECURITIES OWNED BY THE PORTFOLIO AS SET FORTH IN SECTION 2.2 HEREOF;
3) REDEMPTIONS. FOR THE REDEMPTION OR REPURCHASE OF SHARES ISSUED BY THE
PORTFOLIO AS SET FORTH IN THIS AGREEMENT;
4) EXPENSE AND LIABILITY. FOR THE PAYMENT OF ANY EXPENSE OR LIABILITY
INCURRED BY THE PORTFOLIO, INCLUDING BUT NOT LIMITED TO THE FOLLOWING PAYMENTS
FOR THE ACCOUNT OF THE PORTFOLIO: INTEREST, TAXES, MANAGEMENT, ACCOUNTING,
TRANSFER AGENT AND LEGAL FEES, AND OPERATING EXPENSES OF THE PORTFOLIO WHETHER
OR NOT SUCH EXPENSES ARE TO BE IN WHOLE OR PART CAPITALIZED OR TREATED AS
DEFERRED EXPENSES;
5) DIVIDENDS. FOR THE PAYMENT OF ANY DIVIDENDS OR OTHER DISTRIBUTIONS TO
SHAREHOLDERS DECLARED BY THE PORTFOLIO;
6) SHORT SALE DIVIDEND. FOR PAYMENT OF THE AMOUNT OF DIVIDENDS RECEIVED IN
RESPECT OF SECURITIES SOLD SHORT;
7) LOAN. FOR REPAYMENT OF A LOAN UPON REDELIVERY OF PLEDGED SECURITIES AND
UPON SURRENDER OF THE NOTE(S), IF ANY, EVIDENCING THE LOAN;
8) MISCELLANEOUS. FOR ANY OTHER PROPER PURPOSE UPON RECEIPT OF A CERTIFIED
COPY OF A RESOLUTION OF THE BOARD OF TRUSTEES SIGNED BY AN OFFICER OF THE FUND
AND CERTIFIED BY ITS SECRETARY OR AN ASSISTANT SECRETARY, SPECIFYING THE AMOUNT
OF SUCH PAYMENT, SETTING FORTH THE PURPOSE FOR WHICH SUCH PAYMENT IS TO BE MADE,
DECLARING SUCH PURPOSE TO BE A PROPER PURPOSE, AND NAMING THE PERSON OR PERSONS
TO WHOM SUCH PAYMENT IS TO BE MADE.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
WHERE PAYMENT FOR PORTFOLIO SECURITIES IS MADE BY THE CUSTODIAN IN ADVANCE OF
RECEIPT OF THE SECURITIES PURCHASED IN THE ABSENCE OF SPECIFIC WRITTEN
INSTRUCTIONS FROM THE PORTFOLIO TO SO PAY IN ADVANCE, THE CUSTODIAN WILL BE
ABSOLUTELY LIABLE TO THE PORTFOLIO FOR SUCH SECURITIES TO THE SAME EXTENT AS IF
THE SECURITIES HAD BEEN RECEIVED BY THE CUSTODIAN.
2.9 APPOINTMENT OF AGENTS. AT ITS DISCRETION, THE CUSTODIAN MAY AT ANY TIME
APPOINT (AND MAY AT ANY TIME REMOVE) ANY OTHER BANK OR TRUST COMPANY QUALIFIED
TO ACT AS A CUSTODIAN UNDER THE INVESTMENT COMPANY ACT OF 1940 AS ITS AGENT TO
CARRY OUT SUCH OF THE PROVISIONS OF THIS SECTION 2 AS THE CUSTODIAN MAY FROM
TIME TO TIME DIRECT; PROVIDED, HOWEVER, THAT THE APPOINTMENT OF ANY AGENT WILL
NOT RELIEVE THE CUSTODIAN OF ITS RESPONSIBILITIES OR LIABILITIES UNDER THIS
AGREEMENT.
2.10 DEPOSIT OF SECURITIES IN SECURITIES SYSTEMS. THE CUSTODIAN MAY DEPOSIT
AND/OR MAINTAIN PORTFOLIO SECURITIES IN A SECURITIES SYSTEM IN ACCORDANCE WITH
APPLICABLE FEDERAL RESERVE BOARD AND SECURITIES AND EXCHANGE COMMISSION RULES
AND REGULATIONS, IF ANY, AND SUBJECT TO THE FOLLOWING PROVISIONS:
L) ACCOUNT OF CUSTODIAN. THE CUSTODIAN MAY KEEP PORTFOLIO SECURITIES IN A
SECURITIES SYSTEM PROVIDED THAT SUCH SECURITIES ARE REPRESENTED IN AN ACCOUNT OF
THE CUSTODIAN IN THE SECURITIES SYSTEM THAT DOES NOT INCLUDE ANY ASSETS OF THE
CUSTODIAN OTHER THAN ASSETS HELD AS A FIDUCIARY, CUSTODIAN OR OTHERWISE FOR
CUSTOMERS;
2) RECORDS. THE CUSTODIAN'S REOCRDS, WITH RESPECT TO PORTFOLIO SECURITIES
MAINTAINED IN A SECURITIES SYSTEM, MUST IDENTIFY BY BOOK ENTRY THOSE SECURITIES
BELONGING TO THE PORTFOLIO;
3) PAYMENT/DELIVERY.
(A) SUBJECT TO SECTION 2.7 (PAYMENT OF PORTFOLIO MONIES), THE CUSTODIAN WILL
PAY FOR PORTFOLIO SECURITIES UPON (I) RECEIPT OF ADVICE FROM THE SECURITIES
SYSTEM THAT SUCH SECURITIES HAVE BEEN TRANSFERRED TO THE ACCOUNT, AND (II) THE
MAKING OF AN ENTRY ON THE RECORDS OF THE CUSTODIAN TO REFLECT SUCH PAYMENT AND
TRANSFER FOR THE ACCOUNT OF THE PORTFOLIO.
(B) SUBJECT TO SECTION 2.2 (DELIVERY OF SECURITIES), THE CUSTODIAN WILL
TRANSFER PORTFOLIO SECURITIES UPON (I) RECEIPT OF ADVICE FROM THE SECURITIES
SYSTEM THAT PAYMENT FOR SUCH SECURITIES HAS BEEN TRANSFERRED TO THE CUSTODIAN'S
ACCOUNT, AND (II) THE MAKING OF AN ENTRY ON THE RECORDS OF THE CUSTODIAN TO
REFLECT SUCH TRANSFER AND PAYMENT FOR THE ACCOUNT OF THE PORTFOLIO.
(C) COPIES OF ALL ADVICES FROM THE SECURITIES SYSTEM OF TRANSFERS OF
PORTFOLIO SECURITIES WILL IDENTIFY THE PORTFOLIO, BE MAINTAINED FOR THE
PORTFOLIO BY THE CUSTODIAN AND BE PROVIDED TO THE PORTFOLIO AT ITS REQUEST. THE
CUSTODIAN WILL FURNISH DAILY TRANSACTION SHEETS REFLECTING EACH DAY'S
TRANSACTIONS IN THE SECURITIES SYSTEM FOR THE ACCOUNT OF THE PORTFOLIO;
4) REPORTS. THE CUSTODIAN WILL PROVIDE THE PORTFOLIO WITH ANY REPORT
OBTAINED BY THE CUSTODIAN ON THE SECURITIES SYSTEM'S ACCOUNTING SYSTEM, INTERNAL
ACCOUNTING CONTROL AND PROCEDURES FOR SAFEGUARDING SECURITIES DEPOSITED IN THE
SECURITIES SYSTEM, AND FURTHER AGREES TO PROVIDE THE PORTFOLIO WITH COPIES OF
ANY DOCUMENTATION IT HAS RELATING TO ITS ARRANGEMENTS WITH THE SECURITIES
SYSTEMS AS SET FORTH IN THIS AGREEMENT OR AS OTHERWISE REQUIRED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY OTHER REGULATORY AGENCY OR
ORGANIZATION;
5) INDEMNIFICATION. ANYTHING TO THE CONTRARY IN THIS AGREEMENT
NOTWITHSTANDING, THE CUSTODIAN WILL BE LIABLE TO THE PORTFOLIO FOR ANY LOSS OR
EXPENSE, INCLUDING REASONABLE ATTORNEYS FEES, OR DAMAGE TO THE PORTFOLIO
RESULTING FROM USE OF THE SECURITIES SYSTEM BY REASON OF ANY FAILURE BY THE
CUSTODIAN, ITS AGENTS, OR ANY EMPLOYEE OR AGENT OF THE CUSTODIAN OR AGENT, OR
FROM FAILURE OF THE CUSTODIAN OR ANY SUCH AGENT TO ENFORCE EFFECTIVELY SUCH
RIGHTS AS IT MAY HAVE AGAINST THE SECURITIES SYSTEM; AT THE ELECTION OF THE
PORTFOLIO, IT WILL BE ENTITLED TO BE SUBROGATED TO THE RIGHTS OF THE CUSTODIAN
WITH RESPECT TO ANY CLAIM AGAINST THE SECURITIES SYSTEM OR ANY OTHER PERSON
WHICH THE CUSTODIAN MAY HAVE AS ACONSEQUENCE OF ANY SUCH LOSS, EXPENSE OR DAMAGE
IF AND TO THE EXTENT THAT THE PORTFOLIO HAS NOT BEEN MADE WHOLE FOR ANY SUCH
LOSS, EXPENSE OR DAMAGE.
2.11 PORTFOLIO ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. THE
CUSTODIAN MAY DEPOSIT AND/OR MAINTAIN SECURITIES OWNED BY THE PORTFOLIO IN THE
DIRECT PAPER SYSTEM OF THE CUSTODIAN SUBJECT TO THE FOLLOWING PROVISIONS:
L) NO TRANSACTION RELATING TO SECURITIES IN THE DIRECT PAPER SYSTEM WILL BE
EFFECTED IN THE ABSENCE OF PROPER INSTRUCTIONS;
2) THE CUSTODIAN MAY KEEP SECURITIES OF THE PORTFOLIO IN THE DIRECT PAPER
SYSTEM ONLY IF SUCH SECURITIES ARE REPRESENTED IN AN ACCOUNT OF THE CUSTODIAN IN
THE DIRECT PAPER SYSTEM THAT DOES NOT INCLUDE ANY ASSETS OF THE CUSTODIAN OTHER
THAN ASSETS HELD AS A FIDUCIARY, CUSTODIAN OR OTHERWISE FOR CUSTOMERS;
3) THE RECORDS OF THE CUSTODIAN WITH RESPECT TO SECURITIES OF THE PORTFOLIO
THAT ARE MAINTAINED IN THE DIRECT PAPER SYSTEM WILL IDENTIFY BY BOOK ENTRY THOSE
SECURITIES BELONGING TO THE PORTFOLIO;
4) THE CUSTODIAN WILL PAY FOR SECURITIES PURCHASED FOR THE ACCOUNT OF THE
PORTFOLIO UPON THE MAKING OF AN ENTRY ON THE RECORDS OF THE CUSTODIAN TO REFLECT
SUCH PAYMENT AND TRANSFER OF SECURITIES TO THE ACCOUNT OF THE PORTFOLIO. THE
CUSTODIAN WILL TRANSFER SECURITIES SOLD FOR THE ACCOUNT OF THE PORTFOLIO UPON
THE MAKING OF AN ENTRY ON THE RECORDS OF THE CUSTODIAN TO REFLECT SUCH TRANSFER
AND RECEIPT OF PAYMENT FOR THE ACCOUNT OF THE PORTFOLIO;
5) THE CUSTODIAN WILL FURNISH THE PORTFOLIO CONFIRMATION OF EACH TRANSFER TO
OR FROM THE ACCOUNT OF THE PORTFOLIO, IN THE FORM OF A WRITTEN ADVICE OR NOTICE,
OF DIRECT PAPER ON THE NEXT BUSINESS DAY FOLLOWING SUCH TRANSFER AND WILL
FURNISH TO THE PORTFOLIO COPIES OF DAILY TRANSACTION SHEETS REFLECTING EACH
DAY'S TRANSACTION IN THE SECURITIES SYSTEM FOR THE ACCOUNT OF THE PORTFOLIO;
6) THE CUSTODIAN WILL PROVIDE THE PORTFOLIO WITH ANY REPORT ON ITS SYSTEM OF
INTERNAL ACCOUNTING CONTROL AS THE PORTFOLIO MAY REASONABLY REQUEST FROM TIME TO
TIME;
2.12 SEGREGATED ACCOUNT. THE CUSTODIAN WILL, UPON RECEIPT OF PROPER
INSTRUCTIONS, ESTABLISH AND MAINTAIN A SEGREGATED ACCOUNT OR ACCOUNTS FOR AND ON
BEHALF OF THE PORTFOLIO, INTO WHICH MAY BE TRANSFERRED CASH AND/OR SECURITIES,
INCLUDING SECURITIES MAINTAINED IN AN ACCOUNT BY THE CUSTODIAN PURSUANT TO
SECTION 2.10 OF THIS AGREEMENT; (I) IN ACCORDANCE WITH THE PROVISIONS OF ANY
AGREEMENT AMONG THE PORTFOLIO, THE CUSTODIAN AND A BROKER-DEALER REGISTERED
UNDER THE EXCHANGE ACT AND A MEMBER OF THE NASD (OR ANY FUTURES COMMISSION
MERCHANT REGISTERED UNDER THE COMMODITY EXCHANGE ACT), RELATING TO COMPLIANCE
WITH THE RULES OF THE OPTIONS CLEARING CORPORATION AND OF ANY REGISTERED
NATIONAL SECURITIES EXCHANGE (OR THE COMMODITY FUTURES TRADING COMMISSION OR ANY
REGISTERED CONTRACT MARKET), OR OF ANY SIMILAR ORGANIZATION OR ORGANIZATIONS,
REGARDING ESCROW OR OTHER ARRANGEMENTS IN CONNECTION WITH TRANSACTIONS BY THE
PORTFOLIO, (II) FOR PURPOSES OF SEGREGATING CASH OR GOVERNMENT SECURITIES IN
CONNECTION WITH OPTIONS PURCHASED, SOLD OR WRITTEN BY THE PORTFOLIO OR COMMODITY
FUTURES CONTRACTS OR OPTIONS THEREON PURCHASED OR SOLD BY THE PORTFOLIO, (III)
FOR THE PURPOSES OF COMPLIANCE BY THE PORTFOLIO WITH THE PROCEDURES REQUIRED BY
INVESTMENT COMPANY ACT RELEASE NO. 10666, OR ANY SUBSEQUENT RELEASE, RULE OR
POLICY, OF THE SECURITIES AND EXCHANGE COMMISSION RELATING TO THE MAINTENANCE OF
SEGREGATED ACCOUNTS BY REGISTERED INVESTMENT COMPANIES AND (IV) FOR OTHER PROPER
CORPORATE PURPOSES UPON RECEIPT OF A CERTIFIED COPY OF A RESOLUTION OF THE BOARD
OF TRUSTEES OR OF THE EXECUTIVE COMMITTEE SIGNED BY AN OFFICER OF THE PORTFOLIO
AND CERTIFIED BY THE SECRETARY OR AN ASSISTANT SECRETARY, SETTING FORTH THE
PURPOSE OR PURPOSES OF SUCH SEGREGATED ACCOUNT AND DECLARING SUCH PURPOSES TO BE
PROPER CORPORATE PURPOSES.
2.13 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. THE CUSTODIAN WILL EXECUTE
OWNERSHIP AND OTHER CERTIFICATES AND AFFIDAVITS FOR ALL FEDERAL AND STATE TAX
PURPOSES IN CONNECTION WITH RECEIPT OF INCOME OR OTHER PAYMENTS FOR PORTFOLIO
SECURITIES AND IN CONNECTION WITH TRANSFERS OF SUCH SECURITIES.
2.14 PROXIES. IF THE SECURITIES ARE REGISTERED OTHER THAN IN THE NAME OF THE
PORTFOLIO OR A NOMINEE OF THE PORTFOLIO, THE CUSTODIAN WILL CAUSE ALL PROXIES
PROMPTLY TO BE EXECUTED BY THE REGISTERED HOLDER OF SUCH SECURITIES, WITHOUT
INDICATION OF THE MANNER IN WHICH SUCH PROXIES ARE TO BE VOTED, AND WILL
PROMPTLY DELIVER TO THE PORTFOLIO ALL PROXY SOLICITING MATERIALS AND ALL NOTICES
RELATING TO SUCH SECURITIES.
2.15 COMMUNICATIONS RELATING TO PORTFOLIO SECURITIES. THE CUSTODIAN WILL
TRANSMIT PROMPTLY TO THE PORTFOLIO ALL WRITTEN INFORMATION (INCLUDING, WITHOUT
LIMITATION, PENDENCY OF CALLS AND MATURITIES OF DOMESTIC SECURITIES AND
EXPIRATIONS OF RIGHTS IN CONNECTION THEREWITH AND NOTICES OF EXERCISE OF CALL
AND PUT OPTIONS WRITTEN BY THE PORTFOLIO AND THE MATURITY OF FUTURES CONTRACTS
PURCHASED OR SOLD BY THE PORTFOLIO) RECEIVED BY THE CUSTODIAN FROM ISSUERS OF
THE PORTFOLIO SECURITIES BY THE CUSTODIAN, AN AGENT APPOINTED UNDER SECTION 2.9,
OR SUBCUSTODIAN APPOINTED UNDER SECTION 1. WITH RESPECT TO TENDER OR EXCHANGE
OFFERS, THE CUSTODIAN WILL TRANSMIT PROMPTLY TO THE PORTFOLIO ALL WRITTEN
INFORMATION RECEIVED BY THE CUSTODIAN, AN AGENT APPOINTED UNDER SECTION 2.9, OR
SUBCUSTODIAN APPOINTED UNDER SECTION 1 FROM ISSUERS OF THE SECURITIES WHOSE
TENDER OR EXCHANGE IS SOUGHT AND FROM THE PARTY (OR ITS AGENTS) MAKING THE
TENDER OR EXCHANGE OFFER. IF THE PORTFOLIO DESIRES TO TAKE ACTION WITH RESPECT
TO ANY TENDER OFFER, EXCHANGE OFFER OR ANY OTHER SIMILAR TRANSACTION, THE
PORTFOLIO WILL NOTIFY THE CUSTODIAN OF SUCH DESIRED ACTION AT LEAST 3 BUSINESS
DAYS PRIOR TO THE TIME SUCH ACTION MUST BE TAKEN UNDER THE TERMS OF THE TENDER,
EXCHANGE OFFER, OR OTHER SIMILAR TRANSACTION, AND IT WILL BE THE RESPONSIBILITY
OF THE CUSTODIAN TO TIMELY TRANSMIT TO THE APPROPRIATE PERSON(S) THE PORTFOLIO'S
NOTICE. WHERE THE PORTFOLIO DOES NOT NOTIFY THE CUSTODIAN OF ITS DESIRED ACTION
WITHIN THE 3 BUSINESS DAY PERIOD, THE CUSTODIAN WILL USE ITS BEST EFFORTS TO
TIMELY TRANSMIT THE FUND'S NOTICE TO THE APPROPRIATE PERSON.
2.16 REPORTS TO PORTFOLIO BY INDEPENDENT PUBLIC ACCOUNTANTS. THE CUSTODIAN WILL
PROVIDE THE PORTFOLIO, AT SUCH TIMES AS THE PORTFOLIO MAY REASONABLY REQUIRE,
WITH REPORTS BY INDEPENDENT PUBLIC ACCOUNTANTS ON THE ACCOUNTING SYSTEM,
INTERNAL ACCOUNTING CONTROL AND PROCEDURES FOR SAFEGUARDING SECURITIES, FUTURES
CONTRACTS AND OPTIONS ON FUTURES CONTRACTS, INCLUDING SECURITIES DEPOSITED
AND/OR MAINTAINED IN A SECURITIES SYSTEM, RELATING TO THE SERVICES PROVIDED BY
THE CUSTODIAN UNDER THIS CONTRACT; SUCH REPORTS WILL BE OF SUFFICIENT SCOPE AND
IN SUFFICIENT DETAIL, AS MAY REASONABLY BE REQUIRED BY THE PORTFOLIO TO PROVIDE
REASONABLE ASSURANCE THAT ANY MATERIAL INADEQUACIES EXISTING OR ARISING SINCE
THE PRIOR EXAMINATION WOULD BE DISCLOSED BY SUCH EXAMINATION. THE REPORTS MUST
DESCRIBE ANY MATERIAL INADEQUACIES DISCLOSED AND, IF THERE ARE NO SUCH
INADEQUACIES, THE REPORTS WILL SO STATE.
3. PAYMENTS FOR REDEMPTIONS OF SHARES OF THE PORTFOLIO
FROM SUCH FUNDS AS MAY BE AVAILABLE FOR THE PURPOSE BUT SUBJECT TO THE
LIMITATIONS OF THE GOVERNING DOCUMENTS OF THE PORTFOLIO AND ANY APPLICABLE VOTES
OF THE BOARD OF TRUSTEES OF THE FUND PURSUANT THERETO, THE CUSTODIAN WILL, UPON
RECEIPT OF INSTRUCTIONS FROM THE TRANSFER AGENT, MAKE FUNDS AVAILABLE FOR
PAYMENT TO HOLDERS OF SHARES WHO HAVE DELIVERED TO THE TRANSFER AGENT A REQUEST
FOR REDEMPTION OF THEIR SHARES. IN CONNECTION WITH THE REDEMPTION OF SHARES OF
THE PORTFOLIO, THE CUSTODIAN IS AUTHORIZED UPON RECEIPT OF INSTRUCTIONS FROM THE
TRANSFER AGENT TO WIRE FUNDS TO OR THROUGH A COMMERCIAL BANK DESIGNATED BY THE
REDEEMING SHAREHOLDER.
THE CUSTODIAN WILL RECEIVE PAYMENTS FOR PORTFOLIO SHARES ISSUED OR SOLDFROM
THE DISTRIBUTOR FOR THE PORTFOLIO'S SHARES OR FROM THE TRANSFER AGENT OF THE
PORTFOLIO AND DEPOSIT AS RECEIVED INTO THE FUND'S ACCOUNT SUCH PAYMENTS AS ARE
RECEIVED FOR SHARES OF THE PORTFOLIO ISSUED OR SOLD FROM TIME TO TIME BY THE
PORTFOLIO. THE CUSTODIAN WILL PROVIDE TIMELY NOTIFICATION TO THE PORTFOLIO AND
THE TRANSFER AGENT OF ANY RECEIPT BY IT OF PAYMENTS FOR SHARES OF THE PORTFOLIO.
4. PROPER INSTRUCTIONS
"PROPER INSTRUCTIONS" MEANS A WRITING SIGNED OR INITIALLED BY ONE OR MORE
PERSONS AUTHORIZED BY THE BOARD OF TRUSTEES. EACH SUCH WRITING MUST SET FORTH
THE SPECIFIC TRANSACTION OR TYPE OF TRANSACTION INVOLVED, INCLUDING A STATEMENT
OF THE PURPOSE FOR WHICH SUCH ACTION IS REQUESTED, AND MAY BE A BLANKET
INSTRUCTION AUTHORIZING SPECIFIC TRANSACTIONS OF A ROUTINE NATURE OR OCCURING
REPEATEDLY. ORAL INSTRUCTIONS WILL BE CONSIDERED PROPER INSTRUCTIONS IF THE
CUSTODIAN REASONABLY BELIEVES THEM TO HAVE BEEN GIVEN BY A PERSON AUTHORIZED TO
GIVE SUCH INSTRUCTIONS WITH RESPECT TO THE TRANSACTION INVOLVED. THE PORTFOLIO
WILL CAUSE ALL ORAL INSTRUCTIONS TO BE CONFIRMED IN WRITING. UPON RECEIPT OF A
CERTIFICATE OF THE SECRETARY OR AN ASSISTANT SECRETARY AS TO THE AUTHORIZATION
BY THE BOARD OF TRUSTEES OF THE FUND, ACCOMPANIED BY A DETAILED DESCRIPTION OF
PROCEDURES APPROVED BY THE BOARD OF TRUSTEES, PROPER INSTRUCTIONS MAY INCLUDE
COMMUNICATIONS EFFECTED DIRECTLY BETWEEN ELECTRO-MECHANICAL OR ELECTRONIC
DEVICES PROVIDED THAT THE BOARD OF TRUSTEES AND THE CUSTODIAN ARE SATISFIED THAT
SUCH PROCEDURES AFFORD ADEQUATE SAFEGUARDS FOR THE PORTFOLIO'S ASSETS.
5. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
IN ITS DISCRETION THE CUSTODIAN MAY, WITHOUT EXPRESS AUTHORITY FROM THE
PORTFOLIO:
L) MAKE PAYMENTS TO ITSELF OR OTHERS FOR MINOR EXPENSES OF HANDLING
SECURITIES OR OTHER SIMILAR ITEMS RELATING TO ITS DUTIES UNDER THIS AGREEMENT,
PROVIDED THAT ALL SUCH PAYMENTS WILL BE ACCOUNTED FOR TO THE PORTFOLIO;
2) SURRENDER SECURITIES IN TEMPORARY FORM FOR SECURITIES IN DEFINITIVE FORM;
3) ENDORSE FOR COLLECTION, IN THE NAME OF THE PORTFOLIO, CHECKS, DRAFTS AND
OTHER NEGOTIABLE INSTRUMENTS ON THE SAME DAY AS RECEIVED; AND
4) IN GENERAL, ATTEND TO ALL NONDISCRETIONARY DETAILS IN CONNECTION WITH THE
SALE, EXCHANGE, SUBSTITUTION, PURCHASE, TRANSFER AND OTHER DEALINGS WITH THE
SECURITIES AND PROPERTY OF THE PORTFOLIO EXCEPT AS OTHERWISE DIRECTED BY THE
BOARD OF TRUSTEES OF THE FUND.
6. EVIDENCE OF AUTHORITY, RELIANCE ON DOCUMENTS
THE CUSTODIAN WILL NOT BE LIABLE FOR ACTIONS TAKEN PURSUANT TO
INSTRUCTIONS, NOTICE, REQUEST, CONSENT, CERTIFICATE OR OTHER INSTRUMENT OR PAPER
REASONABLY AND IN GOOD FAITH BELIEVED BY IT TO BE GENUINE AND TO HAVE BEEN
PROPERLY EXECUTED BY OR ON BEHALF OF THE PORTFOLIO IN ACCORDANCE WITH PROPER
INSTRUCTIONS AS DEFINED IN SECTION 4 OF THIS AGREEMENT. THE CUSTODIAN MAY
RECEIVE AND ACCEPT A CERTIFIED COPY OF A VOTE OF THE BOARD OF TRUSTEES OF THE
FUND AS CONCLUSIVE EVIDENCE (A) OF THE AUTHORITY OF ANY PERSON TO ACT IN
ACCORDANCE WITH SUCH VOTE OR (B) OF ANY DETERMINATION OR OF ANY ACTION BY THE
BOARD OF TRUSTEES PURSUANT TO THE GOVERNING DOCUMENTS OF THE FUND AS DESCRIBED
IN SUCH VOTE, AND SUCH VOTE MAY BE CONSIDERED AS IN FULL FORCE AND EFFECT UNTIL
RECEIPT BY THE CUSTODIAN OF WRITTEN NOTICE TO THE CONTRARY. SO LONG AS AND TO
THE EXTENT THAT IT IS IN THE EXERCISE OF THE STANDARD OF CARE SET FORTH IN
SECTION 11 OF THIS AGREEMENT, THE CUSTODIAN WILL NOT BE RESPONSIBLE FOR THE
TITLE, VALIDITY OR GENUINENESS OF ANY PROPERTY OR EVIDENCE OF TIT!E RECEIVED BY
IT OR DELIVERED BY IT PURSUANT TO THIS AGREEMENT AND WILL BE HELD HARMLESS IN
ACTING UPON ANY NOTICE, REQUEST, CONSENT, CERTIFICATE OR OTHER INSTRUMENT
REASONABLY BELIEVED BY IT TO BE GENUINE AND TO BE SIGNED BY THE PROPER PARTY OR
PARTIES.
7. RECORDS, INVENTORY
THE CUSTODIAN WILL CREATE AND MAINTAIN ALL RECORDS RELATING TO ITS
ACTIVITIES AND OBLIGATIONS UNDER THIS AGREEMENT IN SUCH MANNER AS WILL MEET THE
OBLIGATIONS OF THE PORTFOLIO UNDER THE INVESTMENT COMPANY ACT OF 1940, WITH
PARTICULAR ATTENTION TO SECTION 31 AND RULES 31A-1 AND 31A-2 THEREUNDER,
APPLICABLE FEDERAL AND STATE TAX LAWS AND ANY OTHER LAW OR ADMINISTRATIVE RULES
OR PROCEDURES THAT MAY BE APPLICABLE TO THE PORTFOLIO. ALL SUCH RECORDS WILL BE
THE PROPERTY OF THE PORTFOLIO AND WILL AT ALL TIMES DURING THE REGULAR BUSINESS
HOURS OF THE CUSTODIAN BE OPEN FOR INSPECTION AND AUDIT BY DULY AUTHORIZED
OFFICERS, EMPLOYEES OR AGENTS OF THE PORTFOLIO AND EMPLOYEES AND AGENTS OF THE
SECURITIES AND EXCHANGE COMMISSION, AND, IN THE EVENT OF TERMINATION OF THIS
AGREEMENT, WILL BE DELIVERED IN ACCORDANCE WITH SECTION 12 OF THIS AGREEMENT.
THE CUSTODIAN WILL, AT THE PORTFOLIO'S REQUEST, SUPPLY THE PORTFOLIO WITH A
TABULATION OF SECURITIES OWNED BY THE PORTFOLIO AND HELD BY THE CUSTODIAN AND
WILL, WHEN REQUESTED TO DO SO BY THE PORTFOLIO AND FOR SUCH COMPENSATION AS WILL
BE AGREED UPON BETWEEN THE PORTFOLIO AND THE CUSTODIAN, INCLUDE CERTIFICATE
NUMBERS IN SUCH TABULATIONS. THE CUSTODIAN WILL CONDUCT A PERIODIC INVENTORY OF
ALL SECURITIES AND OTHER PROPERTY SUBJECT TO THIS AGREEMENT AND PROVIDE TO THE
PORTFOLIO A PERIODIC RECONCILIATION OF THE VAULTED POSITION OF THE PORTFOLIO TO
THE APPRAISED POSITION OF THE PORTFOLIO. THE CUSTODIAN WILL PROMPTLY REPORT TO
THE PORTFOLIO THE RESULTS OF THE RECONCILIATION, INDICATING ANY SHORTAGES OR
DISCREPANCIES UNCOVERED THEREBY, AND TAKE APPROPRIATE ACTION TO REMEDY ANY SUCH
SHORTAGES OR DISCREPANCIES.
8. OPINION OF THE PORTFOLIO'S INDEPENDENT ACCOUNTANT
THE CUSTODIAN WILL COOPERATE WITH THE PORTFOLIO'S INDEPENDENT PUBLIC
ACCOUNTANTS IN CONNECTION WITH THE ANNUAL AND OTHER AUDITS OF THE BOOKS AND
RECORDS OF THE PORTFOLIO AND TAKE ALL REASONABLE ACTION, AS THE PORTFOLIO MAY
FROM TIME TO TIME REQUEST, TO PROVIDE THE NECESSARY INFORMATION TO SUCH
ACCOUNTANTS FOR THE EXPRESSION OF THEIR OPINION WITHOUT ANY QUALIFICATION AS TO
THE SCOPE OF THEIR EXAMINATION, INCLUDING BUT NOT LIMITED TO, ANY OPINION IN
CONNECTION WITH THE PREPARATION OF THE PORTFOLIO'S FORM N-LA, AND FORM N-SAR OR
OTHER REPORTS TO THE SECURITIES AND EXCHANGE COMMISSION OR STATE REGULATORY
AGENCY AND WITH RESPECT TO ANY OTHER LEGAL REQUIREMENTS.
9. COMPENSATION OF CUSTODIAN
THE CUSTODIAN WILL BE ENTITLED TO REASONABLE COMPENSATION FOR ITS SERVICES
AND EXPENSES AS CUSTODIAN, AS AGREED UPON FROM TIME TO TIME BETWEEN THE
PORTFOLIO AND THE CUSTODIAN.
10. RESPONSIBILITY OF CUSTODIAN - INDEMNIFICATION
REASONABLE CARE - NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS
AGREEMENT, THE CUSTODIAN WILL BE HELD TO THE EXERCISE OF REASONABLE CARE IN
CARRYING OUT THE PROVISIONS OF THIS AGREEMENT, BUT WILL BE KEPT INDEMNIFIED BY
AND WILL BE WITHOUT LIABILITY TO THE PORTFOLIO FOR ANY ACTION TAKEN OR OMITTED
BY IT IN GOOD FAITH WITHOUT NEGLIGENCE.
NOTICE TO PORTFOLIO - IN ORDER FOR THE INDEMNIFICATION PROVISION CONTAINED
IN THIS SECTION TO APPLY, IT IS UNDERSTOOD THAT IF IN ANY CASE THE PORTFOLIO MAY
BE ASKED TO INDEMNIFY OR HOLD THE CUSTODIAN HARMLESS, THE PORTFOLIO WILL BE
FULLY AND PROMPTLY ADVISED OF ALL PERTINENT FACTS CONCERNING THE SITUATION IN
QUESTION, AND IT IS FURTHER UNDERSTOOD THAT THE CUSTODIAN WILL USE ALL
REASONABLE CARE TO IDENTIFY AND NOTIFY THE PORTFOLIO PROMPTLY CONCERNING ANY
SITUATION WHICH PRESENTS OR APPEARS LIKELY TO PRESENT THE PROBABILITY OF SUCH A
CLAIM FOR INDEMNIFICATION AGAINST THE PORTFOLIO.
DEFENSE OF CUSTODIAN - THE PORTFOLIO WILL HAVE THE OPTION TO DEFEND THE
CUSTODIAN AGAINST ANY CLAIM WHICH MAY BE THE SUBJECT OF THIS INDEMNIFICATION,
AND IN THE EVENT THAT THE PORTFOLIO SO ELECTS, IT WILL SO NOTIFY THE CUSTODIAN,
AND THEREUPON THE PORTFOLIO WILL TAKE OVER COMPLETE DEFENSE OF THE CLAIM AND THE
CUSTODIAN WILL IN SUCH SITUATION INITIATE NO FURTHER LEGAL OR OTHER EXPENSES FOR
WHICH IT WILL SEEK INDEMNIFICATION UNDER THIS SECTION. THE CUSTODIAN WILL IN NO
CASE CONFESS ANY CLAIM OR MAKE ANY COMPROMISE IN ANY CASE IN WHICH THE PORTFOLIO
WILL BE ASKED TO INDEMNIFY THE CUSTODIAN EXCEPT WITH THE PORTFOLIO'S PRIOR
WRITTEN CONSENT. NOTHING IN THIS SECTION WILL BE CONSTRUED TO LIMIT ANY RIGHT
OR CAUSE OF ACTION ON THE PART OF THE CUSTODIAN UNDER THIS AGREEMENT WHICH IS
INDEPENDENT OF ANY RIGHT OR CAUSE OF ACTION ON THE PART OF THE PORTFOLIO. THE
CUSTODIAN WILL BE ENTITLED TO RELY ON AND MAY ACT UPON ADVICE OF COUNSEL (WHO
MAY BE COUNSEL FOR THE PORTFOLIO OR SUCH OTHER COUNSEL AS MAY BE AGREED TO BY
THE PARTIES) ON ALL MATTERS, AND WILL BE WITHOUT LIABILITY FOR ANY ACTION
REASONABLY TAKEN OR OMITTED PURSUANT TO SUCH ADVICE.
IF THE PORTFOLIO REQUIRES THE CUSTODIAN TO TAKE ANY ACTION WITH RESPECT TO
SECURITIES THAT INVOLVES THE PAYMENT OF MONEY, OR THAT MAY, IN THE OPINION OF
THE CUSTODIAN, RESULT IN THE CUSTODIAN OR ITS NOMINEE ASSIGNED TO THE PORTFOLIO
BEING LIABLE FOR THE PAYMENT OF MONEY OR INCURRING LIABILITY OF SOME OTHER FORM,
THE PORTFOLIO, AS A PREREQUISITE TO REQUIRING THE CUSTODIAN TO TAKE SUCH ACTION,
WILL INDEMNIFY THE CUSTODIAN IN AN AMOUNT AND FORM SATISFACTORY TO IT.
IF THE PORTFOLIO REQUIRES THE CUSTODIAN TO ADVANCE CASH OR SECURITIES FOR
ANY PURPOSE OR IN THE EVENT THAT THE CUSTODIAN OR ITS NOMINEE INCURS OR IS
ASSESSED ANY TAXES, CHARGES, EXPENSES, ASSESSMENTS, CLAIMS OR LIABILITIES IN
CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT, EXCEPT AS MAY ARISE FROM THE
CUSTODIAN'S OR ITS AGENT'S NEGLIGENT ACTION OR OMISSION, OR WILLFUL MISCONDUCT,
ANY PROPERTY HELD FOR THE ACCOUNT OF THE PORTFOLIO WILL SERVE AS SECURITY. IF
THE PORTFOLIO FAILS TO REPAY THE CUSTODIAN PROMPTLY, THE CUSTODIAN WILL BE
ENTITLED TO USE AVAILABLE CASH AND TO DISPOSE OF THE PORTFOLIO'S ASSETS TO THE
EXTENT NECESSARY FOR REIMBURSEMENT. IF THE CUSTODIAN EXERCISES THIS OPTION, IT
MUST GIVE THE PORTFOLIO REASONABLE NOTICE SO AS TO ENABLE THE PORTFOLIO TO REPAY
THE CASH OR SECURITIES ADVANCED. SUCH NOTICE WILL NOT PRECLUDE THE CUSTODIAN
FROM ASSERTING ANY LIEN UNDER THIS PROVISION.
11. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
THIS AGREEMENT WILL BECOME EFFECTIVE AS OF ITS EXECUTION, AND WILL CONTINUE
IN FORCE UNTIL TERMINATED AS PROVIDED IN THIS SECTION. IT MAY BE AMENDED AT ANY
TIME BY MUTUAL AGREEMENT OF THE PARTIES, AND MAY BE TERMINATED BY EITHER PARTY
WITH 60 DAYS WRITTEN NOTICE. THE PORTFOLIO MAY, BY ACTION OF THE FUND'S BOARD
OF TRUSTEES, IMMEDIATELY TERMINATE THIS AGREEMENT IN THE EVENT OF THE
APPOINTMENT OF A CONSERVATOR OR RECEIVER FOR THE CUSTODIAN BY THE COMPTROLLER OF
THE CURRENCY OR A LIKE EVENT AT THE DIRECTION OF AN APPROPRIATE REGULATORY
AGENCY OR COURT OF COMPETENT JURISDICTION.
IN THE EVENT THE AGREEMENT TERMINATES, THE PORTFOLIO WILL PAY THE CUSTODIAN
WHATEVER COMPENSATION IS DUE AS OF THE DATE OF THE TERMINATION, AND WILL
REIMBURSE THE CUSTODIAN FOR COSTS, EXPENSES AND DISBURSEMENTS INCURRED IN
CONNECTION WITH TERMINATION, BUT ONLY TO THE EXTENT THE PORTFOLIO GIVES PRIOR
APPROVAL FOR THE EXPENDITURES. APPROVAL WILL NOT BE UNREASONABLY WITHHELD.
12. SUCCESSOR CUSTODIAN
IF A SUCCESSOR CUSTODIAN IS APPOINTED BY THE BOARD OF TRUSTEES OF THE FUND,
THE CUSTODIAN WILL, UPON TERMINATION, DELIVER TO THE SUCCESSOR CUSTODIAN AT THE
OFFICE OF THE CUSTODIAN, DULY ENDORSED AND IN THE FORM FOR TRANSFER, ALL
SECURITIES, FUNDS AND OTHER PROPERTIES THEN HELD BY IT PURSUANT TO THIS
AGREEMENT, AND WILL TRANSFER TO AN ACCOUNT OF THE SUCCESSOR CUSTODIAN ALL OF THE
PORTFOLIO'S SECURITIES HELD IN A SECURITIES SYSTEM. THE CUSTODIAN WILL USE ITS
BEST EFFORTS TO ASSURE THAT THE SUCCESSOR CUSTODIAN WILL CONTINUE ANY
SUBCUSTODIAN AGREEMENT ENTERED INTO BY THE CUSTODIAN AND ANY SUBCUSTODIAN ON
BEHALF OF THE PORTFOLIO.
IF NO SUCCESSOR IS TO BE APPOINTED, THE CUSTODIAN WILL MAKE THE SECURITIES,
FUNDS AND OTHER PROPERTIES AVAILABLE AS ABOVE TO THE PORTFOLIO UPON RECEIPT OF A
CERTIFIED COPY OF A VOTE OF THE BOARD OF TRUSTEES OF THE FUND.
IF NO WRITTEN ORDER DESIGNATING A SUCCESSOR CUSTODIAN OR CERTIFIED COPY OF
A VOTE OF THE BOARD OF TRUSTEES IS DELIVERED TO THE CUSTODIAN ON OR BEFORE THE
EFFECTIVE DATE OF THE TERMINATION, THE CUSTODIAN WILL HAVE THE RIGHT TO MAKE
DELIVERY TO A BANK (AS DEFINED IN THE INVESTMENT COMPANY ACT OF 1940) OR TRUST
COMPANY OF ITS OWN SELECTION HAVING AGGREGATE CAPITAL, SURPLUS, AND UNDIVIDED
PROFITS, AS SHOWN BY ITS LAST PUBLISHED REPORT, OF NOT LESS THAN $25,000,000,
WHICH WILL BECOME THE SUCCESSOR CUSTODIAN UNDER THIS AGREEMENT.
IN THE EVENT THE SECURITIES, FUNDS AND OTHER PROPERTIES REMAIN IN THE
POSSESSION OF THE CUSTODIAN AFTER THE TERMINATION DATE DUE TO FAILURE BY THE
PORTFOLIO TO PROCURE THE CERTIFIED COPY OF THE APPROPRIATE VOTE OF THE BOARD OF
TRUSTEES, THE CUSTODIAN WILL BE ENTITLED TO FAIR COMPENSATION FOR ITS SERVICES
DURING THE PERIOD DURING WHICH IT RETAINS POSSESSION OF THE PROPERTY, AND THE
PROVISIONS OF THIS AGREEMENT RELATING TO THE DUTIES AND OBLIGATIONS OF THE
CUSTODIAN WILL REMAIN IN FULL FORCE.
IF DURING THE TERM OF THIS AGREEMENT THE PORTFOLIO IS LIQUIDATED PURSUANT
TO LAW, THE CUSTODIAN WILL DISTRIBUTE THE REMAINING ASSETS OF THE PORTFOLIO
AFTER SATISFYING ALL EXPENSES AND LIABILITIES OF THE PORTFOLIO. SUCH
DISTRIBUTIONS WILL BE PRO RATA AMONG THE PORTFOLIO'S SHAREHOLDERS AS CERTIFIED
BY THE TRANSFER AGENT, AND WILL BE IN CASH OR, IF THE PORTFOLIO SO ORDERS, IN
PORTFOLIO SECURITIES. SECTION 10 (RESPONSIBILITY OF CUSTODIAN) WILL SURVIVE ANY
TERMINATION OF THIS AGREEMENT.
13. INTERPRETIVE AND ADDITIONAL PROVISIONS
IN CONNECTION WITH THE OPERATION OF THIS AGREEMENT, THE CUSTODIAN AND THE
PORTFOLIO MAY FROM TIME TO TIME AGREE ON SUCH PROVISIONS INTERPRETIVE OF OR IN
ADDITION TO THE PROVISIONS OF THIS AGREEMENT AS MAY IN THEIR JOINT OPINION BE
CONSISTENT WITH THE GENERAL TENOR OF THIS AGREEMENT. ANY SUCH INTERPRETIVE OR
ADDITIONAL PROVISIONS WILL BE IN A WRITING SIGNED BY BOTH PARTIES AND WILL BE
ANNEXED TO TH IS AGREEMENT. NO INTERPRETIVE OR ADDITIONAL PROVISIONS WILL
CONTRAVENE ANY APPLICABLE FEDERAL OR STATE REGULATIONS OR ANY PROVISION OF THE
GOVERNING DOCUMENTS OF THE PORTFOLIO, NOR WILL THEY BE DEEMED AMENDMENTS TO THIS
AGREEMENT.
14. NOTICE
NOTICE WILL BE CONSIDERED SUFFICIENT IF SENT BY REGISTERED OR CERTIFIED
MAIL, OR BY SUCH OTHER MEANS AS THE PARTIES AGREE, TO THE OTHER PARTY AT THE
ADDRESS SET FORTH ABOVE OR AT ANY OTHER ADDRESS SPECIFIED IN WRITING AND
DELIVERED TO THE OTHER PARTY.
15. BOND
THE CUSTODIAN WILL, AT ALL TIMES, MAINTAIN A BOND ISSUED BY A REPUTABLE
FIDELITY INSURANCE COMPANY AUTHORIZED TO DO BUSINESS IN THE PLACE WHERE THE BOND
IS ISSUED. THE BOND WILL BE ISSUED AGAINST LARCENY AND EMBEZZLEMENT, AND WILL
COVER EACH OFFICER AND EMPLOYEE OF THE CUSTODIAN WHO MAY, SINGLY OR JOINTLY WITH
OTHERS, HAVE ACCESS TO SECURITIES OR FUNDS OF THE PORTFOLIO, EITHER DIRECTLY OR
THROUGH AUTHORITY TO RECEIVE AND CARRY OUT ANY CERTIFICATE INSTRUCTION, ORDER
REQUEST, NOTE OR OTHER INSTRUMENT REQUIRED OR PERMITTED BY THIS AGREEMENT. THE
CUSTODIAN AGREES THAT IT WILL NOT CANCEL, TERMINATE OR MODIFY THE BOND SO AS TO
AFFECT ADVERSELY THE PORTFOLIO, EXCEPT AFTER WRITTEN NOTICE TO THE PORTFOLIO NOT
LESS THAN 10 DAYS PRIOR TO THE EFFECTIVE DATE OF SUCH CANCELLATION, TERMINATION
OR MODIFICATION. THE CUSTODIAN WILL FURNISH TO THE PORTFOLIO A COPY OF EACH
SUCH BOND AND EACH AMENDMENT THERETO.
16. CONFIDENTIALITY
THE CUSTODIAN AGREES TO TREAT ALL RECORDS AND OTHER INFORMATION RELATIVE TO
THE PORTFOLIO AND ITS PRIOR, PRESENT OR FUTURE SHAREHOLDERS AS CONFIDENTIAL, AND
THE CUSTODIAN, ON BEHALF OF ITSELF AND ITS EMPLOYEES, AGREES TO KEEP
CONFIDENTIAL ALL SUCH INFORMATION EXCEPT WHEN REQUESTED TO DIVULGE SUCH
INFORMATION BY DULY CONSTITUTED AUTHORITIES, OR WHEN SO REQUESTED BY THE
PORTFOLIO. IF REQUESTED TO DIVULGE CONFIDENTIAL INFORMATION, THE CUSTODIAN WILL
NOT RELEASE THE INFORMATION UNTIL IT NOTIFIES THE PORTFOLIO IN WRITING AND
RECEIVES APPROVAL IN WRITING FROM THE PORTFOLIO. APPROVAL BY THE PORTFOLIO WILL
NOT BE UNREASONABLY WITHHELD AND MAY NOT BE WITHHELD WHERE THE CUSTODIAN MAY BE
EXPOSED TO CIVIL OR CRIMINAL CONTEMPT PROCEEDINGS FOR FAILURE TO COMPLY.
17. EXEMPTION FROM LIENS
THE SECURITIES AND OTHER ASSETS HELD BY THE CUSTODIAN FOR THE PORTFOLIO
WILL BE SUBJECT TO NO LIEN OR CHARGE OF ANY KIND IN FAVOR OF THE CUSTODIAN OR
ANY PERSON CLAIMING THROUGH THE CUSTODIAN, BUT NOTHING HEREIN WILL BE DEEMED TO
DEPRIVE THE CUSTODIAN OF ITS RIGHT TO INVOKE ANY AND ALL REMEDIES AVAILABLE AT
LAW OR EQUITY TO COLLECT AMOUNTS DUE IT UNDER THIS AGREEMENT. NEITHER THE
CUSTODIAN NOR ANY SUBCUSTODIAN APPOINTED PURSUANT TO SECTION 1 OF THIS AGREEMENT
WILL HAVE ANY POWER OR AUTHORITY TO ASSIGN, HYPOTHECATE, PLEDGE OR OTHERWISE
DISPOSE OF ANY SECURITIES HELD BY IT FOR THE PORTFOLIO, EXCEPT UPON THE
DIRECTION OF THE PORTFOLIO, DULY GIVEN AS HEREIN PROVIDED, AND ONLY FOR THE
ACCOUNT OF THE PORTFOLIO.
18. MASSACHUSETTS LAW TO APPLY
THIS AGREEMENT WILL BE CONSTRUED AND THE PROVISIONS THEREOF INTERPRETED
UNDER AND IN ACCORDANCE WITH LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
19. GOVERNING DOCUMENTS
THE TERM "GOVERNING DOCUMENTS" REFERS TO THE FUND'S AGREEMENT OF TRUST,
BY-LAWS AND REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED FROM TIME TO TIME WITH REGARD TO THE PORTFOLIO.
20. DIRECTORS AND TRUSTEES
NEITHER THE HOLDERS OF SHARES IN THE PORTFOLIO NOR ANY DIRECTORS OR
TRUSTEES OF THE FUND WILL BE PERSONALLY LIABLE HEREUNDER.
21. MASSACHUSETTS BUSINESS TRUST
WITH RESPECT TO THE PORTFOLIO WHICH IS A PARTY TO THIS AGREEMENT AND WHICH
IS ORGANIZED AS A MASSACHUSETTS BUSINESS TRUST, THE TERM FUND MEANS AND REFERS
TO THE TRUSTEES SERVING UNDER THE APPLICABLE TRUST AGREEMENT. IT IS EXPRESSLY
AGREED THAT THE OBLIGATIONS OF THE TRUST UNDER THIS AGREEMENT WILL NOT BE
BINDING ON ANY OF THE TRUSTEES, SHAREHOLDERS, NOMINEES, OFFICERS, AGENTS OR
EMPLOYEES OF THE TRUST PERSONALLY, BUT BIND ONLY THE TRUST PROPERTY.
22. SUCCESSORS OF PARTIES
THIS CONTRACT WILL BE BINDING ON AND WILL INURE TO THE BENEFIT OF THE
PORTFOLIO AND THE CUSTODIAN AND THEIR RESPECTIVE SUCCESSORS.
IN WITNESS WHEREOF, EACH OF THE PARTIES HAS CAUSED THIS INSTRUMENT TO BE
EXECUTED IN ITS NAME AND BEHALF BY ITS DULY AUTHORIZED REPRESENTATIVE AND ITS
SEAL TO BE AFFIXED HEREUNDER AS OF THE DATES INDICATED BELOW.
[FUND]
ATTEST: BY:
STATE STREET TRUST COMPANY
ATTEST: BY
The Calvert Fund
Administrative Services Agreement
March 1, 1999
Page 3 of 5
ADMINISTRATIVE SERVICES AGREEMENT
THE CALVERT FUND
ADMINISTRATIVE SERVICES AGREEMENT, MADE THIS 1ST DAY OF MARCH, 1999, BY AND
BETWEEN CALVERT ADMINISTRATIVE SERVICES COMPANY, A DELAWARE CORPORATION
("CASC"), AND THE CALVERT FUND, ORGANIZED AS A MASSACHUSETTS BUSINESS TRUST (THE
"FUND"), EACH HAVING ITS PRINCIPAL PLACE OF BUSINESS AT 4550 MONTGOMERY AVENUE,
BETHESDA, MARYLAND.
THE PARTIES TO THIS AGREEMENT, INTENDING TO BE LEGALLY BOUND, AGREE WITH
EACH OTHER AS FOLLOWS:
1. PROVISION OF SERVICES. CASC HEREBY UNDERTAKES TO PROVIDE THE FUND
WITH CERTAIN ADMINISTRATIVE SERVICES THAT MAY BE REQUIRED IN THE CONDUCT OF
BUSINESS. SUCH SERVICES INCLUDE, BUT ARE NOT LIMITED TO, MAINTAINING THE FUND'S
ORGANIZATIONAL EXISTENCE, PREPARING THE FUND'S PROSPECTUS(ES), PREPARING
NOTICES, PROXY MATERIALS, REPORTS TO REGULATORY BODIES AND REPORTS TO
SHAREHOLDERS OF THE FUND, AND SUCH OTHER INCIDENTAL ADMINISTRATIVE SERVICES AS
ARE NECESSARY TO THE CONDUCT OF THE FUND'S AFFAIRS. CASC SHALL OVERSEE THE
DETERMINATION OF THE DAILY NET ASSET VALUE OF SHARES, THE AMOUNT OF DAILY
DIVIDENDS OF NET INVESTMENT INCOME PER SHARE, AND THE MAINTENANCE OF THE
PORTFOLIO AND GENERAL ACCOUNTING RECORDS OF THE FUND THROUGH ITS CHOSEN
ACCOUNTING AGENT. THE FUND HEREBY ENGAGES CASC TO PROVIDE IT WITH SUCH SERVICES,
OR TO CAUSE SUCH SERVICES TO BE PROVIDED TO THE FUND BY THIRD PARTIES.
2. SCOPE OF AUTHORITY. CASC IS AT ALL TIMES, IN THE PERFORMANCE OF ITS
FUNCTIONS UNDER THIS AGREEMENT, SUBJECT TO ANY DIRECTION AND CONTROL OF THE
TRUSTEES OF THE FUND AND OF ITS OFFICERS, AND TO THE TERMS OF ITS DECLARATION OF
TRUST AND BYLAWS, EXCEPT THAT IT HAS NO OBLIGATION TO PROVIDE TO THE FUND ANY
SERVICES THAT ARE CLEARLY OUTSIDE THE SCOPE OF THOSE CONTEMPLATED IN THIS
AGREEMENT. IN THE PERFORMANCE OF ITS DUTIES UNDER THIS AGREEMENT, CASC IS
AUTHORIZED TO TAKE ANY ACTION IT DEEMS ADVISABLE. CASC MAY CONTRACT WITH OTHER
PERSONS TO PROVIDE TO THE FUND ANY OF THE SERVICES CONTEMPLATED UNDER THE
AGREEMENT UNDER SUCH TERMS AS CASC DEEMS REASONABLE, AND CASC HAS THE AUTHORITY
TO DIRECT THE ACTIVITIES OF THOSE OTHER PERSONS IN THE MANNER CASC DEEMS
APPROPRIATE.
3. OTHER ACTIVITIES OF CASC. CASC AND ANY OF ITS AFFILIATES MAY RENDER
TO OTHER PERSONS SERVICES SIMILAR TO THOSE IT PROVIDES TO THE FUND UNDER THIS
AGREEMENT. CASC OR ANY INTERESTED PERSON OF CASC MAY INVEST IN THE FUND AS A
SHAREHOLDER, BECOME AN OFFICER OR TRUSTEE OF THE FUND IF PROPERLY ELECTED, OR
ENTER INTO ANY OTHER RELATIONSHIP WITH THE FUND APPROVED BY THE TRUSTEES, IF
NECESSARY, AND IN ACCORDANCE WITH LAW.
4. RECORDKEEPING AND OTHER INFORMATION. CASC WILL, COMMENCING NO LATER
THAN THE EFFECTIVE DATE OF THIS AGREEMENT, OR THE COMMENCEMENT DATE OF ANY
SUBSEQUENTLY-CONSTITUTED SERIES OR CLASSES, CREATE AND MAINTAIN ALL NECESSARY
ADMINISTRATIVE RECORDS OF THE RELEVANT SERIES OR CLASS IN ACCORDANCE WITH ALL
APPLICABLE LAWS, RULES AND REGULATIONS, INCLUDING, BUT NOT LIMITED TO, RECORDS
REQUIRED BY SECTION 31(A) OF THE INVESTMENT COMPANY ACT OF 1940 (THE "1940 ACT")
AND THE RULES UNDER THAT SECTION. ALL RECORDS ARE THE PROPERTY OF THE FUND AND
ARE AVAILABLE FOR INSPECTION AND USE BY THE FUND.
5. AUDIT, INSPECTION AND VISITATION. CASC WILL MAKE AVAILABLE DURING
REGULAR BUSINESS HOURS ALL RECORDS AND OTHER DATA CREATED AND MAINTAINED
PURSUANT TO THIS AGREEMENT FOR REASONABLE AUDIT AND INSPECTION BY THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION ("SEC"), THE FUND OR ANY PERSON
RETAINED BY THE FUND IF THAT PERSON'S FUNCTION NECESSITATES ACCESS TO SUCH
RECORDS AND DATA.
6. COMPENSATION TO CASC. THE FUND WILL COMPENSATE CASC ON A MONTHLY
BASIS FOR THE SERVICES PERFORMED UNDER THIS AGREEMENT. THE RATE OF COMPENSATION,
BASED ON AVERAGE NET ASSETS, IS SHOWN IN SCHEDULE A. CASC WILL NOT BE
RESPONSIBLE FOR ANY COSTS OR EXPENSES OF THE FUND OTHER THAN THOSE SPECIFICALLY
ASSUMED IN PARAGRAPH 1. EXPENSES INCURRED BY CASC AND NOT INCLUDED IN THE
SERVICE FEE WILL BE REIMBURSED TO CASC BY THE FUND, AS APPROPRIATE. SUCH
EXPENSES MAY INCLUDE EXPENSES INCIDENTAL TO MEETINGS OF SHAREHOLDERS, TAXES AND
CORPORATE FEES LEVIED AGAINST THE FUND OR ITS SERIES, EXPENSES OF PRINTING STOCK
CERTIFICATES REPRESENTING SHARES OF THE SERIES, EXPENSES OF PRINTING, MAILING
NOTICES, PROXY MATERIAL, REPORTS TO REGULATORY BODIES AND REPORTS TO
SHAREHOLDERS OF THE FUND, EXPENSES OF TYPESETTING PROSPECTUSES AND PRINTING AND
MAILING PROSPECTUSES TO SHAREHOLDERS, AND DATA PROCESSING EXPENSES INCIDENTAL TO
MAINTENANCE OF BOOKS AND RECORDS. SUCH CHARGES ARE PAYABLE IN FULL UPON RECEIPT
OF A BILLING INVOICE. IN LIEU OF REIMBURSING CASC FOR EXPENSES INCURRED AND NOT
INCLUDED IN THE SERVICE FEE, THE FUND MAY, IN ITS DISCRETION, DIRECTLY PAY ANY
EXPENSES.
7. USE OF NAMES. THE FUND MAY NOT USE THE NAME OF CASC IN ANY
PROSPECTUS, SALES LITERATURE OR OTHER MATERIAL RELATING TO THE FUND OR ITS
SERIES OR CLASSES IN ANY MANNER WITHOUT PRIOR APPROVAL BY CASC, SUCH APPROVAL
NOT TO BE UNREASONABLY WITHHELD; PROVIDED, HOWEVER, THAT CASC HEREBY APPROVES
ALL USES OF ITS NAME THAT MERELY REFER IN ACCURATE TERMS TO ITS APPOINTMENT OR
THAT ARE REQUIRED BY THE SEC OR A STATE SECURITIES COMMISSION. CASC MAY NOT USE
THE NAME OF THE FUND OR ITS SERIES OR CLASSES IN ANY MATERIAL RELATING TO CASC
IN ANY MANNER WITHOUT PRIOR APPROVAL BY THE FUND, SUCH APPROVAL NOT TO BE
UNREASONABLY WITHHELD; PROVIDED, HOWEVER, THAT THE FUND HEREBY APPROVES ALL USES
OF ITS NAME OR THE NAMES OF ITS SERIES OR CLASSES THAT MERELY REFER IN ACCURATE
TERMS TO THE APPOINTMENT OF CASC OR THAT ARE REQUIRED BY THE SEC.
8. SECURITY. CASC REPRESENTS AND WARRANTS THAT, TO THE BEST OF ITS
KNOWLEDGE, THE VARIOUS PROCEDURES AND SYSTEMS THAT CASC PROPOSES TO IMPLEMENT
WITH REGARD TO SAFEGUARDING INFORMATION FROM LOSS OR DAMAGE ATTRIBUTABLE TO
FIRE, THEFT OR ANY OTHER CAUSE (INCLUDING PROVISIONS FOR TWENTY-FOUR HOUR
RESTRICTED ACCESS) WITH RESPECT TO THE FUND'S BOOKS AND RECORDS ADMINISTERED
PURSUANT TO THIS AGREEMENT AND CASC'S RECORDS, DATA, EQUIPMENT, FACILITIES AND
OTHER PROPERTY USED IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT
ARE ADEQUATE AND THAT CASC WILL IMPLEMENT THESE PROCEDURES AND SYSTEM IN A
MANNER CALCULATED TO ENSURE THE PERFORMANCE OF CASC'S OBLIGATIONS UNDER THIS
AGREEMENT.
9. LIMITATION OF LIABILITY. THE FUND WILL INDEMNIFY AND HOLD CASC
HARMLESS AGAINST ANY LOSSES, CLAIMS, DAMAGES, LIABILITIES OR EXPENSES (INCLUDING
REASONABLE COUNSEL FEES AND EXPENSES) RESULTING FROM ANY CLAIM, DEMAND, ACTION
OR SUIT BROUGHT BY ANY PERSON (INCLUDING A SHAREHOLDER NAMING THE FUND OR ANY OF
ITS SERIES OR CLASSES AS A PARTY) OTHER THAN THE FUND NOT RESULTING FROM CASC'S
NEGLIGENCE, OR CAUSED BY ERRORS OF JUDGMENT OR MISTAKES OF LAW COMMITTED BY CASC
IN A GOOD FAITH EFFORT TO CARRY OUT ITS DUTIES UNDER THIS AGREEMENT.
IN NO EVENT WILL CASC BE LIABLE FOR INDIRECT, SPECIAL, OR CONSEQUENTIAL
DAMAGES (EVEN IF CASC HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES)
ARISING FROM THE OBLIGATIONS ASSUMED HEREUNDER AND THE SERVICES PROVIDED FOR BY
THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LOST PROFITS, LOSS OF USE OF
ACCOUNTING SYSTEMS, COST OF CAPITAL, COST OF SUBSTITUTE FACILITIES, PROGRAMS OR
SERVICES, DOWNTIME COSTS, OR CLAIMS OF THE FUND'S SHAREHOLDERS FOR SUCH DAMAGE.
10. LIMITATION OF FUND'S LIABILITY. CASC ACKNOWLEDGES THAT IT HAS
RECEIVED NOTICE OF AND ACCEPTS THE LIMITATION ON THE FUND'S LIABILITY. CASC
AGREES THAT THE FUND'S OBLIGATIONS IN ANY CASE EXTEND ONLY TO ITS SERIES AND
CLASSES AND THEIR ASSETS, AND THAT CASC WILL NOT SEEK SATISFACTION OF ANY
OBLIGATION FROM THE SHAREHOLDERS OR ANY TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF
THE FUND.
11. FORCE MAJEURE. CASC WILL NOT BE LIABLE FOR DELAYS OR ERRORS CAUSED
BY CIRCUMSTANCES BEYOND CASC'S 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, CASC
WILL TAKE REASONABLE STEPS TO MINIMIZE SERVICE INTERRUPTIONS BUT WILL HAVE NO
LIABILITY IN THE EVENT INTERRUPTIONS OCCUR.
12. AMENDMENTS. CASC AND THE FUND WILL CONSULT EACH OTHER REGARDING
CASC'S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT. ANY CHANGE IN THE
FUND'S REGISTRATION STATEMENTS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE 1940 ACT OR IN THE FORMS RELATING TO ANY PLAN, PROGRAM OR SERVICE OFFERED BY
THE CURRENT PROSPECTUSES OF THE SERIES THAT WOULD REQUIRE A CHANGE IN CASC'S
OBLIGATIONS UNDER THIS AGREEMENT WILL BE SUBJECT TO CASC'S APPROVAL, WHICH WILL
NOT BE UNREASONABLY WITHHELD.
13. DURATION, TERMINATION, ETC. NEITHER THIS AGREEMENT NOR ANY OF ITS
PROVISIONS MAY BE CHANGED, WAIVED, DISCHARGED, OR TERMINATED ORALLY, BUT ONLY BY
WRITTEN INSTRUMENT WHICH WILL MAKE SPECIFIC REFERENCE TO THIS AGREEMENT AND
WHICH WILL BE SIGNED BY THE PARTY AGAINST WHICH ENFORCEMENT OF SUCH CHANGE,
WAIVER, DISCHARGE OR TERMINATION IS SOUGHT. THIS AGREEMENT WILL CONTINUE IN
EFFECT UNTIL DECEMBER 31, 1999, AND FOR ONE-YEAR TERMS THEREAFTER OR AS THE
PARTIES MAY MUTUALLY AGREE. THIS AGREEMENT MAY BE TERMINATED FOR CAUSE EITHER BY
THE FUND OR CASC, BUT ONLY AFTER A REASONABLE OPPORTUNITY TO CURE HAS BEEN
PROVIDED TO THE PARTY ACCUSED OF NOT PERFORMING ACCORDING TO THE TERMS OF THIS
AGREEMENT. WHAT CONSTITUTES A REASONABLE AMOUNT OF TIME TO CURE ANY DEFICIENCY
WILL BE DETERMINED BY THE PARTIES IN THE CONTEXT OF ACTION THAT NEEDS TO BE
TAKEN IN ORDER TO CURE THE DEFICIENCY, BUT IN NO EVENT WILL THE PARTY HAVE LESS
THAN 90 DAYS TO ATTEMPT TO CURE THE DEFICIENCY. IN THE EVENT THAT THE CAUSE
REMAINS UNREMEDIED, THE PARTIES HAVE THE OPTION TO TERMINATE THE CONTRACT PRIOR
TO ITS EXPIRATION DATE. ANY SUCH TERMINATION WILL NOT AFFECT THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER PARAGRAPHS 9 AND 10 OF THIS AGREEMENT. IN THE
EVENT THE FUND DESIGNATES A SUCCESSOR TO ANY OF CASC'S OBLIGATIONS UNDER THIS
AGREEMENT, CASC WILL, AT THE EXPENSE AND DIRECTION OF THE FUND, TRANSFER TO SUCH
SUCCESSOR ALL RELEVANT BOOKS, RECORDS AND OTHER DATA ESTABLISHED OR MAINTAINED
BY CASC.
14. MISCELLANEOUS. EACH PARTY AGREES TO PERFORM SUCH FURTHER ACTS AND
EXECUTE SUCH FURTHER DOCUMENTS AS ARE NECESSARY TO EFFECTUATE THE PURPOSES OF
THIS AGREEMENT. THIS AGREEMENT WILL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF MARYLAND. THE CAPTIONS IN THIS AGREEMENT ARE
INCLUDED FOR CONVENIENCE ONLY AND DO NOT 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 INDICATED ABOVE.
CALVERT ADMINISTRATIVE SERVICES COMPANY, INC.
BY
TITLE
THE CALVERT FUND
BY
TITLE
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
SCHEDULE A
LISTED BELOW ARE THE SERIES OF THE CALVERT FUND THAT ARE ENTITLED TO
RECEIVE ADMINISTRATIVE SERVICES FROM CALVERT ADMINISTRATIVE SERVICES COMPANY,
INC. ("CASC") UNDER THE ADMINISTRATIVE SERVICES AGREEMENT DATED MARCH 1, 1999,
AND WHICH WILL PAY ANNUAL FEES TO CASC PURSUANT TO THE AGREEMENT.
CALVERT INCOME FUND
CLASS A 0.30%
CLASS B 0.30%
CLASS C 0.30%
CLASS I 0.10%
CALVERT NEW VISION SMALL CAP FUND
CLASS A 0.25%
CLASS B 0.25%
CLASS C 0.25%
CLASS I 0.10%
FOR ITS SERVICES UNDER THIS ADMINISTRATIVE SERVICES AGREEMENT, CASC IS
ENTITLED TO RECEIVE THE FEE INDICATED ABOVE BASED ON AVERAGE NET ASSETS. THE
LIABILITY TO PAY FOR SERVICES UNDER THE AGREEMENT ARISES AT THE TIME A CLASS
COMMENCES OPERATIONS, ABSENT WAIVERS.
EXHIBIT 23
APRIL 27, 2000
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. 18 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. 18 TO ITS REGISTRATION STATEMENT.
SINCERELY,
/S/SUSAN WALKER BENDER
SUSAN WALKER BENDER
ASSOCIATE GENERAL COUNSEL
CONSENT OF INDEPENDENT ACCOUNTANTS
WE CONSENT TO THE INCORPORATION BY REFERENCE IN POST EFFECTIVE
AMENDMENT NO. 18 TO THE REGISTRATION STATEMENT OF CALVERT MUNICIPAL INTERMEDIATE
FUNDS (COMPRISED OF THE NATIONAL, CALIFORNIA, MARYLAND, VIRGINIA HEREAFTER
REFERRED TO AS THE "FUNDS") ON FORM N-LA (FILE NUMBER 33-44968 AND 811-6525) OF
OUR REPORTS DATED FEBRUARY 11, 2000, ON OUR AUDITS OF THE FINANCIAL STATEMENTS
AND FINANCIAL HIGHLIGHTS OF THE FUNDS, WHICH REPORTS IS INCLUDED IN THE ANNUAL
REPORT TO SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 1999, WHICH IS
INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT. WE ALSO CONSENT TO THE
REFERENCE OF OUR FIRM UNDER THE CAPTION "FINANCIAL HIGHLIGHTS" IN THE PROSPECTUS
AND "INDEPENDENT ACCOUNTANTS" IN THE STATEMENT OF ADDITIONAL INFORMATION.
PRICEWATERHOUSECOOPERS LLP
BALTIMORE, MARYLAND
APRIL 27, 2000
E:\AGREEMENTS\12B1_PLANS_AND_SCHED\New BC Plan.doc
THE CALVERT GROUP OF FUNDS
CLASS B AND CLASS C
DISTRIBUTION PLAN
AS APPROVED BY THE BOARDS
IN NOVEMBER 1993 AND AS AMENDED AND RESTATED
FEBRUARY 1998 PURSUANT TO RULE 12B-1
UNDER THE INVESTMENT COMPANY ACT OF 1940
THIS DISTRIBUTION PLAN APPLIES TO CLASS B AND CLASS C IN EACH PORTFOLIO OF
THE CALVERT FUNDS LISTED IN SCHEDULE A (EACH A "FUND" AND TOGETHER, THE "FUNDS")
AND TO ANY FUTURE CLASS FOR WHICH THIS DISTRIBUTION PLAN HAS BEEN APPROVED IN
ACCORDANCE WITH PARAGRAPH 2(A) BELOW. FOR PURPOSES OF THIS DISTRIBUTION PLAN
EACH SERIES PORTFOLIO OF A FUND IS REFERRED TO HEREIN AS A "SERIES" AND
TOGETHER, AS THE "SERIES".
AS PERMITTED BY RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940 AND IN
ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS PLAN, AS HEREINAFTER SET FORTH,
A FUND MAY INCUR CERTAIN EXPENDITURES TO PROMOTE ITSELF AND FURTHER THE
DISTRIBUTION OF ITS SHARES.
1. PAYMENT OF FEE
(A) AS COMPENSATION FOR CERTAIN SERVICES PERFORMED AND EXPENSES ASSUMED
BY EACH FUND'S DISTRIBUTOR AND PRINCIPAL UNDERWRITER ("DISTRIBUTOR") EACH FUND
MAY PAY THE DISTRIBUTOR A DISTRIBUTION FEE (THE "DISTRIBUTION FEE"). THE
DISTRIBUTION FEE IS INTENDED TO COMPENSATE THE DISTRIBUTOR FOR ITS MARKETING
EFFORTS, WHICH INCLUDE, BUT ARE NOT LIMITED TO THE FOLLOWING COSTS: COMMISSIONS
AND OTHER PAYMENTS ADVANCED TO SALES PERSONNEL AND THIRD PARTIES AND RELATED
INTEREST COSTS AS PERMITTED BY THE RULES OF THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC. ("NASD"), PRINTING AND MAILING PROSPECTUSES, SALES
LITERATURE AND OTHER RELEVANT MATERIAL TO OTHER THAN CURRENT SHAREHOLDERS,
ADVERTISING AND PUBLIC RELATIONS, TELEMARKETING, MARKETING-RELATED OVERHEAD
EXPENSES AND OTHER DISTRIBUTION COSTS. SUCH DISTRIBUTION FEE IS IN ADDITION TO
ANY NASD SERVICE FEE THAT MAY BE PAID HEREUNDER AND AS DESCRIBED AT SECTION 3(B)
OF THE DISTRIBUTION AGREEMENT BETWEEN THE RESPECTIVE FUNDS AND THE DISTRIBUTOR,
OR ANY FRONT-END OR DEFERRED SALES CHARGES THE DISTRIBUTOR RECEIVES FROM A FUND
WITH RESPECT TO SALES OR REDEMPTION OF FUND SHARES. TOTAL FEES PAID PURSUANT TO
THIS PLAN, INCLUDING THE DISTRIBUTION FEE DESCRIBED ABOVE, AND THE NASD SERVICE
FEE, SHALL NOT EXCEED THE RATE SET FORTH IN THE ATTACHED SCHEDULE B TO THIS
PLAN. ALL AGREEMENTS WITH ANY PERSON RELATING TO THE IMPLEMENTATION OF THIS
PLAN SHALL BE IN WRITING, AND SUCH AGREEMENTS SHALL BE SUBJECT TO TERMINATION,
WITHOUT PENALTY, PURSUANT TO THE PROVISIONS OF PARAGRAPH 2(C) OF THIS PLAN.
<PAGE>
-3-
(B) A FUND WILL PAY EACH PERSON WHICH HAS ACTED AS PRINCIPAL
UNDERWRITER OF ITS CLASS B SHARES ITS ALLOCABLE PORTION (AS SUCH TERM IS DEFINED
IN THE DISTRIBUTION AGREEMENT PURSUANT TO WHICH SUCH PERSON ACTS OR ACTED AS
PRINCIPAL UNDERWRITER OF THE CLASS B SHARES (THE "APPLICABLE DISTRIBUTION
AGREEMENT")) OF THE DISTRIBUTION FEE IN RESPECT OF CLASS B SHARES OF THE FUND.
SUCH PERSON SHALL BE PAID ITS ALLOCABLE PORTION OF SUCH DISTRIBUTION FEES
NOTWITHSTANDING SUCH PERSON'S TERMINATION AS DISTRIBUTOR OF THE CLASS B SHARES
OF THE FUND, SUCH PAYMENTS TO BE CHANGED OR TERMINATED ONLY: (I) AS REQUIRED BY
A CHANGE IN APPLICABLE LAW OR A CHANGE IN ACCOUNTING POLICY ADOPTED BY THE
INVESTMENT COMPANIES COMMITTEE OF THE AICPA AND APPROVED BY FASB THAT RESULTS IN
A DETERMINATION BY THE FUND'S INDEPENDENT ACCOUNTANTS THAT ANY ASSET BASED SALES
CHARGES (AS THAT TERM IS DEFINED BY THE NASD) IN RESPECT OF SUCH FUND, AND WHICH
ARE NOT YET DUE AND PAYABLE, MUST BE ACCOUNTED FOR BY SUCH FUND AS A LIABILITY
IN ACCORDANCE WITH GAAP, EACH AFTER THE EFFECTIVE DATE OF THIS RESTATED
DISTRIBUTION PLAN; (II) IF IN THE SOLE DISCRETION OF THE BOARD OF
TRUSTEES/DIRECTORS, AFTER DUE CONSIDERATION OF THE RELEVANT FACTORS CONSIDERED
WHEN ADOPTING AND/OR AMENDING THIS DISTRIBUTION PLAN INCLUDING THE TRANSACTIONS
CONTEMPLATED IN THAT CERTAIN PURCHASE AND SALE AGREEMENT ENTERED INTO BETWEEN A
FUND'S DISTRIBUTOR AND THE COMMISSION FINANCING ENTITY, THE BOARD OF
TRUSTEES/DIRECTORS DETERMINES, SUBJECT TO ITS FIDUCIARY DUTY, THAT THIS
DISTRIBUTION PLAN AND THE PAYMENTS THEREUNDER MUST BE CHANGED OR TERMINATED,
NOTWITHSTANDING THE EFFECT THIS ACTION MIGHT HAVE ON THE FUND'S ABILITY TO OFFER
AND SELL CLASS B SHARES; OR (III) IN CONNECTION WITH A COMPLETE TERMINATION OF
THIS DISTRIBUTION PLAN, IT BEING UNDERSTOOD THAT FOR THIS PURPOSE A COMPLETE
TERMINATION OF THIS DISTRIBUTION PLAN OCCURS ONLY IF, AS TO A FUND OR SERIES,
THIS DISTRIBUTION PLAN IS TERMINATED AND THE FUND HAS NOT ADOPTED ANY OTHER
DISTRIBUTION PLAN WITH RESPECT TO ITS CLASS B OR OTHER SUBSTANTIALLY SIMILAR
CLASS OF SHARES. THE SERVICES RENDERED BY A DISTRIBUTOR FOR WHICH THAT
DISTRIBUTOR IS ENTITLED TO RECEIVE ITS ALLOCABLE PORTION OF THE DISTRIBUTION FEE
SHALL BE DEEMED TO HAVE BEEN COMPLETED AT THE TIME OF THE INITIAL PURCHASE OF
THE COMMISSION SHARES (AS DEFINED IN THE DISTRIBUTION AGREEMENT) TAKEN INTO
ACCOUNT IN COMPUTING THAT DISTRIBUTOR'S ALLOCABLE PORTION OF THE DISTRIBUTION
FEE.
THE OBLIGATION OF A FUND TO PAY THE DISTRIBUTION FEE SHALL TERMINATE UPON
THE TERMINATION OF THIS DISTRIBUTION PLAN AS TO SUCH FUND IN ACCORDANCE WITH THE
TERMS HEREOF. EXCEPT AS PROVIDED IN THE PRECEDING PARAGRAPH, A FUND'S
OBLIGATION TO PAY THE DISTRIBUTION FEE TO A DISTRIBUTOR OF THE CLASS B SHARES OF
THE FUND SHALL BE ABSOLUTE AND UNCONDITIONAL AND SHALL NOT BE SUBJECT TO ANY
DISPUTE, OFFSET, COUNTERCLAIM OR DEFENSE WHATSOEVER (IT BEING UNDERSTOOD THAT
NOTHING IN THIS SENTENCE SHALL BE DEEMED A WAIVER BY A FUND OF ITS RIGHT
SEPARATELY TO PURSUE ANY CLAIMS IT MAY HAVE AGAINST SUCH DISTRIBUTOR AND ENFORCE
SUCH CLAIMS AGAINST ANY ASSETS (OTHER THAN ITS RIGHT TO BE PAID ITS ALLOCABLE
PORTION OF THE DISTRIBUTION FEE AND TO BE PAID THE CONTINGENT DEFERRED SALES
CHARGES) OF SUCH DISTRIBUTOR).
THE RIGHT OF A DISTRIBUTOR TO RECEIVE THE DISTRIBUTION FEE, BUT NOT THE
RELEVANT DISTRIBUTION AGREEMENT OR THAT DISTRIBUTOR'S OBLIGATIONS THEREUNDER,
MAY BE TRANSFERRED BY THAT DISTRIBUTOR IN ORDER TO RAISE FUNDS WHICH MAY BE
USEFUL OR NECESSARY TO PERFORM ITS DUTIES AS PRINCIPAL UNDERWRITER, AND ANY SUCH
TRANSFER SHALL BE EFFECTIVE UPON WRITTEN NOTICE FROM THAT DISTRIBUTOR TO THE
FUND. IN CONNECTION WITH THE FOREGOING, EACH FUND IS AUTHORIZED TO PAY ALL OR
PART OF THE DISTRIBUTION FEE DIRECTLY TO SUCH TRANSFEREE AS DIRECTED BY THAT
DISTRIBUTOR.
(C) NOTHING IN THIS DISTRIBUTION PLAN SHALL OPERATE OR BE CONSTRUED TO
LIMIT THE EXTENT TO WHICH THE FUND'S INVESTMENT ADVISOR OR ANY OTHER PERSON,
OTHER THAN THE FUND, AT ITS EXPENSE APART FROM THE DISTRIBUTION PLAN, MAY INCUR
COSTS AND PAY EXPENSES ASSOCIATED WITH THE DISTRIBUTION OF FUND SHARES.
2. EFFECTIVE DATE AND TERM
(A) THIS DISTRIBUTION PLAN SHALL BECOME EFFECTIVE AS TO ANY CLASS OF
ANY SERIES UPON APPROVAL BY MAJORITY VOTES OF (I) THE BOARD OF THE FUND AND THE
MEMBERS THEREOF WHO ARE NOT INTERESTED PERSONS WITHIN THE MEANING OF SECTION
2(A)(19) OF THE INVESTMENT COMPANY ACT OF 1940 AND HAVE NO DIRECT OR INDIRECT
FINANCIAL INTEREST IN THE OPERATION OF THE DISTRIBUTION PLAN OR IN ANY
AGREEMENTS RELATED TO THE DISTRIBUTION PLAN ("QUALIFIED TRUSTEES/DIRECTORS"),
CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING ON THIS
DISTRIBUTION PLAN, AND (II) THE OUTSTANDING VOTING SECURITIES OF THE FUND.
(B) THIS DISTRIBUTION PLAN SHALL REMAIN IN EFFECT FOR ONE YEAR FROM ITS
ADOPTION DATE AND MAY CONTINUE IN EFFECT THEREAFTER IF THIS DISTRIBUTION PLAN IS
APPROVED AT LEAST ANNUALLY BY A MAJORITY VOTE OF THE BOARD OF THE FUND,
INCLUDING A MAJORITY OF THE QUALIFIED TRUSTEES/DIRECTORS, CAST IN PERSON AT A
MEETING CALLED FOR THE PURPOSE OF VOTING ON THE DISTRIBUTION PLAN.
(C) SUBJECT TO PARAGRAPH 1(B) ABOVE, THIS DISTRIBUTION PLAN MAY BE
TERMINATED AT ANY TIME WITHOUT PAYMENT OF ANY PENALTY BY A MAJORITY VOTE OF THE
QUALIFIED TRUSTEES/DIRECTORS OR BY VOTE OF A MAJORITY OF THE OUTSTANDING VOTING
SECURITIES OF THE FUND, OR, WITH RESPECT TO THE TERMINATION OF THIS DISTRIBUTION
PLAN AS TO A PARTICULAR CLASS OF A PORTFOLIO, BY A VOTE OF A MAJORITY OF THE
OUTSTANDING VOTING SECURITIES OF THAT CLASS.
(D) THE PROVISIONS OF THIS DISTRIBUTION PLAN ARE SEVERABLE FOR EACH
SERIES OR CLASS, AND WHENEVER ACTION IS TO BE TAKEN WITH RESPECT TO THIS
DISTRIBUTION PLAN, THAT ACTION MUST BE TAKEN SEPARATELY FOR EACH SERIES OR CLASS
AFFECTED BY THE MATTER.
3. REPORTS
THE PERSON AUTHORIZED TO DIRECT THE DISPOSITION OF MONIES PAID OR PAYABLE
BY THE FUND PURSUANT TO THE DISTRIBUTION PLAN SHALL PROVIDE, ON AT LEAST A
QUARTERLY BASIS, A WRITTEN REPORT TO EACH FUND'S BOARD OF THE AMOUNTS EXPENDED
PURSUANT TO THIS DISTRIBUTION PLAN OR ANY RELATED AGREEMENTS AND THE PURPOSES
FOR WHICH SUCH EXPENDITURES WERE MADE.
4. SELECTION OF DISINTERESTED TRUSTEES/DIRECTORS
WHILE THIS DISTRIBUTION PLAN IS IN EFFECT, THE SELECTION AND NOMINATION OF
THOSE TRUSTEES/DIRECTORS WHO ARE NOT INTERESTED PERSONS OF A FUND WITHIN THE
MEANING OF SECTION 2(A)(19) OF THE INVESTMENT COMPANY ACT OF 1940 SHALL BE
COMMITTED TO THE DISCRETION OF THE TRUSTEES/DIRECTORS THEN IN OFFICE WHO ARE NOT
INTERESTED PERSONS OF THE FUND.
5. EFFECT OF PLAN
THIS DISTRIBUTION PLAN SHALL NOT OBLIGATE THE FUND OR ANY OTHER PARTY TO
ENTER INTO AN AGREEMENT WITH ANY PARTICULAR PERSON.
6. AMENDMENT
THIS DISTRIBUTION PLAN MAY NOT BE AMENDED TO INCREASE MATERIALLY THE AMOUNT
AUTHORIZED IN PARAGRAPH 1 HEREOF TO BE SPENT BY A FUND FOR DISTRIBUTION WITHOUT
APPROVAL BY A VOTE OF THE MAJORITY OF THE OUTSTANDING SHARES OF SUCH FUND,
EXCEPT THAT IF THE AMENDMENT RELATES ONLY TO A PARTICULAR CLASS OF A FUND, SUCH
APPROVAL NEED ONLY BE BY A VOTE OF THE MAJORITY OF THE OUTSTANDING SHARES OF
THAT CLASS. ALL MATERIAL AMENDMENTS TO THIS DISTRIBUTION PLAN MUST BE APPROVED
BY A MAJORITY VOTE OF THE BOARD OF THE FUND, AND OF THE QUALIFIED
TRUSTEES/DIRECTORS, CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING
THEREON.
<PAGE>
SCHEDULE A
THE CALVERT FUND
CALVERT TAX-FREE RESERVES
CALVERT MUNICIPAL FUND
CALVERT SOCIAL INVESTMENT FUND
CALVERT WORLD VALUES FUND
CALVERT NEW WORLD FUND
FIRST VARIABLE RATE FUND
<PAGE>
SCHEDULE B
THE TOTAL FEES PAID BY THE RESPECTIVE CLASS OF EACH SERIES OF A FUND
PURSUANT TO THIS DISTRIBUTION PLAN SHALL NOT EXCEED THE RATE, AS A PERCENTAGE OF
THAT CLASS' AVERAGE ANNUAL NET ASSETS, SET FORTH BELOW:
FUND/SERIES CLASS B CLASS C
DISTRIBUTION SERVICE DISTRIBUTION
SERVICE
FEE FEE FEE FEE
THE CALVERT FUND
CALVERT NEW VISION
SMALL CAP FUND 0.75 0.25 0.75 0.25
CALVERT INCOME FUND 0.75 0.25 0.75 0.25
CALVERT TAX-FREE RESERVES
LONG-TERM 0.75 0.25 0.75 0.25
VERMONT MUNICIPAL 0.75 0.25 0.75 0.25
CALVERT MUNICIPAL FUND
NATIONAL 0.75 0.25 N/A N/A
CALIFORNIA 0.75 0.25 N/A N/A
MARYLAND 0.75 0.25 N/A N/A
VIRGINIA 0.75 0.25 N/A N/A
CALVERT SOCIAL INVESTMENT FUND
MANAGED GROWTH 0.75 0.25 0.75 0.25
EQUITY 0.75 0.25 0.75 0.25
BOND 0.75 0.25 0.75 0.25
MANAGED INDEX 0.75 0.25 0.75 0.25
CALVERT WORLD VALUES FUND
INTERNATIONAL EQUITY 0.75 0.25 0.75 0.25
CAPITAL ACCUMULATION 0.75 0.25 0.75 0.25
CALVERT NEW WORLD FUND
CALVERT NEW AFRICA 0.75 0.25 0.75 0.25
FIRST VARIABLE RATE FUND
CALVERT FIRST GOV.
MONEY MARKET 0.75 0.25 0.75 0.25
RESTATED FEB. 1998
E:\AGREEMENTS\MULTI FUND AGMTS\NEW BC PLAN.DOC
18f-3 Multiple Class Plan
As Restated December 1998
Page 3 of 11
THE CALVERT GROUP OF FUNDS
RULE 18F-3 MULTIPLE CLASS PLAN
UNDER THE INVESTMENT COMPANY ACT OF 1940
AS RESTATED DECEMBER 1998
RULE 18F-3 UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940
ACT"), REQUIRES THAT AN INVESTMENT COMPANY DESIRING TO OFFER MULTIPLE CLASSES OF
SHARES PURSUANT TO THE RULE ADOPT A PLAN SETTING FORTH THE DIFFERENCES AMONG THE
CLASSES WITH RESPECT TO SHAREHOLDER SERVICES, DISTRIBUTION ARRANGEMENTS, EXPENSE
ALLOCATIONS AND ANY RELATED CONVERSION FEATURES OR EXCHANGE PRIVILEGES. ANY
MATERIAL AMENDMENT TO THE PLAN MUST BE APPROVED BY THE INVESTMENT COMPANY'S
BOARD OF TRUSTEES/DIRECTORS, INCLUDING A MAJORITY OF THE DISINTERESTED BOARD
MEMBERS, WHO MUST FIND THAT THE PLAN IS IN THE BEST INTERESTS OF EACH CLASS
INDIVIDUALLY AND THE INVESTMENT COMPANY AS A WHOLE.
THIS RULE 18F-3 MULTIPLE CLASS PLAN ("PLAN") SHALL APPLY TO THOSE FUNDS IN
THE CALVERT GROUP OF FUNDS LISTED IN EXHIBIT I (EACH A "FUND" AND COLLECTIVELY,
"FUNDS") AND TO ANY FUTURE FUND FOR WHICH THIS PLAN HAS BEEN APPROVED IN
ACCORDANCE WITH THE ABOVE PARAGRAPH.
THE PROVISIONS OF THIS PLAN ARE SEVERABLE FOR EACH FUND OR SERIES THEREOF
("SERIES") OR CLASS, AND WHENEVER ACTION IS TO BE TAKEN WITH RESPECT TO THIS
PLAN, THAT ACTION MUST BE TAKEN SEPARATELY FOR EACH FUND, SERIES OR CLASS
AFFECTED BY THE MATTER.
1. CLASS DESIGNATION. A FUND MAY OFFER SHARES DESIGNATED CLASS A, CLASS B,
CLASS C , CLASS I, AND FOR CERTAIN MONEY MARKET PORTFOLIOS, CLASS O AND CLASS T.
2. DIFFERENCES IN AVAILABILITY. CLASS A, CLASS B, CLASS C, AND CLASS O
SHARES SHALL EACH BE AVAILABLE THROUGH THE SAME DISTRIBUTION CHANNELS, EXCEPT
THAT (A) CLASS B SHARES MAY NOT BE AVAILABLE THROUGH SOME DEALERS AND ARE NOT
AVAILABLE FOR PURCHASES OF $500,000 OR MORE, (B) CLASS B SHARES OF CALVERT FIRST
GOVERNMENT MONEY MARKET FUND ARE AVAILABLE ONLY THROUGH EXCHANGE FROM CLASS B OR
CLASS C SHARES OF ANOTHER CALVERT FUND, AND (C) CLASS C SHARES MAY NOT BE
AVAILABLE THROUGH SOME DEALERS AND ARE NOT AVAILABLE FOR PURCHASES OF $1 MILLION
OR MORE. CLASS I SHARES ARE GENERALLY AVAILABLE ONLY DIRECTLY FROM CALVERT GROUP
AND NOT THROUGH DEALERS, AND EACH CLASS I SHAREHOLDER MUST MAINTAIN A $1 MILLION
MINIMUM ACCOUNT BALANCE. CLASS T SHARES ARE ONLY AVAILABLE THROUGH CERTAIN
DEALERS.
3. DIFFERENCES IN SERVICES. THE SERVICES OFFERED TO SHAREHOLDERS OF EACH
CLASS SHALL BE SUBSTANTIALLY THE SAME, EXCEPT THAT THE RIGHTS OF ACCUMULATION,
LETTERS OF INTENT AND REINVESTMENT PRIVILEGES SHALL BE AVAILABLE ONLY TO HOLDERS
OF CLASS A SHARES. CLASS I PURCHASES AND REDEMPTIONS MAY ONLY BE MADE BY BANK
WIRE. CLASS T SHARES HAVE LIMITED SERVICES BY CALVERT, RATHER THE SERVICES TO
SHAREHOLDERS ARE PROVIDED BY THE DEALER OFFERING THE CLASS T SHARES.
4. DIFFERENCES IN DISTRIBUTION ARRANGEMENTS. CLASS A SHARES SHALL BE OFFERED
WITH A FRONT-END SALES CHARGE, AS SUCH TERM IS DEFINED IN RULE 2830 OF THE
CONDUCT RULES OF THE NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. THE AMOUNT
OF THE SALES CHARGE ON CLASS A SHARES IS SET FORTH AT EXHIBIT II. SALES OF CLASS
A SHARES OF $1 MILLION OR MORE SOLD AT NAV SHALL BE SUBJECT TO A 1.00%
CONTINGENT DEFERRED SALES CHARGE ("CDSC") IF THE SHARES ARE REDEEMED WITHIN ONE
YEAR OF PURCHASE. CLASS A SHARES SHALL BE SUBJECT TO A DISTRIBUTION PLAN
ADOPTED PURSUANT TO RULE 12B-1 UNDER THE 1940 ACT. THE AMOUNT OF THE
DISTRIBUTION PLAN EXPENSES FOR CLASS A SHARES, AS SET FORTH AT EXHIBIT II, ARE
USED TO PAY THE FUND'S PRINCIPAL UNDERWRITER FOR DISTRIBUTING AND OR PROVIDING
SERVICES TO THE FUND'S CLASS A SHARES. THIS AMOUNT INCLUDES A SERVICE FEE AT THE
ANNUAL RATE OF .25 OF 1% OF THE VALUE OF THE AVERAGE DAILY NET ASSETS OF CLASS
A.
CLASS B SHARES SHALL BE OFFERED WITH A CDSC AND NO FRONT-END SALES CHARGE.
THE AMOUNT OF THE CDSC ON CLASS B SHARES IS SET FORTH AT EXHIBIT II. CLASS B
SHARES SHALL BE SUBJECT TO A DISTRIBUTION PLAN ADOPTED PURSUANT TO RULE 12B-1
UNDER THE 1940 ACT. THE AMOUNT OF THE DISTRIBUTION PLAN EXPENSES FOR CLASS B
SHARES, AS SET FORTH AT EXHIBIT II, ARE USED TO PAY EACH FUND'S PRINCIPAL
UNDERWRITER FOR DISTRIBUTING AND OR PROVIDING SERVICES TO THE FUND'S CLASS B
SHARES. THIS AMOUNT INCLUDES A SERVICE FEE AT THE ANNUAL RATE OF .25 OF 1% OF
THE VALUE OF THE AVERAGE DAILY NET ASSETS OF CLASS B.
CLASS C SHARES SHALL NOT BE SUBJECT TO A FRONT-END SALES CHARGE, BUT SHALL
BE SUBJECT TO A 1.00% CDSC IF THE SHARES ARE REDEEMED WITHIN ONE YEAR OF
PURCHASE. CLASS C SHARES SHALL BE SUBJECT TO A DISTRIBUTION PLAN ADOPTED
PURSUANT TO RULE 12B-1 UNDER THE 1940 ACT. THE AMOUNT OF THE DISTRIBUTION PLAN
EXPENSES FOR CLASS C SHARES ARE SET FORTH AT EXHIBIT II. THE CLASS C
DISTRIBUTION PLAN PAYS EACH APPLICABLE FUND'S PRINCIPAL UNDERWRITER FOR
DISTRIBUTING AND OR PROVIDING SERVICES TO SUCH FUND'S CLASS C SHARES. THIS
AMOUNT INCLUDES A SERVICE FEE AT THE ANNUAL RATE OF .25 OF 1% OF THE VALUE OF
THE AVERAGE DAILY NET ASSETS OF CLASS C.
CLASS I AND CLASS O SHARES SHALL BE SUBJECT TO NEITHER A FRONT-END SALES
CHARGE, NOR A CDSC, NOR ARE THEY SUBJECT TO A DISTRIBUTION PLAN ADOPTED PURSUANT
TO RULE 12B-1 UNDER THE 1940 ACT.
CLASS T SHARES SHALL BE SUBJECT TO NEITHER A FRONT-END SALES CHARGE, NOR A CDSC,
BUT THEY ARE SUBJECT TO A DISTRIBUTION PLAN ADOPTED PURSUANT TO RULE 12B-1 UNDER
THE 1940 ACT.
5. EXPENSE ALLOCATION. THE FOLLOWING EXPENSES SHALL BE ALLOCATED, TO THE
EXTENT PRACTICABLE, ON A CLASS-BY-CLASS BASIS: (A) DISTRIBUTION PLAN FEES; (B)
TRANSFER AGENT AND SHAREHOLDER SERVICING FEES; (C) ADMINISTRATIVE SERVICE FEES;
AND (E) CERTAIN STATE REGISTRATION FEES.
6. CONVERSION FEATURES. CLASS B SHARES SHALL BE SUBJECT TO AN AUTOMATIC
CONVERSION FEATURE INTO CLASS A SHARES AFTER THEY HAVE BEEN HELD FOR THAT NUMBER
OF YEARS SET FORTH IN EXHIBIT II. CLASS A, CLASS C ,CLASS I, CLASS O, AND CLASS
T ARE NOT SUBJECT TO AUTOMATIC CONVERSION.
7. EXCHANGE PRIVILEGES. CLASS A SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A)
CLASS A SHARES OF OTHER FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP; (B)
SHARES OF FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP WHICH DO NOT HAVE
SEPARATE SHARE CLASSES; AND (C) SHARES OF CERTAIN OTHER FUNDS SPECIFIED FROM
TIME TO TIME.
CLASS B SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A) CLASS B SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP; (B) CLASS A SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP, IF THE FRONT-END LOAD ON THE
CLASS A SHARES IS PAID AT THE TIME OF THE EXCHANGE; AND (C) SHARES OF CERTAIN
OTHER FUNDS SPECIFIED FROM TIME TO TIME.
CLASS C SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A) CLASS C SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP AND CLASS B SHARES OF CALVERT
FIRST GOVERNMENT MONEY MARKET FUND; (B) CLASS A SHARES OF OTHER FUNDS MANAGED OR
ADMINISTERED BY THE CALVERT GROUP, IF THE FRONT-END LOAD ON THE CLASS A SHARES
IS PAID AT THE TIME OF THE EXCHANGE; AND (C) SHARES OF CERTAIN OTHER FUNDS
SPECIFIED FROM TIME TO TIME.
CLASS I SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A) CLASS I SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP; (B) CLASS A SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP, IF THE FRONT-END LOAD ON THE
CLASS A SHARES IS PAID AT THE TIME OF THE EXCHANGE; AND (C) SHARES OF CERTAIN
OTHER FUNDS SPECIFIED FROM TIME TO TIME.
CLASS T SHARES SHALL BE EXCHANGEABLE ONLY FOR: (A) CLASS T SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP; (B) CLASS A SHARES OF OTHER
FUNDS MANAGED OR ADMINISTERED BY THE CALVERT GROUP, IF THE FRONT-END LOAD ON THE
CLASS A SHARES IS PAID AT THE TIME OF THE EXCHANGE; AND (C) SHARES OF CERTAIN
OTHER FUNDS SPECIFIED FROM TIME TO TIME.
<PAGE>
EXHIBIT I
THE CALVERT FUND
CALVERT TAX-FREE RESERVES
CALVERT MUNICIPAL FUND, INC.
CALVERT SOCIAL INVESTMENT FUND
CALVERT WORLD VALUES FUND, INC.
CALVERT NEW WORLD FUND, INC.
FIRST VARIABLE RATE FUND
<PAGE>
EXHIBIT II
CALVERT SOCIAL INVESTMENT FUND (CSIF)
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1FEE
SALES CHARGE
CSIF BALANCED 4.75% 0.35% 1.00%
CSIF EQUITY 4.75% 0.35% 1.00%
CSIF MANAGED INDEX 4.75% 0.25% 1.00%
CSIF BOND 3.75% 0.35% 1.00%
BALANCED,
CLASS B EQUITY, AND MAXIMUM
CONTINGENT DEFERRED SALES CHARGE MANAGED INDEX BOND 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER
PURCHASE 5% 4% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 4% 3%
MORE THAN TWO YEARS BUT LESS THAN THREE 4% 2%
MORE THAN THREE YEARS BUT LESS THAN FOUR 3% 1%
MORE THAN FOUR YEARS BUT LESS THAN FIVE 2%
MORE THAN FIVE YEARS BUT LESS THAN SIX 1%
CONVERTS TO CLASS A AFTER 8 YRS. 6 YRS.
<PAGE>
EXHIBIT II
CALVERT TAX-FREE RESERVES (CTFR)
MAXIMUM MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C CLASS T
FRONT-END 12B-1 FEE 12B-1FEE 12B-1 FEE
SALES CHARGE
CTFR MONEY MARKET N/A N/A N/A 0.25%
CTFR LONG-TERM 3.75% 0.35% 1.00%
CTFR VERMONT 3.75% N/A 1.00%
LONG-TERM MAXIMUM
CLASS B AND CLASS B
CONTINGENT DEFERRED SALES CHARGE VERMONT 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER PURCHASE 4% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 3%
MORE THAN TWO YEARS BUT LESS THAN THREE 2%
MORE THAN THREE YEARS BUT LESS THAN FOUR 1%
CONVERTS TO CLASS A AFTER 6 YRS.
<PAGE>
EXHIBIT II
CALVERT MUNICIPAL FUND, INC. (CMF)
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1FEE
SALES CHARGE
NATIONAL INTERMEDIATE 2.75% 0.25% N/A
CALIFORNIA INTERMEDIATE 2.75% 0.25% N/A
MARYLAND INTERMEDIATE 2.75% 0.25% N/A
VIRGINIA INTERMEDIATE 2.75% 0.25% N/A
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE CMF 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER PURCHASE 3% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 2%
MORE THAN TWO YEARS BUT LESS THAN THREE 2%
MORE THAN THREE YEARS BUT LESS THAN FOUR 1%
CONVERTS TO CLASS A AFTER 4 YRS.
<PAGE>
EXHIBIT II
THE CALVERT FUND
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1 FEE
SALES CHARGE
NEW VISION SMALL CAP 4.75% 0.25% 1.00%
CALVERT INCOME FUND 3.75% 0.50% 1.00%
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE NEW VISION INCOME 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER
PURCHASE 5% 4% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 4% 3%
MORE THAN TWO YEARS BUT LESS THAN THREE 4% 2%
MORE THAN THREE YEARS BUT LESS THAN FOUR 3% 1%
MORE THAN FOUR YEARS BUT LESS THAN FIVE 2%
MORE THAN FIVE YEARS BUT LESS THAN SIX 1%
CONVERTS TO CLASS A AFTER 8 YRS. 6 YRS.
<PAGE>
EXHIBIT II
CALVERT WORLD VALUES FUND, INC. (CWVF)
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1FEE
SALES CHARGE
INTERNATIONAL EQUITY 4.75% 0.35% 1.00%
CAPITAL ACCUMULATION 4.75% 0.35% 1.00%
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE CWVF 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER PURCHASE 5% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 4%
MORE THAN TWO YEARS BUT LESS THAN THREE 4%
MORE THAN THREE YEARS BUT LESS THAN FOUR 3%
MORE THAN FOUR YEARS BUT LESS THAN FIVE 2%
MORE THAN FIVE YEARS BUT LESS THAN SIX 1%
CONVERTS TO CLASS A AFTER 8 YRS.
<PAGE>
EXHIBIT II
CALVERT NEW WORLD FUND, INC. (CNWF)
MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C
FRONT-END 12B-1 FEE 12B-1 FEE
SALES CHARGE
CALVERT NEW AFRICA 4.75% 0.25% 1.00%
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE CNWF 12B-1 FEE
SHARES HELD LESS THAN ONE YEAR AFTER PURCHASE 5% 1.00%
MORE THAN ONE YEAR BUT LESS THAN TWO 4%
MORE THAN TWO YEARS BUT LESS THAN THREE 4%
MORE THAN THREE YEARS BUT LESS THAN FOUR 3%
MORE THAN FOUR YEARS BUT LESS THAN FIVE 2%
MORE THAN FIVE YEARS BUT LESS THAN SIX 1%
CONVERTS TO CLASS A AFTER 8 YRS.
<PAGE>
EXHIBIT II
FIRST VARIABLE RATE FUND (FVRF)
MAXIMUM MAXIMUM MAXIMUM MAXIMUM
CLASS A CLASS A CLASS C CLASS T
FRONT-END 12B-1 FEE 12B-1 FEE 12B-1 FEE
SALES CHARGE
FIRST GOVERNMENT
MONEY MARKET N/A N/A 1.00% 0.25%
MAXIMUM
CLASS B CLASS B
CONTINGENT DEFERRED SALES CHARGE 12B-1 FEE
CDSC OF ORIGINAL CLASS B FUND PURCHASED 1.00%
IS APPLIED UPON REDEMPTION FROM CLASS B
OF CALVERT FIRST GOVERNMENT MONEY MARKET FUND.
CONVERSION PERIOD OF ORIGINAL CLASS B FUND PURCHASED IS APPLIED.
E:\PROCEDURES\FALL FINAL 1999 CODE of ETHICS REVISIONS.doc
REVISED DECEMBER 1999
CODE OF ETHICS AND INSIDER TRADING POLICY AND PROCEDURES
CALVERT ASSET MANAGEMENT COMPANY, INC.
CALVERT-SLOAN, ADVISERS, L.L.C.
CALVERT DISTRIBUTORS, INC.
FIRST VARIABLE RATE FUND FOR GOVERNMENT INCOME
CALVERT TAX-FREE RESERVES
CALVERT SOCIAL INVESTMENT FUND
THE CALVERT FUND
CALVERT MUNICIPAL FUND INC.
CALVERT WORLD VALUES FUND, INC.
CALVERT VARIABLE SERIES, INC.
CALVERT CASH RESERVES
CALVERT NEW WORLD FUND, INC.
THE CODE OF ETHICS AND INSIDER TRADING POLICIES AND PROCEDURES ARE DESIGNED TO
PROTECT THE PUBLIC FROM ABUSIVE TRADING PRACTICES AND TO MAINTAIN ETHICAL
STANDARDS FOR ACCESS PERSONS WHEN DEALING WITH THE PUBLIC. ACTIVE LEADERSHIP
AND INTEGRITY OF MANAGEMENT DICTATES THESE PRINCIPLES BE DILIGENTLY IMPLEMENTED
AND MONITORED. THE CODE OF ETHICS IMPOSES THE FOLLOWING GENERAL OBLIGATIONS:
- - INFORMATION CONCERNING THE PURCHASE AND SALE OF SECURITIES LEARNED IN
CONNECTION WITH AN ACCESS PERSON'S SERVICE, IS PROPERTY OF THE FUND, ADVISER OR
EMPLOYER AND MAY NOT BE USED FOR PERSONAL BENEFIT.
- - FIDUCIARY DUTIES MANDATE SUITABLE INVESTMENT OPPORTUNITIES BE PRESENTED
FIRST TO THE FUND, ADVISER, OR EMPLOYER AND SHOULD NOT BE EXERCISED EVEN AFTER
FULL DISCLOSURE FOR PERSONAL BENEFIT.
- - MATERIAL INSIDE INFORMATION MUST BE KEPT CONFIDENTIAL AND RESTRICTS
TRADING OF SECURITIES.
- - FRONT RUNNING, MARKET MANIPULATION AND DECEPTIVE TRADING PRACTICES ARE
ABUSIVE TECHNIQUES PROHIBITED BY THESE PROCEDURES AND MAY RESULT, IN FINES,
TERMINATION OR LEGAL ACTIONS BY THIRD PARTIES.
- - ACCESS PERSONS MAY NOT PURCHASE IPOS DUE TO THE HIGH POTENTIAL FOR ABUSIVE
TRADING PRACTICES.
- - ACCESS PERSONS MUST NOT TRADE IN SECURITIES WITH KNOWLEDGE THAT THE FUND,
ADVISER, SUB-ADVISER OR EMPLOYER IS CONSIDERING TO MAKE A SIMILAR PURCHASE OR
SALE OF THE SAME SECURITIES.
- - ACCESS PERSONS SHALL NOT ENGAGE IN TRANSACTIONS THAT CREATE A CONFLICT OF
INTEREST INCLUDING BUT NOT LIMITED TO INAPPROPRIATELY MAKING DECISIONS ON BEHALF
OF A FUND REGARDING SECURITIES OR PRIVATE PLACEMENTS PERSONALLY OWNED BY THE
ACCESS PERSON.
CODE OF ETHICS GUIDELINES
THE LEGAL DEFINITION OF A SECURITY IS VERY BROAD AND INCORPORATES THE PURCHASE
AND SALE OF PUBLIC, PRIVATE, REGISTERED AND EXEMPT FROM REGISTRATION SECURITIES,
AS WELL AS DERIVATIVES. TO EASE THE BURDEN OF FOLLOWING THESE GUIDELINES, THE
CODE OF ETHICS REPORTING AND DISCLOSURE OBLIGATIONS AS WELL AS PRECLEARANCE
POLICIES DO NOT APPLY TO THE FOLLOWING:
1) THE SALE AND PURCHASE OF OPEN-END MUTUAL FUNDS INCLUDING MONEY MARKET
FUNDS.
2) THE SALE AND PURCHASE OF U.S. GOVERNMENT, U.S. GOVERNMENT AGENCY
SECURITIES AND MUNICIPAL SECURITIES IN TRADE AMOUNTS OF LESS THAN $20,000.
3) ACQUISITIONS THROUGH STOCK DIVIDEND PLANS, SPIN-OFFS OR OTHER
DISTRIBUTIONS APPLIED TO ALL HOLDERS OF THE SAME CLASS OF SECURITIES.
4) ACQUISITIONS THROUGH THE EXERCISE OF RIGHTS ISSUED PRO RATA TO ALL
HOLDERS.
5) ACQUISITIONS THROUGH GIFTS OR BEQUESTS.
6) TRADES IN ANY S & P 500 COMPANY OF 500 SHARES OR LESS.
7) TRADES IN REITS AND VARIABLE INSURANCE PRODUCTS.
A. DISCLOSURE OF HOLDINGS & DUPLICATE STATEMENTS AND CONFIRMATIONS FOR THE
PURCHASE AND SALE OF SECURITIES OR OPTIONS ON SECURITIES BY ACCESS PERSONS.
TO ASSURE THAT ABUSIVE OR UNETHICAL TRADING PRACTICES ARE NOT CONDUCTED BY
ACCESS PERSONS, ACCESS PERSONS ARE REQUIRED TO DISCLOSE PERSONAL SECURITIES
HOLDINGS INCLUDING PRIVATE PLACEMENT HOLDINGS AND SEND DUPLICATE BROKERAGE AND
CONFIRMATION STATEMENTS TO THE ATTENTION OF THE COMPLIANCE OFFICER AT CALVERT
GROUP, LTD., 4550 MONTGOMERY AVENUE, BETHESDA, MD 20814. PERSONAL SECURITIES
HOLDINGS MUST BE DISCLOSED AT THE POINT OF HIRE AND UPON ANNUAL ACKNOWLEDGEMENT
OF THESE PROCEDURES. DUPLICATE STATEMENTS AND CONFIRMATIONS ARE REQUIRED FOR
ANY ACCESS PERSON'S ACCOUNT OR AN ACCOUNT OVER WHICH THE ACCESS PERSON HAS
EITHER CUSTODY, CONTROL OR BENEFICIAL OWNERSHIP. ACCOUNT STATEMENTS FOR
IMMEDIATE FAMILY MEMBERS ARE ALSO REQUIRED."BENEFICIAL OWNERSHIP" SHALL HAVE THE
SAME MEANING AS IN RULE 16A-1(A)(2) UNDER THE SECURITIES EXCHANGE ACT OF 1934.
GENERALLY, A PERSON HAS A BENEFICIAL OWNERSHIP IN A SECURITY IF HE OR SHE,
DIRECTLY OR INDIRECTLY, THROUGH ANY CONTRACT, ARRANGEMENT, UNDERSTANDING,
RELATIONSHIP OR OTHERWISE, HAS OR SHARES A DIRECT OR INDIRECT PECUNIARY INTEREST
IN THE SECURITY, [HAS OR SHARES VOTING POWER (THE POWER TO VOTE OR DIRECT THE
VOTING OF THE SECURITY) OR INVESTMENT POWER (THE POWER TO DISPOSE OF OR DIRECT
THE DISPOSITION OF THE SECURITY).] BENEFICIAL OWNERSHIP" INCLUDES ACCOUNTS OF
A SPOUSE, MINOR CHILDREN AND RELATIVES RESIDENT IN THE ACCESS PERSON'S HOME, AS
WELL AS ACCOUNTS OF ANOTHER PERSON IF BY REASON OF ANY CONTRACT, UNDERSTANDING,
RELATIONSHIP, AGREEMENT OR OTHER ARRANGEMENT THE ACCESS PERSON OBTAINS THEREFROM
BENEFITS SUBSTANTIALLY EQUIVALENT TO THOSE OF OWNERSHIP, E.G., AS TRUSTEE,
SETTLOR, BENEFICIARY, POWER OF ATTORNEY.
ALL INFORMATION PROVIDED TO THE COMPLIANCE OFFICER WILL BE CONFIDENTIAL.
STATEMENTS AND CONFIRMATIONS WILL BE REVIEWED BY THE COMPLIANCE OFFICER OR HIS
OR HER DESIGNEE(S) FOR ANY PATTERN OF TRANSACTIONS INVOLVING PARALLEL
TRANSACTIONS (PORTFOLIO AND INDIVIDUAL BOTH BUYING OR BOTH SELLING THE SAME
SECURITY) GENERALLY WITHIN A 15 DAY PERIOD BEFORE OR AFTER THE TRANSACTION DATE.
AMONG THE FACTORS THAT WILL BE CONSIDERED IN THE ANALYSIS OF WHETHER ANY
PROVISION OF THE CODE HAS BEEN VIOLATED WILL BE THE NUMBER AND DOLLAR VALUE OF
THE TRANSACTIONS, THE TRADING VOLUME OF THE SECURITIES IN QUESTION, THE LENGTH
OF TIME THE SECURITY IS HELD BY THE INDIVIDUAL AND THE INDIVIDUAL'S INVOLVEMENT
IN THE INVESTMENT PROCESS. WHILE THE FOCUS OF THIS PROCEDURE OF THE CODE IS ON
"PATTERNS", IT IS IMPORTANT TO NOTE THAT A VIOLATION COULD RESULT FROM A SINGLE
TRANSACTION IF THE CIRCUMSTANCES WARRANT A FINDING THAT THE UNDERLYING
PRINCIPLES OF FAIR DEALING HAVE BEEN VIOLATED. THE COMPLIANCE OFFICER OR HIS OR
HER DESIGNEE(S), WILL SIMILARLY REVIEW THE PERSONAL SECURITIES HOLDINGS REPORTS
PROVIDED TO THE COMPLIANCE OFFICER.
B. PRECLEARANCE POLICY
BECAUSE OF THE SENSITIVE NATURE OF SECURITIES TRADING, THE COMPLIANCE OFFICER
WILL NOTIFY CERTAIN ACCESS PERSONS AND INVESTMENT PERSONNEL ABOUT THE NEED TO
FOLLOW A PRECLEARANCE POLICY. ATTACHMENT A WILL BE USED BY DESIGNATED ACCESS
PERSONS SEEKING PRECLEARANCE FOR SECURITIES TRADES INCLUDING PRECLEARANCE BY
INVESTMENT PERSONNEL FOR PRIVATE PLACEMENT TRANSACTIONS. THOSE INDIVIDUALS
SUBJECT TO THE PRECLEARANCE POLICY WILL NOT BE EXEMPT FROM THE GENERAL
PROHIBITIONS LISTED IN THE CODE OR THE POLICIES AND PROCEDURES DESIGNED TO
PREVENT INSIDER TRADING. THE COMPLIANCE OFFICER WILL REVIEW WITH THE
DIRECTORS/TRUSTEES PERIODICALLY A LIST OF PERSONS WHO ARE SUBJECT TO THE
PRECLEARANCE POLICY AND THE CRITERIA USED TO SELECT SUCH INDIVIDUALS.
THE PRECLEARANCE AUTHORIZATION SHALL BE VALID FOR A PERIOD OF THREE BUSINESS
DAYS UNLESS A FURTHER EXTENSION OF TIME IS INDICATED BY THE COMPLIANCE OFFICER.
<PAGE>
C. NOTIFICATION OF REPORTING OBLIGATION - ANNUAL CERTIFICATION TO BOARD
MEMBERS OF THE LEGAL DEPARTMENT WILL BE RESPONSIBLE FOR NOTIFYING ALL ACCESS
PERSONS ABOUT THE DUTY TO FORWARD TRADE CONFIRMATIONS TO THE COMPLIANCE OFFICER.
ONCE INFORMED OF THE DUTY TO FORWARD TRADE CONFIRMATIONS, AN ACCESS PERSON HAS A
CONTINUING OBLIGATION TO PROVIDE SUCH CONFIRMS, IN A TIMELY MANNER, UNTIL SUCH
TIME AS NOTIFIED OTHERWISE. INFORMATION COMPILED IN COMPLIANCE OFFICER REPORTS
IS AVAILABLE FOR INSPECTION BY THE SEC OR OTHER REGULATORY AUTHORITIES AT ANY
TIME DURING THE FIVE-YEAR PERIOD FOLLOWING THE END OF THE FISCAL YEAR IN WHICH
EACH REPORT IS MADE.
ANNUALLY, THE LEGAL DEPARTMENT WILL PREPARE A WRITTEN " ISSUES AND CERTIFICATION
REPORT" FOR THE BOARD THAT:
- - DESCRIBES ANY ISSUES THAT HAVE ARISEN UNDER THIS CODE OF ETHICS OR ITS
PROCEDURES SINCE THE LAST REPORT, INCLUDING INFORMATION ABOUT MATERIAL CODE OF
ETHICS OR PROCEDURE VIOLATIONS AND SANCTIONS IMPOSED IN RESPONSE TO THOSE
VIOLATIONS; AND
- - CERTIFIES TO THE BOARD THAT THE ADOPTED CODE OF ETHICS AND ITS PROCEDURES
PROVIDE REASONABLY NECESSARY MEASURES TO PREVENT INVESTMENT PERSONNEL FROM
VIOLATING THE CODE AND APPLICABLE PROCEDURES.
THE CODE OF ETHICS AND ANY MATERIAL CHANGES TO ITS PROVISIONS AND/OR PROCEDURES
MUST BE APPROVED BY A MAJORITY OF THE BOARD, INCLUDING A MAJORITY OF THE
INDEPENDENT DIRECTORS.
D. RESTRICTIONS AS TO GIFTS, ENTERTAINMENT, FAVORS AND DIRECTORSHIPS
1. GIFTS, ENTERTAINMENT AND FAVORS. ACCESS PERSONS MUST NOT MAKE BUSINESS
DECISIONS THAT ARE INFLUENCED OR APPEAR TO BE INFLUENCED BY GIVING OR ACCEPTING
GIFTS, ENTERTAINMENT OR FAVORS. ACCESS PERSONS ARE PROHIBITED FROM RECEIVING ANY
GIFT OR OTHER THING OF MORE THAN DE MINIMIS VALUE FROM ANY PERSON OR ENTITY THAT
DOES BUSINESS WITH OR ON BEHALF OF CALVERT ASSET MANAGEMENT COMPANY,
CALVERT-SLOAN ADVISERS, OR CALVERT DISTRIBUTORS INC. INVITATIONS TO AN
OCCASIONAL MEAL, SPORTING EVENT OR OTHER SIMILAR ACTIVITY WILL NOT BE DEEMED TO
VIOLATE THIS RESTRICTION UNLESS THE OCCURRENCE OF SUCH EVENTS IS SO FREQUENT OR
LAVISH AS TO SUGGEST AN IMPROPRIETY. THE PRESIDENT/CEO OF CALVERT GROUP MUST
APPROVE THE ACCEPTANCE OF ANY GIFT, ENTERTAINMENT OR FAVOR WITH A PER GIFT VALUE
OF MORE THAN $100.00.
2. DIRECTORSHIPS.
(A) GENERAL RULE:
NO ACCESS PERSON, OTHER THAN A DISINTERESTED FUND DIRECTOR/TRUSTEE, MAY SERVE ON
THE BOARD OF DIRECTORS OF A PUBLICLY-HELD OR PRIVATE FOR-PROFIT COMPANY ABSENT
PRIOR WRITTEN APPROVAL FROM THE CALVERT GROUP, LTD. BOARD OF DIRECTORS AND/OR
THE APPLICABLE FUND'S BOARD OF DIRECTORS/TRUSTEES. DISINTERESTED
DIRECTORS/TRUSTEES MUST PROVIDE ANNUAL DISCLOSURE ABOUT DIRECTORSHIPS AND OTHER
POTENTIAL CONFLICTS OF INTEREST.
(B) APPLICATIONS FOR APPROVAL:
APPLICATIONS FOR APPROVAL TO SERVE AS A DIRECTOR OF A PUBLICLY TRADED OR PRIVATE
FOR-PROFIT COMPANY SHALL BE DIRECTED, IN WRITING, TO THE OFFICE OF THE GENERAL
COUNSEL FOR PROMPT FORWARDING TO THE CALVERT GROUP, LTD. BOARD OF DIRECTORS AND
THE RESPECTIVE FUND'S BOARD OF DIRECTORS/TRUSTEES. AUTHORIZATION MAY BE GRANTED
WHERE IT IS DETERMINED THAT SUCH BOARD SERVICE WOULD BE CONSISTENT WITH THE
INTERESTS OF THE FUNDS AND THEIR SHAREHOLDERS.
(C) SUBSEQUENT INVESTMENT MANAGEMENT ACTIVITIES:
WHENEVER AN ACCESS PERSON IS GRANTED APPROVAL TO SERVE AS A DIRECTOR OF A
PUBLICLY-TRADED OR PRIVATE FOR-PROFIT COMPANY, HE OR SHE SHALL PERSONALLY
REFRAIN FROM PARTICIPATING IN ANY DELIBERATION, RECOMMENDATIONS, OR
CONSIDERATIONS OF WHETHER OR NOT TO RECOMMEND THAT ANY SECURITIES OF THAT
COMPANY BE PURCHASED, SOLD OR RETAINED IN THE INVESTMENT PORTFOLIO OF ANY
CALVERT GROUP FUND OR CALVERT ASSET MANAGEMENT COMPANY MANAGED ACCOUNT.
E. ENFORCEMENT AND SANCTIONS
EACH VIOLATION OF THIS CODE SHALL BE REPORTED TO THE BOARD OF
DIRECTORS/TRUSTEES OF THE APPLICABLE FUND OR ENTITY AT OR BEFORE THE NEXT
REGULAR MEETING OF THE BOARD. UPON DISCOVERING OR OTHERWISE BEING INFORMED OF A
VIOLATION OF THIS CODE, THE BOARD OF DIRECTORS/TRUSTEES MAY TAKE ANY ACTION IT
DEEMS APPROPRIATE INCLUDING, INTER ALIA, A LETTER OF CENSURE, TERMINATION WITH
RESPECT TO PORTFOLIO MANAGEMENT DUTIES REGARDING THE FUND, OR RECOMMENDING TO
THE OPERATING COMPANIES, SUSPENSION OR REMOVAL FROM OFFICE, IMPOSITION OF A FINE
OR TERMINATION OF EMPLOYMENT OF THE VIOLATOR.
F. RECORDKEEPING
EACH ENTITY SHALL MAINTAIN SUCH LISTS, RECORDS, AND REPORTS AS ARE REQUIRED
BY LAW.
<PAGE>
G. INSIDER TRADING POLICY AND PROCEDURES
1. SCOPE OF POLICY STATEMENT
THIS POLICY STATEMENT IS DRAFTED BROADLY; IT WILL BE APPLIED AND
INTERPRETED IN A SIMILAR MANNER. THIS POLICY STATEMENT APPLIES TO SECURITIES
TRADING AND INFORMATION HANDLING BY ALL ACCESS PERSONS.
THE LAW OF INSIDER TRADING IS UNSETTLED; AN INDIVIDUAL LEGITIMATELY MAY BE
UNCERTAIN ABOUT THE APPLICATION OF THE POLICY STATEMENT IN A PARTICULAR
CIRCUMSTANCE. OFTEN, A SINGLE QUESTION CAN FORESTALL DISCIPLINARY ACTION OR
COMPLEX LEGAL PROBLEMS. YOU SHOULD DIRECT ANY QUESTIONS RELATING TO THE POLICY
STATEMENT TO AN ATTORNEY IN THE CALVERT GROUP LEGAL DEPARTMENT. YOU MUST ALSO
NOTIFY AN ATTORNEY IN THE LEGAL DEPARTMENT IF YOU HAVE ANY REASON TO BELIEVE
THAT A VIOLATION OF THE POLICY STATEMENT HAS OCCURRED OR IS ABOUT TO OCCUR.
2. POLICY STATEMENT ON INSIDER TRADING
CALVERT FORBIDS ANY OFFICER, DIRECTOR\TRUSTEE OR EMPLOYEE FROM TRADING,
EITHER PERSONALLY OR ON BEHALF OF OTHERS, INCLUDING MUTUAL FUNDS MANAGED BY
CALVERT, ON MATERIAL NONPUBLIC INFORMATION OR COMMUNICATING MATERIAL NONPUBLIC
INFORMATION TO OTHERS IN VIOLATION OF THE LAW. THIS CONDUCT IS FREQUENTLY
REFERRED TO AS "INSIDER TRADING." CALVERT'S POLICY APPLIES TO EACH FUND, ITS
INVESTMENT ADVISOR, ITS PRINCIPAL UNDERWRITER, AND EVERY OFFICER, DIRECTOR AND
EMPLOYEE THEREOF, AND EXTENDS TO ACTIVITIES WITHIN AND OUTSIDE THEIR DUTIES AT
CALVERT. EVERY OFFICER, DIRECTOR, TRUSTEE AND EMPLOYEE MUST READ AND RETAIN THIS
POLICY STATEMENT. ANY QUESTIONS REGARDING CALVERT'S POLICY AND PROCEDURES SHOULD
BE REFERRED TO AN ATTORNEY IN THE CALVERT LEGAL DEPARTMENT. AN OFFICER,
DIRECTOR, TRUSTEE OR EMPLOYEE MUST NOTIFY AN ATTORNEY IN THE LEGAL DEPARTMENT
IMMEDIATELY IF THEY HAVE ANY REASON TO BELIEVE THAT A VIOLATION OF THE POLICY
STATEMENT HAS OCCURRED OR IS ABOUT TO OCCUR.
THE TERM "INSIDER TRADING" IS NOT DEFINED IN THE FEDERAL SECURITIES LAWS,
BUT GENERALLY IS USED TO REFER TO THE USE OF MATERIAL NONPUBLIC INFORMATION TO
TRADE IN SECURITIES (WHETHER OR NOT ONE IS AN "INSIDER") OR TO COMMUNICATIONS OF
MATERIAL NONPUBLIC INFORMATION TO OTHERS.
WHILE THE LAW CONCERNING INSIDER TRADING IS NOT STATIC, IT IS GENERALLY
UNDERSTOOD THAT THE LAW PROHIBITS:
A) TRADING BY AN INSIDER, WHILE IN POSSESSION OF MATERIAL
NONPUBLIC INFORMATION; OR
B) TRADING BY A NON-INSIDER, WHILE IN POSSESSION OF MATERIAL NONPUBLIC
INFORMATION, WHERE THE INFORMATION EITHER WAS DISCLOSED TO THE NON-INSIDER IN
VIOLATION OF AN INSIDER'S DUTY TO KEEP IT CONFIDENTIAL OR WAS MISAPPROPRIATED;
OR
C) COMMUNICATING MATERIAL NONPUBLIC INFORMATION TO OTHERS.
I. WHO IS AN INSIDER?
THE CONCEPT OF "INSIDER" IS BROAD. IT INCLUDES OFFICERS, DIRECTORS,
TRUSTEES AND EMPLOYEES OF A COMPANY. IN ADDITION, A PERSON CAN BE A "TEMPORARY
INSIDER" IF HE OR SHE ENTERS INTO A SPECIAL CONFIDENTIAL RELATIONSHIP IN THE
CONDUCT OF A COMPANY'S AFFAIRS AND AS A RESULT IS GIVEN ACCESS TO INFORMATION
SOLELY FOR THE COMPANY'S PURPOSES. A TEMPORARY INSIDER CAN INCLUDE, AMONG
OTHERS, A COMPANY'S ATTORNEYS, ACCOUNTANTS, CONSULTANTS, BANK LENDING OFFICERS,
AND THE EMPLOYEES OF SUCH ORGANIZATIONS. IN ADDITION, CALVERT MAY BECOME A
TEMPORARY INSIDER OF A COMPANY IT ADVISES OR FOR WHICH IT PERFORMS OTHER
SERVICES. ACCORDING TO THE SUPREME COURT, THE COMPANY MUST EXPECT THE OUTSIDER
TO KEEP THE DISCLOSED NONPUBLIC INFORMATION CONFIDENTIAL AND THE RELATIONSHIP
MUST AT LEAST IMPLY SUCH A DUTY BEFORE THE OUTSIDER WILL BE CONSIDERED AN
INSIDER.
II. WHAT IS MATERIAL INFORMATION?
TRADING ON INSIDE INFORMATION IS NOT A BASIS FOR LIABILITY UNLESS THE
INFORMATION IS MATERIAL. "MATERIAL INFORMATION" GENERALLY IS DEFINED AS
INFORMATION FOR WHICH THERE IS A SUBSTANTIAL LIKELIHOOD THAT A REASONABLE
INVESTOR WOULD CONSIDER IT IMPORTANT IN MAKING HIS OR HER INVESTMENT DECISIONS,
OR INFORMATION THAT IS REASONABLY CERTAIN TO HAVE A SUBSTANTIAL EFFECT ON THE
PRICE OF A COMPANY'S SECURITIES. INFORMATION THAT OFFICERS, DIRECTORS AND
EMPLOYEES SHOULD CONSIDER MATERIAL INCLUDES, BUT IS NOT LIMITED TO: DIVIDEND
CHANGES, EARNINGS ESTIMATES, CHANGES IN PREVIOUSLY RELEASED EARNINGS ESTIMATES,
SIGNIFICANT MERGER OR ACQUISITION PROPOSALS OR AGREEMENTS, MAJOR LITIGATION,
LIQUIDATION PROBLEMS, AND EXTRAORDINARY MANAGEMENT DEVELOPMENTS.
MATERIAL INFORMATION ALSO MAY RELATE TO THE MARKET FOR A COMPANY'S SECURITIES.
INFORMATION ABOUT A SIGNIFICANT ORDER TO PURCHASE OR SELL SECURITIES MAY, IN
SOME CONTEXTS, BE DEEMED MATERIAL. SIMILARLY, PREPUBLICATION INFORMATION
REGARDING REPORTS IN THE FINANCIAL PRESS ALSO MAY BE DEEMED MATERIAL. FOR
EXAMPLE, THE SUPREME COURT UPHELD THE CRIMINAL CONVICTIONS OF INSIDER TRADING
DEFENDANTS WHO CAPITALIZED ON PREPUBLICATION INFORMATION ABOUT THE WALL STREET
JOURNAL'S HEARD ON THE STREET COLUMN.
IT IS CONCEIVABLE THAT SIMILAR ADVANCE REPORTS OF SECURITIES TO BE BOUGHT OR
SOLD BY A LARGE, INFLUENTIAL INSTITUTIONAL INVESTOR, SUCH AS A FUND, MAY BE
DEEMED MATERIAL TO AN INVESTMENT IN THOSE PORTFOLIO SECURITIES. ADVANCE
KNOWLEDGE OF IMPORTANT PROPOSED GOVERNMENT REGULATION, FOR EXAMPLE, COULD ALSO
BE DEEMED MATERIAL INFORMATION REGARDING COMPANIES IN THE REGULATED INDUSTRY.
III. WHAT IS NONPUBLIC INFORMATION?
INFORMATION IS NONPUBLIC UNTIL IT HAS BEEN DISSEMINATED BROADLY TO INVESTORS IN
THE MARKET PLACE. TANGIBLE EVIDENCE OF SUCH DISSEMINATION IS THE BEST INDICATION
THAT THE INFORMATION IS PUBLIC. FOR EXAMPLE, INFORMATION IS PUBLIC AFTER IT HAS
BECOME AVAILABLE TO THE GENERAL PUBLIC THROUGH A PUBLIC FILING WITH THE SEC OR
SOME OTHER GOVERNMENTAL AGENCY, THE DOW JONES "TAPE" OR THE WALL STREET JOURNAL
OR SOME OTHER PUBLICATION OF GENERAL CIRCULATION, AND AFTER SUFFICIENT TIME HAS
PASSED SO THAT THE INFORMATION HAS BEEN DISSEMINATED WIDELY
IV. PENALTIES FOR INSIDER TRADING
PENALTIES FOR TRADING ON OR COMMUNICATING MATERIAL NONPUBLIC
INFORMATION ARE SEVERE, BOTH FOR INDIVIDUALS INVOLVED IN SUCH UNLAWFUL CONDUCT
AND THEIR EMPLOYERS. A PERSON CAN BE SUBJECT TO SOME OR ALL OF THE PENALTIES
BELOW EVEN IF HE OR SHE DOES NOT PERSONALLY BENEFIT FROM THE VIOLATION.
PENALTIES INCLUDE:
- - CIVIL INJUNCTIONS
- - TREBLE DAMAGES
- - DISGORGEMENT OF PROFITS
- - JAIL SENTENCES
- - FINES FOR THE PERSON WHO COMMITTED THE VIOLATION OF UP TO THREE TIMES THE
PROFIT GAINED OR LOSS AVOIDED, WHETHER OR NOT THE PERSON ACTUALLY BENEFITED, AND
- - FINES FOR THE EMPLOYER OR OTHER CONTROLLING PERSON OF UP TO THE GREATER OF
$1,000,000 OR THREE TIMES THE AMOUNT OF THE PROFIT GAINED OR LOSS AVOIDED.
IN ADDITION, ANY VIOLATION OF THIS POLICY STATEMENT CAN BE EXPECTED TO
RESULT IN SERIOUS SANCTIONS BY CALVERT, UP TO AND INCLUDING DISMISSAL OF THE
PERSONS INVOLVED.
<PAGE>
3. IDENTIFYING INSIDE INFORMATION
BEFORE A CALVERT EMPLOYEE EXECUTES ANY TRADE FOR HIM/HERSELF OR ON
BEHALF OF OTHERS, INCLUDING INVESTMENT COMPANIES MANAGED BY CALVERT, IN THE
SECURITIES OF A COMPANY ABOUT WHICH THE EMPLOYEE MAY HAVE POTENTIAL INSIDE
INFORMATION, THE FOLLOWING QUESTIONS SHOULD BE CONSIDERED:
A) IS THE INFORMATION MATERIAL? IS THIS INFORMATION THAT AN INVESTOR
WOULD CONSIDER IMPORTANT IN MAKING HIS OR HER INVESTMENT DECISIONS? IS THIS
INFORMATION THAT WOULD SUBSTANTIALLY AFFECT THE MARKET PRICE OF THE SECURITIES
IF GENERALLY DISCLOSED?
B) IS THE INFORMATION NONPUBLIC? HOW WAS THE INFORMATION OBTAINED? TO
WHOM HAS THIS INFORMATION BEEN PROVIDED? HAS THE INFORMATION BEEN DISSEMINATED
BROADLY TO INVESTORS IN THE MARKETPLACE BY BEING PUBLISHED IN REUTERS, THE WALL
STREET JOURNAL OR OTHER PUBLICATIONS OF GENERAL CIRCULATION? IS IT ON FILE WITH
THE SECURITIES AND EXCHANGE COMMISSION?
IF, AFTER CONSIDERATION OF THE ABOVE, IT IS FOUND THAT THE INFORMATION IS
MATERIAL AND NONPUBLIC, OR IF THERE ARE QUESTIONS AS TO WHETHER THE INFORMATION
IS MATERIAL AND NONPUBLIC, THE FOLLOWING STEPS SHOULD BE TAKEN:
A) REPORT THE MATTER IMMEDIATELY TO THE COMPLIANCE OFFICER OR AN
ATTORNEY IN THE LEGAL DEPARTMENT.
B) THE SECURITIES SHOULD NOT BE PURCHASED OR SOLD BY THE OFFICER,
DIRECTOR, TRUSTEE OR EMPLOYEE FOR HIM/HERSELF OR ON BEHALF OF OTHERS, INCLUDING
INVESTMENT COMPANIES MANAGED BY CALVERT.
C) THE INFORMATION SHOULD NOT BE COMMUNICATED INSIDE OR OUTSIDE
CALVERT, OTHER THAN TO THE LEGAL DEPARTMENT.
D) AFTER THE ISSUE HAS BEEN REVIEWED, THE LEGAL DEPARTMENT WILL
INSTRUCT THE OFFICER, DIRECTOR, OR EMPLOYEE AS TO WHETHER TO CONTINUE THE
PROHIBITIONS AGAINST TRADING AND COMMUNICATION, OR ALLOWING THE TRADE AND
COMMUNICATION OF THE INFORMATION.
4. CONTACTS WITH PUBLIC COMPANIES.
FOR CALVERT, CONTACTS WITH PUBLIC COMPANIES REPRESENT AN IMPORTANT PART OF
OUR RESEARCH EFFORTS. CALVERT MAY MAKE INVESTMENT DECISIONS ON THE BASIS OF THE
FIRM'S CONCLUSIONS FORMED THROUGH SUCH CONTACTS AND ANALYSIS OF
PUBLICLY-AVAILABLE INFORMATION. DIFFICULT LEGAL ISSUES ARISE, HOWEVER, WHEN, IN
THE COURSE OF THESE CONTACTS, A CALVERT EMPLOYEE OR OTHER PERSON SUBJECT TO THIS
POLICY STATEMENT BECOMES AWARE OF MATERIAL, NONPUBLIC INFORMATION. THIS COULD
HAPPEN, FOR EXAMPLE, IF A COMPANY'S CHIEF FINANCIAL OFFICER PREMATURELY
DISCLOSES QUARTERLY RESULTS TO AN ANALYST OR AN INVESTOR RELATION REPRESENTATIVE
MAKES A SELECTIVE DISCLOSURE OF ADVERSE NEWS TO A HANDFUL OF INVESTORS. IN SUCH
SITUATION, CALVERT MUST MAKE A JUDGMENT AS TO ITS FURTHER CONDUCT. FOR THE
PROTECTION OF THE COMPANY AND ITS EMPLOYEES, THE LEGAL DEPARTMENT SHOULD BE
CONTACTED IF AN EMPLOYEE BELIEVES THAT HE/SHE HAS RECEIVED MATERIAL, NONPUBLIC
INFORMATION.
5. TENDER OFFERS
TENDER OFFERS REPRESENT A PARTICULAR CONCERN IN THE LAW OF INSIDER TRADING
FOR TWO REASONS. FIRST, TENDER OFFER ACTIVITY OFTEN PRODUCES EXTRAORDINARY
GYRATIONS IN THE PRICE OF THE TARGET COMPANY'S SECURITIES. TRADING DURING THIS
TIME PERIOD IS MORE LIKELY TO ATTRACT REGULATORY ATTENTION (AND PRODUCES A
DISPROPORTIONATE PERCENTAGE OF INSIDER TRADING CASES). SECOND, THE SEC HAS
ADOPTED A RULE WHICH EXPRESSLY FORBIDS TRADING AND "TIPPING" WHILE IN POSSESSION
OF MATERIAL, NONPUBLIC INFORMATION REGARDING A TENDER OFFER RECEIVED FROM THE
TENDER OFFEROR, THE TARGET COMPANY OR ANYONE ACTING ON BEHALF OF EITHER. CALVERT
EMPLOYEES AND OTHERS SUBJECT TO THIS POLICY STATEMENT SHOULD EXERCISE PARTICULAR
CAUTION ANY TIME THEY BECOME AWARE OF NONPUBLIC INFORMATION RELATING TO A TENDER
OFFER.
6. EDUCATION
ANOTHER ASPECT OF CALVERT'S COMPLIANCE PROCEDURES WILL BE TO KEEP CALVERT
PERSONNEL AND OTHER ACCESS PERSONS INFORMED. THIS MEMORANDUM SERVES AS A BASIC
PRIMER ON WHAT CONSTITUTES INSIDE INFORMATION AND PERIODIC MEMORANDA WILL BE
DISTRIBUTED, PARTICULARLY WHEN A SIGNIFICANT CASE DEALING WITH THE SUBJECT HAS
BEEN DECIDED.
ALL NEW EMPLOYEES WILL BE GIVEN A COPY OF THIS STATEMENT AND WILL BE
REQUIRED TO READ IT AND AGREE TO ITS CONDITIONS. ALL EMPLOYEES WILL BE REQUIRED
TO CONFIRM THEIR UNDERSTANDING AND ACKNOWLEDGMENT OF THE STATEMENT ON AN ANNUAL
BASIS.
<PAGE>
ATTACHMENT A
[GRAPHIC OMITED]
MEMO
TO: LEGAL DEPARTMENT; COMPLIANCE
FROM:
RE: PRIOR APPROVAL OF ACCESS PERSON TRADING IN SECURITIES
THE FOLLOWING PROPOSED SECURITY(IES) TRANSACTION(S) WAS (WERE) REVIEWED BY THE
FUND, OR DESIGNATED EMPLOYEE OF THE ADVISOR (CHIEF INVESTMENT OFFICER OR
DIRECTOR OF RESEARCH) PURSUANT TO CALVERT GROUP'S CODE OF ETHICS:
NAME OF ADVISORY PERSON:
SECURITY (IES) TO BE PURCHASED OR SOLD:
BASIS OF APPROVAL OR DENIAL:
FUND OR ADVISOR DESIGNEE SIGNATURE
SIGNATURE PAGE
CODE OF ETHICS AND INSIDER TRADING POLICY AND PROCEDURES
ACKNOWLEDGEMENT FORM
I HAVE READ AND UNDERSTAND CALVERT GROUP'S CODE OF ETHICS AND INSIDER TRADING
POLICY AND PROCEDURES AND WILL COMPLY IN ALL RESPECTS WITH SUCH PROCEDURES.
SIGNATURE DATE
PRINT NAME
<PAGE>
ATTACHMENT B
ACCESS PERSONS SUBJECT TO PRECLEARANCE FOR SECURITIES TRANSACTIONS INCLUDING
PRIVATE PLACEMENTS
MICHAEL ABRAMO
FATIMA BATALVI
SUSAN BENDER
YING-WEI CHEN
TOM DAILEY
IVY DUKE
PATRICK FAUL
VICTOR FRYE
DAVID GIBSON
CEASAR GONZALES
DONNA GOMEZ
GREG HABEEB
DAN HAYES
HUI PING HO
MOHAMMED JAVAID
ANU KHONDOKAR
TRACY KNIGHT
BARBARA KRUMSIEK
EMMETT LONG
RENO MARTINI
GARY MILLER
JOHN NICHOLS
MATT NOTTINGHAM
KENDRA PLEMMONS
CARMEN REID
CHRIS SANTOS
BILL TARTIKOFF
LAURIE WEBSTER
RON WOLFSHEIMER
MIKE YUHAS
INVESTMENT PERSONNEL SUBJECT SOLEY TO PRIVATE PLACEMENT PRECLEARANCE
MEMBERS OF THE SPECIAL EQUITIES COMMITTEE OF THE BOARD OF DIRECTORS/TRUSTEES
The term "entity" will be used for any organization adopting these procedures.
For those organizations which are investment companies as defined under the
Investment Company Act of 1940, the term "Fund" may also be used if applicable.
Access person means any director/trustee, officer, general partner, or employee
of any entity adopting these procedures who participates in the selection of
securities (other than high social impact securities or special equity
securities) or who has access to information regarding impending purchases or
sales [See rule 17 j-1(e)]. The General Counsel or Compliance Officer may
designate any person, including an independent contractor or consultant, as an
access person, who, as such, shall provide signed acknowledgement of the receipt
of these procedures and their applicability. A current list of access persons
and investment personnel subject to preclearance or other requirements shall be
maintained by the Compliance Officer.
For this purpose, "securities" include options on securities and securities that
are convertible into or exchangeable for securities held or to be acquired by a
fund. A security is being considered for purchase once a recommendation has
been documented, communicated and under serious evaluation by the purchaser or
seller. Evidence of consideration may include such things as approved
recommendations in current research reports, pending or active order tickets,
and a watch list of securities under current evaluation.
Disinterested Directors and/or Trustees as defined by the Investment Company Act
of 1940, are excluded from the duplicate statement and confirmation requirement
unless the General Counsel or Compliance Officer imposes a different standard
due to an entity's active trading strategy and/or the information available to
the Disinterested Directors and/or Trustees.
All account information is subject to regulatory review. The trade confirmations
of persons other than disinterested directors or trustees may be disclosed to
other senior officers of the Fund or to legal counsel as deemed necessary for
compliance purposes and to otherwise administer the Code of Ethics.
