SEC REGISTRATION NOS.
33-45829 AND 811-06563
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
POST-EFFECTIVE AMENDMENT NO. 13 XX
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
POST-EFFECTIVE AMENDMENT NO. 13 XX
CALVERT WORLD VALUES 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) 951-4800
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 JANUARY 31, 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.
<PAGE>
CALVERT
SOCIALLY RESPONSIBLE
PROSPECTUS
- -CALVERT SOCIAL INVESTMENT FUND
- -CALVERT CAPITAL ACCUMULATION FUND
- -CALVERT NEW VISION SMALL CAP FUND
- -CALVERT WORLD VALUES INTERNATIONAL EQUITY FUND
JANUARY 31, 2000
<PAGE>
PROSPECTUS
JANUARY 31, 2000
FUNDS IN THIS PROSPECTUS
EQUITY FUNDS
CALVERT SOCIAL INVESTMENT FUND (CSIF)
CSIF BALANCED
CSIF MANAGED INDEX
CSIF EQUITY
CALVERT CAPITAL ACCUMULATION
CALVERT WORLD VALUES
INTERNATIONAL EQUITY
CALVERT NEW VISION
SMALL CAP
BOND AND MONEY MARKET FUNDS
CALVERT SOCIAL INVESTMENT FUND (CSIF)
CSIF BOND
CSIF MONEY MARKET
ABOUT THE FUNDS
2 INVESTMENT OBJECTIVE, STRATEGY,
PAST PERFORMANCE
24 FEES AND EXPENSES
28 PRINCIPAL INVESTMENT PRACTICES
AND RISKS
ABOUT SOCIAL INVESTING
32 INVESTMENT SELECTION PROCESS
33 SOCIALLY RESPONSIBLE INVESTMENT
CRITERIA
37 HIGH SOCIAL IMPACT INVESTMENTS
37 SPECIAL EQUITIES
ABOUT YOUR INVESTMENT
38 SUBADVISORS AND PORTFOLIO
MANAGERS
40 ADVISORY FEES
41 HOW TO BUY SHARES
41 GETTING STARTED
41 CHOOSING A SHARE CLASS
43 CALCULATION OF CDSC/WAIVER
44 DISTRIBUTION AND SERVICE FEES
45 NEXT STEP - ACCOUNT APPLICATION
46 IMPORTANT - HOW SHARES ARE
PRICED
46 WHEN YOUR ACCOUNT WILL BE
CREDITED
47 OTHER CALVERT GROUP FEATURES
(EXCHANGES, MINIMUM ACCOUNT
BALANCE, ETC.)
50 DIVIDENDS, CAPITAL GAINS
AND TAXES
51 HOW TO SELL SHARES
53 FINANCIAL HIGHLIGHTS
66 EXHIBIT A- REDUCED SALES CHARGES
(CLASS A)
68 EXHIBIT B- SERVICE FEES AND
OTHER ARRANGEMENTS WITH DEALERS
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (SEC) OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC OR
ANY STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
CSIF BALANCED
(NOTE: FORMERLY KNOWN AS CSIF MANAGED GROWTH)
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
SUBADVISORS BROWN CAPITAL MANAGEMENT, INC.
NCM CAPITAL MANAGEMENT, INC.
OBJECTIVE
CSIF BALANCED SEEKS TO ACHIEVE A COMPETITIVE TOTAL RETURN THROUGH AN ACTIVELY
MANAGED PORTFOLIO OF STOCKS, BONDS AND MONEY MARKET INSTRUMENTS WHICH OFFER
INCOME AND CAPITAL GROWTH OPPORTUNITY AND WHICH SATISFY THE INVESTMENT AND
SOCIAL CRITERIA.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND TYPICALLY INVESTS ABOUT 60% OF ITS ASSETS IN STOCKS AND 40% IN BONDS OR
OTHER FIXED-INCOME INVESTMENTS. STOCK INVESTMENTS ARE PRIMARILY COMMON STOCK IN
LARGE-CAP COMPANIES, WHILE THE FIXED-INCOME INVESTMENTS ARE PRIMARILY A WIDE
VARIETY OF INVESTMENT GRADE BONDS.
CSIF BALANCED INVESTS IN A COMBINATION OF STOCKS, BONDS AND MONEY MARKET
INSTRUMENTS IN AN ATTEMPT TO PROVIDE A COMPLETE INVESTMENT PORTFOLIO IN A SINGLE
PRODUCT. THE ADVISOR REBALANCES THE FUND QUARTERLY TO ADJUST FOR CHANGES IN
MARKET VALUE. THE FUND IS A LARGE-CAP, GROWTH-ORIENTED U.S. DOMESTIC PORTFOLIO,
ALTHOUGH IT MAY HAVE OTHER INVESTMENTS, INCLUDING SOME FOREIGN SECURITIES AND
SOME MID-CAP STOCKS. FOR THE EQUITY PORTION, THE FUND SEEKS COMPANIES WITH
BETTER THAN AVERAGE EXPECTED GROWTH RATES AT LOWER THAN AVERAGE VALUATIONS. THE
FIXED-INCOME PORTION REFLECTS AN ACTIVE TRADING STRATEGY, SEEKING TOTAL RETURN,
AND FOCUSES ON A DURATION TARGET APPROXIMATING THE LEHMAN AGGREGATE BOND INDEX.
EQUITY INVESTMENTS ARE SELECTED BY THE TWO SUBADVISORS, WHILE THE ADVISOR
MANAGES THE FIXED-INCOME ASSETS AND DETERMINES THE OVERALL MIX FOR THE FUND
DEPENDING UPON ITS VIEW OF MARKET CONDITIONS AND ECONOMIC OUTLOOK.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
<PAGE>
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
- - THE STOCK OR BOND MARKET GOES DOWN
- - THE INDIVIDUAL STOCKS AND BONDS IN THE FUND DO NOT PERFORM AS WELL AS
EXPECTED
- - FOR THE FIXED-INCOME PORTION OF THE FUND, THE ADVISOR'S FORECAST AS TO
INTEREST RATES IS NOT CORRECT
- - FOR THE FOREIGN SECURITIES HELD IN THE FUND, IF FOREIGN CURRENCY VALUES GO
DOWN VERSUS THE U.S. DOLLAR
- - THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE STOCK AND BOND
MARKETS DOES NOT PERFORM AS WELL AS EXPECTED
THE ACTIVE TRADING STRATEGY FOR THE FIXED-INCOME PORTION OF THE FUND MAY CAUSE
THE FUND TO HAVE, RELATIVE TO OTHER BALANCED FUNDS, A HIGH AMOUNT OF SHORT-TERM
CAPITAL GAINS, WHICH ARE TAXABLE TO YOU AT THE ORDINARY INCOME TAX RATE.
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.
CSIF BALANCED 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 CLASS A SHARES
HAS VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER
TIME TO THAT OF THE STANDARD & POOR'S 500 INDEX AND THE LEHMAN AGGREGATE BOND
INDEX, A WIDELY RECOGNIZED, UNMANAGED INDEX OF COMMON STOCK AND BONDS PRICES,
RESPECTIVELY. IT ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE LIPPER BALANCED
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 RETURN FOR THE FUND'S OTHER CLASSES OF SHARES OFFERED BY THIS PROSPECTUS
WILL DIFFER FROM THE CLASS A RETURNS SHOWN IN THE BAR CHART, DEPENDING UPON THE
EXPENSES OF THAT CLASS. THE BAR CHART DOES NOT REFLECT ANY SALES CHARGE THAT YOU
MAY BE REQUIRED TO PAY UPON PURCHASE OR REDEMPTION OF THE FUND'S SHARES. ANY
SALES CHARGE WILL REDUCE YOUR RETURN. THE AVERAGE TOTAL RETURN TABLE SHOWS
RETURNS WITH THE MAXIMUM SALES CHARGE DEDUCTED. NO SALES CHARGE HAS BEEN APPLIED
TO THE INDICES USED FOR COMPARISON IN THE TABLE.
<PAGE>
CSIF BALANCED
YEAR-BY-YEAR TOTAL RETURN
(CLASS A RETURN AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q4 '98 12.42%
WORST QUARTER (OF PERIODS SHOWN) Q3 '98 (6.47%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR 10 YEAR
CSIF BALANCED: CLASS A 1.73% 14.29% 9.75%
CSIF BALANCED: CLASS B 0.54% N/A N/A
CSIF BALANCED: CLASS C 4.76% 14.12% N/A
S&P 500 INDEX MONTHLY REINVESTED
21.03% 28.54% 18.19%
LEHMAN AGGREGATE BOND INDEX TR
(0.82%) 7.73% 7.70%
LIPPER BALANCED FUND INDEX
8.98% 16.33% 12.26%
<PAGE>
CSIF MANAGED INDEX
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
SUBADVISOR STATE STREET GLOBAL ADVISORS
OBJECTIVE
CSIF MANAGED INDEX SEEKS A TOTAL RETURN AFTER EXPENSES WHICH EXCEEDS OVER TIME
THE TOTAL RETURN OF THE RUSSELL 1000 INDEX. IT SEEKS TO OBTAIN THIS OBJECTIVE
WHILE MAINTAINING RISK CHARACTERISTICS SIMILAR TO THOSE OF THE RUSSELL 1000
INDEX AND THROUGH INVESTMENTS IN STOCKS THAT MEET THE FUND'S INVESTMENT AND
SOCIAL CRITERIA. THIS OBJECTIVE MAY BE CHANGED BY THE FUND'S BOARD OF
TRUSTEES/DIRECTORS WITHOUT SHAREHOLDER APPROVAL.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND INVESTS IN STOCKS THAT MEET THE SOCIAL CRITERIA AND CREATES A PORTFOLIO
WHOSE CHARACTERISTICS CLOSELY RESEMBLE THE CHARACTERISTICS OF THE RUSSELL 1000
INDEX, WHILE EMPHASIZING THE STOCKS WHICH IT BELIEVES OFFER THE GREATEST
POTENTIAL OF RETURN.
CSIF MANAGED INDEX FOLLOWS AN ENHANCED INDEX MANAGEMENT STRATEGY. INSTEAD OF
PASSIVELY HOLDING A REPRESENTATIVE BASKET OF SECURITIES DESIGNED TO MATCH THE
RUSSELL 1000 INDEX, THE SUBADVISOR ACTIVELY USES A PROPRIETARY ANALYTICAL MODEL
TO ATTEMPT TO ENHANCE THE FUND'S PERFORMANCE, RELATIVE TO THE INDEX. THE FUND
MAY PURCHASE STOCKS NOT IN THE RUSSELL 1000 INDEX, BUT AT LEAST 65% OF THE
FUND'S TOTAL ASSETS WILL BE INVESTED IN STOCKS THAT ARE IN THE INDEX. ANY
INVESTMENTS NOT IN THE INDEX WILL MEET THE FUND'S SOCIAL SCREENING CRITERIA AND
BE SELECTED TO CLOSELY MIRROR THE INDEX'S RISK/RETURN CHARACTERISTICS. THE
SUBADVISOR REBALANCES THE FUND QUARTERLY TO MAINTAIN ITS RELATIVE EXPOSURE TO
THE INDEX.
THE FIRST STEP OF THE INVESTMENT STRATEGY IS TO IDENTIFY THOSE STOCKS IN THE
RUSSELL 1000 INDEX WHICH MEET THE FUND'S SOCIAL SCREENING CRITERIA. FROM THIS
LIST OF STOCKS, THE SUBADVISOR CHOOSES STOCKS THAT CLOSELY MIRROR THE INDEX IN
TERMS OF VARIOUS FACTORS SUCH AS INDUSTRY WEIGHTINGS, CAPITALIZATION, AND YIELD.
EVEN THOUGH CERTAIN INDUSTRIES MAY BE ELIMINATED FROM THE FUND BY THE SCREENS,
THE FACTOR MODEL PERMITS MATHEMATICAL SUBSTITUTES WHICH THE SUBADVISOR EXPECTS
TO MIMIC THE RETURN CHARACTERISTICS OF THE MISSING INDUSTRIES AND STOCKS.
THE FINAL STEP IN THE PROCESS IS TO APPLY THE SUBADVISOR'S PROPRIETARY VALUATION
METHOD WHICH ATTEMPTS TO IDENTIFY THE STOCKS WHICH HAVE THE GREATEST POTENTIAL
FOR SUPERIOR PERFORMANCE. EACH SECURITY IDENTIFIED FOR POTENTIAL INVESTMENT IS
RANKED ACCORDING TO TWO SEPARATE MEASURES: VALUE AND MOMENTUM OF MARKET
SENTIMENT. THESE TWO MEASURES COMBINE TO CREATE A SINGLE COMPOSITE SCORE OF
EACH STOCK'S ATTRACTIVENESS. THE FUND IS CONSTRUCTED FROM SECURITIES THAT MEET
ITS SOCIAL CRITERIA, WEIGHTED THROUGH A MATHEMATICAL PROCESS THAT SEEKS TO
REDUCE RISK VIS- -VIS THE RUSSELL 1000 INDEX.
<PAGE>
THE RUSSELL 1000 INDEX MEASURES THE PERFORMANCE OF THE 1,000 LARGEST U.S.
COMPANIES BASED ON TOTAL MARKET CAPITALIZATION. THE INDEX IS ADJUSTED, OR
RECONSTITUTED, ANNUALLY. AS OF THE LATEST RECONSTITUTION, THE AVERAGE MARKET
CAPITALIZATION OF THE RUSSELL 1000 WAS APPROXIMATELY $91.485 BILLION.
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM THE STOCK MARKET FOR ANY OF THE FOLLOWING REASONS:
- - THE STOCK MARKET OR THE RUSSELL 1000 INDEX GOES DOWN
- - THE INDIVIDUAL STOCKS IN THE FUND OR THE INDEX MODELING PORTFOLIO DO NOT
PERFORM AS WELL AS EXPECTED
- - AN INDEX FUND HAS OPERATING EXPENSES; A MARKET INDEX DOES NOT. THE FUND
- - WHILE EXPECTED TO TRACK ITS TARGET INDEX AS CLOSELY AS POSSIBLE
WHILE SATISFYING ITS OWN INVESTMENT AND SOCIAL CRITERIA - WILL NOT BE
ABLE TO MATCH THE PERFORMANCE OF THE INDEX EXACTLY
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.
THE FUND IS NOT SPONSORED, SOLD, PROMOTED OR ENDORSED BY THE FRANK RUSSELL
COMPANY.
TRACKING THE INDEX
THE SUBADVISOR EXPECTS THE ANNUAL TRACKING ERROR, RELATIVE TO THE RETURN OF THE
INDEX BEFORE DEDUCTING EXPENSES, TO BE WITHIN CERTAIN LIMITS ESTABLISHED BY THE
ADVISOR AND SUBADVISOR. THE FUND'S ABILITY TO TRACK THE INDEX WILL BE MONITORED
BY ANALYZING RETURNS TO ENSURE THAT THE RETURNS ARE REASONABLY CONSISTENT WITH
INDEX RETURNS. ANY DEVIATIONS OF REALIZED RETURNS FROM THE INDEX WHICH ARE IN
EXCESS OF THOSE EXPECTED WILL BE ANALYZED FOR SOURCES OF VARIANCE.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
<PAGE>
CSIF MANAGED INDEX 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 THE PERFORMANCE OF THE CLASS A SHARES FOR
EACH CALENDAR YEAR. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER TIME TO THAT
OF THE RUSSELL 1000 INDEX, A WIDELY RECOGNIZED, UNMANAGED INDEX OF COMMON STOCK
PRICES. IT ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE LIPPER LARGE-CAP CORE
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 RETURN FOR THE FUND'S OTHER CLASSES OF SHARES OFFERED BY THIS PROSPECTUS
WILL DIFFER FROM THE CLASS A RETURNS SHOWN IN THE BAR CHART, DEPENDING UPON THE
EXPENSES OF THAT CLASS. THE BAR CHART DOES NOT REFLECT ANY SALES CHARGE THAT YOU
MAY BE REQUIRED TO PAY UPON PURCHASE OR REDEMPTION OF THE FUND'S SHARES. ANY
SALES CHARGE WILL REDUCE YOUR RETURN. THE AVERAGE TOTAL RETURN TABLE SHOWS
RETURNS WITH THE MAXIMUM SALES CHARGE DEDUCTED. NO SALES CHARGE HAS BEEN APPLIED
TO THE INDICES USED FOR COMPARISON IN THE TABLE.
<PAGE>
CSIF MANAGED INDEX
YEAR-BY-YEAR TOTAL RETURN
(CLASS A RETURN AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q4 '99 14.59%
WORST QUARTER (OF PERIODS SHOWN) Q3 '99 (6.45%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR 10 YEAR
CSIF MANAGED INDEX: CLASS A1 11.60% N/A N/A
CSIF MANAGED INDEX: CLASS B 10.69% N/A N/A
CSIF MANAGED INDEX: CLASS C 14.71% N/A N/A
RUSSELL 1000 INDEX 20.91% N/A N/A
LIPPER LARGE-CAP CORE INDEX 19.35% N/A N/A
1SINCE INCEPTION "A" (4/30/98) 13.69%; RUSSELL 1000 19.20%; AND LIPPER LARGE-CAP
CORE INDEX 18.16%. THE MONTH END DATE OF 4/30/98 IS USED FOR COMPARISON PURPOSES
ONLY, ACTUAL FUND INCEPTION IS 4/15/98.
<PAGE>
CSIF EQUITY
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
SUBADVISOR ATLANTA CAPITAL MANAGEMENT COMPANY, L.L.C.
OBJECTIVE
CSIF EQUITY SEEKS GROWTH OF CAPITAL THROUGH INVESTMENT IN STOCKS OF ISSUERS IN
INDUSTRIES BELIEVED TO OFFER OPPORTUNITIES FOR POTENTIAL CAPITAL APPRECIATION
AND WHICH MEET THE FUND'S INVESTMENT AND SOCIAL CRITERIA.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND INVESTS PRIMARILY IN THE COMMON STOCKS OF LARGE-CAP COMPANIES HAVING,
ON AVERAGE, MARKET CAPITALIZATION OF AT LEAST $1 BILLION. INVESTMENT RETURNS
WILL BE MOSTLY FROM CHANGES IN THE PRICE OF THE FUND'S HOLDINGS (CAPITAL
APPRECIATION).
THE SUBADVISOR LOOKS FOR GROWING COMPANIES WITH A HISTORY OF STEADY EARNINGS
GROWTH. COMPANIES ARE SELECTED BASED ON THE SUBADVISOR'S OPINION THAT THE
COMPANY HAS THE ABILITY TO SUSTAIN GROWTH THROUGH GROWING PROFITABILITY AND THAT
THE STOCK IS FAVORABLY PRICED WITH RESPECT TO THOSE GROWTH EXPECTATIONS.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
- - THE STOCK MARKET GOES DOWN
- - THE INDIVIDUAL STOCKS IN THE FUND DO 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.
CSIF EQUITY 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 CLASS A SHARES
HAS VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER
TIME TO THAT OF THE STANDARD & POOR'S 500 INDEX. THIS IS A WIDELY RECOGNIZED,
UNMANAGED
<PAGE>
INDEX OF COMMON STOCK PRICES. IT ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE
LIPPER MULTI-CAP CORE 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 RETURN FOR EACH OF THE FUND'S OTHER CLASSES OF SHARES OFFERED BY THIS
PROSPECTUS WILL DIFFER FROM THE CLASS A RETURNS SHOWN IN THE BAR CHART,
DEPENDING UPON THE EXPENSES OF THAT CLASS. THE BAR CHART DOES NOT REFLECT ANY
SALES CHARGE THAT YOU MAY BE REQUIRED TO PAY UPON PURCHASE OR REDEMPTION OF THE
FUND'S SHARES. ANY SALES CHARGE WILL REDUCE YOUR RETURN. THE AVERAGE TOTAL
RETURN TABLE SHOWS RETURNS WITH THE MAXIMUM SALES CHARGE DEDUCTED. NO SALES
CHARGE HAS BEEN APPLIED TO THE INDICES USED FOR COMPARISON IN THE TABLE.
CSIF EQUITY
YEAR-BY-YEAR TOTAL RETURN
(CLASS A RETURN AT NAV)
[INSERT BAR CHART HERE]
BEST QU ARTER (OF PERIODS SHOWN) Q4 '98 26.98%
WORST QUARTER (OF PERIODS SHOWN) Q3 '98 (17.56%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR 10 YEAR
CSIF EQUITY: CLASS A 17.31% 17.84% 9.88%
CSIF EQUITY: CLASS B 16.85% N/A N/A
CSIF EQUITY: CLASS C 21.13% 17.63% N/A
S&P 500 INDEX MONTHLY REINVESTED
21.03% 28.54% 18.19%
LIPPER MULTI-CAP CORE INDEX
20.79% 23.59% 16.05%
<PAGE>
CALVERT CAPITAL ACCUMULATION
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
SUBADVISOR BROWN CAPITAL MANAGEMENT, INC.
OBJECTIVE
CAPITAL ACCUMULATION SEEKS TO PROVIDE LONG-TERM CAPITAL APPRECIATION BY
INVESTING PRIMARILY IN MID-CAP STOCKS THAT MEET THE FUND'S INVESTMENT AND SOCIAL
CRITERIA. THIS OBJECTIVE MAY BE CHANGED BY THE FUND'S BOARD OF
TRUSTEES/DIRECTORS WITHOUT SHAREHOLDER APPROVAL.
PRINCIPAL INVESTMENT STRATEGIES
INVESTMENTS ARE PRIMARILY IN THE COMMON STOCKS OF MID-SIZE COMPANIES. RETURNS IN
THE FUND WILL BE MOSTLY FROM THE CHANGES IN THE PRICE OF THE FUND'S HOLDINGS
(CAPITAL APPRECIATION.)
THE FUND CURRENTLY DEFINES MID-CAP COMPANIES AS THOSE WITHIN THE RANGE OF MARKET
CAPITALIZATIONS OF THE STANDARD & POOR'S MID-CAP 400 INDEX. MOST COMPANIES IN
THE INDEX HAVE A CAPITALIZATION OF $500 MILLION TO $10 BILLION. STOCKS CHOSEN
FOR THE FUND COMBINE GROWTH AND VALUE CHARACTERISTICS OR OFFER THE OPPORTUNITY
TO BUY GROWTH AT A REASONABLE PRICE.
THE SUBADVISOR FAVORS COMPANIES WHICH HAVE AN ABOVE MARKET AVERAGE PROSPECTIVE
GROWTH RATE, BUT SELL AT BELOW MARKET AVERAGE VALUATIONS. THE SUBADVISOR
EVALUATES EACH STOCK IN TERMS OF ITS GROWTH POTENTIAL, THE RETURN FOR RISK FREE
INVESTMENTS AND THE RISK AND REWARD POTENTIAL FOR THE COMPANY TO DETERMINE A
REASONABLE PRICE FOR THE STOCK.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
<PAGE>
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
- - THE STOCK MARKET GOES DOWN
- - THE INDIVIDUAL STOCKS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED
- - THE POSSIBILITY OF GREATER RISK BY INVESTING IN MEDIUM-SIZED COMPANIES
RATHER THAN LARGER, MORE ESTABLISHED COMPANIES.
- - THE FUND IS NON-DIVERSIFIED. COMPARED TO OTHER FUNDS, THE FUND MAY INVEST
MORE OF ITS ASSETS IN A SMALLER NUMBER OF COMPANIES. GAINS OR LOSSES ON A SINGLE
STOCK 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.
CAPITAL ACCUMULATION 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 FUND'S CLASS A
SHARES HAS VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE FUND'S PERFORMANCE
OVER TIME TO THAT OF THE STANDARD & POOR'S MID-CAP 400 INDEX. THIS IS A WIDELY
RECOGNIZED, UNMANAGED INDEX OF COMMON STOCK PRICES. IT ALSO SHOWS THE FUND'S
RETURNS COMPARED TO THE LIPPER MID-CAP GROWTH 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 RETURN FOR THE FUND'S OTHER CLASSES OF SHARES OFFERED BY THIS PROSPECTUS
WILL DIFFER FROM THE CLASS A RETURNS SHOWN IN THE BAR CHART, DEPENDING UPON THE
EXPENSES OF THAT CLASS. THE BAR CHART DOES NOT REFLECT ANY SALES CHARGE THAT YOU
MAY BE REQUIRED TO PAY UPON PURCHASE OR REDEMPTION OF THE FUND'S SHARES. ANY
SALES CHARGE WILL REDUCE YOUR RETURN. THE AVERAGE TOTAL RETURN TABLE SHOWS
RETURNS WITH THE MAXIMUM SALES CHARGE DEDUCTED. NO SALES CHARGE HAS BEEN APPLIED
TO THE INDICES USED FOR COMPARISON IN THE TABLE.
<PAGE>
CAPITAL ACCUMULATION
YEAR-BY-YEAR TOTAL RETURN
(CLASS A RETURN AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q4 '98 25.03%
WORST QUARTER (OF PERIODS SHOWN) Q3 '99 (14.82%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR 10 YEAR
CAPITAL ACCUMULATION: CLASS A1 1.12% 19.01% N/A
CAPITAL ACCUMULATION: CLASS B 0.28% N/A N/A
CAPITAL ACCUMULATION: CLASS C 4.36% 18.98% N/A
S&P MID-CAP 400 INDEX 14.72% 23.05% N/A
LIPPER MID-CAP GROWTH INDEX 73.72% 28.07% N/A
1 SINCE INCEPTION "A" (10/31/94) 18.83%; S&P MID CAP 400 INDEX 21.34%; AND
LIPPER MID-CAP GROWTH INDEX 26.73%.
<PAGE>
CALVERT WORLD VALUES
INTERNATIONAL EQUITY FUND
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
SUBADVISOR MURRAY JOHNSTONE INTERNATIONAL, LTD.
OBJECTIVE
CWVF INTERNATIONAL EQUITY SEEKS TO PROVIDE A HIGH TOTAL RETURN CONSISTENT WITH
REASONABLE RISK BY INVESTING PRIMARILY IN A GLOBALLY DIVERSIFIED PORTFOLIO OF
STOCKS THAT MEET THE FUND'S INVESTMENT AND SOCIAL CRITERIA.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND INVESTS PRIMARILY IN THE COMMON STOCKS OF MID- TO LARGE-CAP COMPANIES
USING A VALUE APPROACH. THE FUND IDENTIFIES THOSE COUNTRIES WITH MARKETS AND
ECONOMIES THAT IT BELIEVES CURRENTLY PROVIDE THE MOST FAVORABLE CLIMATE FOR
INVESTING. THE SUBADVISOR SELECTS COUNTRIES BASED ON A "20 QUESTIONS" MODEL
WHICH USES MACRO- AND MICRO-ECONOMIC INPUTS TO RANK THE ATTRACTIVENESS OF
MARKETS IN VARIOUS COUNTRIES. WITHIN EACH COUNTRY, THE SUBADVISOR USES
VALUATION TECHNIQUES THAT HAVE BEEN SHOWN TO BEST DETERMINE VALUE WITHIN THAT
MARKET. IN SOME COUNTRIES, THE VALUATION PROCESS MAY FAVOR THE COMPARISON OF
PRICE-TO-CASH-FLOW WHILE IN OTHER COUNTRIES, PRICE-TO-SALES OR PRICE-TO-BOOK MAY
BE MORE USEFUL IN DETERMINING WHICH STOCKS ARE UNDERVALUED.
THE FUND INVESTS PRIMARILY IN MORE DEVELOPED ECONOMIES AND MARKETS. NO MORE THAN
5% OF FUND ASSETS ARE INVESTED IN THE U.S. (EXCLUDING HIGH SOCIAL IMPACT AND
SPECIAL EQUITIES INVESTMENTS).
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
- - THE STOCK MARKETS GO DOWN (INCLUDING MARKETS OUTSIDE THE U.S.)
- - THE INDIVIDUAL STOCKS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED
- - FOREIGN CURRENCY VALUES GO DOWN VERSUS THE U.S. DOLLAR
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>
CWVF INTERNATIONAL EQUITY 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 CLASS A SHARES
HAS VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER
TIME TO THAT OF THE MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX. THIS IS A
WIDELY RECOGNIZED, UNMANAGED INDEX OF COMMON STOCK PRICES AROUND THE WORLD. IT
ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE LIPPER INTERNATIONAL 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 RETURN FOR THE FUND'S OTHER CLASSES OF SHARES OFFERED BY THIS PROSPECTUS
WILL DIFFER FROM THE CLASS A RETURNS SHOWN IN THE BAR CHART, DEPENDING UPON THE
EXPENSES OF THAT CLASS. THE BAR CHART DOES NOT REFLECT ANY SALES CHARGE THAT YOU
MAY BE REQUIRED TO PAY UPON PURCHASE OR REDEMPTION OF THE FUND'S SHARES. ANY
SALES CHARGE WILL REDUCE YOUR RETURN. THE AVERAGE TOTAL RETURN TABLE SHOWS
RETURNS WITH THE MAXIMUM SALES CHARGE DEDUCTED. NO SALES CHARGE HAS BEEN APPLIED
TO THE INDICES USED FOR COMPARISON IN THE TABLE.
<PAGE>
CWVF INTERNATIONAL EQUITY
YEAR-BY-YEAR TOTAL RETURN
(CLASS A RETURN AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q4 '99 20.38%
WORST QUARTER (OF PERIODS SHOWN) Q3 '98 (14.82%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR 10 YEAR
CWVF INTERNATIONAL EQUITY: CLASS A1 23.94% 13.95% N/A
CWVF INTERNATIONAL EQUITY: CLASS B 23.37% N/A N/A
CWVF INTERNATIONAL EQUITY: CLASS C 27.82% 13.86% N/A
MSCI EAFE INDEX GD 27.30% 13.15% N/A
LIPPER INTERNATIONAL FUND INDEX 37.83% 15.96% N/A
1 INCEPTION "A" (7/31/92) 11.85%; MSCI EAFE INDEX GD 14.17%; AND LIPPER
INTERNATIONAL FUND INDEX 14.96%. THE MONTH END DATE OF 7/31/92 IS USED FOR
COMPARISON PURPOSES ONLY, ACTUAL FUND INCEPTION IS 7/2/92.
<PAGE>
CALVERT NEW VISION SMALL CAP
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
SUBADVISOR AWAD ASSET MANAGEMENT, INC.
OBJECTIVE
NEW VISION SMALL CAP SEEKS TO PROVIDE LONG-TERM CAPITAL APPRECIATION BY
INVESTING PRIMARILY IN SMALL-CAP STOCKS THAT MEET THE FUND'S INVESTMENT AND
SOCIAL CRITERIA. THIS OBJECTIVE MAY BE CHANGED BY THE FUND'S BOARD OF
TRUSTEES/DIRECTORS WITHOUT SHAREHOLDER APPROVAL.
PRINCIPAL INVESTMENT STRATEGIES
AT LEAST 65% OF THE FUND'S ASSETS WILL BE INVESTED IN THE COMMON STOCKS OF
SMALL-CAP COMPANIES. RETURNS IN THE FUND WILL BE MOSTLY FROM THE CHANGES IN THE
PRICE OF THE FUND'S HOLDINGS (CAPITAL APPRECIATION).
THE FUND CURRENTLY DEFINES SMALL-CAP COMPANIES AS THOSE WITH MARKET
CAPITALIZATION OF $1 BILLION OR LESS AT THE TIME THE FUND INITIALLY INVESTS.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
- - THE STOCK MARKET GOES DOWN
- - THE INDIVIDUAL STOCKS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED
- - PRICES OF SMALL-CAP STOCKS MAY RESPOND TO MARKET ACTIVITY DIFFERENTLY THAN
LARGER MORE ESTABLISHED COMPANIES
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.
NEW VISION SMALL CAP 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 CLASS A SHARES
HAS VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER
TIME TO THAT OF THE RUSSELL 2000 INDEX. THIS IS A WIDELY RECOGNIZED, UNMANAGED
INDEX OF COMMON STOCK PRICES. IT ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE
<PAGE>
LIPPER SMALL-CAP CORE 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 RETURN FOR THE FUND'S OTHER CLASSES OF SHARES OFFERED BY THIS PROSPECTUS
WILL DIFFER FROM THE CLASS A RETURNS SHOWN IN THE BAR CHART, DEPENDING UPON THE
EXPENSES OF THAT CLASS. THE BAR CHART DOES NOT REFLECT ANY SALES CHARGE THAT YOU
MAY BE REQUIRED TO PAY UPON PURCHASE OR REDEMPTION OF THE FUND'S SHARES. ANY
SALES CHARGE WILL REDUCE YOUR RETURN. THE AVERAGE TOTAL RETURN TABLE SHOWS
RETURNS WITH THE MAXIMUM SALES CHARGE DEDUCTED. NO SALES CHARGE HAS BEEN APPLIED
TO THE INDICES USED FOR COMPARISON IN THE TABLE.
NEW VISION SMALL CAP
YEAR-BY-YEAR TOTAL RETURN
(CLASS A RETURN AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q4 '99 23.57%
WORST QUARTER (OF PERIODS SHOWN) Q3 '98 (21.82%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR 10 YEAR
NEW VISION SMALL CAP: CLASS A1 17.15% N/A N/A
NEW VISION SMALL CAP: CLASS B 16.53% N/A N/A
NEW VISION SMALL CAP: CLASS C 21.09% N/A N/A
RUSSELL 2000 INDEX TR 21.26% N/A N/A
LIPPER SMALL-CAP CORE INDEX 20.17% N/A N/A
1 FROM INCEPTION (1/31/97) 2.06%; RUSSELL 2000 INDEX TR 12.69%;
LIPPER SMALL-CAP CORE INDEX 11.79%.
<PAGE>
CSIF BOND
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
OBJECTIVE
CSIF BOND SEEKS TO PROVIDE AS HIGH A LEVEL OF CURRENT INCOME AS IS CONSISTENT
WITH PRUDENT INVESTMENT RISK AND PRESERVATION OF CAPITAL THROUGH INVESTMENT IN
BONDS AND OTHER STRAIGHT DEBT SECURITIES MEETING THE FUND'S INVESTMENT AND
SOCIAL CRITERIA.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND USES AN ACTIVE STRATEGY, SEEKING RELATIVE VALUE TO EARN INCREMENTAL
INCOME. THE FUND TYPICALLY INVESTS AT LEAST 65% OF ITS ASSETS IN INVESTMENT
GRADE DEBT SECURITIES.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
PRINCIPAL RISKS
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM, FOR ANY OF THE FOLLOWING REASONS:
- - THE BOND MARKET GOES DOWN
- - THE INDIVIDUAL BONDS IN THE FUND DO NOT PERFORM AS WELL AS EXPECTED
- - THE ADVISOR'S FORECAST AS TO INTEREST RATES IS NOT CORRECT
- - THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE BOND MARKET DOES
NOT PERFORM AS WELL AS EXPECTED
- - THE FUND IS NON-DIVERSIFIED. COMPARED TO OTHER FUNDS, THE FUND MAY INVEST
MORE OF ITS ASSETS IN A SMALLER NUMBER OF COMPANIES. GAINS OR LOSSES ON A SINGLE
BOND MAY HAVE GREATER IMPACT ON THE FUND.
THE FUND'S ACTIVE TRADING STRATEGY MAY CAUSE THE FUND TO HAVE A RELATIVELY HIGH
AMOUNT OF SHORT TERM CAPITAL GAINS, WHICH ARE TAXABLE TO YOU AT THE ORDINARY
INCOME TAX RATE.
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>
CSIF BOND 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 CLASS A SHARES
HAS VARIED FROM YEAR TO YEAR. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER
TIME TO THAT OF THE LEHMAN AGGREGATE BOND INDEX. THIS IS A WIDELY RECOGNIZED,
UNMANAGED INDEX OF BOND PRICES. IT ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE
LIPPER A RATED BOND 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 RETURN FOR THE FUND'S OTHER CLASSES OF SHARES OFFERED BY THIS PROSPECTUS
WILL DIFFER FROM THE CLASS A RETURNS SHOWN IN THE BAR CHART, DEPENDING UPON THE
EXPENSES OF THAT CLASS. THE BAR CHART DOES NOT REFLECT ANY SALES CHARGE THAT YOU
MAY BE REQUIRED TO PAY UPON PURCHASE OR REDEMPTION OF THE FUND'S SHARES. ANY
SALES CHARGE WILL REDUCE YOUR RETURN. THE AVERAGE TOTAL RETURN TABLE SHOWS
RETURNS WITH THE MAXIMUM SALES CHARGE DEDUCTED. NO SALES CHARGE HAS BEEN APPLIED
TO THE INDICES USED FOR COMPARISON IN THE TABLE.
<PAGE>
CSIF BOND
YEAR-BY-YEAR TOTAL RETURN
(CLASS A RETURN AT NAV)
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q3 '91 5.99%
WORST QUARTER (OF PERIODS SHOWN) Q1 '94 (3.57%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
(WITH MAXIMUM SALES CHARGE DEDUCTED)
1 YEAR 5 YEAR 10 YEAR
CSIF BOND: CLASS A (3.09%) 6.43% 6.80%
CSIF BOND: CLASS B (4.60%) N/A N/A
CSIF BOND: CLASS C (1.71%) N/A N/A
LEHMAN AGGREGATE BOND INDEX TR
(0.82%) 7.73% 7.70%
LIPPER A RATED BOND FUND INDEX
(2.04%) 7.25% 7.36%
<PAGE>
CSIF MONEY MARKET
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
OBJECTIVE
CSIF MONEY MARKET SEEKS TO PROVIDE THE HIGHEST LEVEL OF CURRENT INCOME,
CONSISTENT WITH LIQUIDITY, SAFETY AND SECURITY OF CAPITAL, THROUGH INVESTMENT IN
MONEY MARKET INSTRUMENTS MEETING THE FUND'S INVESTMENT AND SOCIAL CRITERIA.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND INVESTS IN HIGH QUALITY, MONEY MARKET INSTRUMENTS, SUCH AS COMMERCIAL
PAPER, VARIABLE RATE DEMAND NOTES, CORPORATE, AGENCY AND TAXABLE MUNICIPAL
OBLIGATIONS. ALL INVESTMENTS MUST COMPLY WITH THE SEC MONEY MARKET FUND
REQUIREMENTS.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
PRINCIPAL RISKS
THE FUND'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.
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>
CSIF MONEY MARKET 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 RETURNS OVER TIME TO THE LIPPER MONEY
MARKET 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.
CSIF MONEY MARKET
YEAR-BY-YEAR TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER (OF PERIODS SHOWN) Q1 '90 1.89%
WORST QUARTER (OF PERIODS SHOWN) Q2 '93 0.59%
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
1 YEAR 5 YEAR 10 YEAR
CSIF MONEY MARKET 4.65% 4.92% 4.73%
LIPPER MONEY MARKET FUND INDEX 4.74% 5.10% 4.91%
FOR CURRENT YIELD INFORMATION, CALL 800-368-2745, OR VISIT CALVERT GROUP'S
WEBSITE AT WWW.CALVERT.COM.
<PAGE>
FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF YOU BUY AND HOLD
SHARES OF A FUND. SHAREHOLDER FEES ARE PAID DIRECTLY FROM YOUR ACCOUNT; ANNUAL
FUND OPERATING EXPENSES ARE DEDUCTED FROM FUND ASSETS.
Colunms
1 CSIF Balanced
2 CSIF Managed Indes
3 CSIF Equity
4.Capital Accumulation
5 CWVF International Equity
6 Calvert New Vision Small Cap
7 CSIF Money Market9
CLASS A
SHAREHOLDER FEES
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON
PURCHASES (AS A PERCENTAGE OF OFFERING PRICE)
4.75 4.75 4.75 4.75 4.75 4.75 3.75 NONE
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(AS A PERCENTAGE OF PURCHASE OR REDEMPTION
PROCEEDS, WHICHEVER IS LOWER)
MAXIMUM ACCOUNT FEE 3 4
NONE2 NONE2 NONE2 NONE2 NONE2 NONE2 NONE2 NONE
ANNUAL FUND OPERATING EXPENSES1
ANAGEMENT FEE
.70 .75 .70 .90 1.10 1.00 .55 .50
DISTRIBUTION AND SERVICE (12B-1) FEES
.24 .25 .23 .35 .25 .25 .20 .00
OTHER EXPENSES
.25 .59 .35 .48 .52 .71 .38 .40
TOTAL ANNUAL FUND OPERATING EXPENSES
1.19 1.59 1.28 1.73 1.87 1.96 1.13 .90
FEE WAIVER AND/OR EXPENSE REIMBURSEMENT5
(.34) (.03)
NET EXPENSES
1.25 .87
CLASS B
SHAREHOLDER FEES
MAXIMUM SALES CHARGE (LOAD) IMPOSED ON
PURCHASES (AS A PERCENTAGE OF OFFERING PRICE)
NONE NONE NONE NONE NONE NONE NONE N/A
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(AS A PERCENTAGE OF PURCHASE OR REDEMPTION
PROCEEDS, WHICHEVER IS LOWER)
5%6 5%6 5%6 5%6 5%6 5%6 4%7 N/A
MAXIMUM ACCOUNT FEE
3
ANNUAL FUND OPERATING EXPENSES1
MANAGEMENT FEES
.70 .75 .70 .90 1.10 1.00 .55 N/A
DISTRIBUTION AND SERVICE (12B-1) FEES
1.00 1.00 1.00 1.00 1.00 1.00 1.00 N/A
OTHER EXPENSES
.72 .92 .79 .77 1.52 1.87 1.17
TOTAL ANNUAL FUND OPERATING EXPENSES
2.42 2.67 2.49 2.67 3.62 3.87 2.72
FEE WAIVER AND/OR EXPENSE REIMBURSEMENT5
(.17) (.46) (.86) (.22)
NET EXPENSES
2.50 3.16 3.01 2.50
<PAGE>
FEES AND EXPENSES (CONT'D)
CLASS C
SHAREHOLDER FEES
MAXIMUM SALES CHARGE (LOAD) IMPOSED
ON PURCHASES(AS A PERCENTAGE OF OFFERING PRICE)
NONE NONE NONE NONE NONE NONE NONE N/A
MAXIMUM DEFERRED SALES CHARGE (LOAD)
(AS A PERCENTAGE OF PURCHASE OR REDEMPTION
PROCEEDS, WHICHEVER IS LOWER)
1%8 1%8 1%8 1%8 1%8 1%8 1%8 N/A
MAXIMUM ACCOUNT FEE
3
ANNUAL FUND OPERATING EXPENSES 1
MANAGEMENT FEES
.70 .75 .70 .90 1.10 1.00 .55 N/A
DISTRIBUTION AND SERVICE (12B-1) FEES
1.00 1.00 1.00 1.00 1.00 1.00 1.00 N/A
OTHER EXPENSES
.51 .93 .58 .66 .73 .87 1.30
TOTAL ANNUAL FUND OPERATING EXPENSES
2.21 2.68 2.28 2.56 2.83 2.87 2.85
FEE WAIVER AND/OR EXPENSE REIMBURSEMENT5
(.18) (.35)
NET EXPENSES
2.50 2.50
EXPLANATION OF FEES AND EXPENSES TABLE
1 EXPENSES ARE BASED ON EXPENSES FOR THE FUND'S MOST RECENT FISCAL YEAR,
UNLESS OTHERWISE INDICATED. MANAGEMENT FEES INCLUDE THE SUBADVISORY FEES PAID BY
THE ADVISOR ("CAMCO") TO THE SUBADVISORS, AND THE ADMINISTRATIVE FEE PAID BY THE
FUND TO CALVERT ADMINISTRATIVE SERVICES COMPANY, AN AFFILIATE OF CAMCO.
2 PURCHASES OF CLASS A SHARES FOR ACCOUNTS WITH $1 MILLION OR MORE ARE NOT
SUBJECT TO FRONT-END SALES CHARGES, BUT MAY BE SUBJECT TO A 1% CONTINGENT
DEFERRED SALES CHARGE ON SHARES REDEEMED WITHIN 1 YEAR OF PURCHASE. (SEE "HOW TO
BUY SHARES" - CLASS A).
3 FOR EACH ACCOUNT WITH A BALANCE OF LESS THAN $5000 (LESS THAN $1000 FOR
IRAS), THE FUND CHARGES A MONTHLY ACCOUNT MAINTENANCE FEE OF $1.
4 FOR EACH ACCOUNT WITH A BALANCE OF LESS THAN $1000, THE FUND CHARGES A
MONTHLY ACCOUNT MAINTENANCE FEE OF $3.
5 CAMCO HAS AGREED TO WAIVE FEES AND OR REIMBURSE EXPENSES (NET OF ANY
EXPENSE OFFSET ARRANGEMENTS) FOR CERTAIN OF THE FUNDS THROUGH JANUARY 31, 2001:
CSIF MONEY MARKET, CSIF BOND (CLASS B AND C), CSIF MANAGED INDEX (CLASS A, B AND
C), CWVF INTERNATIONAL EQUITY (CLASS B), AND NEW VISION (CLASS B). "NET
EXPENSES" IS THE MAXIMUM AMOUNT THAT MAY BE CHARGED TO THESE FUNDS FOR THIS
PERIOD, EXCLUDING ANY EXPENSE OFFSET ARRANGEMENT.
6 A CONTINGENT DEFERRED SALES CHARGE IS IMPOSED ON THE PROCEEDS OF CLASS B
SHARES REDEEMED WITHIN 6 YEARS, SUBJECT TO CERTAIN EXCEPTIONS. THE CHARGE IS A
PERCENTAGE OF NET ASSET VALUE AT THE TIME OF PURCHASE OR REDEMPTION, WHICHEVER
IS LESS, AND DECLINES FROM 5% IN THE FIRST YEAR THAT SHARES ARE HELD, TO 4% IN
THE SECOND AND THIRD YEAR, 3% IN THE FOURTH YEAR, 2% IN THE FIFTH YEAR, AND 1%
IN THE SIXTH YEAR. THERE IS NO CHARGE ON REDEMPTIONS OF CLASS B SHARES HELD FOR
MORE THAN SIX YEARS. SEE "CALCULATION OF CONTINGENT DEFERRED SALES CHARGE."
<PAGE>
EXPLANATION OF FEES AND EXPENSES TABLE (CONT'D)
7 A CONTINGENT DEFERRED SALES CHARGE IS IMPOSED ON THE PROCEEDS OF CLASS B
SHARES OF CSIF BOND REDEEMED WITHIN 4 YEARS, SUBJECT TO CERTAIN EXCEPTIONS. THE
CHARGE IS A PERCENTAGE OF NET ASSET VALUE AT THE TIME OF PURCHASE OR REDEMPTION,
WHICHEVER IS LESS, AND DECLINES FROM 4% IN THE FIRST YEAR THAT SHARES ARE HELD,
TO 3% IN THE SECOND, 2% IN THE THIRD YEAR, AND 1% IN THE FOURTH YEAR. THERE IS
NO CHARGE ON REDEMPTIONS OF CLASS B SHARES HELD FOR MORE THAN FOUR YEARS. SEE
"CALCULATION OF CONTINGENT DEFERRED SALES CHARGE."
8 A CONTINGENT DEFERRED SALES CHARGE OF 1% IS IMPOSED ON THE PROCEEDS OF
CLASS C SHARES REDEEMED WITHIN ONE YEAR. THE CHARGE IS A PERCENTAGE OF NET ASSET
VALUE AT THE TIME OF PURCHASE OR REDEMPTION, WHICHEVER IS LESS. SEE "CALCULATION
OF CONTINGENT DEFERRED SALES CHARGE."
9 FOR CSIF MONEY MARKET, CLASS A REFERS TO CLASS O.
10 THE MANAGEMENT FEES FOR CSIF BALANCED, CSIF EQUITY AND CAPITAL ACCUMULATION
HAVE BEEN RESTATED TO REFLECT CHANGES APPROVED BY SHAREHOLDERS IN EARLY 1999.
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:
NUMBER OF YEARS INVESTMENT IS HELD
CSIF BALANCED
1 591 745 245 324 224
3 835 1,115 755 691 691
5 1,098 1,491 1,291 1,185 1,185
10 1,850 2,451 2,451 2,544 2,544
CSIF MANAGED INDEX
1 596 753 253 353 253
3 921 1,213 813 815 815
5 1,269 1,600 1,400 1,404 1,404
10 2,247 2,728 2,728 2,999 2,999
<PAGE>
[INSERT HEADINGS]
NUMBER OF YEARS INVESTMENT IS HELD
CSIF EQUITY
1 599 752 252 331 231
3 862 1,176 776 712 712
5 1,144 1,526 1,326 1,220 1,220
10 1,947 2,527 2,527 2,615 2,615
CAPITAL ACCUMULATION
1 642 770 270 359 259
3 994 1,229 829 796 796
5 1,369 1,615 1,415 1,360 1,360
10 2,419 2,775 2,775 2,895 2,895
CWVF INTERNATIONAL EQUITY
1 656 819 319 386 286
3 1,035 1,466 1,066 877 877
5 1,438 2,035 1,835 1,494 1,494
10 2,561 3,460 3,460 3,157 3,157
CALVERT NEW VISION SMALL CAP
1 665 804 304 390 290
3 1,061 1,502 1,102 889 889
5 1,482 2,119 1,919 1,513 1,513
10 2,652 3,624 3,624 3,195 3,195
CSIF BOND
1 486 653 253 353 253
3 721 1,024 824 850 850
5 974 1,420 1,420 1,473 1,473
10 1,698 2,289 2,289 3,151 3,151
CSIF MONEY MARKET
(CLASS A REFERS TO CLASS O FOR CSIF MONEY MARKET)
1 89 N/A N/A N/A N/A
3 284 N/A N/A N/A N/A
5 496 N/A N/A N/A N/A
10 1,105 N/A N/A N/A N/A
<PAGE>
PRINCIPAL INVESTMENT PRACTICES AND RISKS
THE MOST CONCISE DESCRIPTION OF EACH FUND'S PRINCIPAL INVESTMENT STRATEGIES AND
ASSOCIATED RISKS IS UNDER THE EARLIER SUMMARY FOR EACH FUND. THE FUNDS ARE ALSO
PERMITTED TO INVEST IN CERTAIN OTHER INVESTMENTS AND TO USE CERTAIN INVESTMENT
TECHNIQUES THAT HAVE HIGHER RISKS ASSOCIATED WITH THEM. ON THE FOLLOWING PAGES
ARE BRIEF DESCRIPTIONS OF THE INVESTMENTS AND TECHNIQUES SUMMARIZED EARLIER
ALONG WITH CERTAIN ADDITIONAL INVESTMENT TECHNIQUES AND THEIR RISKS.
FOR EACH OF THE INVESTMENT PRACTICES LISTED, THE TABLE BELOW SHOWS EACH FUND'S
LIMITATIONS AS A PERCENTAGE OF ITS ASSETS AND THE PRINCIPAL TYPES OF RISK
INVOLVED. (SEE THE PAGES FOLLOWING THE TABLE FOR A DESCRIPTION OF THE TYPES OF
RISKS). NUMBERS IN THIS TABLE SHOW MAXIMUM ALLOWABLE AMOUNT ONLY; FOR ACTUAL
USAGE, CONSULT THE FUND'S ANNUAL/SEMI-ANNUAL REPORTS.
KEY TO TABLE
J FUND CURRENTLY USES
O PERMITTED, BUT NOT TYPICALLY USED
(% OF ASSETS ALLOWABLE, IF RESTRICTED)
X NOT PERMITTED
XN ALLOWED UP TO X% OF FUND'S NET ASSETS
XT ALLOWED UP TO X% OF FUND'S TOTAL ASSETS
N/A NOT APPLICABLE TO THIS TYPE OF FUND
Column 1 = Explanation of Practice
Column 2 = CSIF Balanced
Column 3 = CSIF Managed Index
Column 4 = CSIF Equity
Column 5 = Capital Accumulation
Column 2 = CWVF International Equity
Column 7 = Calvert New Vision Small Cap
Column 8 = CSIF Bond
Column 9 = CSIF Money Market
Investment Practices
- -------------------------------------------------------------------------------
Column 1 2 3 4 5 6 7 8 9
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Active Trading @ 0 0 0 0 0 @ NA
Strategy/Turnover
involves selling a
security soon after
purchase. An active
trading strategy
causes a fund to have
higher portfolio
turnover compared to
other funds and
higher transaction
costs, such as
commissions and
custodian and
settlement fees, and
may increase a Fund's
tax liability. Risks:
Opportunity, Market
and Transaction.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Temporary Defensive
Positions. 0 0 0 0 0 0 0 NA
During adverse (35T) (35T)
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.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Conventional
Securities 25N -- 25N @ 25N 15T1 25N NA
Foreign Securities.
Securities issued by
companies located
outside the U.S.
and/or traded
primarily on a
foreign exchange.
Risks: Market,
Currency,
Transaction,
Liquidity,
Information and
Political.
- -------------------------------------------------------------------------------
1 New Vision may invest only in American Depositary Receipts (ADRs) -
dollar-denominated receipts representing shares of a foreign issuer. ADRs are
traded on U.S. exchanges. See the SAI.
<PAGE>
- -------------------------------------------------------------------------------
Column 1 2 3 4 5 6 7 8 9
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Small Cap Stocks.
Investing in small 0 NA 0 0 0 @ NA NA
companies involves
greater risk than
with more established
companies. Small cap
stock prices are more
volatile and the
companies often have
limited product
lines, markets,
financial resources,
and management
experience. Risks:
Market, Liquidity and
Information.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment grade
bonds. Bonds rated @ Na 0 0 0 0 @ NA
BBB/Baa or higher or
comparable unrated
bonds. Risks:
Interest Rate, Market
and Credit.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Below-investment 20N3 NA 20N3 10N3 5N3 5N3 20N3 NA
grade bonds. Bonds
rated below BBB/Baa
or comparable unrated
bonds are considered
junk bonds. They are
subject to greater
credit risk than
investment grade
bonds. Risks: Credit,
Market, Interest
Rate, Liquidity and
Information.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Unrated debt @ NA 0 0 0 0 @ @2
securities. Bonds
that have not been
rated by a recognized
rating agency; the
Advisor has
determined the credit
quality based on its
own research. Risks:
Credit, Market,
Interest Rate,
Liquidity and
Information.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Illiquid securities.
Securities which 15N 15N 15N 15N 15N 15N 15N 10N
cannot be readily
sold because there is
no active market.
Risks: Liquidity,
Market and
Transaction.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Unleveraged
derivative securities @ NA 0 0 0 0 @ @4
Asset-backed
securities.
Securities are backed
by unsecured debt,
such as credit card
debt. These
securities are often
guaranteed or
over-collateralized
to enhance their
credit quality.
Risks: Credit,
Interest Rate and
Liquidity.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Mortgage-backed
securities. @ NA 0 0 0 0 @ 05
Securities are backed
by pools of
mortgages, including
passthrough
certificates, and
other senior classes
of collateralized
mortgage obligations
(CMOs). Risks:
Credit, Extension,
Prepayment, Liquidity
and Interest Rate.
- -------------------------------------------------------------------------------
2 Must be money-market eligible under SEC Rule 2a-7.
3 Excludes any high social impact investments.
4 Must be money-market eligible under SEC Rule 2a-7.
5 Must be money-market eligible under SEC Rule 2a-7.
<PAGE>
- -------------------------------------------------------------------------------
Column 1 2 3 4 5 6 7 8 9
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Unleveraged
derivative
securities, (con't.)
Participation 0 NA 0 0 0 0 0 06
interests. Securities
representing an
interest in another
security or in bank
loans. Risks: Credit,
Interest Rate and
Liquidity.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Leveraged derivative
instruments Currency
contracts. Contracts 0 NA 0 5T 5T - - 0 NA
involving the right
or obligation to buy
or sell a given
amount of foreign
currency at a
specified price and
future date. Risks:
Currency, Leverage,
Correlation,
Liquidity and
Opportunity.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Options on securities
and indices. 5T 5T 5T 5T 5T 5T 5T NA
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. In
the case of selling
(writing) options,
the Funds will write
call options only if
they already own the
security (if it is
"covered"). Risks:
Interest Rate,
Currency, Market,
Leverage,
Correlation,
Liquidity, Credit and
Opportunity.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Futures contract. 0 0 0 0 0 0 0 NA
Agreement to buy or 5N 5N 5N 5N 5N 5N 5N
sell a specific
amount of a commodity
or financial
instrument at a
particular price on a
specific future date.
Risks: Interest Rate,
Currency, Market,
Leverage,
Correlation,
Liquidity and
Opportunity.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Structured securities
Indexed and/or
leveraged 0 NA NA NA 0 NA 0 NA
mortgage-backed and
other debt
securities, including
principal-only and
interest-only
securities, leveraged
floating rate
securities, and
others. These
securities tend to be
highly sensitive to
interest rate
movements and their
performance may not
correlate to these
movements in a
conventional fashion.
Risks: Credit,
Interest Rate,
Extension,
Prepayment, Market,
Leverage, Liquidity
and Correlation.
- -------------------------------------------------------------------------------
INVESTMENT PRACTICES
ACTIVE TRADING STRATEGY/TURNOVER INVOLVES
SELLING A SECURITY SOON AFTER PURCHASE. AN ACTIVE
TRADING STRATEGY CAUSES A FUND TO HAVE HIGHER
PORTFOLIO TURNOVER COMPARED TO OTHER FUNDS AND
J O O O O O J N/A
HIGHER TRANSACTION COSTS, SUCH AS COMMISSIONS AND
CUSTODIAN AND SETTLEMENT FEES, AND MAY INCREASE A
FUND'S TAX LIABILITY. RISKS: OPPORTUNITY, MARKET
AND TRANSACTION.
TEMPORARY DEFENSIVE POSITIONS. DURING
ADVERSE MARKET, ECONOMIC OR POLITICAL CONDITIONS,
MAY DEPART FROM ITS PRINCIPAL INVESTMENT
STRATEGIES BY INCREASING ITS INVESTMENT IN U.S.
O O O O O O O N/A
GOVERNMENT SECURITIES AND OTHER SHORT-TERM (35T)
INTEREST-BEARING SECURITIES. DURING TIMES OF ANY
TEMPORARY DEFENSIVE POSITIONS, A FUND MAY NOT
BE ABLE TO ACHIEVE ITS INVESTMENT OBJECTIVE.
RISKS: OPPORTUNITY.
CONVENTIONAL SECURITIES
FOREIGN SECURITIES. SECURITIES ISSUED BY
COMPANIES LOCATED OUTSIDE THE U.S. AND/OR
25N X 25N 25N J 15T1 25N N/A
TRADED PRIMARILY ON A FOREIGN EXCHANGE.
RISKS: MARKET, CURRENCY,TRANSACTION,
LIQUIDITY, INFORMATION AND POLITICAL.
1 NEW VISION MAY INVEST ONLY IN AMERICAN DEPOSITORY RECEIPTS (ADRS) -
DOLLAR-DENOMINATED RECEIPTS REPRESENTING SHARES OF A FOREIGN ISSUER. ADRS ARE
TRADED ON US EXCHANGES. SEE THE SAI.
<PAGE>
[INSERT HEADINGS]
PRACTICES/RISKS (CONT'D)
CONVENTIONAL SECURITIES (CONT'D)
SMALL CAP STOCKS. INVESTING IN SMALL
COMPANIES INVOLVES GREATER RISK THAN WITH MORE
ESTABLISHED COMPANIES. SMALL CAP STOCK PRICES
O N/A O O O J N/A N/A
ARE MORE VOLATILE AND THE COMPANIES OFTEN HAVE
LIMITED PRODUCT LINES,MARKETS, FINANCIAL RESOURCES,
AND MANAGEMENT EXPERIENCE. RISKS: MARKET,
LIQUIDITY AND INFORMATION.
INVESTMENT GRADE BONDS. BONDS RATED
BBB/BAA OR HIGHER OR COMPARABLE UNRATED
J N/A O O O O J N/A
BONDS. RISKS: INTEREST RATE, MARKET (35N) (35N)
AND CREDIT.
BELOW-INVESTMENT GRADE BONDS. BONDS
RATED BELOW BBB/BAA OR COMPARABLE UNRATED
BONDS ARE CONSIDERED JUNK BONDS. THEY ARE
20N3 N/A 20N3 10N3 5N3 5N3 20N3 N/A
SUBJECT TO GREATER CREDIT RISK THAN INVESTMENT
GRADE BONDS. RISKS: CREDIT, MARKET,
INTEREST RATE, LIQUIDITY AND INFORMATION.
UNRATED DEBT SECURITIES. BONDS THAT HAVE NOT
BEEN RATED BY A RECOGNIZED RATING AGENCY; THE
ADVISOR HAS DETERMINED THE CREDIT QUALITY BASED
J N/A O O O O J J2
ON ITS OWN RESEARCH. RISKS: CREDIT, MARKET,
INTEREST RATE,LIQUIDITY AND INFORMATION.
ILLIQUID SECURITIES. SECURITIES WHICH CANNOT BE
READILY SOLD BECAUSE THERE IS NO ACTIVE MARKET.
15N 15N 15N 15N 15N 15N 15N 10N
RISKS: LIQUIDITY, MARKET AND TRANSACTION.
UNLEVERAGED DERIVATIVE SECURITIES
ASSET-BACKED SECURITIES. SECURITIES ARE BACKED
BY UNSECURED DEBT, SUCH AS CREDIT CARD DEBT.
THESE SECURITIES ARE OFTEN GUARANTEED OR
J N/A O O O O J J4
OVER-COLLATERALIZED TO ENHANCE THEIR CREDIT
QUALITY. RISKS: CREDIT, INTEREST RATE AND
LIQUIDITY.
MORTGAGE-BACKED SECURITIES. SECURITIES ARE
BACKED BY POOLS OF MORTGAGES, INCLUDING
PASSTHROUGH CERTIFICATES, AND OTHER SENIOR CLASSES
J N/A O O O O J O5
OF COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS).
RISKS: CREDIT, EXTENSION, PREPAYMENT,
LIQUIDITY AND INTEREST RATE.
2 MUST BE MONEY-MARKET ELIGIBLE UNDER SEC RULE 2A-7. 3 EXCLUDES ANY
HIGH SOCIAL IMPACT INVESTMENTS.
4 MUST BE MONEY-MARKET ELIGIBLE UNDER SEC RULE 2A-7. 5 MUST BE
MONEY-MARKET ELIGIBLE UNDER SEC RULE 2A-7.
<PAGE>
[INSERT HEADINGS]
PRACTICES/RISKS (CONT'D)
UNLEVERAGED DERIVATIVE SECURITIES (CONT'D.)
PARTICIPATION INTERESTS. SECURITIES
REPRESENTING AN INTEREST IN ANOTHER SECURITY OR IN
O N/A O O O O O O6
BANK LOANS. RISKS: CREDIT, INTEREST RATE
AND LIQUIDITY.
LEVERAGED DERIVATIVE INSTRUMENTS
CURRENCY CONTRACTS. CONTRACTS INVOLVING THE
RIGHT OR OBLIGATION TO BUY OR SELL A GIVEN AMOUNT
O N/A O 5T 5T X O N/A
OF FOREIGN CURRENCY AT A SPECIFIED PRICE AND
FUTURE DATE. RISKS: CURRENCY, LEVERAGE,
CORRELATION, LIQUIDITY AND OPPORTUNITY.
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. IN
5T7 5T7 5T7 5T7 5T7 5T7 5T7 N/A
THE CASE OF SELLING (WRITING) OPTIONS, THE FUNDS
WILL WRITE CALL OPTIONS ONLY IF THEY ALREADY OWN
THE SECURITY (IF IT IS "COVERED").
RISKS: INTEREST RATE, CURRENCY, MARKET,
LEVERAGE, CORRELATION,LIQUIDITY, CREDIT
AND OPPORTUNITY.
FUTURES CONTRACT. AGREEMENT TO BUY OR SELL A
SPECIFIC AMOUNT OF A COMMODITY OR FINANCIAL
INSTRUMENT AT A PARTICULAR PRICE ON A SPECIFIC
O O O O O O O N/A
FUTURE DATE. RISKS: INTEREST RATE, CURRENCY,
5N 5N 5N 5N 5N 5N 5N
MARKET, LEVERAGE, CORRELATION, LIQUIDITY
AND OPPORTUNITY.
STRUCTURED SECURITIES. INDEXED AND/OR
LEVERAGED MORTGAGE-BACKED AND OTHER DEBT
SECURITIES, INCLUDING PRINCIPAL-ONLY AND INTEREST-
ONLY SECURITIES, LEVERAGED FLOATING RATE
SECURITIES, AND OTHERS. THESE SECURITIES TEND TO BE
O N/A N/A O N/A N/A O N/A
HIGHLY SENSITIVE TO INTEREST RATE MOVEMENTS AND
THEIR PERFORMANCE MAY NOT CORRELATE TO THESE
MOVEMENTS IN A CONVENTIONAL FASHION. RISKS:
CREDIT, INTEREST RATE, EXTENSION,
PREPAYMENT, MARKET, LEVERAGE, LIQUIDITY
AND CORRELATION.
6 MUST BE MONEY-MARKET ELIGIBLE UNDER SEC RULE 2A-7.
7 BASED ON NET PREMIUM PAYMENTS.
<PAGE>
THE FUNDS HAVE ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS THAT ARE NOT
PRINCIPAL TO THEIR INVESTMENT STRATEGIES (FOR EXAMPLE, REPURCHASE AGREEMENTS,
BORROWING, PLEDGING, AND REVERSE REPURCHASE AGREEMENTS, SECURITIES LENDING,
WHEN-ISSUED SECURITIES AND SHORT SALES.) 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.
CURRENCY RISK
CURRENCY RISK OCCURS WHEN A FUND BUYS, SELLS OR HOLDS A SECURITY DENOMINATED IN
FOREIGN CURRENCY. FOREIGN CURRENCIES "FLOAT" IN VALUE AGAINST THE U.S. DOLLAR.
ADVERSE CHANGES IN FOREIGN CURRENCY VALUES CAN CAUSE INVESTMENT LOSSES WHEN A
FUND'S INVESTMENTS ARE CONVERTED TO U.S. DOLLARS.
EXTENSION RISK
THE RISK THAT AN UNEXPECTED RISE IN INTEREST RATES WILL EXTEND THE LIFE OF A
MORTGAGE-BACKED SECURITY BEYOND THE EXPECTED PREPAYMENT TIME, TYPICALLY REDUCING
THE SECURITY'S VALUE.
INFORMATION RISK
THE RISK THAT INFORMATION ABOUT A SECURITY OR ISSUER OR THE MARKET MIGHT NOT BE
AVAILABLE, COMPLETE, ACCURATE OR COMPARABLE.
INTEREST RATE RISK
THE RISK THAT CHANGES IN INTEREST RATES WILL ADVERSELY AFFECT THE VALUE OF AN
INVESTOR'S SECURITIES. WHEN INTEREST RATES RISE, THE VALUE OF FIXED-INCOME
SECURITIES WILL GENERALLY FALL. CONVERSELY, A DROP IN INTEREST RATES WILL
GENERALLY CAUSE AN INCREASE IN THE VALUE OF FIXED-INCOME SECURITIES. LONGER-TERM
SECURITIES AND ZERO COUPON/"STRIPPED" COUPON SECURITIES ("STRIPS") ARE SUBJECT
TO GREATER INTEREST RATE RISK.
<PAGE>
LEVERAGE RISK
THE RISK THAT OCCURS IN SOME SECURITIES OR TECHNIQUES WHICH TEND TO MAGNIFY THE
EFFECT OF SMALL CHANGES IN AN INDEX OR A MARKET. THIS CAN RESULT IN A LOSS THAT
EXCEEDS THE AMOUNT ACTUALLY INVESTED.
LIQUIDITY RISK
THE RISK THAT OCCURS WHEN INVESTMENTS CANNOT BE READILY SOLD. A FUND MAY HAVE TO
ACCEPT A LESS-THAN-DESIRABLE PRICE TO COMPLETE THE SALE OF AN ILLIQUID SECURITY
OR MAY NOT BE ABLE TO SELL IT AT ALL.
MANAGEMENT RISK
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
THE RISK THAT MAY OCCUR WITH FOREIGN INVESTMENTS, AND MEANS THAT THE VALUE OF AN
INVESTMENT MAY BE ADVERSELY AFFECTED BY NATIONALIZATION, TAXATION, WAR,
GOVERNMENT INSTABILITY OR OTHER ECONOMIC OR POLITICAL ACTIONS OR FACTORS.
PREPAYMENT RISK
THE RISK THAT UNANTICIPATED PREPAYMENTS MAY OCCUR, REDUCING THE VALUE OF A
MORTGAGE-BACKED SECURITY. THE FUND MUST THEN REINVEST THOSE ASSETS AT THE
CURRENT, MARKET RATE WHICH MAY BE LOWER.
TRANSACTION RISK
THE RISK THAT A FUND MAY BE DELAYED OR UNABLE TO SETTLE A TRANSACTION OR THAT
COMMISSIONS AND SETTLEMENT EXPENSES MAY BE HIGHER THAN USUAL.
INVESTMENT SELECTION PROCESS
INVESTMENTS ARE SELECTED ON THE BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL
OBJECTIVES OF FINANCIAL SOUNDNESS AND SOCIAL CRITERIA.
POTENTIAL INVESTMENTS FOR A FUND ARE FIRST SELECTED FOR FINANCIAL SOUNDNESS AND
THEN EVALUATED ACCORDING TO THAT FUND'S SOCIAL CRITERIA. TO THE GREATEST EXTENT
POSSIBLE, CALVERT SOCIAL INVESTMENT FUND (CSIF) AND CALVERT WORLD VALUES
<PAGE>
INTERNATIONAL EQUITY FUND (CWVF) SEEK TO INVEST IN COMPANIES THAT EXHIBIT
POSITIVE ACCOMPLISHMENTS WITH RESPECT TO ONE OR MORE OF THE SOCIAL CRITERIA.
INVESTMENTS FOR ALL FUNDS MUST MEET THE MINIMUM STANDARDS FOR ALL ITS FINANCIAL
AND SOCIAL CRITERIA.
ALTHOUGH EACH FUND'S SOCIAL CRITERIA TEND TO LIMIT THE AVAILABILITY OF
INVESTMENT OPPORTUNITIES MORE THAN IS CUSTOMARY WITH OTHER INVESTMENT COMPANIES,
CAMCO AND THE SUBADVISORS OF THE FUNDS BELIEVE THERE ARE SUFFICIENT INVESTMENT
OPPORTUNITIES TO PERMIT FULL INVESTMENT AMONG ISSUERS WHICH SATISFY EACH FUND'S
INVESTMENT AND SOCIAL OBJECTIVES.
THE SELECTION OF AN INVESTMENT BY A FUND DOES NOT CONSTITUTE ENDORSEMENT OR
VALIDATION BY THAT FUND, NOR DOES THE EXCLUSION OF AN INVESTMENT NECESSARILY
REFLECT FAILURE TO SATISFY THE FUND'S SOCIAL CRITERIA. INVESTORS ARE INVITED TO
SEND A BRIEF DESCRIPTION OF COMPANIES THEY BELIEVE MIGHT BE SUITABLE FOR
INVESTMENT.
SOCIALLY RESPONSIBLE INVESTMENT CRITERIA
THE FUNDS INVEST IN ACCORDANCE WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO
INVESTORS WILL COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND
METHODS ENHANCE THE HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF
INDIVIDUAL INITIATIVE, EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. IN
ADDITION, WE BELIEVE THAT THERE ARE LONG-TERM BENEFITS IN AN INVESTMENT
PHILOSOPHY THAT DEMONSTRATES CONCERN FOR THE ENVIRONMENT, LABOR RELATIONS, HUMAN
RIGHTS AND COMMUNITY RELATIONS. THOSE ENTERPRISES THAT EXHIBIT A SOCIAL
AWARENESS IN THESE ISSUES SHOULD BE BETTER PREPARED TO MEET FUTURE SOCIETAL
NEEDS. BY RESPONDING TO SOCIAL CONCERNS, THESE ENTERPRISES SHOULD NOT ONLY
AVOID THE LIABILITY THAT MAY BE INCURRED WHEN A PRODUCT OR SERVICE IS DETERMINED
TO HAVE A NEGATIVE SOCIAL IMPACT OR HAS OUTLIVED ITS USEFULNESS, BUT ALSO BE
BETTER POSITIONED TO DEVELOP OPPORTUNITIES TO MAKE A PROFITABLE CONTRIBUTION TO
SOCIETY. THESE ENTERPRISES SHOULD BE READY TO RESPOND TO EXTERNAL DEMANDS AND
ENSURE THAT OVER THE LONGER TERM THEY WILL BE VIABLE TO SEEK TO PROVIDE A
POSITIVE RETURN TO BOTH INVESTORS AND SOCIETY AS A WHOLE.
EACH FUND HAS DEVELOPED SOCIAL INVESTMENT CRITERIA, DETAILED BELOW. THESE
CRITERIA REPRESENT STANDARDS OF BEHAVIOR WHICH FEW, IF ANY, ORGANIZATIONS
TOTALLY SATISFY. AS A MATTER OF PRACTICE, EVALUATION OF A PARTICULAR
ORGANIZATION IN THE CONTEXT OF THESE CRITERIA WILL INVOLVE SUBJECTIVE JUDGMENT
BY CAMCO AND THE SUBADVISORS. ALL SOCIAL CRITERIA MAY BE CHANGED BY THE BOARD OF
TRUSTEES/DIRECTORS WITHOUT SHAREHOLDER APPROVAL.
<PAGE>
CALVERT SOCIAL INVESTMENT FUND
CSIF SEEKS TO INVEST IN COMPANIES THAT:
- - DELIVER SAFE PRODUCTS AND SERVICES IN WAYS THAT SUSTAIN OUR NATURAL
ENVIRONMENT. FOR EXAMPLE, CSIF LOOKS FOR COMPANIES THAT PRODUCE ENERGY FROM
RENEWABLE RESOURCES, WHILE AVOIDING CONSISTENT POLLUTERS.
- - MANAGE WITH PARTICIPATION THROUGHOUT THE ORGANIZATION IN DEFINING AND
ACHIEVING OBJECTIVES. FOR EXAMPLE, CSIF LOOKS FOR COMPANIES THAT OFFER EMPLOYEE
STOCK OWNERSHIP OR PROFIT-SHARING PLANS.
- - NEGOTIATE FAIRLY WITH THEIR WORKERS, PROVIDE AN ENVIRONMENT SUPPORTIVE OF
THEIR WELLNESS, DO NOT DISCRIMINATE ON THE BASIS OF RACE, GENDER, RELIGION, AGE,
DISABILITY, ETHNIC ORIGIN, OR SEXUAL ORIENTATION, DO NOT CONSISTENTLY VIOLATE
REGULATIONS OF THE EEOC, AND PROVIDE OPPORTUNITIES FOR WOMEN, DISADVANTAGED
MINORITIES, AND OTHERS FOR WHOM EQUAL OPPORTUNITIES HAVE OFTEN BEEN DENIED. FOR
EXAMPLE, CSIF CONSIDERS BOTH UNIONIZED AND NON-UNION FIRMS WITH GOOD LABOR
RELATIONS.
- - FOSTER AWARENESS OF A COMMITMENT TO HUMAN GOALS, SUCH AS CREATIVITY,
PRODUCTIVITY, SELF-RESPECT AND RESPONSIBILITY, WITHIN THE ORGANIZATION AND THE
WORLD, AND CONTINUALLY RECREATES A CONTEXT WITHIN WHICH THESE GOALS CAN BE
REALIZED. FOR EXAMPLE, CSIF LOOKS FOR COMPANIES WITH AN ABOVE AVERAGE
COMMITMENT TO COMMUNITY AFFAIRS AND CHARITABLE GIVING.
CSIF WILL NOT INVEST IN COMPANIES THAT THE ADVISOR DETERMINES TO BE
SIGNIFICANTLY ENGAGED IN:
- - BUSINESS ACTIVITIES IN SUPPORT OF REPRESSIVE REGIMES
- - PRODUCTION, OR THE MANUFACTURE OF EQUIPMENT, TO PRODUCE NUCLEAR ENERGY
- - MANUFACTURE OF WEAPON SYSTEMS
- - MANUFACTURE OF ALCOHOLIC BEVERAGES OR TOBACCO PRODUCTS
- - OPERATION OF GAMBLING CASINOS
- - A PATTERN AND PRACTICE OF VIOLATING THE RIGHTS OF INDIGENOUS PEOPLE. WE
URGE COMPANIES TO END NEGATIVE STEREOTYPES OF NATIVE AMERICANS AND OTHER
INDIGENOUS PEOPLES. FOR EXAMPLE, CSIF OBJECTS TO THE UNAUTHORIZED USE OF NAMES
AND IMAGES THAT PORTRAY NATIVE AMERICANS IN A NEGATIVE LIGHT, AND
SUPPORTS THE PROMOTION OF POSITIVE PORTRAYALS OF ALL INDIVIDUALS AND ETHNIC
GROUPS.
WITH RESPECT TO U.S. GOVERNMENT SECURITIES, CSIF INVESTS PRIMARILY IN DEBT
OBLIGATIONS ISSUED OR GUARANTEED BY AGENCIES OR INSTRUMENTALITIES OF THE U.S.
GOVERNMENT WHOSE PURPOSES FURTHER OR ARE COMPATIBLE WITH CSIF'S SOCIAL CRITERIA,
SUCH AS OBLIGATIONS OF THE STUDENT LOAN MARKETING ASSOCIATION, RATHER THAN
GENERAL OBLIGATIONS OF THE U.S. GOVERNMENT, SUCH AS TREASURY SECURITIES.
<PAGE>
CALVERT WORLD VALUES INTERNATIONAL EQUITY FUND
THE SPIRIT OF CALVERT WORLD VALUES INTERNATIONAL EQUITY FUND'S SOCIAL CRITERIA
IS SIMILAR TO CSIF, BUT THE APPLICATION OF THE SOCIAL ANALYSIS IS SIGNIFICANTLY
DIFFERENT. INTERNATIONAL INVESTING BRINGS UNIQUE CHALLENGES IN TERMS OF
CORPORATE DISCLOSURE, REGULATORY STRUCTURES, ENVIRONMENTAL STANDARDS, AND
DIFFERING NATIONAL AND CULTURAL PRIORITIES. DUE TO THESE FACTORS, THE CWVF
SOCIAL INVESTMENT STANDARDS ARE LESS STRINGENT THAN THOSE OF CSIF.
CWVF SEEKS TO INVEST IN COMPANIES THAT:
- - ACHIEVE EXCELLENCE IN ENVIRONMENTAL MANAGEMENT. WE SELECT INVESTMENTS
THAT TAKE POSITIVE STEPS TOWARD PRESERVING AND ENHANCING OUR NATURAL ENVIRONMENT
THROUGH THEIR OPERATIONS AND PRODUCTS. WE AVOID COMPANIES WITH POOR
ENVIRONMENTAL RECORDS.
- - HAVE POSITIVE LABOR PRACTICES. WE CONSIDER THE INTERNATIONAL LABOR
ORGANIZATION'S BASIC CONVENTIONS ON WORKER RIGHTS AS A GUIDELINE FOR OUR LABOR
CRITERIA. WE SEEK TO INVEST IN COMPANIES THAT HIRE AND PROMOTE WOMEN AND ETHNIC
MINORITIES; RESPECT THE RIGHT TO FORM UNIONS; COMPLY, AT A MINIMUM, WITH
DOMESTIC HOUR AND WAGE LAWS; AND PROVIDE GOOD HEALTH AND SAFETY STANDARDS. WE
AVOID COMPANIES THAT DEMONSTRATE A PATTERN OF ENGAGING IN FORCED, COMPULSORY, OR
CHILD LABOR.
CWVF AVOIDS INVESTING IN COMPANIES THAT:
- - CONTRIBUTE TO HUMAN RIGHTS ABUSES IN OTHER COUNTRIES1
- - PRODUCE NUCLEAR POWER OR NUCLEAR WEAPONS, OR HAVE MORE THAN 10% OF REVENUES
DERIVED FROM THE PRODUCTION OR SALE OF WEAPONS SYSTEMS
- - DERIVE MORE THAN 10% OF REVENUES FROM THE PRODUCTION OF ALCOHOL OR TOBACCO
PRODUCTS, BUT ACTIVELY SEEKS TO INVEST IN COMPANIES WHOSE PRODUCTS OR SERVICES
IMPROVE THE QUALITY OF OR ACCESS TO HEALTH CARE, INCLUDING PUBLIC HEALTH AND
PREVENTATIVE MEDICINE
1 CWVF MAY INVEST IN COMPANIES THAT OPERATE IN COUNTRIES WITH POOR HUMAN
RIGHTS RECORDS IF WE BELIEVE THE COMPANIES ARE MAKING A POSITIVE
CONTRIBUTION.
<PAGE>
CALVERT CAPITAL ACCUMULATION FUND
CALVERT NEW VISION SMALL CAP FUND
THE FUNDS CAREFULLY REVIEW COMPANY POLICIES AND BEHAVIOR REGARDING SOCIAL ISSUES
IMPORTANT TO QUALITY OF LIFE SUCH AS:
- - ENVIRONMENT
- - EMPLOYEE RELATIONS
- - PRODUCT CRITERIA
- - WEAPONS SYSTEMS
- - NUCLEAR ENERGY
- - HUMAN RIGHTS
BOTH FUNDS WILL AVOID INVESTING IN COMPANIES THAT HAVE:
- - SIGNIFICANT OR HISTORICAL PATTERNS OF VIOLATING ENVIRONMENTAL REGULATIONS,
OR OTHERWISE HAVE AN EGREGIOUS ENVIRONMENTAL RECORD
- - SIGNIFICANT OR HISTORICAL PATTERNS OF DISCRIMINATION AGAINST EMPLOYEES ON
THE BASIS OF RACE, GENDER, RELIGION, AGE, DISABILITY OR SEXUAL ORIENTATION, OR
THAT HAVE MAJOR LABOR-MANAGEMENT DISPUTES
- - NUCLEAR POWER PLANT OPERATORS AND OWNERS, OR MANUFACTURERS OF KEY
COMPONENTS IN THE NUCLEAR POWER PROCESS
- - SIGNIFICANTLY ENGAGED IN WEAPONS PRODUCTION( INCLUDING WEAPONS SYSTEMS
CONTRACTORS AND MAJOR NUCLEAR WEAPONS SYSTEMS CONTRACTORS)
- - SIGNIFICANTLY INVOLVED IN THE MANUFACTURE OF TOBACCO OR ALCOHOL PRODUCTS
- - PRODUCTS OR OFFER SERVICES THAT, UNDER PROPER USE, ARE CONSIDERED HARMFUL
CAPITAL ACCUMULATION WILL AVOID COMPANIES THAT THE ADVISOR DETERMINES TO BE
SIGNIFICANTLY ENGAGED IN:
- - A PATTERN AND PRACTICE OF VIOLATING THE RIGHTS OF INDIGENOUS PEOPLE. WE
URGE COMPANIES TO END NEGATIVE STEREOTYPES OF NATIVE AMERICANS AND OTHER
INDIGENOUS PEOPLES. FOR EXAMPLE, CAPITAL ACCUMULATION OBJECTS TO THE
UNAUTHORIZED USE OF NAMES AND IMAGES THAT PORTRAY NATIVE AMERICANS IN A NEGATIVE
LIGHT, AND SUPPORTS THE PROMOTION OF POSITIVE PORTRAYALS OF ALL INDIVIDUALS AND
ETHNIC GROUPS.
THE ADVISOR WILL SEEK TO REVIEW COMPANIES' OVERSEAS OPERATIONS CONSISTENT WITH
THE SOCIAL CRITERIA STATED ABOVE.
WHILE CAPITAL ACCUMULATION AND NEW VISION MAY INVEST IN COMPANIES THAT EXHIBIT
POSITIVE SOCIAL CHARACTERISTICS, THEY MAKE NO EXPLICIT CLAIMS TO SEEK OUT
COMPANIES WITH SUCH PRACTICES.
<PAGE>
HIGH SOCIAL IMPACT INVESTMENTS
CSIF BALANCED, BOND AND EQUITY, CALVERT WORLD VALUES INTERNATIONAL
EQUITY, CAPITAL ACCUMULATION AND NEW VISION SMALL CAP
HIGH SOCIAL IMPACT INVESTMENTS IS A PROGRAM THAT TARGETS A PERCENTAGE OF THE
FUND'S ASSETS (UP TO 1% FOR EACH OF CSIF BALANCED, CSIF EQUITY AND CSIF BOND AND
NEW VISION AND UP TO 3% FOR EACH OF CWVF INTERNATIONAL EQUITY AND CAPITAL
ACCUMULATION) TO DIRECTLY SUPPORT THE GROWTH OF COMMUNITY-BASED ORGANIZATIONS
FOR THE PURPOSES OF PROMOTING BUSINESS CREATION, HOUSING DEVELOPMENT, AND
ECONOMIC AND SOCIAL DEVELOPMENT OF URBAN AND RURAL COMMUNITIES. THESE TYPES OF
INVESTMENTS OFFER A RATE OF RETURN BELOW THE THEN-PREVAILING MARKET RATE, AND
ARE CONSIDERED ILLIQUID, UNRATED AND BELOW-INVESTMENT GRADE. THEY ALSO INVOLVE A
GREATER RISK OF DEFAULT OR PRICE DECLINE THAN INVESTMENT GRADE SECURITIES.
HOWEVER, THEY HAVE A SIGNIFICANT SOCIAL RETURN BY MAKING A TREMENDOUS DIFFERENCE
IN OUR LOCAL COMMUNITIES. HIGH SOCIAL IMPACT INVESTMENTS ARE VALUED UNDER THE
DIRECTION AND CONTROL OF THE FUNDS' BOARDS. THE PROGRAM IS ADMINISTERED BY THE
CALVERT SOCIAL INVESTMENT FOUNDATION, WHICH MAY RECEIVE A FEE FROM THE FUNDS.
THE FUNDS HAVE RECEIVED AN EXEMPTIVE ORDER TO PERMIT THEM TO INVEST THOSE ASSETS
ALLOCATED FOR INVESTMENT IN HIGH SOCIAL IMPACT INVESTMENTS THROUGH THE PURCHASE
OF COMMUNITY INVESTMENT NOTES FROM THE CALVERT SOCIAL INVESTMENT FOUNDATION. THE
CALVERT SOCIAL INVESTMENT FOUNDATION IS A NON-PROFIT ORGANIZATION, LEGALLY
DISTINCT FROM CALVERT GROUP, ORGANIZED AS A CHARITABLE AND EDUCATIONAL
FOUNDATION FOR THE PURPOSE OF INCREASING PUBLIC AWARENESS AND KNOWLEDGE OF THE
CONCEPT OF SOCIALLY RESPONSIBLE INVESTING. IT HAS INSTITUTED THE CALVERT
COMMUNITY INVESTMENTS PROGRAM TO RAISE ASSETS FROM INDIVIDUAL AND INSTITUTIONAL
INVESTORS AND THEN INVEST THESE ASSETS DIRECTLY IN NON-PROFIT OR NOT-FOR-PROFIT
COMMUNITY DEVELOPMENT ORGANIZATIONS AND COMMUNITY DEVELOPMENT BANKS THAT FOCUS
ON LOW INCOME HOUSING, ECONOMIC DEVELOPMENT AND BUSINESS DEVELOPMENT IN URBAN
AND RURAL COMMUNITIES.
SPECIAL EQUITIES
CSIF BALANCED AND CALVERT WORLD VALUES INTERNATIONAL EQUITY
CSIF BALANCED AND CWVF INTERNATIONAL EQUITY EACH HAVE A SPECIAL EQUITIES
INVESTMENT PROGRAM THAT ALLOWS THE FUND TO PROMOTE ESPECIALLY PROMISING
APPROACHES TO SOCIAL GOALS THROUGH PRIVATELY PLACED INVESTMENTS. THE INVESTMENTS
ARE GENERALLY VENTURE CAPITAL INVESTMENTS IN SMALL, UNTRIED ENTERPRISES. THE
SPECIAL EQUITIES COMMITTEE OF EACH FUND IDENTIFIES, EVALUATES, AND SELECTS THE
SPECIAL EQUITIES INVESTMENTS. SPECIAL EQUITIES INVOLVE A HIGH DEGREE OF RISK--
THEY ARE SUBJECT TO LIQUIDITY, INFORMATION, AND IF A DEBT INVESTMENT, CREDIT
RISK. SPECIAL EQUITIES ARE VALUED UNDER THE DIRECTION AND CONTROL OF THE FUNDS'
BOARDS.
<PAGE>
ABOUT CALVERT GROUP
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. CALVERT 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, CALVERT HAD OVER $6 BILLION IN ASSETS
UNDER MANAGEMENT.
CAMCO USES A TEAM APPROACH TO ITS MANAGEMENT OF CSIF BOND (SINCE FEBRUARY 1997)
AND THE FIXED-INCOME ASSETS OF CSIF BALANCED (JUNE 1995). RENO J. MARTINI,
SENIOR VICE PRESIDENT AND CHIEF INVESTMENT OFFICER, HEADS THIS TEAM AND OVERSEES
THE INVESTMENT STRATEGY AND MANAGEMENT OF ALL CALVERT FUNDS FOR CAMCO WHILE
GREGORY HABEEB MANAGES THE DAY-TO-DAY INVESTMENTS OF CAMCO'S TAXABLE
FIXED-INCOME PORTFOLIOS. MR. HABEEB HAS OVER 19 YEARS OF EXPERIENCE AS AN
ANALYST, TRADER, AND PORTFOLIO MANAGER.
SUBADVISORS AND PORTFOLIO MANAGERS
BROWN CAPITAL MANAGEMENT, INC., 1201 NORTH CALVERT STREET, BALTIMORE, MARYLAND
21202 HAS MANAGED PART OF THE EQUITY INVESTMENTS OF CSIF BALANCED SINCE 1996,
AND CAPITAL ACCUMULATION SINCE 1994. IN 1997, BROWN CAPITAL BECAME THE SOLE
SUBADVISOR FOR CAPITAL ACCUMULATION. IT USES A BOTTOM-UP APPROACH THAT
INCORPORATES GROWTH-ADJUSTED PRICE EARNINGS, CONCENTRATING ON MID-/LARGE-CAP
GROWTH STOCKS.
EDDIE C. BROWN, FOUNDER AND PRESIDENT OF BROWN CAPITAL MANAGEMENT, INC., HEADS
THE PORTFOLIO MANAGEMENT TEAM FOR CAPITAL ACCUMULATION AND BROWN CAPITAL'S
PORTION OF CSIF BALANCED. HE BRINGS OVER 24 YEARS OF MANAGEMENT EXPERIENCE TO
THE FUNDS, AND HAS HELD POSITIONS WITH T. ROWE PRICE ASSOCIATES AND IRWING
MANAGEMENT COMPANY. MR. BROWN IS A FREQUENT PANELIST ON "WALL STREET WEEK WITH
LOUIS RUKEYSER" AND IS A MEMBER OF THE WALL STREET WEEK HALL OF FAME.
NCM CAPITAL MANAGEMENT GROUP, INC., 103 WEST MAIN STREET, DURHAM, NC 27701, HAS
MANAGED PART OF THE EQUITY INVESTMENTS OF CSIF BALANCED SINCE 1995. NCM IS ONE
OF THE LARGEST MINORITY-OWNED INVESTMENT MANAGEMENT FIRMS IN THE COUNTRY AND
PROVIDES PRODUCTS IN EQUITY FIXED INCOME AND BALANCED PORTFOLIO MANAGEMENT. IT
IS ALSO ONE OF THE INDUSTRY LEADERS IN THE EMPLOYMENT AND TRAINING OF MINORITY
AND WOMEN INVESTMENT PROFESSIONALS.
<PAGE>
NCM'S PORTFOLIO MANAGEMENT TEAM CONSISTS OF SEVERAL MEMBERS, HEADED BY MACEO K.
SLOAN. MR. SLOAN HAS MORE THAN 12 YEARS OF EXPERIENCE IN THE INVESTMENT
INDUSTRY, AND IS A FREQUENT PANELIST ON WALL STREET WEEK WITH LOUIS RUKEYSER.
STATE STREET GLOBAL ADVISORS (SSGA); 225 FRANKLIN ST., BOSTON, MA 02110, WAS
ESTABLISHED IN 1978 AS AN INVESTMENT MANAGEMENT DIVISION OF THE STATE STREET
BANK AND TRUST COMPANY. SSGA IS A PIONEER IN THE DEVELOPMENT OF DOMESTIC AND
INTERNATIONAL INDEX FUNDS, AND HAS MANAGED CSIF MANAGED INDEX SINCE ITS
INCEPTION.
SSGA'S PORTFOLIO MANAGEMENT TEAM CONSISTS OF SEVERAL MEMBERS, HEADED BY ARLENE
ROCKEFELLER. SHE JOINED SSGA IN 1982, WITH 10 YEARS EXPERIENCE IN INVESTMENT
COMPUTER SYSTEMS. MS. ROCKEFELLER IS CURRENTLY DIRECTOR OF SSGA'S GLOBAL EQUITY
GROUP. SHE MANAGES A VARIETY OF SSGA'S EQUITY AND TAX-FREE FUNDS.
ATLANTA CAPITAL MANAGEMENT COMPANY, L.L.C.; TWO MIDTOWN PLAZA, SUITE 1600, 1349
WEST PEACHTREE STREET, ATLANTA, GA 30309 HAS MANAGED CSIF EQUITY SINCE SEPTEMBER
1998.
DANIEL W. BOONE, III, C.F.A. HEADS THE ATLANTA PORTFOLIO MANAGEMENT TEAM FOR
CSIF EQUITY. HE IS A SENIOR PARTNER AND SENIOR INVESTMENT PROFESSIONAL FOR
ATLANTA CAPITAL. HE HAS BEEN WITH THE FIRM SINCE 1976. HE SPECIALIZES IN EQUITY
PORTFOLIO MANAGEMENT AND RESEARCH. BEFORE JOINING THE FIRM, HE HELD POSITIONS
WITH THE INTERNATIONAL FIRM OF LAZARD, FRERES IN NEW YORK, AND WELLINGTON
MANAGEMENT COMPANY. MR. BOONE HAS EARNED A MBA FROM THE WHARTON SCHOOL OF
UNIVERSITY OF PENNSYLVANIA, WHERE HE GRADUATED WITH DISTINCTION, AND A B.A. FROM
DAVIDSON COLLEGE.
MURRAY JOHNSTONE INTERNATIONAL, LTD.; 875 NORTH MICHIGAN AVE., SUITE 3415,
CHICAGO, IL 60611. THE FIRM HAS MANAGED CALVERT WORLD VALUES INTERNATIONAL
EQUITY FUND SINCE ITS INCEPTION.
ANDREW PRESTON HEADS THE PORTFOLIO MANAGEMENT TEAM FOR INTERNATIONAL EQUITY. HE
JOINED MURRAY JOHNSTONE INTERNATIONAL IN 1985, AND HAS HELD POSITIONS AS
INVESTMENT ANALYST IN THE UNITED KINGDOM AND U.S. DEPARTMENT, AND FUND MANAGER
IN THE JAPANESE DEPARTMENT. HE WAS APPOINTED DIRECTOR OF THE COMPANY IN 1993.
PRIOR TO JOINING MURRAY JOHNSTONE, HE WAS A MEMBER OF THE AUSTRALIAN FOREIGN
SERVICE AND ATTENDED UNIVERSITY IN AUSTRALIA AND JAPAN.
AWAD ASSET MANAGEMENT, INC. (AWAD); 250 PARK AVENUE, NEW YORK, NY 10177, A
SUBSIDIARY OF RAYMOND JAMES & ASSOCIATES, HAS MANAGED THE NEW VISION SMALL CAP
FUND SINCE 1997. THE FIRM SPECIALIZES IN THE MANAGEMENT OF SMALL-CAPITALIZATION
GROWTH STOCKS. THEY EMPHASIZE A GROWTH-AT-A-REASONABLE-PRICE INVESTMENT
PHILOSOPHY.
<PAGE>
JAMES AWAD, PRESIDENT OF AWAD, FOUNDED THE FIRM IN 1992. HE HEADS THE PORTFOLIO
MANAGEMENT TEAM FOR NEW VISION SMALL CAP. MR. AWAD HAS MORE THAN 30 YEARS
EXPERIENCE IN THE INVESTMENT BUSINESS, HOLDING POSITIONS WITH FIRMS SUCH AS
NEUBERGER & BERMAN AND FIRST INVESTORS CORPORATION.
EACH OF THE FUNDS HAS OBTAINED AN EXEMPTIVE ORDER FROM THE SECURITIES AND
EXCHANGE COMMISSION TO PERMIT THE FUND, PURSUANT TO APPROVAL BY THE BOARD OF
TRUSTEES/DIRECTORS, TO ENTER INTO AND MATERIALLY AMEND CONTRACTS WITH THE FUND'S
SUBADVISOR WITHOUT SHAREHOLDER APPROVAL. SEE "INVESTMENT ADVISOR AND SUBADVISOR"
IN THE SAI FOR FURTHER DETAILS.
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
CSIF BALANCED 0.51%
CSIF MANAGED INDEX 0.50%1
CSIF EQUITY 0.51%
CSIF BOND 0.43%
CSIF MONEY MARKET 0.38%
CWVF INTERNATIONAL EQUITY 0.85%
CAPITAL ACCUMULATION 0.70%
NEW VISION SMALL CAP 0.82%
1 CSIF MANAGED INDEX HAS A RECAPTURE PROVISION UNDER WHICH CAMCO MAY ELECT
TO RECAPTURE FROM THE FUND IN A LATER YEAR ANY FEES CAMCO WAIVES OR EXPENSES IT
ASSUMES, SUBJECT TO CERTAIN LIMITATIONS.
A WORD ABOUT THE YEAR 2000 (Y2K) AND OUR COMPUTER SYSTEMS
LIKE WITH OTHER MUTUAL FUNDS, CAMCO AND ITS SERVICE PROVIDERS USE COMPUTER
SYSTEMS FOR ALL ASPECTS OF OUR BUSINESS-PROCESSING SHAREHOLDER AND FUND
TRANSACTIONS, FUND ACCOUNTING, EXECUTING TRADES, AND PRICING SECURITIES JUST TO
NAME A FEW. THE CONCERN HAS BEEN THAT MANY SOFTWARE PROGRAMS CANNOT DISTINGUISH
BETWEEN THE YEAR 2000 AND THE YEAR 1900. THIS COULD CAUSE PROBLEMS WITH
RETIREMENT PLAN DISTRIBUTIONS, DIVIDEND PAYMENT SOFTWARE, TRANSACTION SOFTWARE,
AND NUMEROUS OTHER AREAS THAT IMPACT THE FUND. LEADING UP TO THIS YEAR, CALVERT
GROUP HAS BEEN REVIEWING ALL OF ITS COMPUTER SYSTEMS FOR Y2K COMPLIANCE.
ALTHOUGH, THUS FAR, THERE HAVE BEEN NO PROBLEMS CAUSED BY Y2K THAT COULD IMPACT
THE FUND, THERE CAN BE NO ASSURANCE THAT THERE WILL BE NO FUTURE IMPACT. THE
ADVISOR, THE UNDERWRITER, TRANSFER AGENT AND CUSTODIAN HAVE ADVISED THE FUND
THAT THEY WILL CONTINUE TO ACTIVELY WORK ON ANY NECESSARY CHANGES TO THEIR
COMPUTER SYSTEMS TO ADDRESS ANY ISSUES THAT MAY ARISE THROUGHOUT THE YEAR AND
EXPECT THAT THEIR SYSTEMS, AND THOSE OF THEIR OUTSIDE SERVICE PROVIDERS, WILL BE
ADAPTED ACCORDINGLY. FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE AT
WWW.CALVERT.COM.
<PAGE>
HOW TO BUY SHARES
GETTING STARTED - BEFORE YOU OPEN AN ACCOUNT
YOU HAVE A FEW DECISIONS TO MAKE BEFORE YOU OPEN AN ACCOUNT IN A MUTUAL FUND.
FIRST, DECIDE WHICH FUND OR FUNDS BEST SUITS YOUR NEEDS AND YOUR GOALS.
SECOND, DECIDE WHAT KIND OF ACCOUNT YOU WANT TO OPEN. CALVERT OFFERS
INDIVIDUAL, JOINT, TRUST, UNIFORM GIFTS/TRANSFERS TO MINOR ACCOUNTS,
TRADITIONAL, EDUCATION AND ROTH IRAS, QUALIFIED PROFIT-SHARING AND MONEY
PURCHASE PLANS, SIMPLE IRAS, SEP-IRAS, 403(B)(7) ACCOUNTS, AND SEVERAL OTHER
TYPES OF ACCOUNTS. MINIMUM INVESTMENTS ARE LOWER FOR THE RETIREMENT PLANS.
THEN DECIDE WHICH CLASS OF SHARES IS BEST FOR YOU. YOU SHOULD MAKE THIS
DECISION CAREFULLY, BASED ON:
- - THE AMOUNT YOU WISH TO INVEST;
- - THE LENGTH OF TIME YOU PLAN TO KEEP THE INVESTMENT; AND
- - THE CLASS EXPENSES.
CHOOSING A SHARE CLASS
CSIF MONEY MARKET OFFERS ONLY ONE CLASS OF SHARES (CLASS O), WHICH IS SOLD
WITHOUT A SALES CHARGE. THE OTHER FUNDS IN THIS PROSPECTUS OFFER THREE DIFFERENT
CLASSES (CLASS A, B, OR C). THIS CHART SHOWS THE DIFFERENCE IN THE CLASSES AND
THE GENERAL TYPES OF INVESTORS WHO MAY BE INTERESTED IN EACH CLASS:
CLASS A: FRONT-END SALES CHARGE
F OR ALL INVESTORS, PARTICULARLY THOSE INVESTING A SUBSTANTIAL AMOUNT WHO PLAN
TO HOLD THE SHARES FOR A LONG PERIOD OF TIME.
SALES CHARGE ON EACH PURCHASE OF 4.75% OR LESS (3.75% OR LESS FOR CSIF BOND),
DEPENDING ON THE AMOUNT YOU INVEST.
CLASS B: DEFERRED SALES CHARGE FOR 6 YEARS (4 YEARS FOR CSIF BOND)
FOR INVESTORS WHO PLAN TO HOLD THE SHARES AT LEAST 6 YEARS (4 FOR CSIF BOND).
THE EXPENSES OF THIS CLASS ARE HIGHER THAN CLASS A, BECAUSE OF THE 12B-1 FEE.
NO SALES CHARGE ON EACH PURCHASE, BUT IF YOU SELL YOUR SHARES WITHIN 6 YEARS,
YOU WILL PAY A DEFERRED SALES CHARGE OF 5% OR LESS ON SHARES YOU SELL (4% OR
LESS ON SHARES OF CSIF BOND YOU SELL WITHIN 4 YEARS OF PURCHASE).
CLASS C: DEFERRED SALES CHARGE FOR 1 YEAR
FOR INVESTORS WHO ARE INVESTING FOR AT LEAST ONE YEAR, BUT LESS THAN SIX YEARS.
THE EXPENSES OF THIS CLASS ARE HIGHER THAN CLASS A, BECAUSE OF THE 12B-1 FEE.
NO SALES CHARGE ON EACH PURCHASE, BUT IF YOU SELL SHARES WITHIN 1 YEAR, THEN YOU
WILL PAY A DEFERRED SALES
CHARGE OF 1% AT THAT TIME.
<PAGE>
CLASS A: FRONT-END SALES CHARGE
CLASS A SHARES HAVE ANNUAL 12B-1 FEE OF UP TO 0.35%.
CLASS A SHARES HAVE LOWER ANNUAL EXPENSES DUE TO A LOWER 12B-1 FEE.
PURCHASES OF CLASS A SHARES AT NAV FOR ACCOUNTS WITH $1,000,000 OR MORE WILL BE
SUBJECT TO A 1.0% DEFERRED SALES CHARGE FOR 1 YEAR.
CLASS B: DEFERRED SALES CHARGE FOR 6 YEARS (4 YEARS FOR CSIF BOND)
CLASS B SHARES HAVE AN ANNUAL 12B-1 FEE OF 1.00%.
YOUR SHARES WILL AUTOMATICALLY CONVERT TO CLASS A SHARES AFTER 8 YEARS (6 YEARS
FOR CSIF BOND), REDUCING YOUR FUTURE ANNUAL EXPENSES.
IF YOU ARE INVESTING MORE THAN $250,000, YOU SHOULD CONSIDER INVESTING IN CLASS
A OR C.
CLASS C: DEFERRED SALES CHARGE FOR 1 YEAR
CLASS C SHARES HAVE AN ANNUAL 12B-1 FEE OF 1.00%.
CLASS C SHARES HAVE HIGHER ANNUAL EXPENSES THAN CLASS A AND THERE IS NO
AUTOMATIC CONVERSION TO CLASS A.
IF YOU ARE INVESTING MORE THAN $1,000,000, YOU SHOULD INVEST IN CLASS A.
CLASS A
IF YOU CHOOSE CLASS A, YOU WILL PAY A SALES CHARGE AT THE TIME OF EACH PURCHASE.
THIS TABLE SHOWS THE CHARGES BOTH AS A PERCENTAGE OF OFFERING PRICE AND AS A
PERCENTAGE OF THE AMOUNT YOU INVEST. THE TERM "OFFERING PRICE" INCLUDES THE
FRONT-END SALES CHARGE. IF YOU INVEST MORE, THE SALES CHARGE WILL BE LOWER. FOR
EXAMPLE, IF YOU INVEST MORE THAN $50,000, OR IF YOUR CUMULATIVE PURCHASES OR THE
VALUE IN YOUR ACCOUNT IS MORE THAN $50,000,4 THEN THE SALES CHARGE IS REDUCED TO
3.75%.
[INSERT HEADINGS]
YOUR INVESTMENT IN SALES CHARGE % % OF AMT. SALES CHARGE % % OF AMT
CLASS A SHARES OF OFFERING PRICE INVESTED OF OFFERING PRICE INVESTED
LESS THAN $50,000 4.75% 4.99% 3.75% 3.90%
$50,000 BUT LESS THAN $100,000 3.75% 3.90% 3.00% 3.09%
$100,000 BUT LESS THAN $250,000 2.75% 2.83% 2.25% 2.30%
$250,000 BUT LESS THAN $500,000 1.75% 1.78% 1.75% 1.78%
$500,000 BUT LESS THAN $1,000,000 1.00% 1.01% 1.00% 1.01%
$1,000,000 AND OVER NONE5 NONE5 NONE5 NONE5
4 THIS IS CALLED "RIGHTS OF ACCUMULATION." THE SALES CHARGE IS CALCULATED BY
TAKING INTO ACCOUNT NOT ONLY THE DOLLAR AMOUNT OF THE NEW PURCHASE OF SHARES,
BUT ALSO THE HIGHER OF COST OR CURRENT VALUE OF SHARES YOU HAVE PREVIOUSLY
PURCHASED IN CALVERT GROUP FUNDS THAT IMPOSE SALES CHARGES. THIS AUTOMATICALLY
APPLIES TO YOUR ACCOUNT FOR EACH NEW PURCHASE OF CLASS A SHARES.
5 PURCHASES OF CLASS A SHARES AT NAV FOR ACCOUNTS WITH $1,000,000 OR MORE
ARE SUBJECT TO A ONE YEAR CDSC OF 1.00%. SEE THE "CALCULATION OF CONTINGENT
DEFERRED SALES CHARGE AND WAIVER OF SALES CHARGES."
<PAGE>
THE CLASS A FRONT-END SALES CHARGE MAY BE WAIVED FOR CERTAIN PURCHASES OR
INVESTORS, SUCH AS PARTICIPANTS IN CERTAIN GROUP RETIREMENT PLANS OR OTHER
QUALIFIED GROUPS AND CLIENTS OF REGISTERED INVESTMENT ADVISERS. FOR DETAILS ON
THESE AND OTHER PURCHASES THAT MAY QUALIFY FOR A REDUCED SALES CHARGE, SEE
EXHIBIT A.
CLASS B
IF YOU CHOOSE CLASS B, THERE IS NO FRONT-END SALES CHARGE LIKE CLASS A, BUT IF
YOU SELL THE SHARES WITHIN THE FIRST 6 YEARS (OR 4 YEARS FOR CSIF BOND), YOU
WILL HAVE TO PAY A "CONTINGENT DEFERRED" SALES CHARGE ("CDSC"). THIS MEANS THAT
YOU DO NOT HAVE TO PAY THE SALES CHARGE UNLESS YOU SELL YOUR SHARES WITHIN THE
FIRST 6 YEARS AFTER PURCHASE (OR 4 YEARS FOR CSIF BOND). KEEP IN MIND THAT THE
LONGER YOU HOLD THE SHARES, THE LESS YOU WILL HAVE TO PAY IN DEFERRED SALES
CHARGES.
[INSERT HEADINGS]
TIME SINCE PURCHASE CDSC % CDSC %
1ST YEAR 5% 4%
2ND YEAR 4% 3%
3RD YEAR 4% 2%
4TH YEAR 3% 1%
5TH YEAR 2% NONE
6TH YEAR 1% NONE
AFTER 6 YEARS NONE NONE
CALCULATION OF CONTINGENT DEFERRED SALES CHARGE
AND WAIVER OF SALES CHARGES
THE CDSC WILL NOT BE CHARGED ON SHARES YOU RECEIVED AS DIVIDENDS OR FROM CAPITAL
GAINS DISTRIBUTIONS OR ON ANY CAPITAL APPRECIATION (GAIN IN THE VALUE) OF SHARES
THAT ARE SOLD.
SHARES THAT ARE NOT SUBJECT TO THE CDSC WILL BE REDEEMED FIRST, FOLLOWED BY
SHARES YOU HAVE HELD THE LONGEST. THE CDSC IS CALCULATED BY DETERMINING THE
SHARE VALUE AT BOTH THE TIME OF PURCHASE AND REDEMPTION AND THEN MULTIPLYING
WHICHEVER VALUE IS LESS BY THE PERCENTAGE THAT APPLIES AS SHOWN ABOVE. FOR
EXAMPLE, IF YOU INVESTED $5,000 IN CSIF EQUITY CLASS B SHARES THREE YEARS AGO,
AND IT IS NOW WORTH $5,750, THE CDSC WILL BE CALCULATED BY TAKING THE LESSER OF
THE TWO VALUES ($5,000), AND MULTIPLYING IT BY 4%, FOR A CDSC OF $200. 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>
THE CDSC ON CLASS B SHARES WILL BE WAIVED IN THE FOLLOWING CIRCUMSTANCES:
- - REDEMPTION UPON THE DEATH OR DISABILITY OF THE SHAREHOLDER, PLAN
PARTICIPANT, OR BENEFICIARY.6
- - MINIMUM REQUIRED DISTRIBUTIONS FROM RETIREMENT PLAN ACCOUNTS FOR
SHAREHOLDERS 701/2 AND OLDER.7
- - THE RETURN OF AN EXCESS CONTRIBUTION OR DEFERRAL AMOUNTS, PURSUANT TO
SECTIONS 408(D)(4) OR (5), 401(K)(8), 402(G)(2), OR 401(M)(6) OF THE INTERNAL
REVENUE CODE.
- - INVOLUNTARY REDEMPTIONS OF ACCOUNTS UNDER PROCEDURES SET FORTH BY THE
FUND'S BOARD OF TRUSTEES/DIRECTORS.
- - A SINGLE ANNUAL WITHDRAWAL UNDER A SYSTEMATIC WITHDRAWAL PLAN OF UP TO 10%
PER YEAR OF THE SHAREHOLDER'S ACCOUNT BALANCE.8
CLASS C
IF YOU CHOOSE CLASS C, THERE IS NO FRONT-END SALES CHARGE LIKE CLASS A, BUT IF
YOU SELL THE SHARES WITHIN THE FIRST YEAR, YOU WILL HAVE TO PAY A 1% CDSC. CLASS
C MAY BE A GOOD CHOICE FOR YOU IF YOU PLAN TO BUY SHARES AND HOLD THEM FOR AT
LEAST 1 YEAR, BUT NOT MORE THAN FIVE OR SIX YEARS.
DISTRIBUTION AND SERVICE FEES
EACH FUND HAS 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.
6 "DISABILITY" MEANS A TOTAL DISABILITY AS EVIDENCED BY A DETERMINATION BY
THE FEDERAL SOCIAL SECURITY ADMINISTRATION.
7 THE MAXIMUM AMOUNT SUBJECT TO THIS WAIVER IS BASED ONLY UPON THE
SHAREHOLDER'S CALVERT GROUP RETIREMENT ACCOUNTS.
8 THIS SYSTEMATIC WITHDRAW PLAN REQUIRES A MINIMUM ACCOUNT BALANCE OF
$50,000 TO BE ESTABLISHED.
<PAGE>
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 BY PARTICULAR CLASS.
MAXIMUM PAYABLE UNDER PLAN/AMOUNT ACTUALLY PAID
CSIF MONEY MARKET 0.25%/0.00%
CLASS A CLASS B CLASS C
CSIF BALANCED 0.35%/0.24% 1.00%/1.00% 1.00%/1.00%
CSIF BOND 0.35%/0.20% 1.00%/1.00% 1.00%/1.00%
CSIF EQUITY 0.35%/0.23% 1.00%/1.00% 1.00%/1.00%
CSIF MANAGED INDEX 0.25%/0.25% 1.00%/1.00% 1.00%/1.00%
CWVF INTERNATIONAL EQUITY 0.35%/0.25% 1.00%/1.00% 1.00%/1.00%
CAPITAL ACCUMULATION 0.35%/0.35% 1.00%/1.00% 1.00%/1.00%
NEW VISION SMALL CAP 0.25%/0.25% 1.00%/1.00% 1.00%/1.00%
NEXT STEP - ACCOUNT APPLICATION
COMPLETE AND SIGN AN APPLICATION FOR EACH NEW ACCOUNT. WHEN MULTIPLE CLASSES OF
SHARES ARE OFFERED, PLEASE SPECIFY WHICH CLASS YOU WISH TO PURCHASE. FOR MORE
INFORMATION, CONTACT YOUR FINANCIAL PROFESSIONAL OR OUR SHAREHOLDER SERVICES
DEPARTMENT AT 800-368-2748.
MINIMUM TO OPEN AN ACCOUNT MINIMUM ADDITIONAL INVESTMENTS-
$250
CSIF MONEY MARKET $1,000
CSIF BALANCED $1,000
CSIF BOND $1,000
CSIF EQUITY $1,000
CSIF MANAGED INDEX $5,000
CWVF INTERNATIONAL EQUITY $2,000
CAPITAL ACCUMULATION $2,000
NEW VISION SMALL CAP $2,000
<PAGE>
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 64121-9544 KANSAS CITY, MO 64121-9739
BY REGISTERED, CALVERT GROUP
CERTIFIED, OR C/O NFDS
OVERNIGHT MAIL 330 WEST 9TH STREET
KANSAS CITY, MO 64105-1807
AT THE CALVERT OFFICE VISIT THE CALVERT OFFICE TO MAKE INVESTMENTS BY CHECK.
SEE THE BACK COVER PAGE FOR THE ADDRESS.
IMPORTANT - HOW SHARES ARE PRICED
THE PRICE OF SHARES IS BASED ON EACH FUND'S NET ASSET VALUE ("NAV"). NAV IS
COMPUTED BY ADDING THE VALUE OF A FUND'S HOLDINGS PLUS OTHER ASSETS, SUBTRACTING
LIABILITIES, AND THEN DIVIDING THE RESULT BY THE NUMBER OF SHARES OUTSTANDING.
IF A FUND HAS MORE THAN ONE CLASS OF SHARES, THE NAV OF EACH CLASS WILL BE
DIFFERENT, DEPENDING ON THE NUMBER OF SHARES OUTSTANDING FOR EACH CLASS.
PORTFOLIO SECURITIES AND OTHER ASSETS ARE VALUED BASED ON MARKET QUOTATIONS,
EXCEPT THAT SECURITIES MATURING WITHIN 60 DAYS ARE VALUED AT AMORTIZED COST.
CSIF MONEY MARKET IS VALUED ACCORDING TO THE "AMORTIZED COST" METHOD, WHICH IS
INTENDED TO STABILIZE THE NAV AT $1 PER SHARE. 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.
SOME FUNDS HOLD SECURITIES THAT ARE PRIMARILY LISTED ON FOREIGN EXCHANGES THAT
TRADE ON DAYS WHEN THE NYSE IS CLOSED. THESE FUNDS DO NOT PRICE SHARES ON DAYS
WHEN THE NYSE IS CLOSED, EVEN IF FOREIGN MARKETS MAY BE OPEN. AS A RESULT, THE
VALUE OF THE FUND'S SHARES MAY CHANGE ON DAYS WHEN YOU WILL NOT BE ABLE TO BUY
OR SELL YOUR SHARES.
WHEN YOUR ACCOUNT WILL BE CREDITED
YOUR PURCHASE WILL BE PROCESSED AT THE NEXT NAV CALCULATED AFTER YOUR ORDER IS
RECEIVED AND IN GOOD ORDER. ALL OF YOUR PURCHASES MUST BE MADE IN US DOLLARS.
<PAGE>
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).
CSIF 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.
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
<PAGE>
BUSINESS DAYS BEFORE REDEMPTION REQUESTS ARE HONORED. TRANSACTION REQUESTS MUST
BE RECEIVED BY 4 P.M. ET. YOU MAY REQUEST THIS SERVICE ON YOUR INITIAL ACCOUNT
APPLICATION. CALVERT MONEY CONTROLLER TRANSACTIONS RETURNED FOR INSUFFICIENT
FUNDS WILL INCUR A $25 CHARGE.
TELEPHONE TRANSACTIONS
YOU MAY PURCHASE, REDEEM, OR EXCHANGE SHARES, WIRE FUNDS AND USE CALVERT MONEY
CONTROLLER BY TELEPHONE IF YOU HAVE PRE-AUTHORIZED SERVICE INSTRUCTIONS. YOU
RECEIVE TELEPHONE PRIVILEGES AUTOMATICALLY WHEN YOU OPEN YOUR ACCOUNT UNLESS YOU
ELECT OTHERWISE. FOR OUR MUTUAL PROTECTION, THE FUND, THE SHAREHOLDER SERVICING
AGENT AND THEIR AFFILIATES USE PRECAUTIONS SUCH AS VERIFYING SHAREHOLDER
IDENTITY AND RECORDING TELEPHONE CALLS TO CONFIRM INSTRUCTIONS GIVEN BY PHONE. A
CONFIRMATION STATEMENT IS SENT FOR MOST TRANSACTIONS; PLEASE REVIEW THIS
STATEMENT AND VERIFY THE ACCURACY OF YOUR TRANSACTION IMMEDIATELY.
EXCHANGES
CALVERT GROUP OFFERS A WIDE VARIETY OF INVESTMENT OPTIONS THAT INCLUDES COMMON
STOCK FUNDS, TAX-EXEMPT AND CORPORATE BOND FUNDS, AND MONEY MARKET FUNDS (CALL
YOUR BROKER OR CALVERT REPRESENTATIVE FOR MORE INFORMATION). WE MAKE IT EASY FOR
YOU TO PURCHASE SHARES IN OTHER CALVERT FUNDS IF YOUR INVESTMENT GOALS CHANGE.
THE EXCHANGE PRIVILEGE OFFERS FLEXIBILITY BY ALLOWING YOU TO EXCHANGE SHARES ON
WHICH YOU HAVE ALREADY PAID A SALES CHARGE FROM ONE MUTUAL FUND TO ANOTHER AT NO
ADDITIONAL CHARGE.
COMPLETE AND SIGN AN ACCOUNT APPLICATION, TAKING CARE TO REGISTER YOUR NEW
ACCOUNT IN THE SAME NAME AND TAXPAYER IDENTIFICATION NUMBER AS YOUR EXISTING
CALVERT ACCOUNT(S). EXCHANGE INSTRUCTIONS MAY THEN BE GIVEN BY TELEPHONE IF
TELEPHONE REDEMPTIONS HAVE BEEN AUTHORIZED AND THE SHARES ARE NOT IN CERTIFICATE
FORM.
BEFORE YOU MAKE AN EXCHANGE, PLEASE NOTE THE FOLLOWING:
EACH EXCHANGE REPRESENTS THE SALE OF SHARES OF ONE FUND AND THE PURCHASE OF
SHARES OF ANOTHER. THEREFORE, YOU COULD REALIZE A TAXABLE GAIN OR LOSS.
YOU MAY EXCHANGE SHARES ACQUIRED BY REINVESTMENT OF DIVIDENDS OR DISTRIBUTIONS
INTO ANOTHER CALVERT FUND AT NO ADDITIONAL CHARGE.
SHARES MAY ONLY BE EXCHANGED FOR SHARES OF THE SAME CLASS OF ANOTHER CALVERT
FUND.
NO CDSC IS IMPOSED ON EXCHANGES OF SHARES SUBJECT TO A CDSC AT THE TIME OF THE
EXCHANGE. THE APPLICABLE CDSC IS IMPOSED AT THE TIME THE SHARES ACQUIRED BY THE
EXCHANGE ARE REDEEMED.
<PAGE>
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 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. CSIF
MONEY MARKET WILL CHARGE A SERVICE FEE OF $25 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 FUND ACCOUNTS OF AT LEAST $1,000 PER
CLASS ($5,000 FOR THE CSIF MANAGED INDEX). IF THE BALANCE IN YOUR ACCOUNT FALLS
BELOW THE MINIMUM DURING A MONTH, A FEE MAY BE CHARGED TO YOUR ACCOUNT (CSIF
MONEY MARKET, $3/MONTH; CSIF MANAGED INDEX, $1/MONTH).
IF THE BALANCE IN YOUR ACCOUNT FALLS BELOW THE MINIMUM DURING A MONTH, THE
<PAGE>
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 WITHIN 30 DAYS.
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.
CSIF MONEY MARKET ACCRUED DAILY, PAID MONTHLY
CSIF BOND PAID MONTHLY
CSIF BALANCED PAID QUARTERLY
CSIF EQUITY PAID ANNUALLY
CSIF MANAGED INDEX PAID ANNUALLY
CWVF INTERNATIONAL EQUITY PAID ANNUALLY
CAPITAL ACCUMULATION PAID ANNUALLY
NEW VISION SMALL CAP PAID ANNUALLY
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 MONEY MARKET FUNDS)
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
IN JANUARY, EACH 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. DIVIDENDS, INCLUDING SHORT-TERM CAPITAL GAINS, ARE TAXABLE AS
ORDINARY INCOME. DISTRIBUTIONS FROM LONG-TERM CAPITAL GAINS ARE TAXABLE AS
LONG-TERM CAPITAL GAINS, REGARDLESS OF HOW LONG YOU HAVE OWNED SHARES.
FOR NON-MONEY MARKET FUNDS
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
IN ADDITION TO FEDERAL TAXES, YOU MAY BE SUBJECT TO STATE OR LOCAL TAXES ON YOUR
INVESTMENT, DEPENDING ON THE LAWS IN YOUR AREA. YOU WILL BE NOTIFIED TO THE
EXTENT, IF ANY, THAT DIVIDENDS REFLECT INTEREST RECEIVED FROM US GOVERNMENT
SECURITIES. 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.
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
<PAGE>
AGENT IS REASONABLY SATISFIED THAT THE PURCHASE PAYMENT HAS BEEN COLLECTED.
DRAFTS WRITTEN ON CSIF 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 YOUR 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.
DRAFTWRITING (CSIF MONEY MARKET PORTFOLIO ONLY)
YOU MAY REDEEM SHARES IN YOUR CSIF MONEY MARKET PORTFOLIO ACCOUNT BY WRITING A
DRAFT FOR AT LEAST $250. IF YOU COMPLETE AND RETURN THE SIGNATURE CARD FOR
DRAFTWRITING, THE PORTFOLIO WILL MAIL BANK DRAFTS TO YOU, PRINTED WITH YOUR NAME
AND ADDRESS. DRAFTS MAY NOT BE ORDERED UNTIL YOUR INITIAL PURCHASE HAS CLEARED.
CALVET 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.
CSIF MONEY MARKET WILL CHARGE A SERVICE FEE OF $25 FOR DRAFTS RETURNED
<PAGE>
FOR INSUFFICIENT OR UNCOLLECTED FUNDS. CSIF MONEY MARKET WILL CHARGE $25 FOR ANY
STOP PAYMENT ON DRAFTS. 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.
UNLESS THEY OTHERWISE QUALIFY FOR A WAIVER, CLASS B OR CLASS C SHARES REDEEMED
BY SYSTEMATIC CHECK REDEMPTION WILL BE SUBJECT TO THE CONTINGENT DEFERRED SALES
CHARGE.
CORPORATIONS AND ASSOCIATIONS
YOUR LETTER OF INSTRUCTION AND CORPORATE RESOLUTION SHOULD BE SIGNED BY
PERSON(S) AUTHORIZED TO ACT ON THE ACCOUNT, ACCOMPANIED BY SIGNATURE
GUARANTEE(S).
TRUSTS
YOUR LETTER OF INSTRUCTION SHOULD BE SIGNED BY THE TRUSTEE(S) (AS TRUSTEE(S)),
WITH A SIGNATURE GUARANTEE. (IF THE TRUSTEE'S NAME IS NOT REGISTERED ON YOUR
ACCOUNT, PLEASE PROVIDE A COPY OF THE TRUST DOCUMENT, CERTIFIED WITHIN THE LAST
60 DAYS.)
THROUGH YOUR DEALER
YOUR DEALER MUST RECEIVE YOUR REQUEST BEFORE THE CLOSE OF REGULAR TRADING ON THE
NYSE TO RECEIVE THAT DAY'S NAV. YOUR DEALER WILL BE RESPONSIBLE FOR FURNISHING
ALL NECESSARY DOCUMENTATION TO CALVERT GROUP AND MAY CHARGE YOU FOR SERVICES
PROVIDED.
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUNDS'
FINANCIAL PERFORMANCE FOR THE PAST FIVE (5) FISCAL YEARS (OR IF SHORTER, THE
PERIOD OF THE FUND'S OPERATIONS). THE FUNDS' FISCAL YEAR END IS SEPTEMBER 30.
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.
Balanced Portfolio
Financial Highlights
Years Ended September 30,
Class A Shares 1999 1998 1997 1996
Net asset value, beginning $32.45 $34.88 $31.35 $32.81
Income from investment operations
Net investment income .68 .77 .83 .78
Net realized and unrealized
gain (loss) 3.03 .92 5.61 2.28
Total from investment
operations 3.71 1.69 6.44 3.06
Distributions from
Net investment income (.66) (.76) (.81) (.77)
Net realized gain (3.36) (3.36) (2.10) (3.75)
Total distributions (4.02) (4.12) (2.91) (4.52)
Total increase (decrease) in
net asset value (.31) (2.43) 3.53 (1.46)
Net asset value, ending $32.14 $32.45 $34.88 $31.35
Total return* 11.52% 5.50% 21.94% 10.27%
Ratios to average net assets:
Net investment income 2.05% 2.27% 2.57% 2.58%
Total expenses 1.17% 1.13% 1.14% 1.28%
Expenses before offset 1.17% 1.13% 1.14% 1.28%
Net expenses 1.15% 1.11% 1.12% 1.26%
Portfolio turnover 175% 185% 215% 111%
Net assets, ending (in thousands) $708,655 $673,907 $675,306 $594,482
Number of shares outstanding,
ending (in thousands) 22,049 20,768 19,362 18,964
Years Ended September 30,
Class A Shares 1995
Net asset value, beginning $28.77
Income from investment operations
Net investment income .87
Net realized and unrealized
gain (loss) 4.25
Total from investment operations 5.12
Distributions from
Net investment income (.87)
Net realized gain (.21)
Total distributions (1.08)
Total increase (decrease) in
net asset value 4.04
Net asset value, ending $32.81
Total return* 18.21%
Ratios to average net assets:
Net investment income 2.89
Total expenses + 1.28%
Expenses before offset
Net expenses 1.26%
Portfolio turnover 114%
Net assets, ending (in thousands) $560,981
Number of shares outstanding,
ending (in thousands) 17,099
Financial Highlights
CSIF Balanced
Years Ended September 30,
1999 1998 #
Class B Shares
Net asset value, beginning $32.38 $34.37
Income from investment operations
Net investment income .35 0.15
Net realized and unrealized gain (loss) 2.94 (1.90)
Total from investment operations 3.29 (1.75)
Distributions from
Net investment income (.34) (0.24)
Net realized gain (3.36) -
Total distributions 3.70) (0.24)
Total increase (decrease) in net asset value (.41) (1.99)
Net asset value, ending $31.97 $32.38
Total return* 10.15% (5.10%)
Ratios to average net assets:
Net investment income .85% 1.22%(a)
Total expenses 2.40% 2.43%(a)
Expenses before offset 2.40% 3.59% (a)
Net expenses 2.38% 2.41%(a)
Portfolio turnover 175% 185%
Net assets, ending (in thousands) $9,910 $2,540
Number of shares outstanding,
ending (in thousands) 310 78
Financial Highlights
CSIF Balanced
Years Ended September 30,
Class C Shares 1999 1998 1997 1996
Net asset value, beginning $32.05 $34.52 $31.05 $32.60
Income from investment operations
Net investment income .36 .41 .47 .46
Net realized and unrealized
gain (loss) 2.98 .89 5.54 2.17
Total from investment
operations 3.34 1.30 6.01 2.63
Distributions from
Net investment income (.33) (.41) (.44) (.43)
Net realized gain (3.36) (3.36) (2.10) (3.75)
Total distributions (3.69) (3.77) (2.54) (4.18)
Total increase (decrease)
in net asset value (.35) (2.47) 3.47 (1.55)
Net asset value, ending $31.70 $32.05 $34.52 $31.05
Total return* 10.43% 4.35% 20.56% 8.85%
Ratios to average net assets:
Net investment income 1.04% 1.16% 1.42% 1.34%
Total expenses 2.19% 2.25% 2.29% 2.52%
Expenses before offset 2.19% 2.25% 2.29% 2.52%
Net expenses 2.17% 2.23% 2.27% 2.50%
Portfolio turnover 175% 185% 215% 111%
Net assets, ending (in thousands) $13,646 $11,483 $8,898 $6,715
Number of shares outstanding,
ending (in thousands) 430 358 258 216
Years Ended September 30,
Class C Shares 1995
Net asset value, beginning $28.65
Income from investment operations
Net investment income .54
Net realized and unrealized gain (loss) 4.20
Total from investment operations 4.74
Distributions from
Net investment income (.58)
Net realized gain (.21)
Total distributions (.79)
Total increase (decrease) in net asset value 3.95
Net asset value, ending $32.60
Total return* 16.85%
Ratios to average net assets:
Net investment income 1.61%
Total expenses 2.51%
Expenses before offset 2.51%
Net expenses 2.50%
Portfolio turnover 114%
Net assets, ending (in thousands) $4,065
Number of shares outstanding,
ending (in thousands) 125
Financial Highlights
Managed Index Portfolio
Class A
Shares
Periods Ended September 30,
1999 1998 ##
Net asset value, beginning $13.54 $15.00
Income from investment operations
Net investment income .0 .02
Net realized and unrealized gain (loss) 3.31 (1.48)
Total from investment operations 3.34 (1.46)
Distributions from
Net investment income (.05) ----
Total increase (decrease) in net asset value 3.29 (1.46)
Net asset value, ending $16.83 $13.54
Total return* 24.68% (9.73%)
Ratios to average net assets:
Net investment income .14% .42%(a)
Total expenses 1.59% 1.01%(a)
Expenses before offsets 1.31% 1.01% (a)
Net expenses 1.25% .95%(a
Portfolio turnover 56% 27%
Net assets, ending (in thousands) $12,257 $4,401
Number of shares outstanding,
ending (in thousands) 728 325
Financial Highlights
Managed Index Portfolio
Class B
Shares
Periods Ended September 30,
1999 1998 ##
Net asset value, beginning $13.48 $15.00
Income from investment operations
Net investment income (.11) (.03)
Net realized and unrealized gain (loss) 3.21 (1.49)
Total from investment operations 3.10 (1.52)
Total increase (decrease) in net asset value 3.10 (1.52)
Net asset value, ending $16.58 $13.48
Total return* 23.00% (10.13%)
Ratios to average net assets:
Net investment income . (1.11%) (.98%)(a)
Total expenses 2.67% 2.56%(a)
Expenses before offsets 2.56% 2.56% (a)
Net expenses 2.50% 2.50%(a)
Portfolio turnover 56% 27%
Net assets, ending (in thousands) $4,078 $975
Number of shares outstanding,
ending (in thousands) 246 72
Class C
Shares
Period Ended
September 30,
1999 1998 ^^
Net asset value, beginning $13.52 $14.52
Income from investment operations
Net investment income (.09) (.02)
Net realized and unrealized gain (loss) 3.19 (.98)
Total from investment operations 3.10 (1.00)
Total increase (decrease) in net asset value 3.10 (1.00)
Net asset value, ending $16.62 $13.52
Total return* 22.93% (6.89%)
Ratios to average net assets:
Net investment income (1.12%) (.96%)(a)
Total expenses 2.68% 4.82%(a)
Expenses before offsets 2.56% 2.56% (a)
Net expenses 2.50% 2.50%(a)
Portfolio turnover 56% 27%
Net assets, ending (in thousands) $2,454 $397
Number of shares outstanding,
ending (in thousands) 148 29
Financial Highlights
Equity Portfolio
Years Ended September 30,
Class A Shares 1999 1998 1997 1996
Net asset value, beginning $20.36 $27.77 $22.54 $21.12
Income from investment operations
Net investment income (.07) (.04) - .03
Net realized and unrealized
gain (loss) 6.78 (4.01) 6.73 3.26
Total from investment operations 6.71 (4.05) 6.73 3.29
Distributions from
Net investment income - - (.01) (.06)
Net realized gain (.01) (3.36) (1.49) (1.81)
Total distributions (.01) (3.36) (1.50) (1.87)
Total increase (decrease) in net
asset value 6.70 (7.41) $5.23 1.42
Net asset value, ending $27.06 20.36 $27.77 $22.54
Total return* 32.98% (5.70%) 31.34% 16.62%
Ratios to average net assets:
Net investment income (.28%) (.14%) .03% .15%
Total expenses 1.22% 1.16% 1.21% 1.29%
Expenses before offsets 1.22% 1.16% 1.21% 1.29%
Net expenses 1.10% 1.07% 1.20% 1.27%
Portfolio turnover 51% 110% 93% 118%
Net assets, ending (in thousands) $166,716 $128,683 $147,002 $101,344
Number of shares outstanding,
ending (in thousands) 6,160 6,320 5,294 4,496
Years Ended September 30,
Class A Shares 1995
Net asset value, beginning $20.13
Income from investment operations
Net investment income .06
Net realized and unrealized gain (loss) 2.22
Total from investment operations 2.28
Distributions from
Net investment income (.04)
Net realized gain (1.25)
Total distributions (1.29)
Total increase (decrease) in net asset value .99
Net asset value, ending $21.12
Total return* 12.43%
Ratios to average net assets:
Net investment income .32%
Total expenses 1.38%
Net expenses 1.36%
Portfolio turnover 35%
Net assets, ending (in thousands) $90,951
Number of shares outstanding,
ending (in thousands) 4,307
Financial Highlights
Equity Portfolio
Period Ended
September 30,
Class B Shares 1999 1998 #
Net asset value, beginning $20.26 $26.01
Income from investment operations
Net investment income (.15) (.09)
Net realized and unrealized gain (loss) 6.50 (5.66)
Total from investment operations 6.35 (5.75)
Total increase (decrease) in net asset value 6.34 (5.75)
Net asset value, ending $26.60 $20.26
Total return* 31.37% (22.11%)
Ratios to average net assets:
Net investment income (1.41%) (1.55%)(a)
Total expenses 2.43% 4.12%(a)
Expenses before offsets 2.43% 3.19% (a)
Net expenses 2.21% 2.56%(a)
Portfolio turnover 51% 110%
Net assets, ending (in thousands) $8,038 $1,670
Number of shares outstanding,
ending (in thousands) 302 82
Financial Highlights
Equity Portfolio
Years Ended September 30,
Class C Shares 1999
Net asset value, beginning $19.00
Income from investment operations.
Net investment income (loss) (.11)
Net realized and unrealized
gain (loss) 6.12
Total from investment operations 6.01
Distributions from
Net investment income -
Net realized gain (.01)
Total distributions (.01)
Total increase (decrease) in net
asset value 6.00
Net asset value, ending $25.00
Total return* 31.66%
Ratios to average net assets:
Net investment income (loss) (1.21%)
Total expenses 2.22%
Expenses before offsets 2.22%
Net expenses 2.01%
Portfolio turnover 51%
Net assets, ending (in thousands) $10,413
Number of shares outstanding,
ending (in thousands) 417
Financial Highlights
Equity Portfolio
Years Ended September 30,
Class C Shares 1998 1997 1996
Net asset value, beginning $26.37 $21.71 $20.66
Income from investment operations.
Net investment income (loss) (.16) (.05) (.16)
Net realized and unrealized
gain (loss) (3.85) 6.21 3.04
Total from investment operations (4.01) 6.16 2.88
Distributions from
Net investment income - (.01) (.02)
Net realized gain 3.36) (1.49) (1.81)
Total distributions (3.36) (1.50) (1.83)
Total increase (decrease) in net
asset value (7.37) 4.66 1.05
Net asset value, ending $19.00 $26.37 $21.71
Total return* (16.47%) 29.84% 14.85%
Ratios to average net assets:
Net investment income (loss) (1.17%) (1.08%) (1.42%)
Total expenses 2.21% 2.31% 2.86%
Expenses before offsets 2.21% 2.31% 2.86%
Net expenses 2.09% 2.30% 2.85%
Portfolio turnover 110% 93% 118%
Net assets, ending (in thousands) $5,981 $6,249 $2,996
Number of shares outstanding,
ending (in thousands) 315 237 138
Periods Ended September 30,
Class C Shares 1995
Net asset value, beginning $19.98
Income from investment operations.
Net investment income (.03)
Net realized and unrealized gain (loss) 2.05
Total from investment operations 2.02
Distributions from
Net investment income (.09)
Net realized gain (1.25)
Total distributions (1.34)
Total increase (decrease) in net asset value .68
Net asset value, ending $20.66
Total return* 11.16%
Ratios to average net assets:
Net investment income (loss) (.84%)
Total expenses 2.51%
Expenses before offset 2.51%
Net expenses 2.50%
Expenses reimbursed 1.07%
Portfolio turnover 35%
Net assets, ending (in thousands) $1,802
Number of shares outstanding,
ending (in thousands) 87
(a) Annualized
* Total return is not annualized for periods less than one year and does not
reflect deduction of any
front-end or deferred sales charge.
# From April 1, 1998 inception.
^ From March 1, 1994 inception.
^^ From June 1, 1998 inception.
## From April 15, 1998 inception.
### From March 1, 1999 inception.
<PAGE>
Financial Highlights
Calvert Capital Accumulation
Years Ended September 30,
Class A Shares 1999
Net asset value, beginning $25.43
Net investment income (loss) (.32)
Net realized and unrealized gain (loss) 4.25
Total from investment operations 3.93
Distributions from
Net investment income -
Net realized gain (3.48)
Total distributions (3.48)
Total increase (decrease) in net asset value .45
Net asset value, ending $25.88
Total return * 14.91%
Ratios to average net assets:
Net investment income (loss) (1.26%)
Total expenses 1.73%
Expenses before offsets 1.73
Net expenses 1.58%
Portfolio turnover 88%
Net assets, ending (in thousands) 102,508
Number of shares outstanding ending
(in thousands) 3,962
Financial Highlights
Calvert Capital Accumulation
Years Ended September 30,
Class A Shares 1998 1997
Net asset value, beginning $27.21 $22.55
Income from investment operations
Net investment income (loss) (.25) (.25)
Net realized and unrealized gain (loss) .96 4.91
Total from investment operations .71 4.66
Distributions from
Net investment income - -
Net realized gain (2.49) -
Total distributions (2.49) -
Total increase (decrease) in net asset value (1.78) 4.66
Net asset value, ending $25.43 $27.21
Total return * 3.37% 20.67%
Ratios to average net assets:
Net investment income (loss) (1.08%) (1.09%)
Total expenses 1.74% 1.91%
Expenses before offsets 1.74% 1.91%
Net expenses 1.61% 1.85%
Expenses reimbursed - -
Portfolio turnover 77% 126%
Net assets, ending (in thousands) $75,068 $54,751
Number of shares outstanding ending
(in thousands) 2,952 2,012
Periods ended September 30,
Class A Shares 1996 1995^
Net asset value, beginning $21.48 $15.00
Income from investment operations
Net investment income (loss) (.24) (.11)
Net realized and unrealized gain (loss) 1.88 6.61
Total from investment operations 1.64 6.50
Distributions from
Net investment income - (.02)
Net realized gain (.57) -
Total distributions (.57) (.02)
Total increase (decrease) in net asset value 1.07 6.48
Net asset value, ending $22.55 $21.48
Total return* 7.92% 43.40%
Ratios to average net assets:
Net investment income (loss) (1.56%) (1.55%)(a)
Total expenses 2.16% 2.35%(a)
Expenses before offset
Net expenses 1.98% 2.06%(a)
Expenses reimbursed - .05%(a)
Portfolio turnover 114% 95%
Net assets, ending (in thousands) $39,834 $16,111
Number of shares outstanding, ending
(in thousands) 1,767 750
Financial Highlights
Calvert Capital Accumulation
Period Ended
September 30,
Class B Shares 1999 1998 #
Net asset value, beginning $25.28 $28.39
Income from investment operations
Net investment income (loss) (.41) (.16)
Net realized and unrealized gain (loss) 4.07 (2.95)
Total from investment operations 3.66 (3.11)
Distributions from
Net investment income -- -
Net realized gain (3.48) -
Total distributions (3.48) -
Total increase (decrease) in net asset value .18 (3.11)
Net asset value, ending $25.46 $25.28
Total return* 13.85% (10.95)%
Ratios to average net assets:
Net investment income (loss) (2.11%) (2.62%)
Total expenses 2.67% 3.31%
Expenses before offsets 2.67% 3.31% (a)
Net expenses 2.42% 3.01% (a)
Portfolio turnover 88% 77%
Net assets, ending (in thousands) 9,445 $3,311
Number of shares outstanding, ending
(in thousands) 371 131
Financial Highlights
Calvert Capital Accumulation
Years Ended September 30,
Class C Shares 1999
Net asset value, beginning $24.63
Income from investment operations
Net investment income (loss) (.51)
Net realized and unrealized gain (loss) 4.12
Total from investment operations 3.61
Distributions from
Net investment income -
Net realized gain (3.48)
Total distributions (3.48)
Total increase (decrease) in net asset value .13
Net asset value, ending $24.76
Total return* 14.02%
Ratios to average net assets:
Net investment income (loss) (2.04%)
Total expenses 2.56%
Expenses before offsets 2.56%
Expenses before offset
Net expenses 2.35%
Expenses reimbursed -
Portfolio turnover 88%
Net assets, ending (in thousands) 9,021
Number of shares outstanding, ending
(in thousands) 364
Years Ended September 30,
Class C Shares 1998 1997
Net asset value, beginning $26.64 $22.34
Income from investment operations
Net investment income (loss (.40) (.47)
Net realized and unrealized gain (loss) .88 4.77
Total from investment operations .48 4.30
Distributions from
Net investment income - -
Net realized gain (2.49) -
Total distributions (2.49) -
Total increase (decrease) in net asset value (2.01) 4.30
Net asset value, ending $24.63 $26.64
Total return* 2.52% 19.25%
Ratios to average net assets:
Net investment income (loss) (1.98%) (2.30%)
Total expenses 2.75% 3.11%
Expenses before offsets 2.75% 3.11%
Net expenses 2.50% 3.05%
Expenses reimbursed - -
Portfolio turnover 77% 126%
Net assets, ending (in thousands) $6,548 $4,184
Number of shares outstanding, ending (in thousands) 266 157
Periods Ended September 30,
Class C Shares 1996 1995^
Net asset value, beginning $21.55 $15.00
Income from investment operations
Net investment income (loss) (.55) (.15)
Net realized and unrealized gain (loss) 1.91 6.70
Total from investment operations 1.36 6.55
Distributions from
Net investment income - -
Net realized gain (.57) -
Total distributions (.57) -
Total increase (decrease) in net asset value .79 6.55
Net asset value, ending $22.34 $21.55
Total return* 6.56% 43.67%
Ratios to average net assets:
Net investment income (loss) (2.82%) (3.13%)(a)
Total expenses 3.42% 3.79%(a)
Expenses before offset
Net expenses 3.24% 3.50%(a)
Expenses reimbursed - 2.79%(a)
Portfolio turnover 114% 95%
Net assets, ending (in thousands) $3,164 $1,992
Number of shares outstanding, ending
(in thousands) 142 92
(a) Annualized
* Total return does not reflect deduction of any front-end or deferred sales
charge.
^ From October 31, 1994 inception.
# From April 1, 1998 inception.
^^ From March 1, 1999 inception.
<PAGE>
Calvert Group and the Year 2000
Financial Highlights
Calvert World Values International Equity
Years Ended
Class A Shares 1999
Net asset value, beginning $18.57
Income from investment operations
Net investment income .01
Net realized and unrealized gain (loss) 4.94
Total from investment operations 4.95
Distributions from
Net investment income (.07)
Net realized gains (1.56)
Total distributions (1.64)
Total increase (decrease) in net asset value 3.32
Net asset value, ending $17.62
Total return* 27.53%
Ratios to average net assets:
Net investment income (loss) .04%
Total expenses 1.87%
Expenses before offset 1.87%
Net expenses 1.83%
Portfolio turnover 82%
Net assets, ending (in thousands) $231,516
Number of shares outstanding,
ending (in thousands) 10,576
Years Ended September 30,
Class A Shares 1998 1997 1996
Net asset value, beginning $22.06 $18.62 $17.62
Income from investment operations
Net investment income (.06) .10 .04
Net realized and unrealized gain (loss) (2.11) 3.81 1.53
Total from investment operations (2.05) 3.91 1.57
Distributions from
Net investment income (.06) (.05) (.13)
Excess of net investment income - - -
Net realized gain (loss) (1.38) (.42) (.44)
Total distributions (1.44) (.47) (.57)
Total increase (decrease) in net asset value (3.49) 3.44 1.00
Net asset value, ending $18.57 $22.06 $18.62
Total return* (9.29%) 21.44% 9.22%
Ratios to average net assets:
Net investment income (loss) .27% .51% .23%
Total expenses+ 1.86% 1.91% 1.95%
Expenses before offsets 1.86% 1.91% 1.95%
Net expenses 1.80% 1.76% 1.81%
Portfolio turnover 84% 58% 96%
Net assets, ending (in thousands) $195,192 $225,169 $194,032
Number of shares outstanding,
ending (in thousands) 10,510 10,207 10,422
Years Ended
Class A Shares 1995
Net asset value, beginning $17.99
Income from investment operations
Net investment income .11
Net realized and unrealized gain (loss) .38
Total from investment operations .49
Distributions from
Net investment income -
Excess of net investment income -
Net realized gains (.86)
Total distributions (.86)
Total increase (decrease) in net asset value (.37)
Net asset value, ending $17.62
Total return* 3.19%
Ratios to average net assets:
Net investment income (loss) .68%
Total expenses 1.93%
Expenses before offsets 1.93%
Net expenses 1.79%
Portfolio turnover 73%
Net assets, ending (in thousands) $191,586
Number of shares outstanding,
ending (in thousands) 10,876
Financial Highlights
Calvert World Values International Equity
Period Ended
September 30,
Class B Shares 1999 1998^^
Net asset value, beginning $18.48 $21.83
Income from investment operations
Net investment income (.15) (.05)
Net realized and unrealized gain (loss) 4.79 (3.30)
Total from investment operation 4.64 (3.35)
Distributions from
Net realized gains (1.56) ----
Total distributions (1.56) ----
Total increase (decrease) in net asset value 3.08 (3.35)
Net asset value, ending $21.56 $18.48
Total return* 25.84% (15.35%)
Ratios to average net assets:
Net investment income (loss) (1.20%) (.99%)(a)
Total expenses 3.62% 6.11%(a)
Expenses before offsets 3.20% 3.22%(a)
Net expenses 3.16% 3.16%(a)
Portfolio turnover 82% 84%
Net assets, ending (in thousands). $3,133 $879
Number of shares outstanding,
ending (in thousands) 145 48
Financial Highlights
Calvert World Values International Equity
Years Ended
Class C Shares 1999
Net asset value, beginning $17.83
Income from investment operations
Net investment income (.17)
Net realized and unrealized gain (loss) 4.71
Total from investment operations 4.54
Distributions from
Net realized gains (1.56)
Total distributions (1.56)
Total increase (decrease) in net asset value 2.98
Net asset value, ending $20.81
Total return* 26.25%
Ratios to average net assets:
Net investment income (loss) (.92%)
Total expenses 2.83%
Expenses before offsets 2.83%
Net expenses 2.99%
Portfolio turnover 82%
Net assets, ending (in thousands) $9,777
Number of shares outstanding,
ending (in thousands) 470
Years Ended September 30,
Class C Shares 1998 1997 1996
Net asset value, beginning $21.39 $18.20 $17.28
Income from investment operations
Net investment income (.13) (.07) (.15)
Net realized and unrealized gain (loss) (2.05) 3.68 1.51
Total from investment operations (2.18) 3.61 1.36
Distributions from
Net realized gain (loss) (1.38) (.42) (.44)
Total distributions (1.38) (.47) (.57)
Total increase (decrease) in net asset value (3.56) 3.19 .92
Net asset value, ending $17.83 $21.39 $18.20
Total return* (10.22%) 20.22% 8.07%
Ratios to average net assets:
Net investment income (loss) (.79%) (.47%) (.88%)
Total expenses 2.91% 2.91% 3.08%
Expenses before offsets 2.91% 2.91% 3.08%
Net expenses 2.85% 2.76% 2.93%
Portfolio turnover 84% 58% 96%
Net assets, ending (in thousands) $8,043 $8,799 $6,779
Number of shares outstanding,
ending (in thousands) 451 411 373
Years Ended
Class C Shares 1995
Net asset value, beginning $17.86
Income from investment operations
Net investment income (.05)
Net realized and unrealized gain (loss) .32
Total from investment operations .27
Distributions from
Net realized gains (.85)
Total distributions (.85)
Total increase (decrease) in net asset value (.58)
Net asset value, ending $17.28
Total return* 1.95%
Ratios to average net assets:
Net investment income (loss) (.47%)
Total expenses 3.12%
Expenses before offsets 3.12%
Net expenses 2.99%
Portfolio turnover 73%
Net assets, ending (in thousands) $6,061
Number of shares outstanding,
ending (in thousands) 351
(a) Annualized
* Total return is not annualized for periods less than one year and does not
reflect deduction of any front-end or deferred sales charge.
^ From April 1, 1998 inception.
# From March 1, 1999 inception.
<PAGE>
Financial Highlights
Calvert New Vision Small Cap
Period Ended September 30,
Class A Shares 1999
Net asset value, beginning $12.04
Income from investment operations
Net investment income (loss) (.05)
Net realized and unrealized gain (loss) 1.50
Total from investment operations 1.45
Distributions from
Net realized gain -
Total distributions -
Total increase (decrease) in net asset value 1.45
Net asset value, ending $13.49
Total return* 12.04%
Ratios to average net assets:
Net investment income (loss) (.39%)
Total expenses + 1.96%
Expenses before offsets 1.93%
Net expenses 1.66%
Portfolio turnover 68%
Net assets, ending (in thousands) $52,961
Number of shares outstanding,
ending (in thousands) 3,926
Periods Ended September 30,
Class A Shares 1998 1997^
Net asset value, beginning $15.65 $15.00
Income from investment operations
Net investment income (loss) (.02) (.05)
Net realized and unrealized gain (loss) (3.55) .70
Total from investment operations (3.57) .65
Distributions from
Net investment income - -
Net realized gain (.04) -
Total distributions (.04) -
Total increase (decrease) in net asset value (3.61) .65
Net asset value, ending $12.04 $15.65
Total return* (22.86%) 4.33%
Ratios to average net assets:
Net investment income (loss) (.17%) (.71%)(a)
Total expenses 1.82% 1.36% (a)
Expenses before offsets 1.82% 1.36% (a)
Net expenses 1.71% .90%(a)
Portfolio turnover 68% 196%
Net assets, ending (in thousands) $61,765 $3,260
Number of shares outstanding,
ending (in thousands) 5,129 208
Period Ended September 30,
Class B Shares 1999 1998#
Net asset value, beginning $12.01 $16.18
Income from investment operations
Net investment income (loss) (.15) (.05)
Net realized and unrealized gain (loss) 1.43 (4.12)
Total from investment operations 1.28 (4.17)
Distributions from
Net investment income -
Net realized gain -
Total distributions -
Total increase (decrease) in net asset value 1.28 (4.17)
Net asset value, ending $13.29 $12.01
Total return* 10.66% (25.77%)
Ratios to average net assets:
Net investment income (loss) (1.68%) (1.39%)(a)
Total expenses 3.87% 7.68%(a)
Expenses before offsets 3.33% 3.40%(a)
Net expenses 2.93% 2.99%(a)
Portfolio turnover 68% 68%
Net assets, ending (in thousands) $1,504 $523
Number of shares outstanding,
ending (in thousands) 113 44
Period Ended September 30,
Class C Shares 1999
Net asset value, beginning $11.95
Income from investment operations
Net investment income (loss) (.22)
Net realized and unrealized gain (loss) 1.54
Total from investment operations 1.32
Distributions from
Net realized gain -
Total distributions -
Total increase (decrease) in net asset value 1.32
Net asset value, ending $13.27
Total return* 11.05%
Ratios to average net assets:
Net investment income (loss) (1.27%)
Total expenses 2.87%
Expenses before offsets 2.84%
Net expenses 2.53%
Portfolio turnover 68%
Net assets, ending (in thousands) $6,215
Number of shares outstanding,
ending (in thousands) 468
Periods Ended September 30,
Class C Shares 1998 1997^
Net asset value, beginning $15.62 $15.00
Income from investment operations
Net investment income (loss) (.15) (.10)
Net realized and unrealized gain (loss) (3.48) .72
Total from investment operations (3.63) .62
Distributions from
Net investment income - -
Net realized gain (.04) -
Total distributions (.04) -
Total increase (decrease) in net asset value (3.67) .62
Net asset value, ending $11.95 $15.62
Total return* (23.31%) 4.13%
Ratios to average net assets:
Net investment income (loss) (1.15%) (.95%)(a)
Total expenses 2.78% 1.47%(a)
Expenses before offsets
Net expenses 2.64% 1.15%(a)
Expenses reimbursed .16% 9.44%(a)
Portfolio turnover 68% 196%
Net assets, ending (in thousands) $7,097 $318
Number of shares outstanding,
ending (in thousands) 594 20
Financial Highlights
Bond Portfolio
Years Ended September 30,
Class A Shares 1999 1998 1997 1996
Net asset value, beginning $16.88 $16.64 $16.06 $16.34
Income from investment operations
Net investment income .93 .95 .96 .92
Net realized and unrealized
gain (loss) (.74) .41 .58 (.29)
Total from investment
operations .19 1.36 1.54 .63
Distributions from
Net investment income (.93) (.96) (.96) (.91)
Net realized gain (.55) (.16) - -
Total distributions (1.48) (1.12) (.96) (.91)
Total increase (decrease) in
net asset value (1.29) .24 .58 (.28)
Net asset value, ending $16.88 $16.64 $16.06
Total return* 1.18% 8.46% 9.89% 3.96%
Ratios to average net assets:
Net investment income 5.79% 5.69% 5.85% 5.60%
Total expenses 1.13% 1.14% 1.23% 1.29%
Expenses before offsets 1.13% 1.14% 1.23% 1.29%
Net expenses 1.09% 1.07% 1.19% 1.26%
Portfolio turnover 570% 620% 319% 22%
Net assets, ending (in thousands) $66,944 $65,807 $59,656 $62,259
Number of shares outstanding,
ending (in thousands) 4,295 3,897 3,585 3,876
Years Ended September 30,
Class A Shares 1995
Net asset value, beginning $15.49
Income from investment operations
Net investment income .96
Net realized and unrealized gain (loss) .91
Total from investment operations 1.87
Distributions from
Net investment income (.93)
Net realized gain (.06)
Tax return of capital (.03)
Total distributions (1.02)
Total increase (decrease) in net asset value .85
Net asset value, ending $16.34
Total return* 12.57%
Ratios to average net assets:
Net investment income 6.04%
Total expenses 1.24%
Expenses before offsets 1.24%
Net expenses 1.22%
Portfolio turnover 29%
Net assets, ending (in thousands) $62,929
Number of shares outstanding,
ending (in thousands) 3,850
Financial Highlights
Bond Portfolio
Period Ended
September 30
Class B Shares 1999 1998#
Net asset value, beginning $16.84 $16.69
Income from investment operations
Net investment income .74 .36
Net realized and unrealized gain (loss) (.79) 19
Total from investment operations (.05) 55
Distributions from
Net investment income (.71) (.40)
Total increase (decrease) in net asset value (1.31) 15
Net asset value, ending $15.53 $16.84
Total return* (.29%) 3.36%
Ratios to average net assets:
Net investment income 4.43% 4.14%(a)
Total expenses 2.72% 2.55%(a)
Expenses before offsets 2.56% 2.55% (a)
Net expenses 2.50% 2.50%(a)
Portfolio turnover 570% 620%
Net assets, ending (in thousands) $2,773 $557
Number of shares outstanding,
ending (in thousands) 179 33
Period Ended
September 30,
Class
C Shares 1999 1998^^
Net asset value, beginning $16.84 $16.81
Income from investment operations
Net investment income .74 .21
Net realized and unrealized gain (loss) (.80) .08
Total from investment operations (.06) .29
Distributions from
Net investment income (.72) (.26)
Net realized gain (.55)
Total distributions (1.27)
Total increase (decrease) in net asset value (1.33) .03
Net asset value, ending $15.51 $16.84
Total return* (.40%) 1.75%
Ratios to average net assets:
Net investment income 4.41% 4.06%(a)
Total expenses + 2.85% 2.74%(a)
Expenses before offsets 2.55%
Net expenses 2.50% 2.50%(a)
Portfolio turnover 570% 620%
Net assets, ending (in thousands) $1,779 $399
Number of shares outstanding,
ending (in thousands) 115 24
(a) Annualized
* Total return does not reflect deduction of any front-end or deferred sales
charge.
^ From January 31, 1997 inception.
# From April 1, 1998 inception.
^^ From March 1, 1999 inception.
Financial Highlights
Money Market Portfolio
Years Ended September 30,
1999 1998 1997 1996
Net asset value, beginning $1.00 $1.00 $1.00 $1.00
Income from investment operations
Net investment income .045 .049 .048 .048
Distributions from
Net investment income (.045) (.049) (.048) (.048)
Net asset value, ending $1.00 $1.00 $1.00 $1.00
Total return* 4.54% 5.02% 4.89% 4.88%
Ratios to average net assets:
Net investment income 4.43% 4.92% 4.79% 4.77%
Total expenses .90% .94% 1.00% 1.10%
Expenses before offsets .89% .89% .89% .89%
Net expenses .87% .87% .87% .87%
Net assets, ending (in thousands) $193,941 $172,701 $166,111 $166,516
Number of shares outstanding,
ending (in thousands) 194,031 172,739 166,163 166,569
Years Ended September 30,
1995
Net asset value, beginning $1.00
Income from investment operations
Net investment income .050
Distributions from
Net investment income (.050)
Net asset value, ending $1.00
Total return 5.13%
Ratios to average net assets:
Net investment income 5.03%
Total expenses 1.07%
Expenses before offsets .89%
Net expenses .87%
Net assets, ending (in thousands) $153,996
Number of shares outstanding,
ending (in thousands) 154,044
<PAGE>
EXHIBIT A
REDUCED SALES CHARGES (CLASS A ONLY)
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE THROUGH SEVERAL PURCHASE PLANS
AVAILABLE. YOU MUST NOTIFY THE FUND AT THE TIME OF PURCHASE TO TAKE ADVANTAGE OF
THE REDUCED SALES CHARGE.
RIGHTS OF ACCUMULATION CAN BE APPLIED TO SEVERAL ACCOUNTS
CLASS A SALES CHARGE BREAKPOINTS ARE AUTOMATICALLY CALCULATED FOR EACH ACCOUNT
BASED ON THE HIGHER OF COST OR CURRENT VALUE OF SHARES PREVIOUSLY PURCHASED.
THIS PRIVILEGE CAN BE APPLIED TO A FAMILY GROUP OR OTHER QUALIFIED GROUP* UPON
REQUEST. SHARES COULD THEN BE PURCHASED AT THE REDUCED SALES CHARGE WHICH
APPLIES TO THE ENTIRE GROUP; THAT IS, BASED ON THE HIGHER OF COST OR CURRENT
VALUE OF SHARES PREVIOUSLY PURCHASED AND CURRENTLY HELD BY ALL THE MEMBERS OF
THE GROUP.
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 FUND PURCHASES, INSTEAD OF THE HIGHER 4.75% SALES CHARGE. 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.
RETIREMENT PLANS UNDER SECTION 457, SECTION 403(B)(7), OR SECTION 401(K)
THERE IS NO SALES CHARGE ON SHARES PURCHASED FOR THE BENEFIT OF A RETIREMENT
PLAN UNDER SECTION 457 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
("CODE"), OR FOR A PLAN QUALIFYING UNDER SECTION 403(B) OR 401(K) OF THE CODE
IF, AT THE TIME OF PURCHASE, (I) CALVERT GROUP HAS BEEN NOTIFIED IN WRITING THAT
THE 403(B) OR 401(K) PLAN HAS AT LEAST 200 ELIGIBLE EMPLOYEES AND IS NOT
SPONSORED BY A K-12 SCHOOL DISTRICT, OR (II) THE COST OR CURRENT VALUE OF SHARES
A 401(K) PLAN HAS IN CALVERT GROUP OF FUNDS (EXCEPT MONEY MARKET FUNDS) IS AT
LEAST $1 MILLION.
NEITHER THE FUNDS, NOR CALVERT DISTRIBUTORS, INC. ("CDI"), NOR ANY AFFILIATE
THEREOF WILL REIMBURSE A PLAN OR PARTICIPANT FOR ANY SALES CHARGES PAID PRIOR TO
RECEIPT OF SUCH WRITTEN COMMUNICATION AND CONFIRMATION BY CALVERT GROUP. PLAN
ADMINISTRATORS SHOULD SEND REQUESTS FOR THE WAIVER OF SALES CHARGES BASED ON THE
ABOVE CONDITIONS TO: CALVERT GROUP RETIREMENT PLANS, 4550 MONTGOMERY AVENUE,
SUITE 1000N, BETHESDA, MARYLAND 20814.
OTHER CIRCUMSTANCES
THERE IS NO SALES CHARGE ON SHARES OF ANY FUND OF THE CALVERT GROUP OF FUNDS
SOLD TO (I) CURRENT OR RETIRED DIRECTORS, TRUSTEES, OR OFFICERS OF THE CALVERT
GROUP
<PAGE>
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 CSIF BALANCED MAY BE SOLD AT NET ASSET VALUE TO YOU IF YOUR ACCOUNT
WAS ESTABLISHED ON OR BEFORE JULY 17, 1986.
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.
* 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>
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 FOR CLASS A, AND
A PERCENTAGE OF AMOUNT INVESTED FOR CLASS B AND C) WHEN YOU PURCHASE SHARES OF
NON-MONEY MARKET FUNDS. CDI ALSO PAYS DEALERS AN ONGOING SERVICE FEE WHILE YOU
OWN SHARES OF THAT 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
CSIF MONEY MARKET NONE/0.25%
CLASS A CLASS B* CLASS C**
CSIF BALANCED 4.00%/0.25% 4.00%/0.25% 1.00%/1.00%
CSIF BOND 3.00%/0.25% 3.00%/0.25% 1.00%/1.00%
CSIF EQUITY 4.00%/0.25% 4.00%/0.25% 1.00%/1.00%
CSIF MANAGED INDEX 4.00%/0.25% 4.00%/0.25% 1.00%/1.00%
CWVF INTERNATIONAL EQUITY 4.00%/0.25% 4.00%/0.25% 1.00%/1.00%
CAPITAL ACCUMULATION 4.00%/0.25% 4.00%/0.25% 1.00%/1.00%
NEW VISION SMALL CAP 4.00%/0.25% 4.00%/0.25% 1.00%/1.00%
*CLASS B SERVICE FEE BEGINS TO ACCRUE IN 13TH MONTH.
**CLASS C PAYS DEALERS A SERVICE FEE OF 0.25% AND ADDITIONAL COMPENSATION OF
0.75% FOR A TOTAL OF 1%. BEGINS TO ACCRUE IN 13TH MONTH.
OCCASIONALLY, CDI MAY REALLOW TO DEALERS THE FULL CLASS A FRONT-END SALES
CHARGE. CDI MAY ALSO PAY ADDITIONAL CONCESSIONS, INCLUDING NON-CASH PROMOTIONAL
INCENTIVES, SUCH AS MERCHANDISE OR TRIPS, TO BROKERS EMPLOYING REGISTERED
REPRESENTATIVES WHO HAVE SOLD OR ARE EXPECTED TO SELL A MINIMUM DOLLAR AMOUNT OF
SHARES OF THE FUNDS AND/OR SHARES OF OTHER FUNDS UNDERWRITTEN BY CDI. CDI MAY
MAKE EXPENSE REIMBURSEMENTS FOR SPECIAL TRAINING OF A BROKER'S REGISTERED
REPRESENTATIVES, ADVERTISING OR EQUIPMENT, OR TO DEFRAY THE EXPENSES OF SALES
CONTESTS. CAMCO, CDI, OR THEIR AFFILIATES MAY PAY CERTAIN BROKER-DEALERS AND/OR
OTHER PERSONS, FOR THE SALE AND DISTRIBUTION OF THE SECURITIES OR FOR SERVICES
TO THE FUND. PAYMENTS MAY INCLUDE ADDITIONAL COMPENSATION BEYOND THE REGULARLY
SCHEDULED RATES, AND FINDER'S FEES. CDI PAYS DEALERS A FINDER'S FEE ON CLASS A
SHARES PURCHASED AT NAV IN ACCOUNTS WITH $1 MILLION OR MORE (EXCLUDING CSIF
MONEY MARKET.) THE FINDER'S FEE IS 1% OF THE PURCHASE NAV AMOUNT ON THE FIRST
$2 MILLION, 0.80% ON $2 TO $3 MILLION, 0.50% ON $3 TO $50 MILLION, 0.25% ON $50
TO $100 MILLION, AND 0.15% OVER $100 MILLION. 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
ADDRESS: 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.811-3334(CSIF)
NO.811- 06563(CWVF INTERNATIONAL EQUITY AND CAPITAL ACCUMULATION)
NO.811- 3416 (NEW VISION)
PRINTED ON RECYCLED PAPER USING SOY INKS
<PAGE>
PROSPECTUS
JANUARY 31, 2000
CLASS I (INSTITUTIONAL) SHARES
- CALVERT SOCIAL INVESTMENT FUND (CSIF) BALANCED
- CSIF MANAGED INDEX
- CSIF EQUITY
- CALVERT CAPITAL ACCUMULATION
- CALVERT WORLD VALUES INTERNATIONAL EQUITY
- CALVERT NEW VISION SMALL CAP
- CALVERT INCOME
- CSIF BOND
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION (SEC) OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC OR
ANY STATE SECURITIES COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NOTE: CLASS I SHARES MAY NOT BE AVAILABLE IN ALL FUNDS. PLEASE CALL
1-800-327-2109 FOR AVAILABILITY.
TABLE OF CONTENTS
ABOUT THE FUNDS
INVESTMENT OBJECTIVE, STRATEGY, PAST PERFORMANCE 1
FEES AND EXPENSES 9
PRINCIPAL INVESTMENT PRACTICES AND RISKS 10
ABOUT SOCIAL INVESTING
INVESTMENT SELECTION PROCESS AND SOCIALLY RESPONSIBLE
INVESTMENT CRITERIA 13
HIGH SOCIAL IMPACT INVESTMENTS 15
SPECIAL EQUITIES 15
ABOUT YOUR INVESTMENT
SUBADVISORS AND PORTFOLIO MANAGERS 15
ADVISORY FEES 16
HOW TO OPEN AN ACCOUNT 17
IMPORTANT - HOW SHARES ARE PRICED 17
WHEN YOUR ACCOUNT WILL BE CREDITED 17
OTHER CALVERT GROUP FEATURES (EXCHANGES, MINIMUM ACCOUNT BALANCE,
ETC.) 17
DIVIDENDS, CAPITAL GAINS AND TAXES 18
HOW TO SELL SHARES 19
FINANCIAL HIGHLIGHTS 20
<PAGE>
CSIF BALANCED (NOTE: FORMERLY KNOWN AS CSIF MANAGED GROWTH)
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
SUBADVISORS BROWN CAPITAL MANAGEMENT, INC.
NCM CAPITAL MANAGEMENT, INC.
OBJECTIVE
CSIF BALANCED SEEKS TO ACHIEVE A COMPETITIVE TOTAL RETURN THROUGH AN ACTIVELY
MANAGED PORTFOLIO OF STOCKS, BONDS AND MONEY MARKET INSTRUMENTS WHICH OFFER
INCOME AND CAPITAL GROWTH OPPORTUNITY AND WHICH SATISFY THE INVESTMENT AND
SOCIAL CRITERIA.
PRINCIPAL INVESTMENT STRATEGIES:
THE FUND TYPICALLY INVESTS ABOUT 60% OF ITS ASSETS IN STOCKS AND 40% IN BONDS OR
OTHER FIXED-INCOME INVESTMENTS. STOCK INVESTMENTS ARE PRIMARILY COMMON STOCK IN
LARGE-CAP COMPANIES, WHILE THE FIXED-INCOME INVESTMENTS ARE PRIMARILY A WIDE
VARIETY OF INVESTMENT GRADE BONDS. CSIF BALANCED INVESTS IN A COMBINATION OF
STOCKS, BONDS AND MONEY MARKET INSTRUMENTS IN AN ATTEMPT TO PROVIDE A COMPLETE
INVESTMENT PORTFOLIO IN A SINGLE PRODUCT. THE ADVISOR REBALANCES THE FUND
QUARTERLY TO ADJUST FOR CHANGES IN MARKET VALUE. THE FUND IS A LARGE-CAP,
GROWTH-ORIENTED U.S. DOMESTIC PORTFOLIO, ALTHOUGH IT MAY HAVE OTHER INVESTMENTS,
INCLUDING SOME FOREIGN SECURITIES AND SOME MID-CAP STOCKS. FOR THE EQUITY
PORTION, THE FUND SEEKS COMPANIES WITH BETTER THAN AVERAGE EXPECTED GROWTH RATES
AT LOWER THAN AVERAGE VALUATIONS. THE FIXED-INCOME PORTION REFLECTS AN ACTIVE
TRADING STRATEGY, SEEKING TOTAL RETURN AND FOCUSES ON A DURATION TARGET
APPROXIMATING THE LEHMAN AGGREGATE BOND INDEX.
EQUITY INVESTMENTS ARE SELECTED BY THE TWO SUBADVISORS, WHILE THE ADVISOR
MANAGES THE FIXED-INCOME ASSETS AND DETERMINES THE OVERALL MIX FOR THE FUND
DEPENDING UPON ITS VIEW OF MARKET CONDITIONS AND ECONOMIC OUTLOOK.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
PRINCIPAL RISKS:
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
- THE STOCK OR BOND MARKET GOES DOWN
- THE INDIVIDUAL STOCKS AND BONDS IN THE FUND DO NOT
PERFORM AS WELL AS EXPECTED
- FOR THE FIXED-INCOME PORTION OF THE FUND, THE ADVISOR'S
FORECAST AS TO INTEREST RATES IS NOT CORRECT
- FOR THE FOREIGN SECURITIES HELD IN THE FUND, IF FOREIGN
CURRENCY VALUES GO DOWN VERSUS THE U.S. DOLLAR
- THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE
STOCK AND BOND MARKETS DOES NOT PERFORM AS WELL AS
EXPECTED
THE ACTIVE TRADING STRATEGY FOR THE FIXED INCOME PORTION OF THE FUND MAY CAUSE
THE FUND TO HAVE, RELATIVE TO OTHER BALANCED FUNDS, A HIGH AMOUNT OF SHORT-TERM
CAPITAL GAINS, WHICH ARE TAXABLE TO YOU AT THE ORDINARY INCOME TAX
RATE.
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.
BAR CHART AND PERFORMANCE TABLE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER TIME TO THAT OF THE
STANDARD & POOR'S 500 INDEX AND THE LEHMAN AGGREGATE BOND INDEX. IT ALSO SHOWS
THE FUND'S RETURNS COMPARED TO THE LIPPER BALANCED FUND INDEX. CLASS I SHARES
HAVE AN ACTUAL INCEPTION DATE OF 2/26/99. HOWEVER, CLASS A SHARES (NOT OFFERED
IN THIS PROSPECTUS) HAVE AN INCEPTION DATE OF 10/21/82. IN THE CHART AND TABLE
BELOW, PERFORMANCE RESULTS BEFORE 2/26/99 ARE FOR CLASS A AT NAV (I.E., THEY DO
NOT REFLECT THE DEDUCTION OF THE CLASS A FRONT-END SALES CHARGE.) BECAUSE CLASS
A HAD HIGHER EXPENSES, ITS PERFORMANCE WAS LOWER THAN THE CLASS I WOULD HAVE
REALIZED IN THE SAME PERIOD. THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY
INDICATE HOW THE FUND WILL PERFORM IN THE FUTURE.
CALENDAR YEAR-BY-YEAR CSIF BALANCED TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER: (OF PERIOD SHOWN ) Q4 '98; 12.42%
WORST QUARTER: (OF PERIOD SHOWN) Q3 '98; (6.47%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
1 YEAR 5 YEAR 10 YEAR
CSIF BALANCED 7.22% 15.50% 10.33%
S&P 500 INDEX MONTHLY
REINVESTED 21.03% 28.54% 18.19%
LEHMAN AGGREGATE BOND
INDEX TR (0.82%) 7.73% 7.70%
LIPPER BALANCED FUND INDEX 8.98% 16.33% 12.26%
<PAGE>
CSIF MANAGED INDEX
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
SUBADVISOR STATE STREET GLOBAL ADVISORS
OBJECTIVE
CSIF MANAGED INDEX SEEKS A TOTAL RETURN AFTER EXPENSES WHICH EXCEEDS OVER TIME
THE TOTAL RETURN OF THE RUSSELL 1000 INDEX. IT SEEKS TO OBTAIN THIS OBJECTIVE
WHILE MAINTAINING RISK CHARACTERISTICS SIMILAR TO THOSE OF THE RUSSELL 1000
INDEX AND THROUGH INVESTMENTS IN STOCKS THAT MEET THE FUND'S INVESTMENT AND
SOCIAL CRITERIA. THIS OBJECTIVE MAY BE CHANGED BY THE FUND'S BOARD OF
TRUSTEES/DIRECTORS WITHOUT SHAREHOLDER APPROVAL.
PRINCIPAL INVESTMENT STRATEGIES:
THE FUND INVESTS IN STOCKS THAT MEET THE SOCIAL CRITERIA AND CREATES A PORTFOLIO
WHOSE CHARACTERISTICS CLOSELY RESEMBLE THE CHARACTERISTICS OF THE RUSSELL 1000
INDEX, WHILE EMPHASIZING THE STOCKS WHICH IT BELIEVES OFFER THE GREATEST
POTENTIAL OF RETURN.
CSIF MANAGED INDEX FOLLOWS AN ENHANCED INDEX MANAGEMENT STRATEGY. INSTEAD OF
PASSIVELY HOLDING A REPRESENTATIVE BASKET OF SECURITIES DESIGNED TO MATCH THE
RUSSELL 1000 INDEX, THE SUBADVISOR ACTIVELY USES A PROPRIETARY ANALYTICAL MODEL
TO ATTEMPT TO ENHANCE THE FUND'S PERFORMANCE, RELATIVE TO THE INDEX. THE FUND
MAY PURCHASE STOCKS NOT IN THE RUSSELL 1000 INDEX, BUT AT LEAST 65% OF THE
FUND'S TOTAL ASSETS WILL BE INVESTED IN STOCKS THAT ARE IN THE INDEX. ANY
INVESTMENTS NOT IN THE INDEX WILL MEET THE FUND'S SOCIAL SCREENING CRITERIA AND
BE SELECTED TO CLOSELY MIRROR THE INDEX'S RISK/RETURN CHARACTERISTICS. THE
SUBADVISOR REBALANCES THE FUND QUARTERLY TO MAINTAIN ITS RELATIVE EXPOSURE TO
THE INDEX.
THE FIRST STEP OF THE INVESTMENT STRATEGY IS TO IDENTIFY THOSE STOCKS IN THE
RUSSELL 1000 INDEX WHICH MEET THE FUND'S SOCIAL SCREENING CRITERIA. FROM THIS
LIST OF STOCKS, THE SUBADVISOR CHOOSES STOCKS THAT CLOSELY MIRROR THE INDEX IN
TERMS OF VARIOUS FACTORS SUCH AS INDUSTRY WEIGHTINGS, CAPITALIZATION, AND YIELD.
EVEN THOUGH CERTAIN INDUSTRIES MAY BE ELIMINATED FROM THE FUND BY THE SCREENS,
THE FACTOR MODEL PERMITS MATHEMATICAL SUBSTITUTES WHICH THE SUBADVISOR EXPECTS
TO MIMIC THE RETURN CHARACTERISTICS OF THE MISSING INDUSTRIES AND STOCKS.
THE FINAL STEP IN THE PROCESS IS TO APPLY THE SUBADVISOR'S PROPRIETARY VALUATION
METHOD WHICH ATTEMPTS TO IDENTIFY THE STOCKS WHICH HAVE THE GREATEST POTENTIAL
FOR SUPERIOR PERFORMANCE. EACH SECURITY IDENTIFIED FOR POTENTIAL INVESTMENT IS
RANKED ACCORDING TO TWO SEPARATE MEASURES: VALUE AND MOMENTUM OF MARKET
SENTIMENT. THESE TWO MEASURES COMBINE TO CREATE A SINGLE COMPOSITE SCORE OF
EACH STOCK'S ATTRACTIVENESS. THE FUND IS CONSTRUCTED FROM SECURITIES THAT MEET
ITS SOCIAL CRITERIA, WEIGHTED THROUGH A MATHEMATICAL PROCESS THAT SEEKS TO
REDUCE RISK VIS- -VIS THE RUSSELL 1000 INDEX.
THE RUSSELL 1000 INDEX MEASURES THE PERFORMANCE OF THE 1,000 LARGEST U.S.
COMPANIES BASED ON TOTAL MARKET CAPITALIZATION. THE INDEX IS ADJUSTED, OR
RECONSTITUTED, ANNUALLY. AS OF THE LATEST RECONSTITUTION, THE AVERAGE MARKET
CAPITALIZATION OF THE RUSSELL 1000 WAS APPROXIMATELY $91.485 BILLION.
PRINCIPAL RISKS:
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
- THE STOCK MARKET OR THE RUSSELL 1000 INDEX GOES DOWN
- THE INDIVIDUAL STOCKS IN THE FUND OR THE INDEX MODELING
PORTFOLIO DO NOT PERFORM AS WELL AS EXPECTED
- AN INDEX FUND HAS OPERATING EXPENSES; A MARKET INDEX
DOES NOT. THE FUND - WHILE EXPECTED TO TRACK ITS TARGET
INDEX AS CLOSELY AS POSSIBLE WHILE SATISFYING ITS OWN
INVESTMENT AND SOCIAL CRITERIA - WILL NOT BE ABLE TO MATCH
THE PERFORMANCE OF THE INDEX EXACTLY
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.
THE FUND IS NOT SPONSORED, SOLD, PROMOTED OR ENDORSED BY THE FRANK RUSSELL
COMPANY.
TRACKING THE INDEX
THE SUBADVISOR EXPECTS THE ANNUAL TRACKING ERROR, RELATIVE TO THE RETURN OF THE
INDEX BEFORE DEDUCTING EXPENSES, TO BE WITHIN CERTAIN LIMITS ESTABLISHED BY THE
ADVISOR AND SUBADVISOR. THE FUND'S ABILITY TO TRACK THE INDEX WILL BE MONITORED
BY ANALYZING RETURNS TO ENSURE THAT THE RETURNS ARE REASONABLY CONSISTENT WITH
INDEX RETURNS. ANY DEVIATIONS OF REALIZED RETURNS FROM THE INDEX WHICH ARE IN
EXCESS OF THOSE EXPECTED WILL BE ANALYZED FOR SOURCES OF VARIANCE.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
<PAGE>
BAR CHART AND PERFORMANCE TABLE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER TIME TO THAT OF THE
RUSSELL 1000 INDEX. IT ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE LIPPER
LARGE CAP CORE INDEX. THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE
HOW THE FUND WILL PERFORM IN THE FUTURE.
CALENDAR YEAR-BY-YEAR CSIF MANAGED INDEX TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER: (OF PERIOD SHOWN ) Q1 '99; 14.72%
WORST QUARTER: (OF PERIOD SHOWN) Q3 '99; (6.32%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
1 YEAR 5 YEAR 10 YEAR
CSIF MANAGED INDEX 17.65% N/A1 N/A
RUSSELL 1000 INDEX TR 20.91% N/A N/A
LIPPER LARGE CAP CORE INDEX 19.35% N/A N/A
1SINCE INCEPTION (4/30/98) 17.45%; RUSSELL 1000 INDEX TR 19.20%; LIPPER LARGE
CAP CORE INDEX 18.16%. THE MONTH END DATE OF 4/30/98 IS USED FOR COMPARISON
PURPOSES ONLY, ACTUAL FUND INCEPTION IS 4/15/98.
<PAGE>
CSIF EQUITY
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
SUBADVISOR ATLANTA CAPITAL MANAGEMENT COMPANY, L.L.C
OBJECTIVE
CSIF EQUITY SEEKS GROWTH OF CAPITAL THROUGH INVESTMENT IN STOCKS OF ISSUERS IN
INDUSTRIES BELIEVED TO OFFER OPPORTUNITIES FOR POTENTIAL CAPITAL APPRECIATION
AND WHICH MEET THE FUND'S INVESTMENT AND SOCIAL CRITERIA.
PRINCIPAL INVESTMENT STRATEGIES:
THE FUND INVESTS PRIMARILY IN THE COMMON STOCKS OF LARGE-CAP COMPANIES HAVING,
ON AVERAGE, MARKET CAPITALIZATION OF AT LEAST $1 BILLION. INVESTMENT RETURNS
WILL BE MOSTLY FROM CHANGES IN THE PRICE OF THE FUND'S HOLDINGS (CAPITAL
APPRECIATION).
THE SUBADVISOR LOOKS FOR GROWING COMPANIES WITH A HISTORY OF STEADY EARNINGS
GROWTH. COMPANIES ARE SELECTED BASED ON THE SUBADVISOR'S OPINION THAT THE
COMPANY HAS THE ABILITY TO SUSTAIN GROWTH THROUGH GROWING PROFITABILITY AND THAT
THE STOCK IS FAVORABLY PRICED WITH RESPECT TO THOSE GROWTH EXPECTATIONS.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
PRINCIPAL RISKS:
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
- THE STOCK MARKET GOES DOWN
- THE INDIVIDUAL STOCKS IN THE FUND DO 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.
BAR CHART AND PERFORMANCE TABLE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER TIME TO THAT OF THE
STANDARD & POOR'S 500 INDEX. IT ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE
LIPPER MULTI-CAP CORE INDEX. CLASS I SHARES HAVE AN ACTUAL INCEPTION DATE OF
11/1/99. HOWEVER, CLASS A SHARES (NOT OFFERED IN THIS PROSPECTUS) HAVE AN
INCEPTION DATE OF 8/24/87. IN THE CHART AND TABLE BELOW, PERFORMANCE RESULTS
BEFORE 11/1/99 ARE FOR CLASS A AT NAV (I.E., THEY DO NOT REFLECT THE DEDUCTION
OF THE CLASS A FRONT-END SALES CHARGE.) BECAUSE CLASS A HAD HIGHER EXPENSES,
ITS PERFORMANCE WAS LOWER THAN THE CLASS I WOULD HAVE REALIZED IN THE SAME
PERIOD. THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE HOW THE FUND
WILL PERFORM IN THE FUTURE.
CALENDAR YEAR-BY-YEAR CSIF EQUITY TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER: (OF PERIOD SHOWN ) Q4 '98; 26.98%
WORST QUARTER: (OF PERIOD SHOWN) Q3 '98; (17.56%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
1 YEAR 5 YEAR 10 YEAR
CSIF EQUITY 23.47% 19.05% 10.44%
S&P 500 INDEX MONTHLY
REINVESTED 21.03% 28.54% 18.19%
LIPPER MULTI-CAP CORE INDEX 20.79% 23.59% 16.05%
<PAGE>
CALVERT CAPITAL ACCUMULATION
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
SUBADVISOR BROWN CAPITAL MANAGEMENT, INC.
OBJECTIVE
CAPITAL ACCUMULATION SEEKS TO PROVIDE LONG-TERM CAPITAL APPRECIATION BY
INVESTING PRIMARILY IN MID-CAP STOCKS THAT MEET THE FUND'S INVESTMENT AND SOCIAL
CRITERIA. THIS OBJECTIVE MAY BE CHANGED BY THE FUND'S BOARD OF
TRUSTEES/DIRECTORS WITHOUT SHAREHOLDER APPROVAL.
PRINCIPAL INVESTMENT STRATEGIES -- INVESTMENTS ARE PRIMARILY IN THE COMMON
STOCKS OF MID-SIZE COMPANIES.
RETURNS IN THE FUND WILL BE MOSTLY FROM THE CHANGES IN THE PRICE OF THE FUND'S
HOLDINGS (CAPITAL APPRECIATION.) THE FUND CURRENTLY DEFINES MID-CAP COMPANIES AS
THOSE WITHIN THE RANGE OF MARKET CAPITALIZATIONS OF THE STANDARD AND POOR'S
MID-CAP 400 INDEX. MOST COMPANIES IN THE INDEX HAVE A CAPITALIZATION OF $500
MILLION TO $10 BILLION. STOCKS CHOSEN FOR THE FUND COMBINE GROWTH AND VALUE
CHARACTERISTICS OR OFFER THE OPPORTUNITY TO BUY GROWTH AT A REASONABLE PRICE.
THE SUBADVISOR FAVORS COMPANIES WHICH HAVE AN ABOVE MARKET AVERAGE PROSPECTIVE
GROWTH RATE, BUT SELL AT BELOW MARKET AVERAGE VALUATIONS. THE SUBADVISOR
EVALUATES EACH STOCK IN TERMS OF ITS GROWTH POTENTIAL, THE RETURN FOR RISK FREE
INVESTMENTS AND THE RISK AND REWARD POTENTIAL FOR THE COMPANY TO DETERMINE A
REASONABLE PRICE FOR THE STOCK.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
PRINCIPAL RISKS:
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
- THE STOCK MARKET GOES DOWN
- THE INDIVIDUAL STOCKS IN THE FUND DO NOT PERFORM AS
WELL AS EXPECTED
- THE POSSIBILITY OF GREATER RISK BY INVESTING IN MEDIUM-
SIZED COMPANIES RATHER THAN LARGER, MORE ESTABLISHED
COMPANIES
- THE FUND IS NON-DIVERSIFIED. COMPARED TO OTHER FUNDS,
THE FUND MAY INVEST MORE OF ITS ASSETS IN A SMALLER NUMBER OF
COMPANIES. GAINS OR LOSSES ON A SINGLE STOCK 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.
BAR CHART AND PERFORMANCE TABLE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER TIME TO THAT OF THE
STANDARD & POOR'S MID-CAP 400 INDEX. IT ALSO SHOWS THE FUND'S RETURNS COMPARED
TO THE LIPPER MID-CAP GROWTH INDEX. CLASS I SHARES HAVE AN ACTUAL INCEPTION DATE
OF 2/26/99. HOWEVER, CLASS A SHARES (NOT OFFERED IN THIS PROSPECTUS) HAVE AN
INCEPTION DATE OF 10/31/94. IN THE CHART AND TABLE BELOW, PERFORMANCE RESULTS
BEFORE 2/26/99 ARE FOR CLASS A AT NAV (I.E., THEY DO NOT REFLECT THE DEDUCTION
OF THE CLASS A FRONT-END SALES CHARGE.) BECAUSE CLASS A HAD HIGHER EXPENSES,
ITS PERFORMANCE WAS LOWER THAN THE CLASS I WOULD HAVE REALIZED IN THE SAME
PERIOD. THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE HOW THE FUND
WILL PERFORM IN THE FUTURE.
CALENDAR YEAR-BY-YEAR CAPITAL ACCUMULATION
TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER: (OF PERIOD SHOWN ) Q4 '98; 25.03%
WORST QUARTER: (OF PERIOD SHOWN) Q3 '99; (14.65%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
1 YEAR 5 YEAR 10 YEAR
CAPITAL ACCUMULATION 6.79% 20.31% NA1
S&P MID-CAP 400 INDEX TR 14.72% 23.05% NA
LIPPER MID-CAP GROWTH INDEX 73.72% 28.07% NA
1 SINCE INCEPTION (10/31/94) 20.12%; S&P MID CAP 400 INDEX 21.34%; AND
LIPPER MID-CAP GROWTH FUNDS INDEX 26.73%.
<PAGE>
CALVERT WORLD VALUES INTERNATIONAL EQUITY FUND
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
SUBADVISOR MURRAY JOHNSTONE INTERNATIONAL, LTD.
OBJECTIVE
CWVF INTERNATIONAL EQUITY SEEKS TO PROVIDE A HIGH TOTAL RETURN CONSISTENT WITH
REASONABLE RISK BY INVESTING PRIMARILY IN A GLOBALLY DIVERSIFIED PORTFOLIO OF
STOCKS THAT MEET THE FUND'S INVESTMENT AND SOCIAL CRITERIA.
PRINCIPAL INVESTMENT STRATEGIES:
THE FUND IDENTIFIES THOSE COUNTRIES WITH MARKETS AND ECONOMIES THAT IT BELIEVES
CURRENTLY PROVIDE THE MOST FAVORABLE CLIMATE FOR INVESTING. THE FUND INVESTS
PRIMARILY IN THE COMMON STOCKS OF MID- TO LARGE-CAP COMPANIES USING A VALUE
APPROACH. THE SUBADVISOR SELECTS COUNTRIES BASED ON A "20 QUESTIONS" MODEL
WHICH USES MACRO- AND MICRO-ECONOMIC INPUTS TO RANK THE ATTRACTIVENESS OF
MARKETS IN VARIOUS COUNTRIES. WITHIN EACH COUNTRY, THE SUBADVISOR USES
VALUATION TECHNIQUES THAT HAVE BEEN SHOWN TO BEST DETERMINE VALUE WITHIN THAT
MARKET. IN SOME COUNTRIES, THE VALUATION PROCESS MAY FAVOR THE COMPARISON OF
PRICE-TO-CASH-FLOW WHILE IN OTHER COUNTRIES, PRICE-TO-SALES OR PRICE-TO-BOOK MAY
BE MORE USEFUL IN DETERMINING WHICH STOCKS ARE UNDERVALUED.
THE FUND INVESTS PRIMARILY IN MORE DEVELOPED ECONOMIES AND MARKETS. NO MORE THAN
5% OF FUND ASSETS ARE INVESTED IN THE U.S. (EXCLUDING HIGH SOCIAL IMPACT AND
SPECIAL EQUITIES INVESTMENTS).
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
PRINCIPAL RISKS:
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
- THE STOCK MARKETS (INCLUDING THOSE OUTSIDE THE U.S.) GO
DOWN
- THE INDIVIDUAL STOCKS IN THE FUND DO NOT PERFORM AS WELL AS
EXPECTED
- FOREIGN CURRENCY VALUES GO DOWN VERSUS THE U.S. DOLLAR
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.
BAR CHART AND PERFORMANCE TABLE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER TIME TO THAT OF THE
MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX. IT ALSO SHOWS THE FUND'S
RETURNS COMPARED TO THE LIPPER INTERNATIONAL FUND INDEX. CLASS I SHARES HAVE AN
ACTUAL INCEPTION DATE OF 2/26/99. HOWEVER, CLASS A SHARES (NOT OFFERED IN THIS
PROSPECTUS) HAVE AN INCEPTION DATE OF 7/2/92. IN THE CHART AND TABLE BELOW,
PERFORMANCE RESULTS BEFORE 2/26/99 ARE FOR CLASS A AT NAV (I.E., THEY DO NOT
REFLECT THE DEDUCTION OF THE CLASS A FRONT-END SALES CHARGE.) BECAUSE CLASS A
HAD HIGHER EXPENSES, ITS PERFORMANCE WAS LOWER THAN THE CLASS I WOULD HAVE
REALIZED IN THE SAME PERIOD. THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY
INDICATE HOW THE FUND WILL PERFORM IN THE FUTURE.
CALENDAR YEAR-BY-YEAR CWVF INTERNATIONAL EQUITY
TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER: (OF PERIOD SHOWN ) Q4 '99; 20.60%
WORST QUARTER: (OF PERIOD SHOWN) Q3 '98; (14.82%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
1 YEAR 5 YEAR 10 YEAR
CWVF INTERNATIONAL EQUITY 30.97% 15.21% NA1
MSCI EAFE INDEX GD 27.30% 13.15% NA
LIPPER INTERNATIONAL FUND
INDEX 37.83% 15.96% NA
1 SINCE INCEPTION (7/31/92) 12.70%; MSCI EAFE INDEX GD 14.17%; AND LIPPER
INTERNATIONAL FUNDS INDEX 14.96%. THE MONTH END DATE OF 7/31/92 IS USED FOR
COMPARISON PURPOSES ONLY, ACTUAL FUND INCEPTION IS 7/2/92.
<PAGE>
CALVERT NEW VISION SMALL CAP
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
SUBADVISOR AWAD ASSET MANAGEMENT, INC.
OBJECTIVE
NEW VISION SMALL CAP SEEKS TO PROVIDE LONG-TERM CAPITAL APPRECIATION BY
INVESTING PRIMARILY IN SMALL-CAP STOCKS THAT MEETS THE FUND'S INVESTMENT AND
SOCIAL CRITERIA. THIS OBJECTIVE MAY BE CHANGED BY THE FUND'S BOARD OF
TRUSTEES/DIRECTORS WITHOUT SHAREHOLDER APPROVAL.
PRINCIPAL INVESTMENT STRATEGIES
AT LEAST 65% OF THE FUND'S ASSETS WILL BE INVESTED IN THE COMMON STOCKS OF
SMALL-CAP COMPANIES. RETURNS IN THE FUND WILL BE MOSTLY FROM THE CHANGES IN THE
PRICE OF THE FUND'S HOLDINGS (CAPITAL APPRECIATION). THE FUND CURRENTLY DEFINES
SMALL-CAP COMPANIES AS THOSE WITH MARKET CAPITALIZATION OF $1 BILLION OR LESS AT
THE TIME THE FUND INITIALLY INVESTS.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
PRINCIPAL RISKS:
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM FOR ANY OF THE FOLLOWING REASONS:
- THE STOCK MARKET GOES DOWN
- THE INDIVIDUAL STOCKS IN THE FUND DO NOT PERFORM AS
WELL AS EXPECTED
- PRICES OF SMALL-CAP STOCKS MAY RESPOND TO MARKET ACTIVITY
DIFFERENTLY THAN LARGER MORE ESTABLISHED COMPANIES
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.
BAR CHART AND PERFORMANCE TABLE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER TIME TO THAT OF THE
RUSSELL 2000 INDEX. IT ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE LIPPER
SMALL-CAP CORE INDEX. CLASS I SHARES HAVE AN ACTUAL INCEPTION DATE OF 2/26/99.
HOWEVER, CLASS A SHARES (NOT OFFERED IN THIS PROSPECTUS) HAVE AN INCEPTION DATE
OF 1/31/97. IN THE CHART AND TABLE BELOW, PERFORMANCE RESULTS BEFORE 2/26/99
ARE FOR CLASS A AT NAV (I.E., THEY DO NOT REFLECT THE DEDUCTION OF THE CLASS A
FRONT-END SALES CHARGE.) BECAUSE CLASS A HAD HIGHER EXPENSES, ITS PERFORMANCE
WAS LOWER THAN THE CLASS I WOULD HAVE REALIZED IN THE SAME PERIOD. THE FUND'S
PAST PERFORMANCE DOES NOT NECESSARILY INDICATE HOW THE FUND WILL PERFORM IN THE
FUTURE.
CALENDAR YEAR-BY-YEAR NEW VISION SMALL CAP
TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER: (OF PERIOD SHOWN ) Q4 '99; 23.88%
WORST QUARTER: (OF PERIOD SHOWN) Q3 '98; (21.82%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
1 YEAR 5 YEAR 10 YEAR
NEW VISION SMALL CAP 24.06% NA1 NA
RUSSELL 2000 INDEX TR 21.26% NA NA
LIPPER SMALL-CAP CORE INDEX 20.17% NA NA
1 SINCE INCEPTION (1/31/97) 4.08%; RUSSELL 2000 INDEX TR 12.69%;
LIPPER SMALL-CAP CORE FUNDS INDEX 11.79%.
<PAGE>
CALVERT INCOME
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
OBJECTIVE
CALVERT INCOME FUND SEEKS TO MAXIMIZE LONG-TERM INCOME, TO THE EXTENT CONSISTENT
WITH PRUDENT INVESTMENT MANAGEMENT AND PRESERVATION OF CAPITAL, THROUGH
INVESTMENT IN BONDS AND OTHER INCOME PRODUCING SECURITIES.
PRINCIPAL INVESTMENT STRATEGIES
THE FUND USES AN ACTIVE STRATEGY, SEEKING RELATIVE VALUE TO EARN INCREMENTAL
INCOME. THE FUND TYPICALLY INVESTS AT LEAST 65% OF ITS ASSETS IN INVESTMENT
GRADE DEBT SECURITIES.
PRINCIPAL RISKS:
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM, FOR ANY OF THE FOLLOWING REASONS:
- THE BOND MARKET GOES DOWN.
- THE INDIVIDUAL BONDS IN THE FUND DO NOT PERFORM AS
WELL AS EXPECTED.
- THE ADVISOR'S FORECAST AS TO INTEREST RATES IS NOT CORRECT.
- THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE
BOND MARKET DOES NOT PERFORM AS WELL AS EXPECTED.
- THE FUND IS NON-DIVERSIFIED. COMPARED TO OTHER FUNDS,
THE FUND MAY INVEST MORE OF ITS ASSETS IN A SMALLER
NUMBER OF COMPANIES. GAINS OR LOSSES ON A SINGLE BOND
MAY HAVE GREATER IMPACT ON THE FUND.
THE FUND'S ACTIVE TRADING STRATEGY MAY CAUSE THE FUND TO HAVE A RELATIVELY
HIGH AMOUNT OF SHORT-TERM CAPITAL GAINS, WHICH ARE TAXABLE TO YOU AT
THE ORDINARY INCOME TAX RATE.
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.
BAR CHART AND PERFORMANCE TABLE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. THE TABLE COMPARES THE FUND'S PERFORMANCE OVER TIME TO THAT OF THE
LEHMAN AGGREGATE BOND INDEX. IT ALSO SHOWS THE FUND'S RETURNS COMPARED TO THE
LIPPER BBB RATED FUND INDEX. CLASS I SHARES HAVE AN ACTUAL INCEPTION DATE OF
2/26/99. HOWEVER, CLASS A SHARES (NOT OFFERED IN THIS PROSPECTUS) HAVE AN
INCEPTION DATE OF 10/12/82. IN THE CHART AND TABLE BELOW, PERFORMANCE RESULTS
BEFORE 2/26/99 ARE FOR CLASS A AT NAV (I.E., THEY DO NOT REFLECT THE DEDUCTION
OF THE CLASS A FRONT-END SALES CHARGE.) BECAUSE CLASS A HAD HIGHER EXPENSES, ITS
PERFORMANCE WAS LOWER THAN THE CLASS I WOULD HAVE REALIZED IN THE SAME PERIOD.
THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE HOW THE FUND WILL
PERFORM IN THE FUTURE.
CALENDAR YEAR-BY-YEAR CALVERT INCOME TOTAL RETURN
[INSERT BAR CHART HERE]
BEST QUARTER: (OF PERIOD SHOWN ) Q2 '95; 7.04%
WORST QUARTER: (OF PERIOD SHOWN) Q1 '94; (4.56%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
1 YEAR 5 YEAR 10 YEAR
CALVERT INCOME 7.56% 10.23% 8.53%
LEHMAN AGGREGATE BOND
INDEX TR (0.82%) 7.73% 7.70%
LIPPER BBB RATED FUND INDEX (1.12%) 7.68% 7.72%
<PAGE>
CSIF BOND
ADVISOR CALVERT ASSET MANAGEMENT COMPANY, INC.
OBJECTIVE
CSIF BOND SEEKS TO PROVIDE AS HIGH A LEVEL OF CURRENT INCOME AS IS CONSISTENT
WITH PRUDENT INVESTMENT RISK AND PRESERVATION OF CAPITAL THROUGH INVESTMENT IN
BONDS AND OTHER STRAIGHT DEBT SECURITIES MEETING THE FUND'S INVESTMENT AND
SOCIAL CRITERIA.
PRINCIPAL INVESTMENT STRATEGIES:
THE FUND USES AN ACTIVE STRATEGY, SEEKING RELATIVE VALUE TO EARN INCREMENTAL
INCOME. THE FUND TYPICALLY INVESTS AT LEAST 65% OF ITS ASSETS IN INVESTMENT
GRADE DEBT SECURITIES.
THE FUND INVESTS WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO INVESTORS WILL
COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND METHODS ENHANCE THE
HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF INDIVIDUAL INITIATIVE,
EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. INVESTMENTS ARE SELECTED ON THE
BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL OBJECTIVES OF FINANCIAL
SOUNDNESS AND SOCIAL CRITERIA. SEE "INVESTMENT SELECTION PROCESS."
PRINCIPAL RISKS:
YOU COULD LOSE MONEY ON YOUR INVESTMENT IN THE FUND, OR THE FUND COULD
UNDERPERFORM, FOR ANY OF THE FOLLOWING REASONS:
- THE BOND MARKET GOES DOWN
- THE INDIVIDUAL BONDS IN THE FUND DO NOT PERFORM AS WELL AS
EXPECTED
- THE ADVISOR'S FORECAST AS TO INTEREST RATES IS NOT CORRECT
- THE ADVISOR'S ALLOCATION AMONG DIFFERENT SECTORS OF THE
BOND MARKET DOES NOT PERFORM AS WELL AS EXPECTED
- THE FUND IS NON-DIVERSIFIED. COMPARED TO OTHER FUNDS,
THE FUND MAY INVEST MORE OF ITS ASSETS IN A SMALLER
NUMBER OF COMPANIES. GAINS OR LOSSES ON A SINGLE BOND
MAY HAVE GREATER IMPACT ON THE FUND.
THE FUND'S ACTIVE TRADING STRATEGY MAY CAUSE THE FUND TO HAVE A RELATIVELY
HIGH AMOUNT OF SHORT-TERM CAPITAL GAINS, WHICH ARE TAXABLE TO YOU AT
THE ORDINARY INCOME TAX RATE.
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.
BAR CHART AND PERFORMANCE TABLE
THE BAR CHART AND TABLE BELOW SHOW THE FUND'S ANNUAL RETURNS AND ITS LONG-TERM
PERFORMANCE. BECAUSE CLASS I SHARES HAVE NOT COMMENCED OPERATIONS, THE CHART AND
TABLE SHOW THE PERFORMANCE OF THE CLASS A SHARES AT NAV. CLASS I RETURNS WOULD
HAVE BEEN SIMILAR, EXCEPT FOR ITS LOWER EXPENSES. THE TABLE COMPARES THE FUND'S
PERFORMANCE OVER TIME TO THAT OF THE LEHMAN AGGREGATE BOND INDEX. IT ALSO SHOWS
THE FUND'S RETURNS COMPARED TO THE LIPPER CORPORATE DEBT FUNDS A RATED INDEX.
THE FUND'S PAST PERFORMANCE DOES NOT NECESSARILY INDICATE HOW THE FUND WILL
PERFORM IN THE FUTURE.
[INSERT BAR CHART HERE]
BEST QUARTER: (OF PERIOD SHOWN ) Q3 '91; 5.99%
WORST QUARTER: (OF PERIOD SHOWN) Q1 '94; (3.57%)
AVERAGE ANNUAL TOTAL RETURNS (AS OF 12-31-99)
(CLASS A RETURN AT NAV)
1 YEAR 5 YEAR 10 YEAR
CSIF BOND: CLASS A 0.68% 7.24% 7.21%
LEHMAN AGGREGATE
BOND INDEX TR (0.82%) 7.73% 7.70%
LIPPER CORPORATE DEBT FUNDS
A RATED INDEX (2.04%) 7.25% 7.36%
<PAGE>
FEES AND EXPENSES
THIS TABLE DESCRIBES THE FEES AND EXPENSES THAT YOU MAY PAY IF
YOU BUY AND HOLD SHARES OF A FUND. ANNUAL FUND OPERATING
EXPENSES ARE DEDUCTED FROM FUND ASSETS.
[INSERT TABLE HEADINGS (FUND NAMES)]
CLASS I
ANNUAL FUND OPERATING EXPENSES1
MANAGEMENT FEES
.55 .70 .60 .75 .90 .85 .45 .50
DISTRIBUTION AND SERVICE (12B-1) FEES
NONE NONE NONE NONE NONE NONE NONE NONE
OTHER EXPENSES
.21 .21 .31 .49 .63 1.02 .34 .57
TOTAL ANNUAL FUND OPERATING EXPENSES
.76 .91 .91 1.24 1.53 1.87 .79 1.07
FEE WAIVER AND/OR EXPENSE REIMBURSEMENT2
(.01) (.16) (.11) (.44) (.48) (1.05) (.19) (.35)
NET EXPENSES
.75 .75 .80 .80 1.05 .82 .60 .72
EXPLANATION OF FEES AND EXPENSES TABLE
1EXPENSES ARE BASED ON THE FUND'S MOST RECENT FISCAL YEAR, UNLESS OTHERWISE
INDICATED. MANAGEMENT FEES INCLUDE THE SUBADVISORY FEES PAID BY THE ADVISOR
("CAMCO") TO THE SUBADVISORS, AND THE ADMINISTRATIVE FEE PAID BY THE FUND TO
CALVERT ADMINISTRATIVE SERVICES COMPANY, AN AFFILIATE OF CAMCO.
2CAMCO HAS AGREED TO WAIVE FEES AND/OR REIMBURSE EXPENSES (NET OF ANY EXPENSE
OFFSET ARRANGEMENTS) FOR ALL OF THE FUNDS' CLASS I SHARES THROUGH JANUARY 31,
2001. THE CONTRACTUAL EXPENSE CAP IS SHOWN AS "NET EXPENSES", THIS IS THE
MAXIMUM AMOUNT THAT MAY BE CHARGED TO THE FUNDS FOR THIS PERIOD, EXCLUDING ANY
EXPENSE OFFSET ARRANGEMENT.
3THE MANAGEMENT FEES FOR CSIF BALANCED, CSIF EQUITY AND CAPITAL ACCUMULATION
HAVE BEEN RESTATED TO REFLECT CHANGES APPROVED BY SHAREHOLDERS IN EARLY 1999.
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 $1,000,000 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 AS FOLLOWS IF THE CLASS I SHARES
ARE HELD FOR 1, 3, 5 OR 10 YEARS:
CSIF BALANCED CWVF INTERNATIONAL EQUITY CAPITAL
ACCUMULATION
1 $7,659 1 $10,707 1 $8,168
3 $24,186 3 $43,629 3 $34,990
5 $42,147 5 $78,876 5 $63,868
10 $94,171 10 $178,267 10 $146,115
CSIF MANAGED INDEX NEW VISION SMALL CAP CALVERT
INCOME
1 $7,659 1 $8,371 1 $7,354
3 $27,417 3 $48,564 3 $30,556
5 $48,823 5 $91,312 5 $55,617
10 $110,487 10 $210,453 10 $127,412
CSIF EQUITY CSIF BOND
1 $8,168 1 $6,132
3 $27,916 3 $23,329
5 $49,312 5 $42,004
10 $110,947 10 $96,022
<PAGE>
PRINCIPAL INVESTMENT PRACTICES AND RISKS
THE MOST CONCISE DESCRIPTION OF EACH FUND'S PRINCIPAL INVESTMENT STRATEGIES AND
ASSOCIATED RISKS IS UNDER THE EARLIER SUMMARY FOR EACH FUND. THE FUNDS ARE ALSO
PERMITTED TO INVEST IN CERTAIN OTHER INVESTMENTS AND TO USE CERTAIN INVESTMENT
TECHNIQUES THAT HAVE HIGHER RISKS ASSOCIATED WITH THEM. ON THE FOLLOWING PAGES
ARE BRIEF DESCRIPTIONS OF THE INVESTMENTS AND TECHNIQUES SUMMARIZED EARLIER,
ALONG WITH CERTAIN ADDITIONAL INVESTMENT TECHNIQUES AND THEIR RISKS.
FOR EACH OF THE INVESTMENT PRACTICES LISTED, THE TABLE BELOW SHOWS EACH FUND'S
LIMITATIONS AS A PERCENTAGE OF ITS ASSETS AND THE PRINCIPAL TYPES OF RISK
INVOLVED. (SEE THE PAGES FOLLOWING THE TABLE FOR A DESCRIPTION OF THE TYPES OF
RISKS). NUMBERS IN THIS TABLE SHOW MAXIMUM ALLOWABLE AMOUNT ONLY; FOR ACTUAL
USAGE, CONSULT THE FUND'S ANNUAL/SEMI-ANNUAL REPORTS.
[INSERT HEADINGS (FUND NAMES)]
KEY TO TABLE
J FUND CURRENTLY USES
Q PERMITTED, BUT NOT TYPICALLY USED
(% 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
ACTIVE TRADING STRATEGY/TURNOVER INVOLVES SELLING A SECURITY
SOON AFTER PURCHASE. AN ACTIVE TRADING STRATEGY CAUSES A FUND TO
HAVE PORTFOLIO TURNOVER COMPARED TO OTHER FUNDS AND HIGHER
TRANSACTION COSTS, SUCH AS COMMISSIONS AND CUSTODIAN AND
J Q Q Q Q Q J J
SETTLEMENT FEES, AND MAY INCREASE A FUND'S TAX LIABILITY.
RISKS: OPPORTUNITY, MARKET AND TRANSACTION.
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-
Q Q Q Q Q Q Q Q
BEARING SECURITIES. DURING TIMES OF ANY TEMPORARY DEFENSIVE
(35T)
POSITIONS, A FUND MAY NOT BE ABLE TO ACHIEVE ITS INVESTMENT
OBJECTIVE. RISKS: OPPORTUNITY.
HEDGING STRATEGIES. THE USE OF SHORT SALES OF US TREASURY
SECURITIES FOR THE LIMITED PURPOSE OF HEDGING THE FUND'S
DURATION (DURATION IS A MEASURE OF THE INTEREST RATE-SENSITIVITY
8 8 8 8 8 8 8 J
OF THE FUND). ANY SHORT SALES ARE "COVERED" WITH AN EQUIVALENT
AMOUNT OF HIGH QUALITY, LIQUID SECURITIES IN A SEGREGATED ACCOUNT
AT THE FUND'S CUSTODIAN. RISKS: CORRELATION, MANAGEMENT
AND OPPORTUNITY
CONVENTIONAL SECURITIES
FOREIGN SECURITIES. SECURITIES ISSUED BY COMPANIES LOCATED
OUTSIDE THE U.S. AND/OR TRADED PRIMARILY ON A FOREIGN EXCHANGE.
25N 8 25N 25N J 15T1 25N 30N
RISKS: MARKET, CURRENCY, TRANSACTION, LIQUIDITY,
INFORMATION AND POLITICAL.
SMALL CAP STOCKS. INVESTING IN SMALL COMPANIES INVOLVES
GREATER RISK THAN WITH MORE ESTABLISHED COMPANIES. SMALL CAP
STOCK PRICE S ARE MORE VOLATILE AND THE COMPANIES OFTEN HAVE
Q NA Q Q Q J NA 8
LIMITED PRODUCT LINES, MARKETS, FINANCIAL RESOURCES, AND
MANAGEMENT EXPERIENCE. RISKS: MARKET, LIQUIDITY
AND INFORMATION.
INVESTMENT GRADE BONDS. BONDS RATED BBB/BAA OR HIGHER OR
COMPARABLE UNRATED BONDS. RISKS: INTEREST RATE, MARKET
J NA Q Q Q Q J J
AND CREDIT. (35N) (35N)
BELOW-INVESTMENT GRADE BONDS. BONDS RATED BELOW BBB/BAA
COMPARABLE UNRATED BONDS ARE CONSIDERED JUNK BONDS. THEY ARE
SUBJECT TO GREATER CREDIT RISK THAN INVESTMENT GRADE BONDS.
20N2 NA 20N2 10N2 5N2 5N2 20N2 35N
RISKS: CREDIT, MARKET, INTEREST RATE, LIQUIDITY
AND INFORMATION.
<PAGE>
[INSERT HEADINGS]
UNRATED DEBT SECURITIES. BONDS THAT HAVE NOT BEEN RATED BY A
RECOGNIZED RATING AGENCY; THE ADVISOR HAS DETERMINED THE
J NA Q Q Q Q J J
CREDIT QUALITY BASED ON ITS OWN RESEARCH. RISKS: CREDIT,
MARKET, INTEREST RATE, LIQUIDITY AND INFORMATION.
ILLIQUID SECURITIES. SECURITIES WHICH CANNOT BE
READILY SOLD BECAUSE THERE IS NO ACTIVE MARKET.
15N 15N 15N 15N 15N 15N 15N 15N
RISKS: LIQUIDITY, MARKET AND TRANSACTION.
UNLEVERAGED DERIVATIVE SECURITIES
ASSET-BACKED SECURITIES. SECURITIES ARE BACKED BY UNSECURED
DEBT, SUCH AS CREDIT CARD DEBT. THESE SECURITIES ARE OFTEN
GUARANTEED OR OVER-COLLATERALIZED TO ENHANCE THEIR CREDIT QUALITY.
J NA Q Q Q Q J J
RISKS: CREDIT, INTEREST RATE AND LIQUIDITY.
MORTGAGE-BACKED SECURITIES. SECURITIES ARE BACKED BY POOLS OF
MORTGAGES, INCLUDING PASSTHROUGH CERTIFICATES, AND OTHER SENIOR
CLASSES OF COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS). RISKS:
J NA Q Q Q Q J J
CREDIT, EXTENSION, PREPAYMENT, LIQUIDITY AND INTEREST RATE.
PARTICIPATION INTERESTS. SECURITIES REPRESENTING AN INTEREST
IN ANOTHER SECURITY OR IN BANK LOANS.
Q NA Q Q Q Q Q Q
RISKS: CREDIT, INTEREST RATE AND LIQUIDITY.
LEVERAGED DERIVATIVE INSTRUMENTS
CURRENCY CONTRACTS. CONTRACTS INVOLVING THE RIGHT OR
OBLIGATION TO BUY OR SELL A GIVEN AMOUNT OF FOREIGN CURRENCY
Q NA Q 5T 5T 8 Q Q
AT A SPECIFIED PRICE AND FUTURE DATE. RISKS: CURRENCY,
LEVERAGE, CORRELATION, LIQUIDITY AND OPPORTUNITY.
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. IN THE CASE
5T3 5T3 5T3 5T3 5T3 5T3 5T3 5T3
OF SELLING (WRITING) OPTIONS, THE FUNDS WILL WRITE CALL OPTIONS
ONLY IF THEY ALREADY OWN THE SECURITY (IF IT IS "COVERED").
RISKS: INTEREST RATE, CURRENCY, MARKET, LEVERAGE,
CORRELATION, LIQUIDITY, CREDIT AND OPPORTUNITY.
FUTURES CONTRACT. AGREEMENT TO BUY OR SELL A SPECIFIC AMOUNT
OF A COMMODITY OR FINANCIAL INSTRUMENT AT A PARTICULAR PRICE ON
Q Q Q Q Q Q Q Q
A SPECIFIC FUTURE DATE. RISKS: INTEREST RATE, CURRENCY, MARKET,
5N 5N 5N 5N 5N 5N 5N 5N
LEVERAGE, CORRELATION, LIQUIDITY AND
OPPORTUNITY.
STRUCTURED SECURITIES. INDEXED AND/OR LEVERAGED MORTGAGE-
BACKED AND OTHER DEBT SECURITIES, INCLUDING PRINCIPAL-ONLY AND
INTEREST-ONLY SECURITIES, LEVERAGED FLOATING RATE SECURITIES, AND
OTHERS. THESE SECURITIES TEND TO BE HIGHLY SENSITIVE TO INTEREST
Q NA NA Q NA NA Q Q
RATE MOVEMENTS AND THEIR PERFORMANCE MAY NOT CORRELATE TO
THESE MOVEMENTS IN A CONVENTIONAL FASHION. RISKS: CREDIT,
INTEREST RATE, EXTENSION, PREPAYMENT, MARKET, LEVERAGE,
LIQUIDITY AND CORRELATION.
THE FUNDS HAVE ADDITIONAL INVESTMENT POLICIES AND RESTRICTIONS THAT ARE NOT
PRINCIPAL TO THEIR INVESTMENT STRATEGIES (FOR EXAMPLE, REPURCHASE AGREEMENTS,
BORROWING, PLEDGING, AND REVERSE REPURCHASE AGREEMENTS, SECURITIES LENDING,
WHEN-ISSUED SECURITIES AND SHORT SALES.) THESE POLICIES AND RESTRICTIONS ARE
DISCUSSED IN THE SAI.
1 NEW VISION MAY INVEST ONLY IN AMERICAN DEPOSITORY RECEIPTS (ADRS) -
DOLLAR-DENOMINATED RECEIPTS REPRESENTING SHARES OF A FOREIGN ISSUER. ADRS
ARE TRADED ON US EXCHANGES. SEE THE SAI.
2 EXCLUDES ANY HIGH SOCIAL IMPACT INVESTMENTS.
3 BASED ON NET PREMIUM PAYMENTS.
<PAGE>
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.
CURRENCY RISK
CURRENCY RISK OCCURS WHEN A FUND BUYS, SELLS OR HOLDS A SECURITY DENOMINATED IN
FOREIGN CURRENCY. FOREIGN CURRENCIES "FLOAT" IN VALUE AGAINST THE U.S. DOLLAR.
ADVERSE CHANGES IN FOREIGN CURRENCY VALUES CAN CAUSE INVESTMENT LOSSES WHEN A
FUND'S INVESTMENTS ARE CONVERTED TO U.S. DOLLARS.
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
THE RISK THAT MAY OCCUR WITH FOREIGN INVESTMENTS, AND MEANS THAT THE VALUE OF AN
INVESTMENT MAY BE ADVERSELY AFFECTED BY NATIONALIZATION, TAXATION, WAR,
GOVERNMENT INSTABILITY OR OTHER ECONOMIC OR POLITICAL ACTIONS OR FACTORS.
PREPAYMENT RISK
THE RISK THAT UNANTICIPATED PREPAYMENTS MAY OCCUR, REDUCING THE VALUE OF A
MORTGAGE-BACKED SECURITY. THE FUND MUST THEN REINVEST THOSE ASSETS AT THE
CURRENT MARKET RATE, WHICH MAY BE LOWER.
TRANSACTION RISK
THE RISK THAT A FUND MAY BE DELAYED OR UNABLE TO SETTLE A TRANSACTION OR THAT
COMMISSIONS AND SETTLEMENT EXPENSES MAY BE HIGHER THAN USUAL.
INVESTMENT SELECTION PROCESS (NOT APPLICABLE TO CALVERT INCOME FUND)
INVESTMENTS ARE SELECTED ON THE BASIS OF THEIR ABILITY TO CONTRIBUTE TO THE DUAL
OBJECTIVES OF FINANCIAL SOUNDNESS AND SOCIAL CRITERIA. POTENTIAL INVESTMENTS FOR
A FUND ARE FIRST SELECTED FOR FINANCIAL SOUNDNESS AND THEN EVALUATED ACCORDING
TO THAT FUND'S SOCIAL CRITERIA. TO THE GREATEST EXTENT POSSIBLE, CALVERT SOCIAL
INVESTMENT FUND (CSIF) AND CALVERT WORLD VALUES INTERNATIONAL EQUITY FUND (CWVF)
SEEK TO INVEST IN COMPANIES THAT EXHIBIT POSITIVE ACCOMPLISHMENTS WITH RESPECT
TO ONE OR MORE OF THE SOCIAL CRITERIA. INVESTMENTS FOR ALL FUNDS MUST MEET THE
MINIMUM STANDARDS FOR ALL ITS FINANCIAL AND SOCIAL CRITERIA.
ALTHOUGH EACH FUND'S SOCIAL CRITERIA TEND TO LIMIT THE AVAILABILITY OF
INVESTMENT OPPORTUNITIES MORE THAN IS CUSTOMARY WITH OTHER INVESTMENT COMPANIES,
CAMCO AND THE SUBADVISORS OF THE FUNDS BELIEVE THERE ARE SUFFICIENT INVESTMENT
OPPORTUNITIES TO PERMIT FULL INVESTMENT AMONG ISSUERS WHICH SATISFY EACH FUND'S
INVESTMENT AND SOCIAL OBJECTIVES.
THE SELECTION OF AN INVESTMENT BY A FUND DOES NOT CONSTITUTE ENDORSEMENT OR
VALIDATION BY THAT FUND, NOR DOES THE EXCLUSION OF AN INVESTMENT NECESSARILY
REFLECT FAILURE TO SATISFY THE FUND'S SOCIAL CRITERIA. INVESTORS ARE INVITED TO
SEND A BRIEF DESCRIPTION OF COMPANIES THEY BELIEVE MIGHT BE SUITABLE FOR
INVESTMENT.
<PAGE>
SOCIALLY RESPONSIBLE INVESTMENT CRITERIA
THE FUNDS INVEST IN ACCORDANCE WITH THE PHILOSOPHY THAT LONG-TERM REWARDS TO
INVESTORS WILL COME FROM THOSE ORGANIZATIONS WHOSE PRODUCTS, SERVICES, AND
METHODS ENHANCE THE HUMAN CONDITION AND THE TRADITIONAL AMERICAN VALUES OF
INDIVIDUAL INITIATIVE, EQUALITY OF OPPORTUNITY AND COOPERATIVE EFFORT. IN
ADDITION, WE BELIEVE THAT THERE ARE LONG-TERM BENEFITS IN AN INVESTMENT
PHILOSOPHY THAT DEMONSTRATES CONCERN FOR THE ENVIRONMENT, LABOR RELATIONS, HUMAN
RIGHTS AND COMMUNITY RELATIONS. THOSE ENTERPRISES THAT EXHIBIT A SOCIAL
AWARENESS IN THESE ISSUES SHOULD BE BETTER PREPARED TO MEET FUTURE SOCIETAL
NEEDS. BY RESPONDING TO SOCIAL CONCERNS, THESE ENTERPRISES SHOULD NOT ONLY
AVOID THE LIABILITY THAT MAY BE INCURRED WHEN A PRODUCT OR SERVICE IS DETERMINED
TO HAVE A NEGATIVE SOCIAL IMPACT OR HAS OUTLIVED ITS USEFULNESS, BUT ALSO BE
BETTER POSITIONED TO DEVELOP OPPORTUNITIES TO MAKE A PROFITABLE CONTRIBUTION TO
SOCIETY. THESE ENTERPRISES SHOULD BE READY TO RESPOND TO EXTERNAL DEMANDS AND
ENSURE THAT OVER THE LONGER TERM THEY WILL BE VIABLE TO SEEK TO PROVIDE A
POSITIVE RETURN TO BOTH INVESTORS AND SOCIETY AS A WHOLE.
EACH FUND HAS DEVELOPED SOCIAL INVESTMENT CRITERIA, DETAILED BELOW. THESE
CRITERIA REPRESENT STANDARDS OF BEHAVIOR WHICH FEW, IF ANY, ORGANIZATIONS
TOTALLY SATISFY. AS A MATTER OF PRACTICE, EVALUATION OF A PARTICULAR
ORGANIZATION IN THE CONTEXT OF THESE CRITERIA WILL INVOLVE SUBJECTIVE JUDGMENT
BY CAMCO AND THE SUBADVISORS. ALL SOCIAL CRITERIA MAY BE CHANGED BY THE BOARD OF
TRUSTEES/DIRECTORS WITHOUT SHAREHOLDER APPROVAL.
CALVERT SOCIAL INVESTMENT FUND
CSIF SEEKS TO INVEST IN COMPANIES THAT:
- - DELIVER SAFE PRODUCTS AND SERVICES IN WAYS THAT SUSTAIN OUR
NATURAL ENVIRONMENT. FOR EXAMPLE, CSIF LOOKS FOR COMPANIES THAT
PRODUCE ENERGY FROM RENEWABLE RESOURCES, WHILE AVOIDING CONSISTENT
POLLUTERS.
- - MANAGE WITH PARTICIPATION THROUGHOUT THE ORGANIZATION IN DEFINING
AND ACHIEVING OBJECTIVES. FOR EXAMPLE, CSIF LOOKS FOR COMPANIES THAT
OFFER EMPLOYEE STOCK OWNERSHIP OR PROFIT-SHARING PLANS.
- - NEGOTIATE FAIRLY WITH THEIR WORKERS, PROVIDE AN ENVIRONMENT SUPPORTIVE
OF THEIR WELLNESS, DO NOT DISCRIMINATE ON THE BASIS OF RACE, GENDER,
RELIGION, AGE, DISABILITY, ETHNIC ORIGIN, OR SEXUAL ORIENTATION, DO NOT
CONSISTENTLY VIOLATE REGULATIONS OF THE EEOC, AND PROVIDE OPPORTUNITIES FOR
WOMEN, DISADVANTAGED MINORITIES, AND OTHERS FOR WHOM EQUAL
OPPORTUNITIES HAVE OFTEN BEEN DENIED. FOR EXAMPLE, CSIF CONSIDERS BOTH
UNIONIZED AND NON-UNION FIRMS WITH GOOD LABOR RELATIONS.
- - FOSTER AWARENESS OF A COMMITMENT TO HUMAN GOALS, SUCH AS
CREATIVITY, PRODUCTIVITY, SELF-RESPECT AND RESPONSIBILITY, WITHIN THE
ORGANIZATION AND THE WORLD, AND CONTINUALLY RECREATES A CONTEXT WITHIN
WHICH THESE GOALS CAN BE REALIZED. FOR EXAMPLE, CSIF LOOKS FOR
COMPANIES WITH AN ABOVE AVERAGE COMMITMENT TO COMMUNITY AFFAIRS AND
CHARITABLE GIVING.
CSIF WILL NOT INVEST IN COMPANIES THAT THE ADVISOR DETERMINES TO BE
SIGNIFICANTLY ENGAGED IN:
- - BUSINESS ACTIVITIES IN SUPPORT OF REPRESSIVE REGIMES
- - PRODUCTION, OR THE MANUFACTURE OF EQUIPMENT, TO PRODUCE NUCLEAR
ENERGY
- - MANUFACTURE OF WEAPON SYSTEMS
- - MANUFACTURE OF ALCOHOLIC BEVERAGES OR TOBACCO PRODUCTS
- - OPERATION OF GAMBLING CASINOS
- - A PATTERN AND PRACTICE OF VIOLATING THE RIGHTS OF INDIGENOUS
PEOPLE. WE URGE COMPANIES TO END NEGATIVE STEREOTYPES OF NATIVE
AMERICANS AND OTHER INDIGENOUS PEOPLES. FOR EXAM- PLE, CSIF OBJECTS TO
THE UNAUTHORIZED USE OF NAMES AND IMAGES THAT PORTRAY NATIVE AMERICANS
IN A NEGATIVE LIGHT, AND SUPPORTS THE PROMOTION OF POSITIVE PORTRAYALS
OF ALL INDIVIDUALS AND ETHNIC GROUPS.
WITH RESPECT TO U.S. GOVERNMENT SECURITIES, CSIF INVESTS PRIMARILY IN DEBT
OBLIGATIONS ISSUED OR GUARANTEED BY AGENCIES OR INSTRUMENTALITIES OF THE U.S.
GOVERNMENT WHOSE PURPOSES FURTHER OR ARE COMPATIBLE WITH CSIF'S SOCIAL CRITERIA,
SUCH AS OBLIGATIONS OF THE STUDENT LOAN MARKETING ASSOCIATION, RATHER THAN
GENERAL OBLIGATIONS OF THE U.S. GOVERNMENT, SUCH AS TREASURY SECURITIES.
CALVERT WORLD VALUES INTERNATIONAL EQUITY FUND
THE SPIRIT OF CALVERT WORLD VALUES INTERNATIONAL EQUITY FUND'S SOCIAL CRITERIA
IS SIMILAR TO CSIF, BUT THE APPLICATION OF THE SOCIAL ANALYSIS IS SIGNIFICANTLY
DIFFERENT. INTERNATIONAL INVESTING BRINGS UNIQUE CHALLENGES IN TERMS OF
CORPORATE DISCLOSURE, REGULATORY STRUCTURES, ENVIRONMENTAL STANDARDS, AND
DIFFERING NATIONAL AND CULTURAL PRIORITIES. DUE TO THESE FACTORS, THE CWVF
SOCIAL INVESTMENT STANDARDS ARE LESS STRINGENT THAN THOSE OF CSIF.
CWVF SEEKS TO INVEST IN COMPANIES THAT:
- - ACHIEVE EXCELLENCE IN ENVIRONMENTAL MANAGEMENT. WE SELECT
INVESTMENTS THAT TAKE POSITIVE STEPS TOWARD PRESERVING AND ENHANCING OUR
NATURAL ENVIRONMENT THROUGH THEIR OPERATIONS AND PRODUCTS. WE
AVOID COMPANIES WITH POOR ENVIRONMENTAL RECORDS.
- - HAVE POSITIVE LABOR PRACTICES. WE CONSIDER THE INTERNATIONAL LABOR
ORGANIZATION'S BASIC CONVENTIONS ON WORKER RIGHTS AS A GUIDELINE FOR
OUR LABOR CRITERIA. WE SEEK TO INVEST IN COMPANIES THAT HIRE AND
PROMOTE WOMEN AND ETHNIC MINORITIES; RESPECT THE RIGHT TO FORM
UNIONS; COMPLY, AT A MINIMUM, WITH DOMESTIC HOUR AND WAGE LAWS; AND
PROVIDE GOOD HEALTH AND SAFETY STANDARDS. WE AVOID COMPANIES THAT
DEMONSTRATE A PATTERN OF ENGAGING IN FORCED, COMPULSORY, OR CHILD LABOR.
<PAGE>
CWVF AVOIDS INVESTING IN COMPANIES THAT:
- - CONTRIBUTE TO HUMAN RIGHTS ABUSES IN OTHER COUNTRIES 1
- - PRODUCE NUCLEAR POWER OR NUCLEAR WEAPONS, OR HAVE MORE THAN 10%
OF REVENUES DERIVED FROM THE PRODUCTION OR SALE OF WEAPONS SYSTEMS
- - DERIVE MORE THAN 10% OF REVENUES FROM THE PRODUCTION OF ALCOHOL
OR TOBACCO PRODUCTS, BUT ACTIVELY SEEKS TO INVEST IN COMPANIES WHOSE
PRODUCTS OR SERVICES IMPROVE THE QUALITY OF OR ACCESS TO HEALTH CARE,
INCLUDING PUBLIC HEALTH AND PRE- VENTATIVE MEDICINE
CALVERT CAPITAL ACCUMULATION FUND
CALVERT NEW VISION SMALL CAP FUND
THE FUNDS CAREFULLY REVIEW COMPANY POLICIES AND BEHAVIOR REGARDING SOCIAL ISSUES
IMPORTANT TO QUALITY OF LIFE SUCH AS:
- ENVIRONMENT
- EMPLOYEE RELATIONS
- PRODUCT CRITERIA
- WEAPONS SYSTEMS
- NUCLEAR ENERGY
- HUMAN RIGHTS
BOTH FUNDS WILL AVOID INVESTING IN COMPANIES THAT HAVE:
- - SIGNIFICANT OR HISTORICAL PATTERNS OF VIOLATING ENVIRONMENTAL
REGULATIONS, OR OTHERWISE HAVE AN EGREGIOUS ENVIRONMENTAL RECORD
- - SIGNIFICANT OR HISTORICAL PATTERNS OF DISCRIMINATION AGAINST
EMPLOYEES ON THE BASIS OF RACE, GENDER, RELIGION, AGE, DISABILITY
OR SEXUAL ORIENTATION, OR THAT HAVE MAJOR LABOR- MANAGEMENT DISPUTES
- - NUCLEAR POWER PLANT OPERATORS AND OWNERS, OR MANUFACTUR- ERS OF
KEY COMPONENTS IN THE NUCLEAR POWER PROCESS
- - SIGNIFICANTLY ENGAGED IN WEAPONS PRODUCTION( INCLUDING WEAPONS
SYSTEMS CONTRACTORS AND MAJOR NUCLEAR WEAPONS SYSTEMS CONTRACTORS)
- - SIGNIFICANTLY INVOLVED IN THE MANUFACTURE OF TOBACCO OR ALCOHOL
PRODUCTS
- - PRODUCTS OR OFFER SERVICES THAT, UNDER PROPER USE, ARE
CONSIDERED HARMFUL
CAPITAL ACCUMULATION WILL AVOID COMPANIES THAT THE ADVISOR DETERMINES TO BE
SIGNIFICANTLY ENGAGED IN:
- - A PATTERN AND PRACTICE OF VIOLATING THE RIGHTS OF INDIGENOUS
PEOPLE. WE URGE COMPANIES TO END NEGATIVE STEREOTYPES OF NATIVE
AMERICANS AND OTHER INDIGENOUS PEOPLES. FOR EXAM- PLE, CAPITAL
ACCUMULATION OBJECTS TO THE UNAUTHORIZED USE OF NAMES AND IMAGES THAT
PORTRAY NATIVE AMERICANS IN A NEGATIVE LIGHT, AND SUPPORTS THE
PROMOTION OF POSITIVE PORTRAYALS OF ALL INDIVIDUALS AND ETHNIC
GROUPS.
THE ADVISOR WILL SEEK TO REVIEW COMPANIES' OVERSEAS OPERATIONS CONSISTENT WITH
THE SOCIAL CRITERIA STATED ABOVE.
WHILE CAPITAL ACCUMULATION AND NEW VISION MAY INVEST IN COMPANIES THAT EXHIBIT
POSITIVE SOCIAL CHARACTERISTICS, THEY MAKE NO EXPLICIT CLAIMS TO SEEK OUT
COMPANIES WITH SUCH PRACTICES.
1 CWVF MAY INVEST IN COMPANIES THAT OPERATE IN COUNTRIES WITH POOR HUMAN
RIGHTS RECORDS IF WE BELIEVE THE COMPANIES ARE MAKING A POSITIVE CONTRIBUTION.
HIGH SOCIAL IMPACT INVESTMENTS - CSIF BALANCED, BOND AND EQUITY, CALVERT WORLD
VALUES INTERNATIONAL EQUITY, CAPITAL ACCUMULATION AND NEW VISION
HIGH SOCIAL IMPACT INVESTMENTS IS A PROGRAM THAT TARGETS A PERCENTAGE OF THE
FUNDS' ASSETS (UP TO 1% FOR EACH OF CSIF BALANCED, CSIF EQUITY AND CSIF BOND AND
NEW VISION AND UP TO 3% FOR EACH OF CWVF INTERNATIONAL EQUITY AND CAPITAL
ACCUMULATION) TO DIRECTLY SUPPORT THE GROWTH OF COMMUNITY-BASED ORGANIZATIONS
FOR THE PURPOSES OF PROMOTING BUSINESS CREATION, HOUSING DEVELOPMENT, AND
ECONOMIC AND SOCIAL DEVELOPMENT OF URBAN AND RURAL COMMUNITIES. THESE TYPES OF
INVESTMENTS OFFER A RATE OF RETURN BELOW THE THEN-PREVAILING MARKET RATE, AND
ARE CONSIDERED ILLIQUID, UNRATED AND BELOW-INVESTMENT GRADE. THEY ALSO INVOLVE A
GREATER RISK OF DEFAULT OR PRICE DECLINE THAN INVESTMENT GRADE SECURITIES.
HOWEVER, THEY HAVE A SIGNIFICANT SOCIAL RETURN BY MAKING A TREMENDOUS DIFFERENCE
IN OUR LOCAL COMMUNITIES. HIGH SOCIAL IMPACT INVESTMENTS ARE VALUED UNDER THE
DIRECTION AND CONTROL OF THE FUNDS' BOARDS. THE PROGRAM IS ADMINISTERED BY THE
CALVERT SOCIAL INVESTMENT FOUNDATION, WHICH MAY RECEIVE A FEE FROM THE FUNDS.
THE FUNDS HAVE RECEIVED AN EXEMPTIVE ORDER TO PERMIT THEM TO INVEST THOSE ASSETS
ALLOCATED FOR INVESTMENT IN HIGH SOCIAL IMPACT INVESTMENTS THROUGH THE PURCHASE
OF COMMUNITY INVESTMENT NOTES FROM THE CALVERT SOCIAL INVESTMENT FOUNDATION. THE
CALVERT SOCIAL INVESTMENT FOUNDATION IS A NON-PROFIT ORGANIZATION, LEGALLY
DISTINCT FROM CALVERT GROUP, ORGANIZED AS A CHARITABLE AND EDUCATIONAL
FOUNDATION FOR THE PURPOSE OF INCREASING PUBLIC AWARENESS AND KNOWLEDGE OF THE
CONCEPT OF SOCIALLY RESPONSIBLE INVESTING. IT HAS INSTITUTED THE CALVERT
COMMUNITY INVESTMENTS PROGRAM TO RAISE ASSETS FROM INDIVIDUAL AND INSTITUTIONAL
INVESTORS AND THEN INVEST THESE ASSETS DIRECTLY IN NON-PROFIT OR NOT-FOR-PROFIT
COMMUNITY DEVELOPMENT ORGANIZATIONS AND COMMUNITY DEVELOPMENT BANKS THAT FOCUS
ON LOW INCOME HOUSING, ECONOMIC DEVELOPMENT AND BUSINESS DEVELOPMENT IN URBAN
AND RURAL COMMUNITIES.
SPECIAL EQUITIES - CSIF BALANCED AND CALVERT WORLD VALUES INTERNATIONAL EQUITY
CSIF BALANCED AND CWVF INTERNATIONAL EQUITY EACH HAVE A SPECIAL EQUITIES
INVESTMENT PROGRAM THAT ALLOWS THE FUND TO PROMOTE ESPECIALLY PROMISING
APPROACHES TO SOCIAL GOALS THROUGH PRIVATELY PLACED INVESTMENTS. THE
INVESTMENTS ARE GENERALLY VENTURE CAPITAL INVESTMENTS IN SMALL, UNTRIED
ENTERPRISES. THE SPECIAL EQUITIES COMMITTEE OF EACH FUND IDENTIFIES, EVALUATES,
AND SELECTS THE SPECIAL EQUITIES INVESTMENTS. SPECIAL EQUITIES INVOLVE A HIGH
DEGREE OF RISK-- THEY ARE SUBJECT TO LIQUIDITY, INFORMATION, AND IF A DEBT
INVESTMENT, CREDIT RISK. SPECIAL EQUITIES ARE VALUED UNDER THE DIRECTION AND
CONTROL OF THE FUND'S BOARD.
<PAGE>
ABOUT CALVERT GROUP
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 FUND PORTFOLIOS 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 CSIF BOND (SINCE FEBRUARY
1997), CALVERT INCOME (SINCE FEBRUARY 1995) AND THE FIXED-INCOME ASSETS OF CSIF
BALANCED (JUNE 1995). RENO J. MARTINI, SENIOR VICE PRESIDENT AND CHIEF
INVESTMENT OFFICER, HEADS THIS TEAM AND OVERSEES THE INVESTMENT STRATEGY AND
MANAGEMENT OF ALL CALVERT FUNDS FOR CAMCO WHILE GREGORY HABEEB MANAGES THE
DAY-TO-DAY INVESTMENTS OF CAMCO'S TAXABLE FIXED-INCOME PORTFOLIOS. MR. HABEEB
HAS OVER 19 YEARS OF EXPERIENCE AS AN ANALYST, TRADER, AND PORTFOLIO MANAGER.
SUBADVISORS AND PORTFOLIO MANAGERS
BROWN CAPITAL MANAGEMENT, INC., 1201 NORTH CALVERT STREET, BALTIMORE, MARYLAND
21202, HAS MANAGED PART OF THE EQUITY INVESTMENTS OF CSIF BALANCED SINCE 1996,
AND CAPITAL ACCUMULATION SINCE 1994. IN 1997, BROWN CAPITAL BECAME THE SOLE
SUBADVISOR FOR CAPITAL ACCUMULATION. IT USES A BOTTOM-UP APPROACH THAT
INCORPORATES GROWTH-ADJUSTED PRICE EARNINGS, CONCENTRATING ON MID-/LARGE-CAP
GROWTH STOCKS.
EDDIE C. BROWN, FOUNDER AND PRESIDENT OF BROWN CAPITAL MANAGEMENT, INC., HEADS
THE PORTFOLIO MANAGEMENT TEAM FOR CAPITAL ACCUMULATION AND BROWN CAPITAL'S
PORTION OF CSIF BALANCED. HE BRINGS OVER 24 YEARS OF MANAGEMENT EXPERIENCE TO
THE FUNDS, AND HAS HELD POSITIONS WITH T. ROWE PRICE ASSOCIATES AND IRWING
MANAGEMENT COMPANY. MR. BROWN IS A FREQUENT PANELIST ON "WALL STREET WEEK WITH
LOUIS RUKEYSER" AND IS A MEMBER OF THE WALL STREET WEEK HALL OF FAME.
NCM CAPITAL MANAGEMENT GROUP, INC., 103 WEST MAIN STREET, DURHAM, NC 27701, HAS
MANAGED PART OF THE EQUITY INVESTMENTS OF CSIF BALANCED SINCE 1995. NCM IS ONE
OF THE LARGEST MINORITY-OWNED INVESTMENT MANAGEMENT FIRMS IN THE COUNTRY AND
PROVIDES PRODUCTS IN EQUITY FIXED INCOME AND BALANCED PORTFOLIO MANAGEMENT. IT
IS ALSO ONE OF THE INDUSTRY LEADERS IN THE EMPLOYMENT AND TRAINING OF MINORITY
AND WOMEN INVESTMENT PROFESSIONALS.
NCM'S PORTFOLIO MANAGEMENT TEAM CONSISTS OF SEVERAL MEMBERS, HEADED BY MACEO K.
SLOAN. MR. SLOAN HAS MORE THAN 12 YEARS OF EXPERIENCE IN THE INVESTMENT
INDUSTRY, AND IS A FREQUENT PANELIST ON WALL STREET WEEK WITH LOUIS RUKEYSER.
STATE STREET GLOBAL ADVISORS (SSGA); 225 FRANKLIN ST., BOSTON, MA 02110 WAS
ESTABLISHED IN 1978 AS AN INVESTMENT MANAGEMENT DIVISION OF THE STATE STREET
BANK AND TRUST COMPANY. SSGA IS A PIONEER IN THE DEVELOPMENT OF DOMESTIC AND
INTERNATIONAL INDEX FUNDS, AND HAS MANAGED CSIF MANAGED INDEX SINCE ITS
INCEPTION.
SSGA'S PORTFOLIO MANAGEMENT TEAM CONSISTS OF SEVERAL MEMBERS, HEADED BY ARLENE
ROCKEFELLER. SHE JOINED SSGA IN 1982, WITH 10 YEARS EXPERIENCE IN INVESTMENT
COMPUTER SYSTEMS. MS. ROCKEFELLER IS CURRENTLY DIRECTOR OF SSGA'S GLOBAL EQUITY
GROUP. SHE MANAGES A VARIETY OF SSGA'S EQUITY AND TAX-FREE FUNDS.
ATLANTA CAPITAL MANAGEMENT COMPANY, LLCLA; TWO MIDTOWN PLAZA, SUITE 1600, 1349
WEST PEACHTREE STREET, ATLANTA, GA 30309 HAS MANAGED CSIF EQUITY SINCE
SEPTEMBER 1998.
DANIEL W. BOONE, III, C.F.A. HEADS THE ATLANTA PORTFOLIO MANAGEMENT TEAM FOR
CSIF EQUITY. HE IS A SENIOR PARTNER AND SENIOR INVESTMENT PROFESSIONAL FOR
ATLANTA CAPITAL. HE HAS BEEN WITH THE FIRM SINCE 1976. HE SPECIALIZES IN
EQUITY PORTFOLIO MANAGEMENT AND RESEARCH. BEFORE JOINING THE FIRM, HE HELD
POSITIONS WITH THE INTERNATIONAL FIRM OF LAZARD, FRERES IN NEW YORK, AND
WELLINGTON MANAGEMENT COMPANY. MR. BOONE HAS EARNED A MBA FROM THE WHARTON
SCHOOL OF UNIVERSITY OF PENNSYLVANIA, WHERE HE GRADUATED WITH DISTINCTION, AND A
B.A. FROM DAVIDSON COLLEGE.
MURRAY JOHNSTONE INTERNATIONAL, LTD, 875 NORTH MICHIGAN AVE., SUITE 3415,
CHICAGO, IL 60611. THE FIRM HAS MANAGED CALVERT WORLD VALUES INTERNATIONAL
EQUITY FUND SINCE ITS INCEPTION.
ANDREW PRESTON HEADS THE PORTFOLIO MANAGEMENT TEAM FOR INTERNATIONAL EQUITY. HE
JOINED MURRAY JOHNSTONE INTERNATIONAL IN 1985, AND HAS HELD POSITIONS AS
INVESTMENT ANALYST IN THE UNITED KINGDOM AND U.S. DEPARTMENT, AND FUND MANAGER
IN THE JAPANESE DEPARTMENT. HE WAS APPOINTED DIRECTOR OF THE COMPANY IN 1993.
PRIOR TO JOINING MURRAY JOHNSTONE, HE WAS A MEMBER OF THE AUSTRALIAN FOREIGN
SERVICE AND ATTENDED UNIVERSITY IN AUSTRALIA AND JAPAN.
AWAD ASSET MANAGEMENT, INC. (AWAD); 250 PARK AVENUE, NEW YORK, NY 10177, A
SUBSIDIARY OF RAYMOND JAMES & ASSOCIATES, HAS MANAGED THE NEW VISION SMALL CAP
FUND SINCE 1997. THE FIRM SPECIALIZES IN THE MANAGEMENT OF SMALL-CAPITALIZATION
GROWTH STOCKS. THEY EMPHASIZE A GROWTH-AT-A-REASONABLE-PRICE INVESTMENT
PHILOSOPHY.
JAMES AWAD, PRESIDENT OF AWAD, FOUNDED THE FIRM IN 1992. HE HEADS THE PORTFOLIO
MANAGEMENT TEAM FOR NEW VISION SMALL CAP. MR. AWAD HAS MORE THAN 30 YEARS
EXPERIENCE IN THE INVESTMENT BUSINESS, HOLDING POSITIONS WITH FIRMS SUCH AS
NEUBERGER & BERMAN AND FIRST INVESTORS CORPORATION.
EACH OF THE FUNDS HAS OBTAINED AN EXEMPTIVE ORDER FROM THE SECURITIES AND
EXCHANGE COMMISSION TO PERMIT THE FUND, PURSUANT TO APPROVAL BY THE BOARD OF
TRUSTEES/DIRECTORS, TO ENTER INTO AND MATERIALLY AMEND CONTRACTS WITH THE FUND'S
SUBADVISOR WITHOUT SHAREHOLDER APPROVAL. SEE "INVESTMENT ADVISOR AND SUBADVISOR"
IN THE SAI FOR FURTHER DETAILS.
<PAGE>
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.
CSIF BALANCED 0.42%
CSIF MANAGED INDEX 0.50% 1
CSIF EQUITY 0.51%
CSIF BOND 0.43%
CWVF INTERNATIONAL EQUITY 0.75%
CAPITAL ACCUMULATION 0.65%
NEW VISION SMALL CAP 0.75%
CALVERT INCOME 0.40%
1 CSIF MANAGED INDEX HAS A RECAPTURE PROVISION UNDER WHICH CAMCO MAY ELECT TO
RECAPTURE FROM THE FUND IN A LATER YEAR ANY FEES CAMCO WAIVES OR
EXPENSES IT ASSUMES, SUBJECT TO CERTAIN LIMITATIONS.
A WORD ABOUT THE YEAR 2000 (Y2K) AND OUR
COMPUTER SYSTEMS
LIKE WITH OTHER MUTUAL FUNDS, CAMCO AND ITS SERVICE PROVIDERS USE COMPUTER
SYSTEMS FOR ALL ASPECTS OF OUR BUSINESS-PROCESSING SHAREHOLDER AND FUND
TRANSACTIONS, FUND ACCOUNTING, EXECUTING TRADES, AND PRICING SECURITIES JUST TO
NAME A FEW. THE CONCERN HAS BEEN THAT MANY SOFTWARE PROGRAMS CANNOT DISTINGUISH
BETWEEN THE YEAR 2000 AND THE YEAR 1900. THIS COULD CAUSE PROBLEMS WITH
RETIREMENT PLAN DISTRIBUTIONS, DIVIDEND PAYMENT SOFTWARE, TRANSACTION SOFTWARE,
AND NUMEROUS OTHER AREAS THAT IMPACT THE FUND. LEADING UP TO THIS YEAR, CALVERT
GROUP HAS BEEN REVIEWING ALL OF ITS COMPUTER SYSTEMS FOR Y2K COMPLIANCE.
ALTHOUGH, THUS FAR, THERE HAVE BEEN NO PROBLEMS CAUSED BY Y2K THAT COULD IMPACT
THE FUND, THERE CAN BE NO ASSURANCE THAT THERE WILL BE NO FUTURE IMPACT. THE
ADVISOR, THE UNDERWRITER, TRANSFER AGENT AND CUSTODIAN HAVE ADVISED THE FUND
THAT THEY WILL CONTINUE TO ACTIVELY WORK ON ANY NECESSARY CHANGES TO THEIR
COMPUTER SYSTEMS TO ADDRESS ANY ISSUES THAT MAY ARISE THROUGHOUT THE YEAR AND
EXPECT THAT THEIR SYSTEMS, AND THOSE OF THEIR OUTSIDE SERVICE PROVIDERS, WILL BE
ADAPTED ACCORDINGLY. FOR MORE INFORMATION, PLEASE VISIT OUR WEBSITE AT
WWW.CALVERT.COM.
HOW TO OPEN AN ACCOUNT
COMPLETE AND SIGN AN APPLICATION FOR EACH NEW ACCOUNT. BE SURE TO SPECIFY CLASS
I. ALL PURCHASES MUST BE MADE BY BANKWIRE IN U.S. DOLLARS. FOR MORE
INFORMATION AND WIRE INSTRUCTIONS, CALL CALVERT GROUP AT 800-327-2109.
MINIMUM TO OPEN AN ACCOUNT $1,000,000
IMPORTANT - HOW SHARES ARE PRICED
THE PRICE OF SHARES IS BASED ON EACH FUND'S NET ASSET VALUE ("NAV"). NAV IS
COMPUTED BY ADDING THE VALUE OF A FUND'S HOLDINGS PLUS OTHER ASSETS, SUBTRACTING
LIABILITIES, AND THEN DIVIDING THE RESULT BY THE NUMBER OF SHARES OUTSTANDING.
IF A FUND HAS MORE THAN ONE CLASS OF SHARES, THE NAV OF EACH CLASS WILL BE
DIFFERENT, DEPENDING ON THE NUMBER OF SHARES OUTSTANDING FOR EACH CLASS.
PORTFOLIO SECURITIES AND OTHER ASSETS ARE VALUED BASED ON MARKET QUOTATIONS,
EXCEPT THAT SECURITIES MATURING WITHIN 60 DAYS ARE VALUED AT AMORTIZED COST. IF
MARKET QUOTATIONS ARE NOT READILY AVAILABLE, SECURITIES ARE VALUED BY A METHOD
THAT THE FUND'S BOARD OF TRUSTEES/DIRECTORS BELIEVES ACCURATELY REFLECTS FAIR
VALUE.
THE NAV IS CALCULATED AS OF THE CLOSE OF EACH BUSINESS DAY, WHICH COINCIDES WITH
THE CLOSING OF THE REGULAR SESSION OF THE NEW YORK STOCK EXCHANGE ("NYSE")
(NORMALLY 4 P.M. ET). EACH FUND IS OPEN FOR BUSINESS EACH DAY THE NYSE IS OPEN.
PLEASE NOTE THAT THERE ARE SOME FEDERAL HOLIDAYS, HOWEVER, SUCH AS COLUMBUS DAY
AND VETERAN'S DAY, WHEN THE NYSE IS OPEN AND THE FUND IS OPEN BUT PURCHASES
CANNOT BE MADE DUE TO THE CLOSURE OF THE BANKING SYSTEM.
SOME FUNDS HOLD SECURITIES THAT ARE PRIMARILY LISTED ON FOREIGN EXCHANGES THAT
TRADE ON DAYS WHEN THE NYSE IS CLOSED. THESE FUNDS DO NOT PRICE SHARES ON DAYS
WHEN THE NYSE IS CLOSED, EVEN IF FOREIGN MARKETS MAY BE OPEN. AS A RESULT, THE
VALUE OF THE FUND'S SHARES MAY CHANGE ON DAYS WHEN YOU WILL NOT BE ABLE TO BUY
OR SELL YOUR SHARES.
WHEN YOUR ACCOUNT WILL BE CREDITED
YOUR PURCHASE WILL BE PROCESSED AT THE NEXT NAV CALCULATED AFTER YOUR ORDER IS
RECEIVED IN GOOD ORDER. EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF
SHARES FOR A PERIOD OF TIME OR TO REJECT ANY SPECIFIC PURCHASE ORDER. ALL
PURCHASES WILL BE CONFIRMED AND CREDITED TO YOUR ACCOUNT IN FULL AND FRACTIONAL
SHARES (ROUNDED TO THE NEAREST 1/1000TH OF A SHARE).
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.
TELEPHONE TRANSACTIONS
YOU MAY PURCHASE, REDEEM, OR EXCHANGE SHARES AND WIRE FUNDS 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.
<PAGE>
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.
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.
SHARES MAY ONLY BE EXCHANGED FOR CLASS I SHARES OF ANOTHER CALVERT FUND.
EXCHANGE REQUESTS WILL NOT BE ACCEPTED ON ANY DAY 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.
MINIMUM ACCOUNT BALANCE
PLEASE MAINTAIN A BALANCE IN EACH OF YOUR FUND ACCOUNTS OF AT LEAST $1,000,000
PER FUND. IF DUE TO REDEMPTIONS, THE ACCOUNT FALLS BELOW THE MINIMUM, YOUR
ACCOUNT MAY BE CLOSED AND THE PROCEEDS MAILED TO THE ADDRESS OF RECORD. YOU
WILL BE GIVEN A NOTICE THAT YOUR ACCOUNT IS BELOW THE MINIMUM AND WILL BE
CLOSED, OR MOVED TO CLASS A (AT NAV) AFTER 30 DAYS IF THE BALANCE IS NOT BROUGHT
UP TO THE REQUIRED MINIMUM AMOUNT.
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 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.
CSIF BOND PAID MONTHLY
CSIF BALANCED PAID QUARTERLY
CSIF EQUITY PAID ANNUALLY
CSIF MANAGED INDEX PAID ANNUALLY
CWVF INTERNATIONAL EQUITY PAID ANNUALLY
CAPITAL ACCUMULATION PAID ANNUALLY
NEW VISION SMALL CAP PAID ANNUALLY
CALVERT INCOME PAID MONTHLY
DIVIDEND PAYMENT OPTIONS
DIVIDENDS AND ANY DISTRIBUTIONS ARE AUTOMATICALLY REINVESTED IN THE SAME FUND AT
NAV, UNLESS YOU ELECT TO HAVE AMOUNTS OF $10 OR MORE PAID TO YOU BY WIRE TO A
PREDESIGNATED BANK ACCOUNT. 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.
BUYING A DIVIDEND
AT THE TIME OF PURCHASE, THE SHARE PRICE OF EACH CLASS MAY REFLECT UNDISTRIBUTED
INCOME, CAPITAL GAINS OR UNREALIZED APPRECIATION OF SECURITIES. ANY INCOME OR
CAPITAL GAINS FROM THESE AMOUNTS WHICH ARE LATER DISTRIBUTED TO YOU ARE FULLY
TAXABLE. ON THE RECORD DATE FOR A DISTRIBUTION, SHARE VALUE IS REDUCED BY THE
AMOUNT OF THE DISTRIBUTION. IF YOU BUY SHARES JUST BEFORE THE RECORD DATE
("BUYING A DIVIDEND") YOU WILL PAY THE FULL PRICE FOR THE SHARES AND THEN
RECEIVE A PORTION OF THE PRICE BACK AS A TAXABLE DISTRIBUTION.
FEDERAL TAXES
IN JANUARY, EACH 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.
<PAGE>
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.
DIVIDENDS, INCLUDING SHORT-TERM CAPITAL GAINS, ARE TAXABLE AS ORDINARY INCOME.
DISTRIBUTIONS FROM LONG-TERM CAPITAL GAINS ARE TAXABLE AS LONG-TERM CAPITAL
GAINS, REGARDLESS OF HOW LONG YOU HAVE OWNED SHARES.
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
IN ADDITION TO FEDERAL TAXES, YOU MAY BE SUBJECT TO STATE OR LOCAL TAXES ON YOUR
INVESTMENT, DEPENDING ON THE LAWS IN YOUR AREA. YOU WILL BE NOTIFIED TO THE
EXTENT, IF ANY, THAT DIVIDENDS REFLECT INTEREST RECEIVED FROM US GOVERNMENT
SECURITIES. 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.
HOW TO SELL SHARES
YOU MAY REDEEM ALL OR A PORTION OF YOUR SHARES ON ANY DAY YOUR FUND IS OPEN FOR
BUSINESS. YOUR SHARES WILL BE REDEEMED AT THE NEXT NAV CALCULATED AFTER YOUR
REDEMPTION REQUEST IS RECEIVED AND ACCEPTED. THE PROCEEDS WILL NORMALLY BE SENT
TO YOU ON THE NEXT BUSINESS DAY, BUT IF MAKING IMMEDIATE PAYMENT COULD ADVERSELY
AFFECT YOUR FUND, IT MAY TAKE UP TO SEVEN (7) DAYS TO MAKE PAYMENT. 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 - CALL 800-368-2745
YOU MAY REDEEM SHARES FROM YOUR ACCOUNT BY TELEPHONE AND HAVE YOUR MONEY WIRED
TO AN ADDRESS OR BANK YOU HAVE PREVIOUSLY AUTHORIZED. CLASS I REDEMPTIONS MUST
BE MADE BY WIRE.
IF YOU WANT THE MONEY TO BE WIRED TO A BANK NOT PREVIOUSLY AUTHORIZED, THEN A
VOIDED BANK CHECK MUST BE PROVIDED. TO ADD INSTRUCTIONS TO WIRE TO A
DESTINATION NOT PREVIOUSLY ESTABLISHED, OR IF YOU WOULD LIKE FUNDS SENT TO A
DIFFERENT ADDRESS OR ANOTHER PERSON, YOUR LETTER MUST BE SIGNATURE GUARANTEED.
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLE IS INTENDED TO HELP YOU UNDERSTAND THE FUNDS'
FINANCIAL PERFORMANCE FOR THE PAST FIVE (5) FISCAL YEARS (OR IF SHORTER, THE
PERIOD OF THE FUND'S OPERATIONS). THE FUNDS' FISCAL YEAR END IS SEPTEMBER 30.
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>
Balanced Portfolio
Financial Highlights
Period Ended
September 30,
Class I Shares 1999###
Net asset value, beginning $32.52
Income from investment operations
Net investment income .52
Net realized and unrealized gain (loss) (.35)
Total from investment operations .17
Distributions from
Net investment income (.56)
Total distributions (.56)
Total increase (decrease) in net asset value (.39)
Net asset value, ending $32.13
Total return* .52%
Ratios to average net assets:
Net investment income 2.54% (a)
Total expenses 74% (a)
Expenses before offsets .74% (a)
Net expenses .73% (a)
Portfolio turnover 175%
Net assets, ending (in thousands) $13,458
Number of shares outstanding,
ending (in thousands) 419
Managed Index
Periods Ended
September 30, September 30,
Class I Shares
1999 1998 ##
Net asset value, beginning $13.54 $15.00
Income from investment operations
Net investment income .11 . 04
Net realized and unrealized gain (loss) 3.29 (1.50)
Total from investment operations 3.40 (1.46)
Distributions from
Net investment income (.05) --
Total increase (decrease) in net asset value 3.35 (1.46)
Net asset value, ending $16.89 $13.54
Total return* 25.09% (9.73%)
Ratios to average net assets:
Net investment income .65% 54% (a)
Total expenses .91% 1.03% (a)
Expenses before offsets .81% .81% (a)
Net expenses .75% .75% (a)
Portfolio turnover 56% 27%
Net assets, ending (in thousands) $18,652 $14,897
Number of shares outstanding,
ending (in thousands) 1,104 1,100
Capital Accumulation Portfolio
Financial Highlights
Period Ended
September 30,
CLASS I SHARES 1999^^
Net asset value, beginning $26.18
Income from investment operations
Net investment income (loss) (.08)
Net realized and unrealized gain (loss) (.11)
Total from investment operations (.19)
Total increase (decrease) in net asset value (.19)
Net asset value, ending $25.99
Total return* (.73%)
Ratios to average net assets:
Net investment income (loss) (.50) (a)
Total expenses 1.24% (a)
Expenses before offsets .85% (a)
Net expenses .80% (a)
Portfolio turnover 88%
Net assets, ending (in thousands) $2,547
Number of shares outstanding, ending (in thousands) 98
International Equity Portfolio
Financial Highlights
Period Ended
September 30,
Class I Shares 1999#
Net asset value, beginning $19.91
Income from investment operations
Net investment income .15
Net realized and unrealized gain (loss) 1.93
Total from investment operations 2.08
Total increase (decrease) in net asset value 2.08
Net asset value, ending $21.99
Total return* 10.45%
Ratios to average net assets:
Net investment income (loss) 1.19% (a)
Total expenses 1.53% (a)
Expenses before offsets 1.09% (a)
Net expenses 1.05% (a)
Portfolio turnover 82%
Net assets, ending (in thousands) $3,006
Number of shares outstanding,
ending (in thousands) 137
New Vision Small Cap Portfolio
Financial Highlights
Period Ended
September 30,
Class I Shares 1999^^
Net asset value, beginning $12.20
Income from investment operations
Net investment income (loss) .03
Net realized and unrealized gain (loss) 1.34
Total from investment operations 1.37
Total increase (decrease) in net asset value 1.37
Net asset value, ending $13.57
Total return* 11.23%
Ratios to average net assets:
Net investment income (loss) .36% (a)
Total expenses 1.87% (a)
Expenses before offsets .93% (a)
Net expenses .82% (a)
Portfolio turnover 68%
Net assets, ending (in thousands) $1,314
Number of shares outstanding, ending (in thousands) 97
<PAGE>
TO OPEN AN INSTITUTIONAL (CLASS I) ACCOUNT:
800-327-2109
PERFORMANCE AND PRICES:
WWW.CALVERT.COM
CALVERT INFORMATION NETWORK
24 HOURS, 7 DAYS A WEEK
800-368-2745
SERVICE FOR EXISTING ACCOUNTS:
SHAREHOLDERS 800-327-2109
TDD FOR HEARING-IMPAIRED:
800-541-1524
CALVERT 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: 1-800-327-2109
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
WWW.SEC.GOV.
INVESTMENT COMPANY ACT FILE:
NO.811-3334 (CSIF)
NO.811- 06563 (CWVF INTERNATIONAL EQUITY AND CAPITAL ACCUMULATION)
NO.811- 3416 (NEW VISION AND CALVERT INCOME)
<PAGE>
CALVERT WORLD VALUES FUND, INC.
INTERNATIONAL EQUITY FUND
4550 MONTGOMERY AVENUE, BETHESDA, MARYLAND 20814
STATEMENT OF ADDITIONAL INFORMATION
JANUARY 31, 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 ("SAI") IS NOT A PROSPECTUS.
INVESTORS SHOULD READ THE STATEMENT OF ADDITIONAL INFORMATION IN CONJUNCTION
WITH THE FUND'S PROSPECTUS DATED JANUARY 31, 2000. THE FUND'S AUDITED FINANCIAL
STATEMENTS 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 9
INVESTMENT SELECTION PROCESS 11
DIVIDENDS, DISTRIBUTIONS AND TAXES 11
NET ASSET VALUE 12
CALCULATION OF TOTAL RETURN 13
PURCHASE AND REDEMPTION OF SHARES 14
ADVERTISING 15
DIRECTORS AND OFFICERS 15
INVESTMENT ADVISOR AND SUBADVISOR 17
ADMINISTRATIVE SERVICES AGENT 18
METHOD OF DISTRIBUTION 18
TRANSFER AND SHAREHOLDER SERVICING AGENTS 20
PORTFOLIO TRANSACTIONS 21
PERSONAL SECURITIES TRANSACTIONS 21
INDEPENDENT ACCOUNTANTS AND CUSTODIANS 22
CONTROL PERSONS & PRINCIPAL HOLDERS OF SECURITIES 22
GENERAL INFORMATION 22
APPENDIX 22
<PAGE>
INVESTMENT POLICIES AND RISKS
-----------------------------
CALVERT WORLD VALUES FUND, INC., INTERNATIONAL EQUITY FUND (THE "FUND")
SEEKS TO ACHIEVE A HIGH TOTAL RETURN CONSISTENT WITH REASONABLE RISK, BY
INVESTING PRIMARILY IN A GLOBALLY DIVERSIFIED PORTFOLIO OF EQUITY SECURITIES. TO
THE EXTENT POSSIBLE, INVESTMENTS ARE MADE IN ENTERPRISES THAT MAKE A SIGNIFICANT
CONTRIBUTION TO OUR GLOBAL SOCIETY THROUGH THEIR PRODUCTS AND SERVICES AND
THROUGH THE WAY THEY DO BUSINESS.
UNDER NORMAL CIRCUMSTANCES, THE FUND WILL INVEST PRIMARILY IN EQUITY
SECURITIES. HOWEVER, THE FUND MAY INVEST IN ANY OTHER TYPE OF SECURITY
INCLUDING, BUT NOT LIMITED TO, CONVERTIBLE SECURITIES, PREFERRED STOCKS, BONDS,
NOTES AND OTHER DEBT SECURITIES OF COMPANIES, (INCLUDING EURO-CURRENCY
INSTRUMENTS AND SECURITIES) OR OF ANY INTERNATIONAL AGENCY (SUCH AS THE ASIAN
DEVELOPMENT BANK OR INTER-AMERICAN DEVELOPMENT BANK) OR OBLIGATIONS OF DOMESTIC
OR FOREIGN GOVERNMENTS AND THEIR POLITICAL SUBDIVISIONS, AND IN FOREIGN CURRENCY
TRANSACTIONS.
UNDER NORMAL CIRCUMSTANCES, THE FUND WILL INVEST IN THE SECURITIES OF
ISSUERS IN MANY DIFFERENT COUNTRIES, OTHER THAN THE USA. THE FUND MAKES
INVESTMENTS IN VARIOUS COUNTRIES. UNDER EXCEPTIONAL ECONOMIC OR MARKET
CONDITIONS, THE FUND MAY INVEST SUBSTANTIALLY ALL OF ITS ASSETS IN ONLY ONE OR
TWO COUNTRIES, OR IN US GOVERNMENT OBLIGATIONS.
IN DETERMINING THE APPROPRIATE DISTRIBUTION OF INVESTMENTS AMONG VARIOUS
COUNTRIES AND GEOGRAPHIC REGIONS, THE SUBADVISOR ORDINARILY WILL CONSIDER THE
FOLLOWING FACTORS: PROSPECTS FOR RELATIVE ECONOMIC GROWTH AMONG FOREIGN
COUNTRIES; EXPECTED LEVELS OF INFLATION; RELATIVE PRICE LEVELS OF THE VARIOUS
CAPITAL MARKETS; GOVERNMENT POLICIES INFLUENCING BUSINESS CONDITIONS; THE
OUTLOOK FOR CURRENCY RELATIONSHIPS AND THE RANGE OF INDIVIDUAL INVESTMENT
OPPORTUNITIES AVAILABLE TO THE GLOBAL INVESTOR.
FOREIGN SECURITIES
INVESTMENTS IN FOREIGN SECURITIES MAY PRESENT RISKS NOT TYPICALLY INVOLVED
IN DOMESTIC INVESTMENTS. THE FUND MAY PURCHASE FOREIGN SECURITIES DIRECTLY, ON
FOREIGN MARKETS, OR THOSE REPRESENTED BY AMERICAN DEPOSITARY RECEIPTS ("ADRS"),
OR OTHER RECEIPTS EVIDENCING OWNERSHIP OF FOREIGN SECURITIES, SUCH AS
INTERNATIONAL DEPOSITARY RECEIPTS AND GLOBAL DEPOSITARY RECEIPTS. ADRS ARE US
DOLLAR-DENOMINATED AND TRADED IN THE US ON EXCHANGES OR OVER THE COUNTER. IF THE
FUND INVESTS IN ADRS RATHER THAN DIRECTLY IN FOREIGN ISSUERS' STOCK, THE FUND
MAY POSSIBLY AVOID SOME CURRENCY AND SOME LIQUIDITY RISKS. THE INFORMATION
AVAILABLE FOR ADRS IS SUBJECT TO THE MORE UNIFORM AND MORE EXACTING ACCOUNTING,
AUDITING AND FINANCIAL REPORTING STANDARDS OF THE DOMESTIC MARKET OR EXCHANGE ON
WHICH THEY ARE TRADED.
ADDITIONAL COSTS MAY BE INCURRED IN CONNECTION WITH INTERNATIONAL
INVESTMENT SINCE FOREIGN BROKERAGE COMMISSIONS AND THE CUSTODIAL COSTS
ASSOCIATED WITH MAINTAINING FOREIGN PORTFOLIO SECURITIES ARE GENERALLY HIGHER
THAN IN THE UNITED STATES. FEE EXPENSE MAY ALSO BE INCURRED ON CURRENCY
EXCHANGES WHEN THE FUND CHANGES INVESTMENTS FROM ONE COUNTRY TO ANOTHER OR
CONVERTS FOREIGN SECURITIES HOLDINGS INTO U.S. DOLLARS.
UNITED STATES GOVERNMENT POLICIES HAVE AT TIMES, IN THE PAST, THROUGH
IMPOSITION OF INTEREST EQUALIZATION TAXES AND OTHER RESTRICTIONS, DISCOURAGED
CERTAIN INVESTMENTS ABROAD BY UNITED STATES INVESTORS. IN ADDITION, FOREIGN
COUNTRIES MAY IMPOSE WITHHOLDING AND TAXES ON DIVIDENDS AND INTEREST.
SINCE INVESTMENTS IN SECURITIES OF ISSUERS DOMICILED IN FOREIGN COUNTRIES
USUALLY INVOLVE CURRENCIES OF THE FOREIGN COUNTRIES, AND SINCE THE FUND MAY
TEMPORARILY HOLD FUNDS IN FOREIGN CURRENCIES DURING THE COMPLETION OF INVESTMENT
PROGRAMS, THE VALUE OF THE ASSETS OF THE FUND AS MEASURED IN UNITED STATES
DOLLARS MAY BE AFFECTED FAVORABLY OR UNFAVORABLY BY CHANGES IN FOREIGN CURRENCY
EXCHANGE RATES AND EXCHANGE CONTROL REGULATIONS. FOR EXAMPLE, IF THE VALUE OF
THE FOREIGN CURRENCY IN WHICH A SECURITY IS DENOMINATED INCREASES OR DECLINES IN
RELATION TO THE VALUE OF THE U.S. DOLLAR, THE VALUE OF THE SECURITY IN U.S.
DOLLARS WILL INCREASE OR DECLINE CORRESPONDINGLY. THE FUND WILL CONDUCT ITS
FOREIGN CURRENCY EXCHANGE TRANSACTIONS EITHER ON A SPOT (I.E., CASH) BASIS AT
THE SPOT RATE PREVAILING IN THE FOREIGN EXCHANGE MARKET, OR THROUGH ENTERING
INTO FORWARD CONTRACTS TO PURCHASE OR SELL FOREIGN CURRENCIES. IT MAY ALSO USE
FOREIGN CURRENCY OPTIONS AND FUTURES. SEE BELOW. A FORWARD FOREIGN CURRENCY
CONTRACT INVOLVES AN OBLIGATION TO PURCHASE OR SELL A SPECIFIC CURRENCY AT A
FUTURE DATE WHICH MAY BE ANY FIXED NUMBER OF DAYS FROM THE DATE OF THE CONTRACT
AGREED UPON BY THE PARTIES, AT A PRICE SET AT THE TIME OF THE CONTRACT. THESE
CONTRACTS ARE TRADED IN THE INTERBANK MARKET CONDUCTED DIRECTLY BETWEEN CURRENCY
TRADERS (USUALLY LARGE, COMMERCIAL BANKS) AND THEIR CUSTOMERS. A FORWARD FOREIGN
CURRENCY CONTRACT GENERALLY HAS NO DEPOSIT REQUIREMENT, AND NO COMMISSIONS ARE
CHARGED AT ANY STAGE FOR TRADES.
THE FUND MAY ENTER INTO FORWARD FOREIGN CURRENCY CONTRACTS FOR TWO REASONS.
FIRST, THE FUND MAY DESIRE TO PRESERVE THE UNITED STATES DOLLAR PRICE OF A
SECURITY WHEN IT ENTERS INTO A CONTRACT FOR THE PURCHASE OR SALE OF A SECURITY
DENOMINATED IN A FOREIGN CURRENCY. THE FUND MAY BE ABLE TO PROTECT ITSELF
AGAINST POSSIBLE LOSSES RESULTING FROM CHANGES IN THE RELATIONSHIP BETWEEN THE
UNITED STATES DOLLAR AND FOREIGN CURRENCIES DURING THE PERIOD BETWEEN THE DATE
THE SECURITY IS PURCHASED OR SOLD AND THE DATE ON WHICH PAYMENT IS MADE OR
RECEIVED BY ENTERING INTO A FORWARD CONTRACT FOR THE PURCHASE OR SALE, FOR A
FIXED AMOUNT OF DOLLARS, OF THE AMOUNT OF THE FOREIGN CURRENCY INVOLVED IN THE
UNDERLYING SECURITY TRANSACTIONS.
SECOND, WHEN THE ADVISOR OR SUBADVISOR BELIEVES THAT THE CURRENCY OF A
PARTICULAR FOREIGN COUNTRY MAY SUFFER A SUBSTANTIAL DECLINE AGAINST THE UNITED
STATES DOLLAR, THE FUND ENTERS INTO A FORWARD FOREIGN CURRENCY CONTRACT TO SELL,
FOR A FIXED AMOUNT OF DOLLARS, THE AMOUNT OF FOREIGN CURRENCY APPROXIMATING THE
VALUE OF SOME OR ALL OF THE FUND'S SECURITIES DENOMINATED IN SUCH FOREIGN
CURRENCY. THE PRECISE MATCHING OF THE FORWARD FOREIGN CURRENCY CONTRACT AMOUNTS
AND THE VALUE OF THE FUND'S SECURITIES INVOLVED WILL NOT GENERALLY BE POSSIBLE
SINCE THE FUTURE VALUE OF THE SECURITIES WILL CHANGE AS A CONSEQUENCE OF MARKET
MOVEMENTS BETWEEN THE DATE THE FORWARD CONTRACT IS ENTERED INTO AND THE DATE IT
MATURES. THE PROJECTION OF SHORT-TERM CURRENCY MARKET MOVEMENT IS DIFFICULT, AND
THE SUCCESSFUL EXECUTION OF THIS SHORT-TERM HEDGING STRATEGY IS UNCERTAIN.
ALTHOUGH FORWARD FOREIGN CURRENCY CONTRACTS TEND TO MINIMIZE THE RISK OF LOSS
DUE TO A DECLINE IN THE VALUE OF THE HEDGED CURRENCY, AT THE SAME TIME THEY TEND
TO LIMIT ANY POTENTIAL GAIN WHICH MIGHT RESULT SHOULD THE VALUE OF SUCH CURRENCY
INCREASE. THE FUND DOES NOT INTEND TO ENTER INTO SUCH FORWARD CONTRACTS UNDER
THIS CIRCUMSTANCE ON A REGULAR OR CONTINUOUS BASIS.
EUROCURRENCY CONVERSION RISK. EUROPEAN COUNTRIES THAT ARE MEMBERS OF THE
EUROPEAN MONETARY UNION HAVE AGREED TO USE A COMMON CURRENCY UNIT, THE "EURO."
CURRENTLY, EACH OF THESE COUNTRIES HAS ITS OWN CURRENCY UNIT. ALTHOUGH THE
ADVISOR AND SUBADVISOR DO NOT ANTICIPATE ANY PROBLEMS IN CONVERSION FROM THE OLD
CURRENCIES TO THE EURO, THERE MAY BE ISSUES INVOLVED IN SETTLEMENT, VALUATION,
AND NUMEROUS OTHER AREAS THAT COULD IMPACT THE FUND. CALVERT HAS BEEN REVIEWING
ALL OF ITS COMPUTER SYSTEMS FOR EUROCURRENCY CONVERSION COMPLIANCE. THERE CAN
BE NO ASSURANCE THAT THERE WILL BE NO NEGATIVE IMPACT ON THE FUND, HOWEVER, THE
ADVISOR, SUBADVISOR AND CUSTODIAN HAVE ADVISED THE FUND THAT THEY HAVE BEEN
ACTIVELY WORKING ON ANY NECESSARY CHANGES TO THEIR COMPUTER SYSTEMS TO PREPARE
FOR THE CONVERSION, AND EXPECT THAT THEIR SYSTEMS, AND THOSE OF THEIR OUTSIDE
SERVICE PROVIDERS, WILL BE ADAPTED IN TIME FOR THAT EVENT.
TEMPORARY DEFENSIVE POSITIONS
FOR TEMPORARY DEFENSIVE PURPOSES - WHICH MAY INCLUDE A LACK OF ADEQUATE
PURCHASE CANDIDATES OR AN UNFAVORABLE MARKET ENVIRONMENT - THE FUND MAY INVEST
IN CASH OR CASH EQUIVALENTS. CASH EQUIVALENTS INCLUDE INSTRUMENTS SUCH AS, BUT
NOT LIMITED TO, U.S. GOVERNMENT AND AGENCY OBLIGATIONS, CERTIFICATES OF DEPOSIT,
BANKER'S ACCEPTANCES, TIME DEPOSITS COMMERCIAL PAPER, SHORT-TERM CORPORATE DEBT
SECURITIES, AND REPURCHASE AGREEMENTS.
REPURCHASE AGREEMENTS
THE FUND MAY PURCHASE DEBT SECURITIES SUBJECT TO REPURCHASE AGREEMENTS,
WHICH ARE ARRANGEMENTS UNDER WHICH THE FUND 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 FUND ENGAGES IN REPURCHASE AGREEMENTS
IN ORDER TO EARN A HIGHER RATE OF RETURN THAN IT 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 FUND 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
FUND WILL ONLY ENGAGE IN REPURCHASE AGREEMENTS WITH RECOGNIZED SECURITIES
DEALERS AND BANKS DETERMINED TO PRESENT MINIMAL CREDIT RISK BY THE ADVISOR UNDER
THE DIRECTION AND SUPERVISION OF THE FUND'S BOARD OF DIRECTORS. IN ADDITION, THE
FUND 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 FUND PURSUANT
TO THE AGREEMENT, THE FUND 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 FUND 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 FUND MAY ALSO ENGAGE IN REVERSE REPURCHASE AGREEMENTS. UNDER A REVERSE
REPURCHASE AGREEMENT, THE FUND 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 FUND INVESTS THE PROCEEDS
FROM EACH REVERSE REPURCHASE AGREEMENT IN OBLIGATIONS IN WHICH IT IS AUTHORIZED
TO INVEST. THE FUND INTENDS TO ENTER INTO A REVERSE REPURCHASE AGREEMENT ONLY
WHEN THE INTEREST INCOME PROVIDED FOR IN THE OBLIGATION IN WHICH THE FUND
INVESTS THE PROCEEDS IS EXPECTED TO EXCEED THE AMOUNT THE FUND WILL PAY IN
INTEREST TO THE OTHER PARTY TO THE AGREEMENT PLUS ALL COSTS ASSOCIATED WITH THE
TRANSACTIONS. THE FUND DOES NOT INTEND TO BORROW FOR LEVERAGE PURPOSES. THE FUND
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 FUND
WILL MAINTAIN IN A SEGREGATED CUSTODIAL ACCOUNT AN AMOUNT OF CASH, U.S.
GOVERNMENT SECURITIES OR OTHER LIQUID, HIGH-QUALITY DEBT SECURITIES EQUAL IN
VALUE TO THE REPURCHASE PRICE. THE FUND 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 FUND'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
FUND 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 FUND UNDER THE
AGREEMENTS, THE FUND MAY HAVE BEEN BETTER OFF HAD IT NOT ENTERED INTO THE
AGREEMENT. HOWEVER, THE FUND WILL ENTER INTO REVERSE REPURCHASE AGREEMENTS ONLY
WITH BANKS AND DEALERS WHICH THE ADVISOR BELIEVES PRESENT MINIMAL CREDIT RISKS
UNDER GUIDELINES ADOPTED BY THE FUND'S BOARD OF DIRECTORS. IN ADDITION, THE FUND
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 FUND
TO POST ADDITIONAL COLLATERAL.
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. UNRATED DEBT SECURITIES
MAY FALL INTO THE LOWER QUALITY CATEGORY. UNRATED SECURITIES USUALLY ARE NOT
ATTRACTIVE TO AS MANY BUYERS AS RATED SECURITIES ARE, WHICH MAY MAKE THEM LESS
MARKETABLE.
THE QUALITY LIMITATION SET FORTH IN THE FUND'S INVESTMENT POLICY IS
DETERMINED IMMEDIATELY AFTER THE FUND'S ACQUISITION OF A GIVEN SECURITY.
ACCORDINGLY, ANY LATER CHANGE IN RATINGS WILL NOT BE CONSIDERED WHEN DETERMINING
WHETHER AN INVESTMENT COMPLIES WITH THE FUND'S INVESTMENT POLICY.
WHEN PURCHASING HIGH-YIELDING SECURITIES, RATED OR UNRATED, THE ADVISORS
PREPARE THEIR 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 FUND DIVERSIFICATION AND CREDIT ANALYSIS,
INVESTMENT RISK CAN BE REDUCED, ALTHOUGH THERE CAN BE NO ASSURANCE THAT LOSSES
WILL NOT OCCUR.
DERIVATIVES
THE FUND CAN USE VARIOUS TECHNIQUES TO INCREASE OR DECREASE ITS 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 FUND CAN USE THESE PRACTICES
EITHER AS SUBSTITUTION OR AS PROTECTION AGAINST AN ADVERSE MOVE IN THE FUND TO
ADJUST THE RISK AND RETURN CHARACTERISTICS OF THE FUND. IF THE ADVISOR AND/OR
SUBADVISOR JUDGES MARKET CONDITIONS INCORRECTLY OR EMPLOYS A STRATEGY THAT DOES
NOT CORRELATE WELL WITH A FUND'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 FUND 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 FUND 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 WHICH MEET THE FUND'S SOCIAL CRITERIA, AND
EMPLOY A VARIETY OF OTHER INVESTMENT TECHNIQUES. SPECIFICALLY, THE FUND MAY ALSO
ENGAGE IN THE PURCHASE AND SALE OF STOCK INDEX FUTURE CONTRACTS, FOREIGN
CURRENCY FUTURES CONTRACTS, INTEREST RATE FUTURES CONTRACTS, AND OPTIONS ON SUCH
FUTURES, AS DESCRIBED MORE FULLY BELOW.
THE FUND MAY ENGAGE IN SUCH TRANSACTIONS ONLY TO HEDGE THE EXISTING
POSITIONS. IT 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 FUND MAY WRITE "COVERED OPTIONS" ON SECURITIES IN STANDARD CONTRACTS
TRADED ON NATIONAL SECURITIES EXCHANGES. THE FUND 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 FUND MAY PURCHASE PUT AND CALL OPTIONS, IN STANDARD
CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES, ON SECURITIES OF ISSUERS
WHICH MEET THE FUND'S SOCIAL CRITERIA. THE FUND WILL PURCHASE SUCH OPTIONS ONLY
TO HEDGE AGAINST CHANGES IN THE VALUE OF SECURITIES THE FUND HOLD AND NOT FOR
THE PURPOSES OF SPECULATION OR LEVERAGE. BY BUYING A PUT, THE FUND 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 FUND MAY PURCHASE CALL OPTIONS ON SECURITIES WHICH THEY MAY INTEND TO
PURCHASE AND WHICH MEET THE FUND'S SOCIAL CRITERIA. 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 FUND INTENDS TO PURCHASE. 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 FUND MAY WRITE ONLY COVERED OPTIONS ON EQUITY AND DEBT
SECURITIES IN STANDARD CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES. THIS
MEANS THAT, IN THE CASE OF CALL OPTIONS, SO LONG AS THE FUND IS OBLIGATED AS THE
WRITER OF A CALL OPTION, THE FUND WILL OWN THE UNDERLYING SECURITY SUBJECT TO
THE OPTION AND, IN THE CASE OF PUT OPTIONS, THE FUND 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 THE FUND WRITES A COVERED CALL OPTION, THE FUND 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 FUND 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 FUND AND THUS REDUCE DECLINES IN THE NET ASSET VALUE PER SHARE OF
THE FUND IF SECURITIES COVERED BY SUCH OPTIONS DECLINE IN VALUE. EXERCISE OF A
CALL OPTION BY THE PURCHASER HOWEVER WILL CAUSE THE FUND TO FOREGO FUTURE
APPRECIATION OF THE SECURITIES COVERED BY THE OPTION.
WHEN THE FUND 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 FUND 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 FUND 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 FUND 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 FUND. THE FUND'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 FUND HAS NOT ENTERED INTO A CLOSING PURCHASE
TRANSACTION.
RISKS RELATED TO OPTIONS TRANSACTIONS. THE FUND CAN CLOSE OUT ITS
RESPECTIVE POSITIONS IN EXCHANGE-TRADED OPTIONS ONLY ON AN EXCHANGE WHICH
PROVIDES A SECONDARY MARKET IN SUCH OPTIONS. ALTHOUGH THE FUND INTEND 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
FUND FROM CLOSING AN OPTIONS POSITION, WHICH COULD IMPAIR THE FUND'S ABILITY TO
HEDGE EFFECTIVELY. THE INABILITY TO CLOSE OUT A CALL POSITION MAY HAVE AN
ADVERSE EFFECT ON LIQUIDITY BECAUSE THE FUND MAY BE REQUIRED TO HOLD THE
SECURITIES UNDERLYING THE OPTION UNTIL THE OPTION EXPIRES OR IS EXERCISED.
OVER-THE-COUNTER ("OTC") OPTIONS. OTC OPTIONS DIFFER FROM EXCHANGE-TRADED
OPTIONS IN SEVERAL RESPECTS. THEY ARE TRANSACTED DIRECTLY WITH DEALERS AND NOT
WITH A CLEARING CORPORATION, AND THERE IS A RISK OF NON-PERFORMANCE BY THE
DEALER. HOWEVER, THE PREMIUM IS PAID IN ADVANCE BY THE DEALER. OTC OPTIONS ARE
AVAILABLE FOR A GREATER VARIETY OF SECURITIES AND FOREIGN CURRENCIES, AND IN A
WIDER RANGE OF EXPIRATION DATES AND EXERCISE PRICES THAN EXCHANGE-TRADED
OPTIONS. SINCE THERE IS NO EXCHANGE, PRICING IS NORMALLY DONE BY REFERENCE TO
INFORMATION FROM A MARKET MAKER, WHICH INFORMATION IS CAREFULLY MONITORED OR
CAUSED TO BE MONITORED BY THE SUBADVISOR AND VERIFIED IN APPROPRIATE CASES.
A WRITER OR PURCHASER OF A PUT OR CALL OPTION CAN TERMINATE IT VOLUNTARILY
ONLY BY ENTERING INTO A CLOSING TRANSACTION. IN THE CASE OF OTC OPTIONS, THERE
CAN BE NO ASSURANCE THAT A CONTINUOUS LIQUID SECONDARY MARKET WILL EXIST FOR ANY
PARTICULAR OPTION AT ANY SPECIFIC TIME. CONSEQUENTLY, THE FUND MAY BE ABLE TO
REALIZE THE VALUE OF AN OTC OPTION IT HAS PURCHASED ONLY BY EXERCISING IT OR
ENTERING INTO A CLOSING SALE TRANSACTION WITH THE DEALER THAT ISSUED IT.
SIMILARLY, WHEN THE FUND WRITES AN OTC OPTION, IT GENERALLY CAN CLOSE OUT THAT
OPTION PRIOR TO ITS EXPIRATION ONLY BY ENTERING INTO A CLOSING PURCHASE
TRANSACTION WITH THE DEALER TO WHICH IT ORIGINALLY WROTE THE OPTION. IF A
COVERED CALL OPTION WRITER CANNOT EFFECT A CLOSING TRANSACTION, IT CANNOT SELL
THE UNDERLYING SECURITY OR FOREIGN CURRENCY UNTIL THE OPTION EXPIRES OR THE
OPTION IS EXERCISED. THEREFORE, THE WRITER OF A COVERED OTC CALL OPTION MAY NOT
BE ABLE TO SELL AN UNDERLYING SECURITY EVEN THOUGH IT MIGHT OTHERWISE BE
ADVANTAGEOUS TO DO SO. LIKEWISE, THE WRITER OF A SECURED OTC PUT OPTION MAY BE
UNABLE TO SELL THE SECURITIES PLEDGED TO SECURE THE PUT FOR OTHER INVESTMENT
PURPOSES WHILE IT IS OBLIGATED AS A PUT WRITER. SIMILARLY, A PURCHASER OF AN OTC
PUT OR CALL OPTION MIGHT ALSO FIND IT DIFFICULT TO TERMINATE ITS POSITION ON A
TIMELY BASIS IN THE ABSENCE OF A SECONDARY MARKET.
THE FUND UNDERSTANDS THE POSITION OF THE STAFF OF THE SECURITIES AND
EXCHANGE COMMISSION (THE "SEC") TO BE THAT PURCHASED OTC OPTIONS AND THE ASSETS
USED AS "COVER" FOR WRITTEN OTC OPTIONS ARE ILLIQUID SECURITIES. THE FUND HAS
ADOPTED PROCEDURES FOR ENGAGING IN OTC OPTIONS TRANSACTIONS FOR THE PURPOSE OF
REDUCING ANY POTENTIAL ADVERSE EFFECT OF SUCH TRANSACTIONS UPON THE LIQUIDITY OF
THE FUND.
FUTURES TRANSACTIONS. THE FUND MAY PURCHASE AND SELL FUTURES CONTRACTS, BUT ONLY
WHEN, IN THE JUDGMENT OF THE ADVISOR, SUCH A POSITION ACTS AS A HEDGE AGAINST
MARKET CHANGES WHICH WOULD ADVERSELY AFFECT THE SECURITIES HELD BY THE FUND.
THESE FUTURES CONTRACTS MAY INCLUDE, BUT ARE NOT LIMITED TO, MARKET INDEX
FUTURES CONTRACTS AND FUTURES CONTRACTS BASED ON U.S. GOVERNMENT OBLIGATIONS.
A FUTURES CONTRACT IS AN AGREEMENT BETWEEN TWO PARTIES TO BUY AND SELL A
SECURITY ON A FUTURE DATE WHICH HAS THE EFFECT OF ESTABLISHING THE CURRENT PRICE
FOR THE SECURITY. ALTHOUGH FUTURES CONTRACTS BY THEIR TERMS REQUIRE ACTUAL
DELIVERY AND ACCEPTANCE OF SECURITIES, IN MOST CASES THE CONTRACTS ARE CLOSED
OUT BEFORE THE SETTLEMENT DATE WITHOUT THE MAKING OR TAKING OF DELIVERY OF
SECURITIES. UPON BUYING OR SELLING A FUTURES CONTRACT, THE FUND DEPOSITS INITIAL
MARGIN WITH ITS CUSTODIAN, AND THEREAFTER DAILY PAYMENTS OF MAINTENANCE MARGIN
ARE MADE TO AND FROM THE EXECUTING BROKER. PAYMENTS OF MAINTENANCE MARGIN
REFLECT CHANGES IN THE VALUE OF THE FUTURES CONTRACT, WITH THE FUND BEING
OBLIGATED TO MAKE SUCH PAYMENTS IF ITS FUTURES POSITION BECOMES LESS VALUABLE
AND ENTITLED TO RECEIVE SUCH PAYMENTS IF ITS POSITIONS BECOME MORE VALUABLE.
THE FUND MAY ONLY INVEST IN FUTURES CONTRACTS TO HEDGE THEIR RESPECTIVE
EXISTING INVESTMENT POSITIONS AND NOT FOR INCOME ENHANCEMENT, SPECULATION OR
LEVERAGE PURPOSES. ALTHOUGH SOME OF THE SECURITIES UNDERLYING A FUTURES CONTRACT
MAY NOT NECESSARILY MEET THE FUND'S SOCIAL CRITERIA, ANY SUCH HEDGE POSITION
TAKEN BY THE FUND WILL NOT CONSTITUTE A DIRECT OWNERSHIP INTEREST IN THE
UNDERLYING SECURITIES.
FUTURES CONTRACTS ARE DESIGNED BY BOARDS OF TRADE WHICH ARE DESIGNATED
"CONTRACTS MARKETS" BY THE COMMODITY FUTURES TRADING COMMISSION ("CFTC"). AS
SERIES OF A REGISTERED INVESTMENT COMPANY, THE FUND IS ELIGIBLE FOR EXCLUSION
FROM THE CFTC'S DEFINITION OF "COMMODITY POOL OPERATOR," MEANING THAT THE FUND
MAY INVEST IN FUTURES CONTRACTS UNDER SPECIFIED CONDITIONS WITHOUT REGISTERING
WITH THE CFTC. FUTURES CONTRACTS TRADE ON CONTRACTS MARKETS IN A MANNER THAT IS
SIMILAR TO THE WAY A STOCK TRADES ON A STOCK EXCHANGE AND THE BOARDS OF TRADE,
THROUGH THEIR CLEARING CORPORATIONS, GUARANTEE PERFORMANCE OF THE CONTRACTS.
OPTIONS ON FUTURES CONTRACTS. THE FUND MAY PURCHASE AND WRITE PUT OR CALL
OPTIONS AND SELL CALL OPTIONS ON FUTURES CONTRACTS IN WHICH THE FUND COULD
OTHERWISE INVEST AND WHICH ARE TRADED ON A U.S. EXCHANGE OR BOARD OF TRADE. THE
FUND MAY ALSO ENTER INTO CLOSING TRANSACTIONS WITH RESPECT TO SUCH OPTIONS TO
TERMINATE AN EXISTING POSITION; THAT IS, TO SELL A PUT OPTION ALREADY OWNED AND
TO BUY A CALL OPTION TO CLOSE A POSITION WHERE THE FUND HAS ALREADY SOLD A
CORRESPONDING CALL OPTION.
THE FUND MAY ONLY INVEST IN OPTIONS ON FUTURES CONTRACTS TO HEDGE THEIR
RESPECTIVE EXISTING INVESTMENT POSITIONS AND NOT FOR INCOME ENHANCEMENT,
SPECULATION OR LEVERAGE PURPOSES. ALTHOUGH SOME OF THE SECURITIES UNDERLYING THE
FUTURES CONTRACT UNDERLYING THE OPTION MAY NOT NECESSARILY MEET THE FUND'S
SOCIAL CRITERIA, ANY SUCH HEDGE POSITION TAKEN BY THE FUND WILL NOT CONSTITUTE A
DIRECT OWNERSHIP INTEREST IN THE UNDERLYING SECURITIES.
AN OPTION ON A FUTURES CONTRACT GIVES THE PURCHASER THE RIGHT, IN RETURN
FOR THE PREMIUM PAID, TO ASSUME A POSITION IN A FUTURES CONTRACT-A LONG POSITION
IF THE OPTION IS A CALL AND A SHORT POSITION IF THE OPTION IS A PUT-AT A
SPECIFIED EXERCISE PRICE AT ANY TIME DURING THE PERIOD OF THE OPTION. THE FUND
WILL PAY A PREMIUM FOR SUCH OPTIONS PURCHASED OR SOLD. IN CONNECTION WITH SUCH
OPTIONS BOUGHT OR SOLD, THE FUND WILL MAKE INITIAL MARGIN DEPOSITS AND MAKE OR
RECEIVE MAINTENANCE MARGIN PAYMENTS WHICH REFLECT CHANGES IN THE MARKET VALUE OF
SUCH OPTIONS. THIS ARRANGEMENT IS SIMILAR TO THE MARGIN ARRANGEMENTS APPLICABLE
TO FUTURES CONTRACTS DESCRIBED ABOVE.
PUT OPTIONS ON FUTURES CONTRACTS. THE PURCHASE OF PUT OPTIONS ON FUTURES
CONTRACTS IS ANALOGOUS TO THE SALE OF FUTURES CONTRACTS AND IS USED TO PROTECT
THE FUND AGAINST THE RISK OF DECLINING PRICES. THE FUND MAY PURCHASE PUT OPTIONS
AND SELL PUT OPTIONS ON FUTURES CONTRACTS THAT ARE ALREADY OWNED BY THE FUND.
THE FUND WILL ONLY ENGAGE IN THE PURCHASE OF PUT OPTIONS AND THE SALE OF COVERED
PUT OPTIONS ON MARKET INDEX FUTURES FOR HEDGING PURPOSES.
CALL OPTIONS ON FUTURES CONTRACTS. THE SALE OF CALL OPTIONS ON FUTURES CONTRACTS
IS ANALOGOUS TO THE SALE OF FUTURES CONTRACTS AND IS USED TO PROTECT THE FUND
AGAINST THE RISK OF DECLINING PRICES. THE PURCHASE OF CALL OPTIONS ON FUTURES
CONTRACTS IS ANALOGOUS TO THE PURCHASE OF A FUTURES CONTRACT. THE FUND MAY ONLY
BUY CALL OPTIONS TO CLOSE AN EXISTING POSITION WHERE THE FUND HAS ALREADY SOLD A
CORRESPONDING CALL OPTION, OR FOR A CASH HEDGE. THE FUND WILL ONLY ENGAGE IN THE
SALE OF CALL OPTIONS AND THE PURCHASE OF CALL OPTIONS TO COVER FOR HEDGING
PURPOSES.
WRITING CALL OPTIONS ON FUTURES CONTRACTS. THE WRITING OF CALL OPTIONS ON
FUTURES CONTRACTS CONSTITUTES A PARTIAL HEDGE AGAINST DECLINING PRICES OF THE
SECURITIES DELIVERABLE UPON EXERCISE OF THE FUTURES CONTRACT. IF THE FUTURES
CONTRACT PRICE AT EXPIRATION IS BELOW THE EXERCISE PRICE, THE FUND WILL RETAIN
THE FULL AMOUNT OF THE OPTION PREMIUM WHICH PROVIDES A PARTIAL HEDGE AGAINST ANY
DECLINE THAT MAY HAVE OCCURRED IN THE FUND'S SECURITIES HOLDINGS.
RISKS OF OPTIONS AND FUTURES CONTRACTS. IF THE FUND HAS SOLD FUTURES OR TAKES
OPTIONS POSITIONS TO HEDGE AGAINST DECLINE IN THE MARKET AND THE MARKET LATER
ADVANCES, THE FUND MAY SUFFER A LOSS ON THE FUTURES CONTRACTS OR OPTIONS WHICH
IT WOULD NOT HAVE EXPERIENCED IF IT HAD NOT HEDGED. CORRELATION IS ALSO
IMPERFECT BETWEEN MOVEMENTS IN THE PRICES OF FUTURES CONTRACTS AND MOVEMENTS IN
PRICES OF THE SECURITIES WHICH ARE THE SUBJECT OF THE HEDGE. THUS THE PRICE OF
THE FUTURES CONTRACT OR OPTION MAY MOVE MORE THAN OR LESS THAN THE PRICE OF THE
SECURITIES BEING HEDGED. WHERE THE FUND HAS SOLD FUTURES OR TAKEN OPTIONS
POSITIONS TO HEDGE AGAINST DECLINE IN THE MARKET, THE MARKET MAY ADVANCE AND THE
VALUE OF THE SECURITIES HELD IN THE FUND MAY DECLINE. IF THIS WERE TO OCCUR, THE
FUND MIGHT LOSE MONEY ON THE FUTURES CONTRACTS OR OPTIONS AND ALSO EXPERIENCE A
DECLINE IN THE VALUE OF ITS SECURITIES.
THE FUND CAN CLOSE OUT FUTURES POSITIONS ONLY ON AN EXCHANGE OR BOARD OF
TRADE WHICH PROVIDES A SECONDARY MARKET IN SUCH FUTURES. ALTHOUGH THE FUND
INTEND TO PURCHASE OR SELL ONLY SUCH FUTURES FOR WHICH AN ACTIVE SECONDARY
MARKET APPEARS TO EXIST, THERE CAN BE NO ASSURANCE THAT SUCH A MARKET WILL EXIST
FOR ANY PARTICULAR FUTURES CONTRACT AT ANY PARTICULAR TIME. THIS MIGHT PREVENT
THE FUND FROM CLOSING A FUTURES POSITION, WHICH COULD REQUIRE THE FUND TO MAKE
DAILY CASH PAYMENTS WITH RESPECT TO ITS POSITION IN THE EVENT OF ADVERSE PRICE
MOVEMENTS.
OPTIONS ON FUTURES TRANSACTIONS BEAR SEVERAL RISKS APART FROM THOSE
INHERENT IN OPTIONS TRANSACTIONS GENERALLY. THE FUND'S ABILITY TO CLOSE OUT ITS
OPTIONS POSITIONS IN FUTURES CONTRACTS WILL DEPEND UPON WHETHER AN ACTIVE
SECONDARY MARKET FOR SUCH OPTIONS DEVELOPS AND IS IN EXISTENCE AT THE TIME THE
FUND SEEK TO CLOSE ITS POSITIONS. THERE CAN BE NO ASSURANCE THAT SUCH A MARKET
WILL DEVELOP OR EXIST. THEREFORE, THE FUND MIGHT BE REQUIRED TO EXERCISE THE
OPTIONS TO REALIZE ANY PROFIT.
FOREIGN CURRENCY TRANSACTIONS. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACT INVOLVES AN OBLIGATION TO PURCHASE OR
SELL A SPECIFIC CURRENCY AT A FUTURE DATE, WHICH MAY BE ANY FIXED NUMBER OF DAYS
("TERM") FROM THE DATE OF THE CONTRACT AGREED UPON BY THE PARTIES, AT A PRICE
SET AT THE TIME OF THE CONTRACT. THESE CONTRACTS ARE TRADED DIRECTLY BETWEEN
CURRENCY TRADERS (USUALLY LARGE COMMERCIAL BANKS) AND THEIR CUSTOMERS.
THE FUND WILL NOT ENTER INTO SUCH FORWARD CONTRACTS OR MAINTAIN A NET
EXPOSURE IN SUCH CONTRACTS WHERE IT WOULD BE OBLIGATED TO DELIVER AN AMOUNT OF
FOREIGN CURRENCY IN EXCESS OF THE VALUE OF ITS PORTFOLIO SECURITIES AND OTHER
ASSETS DENOMINATED IN THAT CURRENCY. THE SUBADVISOR BELIEVES THAT IT IS
IMPORTANT TO HAVE THE FLEXIBILITY TO ENTER INTO SUCH FORWARD CONTRACTS WHEN IT
DETERMINES THAT TO DO SO IS IN THE FUND'S BEST INTERESTS.
FOREIGN CURRENCY OPTIONS. A FOREIGN CURRENCY OPTION PROVIDES THE OPTION
BUYER WITH THE RIGHT TO BUY OR SELL A STATED AMOUNT OF FOREIGN CURRENCY AT THE
EXERCISE PRICE AT A SPECIFIED DATE OR DURING THE OPTION PERIOD. A CALL OPTION
GIVES ITS OWNER THE RIGHT, BUT NOT THE OBLIGATION, TO BUY THE CURRENCY, WHILE A
PUT OPTION GIVES ITS OWNER THE RIGHT, BUT NOT THE OBLIGATION, TO SELL THE
CURRENCY. THE OPTION SELLER (WRITER) IS OBLIGATED TO FULFILL THE TERMS OF THE
OPTION SOLD IF IT IS EXERCISED. HOWEVER, EITHER SELLER OR BUYER MAY CLOSE ITS
POSITION DURING THE OPTION PERIOD FOR SUCH OPTIONS ANY TIME PRIOR TO EXPIRATION.
A CALL RISES IN VALUE IF THE UNDERLYING CURRENCY APPRECIATES. CONVERSELY, A
PUT RISES IN VALUE IF THE UNDERLYING CURRENCY DEPRECIATES. WHILE PURCHASING A
FOREIGN CURRENCY OPTION CAN PROTECT THE FUND AGAINST AN ADVERSE MOVEMENT IN THE
VALUE OF A FOREIGN CURRENCY, IT DOES NOT LIMIT THE GAIN WHICH MIGHT RESULT FROM
A FAVORABLE MOVEMENT IN THE VALUE OF SUCH CURRENCY. FOR EXAMPLE, IF THE FUND WAS
HOLDING SECURITIES DENOMINATED IN AN APPRECIATING FOREIGN CURRENCY AND HAD
PURCHASED A FOREIGN CURRENCY PUT TO HEDGE AGAINST A DECLINE IN THE VALUE OF THE
CURRENCY, IT WOULD NOT HAVE TO EXERCISE ITS PUT. SIMILARLY, IF THE FUND HAD
ENTERED INTO A CONTRACT TO PURCHASE A SECURITY DENOMINATED IN A FOREIGN CURRENCY
AND HAD PURCHASED A FOREIGN CURRENCY CALL TO HEDGE AGAINST A RISE IN THE VALUE
OF THE CURRENCY BUT INSTEAD THE CURRENCY HAD DEPRECIATED IN VALUE BETWEEN THE
DATE OF PURCHASE AND THE SETTLEMENT DATE, IT WOULD NOT HAVE TO EXERCISE ITS CALL
BUT COULD ACQUIRE IN THE SPOT MARKET THE AMOUNT OF FOREIGN CURRENCY NEEDED FOR
SETTLEMENT.
FOREIGN CURRENCY FUTURES TRANSACTIONS. THE FUND MAY USE FOREIGN CURRENCY
FUTURES CONTRACTS AND OPTIONS ON SUCH FUTURES CONTRACTS. THROUGH THE PURCHASE OR
SALE OF SUCH CONTRACTS, IT MAY BE ABLE TO ACHIEVE MANY OF THE SAME OBJECTIVES
ATTAINABLE THROUGH THE USE OF FOREIGN CURRENCY FORWARD CONTRACTS, BUT MORE
EFFECTIVELY AND POSSIBLY AT A LOWER COST.
UNLIKE FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS, FOREIGN CURRENCY
FUTURES CONTRACTS AND OPTIONS ON FOREIGN CURRENCY FUTURES CONTRACTS ARE
STANDARDIZED AS TO AMOUNT AND DELIVERY PERIOD AND ARE TRADED ON BOARDS OF TRADE
AND COMMODITIES EXCHANGES. IT IS ANTICIPATED THAT SUCH CONTRACTS MAY PROVIDE
GREATER LIQUIDITY AND LOWER COST THAN FORWARD FOREIGN CURRENCY EXCHANGE
CONTRACTS.
THE VALUE OF THE FUND'S ASSETS AS MEASURED IN UNITED STATES DOLLARS MAY BE
AFFECTED FAVORABLY OR UNFAVORABLY BY CHANGES IN FOREIGN CURRENCY EXCHANGE RATES
AND EXCHANGE CONTROL REGULATIONS, AND THE FUND MAY INCUR COSTS IN CONNECTION
WITH CONVERSIONS BETWEEN VARIOUS CURRENCIES. THE FUND WILL CONDUCT ITS FOREIGN
CURRENCY EXCHANGE TRANSACTIONS EITHER ON A SPOT (I.E., CASH) BASIS AT THE SPOT
RATE PREVAILING IN THE FOREIGN CURRENCY EXCHANGE MARKET, OR THROUGH FORWARD
CONTRACTS TO PURCHASE OR SELL FOREIGN CURRENCIES. A FORWARD FOREIGN CURRENCY
EXCHANGE CONTRACT INVOLVES AN OBLIGATION TO PURCHASE OR SELL A SPECIFIC CURRENCY
AT A FUTURE DATE, WHICH MAY BE ANY FIXED NUMBER OF DAYS FROM THE DATE OF THE
CONTRACT AGREED UPON BY THE PARTIES, AT A PRICE SET AT THE TIME OF THE CONTRACT.
THESE CONTRACTS ARE TRADED DIRECTLY BETWEEN CURRENCY TRADERS (USUALLY LARGE
COMMERCIAL BANKS) AND THEIR CUSTOMERS.
WHEN THE FUND ENTERS INTO A CONTRACT FOR THE PURCHASE OR SALE OF A SECURITY
DENOMINATED IN A FOREIGN CURRENCY, IT MAY WANT TO ESTABLISH THE UNITED STATES
DOLLAR COST OR PROCEEDS, AS THE CASE MAY BE. BY ENTERING INTO A FORWARD CONTRACT
IN UNITED STATES DOLLARS FOR THE PURCHASE OR SALE OF THE AMOUNT OF FOREIGN
CURRENCY INVOLVED IN THE UNDERLYING SECURITY TRANSACTION, THE FUND IS ABLE TO
PROTECT ITSELF AGAINST A POSSIBLE LOSS BETWEEN TRADE AND SETTLEMENT DATES
RESULTING FROM AN ADVERSE CHANGE IN THE RELATIONSHIP BETWEEN THE UNITED STATES
DOLLAR AND SUCH FOREIGN CURRENCY. HOWEVER, THIS TENDS TO LIMIT POTENTIAL GAINS
WHICH MIGHT RESULT FROM A POSITIVE CHANGE IN SUCH CURRENCY RELATIONSHIPS. THE
FUND MAY ALSO HEDGE ITS FOREIGN CURRENCY EXCHANGE RATE RISK BY ENGAGING IN
CURRENCY FINANCIAL FUTURES AND OPTIONS TRANSACTIONS.
WHEN THE ADVISOR OR THE SUBADVISOR BELIEVES THAT THE CURRENCY OF A
PARTICULAR FOREIGN COUNTRY MAY SUFFER A SUBSTANTIAL DECLINE AGAINST THE UNITED
STATES DOLLAR, IT MAY ENTER INTO A FORWARD CONTRACT TO SELL AN AMOUNT OF FOREIGN
CURRENCY APPROXIMATING THE VALUE OF SOME OR ALL OF THE FUND'S PORTFOLIO
SECURITIES DENOMINATED IN SUCH FOREIGN CURRENCY. THE FORECASTING OF SHORT-TERM
CURRENCY MARKET MOVEMENT IS EXTREMELY DIFFICULT AND WHETHER SUCH A SHORT-TERM
HEDGING STRATEGY WILL BE SUCCESSFUL IS HIGHLY UNCERTAIN.
IT IS IMPOSSIBLE TO FORECAST WITH PRECISION THE MARKET VALUES OF PORTFOLIO
SECURITIES AT THE EXPIRATION OF A CONTRACT. ACCORDINGLY, IT MAY BE NECESSARY FOR
THE FUND TO PURCHASE ADDITIONAL CURRENCY ON THE SPOT MARKET (AND BEAR THE
EXPENSE OF SUCH PURCHASE) IF THE MARKET VALUE OF THE SECURITY IS LESS THAN THE
AMOUNT OF FOREIGN CURRENCY THE FUND IS OBLIGATED TO DELIVER WHEN A DECISION IS
MADE TO SELL THE SECURITY AND MAKE DELIVERY OF THE FOREIGN CURRENCY IN
SETTLEMENT OF A FORWARD CONTRACT. CONVERSELY, IT MAY BE NECESSARY TO SELL ON THE
SPOT MARKET SOME OF THE FOREIGN CURRENCY RECEIVED UPON THE SALE OF THE PORTFOLIO
SECURITY IF ITS MARKET VALUE EXCEEDS THE AMOUNT OF FOREIGN CURRENCY THE FUND IS
OBLIGATED TO DELIVER.
IF THE FUND RETAINS THE SECURITY AND ENGAGES IN AN OFFSETTING TRANSACTION,
IT WILL INCUR A GAIN OR A LOSS (AS DESCRIBED BELOW) TO THE EXTENT THAT THERE HAS
BEEN MOVEMENT IN FORWARD CONTRACT PRICES. IF THE FUND ENGAGES IN AN OFFSETTING
TRANSACTION, IT MAY SUBSEQUENTLY ENTER INTO A NEW FORWARD CONTRACT TO SELL THE
FOREIGN CURRENCY. SHOULD FORWARD PRICES DECLINE DURING THE PERIOD BETWEEN THE
FUND ENTERING INTO A FORWARD CONTRACT FOR THE SALE OF A FOREIGN CURRENCY AND THE
DATE IT ENTERS INTO AN OFFSETTING CONTRACT FOR THE PURCHASE OF THE FOREIGN
CURRENCY, IT WOULD REALIZE GAINS TO THE EXTENT THE PRICE OF THE CURRENCY IT HAS
AGREED TO SELL EXCEEDS THE PRICE OF THE CURRENCY IT HAS AGREED TO PURCHASE.
SHOULD FORWARD PRICES INCREASE, THE FUND WOULD SUFFER A LOSS TO THE EXTENT THE
PRICE OF THE CURRENCY IT HAS AGREED TO PURCHASE EXCEEDS THE PRICE OF THE
CURRENCY IT HAS AGREED TO SELL. ALTHOUGH SUCH CONTRACTS TEND TO MINIMIZE THE
RISK OF LOSS DUE TO A DECLINE IN THE VALUE OF THE HEDGED CURRENCY, THEY ALSO
TEND TO LIMIT ANY POTENTIAL GAIN WHICH MIGHT RESULT SHOULD THE VALUE OF SUCH
CURRENCY INCREASE. THE FUND MAY HAVE TO CONVERT ITS HOLDINGS OF FOREIGN
CURRENCIES INTO UNITED STATES DOLLARS FROM TIME TO TIME. ALTHOUGH FOREIGN
EXCHANGE DEALERS DO NOT CHARGE A FEE FOR CONVERSION, THEY DO REALIZE A PROFIT
BASED ON THE DIFFERENCE (THE "SPREAD") BETWEEN THE PRICES AT WHICH THEY ARE
BUYING AND SELLING VARIOUS CURRENCIES.
LENDING FUND SECURITIES
THE FUND MAY LEND ITS SECURITIES TO MEMBER FIRMS OF THE NEW YORK STOCK
EXCHANGE AND COMMERCIAL BANKS WITH ASSETS OF ONE BILLION DOLLARS OR MORE,
PROVIDED THE VALUE OF THE SECURITIES LOANED WILL NOT EXCEED 33 1/3% OF ASSETS.
ANY SUCH LOANS MUST BE SECURED CONTINUOUSLY IN THE FORM OF CASH OR CASH
EQUIVALENTS SUCH AS US TREASURY BILLS. THE AMOUNT OF THE COLLATERAL MUST ON A
CURRENT BASIS EQUAL OR EXCEED THE MARKET VALUE OF THE LOANED SECURITIES, AND THE
FUND MUST BE ABLE TO TERMINATE SUCH LOANS UPON NOTICE AT ANY TIME. THE FUND WILL
EXERCISE ITS RIGHT TO TERMINATE A SECURITIES LOAN IN ORDER TO PRESERVE ITS RIGHT
TO VOTE UPON MATTERS OF IMPORTANCE AFFECTING HOLDERS OF THE SECURITIES.
THE ADVANTAGE OF SUCH LOANS IS THAT THE FUND CONTINUES TO RECEIVE THE EQUIVALENT
OF THE INTEREST EARNED OR DIVIDENDS PAID BY THE ISSUERS ON THE LOANED SECURITIES
WHILE AT THE SAME TIME EARNING INTEREST ON THE CASH OR EQUIVALENT COLLATERAL
WHICH MAY BE INVESTED IN ACCORDANCE WITH THE FUND'S INVESTMENT OBJECTIVE,
POLICIES AND RESTRICTIONS.
SECURITIES LOANS ARE USUALLY MADE TO BROKER-DEALERS AND OTHER FINANCIAL
INSTITUTIONS TO FACILITATE THEIR DELIVERY OF SUCH SECURITIES. AS WITH ANY
EXTENSION OF CREDIT, THERE MAY BE RISKS OF DELAY IN RECOVERY AND POSSIBLY LOSS
OF RIGHTS IN THE LOANED SECURITIES SHOULD THE BORROWER OF THE LOANED SECURITIES
FAIL FINANCIALLY. HOWEVER, THE FUND WILL MAKE LOANS OF ITS SECURITIES ONLY TO
THOSE FIRMS THE ADVISOR OR SUBADVISOR DEEMS CREDITWORTHY AND ONLY ON TERMS THE
ADVISOR BELIEVES SHOULD COMPENSATE FOR SUCH RISK. ON TERMINATION OF THE LOAN,
THE BORROWER IS OBLIGATED TO RETURN THE SECURITIES TO THE FUND. THE FUND WILL
RECOGNIZE ANY GAIN OR LOSS IN THE MARKET VALUE OF THE SECURITIES DURING THE LOAN
PERIOD. THE FUND MAY PAY REASONABLE CUSTODIAL FEES IN CONNECTION WITH THE LOAN.
INVESTMENT RESTRICTIONS
-----------------------
FUNDAMENTAL INVESTMENT RESTRICTIONS
THE FUND 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 FUND.
(1) THE FUND MAY NOT MAKE ANY INVESTMENT INCONSISTENT WITH ITS CLASSIFICATION AS
A DIVERSIFIED INVESTMENT COMPANY UNDER THE 1940 ACT.
(2) THE FUND MAY NOT CONCENTRATE ITS INVESTMENTS IN THE SECURITIES OF ISSUERS
PRIMARILY ENGAGED IN ANY PARTICULAR INDUSTRY (OTHER THAN SECURITIES ISSUED OR
GUARANTEED BY THE U.S. GOVERNMENT OR ITS AGENCIES OR INSTRUMENTALITIES AND
REPURCHASE AGREEMENTS SECURED THEREBY).
(3) THE FUND MAY NOT ISSUE SENIOR SECURITIES OR BORROW MONEY, EXCEPT FROM BANKS
FOR TEMPORARY OR EMERGENCY PURPOSES AND THEN ONLY IN AN AMOUNT UP TO 33 1/3% OF
THE VALUE OF ITS TOTAL ASSETS OR AS PERMITTED BY LAW AND EXCEPT BY ENGAGING IN
REVERSE REPURCHASE AGREEMENTS, WHERE ALLOWED. IN ORDER TO SECURE ANY PERMITTED
BORROWINGS AND REVERSE REPURCHASE AGREEMENTS UNDER THIS SECTION, THE FUND MAY
PLEDGE, MORTGAGE OR HYPOTHECATE ITS ASSETS.
(4) THE FUND MAY NOT UNDERWRITE THE SECURITIES OF OTHER ISSUERS, EXCEPT AS
ALLOWED BY LAW OR TO THE EXTENT THAT THE PURCHASE OF OBLIGATIONS IN ACCORDANCE
WITH ITS INVESTMENT OBJECTIVE AND POLICIES, EITHER DIRECTLY FROM THE ISSUER, OR
FROM AN UNDERWRITER FOR AN ISSUER, MAY BE DEEMED AN UNDERWRITING.
(5) THE FUND MAY NOT INVEST DIRECTLY IN COMMODITIES OR REAL ESTATE, ALTHOUGH IT
MAY INVEST IN SECURITIES WHICH ARE SECURED BY REAL ESTATE OR REAL ESTATE
MORTGAGES AND SECURITIES OF ISSUERS WHICH INVEST OR DEAL IN COMMODITIES,
COMMODITY FUTURES, REAL ESTATE OR REAL ESTATE MORTGAGES.
(6) THE FUND MAY NOT MAKE LOANS, OTHER THAN THROUGH THE PURCHASE OF MONEY MARKET
INSTRUMENTS AND REPURCHASE AGREEMENTS OR BY THE PURCHASE OF BONDS, DEBENTURES OR
OTHER DEBT SECURITIES, OR AS PERMITTED BY LAW. THE PURCHASE OF ALL OR A PORTION
OF AN ISSUE OF PUBLICLY OR PRIVATELY DISTRIBUTED DEBT OBLIGATIONS IN ACCORDANCE
WITH THE FUND'S INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS, SHALL NOT
CONSTITUTE THE MAKING OF A LOAN.
NONFUNDAMENTAL INVESTMENT RESTRICTIONS
THE BOARD OF 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) THE FUND MAY NOT ENTER INTO REVERSE REPURCHASE AGREEMENTS IF THE AGGREGATE
PROCEEDS FROM OUTSTANDING REVERSE REPURCHASE AGREEMENTS, WHEN ADDED TO OTHER
OUTSTANDING BORROWINGS PERMITTED BY THE 1940 ACT, WOULD EXCEED 33 1/3% OF THE
FUND'S TOTAL ASSETS. THE FUND DOES NOT INTEND TO MAKE ANY PURCHASES OF
SECURITIES IF BORROWING EXCEEDS 5% OF TOTAL ASSETS.
(2) THE FUND MAY NOT INVEST, IN THE AGGREGATE, MORE THAN 15% OF ITS NET ASSETS
IN ILLIQUID SECURITIES. THE FUND MAY BUY AND SELL SECURITIES OUTSIDE THE U.S.
THAT ARE NOT REGISTERED WITH THE SEC OR MARKETABLE IN THE US.
(3) THE FUND MAY NOT INVEST IN SECURITIES OF U.S. ISSUERS IF MORE THAN 5% OF THE
VALUE OF FUND'S NET ASSETS WOULD BE INVESTED IN SUCH SECURITIES, EXCLUDING
SPECIAL EQUITIES AND HIGH SOCIAL IMPACT INVESTMENTS.
(4) THE FUND MAY NOT MAKE SHORT SALES OF SECURITIES OR PURCHASE ANY SECURITIES
ON MARGIN EXCEPT AS PROVIDED WITH RESPECT TO OPTIONS, FUTURES CONTRACTS AND
OPTIONS ON FUTURE CONTRACTS.
(5) THE FUND MAY NOT ENTER INTO A FUTURES CONTRACT OR AN OPTION ON A FUTURES
CONTRACT IF THE AGGREGATE INITIAL MARGINS AND PREMIUMS REQUIRED TO ESTABLISH
THESE POSITIONS WOULD EXCEED 5% OF THE FUND'S NET ASSETS.
(6) THE FUND MAY NOT PURCHASE A PUT OR CALL OPTION ON A SECURITY (INCLUDING A
STRADDLE OR SPREAD) IF THE VALUE OF THAT OPTION PREMIUM, WHEN AGGREGATED WITH
THE PREMIUMS ON ALL OTHER OPTIONS ON SECURITIES HELD BY THE FUND, WOULD EXCEED
5% OF THE FUND'S TOTAL ASSETS.
(7) THE FUND MAY NOT WRITE, PURCHASE OR SELL PUTS, CALLS OR COMBINATIONS THEREOF
EXCEPT THAT THE FUND MAY (A) WRITE EXCHANGE-TRADED COVERED CALL OPTIONS ON
PORTFOLIO SECURITIES AND ENTER INTO CLOSING PURCHASE TRANSACTIONS WITH RESPECT
TO SUCH OPTIONS, AND THE FUND MAY WRITE EXCHANGE-TRADED COVERED CALL OPTIONS ON
FOREIGN CURRENCIES AND SECURED PUT OPTIONS ON SECURITIES AND FOREIGN CURRENCIES
AND WRITE COVERED CALL AND SECURED PUT OPTIONS ON SECURITIES AND FOREIGN
CURRENCIES TRADED OVER THE COUNTER, AND ENTER INTO CLOSING PURCHASE TRANSACTIONS
WITH RESPECT TO SUCH OPTIONS, AND (B) PURCHASE EXCHANGE-TRADED CALL OPTIONS AND
PUT OPTIONS AND PURCHASE CALL AND PUT OPTIONS TRADED OVER THE COUNTER, PROVIDED
THAT THE PREMIUMS ON ALL OUTSTANDING CALL AND PUT OPTIONS DO NOT EXCEED 5% OF
ITS TOTAL ASSETS, AND ENTER INTO CLOSING SALE TRANSACTION WITH RESPECT TO SUCH
OPTIONS.
(8) THE FUND MAY, UNDER NORMAL CIRCUMSTANCES, FROM TIME TO TIME, HAVE MORE THAN
25% OF ITS ASSETS INVESTED IN ANY MAJOR INDUSTRIAL OR DEVELOPED COUNTRY WHICH IN
THE VIEW OF THE SUBADVISOR POSES NO UNIQUE INVESTMENT RISK. THE SUBADVISOR
CONSIDERS AN INVESTMENT IN A GIVEN FOREIGN COUNTRY TO HAVE "NO UNIQUE INVESTMENT
RISK" IF THE FUND'S INVESTMENT IN THAT COUNTRY IS NOT DISPROPORTIONATE TO THE
RELATIVE SIZE OF THE COUNTRY'S MARKET VERSUS THE MORGAN STANLEY CAPITAL
INTERNATIONAL EUROPE-FAR EAST-ASIA (EFEA) OR WORLD INDEX OR OTHER COMPARABLE
INDEX, AND IF THE CAPITAL MARKETS IN THAT COUNTRY ARE MATURE, AND OF SUFFICIENT
LIQUIDITY AND DEPTH.
(9) THE FUND WILL INVEST AT LEAST 65% OF ITS ASSETS IN THE SECURITIES OF ISSUERS
IN NO LESS THAN THREE COUNTRIES, EXCLUDING THE US, UNDER NORMAL CIRCUMSTANCES.
(10) THE FUND MAY INVEST UP TO 30% OF ITS NET ASSETS IN DEVELOPING COUNTRIES,
WHICH INVOLVE EXPOSURE TO ECONOMIC STRUCTURES THAT ARE GENERALLY LESS DIVERSE
AND MATURE THAN IN THE UNITED STATES, AND TO POLITICAL SYSTEMS WHICH MAY BE LESS
STABLE. A COUNTRY IS CONSIDERED A DEVELOPING COUNTRY IF IT IS NOT INCLUDED IN
THE MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX.
ANY INVESTMENT RESTRICTION WHICH INVOLVES A MAXIMUM PERCENTAGE OF
SECURITIES OR ASSETS SHALL NOT BE CONSIDERED TO BE VIOLATED UNLESS AN EXCESS
OVER THE APPLICABLE PERCENTAGE OCCURS IMMEDIATELY AFTER AN ACQUISITION OF
SECURITIES OR UTILIZATION OF ASSETS AND RESULTS THEREFROM.
INVESTMENT SELECTION PROCESS
----------------------------
INVESTMENTS IN THE FUND ARE SELECTED ON THE BASIS OF THEIR ABILITY TO
CONTRIBUTE TO THE DUAL OBJECTIVE OF THE FUND. THE SUBADVISOR USES ITS BEST
EFFORTS TO SELECT INVESTMENTS FOR THE FUND THAT SATISFY THE FUND'S INVESTMENT
AND SOCIAL CRITERIA TO THE GREATEST PRACTICAL EXTENT. THE SUBADVISOR HAS
DEVELOPED A NUMBER OF TECHNIQUES FOR EVALUATING THE PERFORMANCE OF ISSUERS IN
EACH OF THESE AREAS. THE PRIMARY SOURCES OF INFORMATION ARE REPORTS PUBLISHED BY
THE ISSUERS THEMSELVES, THE REPORTS OF PUBLIC AGENCIES, AND THE REPORTS OF
GROUPS WHICH MONITOR PERFORMANCE IN PARTICULAR AREAS. THESE SOURCES OF
INFORMATION ARE SOMETIMES AUGMENTED WITH DIRECT INTERVIEWS OR WRITTEN
QUESTIONNAIRES ADDRESSED TO THE ISSUERS. IT SHOULD BE RECOGNIZED, HOWEVER, THAT
THERE ARE FEW GENERALLY ACCEPTED MEASURES BY WHICH ACHIEVEMENT IN THESE AREAS
CAN BE READILY DISTINGUISHED; THEREFORE, THE DEVELOPMENT OF SUITABLE MEASUREMENT
TECHNIQUES IS LARGELY WITHIN THE DISCRETION AND JUDGMENT OF THE ADVISORS OF THE
FUND.
CANDIDATES FOR INCLUSION IN ANY PARTICULAR CLASS OF ASSETS ARE THEN
EXAMINED ACCORDING TO THE SOCIAL CRITERIA. THE SUBADVISOR CLASSIFIES THE ISSUERS
INTO THREE CATEGORIES OF SUITABILITY UNDER THE SOCIAL CRITERIA. IN THE FIRST
CATEGORY ARE THOSE ISSUERS WHICH EXHIBIT UNUSUAL POSITIVE ACCOMPLISHMENT WITH
RESPECT TO SOME OF THE CRITERIA AND DO NOT FAIL TO MEET MINIMUM STANDARDS WITH
RESPECT TO THE REMAINING CRITERIA. TO THE GREATEST EXTENT POSSIBLE, INVESTMENT
SELECTIONS ARE MADE FROM THIS GROUP. IN THE SECOND CATEGORY ARE THOSE ISSUERS
WHICH MEET MINIMUM STANDARDS WITH RESPECT TO ALL THE CRITERIA BUT DO NOT EXHIBIT
OUTSTANDING ACCOMPLISHMENT WITH RESPECT TO ANY CRITERION. THIS CATEGORY INCLUDES
ISSUERS WHICH MAY LACK AN AFFIRMATIVE RECORD OF ACCOMPLISHMENT IN THESE AREAS
BUT WHICH ARE NOT KNOWN BY THE SUBADVISOR TO VIOLATE ANY OF THE SOCIAL CRITERIA.
THE THIRD CATEGORY UNDER THE SOCIAL CRITERIA CONSISTS OF ISSUERS WHICH
FLAGRANTLY VIOLATE, OR HAVE VIOLATED, ONE OR MORE OF THOSE VALUES, FOR EXAMPLE,
A COMPANY WHICH REPEATEDLY ENGAGES IN UNFAIR LABOR PRACTICES. THE FUND WILL NOT
KNOWINGLY PURCHASE THE SECURITIES OF ISSUERS IN THIS THIRD CATEGORY.
IT SHOULD BE NOTED THAT THE FUND'S SOCIAL CRITERIA TEND TO LIMIT THE
AVAILABILITY OF INVESTMENT OPPORTUNITIES MORE THAN IS CUSTOMARY WITH OTHER
INVESTMENT COMPANIES. THE ADVISORS OF THE FUND, HOWEVER, BELIEVE THAT WITHIN THE
FIRST AND SECOND CATEGORIES THERE ARE SUFFICIENT INVESTMENT OPPORTUNITIES TO
PERMIT FULL INVESTMENT AMONG ISSUERS WHICH SATISFY THE FUND'S SOCIAL INVESTMENT
OBJECTIVE.
DIVIDENDS, DISTRIBUTIONS, AND TAXES
-----------------------------------
THE FUND INTENDS TO QUALIFY AS REGULATED INVESTMENT COMPANIES UNDER
SUBCHAPTER M OF THE INTERNAL REVENUE CODE. IF FOR ANY REASON THE FUND SHOULD
FAIL TO QUALIFY, IT WOULD BE TAXED AS A CORPORATION AT THE FUND LEVEL, RATHER
THAN PASSING THROUGH ITS INCOME AND GAINS TO SHAREHOLDERS.
DISTRIBUTIONS OF REALIZED NET CAPITAL GAINS, IF ANY, ARE NORMALLY PAID ONCE
A YEAR; HOWEVER, THE FUND DOES NOT INTEND TO MAKE ANY SUCH DISTRIBUTIONS UNLESS
AVAILABLE CAPITAL LOSS CARRYOVERS, IF ANY, HAVE BEEN USED OR HAVE EXPIRED. AS OF
SEPTEMBER 30, 1999, THE FUND HAD TAX-LOSS CARRYFORWARDS OF $0.
GENERALLY, DIVIDENDS (INCLUDING SHORT-TERM CAPITAL GAINS) AND DISTRIBUTIONS
ARE TAXABLE TO THE SHAREHOLDER 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.
THE FUND IS REQUIRED TO WITHHOLD 31% OF ANY REPORTABLE DIVIDENDS AND
LONG-TERM CAPITAL GAIN DISTRIBUTIONS PAID AND 31% REPORTABLE OF EACH REDEMPTION
TRANSACTION IF: (A) THE SHAREHOLDER'S SOCIAL SECURITY NUMBER OR OTHER TAXPAYER
IDENTIFICATION NUMBER ("TIN") IS NOT PROVIDED OR AN OBVIOUSLY INCORRECT TIN IS
PROVIDED; (B) THE SHAREHOLDER DOES NOT CERTIFY UNDER PENALTIES OF PERJURY THAT
THE TIN PROVIDED IS THE SHAREHOLDER'S CORRECT TIN AND THAT THE SHAREHOLDER IS
NOT SUBJECT TO BACKUP WITHHOLDING UNDER SECTION 3406(A)(1)(C) OF THE INTERNAL
REVENUE 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 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 FUND IS REQUIRED TO REPORT TO THE INTERNAL REVENUE SERVICE
THE FOLLOWING INFORMATION WITH RESPECT TO EACH REDEMPTION TRANSACTION OCCURRING
IN THE FUND:(A) THE SHAREHOLDER'S NAME, ADDRESS, ACCOUNT NUMBER AND TAXPAYER
IDENTIFICATION NUMBER; (B) THE TOTAL DOLLAR VALUE OF THE REDEMPTIONS; AND (C)
THE FUND'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; FOREIGN CENTRAL
BANKS OF ISSUE. NON-RESIDENT ALIENS, CERTAIN FOREIGN PARTNERSHIPS AND FOREIGN
CORPORATIONS ARE GENERALLY NOT SUBJECT TO EITHER REQUIREMENT BUT MAY INSTEAD BE
SUBJECT TO WITHHOLDING UNDER SECTIONS 1441 OR 1442 OF THE INTERNAL REVENUE CODE.
SHAREHOLDERS CLAIMING EXEMPTION FROM BACKUP WITHHOLDING AND BROKER REPORTING
SHOULD CALL OR WRITE THE FUND FOR FURTHER INFORMATION.
MANY STATES DO NOT TAX THE PORTION OF THE FUND'S DIVIDENDS WHICH IS DERIVED
FROM INTEREST ON U.S. GOVERNMENT OBLIGATIONS. STATE LAW VARIES CONSIDERABLY
CONCERNING THE TAX STATUS OF DIVIDENDS DERIVED FROM U.S. GOVERNMENT OBLIGATIONS.
ACCORDINGLY, SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS ABOUT THE TAX STATUS
OF DIVIDENDS AND DISTRIBUTIONS FROM THE FUND IN THEIR RESPECTIVE JURISDICTIONS.
DIVIDENDS PAID BY THE FUND MAY BE ELIGIBLE FOR THE DIVIDENDS RECEIVED
DEDUCTION AVAILABLE TO CORPORATE TAXPAYERS. CORPORATE TAXPAYERS REQUIRING THIS
INFORMATION MAY CONTACT CALVERT.
NET ASSET VALUE
---------------
THE PUBLIC OFFERING PRICE OF THE SHARES OF THE FUND IS THE RESPECTIVE NET
ASSET VALUE PER SHARE (PLUS, FOR CLASS A SHARES, THE APPLICABLE SALES CHARGE).
THE NET ASSET VALUES FLUCTUATES BASED ON THE RESPECTIVE MARKET VALUE OF THE
FUND'S INVESTMENTS. THE NET ASSET VALUE PER SHARE FOR EACH CLASS IS DETERMINED
EVERY BUSINESS DAY AS OF THE CLOSE OF THE REGULAR SESSION OF THE NEW YORK STOCK
EXCHANGE (NORMALLY 4:00 P.M. EASTERN TIME) AND AT SUCH OTHER TIMES AS MAY BE
NECESSARY OR APPROPRIATE. THE FUND 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. THE
FUND'S NET ASSET VALUE PER SHARE IS DETERMINED BY DIVIDING TOTAL NET ASSETS (THE
VALUE OF ITS ASSETS NET OF LIABILITIES, INCLUDING ACCRUED EXPENSES AND FEES) BY
THE NUMBER OF SHARES OUTSTANDING FOR THAT CLASS.
THE ASSETS OF THE FUND ARE VALUED AS FOLLOWS: (A) SECURITIES FOR WHICH
MARKET QUOTATIONS ARE READILY AVAILABLE ARE VALUED AT THE MOST RECENT CLOSING
PRICE, MEAN BETWEEN BID AND ASKED PRICE, OR YIELD EQUIVALENT AS OBTAINED FROM
ONE OR MORE MARKET MAKERS FOR SUCH SECURITIES; (B) SECURITIES MATURING WITHIN 60
DAYS MAY BE VALUED AT COST, PLUS OR MINUS ANY AMORTIZED DISCOUNT OR PREMIUM,
UNLESS THE BOARD OF DIRECTORS DETERMINES SUCH METHOD NOT TO BE APPROPRIATE UNDER
THE CIRCUMSTANCES; AND (C) ALL OTHER SECURITIES AND ASSETS FOR WHICH MARKET
QUOTATIONS ARE NOT READILY AVAILABLE WILL BE FAIRLY VALUED BY THE ADVISOR IN
GOOD FAITH UNDER THE SUPERVISION OF THE BOARD OF DIRECTORS. SECURITIES PRIMARILY
TRADED ON FOREIGN SECURITIES EXCHANGES ARE GENERALLY VALUED AT THE PRECEDING
CLOSING VALUES ON THEIR RESPECTIVE EXCHANGES WHERE PRIMARILY TRADED. BECAUSE OF
THE NEED TO OBTAIN PRICES AS OF THE CLOSE OF TRADING ON VARIOUS EXCHANGES
THROUGHOUT THE WORLD, THE CALCULATION OF THE FUND'S NET ASSET VALUE DOES NOT
TAKE PLACE FOR CONTEMPORANEOUSLY WITH THE DETERMINATION OF THE PRICES OF U.S.
PORTFOLIO SECURITIES. FOR PURPOSES OF DETERMINING THE NET ASSET VALUE ALL ASSETS
AND LIABILITIES INITIALLY EXPRESSED IN FOREIGN CURRENCY VALUES WILL BE CONVERTED
INTO UNITED STATES DOLLAR VALUES AT THE MEAN BETWEEN THE BID AND OFFERED
QUOTATIONS OF SUCH CURRENCIES AGAINST UNITED STATES DOLLARS AT LAST QUOTED BY
ANY RECOGNIZED DEALER. IF AN EVENT WERE TO OCCUR AFTER THE VALUE OF AN
INVESTMENT WAS SO ESTABLISHED BUT BEFORE THE NET ASSET VALUE PER SHARE WAS
DETERMINED WHICH WAS LIKELY TO MATERIALLY CHANGE THE NET ASSET VALUE, THEN THE
INSTRUMENT WOULD BE VALUED USING FAIR VALUE CONSIDERATION BY THE DIRECTORS OR
THEIR DELEGATES.
NET ASSET VALUE AND OFFERING PRICE PER SHARE, AS OF 9/30/99
NET ASSET VALUE PER SHARE
($231,515,662/10,576,382 SHARES) $21.89
MAXIMUM SALES CHARGE, CLASS A
(4.75% OF OFFERING PRICE) 1.09
OFFERING PRICE PER SHARE, CLASS A $22.98
CLASS B NET ASSET VALUE AND OFFERING PRICE PER SHARE
($3,132,665/145,280 SHARES) $21.56
CLASS C NET ASSET VALUE AND OFFERING PRICE PER SHARE
($9,776,785/469,761 SHARES) $20.81
CLASS I NET ASSET VALUE AND OFFERING PRICE PER SHARE
($3,005,629/136,661 SHARES) $21.99
CALCULATION OF TOTAL RETURN
---------------------------
THE FUND MAY ADVERTISE "TOTAL RETURN." TOTAL RETURN IS CALCULATED
SEPARATELY FOR EACH CLASS. TOTAL RETURN DIFFERS FROM YIELD IN THAT YIELD FIGURES
MEASURE ONLY THE INCOME COMPONENT OF THE FUND'S INVESTMENTS, WHILE TOTAL RETURN
INCLUDES NOT ONLY THE EFFECT OF INCOME DIVIDENDS BUT ALSO ANY CHANGE IN NET
ASSET VALUE, OR PRINCIPAL AMOUNT, DURING THE STATED PERIOD. TOTAL RETURN IS
COMPUTED BY TAKING THE TOTAL NUMBER OF SHARES PURCHASED BY A HYPOTHETICAL $1,000
INVESTMENT AFTER DEDUCTING ANY APPLICABLE SALES CHARGE, ADDING ALL ADDITIONAL
SHARES PURCHASED WITHIN THE PERIOD WITH REINVESTED DIVIDENDS AND DISTRIBUTIONS,
CALCULATING THE VALUE OF THOSE SHARES AT THE END OF THE PERIOD, AND DIVIDING THE
RESULT BY THE INITIAL $1,000 INVESTMENT. FOR PERIODS OF MORE THAN ONE YEAR, THE
CUMULATIVE TOTAL RETURN IS THEN ADJUSTED FOR THE NUMBER OF YEARS, TAKING
COMPOUNDING INTO ACCOUNT, TO CALCULATE AVERAGE ANNUAL TOTAL RETURN DURING THAT
PERIOD.
TOTAL RETURN IS COMPUTED ACCORDING TO THE FOLLOWING FORMULA:
P(1 + T)N = ERV
WHERE P = A HYPOTHETICAL INITIAL PAYMENT OF $1,000; T = TOTAL RETURN; N = NUMBER
OF YEARS; AND ERV = THE ENDING REDEEMABLE VALUE OF A HYPOTHETICAL $1,000 PAYMENT
MADE AT THE BEGINNING OF THE PERIOD.
TOTAL RETURN IS HISTORICAL IN NATURE AND IS NOT INTENDED TO INDICATE FUTURE
PERFORMANCE. ALL TOTAL RETURN QUOTATIONS REFLECT THE DEDUCTION OF THE MAXIMUM
SALES CHARGE, EXCEPT QUOTATIONS OF "RETURN WITHOUT MAXIMUM LOAD," OR "AT NAV"
(OR "WITHOUT CDSC") WHICH DO NOT DEDUCT SALES CHARGE. CLASS I SHARES DO NOT HAVE
A SALES CHARGE.
THE STANDARDIZED TOTAL RETURN FOR CLASS I SHARES IS "LINKED" TO THE CLASS A
TOTAL RETURN. THAT IS, CLASS I SHARES HAVE AN ACTUAL INCEPTION DATE OF 1999.
HOWEVER, CLASS A SHARES HAVE AN INCEPTION DATE OF SEVERAL YEARS EARLIER. IN THE
TABLE BELOW, PERFORMANCE RESULTS BEFORE THE CLASS I ACTUAL INCEPTION DATE ARE
FOR CLASS A AT NAV (I.E., THEY DO NOT REFLECT THE DEDUCTION OF THE CLASS A
FRONT-END SALES CHARGE.) BECAUSE CLASS A HAD HIGHER EXPENSES, ITS PERFORMANCE
WAS LOWER THAN THE CLASS I WOULD HAVE REALIZED IN THE SAME PERIOD.
NONSTANDARDIZED TOTAL RETURN FOR CLASS I SHARE MAY ALSO BE SHOWN FROM THE ACTUAL
CLASS I INCEPTION DATE; THIS FIGURE IS NOT LINKED TO CLASS A TOTAL RETURN.
TOTAL RETURNS FOR THE FUND'S SHARES FOR THE PERIODS INDICATED ARE AS
FOLLOWS:
PERIODS ENDED CLASS A CLASS B
SEPTEMBER 30, 1999 TOTAL RETURN TOTAL RETURN
WITH/WITHOUT MAXIMUM LOAD WITH/WITHOUT CDSC
INTERNATIONAL EQUITY
ONE YEAR 21.44% 27.53% 20.84% 25.84%
FIVE YEARS 8.56% 9.63% N/A N/A
FROM DATE OF INCEPTION 9.07% 9.81% 1.67% 4.29%
PERIODS ENDED CLASS C CLASS I
SEPTEMBER 30, 1999 TOTAL RETURN TOTAL RETURN
WITH/WITHOUT CDSC LINKED/ACTUAL
INTERNATIONAL EQUITY
ONE YEAR 25.18% 26.18% 28.11% N/A
FIVE YEARS 8.47% 8.47% 9.73% N/A
FROM DATE OF INCEPTION 7.14% 7.14% 9.89% 10.45%
(JULY 2, 1992, FOR CLASS A)
(APRIL 1, 1998, FOR CLASS B)
(MARCH 1, 1994, FOR CLASS C)
(MARCH 1, 1999, FOR ACTUAL CLASS I)
TOTAL RETURN, LIKE NET ASSET VALUE PER SHARE, FLUCTUATES IN RESPONSE TO
CHANGES IN MARKET CONDITIONS. IT SHOULD NOT BE CONSIDERED AN INDICATION OF
FUTURE RETURN.
PURCHASE AND REDEMPTION OF SHARES
---------------------------------
INVESTMENTS IN THE FUND MADE BY MAIL, BANK WIRE OR ELECTRONIC FUNDS
TRANSFER, OR THROUGH THE FUND'S BRANCH OFFICES, CALVERT DISTRIBUTORS, INC., OR
OTHER BROKERS PARTICIPATING IN THE DISTRIBUTION OF FUND SHARES, ARE CREDITED TO
A SHAREHOLDER'S ACCOUNT AT THE PUBLIC OFFERING PRICE WHICH IS THE NET ASSET
VALUE NEXT DETERMINED AFTER RECEIPT BY THE FUND, CALVERT DISTRIBUTORS, INC., OR
THE FUND'S CUSTODIAN BANK OR LOCKBOX FACILITY, PLUS THE APPLICABLE SALES CHARGE
AS SET FORTH IN THE FUND'S PROSPECTUS.
ALL PURCHASES OF THE FUND SHARES WILL BE CONFIRMED AND CREDITED TO
SHAREHOLDER ACCOUNTS IN FULL AND FRACTIONAL SHARES (ROUNDED TO THE NEAREST
1/1000TH OF A SHARE). SHARE CERTIFICATES WILL NOT BE ISSUED UNLESS REQUESTED IN
WRITING BY THE INVESTOR.
THE FUND RESERVES THE RIGHT TO MODIFY THE TELEPHONE REDEMPTION PRIVILEGE.
AMOUNTS REDEEMED BY TELEPHONE MAY BE MAILED BY CHECK TO THE INVESTOR TO THE
ADDRESS OF RECORD. AMOUNTS OF MORE THAN $50 AND LESS THAN $300,000 MAY BE
TRANSFERRED ELECTRONICALLY AT NO CHARGE TO THE INVESTOR. AMOUNTS OF $L,000 OR
MORE WILL BE TRANSMITTED BY WIRE BY THE FUND TO THE INVESTOR'S ACCOUNT AT A
DOMESTIC BANK OR SAVINGS ASSOCIATION THAT IS A MEMBER OF THE FEDERAL RESERVE
SYSTEM OR TO A CORRESPONDENT BANK. A CHARGE OF $5 IS IMPOSED ON WIRE TRANSFERS
OF LESS THAN $1,000. IF THE INSTITUTION IS NOT A FEDERAL RESERVE SYSTEM MEMBER,
FAILURE OF IMMEDIATE NOTIFICATION TO THAT INSTITUTION BY THE CORRESPONDENT BANK
COULD RESULT IN A DELAY IN CREDITING THE FUNDS TO THE INVESTOR'S ACCOUNT AT THE
INSTITUTION.
REDEMPTION PROCEEDS ARE NORMALLY PAID IN CASH. HOWEVER, 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.
THE RIGHT OF REDEMPTION MAY BE SUSPENDED OR THE DATE OF PAYMENT POSTPONED
FOR ANY PERIOD DURING WHICH THE NEW YORK STOCK EXCHANGE IS CLOSED (OTHER THAN
CUSTOMARY WEEKEND AND HOLIDAY CLOSINGS), WHEN TRADING ON THE NEW YORK STOCK
EXCHANGE IS RESTRICTED, OR AN EMERGENCY EXISTS, AS DETERMINED BY THE COMMISSION,
OR IF THE COMMISSION HAS ORDERED SUCH A SUSPENSION FOR THE PROTECTION OF
SHAREHOLDERS.
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 ITS HOLDINGS OR GIVE EXAMPLES OR SECURITIES THAT MAY HAVE BEEN
CONSIDERED FOR INCLUSION IN THE FUND, 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., INCLUDING OTHER SOCIALLY RESPONSIBLE INVESTMENT COMPANIES, AND
UNMANAGED MARKET INDICES SUCH AS MORGAN STANLEY CAPITAL INTERNATIONAL WORLD
INDEX OR EUROPE-FAR EAST-ASIA INDEX. 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 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 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, 199___). CALVERT GROUP WAS ALSO THE FIRST TO
OFFER A FAMILY OF SOCIALLY RESPONSIBLE MUTUAL FUND PORTFOLIOS.
DIRECTORS AND OFFICERS
----------------------
THE FUND'S BOARD OF DIRECTORS SUPERVISES THE FUND'S ACTIVITIES AND REVIEWS
ITS CONTRACTS WITH COMPANIES THAT PROVIDE IT WITH SERVICES.
JOHN G. GUFFEY, JR., 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:
05/15/48. ADDRESS: 388 CALLE COLINA, SANTA FE, NEW MEXICO 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 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, AS WELL AS SENIOR VICE
PRESIDENT OF CALVERT SOCIAL INVESTMENT FUND. MS. KRUMSIEK IS ON THE BOARD OF
DIRECTORS OF THE 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.
TERRENCE J. MOLLNER, ED.D., DIRECTOR. DR. MOLLNER IS FOUNDER, CHAIRPERSON,
AND PRESIDENT OF TRUSTEESHIP INSTITUTE, INC., A DIVERSE FOUNDATION KNOWN
PRINCIPALLY FOR ITS CONSULTATION TO CORPORATIONS CONVERTING TO COOPERATIVE
EMPLOYEE-OWNERSHIP. HE IS ALSO A DIRECTOR OF CALVERT SOCIAL INVESTMENT FUND,
INC. HE SERVED AS A TRUSTEE OF THE COOPERATIVE FUND OF NEW ENGLAND, INC., AND IS
NOW A MEMBER OF ITS BOARD OF ADVISORS. IN ADDITION, DR. MOLLNER IS A FOUNDER AND
MEMBER OF THE BOARD OF TRUSTEES OF THE FOUNDATION FOR SOVIET-AMERICAN ECONOMIC
COOPERATION AND IS ON THE BOARD OF DIRECTORS OF THE CALVERT SOCIAL INVESTMENT
FOUNDATION.
ON OCTOBER 8, 1998, MR. MOLLNER DECLARED AND FILED FOR PERSONAL BANKRUPTCY
PROTECTION UNDER CHAPTER 7 OF THE FEDERAL BANKRUPTCY CODE. THE CAUSE OF MR.
MOLLNER'S FINANCIAL DIFFICULTIES WAS LOSSES SUSTAINED IN TRADING IN THE OPTIONS
AND FUTURES MARKET. DOB: 12/13/44. ADDRESS: 15 EDWARDS SQUARE, NORTHAMPTON,
MASSACHUSETTS 01060.
RUSTUM ROY, DIRECTOR. MR. ROY IS THE EVAN PUGH PROFESSOR OF THE SOLID STATE
GEOCHEMISTRY AT PENNSYLVANIA STATE UNIVERSITY, AND CORPORATION CHAIR, NATIONAL
ASSOCIATION OF SCIENCE, TECHNOLOGY, AND SOCIETY. DOB: 7/3/24. ADDRESS: 528 S.
PUGH STREET, STATE COLLEGE, PA 16801.
*D. WAYNE SILBY, ESQ., 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, INC. HE IS THE PRESIDENT OF
CALVERT SOCIAL INVESTMENT 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 THE CALVERT
SOCIAL INVESTMENT FOUNDATION. DOB: 7/20/48. ADDRESS: 1715 18TH STREET, N.W.,
WASHINGTON, D.C. 20009.
TESSA TENNANT, DIRECTOR. MS. TENNANT IS THE HEAD OF GREEN AND ETHICAL
INVESTING FOR NATIONAL PROVIDENT INVESTMENT MANAGERS LTD. PREVIOUSLY, SHE WAS IN
CHARGE OF THE ENVIRONMENTAL RESEARCH UNIT OF JUPITER TYNDALL MERLIN LTD., AND
WAS THE DIRECTOR OF THE JUPITER TYNDALL MERLIN INVESTMENT MANAGERS. DOB:
5/29/59. ADDRESS: GLEN HOUSE INNERLEITHEN BORDERS, SCOTLAND EH44 6PX.
MUHAMMAD YUNUS, DIRECTOR. MR. YUNUS IS A MANAGING DIRECTOR OF GRAMEEN BANK
IN BANGLADESH. DOB: 6/28/40. ADDRESS: GRAMEEN BANK, MIRPUR TWO, DHAKA 1216,
BANGLADESH.
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, INC. DOB: 1/13/50.
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.
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.
SUSAN WALKER BENDER, ESQ., ASSISTANT SECRETARY. MS. BENDER IS ASSOCIATE
GENERAL COUNSEL OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. DOB: 01/29/59.
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.
IVY WAFFORD DUKE, ESQ., ASSISTANT SECRETARY. MS. DUKE IS ASSOCIATE GENERAL
COUNSEL OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS AND SECRETARY AND PROVIDES
COUNSEL TO THE CALVERT SOCIAL INVESTMENT FOUNDATION. PRIOR TO WORKING AT CALVERT
GROUP, MS. DUKE WAS AN ASSOCIATE IN THE INVESTMENT MANAGEMENT GROUP OF THE
BUSINESS AND FINANCE DEPARTMENT AT DRINKER BIDDLE & REATH. DOB: 09/07/68.
THE ADDRESS OF DIRECTORS AND OFFICERS, UNLESS OTHERWISE NOTED, IS 4550
MONTGOMERY AVENUE, BETHESDA, MARYLAND 20814. DIRECTORS AND OFFICERS AS A GROUP
OWN LESS THAN ONE PERCENT OF THE TOTAL OUTSTANDING SHARES OF THE FUND. DIRECTORS
MARKED WITH A * ABOVE ARE "INTERESTED PERSONS" OF THE FUND UNDER THE INVESTMENT
COMPANY ACT OF 1940.
MESSRS. GUFFEY AND SILBY SERVE ON THE FUND'S HIGH SOCIAL IMPACT INVESTMENTS
COMMITTEE WHICH ASSISTS THE FUND IN IDENTIFYING, EVALUATING, AND SELECTING
INVESTMENTS IN SECURITIES THAT OFFER A RATE OF RETURN BELOW THE THEN-PREVAILING
MARKET RATE AND THAT PRESENT ATTRACTIVE OPPORTUNITIES FOR FURTHERING THE FUND'S
SOCIAL CRITERIA. MESSRS. GUFFEY, SILBY, AND ROY SERVE ON THE FUND'S SPECIAL
EQUITIES COMMITTEE WHICH ASSISTS THE FUND IN IDENTIFYING, EVALUATING, AND
SELECTING APPROPRIATE PRIVATE PLACEMENT INVESTMENT OPPORTUNITIES FOR THE FUND
THAT ARE NOT HIGH SOCIAL IMPACT INVESTMENTS. MESSRS. GUFFEY, SILBY, MOLLNER, AND
MS. KRUMSIEK ALSO SERVE ON THE CALVERT SOCIAL INVESTMENT FOUNDATION BOARD.
DURING FISCAL 1999, DIRECTORS OF THE FUND NOT AFFILIATED WITH THE FUND'S
ADVISOR WERE PAID AGGREGATE FEES AND EXPENSES OF $62,824.
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 DEFERRED COMPENSATION PLAN
(SHOWN AS "PENSION OR RETIREMENT BENEFITS ACCRUED AS PART OF FUND EXPENSES,"
BELOW). DEFERRAL OF THE FEES IS DESIGNED TO MAINTAIN THE PARTIES IN THE SAME
POSITION AS IF THE FEES WERE PAID ON A CURRENT BASIS. MANAGEMENT BELIEVES THIS
WILL HAVE A NEGLIGIBLE EFFECT ON THE FUND'S ASSETS, LIABILITIES, NET ASSETS, AND
NET INCOME PER SHARE.
DIRECTOR COMPENSATION TABLE
FISCAL YEAR 1999 AGGREGATE COMPENSATION PENSION OR RETIREMENT TOTAL
COMPENSATION FROM
(UNAUDITED NUMBERS) FROM REGISTRANT FOR SERVICE BENEFITS ACCRUED AS PART
REGISTRANT AND FUND
AS DIRECTOR OF REGISTRANT EXPENSES* COMPLEX PAID TO
NAME OF DIRECTOR DIRECTOR**
JOHN G. GUFFEY, JR. $9,001 $1,751 $56,365
TERRENCE J. MOLLNER $9,000 $0 $33,830
RUSTUM ROY $9,000 $0 $11,300
D. WAYNE SILBY $8,000 $0 $60,831
TESSA TENNANT $9,000 $9,000 $9,000
MUHAMMAD YUNUS $7,000 $7,000 $7,000
* MS. TENNANT HAS CHOSEN TO DEFER A PORTION OF HER COMPENSATION. HER TOTAL
DEFERRED COMPENSATION, INCLUDING DIVIDENDS AND CAPITAL APPRECIATION, WAS
$47,536, AS OF SEPTEMBER 30, 1999. MESSRS. GUFFEY AND YUNUS HAVE ALSO CHOSEN TO
DEFER A PORTION OF THEIR COMPENSATION. THEIR TOTAL DEFERRED COMPENSATION,
INCLUDING DIVIDENDS AND CAPITAL APPRECIATION, WAS $11,022 AND $3,907,
RESPECTIVELY, AS OF SEPTEMBER 30, 1999.
** AS OF SEPTEMBER 30, 1999. THE FUND COMPLEX CONSISTS OF NINE (9) REGISTERED
INVESTMENT COMPANIES.
FROM TIME TO TIME THE FUND MAY MAKE CHARITABLE CONTRIBUTIONS TO GROUPS INTENDED
TO FURTHER THE FUND'S SOCIAL PURPOSE, INCLUDING BUT NOT LIMITED TO EDUCATING
INVESTORS ABOUT SOCIALLY RESPONSIBLE INVESTING.
INVESTMENT ADVISOR AND SUBADVISOR
---------------------------------
THE FUND'S INVESTMENT ADVISOR IS CALVERT ASSET MANAGEMENT COMPANY, INC.,
4550 MONTGOMERY AVENUE, 1000N, BETHESDA, MARYLAND 20814, A SUBSIDIARY OF CALVERT
GROUP LTD., WHICH IS A SUBSIDIARY OF ACACIA LIFE INSURANCE COMPANY OF
WASHINGTON, D.C. ("ACACIA "). EFFECTIVE JANUARY 1, 1999, ACACIA MERGED WITH AND
BECAME A SUBSIDIARY OF AMERITAS ACACIA MUTUAL HOLDING COMPANY. UNDER THE
ADVISORY CONTRACT, THE ADVISOR PROVIDES INVESTMENT ADVICE TO THE FUND AND
OVERSEES ITS DAY-TO-DAY OPERATIONS, SUBJECT TO DIRECTION AND CONTROL BY THE
FUND'S BOARD OF DIRECTORS. THE ADVISOR 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 EMPLOYEES OF THE ADVISOR OR ITS AFFILIATES. THE FUND PAYS ALL OTHER
ADMINISTRATIVE AND OPERATING EXPENSES, INCLUDING: CUSTODIAL, REGISTRAR, DIVIDEND
DISBURSING AND TRANSFER AGENCY FEES; ADMINISTRATIVE SERVICE FEES; FEDERAL AND
STATE SECURITIES REGISTRATION FEES; SALARIES, FEES AND EXPENSES OF TRUSTEES,
EXECUTIVE OFFICERS AND EMPLOYEES OF THE FUND, WHO ARE NOT EMPLOYEES OF THE
ADVISOR OR OF ITS AFFILIATES; INSURANCE PREMIUMS; TRADE ASSOCIATION DUES; LEGAL
AND AUDIT FEES; INTEREST, TAXES AND OTHER BUSINESS FEES; EXPENSES OF PRINTING
AND MAILING REPORTS, NOTICES, PROSPECTUSES, AND PROXY MATERIAL TO SHAREHOLDERS;
ANNUAL SHAREHOLDERS' MEETING EXPENSES; AND BROKERAGE COMMISSIONS AND OTHER COSTS
ASSOCIATED WITH THE PURCHASE AND SALE OF PORTFOLIO SECURITIES.
FOR ITS SERVICES, THE ADVISOR RECEIVES AN ANNUAL FEE OF .75% OF THE FUND'S
AVERAGE DAILY NET ASSETS UP TO $250 MILLION, 0.725% OF THE NEXT $250 MILLION,
AND 0.675% ON ASSETS IN EXCESS OF $500 MILLION. THE ADVISOR MAY VOLUNTARILY
DEFER ITS FEES OR ASSUME EXPENSES OF THE FUND.
SUBADVISOR
MURRAY JOHNSTONE INTERNATIONAL, LTD., IS CONTROLLED BY UNITED ASSET
MANAGEMENT COMPANY. FOR ITS SERVICES TO INTERNATIONAL EQUITY, IT RECEIVES A
SUBADVISORY FEE, PAID BY THE ADVISOR, OF 0.45% OF THE ASSETS IT MANAGES FOR
INTERNATIONAL EQUITY. MURRAY JOHNSTONE ALSO RECEIVES A 0.05% FEE, PAID BY CAMCO
(NOT THE FUND) FOR ITS ASSISTANCE WITH THE DISTRIBUTION OF THE FUND.
THE FUND HAS RECEIVED AN EXEMPTIVE ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION TO PERMIT THE FUND AND THE ADVISOR TO ENTER INTO AND MATERIALLY AMEND
THE INVESTMENT SUBADVISORY AGREEMENT WITHOUT SHAREHOLDER APPROVAL. WITHIN 90
DAYS OF THE HIRING OF ANY SUBADVISOR OR THE IMPLEMENTATION OF ANY PROPOSED
MATERIAL CHANGE IN THE INVESTMENT SUBADVISORY AGREEMENT, THE FUND WILL FURNISH
ITS SHAREHOLDERS INFORMATION ABOUT THE NEW SUBADVISOR OR INVESTMENT SUBADVISORY
AGREEMENT THAT WOULD BE INCLUDED IN A PROXY STATEMENT. SUCH INFORMATION WILL
INCLUDE ANY CHANGE IN SUCH DISCLOSURE CAUSED BY THE ADDITION OF A NEW SUBADVISOR
OR ANY PROPOSED MATERIAL CHANGE IN THE INVESTMENT SUBADVISORY AGREEMENT OF THE
FUND. THE FUND WILL MEET THIS CONDITION BY PROVIDING SHAREHOLDERS, WITHIN 90
DAYS OF THE HIRING OF THE SUBADVISOR OR IMPLEMENTATION OF ANY MATERIAL CHANGE TO
THE TERMS OF AN INVESTMENT SUBADVISORY AGREEMENT, WITH AN INFORMATION STATEMENT
TO THIS EFFECT.
THE ADVISORY FEES PAID TO THE ADVISOR BY THE FUND FOR THE FISCAL YEARS
ENDED SEPTEMBER 30, 1997, 1998, AND 1999 WERE $2,134,708, $2,338,864, AND
$1,991,863, RESPECTIVELY. FOR THOSE FUNDS WITH MULTIPLE CLASSES, INVESTMENT
ADVISORY FEES ARE ALLOCATED AS A PORTFOLIO-LEVEL EXPENSE BASED ON NET ASSETS.
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 ITS AFFAIRS, INCLUDING THE PREPARATION OF
REGULATORY FILINGS AND SHAREHOLDER REPORTS. FOR PROVIDING SUCH SERVICES, CASC
RECEIVES AN ANNUAL ADMINISTRATIVE SERVICE FEE PAYABLE MONTHLY (AS A PERCENTAGE
OF NET ASSETS) AS FOLLOWS:
CLASS A, B, AND C CLASS I
INTERNATIONAL EQUITY 0.35% 0.15%
FOR FISCAL YEARS 1997, 1998, AND 1999, INTERNATIONAL EQUITY PAID $213,471,
$233,886, AND $590,125, RESPECTIVELY, TO CASC IN ADMINISTRATIVE FEES.
ADMINISTRATIVE SERVICE FEES ARE ALLOCATED AS A CLASS-LEVEL EXPENSE, BASED ON NET
ASSETS.
METHOD OF DISTRIBUTION
----------------------
CALVERT DISTRIBUTORS, INC. ("CDI") 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.
PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940, THE FUND
HAS ADOPTED DISTRIBUTION PLANS (THE "PLANS") WHICH PERMIT THE FUND TO PAY
CERTAIN EXPENSES ASSOCIATED WITH THE DISTRIBUTION AND SERVICING OF ITS SHARES.
SUCH EXPENSES FOR CLASS A SHARES MAY NOT EXCEED, ON AN ANNUAL BASIS, 0.35% OF
THE FUND'S RESPECTIVE AVERAGE DAILY NET ASSETS. EXPENSES UNDER THE FUND'S CLASS
B AND CLASS C PLANS MAY NOT EXCEED, ON AN ANNUAL BASIS, 1.00% OF THE FUND'S
CLASS B AND CLASS C AVERAGE DAILY NET ASSETS, RESPECTIVELY.
THE CLASS A DISTRIBUTION PLANS REIMBURSES CDI ONLY FOR EXPENSES IT INCURS,
WHILE THE CLASS B AND C DISTRIBUTION PLANS COMPENSATE CDI AT A SET RATE
REGARDLESS OF CDI'S EXPENSES.
THE FUND'S DISTRIBUTION PLANS WERE APPROVED BY THE BOARD OF DIRECTORS,
INCLUDING THE 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 PLANS OR IN ANY AGREEMENTS
RELATED TO THE PLANS. THE SELECTION AND NOMINATION OF THE DIRECTORS WHO ARE NOT
INTERESTED PERSONS OF THE FUND IS COMMITTED TO THE DISCRETION OF SUCH
DISINTERESTED DIRECTORS. IN ESTABLISHING THE PLANS, THE DIRECTORS CONSIDERED
VARIOUS FACTORS INCLUDING THE AMOUNT OF THE DISTRIBUTION EXPENSES. THE DIRECTORS
DETERMINED THAT THERE IS A REASONABLE LIKELIHOOD THAT THE PLANS WILL BENEFIT THE
FUND AND ITS SHAREHOLDERS, INCLUDING ECONOMIES OF SCALE AT HIGHER ASSET LEVELS,
BETTER INVESTMENT OPPORTUNITIES, AND MORE FLEXIBILITY IN MANAGING A GROWING
PORTFOLIO.
THE PLANS MAY BE TERMINATED BY VOTE OF A MAJORITY OF THE NON-INTERESTED
DIRECTORS WHO HAVE NO DIRECT OR INDIRECT FINANCIAL INTEREST IN THE PLANS, OR BY
VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF THE AFFECTED CLASS OF THE FUND.
IF THE FUND SHOULD EVER SWITCH TO A NEW PRINCIPAL UNDERWRITER WITHOUT
TERMINATING THE CLASS B PLAN, THE FEE WOULD BE PRORATED BETWEEN CDI AND THE NEW
PRINCIPAL UNDERWRITER. ANY CHANGE IN THE PLANS THAT WOULD MATERIALLY INCREASE
THE DISTRIBUTION COST TO THE FUND REQUIRES APPROVAL OF THE SHAREHOLDERS OF THE
AFFECTED CLASS; OTHERWISE, THE PLANS MAY BE AMENDED BY THE DIRECTORS, INCLUDING
A MAJORITY OF THE NON-INTERESTED DIRECTORS AS DESCRIBED ABOVE. THE PLANS WILL
CONTINUE IN EFFECT FOR SUCCESSIVE ONE-YEAR TERMS PROVIDED THAT SUCH CONTINUANCE
IS SPECIFICALLY APPROVED BY (I) THE VOTE OF A MAJORITY OF THE DIRECTORS WHO ARE
NOT PARTIES TO THE PLANS OR INTERESTED PERSONS OF ANY SUCH PARTY AND WHO HAVE NO
DIRECT OR INDIRECT FINANCIAL INTEREST IN THE PLANS, AND (II) THE VOTE OF A
MAJORITY OF THE ENTIRE BOARD OF DIRECTORS.
APART FROM THE PLANS, THE ADVISOR AND CDI, AT THEIR OWN EXPENSE, MAY INCUR
COSTS AND PAY EXPENSES ASSOCIATED WITH THE DISTRIBUTION OF SHARES OF THE FUND.
THE ADVISOR AND/OR CDI HAS AGREED TO PAY CERTAIN FIRMS COMPENSATION FOR THEIR
MARKETING AND DISTRIBUTION OF THE FUND SHARES, ABOVE THE USUAL SALES CHARGES AND
SERVICE FEES. THIS LIST MAY BE CHANGED FROM TIME TO TIME. AS OF DECEMBER 31,
1999, THE ADVISOR AND/OR CDI HAD SPECIAL ARRANGEMENTS WITH THE FOLLOWING FIRMS:
FIDELITY, 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 EACH PORTFOLIO'S RESPECTIVE
CLASSES. THESE FEES ARE PAID PURSUANT TO THE FUND'S DISTRIBUTION PLAN. TOTAL
DISTRIBUTION PLAN EXPENSES PAID TO CDI BY THE FUND FOR THE FISCAL YEAR ENDED
SEPTEMBER 30, 1999 WERE $552,640 FOR CLASS A, $21,296 FOR CLASS B AND $94,535
FOR CLASS C.
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999, THE FUND'S DISTRIBUTION PLAN
EXPENSES FOR EACH CLASS WERE SPENT FOR THE FOLLOWING PURPOSES:
INTERNATIONAL EQUITY FUND
CLASS A CLASS B CLASS C
COMPENSATION TO BROKER-DEALERS $445,167 $3,462 $63,125
COMPENSATION TO SALES PERSONNEL 44,787 9,563 13,089
ADVERTISING 47,510 10,144 13,884
PRINTING AND MAILING OF PROSPECTUSES
TO OTHER THAN CURRENT SHAREHOLDERS 15,178 3,241 4,436
COMPENSATION TO UNDERWRITERS
INTEREST, FINANCING CHARGES - - -
OTHER
INTERNATIONAL EQUITY FUND
CLASS A 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 % OF
INVESTMENT PRICE INVESTED OFFERING PRICE
LESS THAN $50,000 4.75% 4.99% 4.00%
$50,000 BUT LESS THAN $100,000 3.75% 3.90% 3.00%
$100,000 BUT LESS THAN $250,000 2.75% 2.83% 2.25%
$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%
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 NET
AMOUNT RETAINED BY CDI (I.E., NOT REALLOWED TO DEALERS) FOR THE LAST 3 FISCAL
YEARS ARE:
FISCAL YEAR 1997 1998 1999
CLASS A GROSS NET GROSS NET GROSS NET
INTERNATIONAL $448,027 $141,844 $384,307 $126,829 $258,982
$59,020
EQUITY
FISCAL YEAR 1997 1998 1999
CLASS B
INTERNATIONAL NA $143 $8,430
EQUITY
FISCAL YEAR 1997 1998 1999
CLASS C
INTERNATIONAL NA $0 $741
EQUITY
FUND DIRECTORS 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 (E.G., GROUP RETIREMENT PLANS) ARE
EXEMPT DUE TO ECONOMIES OF SCALE IN DISTRIBUTION. SEE EXHIBIT A TO THE
PROSPECTUS.
TRANSFER AND SHAREHOLDER SERVICING AGENTS
-----------------------------------------
NATIONAL FINANCIAL DATA SERVICES, INC. ("NFDS"), A SUBSIDIARY OF STATE
STREET BANK & TRUST, HAS BEEN RETAINED BY THE FUND TO ACT AS TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT. THESE RESPONSIBILITIES INCLUDE: RESPONDING TO CERTAIN
SHAREHOLDER INQUIRIES AND INSTRUCTIONS, CREDITING AND DEBITING SHAREHOLDER
ACCOUNTS FOR PURCHASES AND REDEMPTIONS OF FUND SHARES AND CONFIRMING SUCH
TRANSACTIONS, AND DAILY UPDATING OF SHAREHOLDER ACCOUNTS TO REFLECT DECLARATION
AND PAYMENT OF DIVIDENDS.
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), A SUBSIDIARY OF CALVERT GROUP,
LTD., AND ACACIA, 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 CSSI RECEIVE A FEE BASED ON NUMBER OF THE
SHAREHOLDER ACCOUNTS AND TRANSACTIONS.
PORTFOLIO TRANSACTIONS
----------------------
FUND TRANSACTIONS ARE UNDERTAKEN ON THE BASIS OF THEIR DESIRABILITY FROM AN
INVESTMENT STANDPOINT. THE FUND'S ADVISOR AND SUBADVISORS MAKE INVESTMENT
DECISIONS AND THE CHOICE OF BROKERS AND DEALERS UNDER THE DIRECTION AND
SUPERVISION OF THE FUND'S BOARD OF DIRECTORS.
BROKER-DEALERS WHO EXECUTE 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, MARKET FAMILIARITY, RELIABILITY, INTEGRITY, FINANCIAL CONDITION,
SUBJECT TO THE ADVISOR/SUBADVISOR OBLIGATION TO SEEK BEST EXECUTION. THE
ADVISOR/SUBADVISOR MAY ALSO CONSIDER SALES OF FUND SHARES AS A FACTOR IN THE
SELECTION OF BROKERS.
FOR THE LAST THREE FISCAL YEARS, TOTAL BROKERAGE COMMISSIONS PAID ARE AS
FOLLOWS:
1997 1998 1999
INTERNATIONAL EQUITY $749,050 $947,291 $870,104
THE FUND DID NOT PAY ANY BROKERAGE COMMISSIONS TO AFFILIATED PERSONS DURING THE
LAST THREE FISCAL YEARS.
WHILE THE FUND'S ADVISOR AND SUBADVISOR(S) SELECT BROKERS PRIMARILY ON THE
BASIS OF BEST EXECUTION, IN SOME CASES THEY MAY DIRECT TRANSACTIONS TO BROKERS
BASED ON THE QUALITY AND AMOUNT OF THE RESEARCH AND RESEARCH-RELATED SERVICES
WHICH THE BROKERS PROVIDE TO THEM. THESE 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 SUBADVISOR(S) OF THE FUND. SUCH SERVICES
INCLUDE PORTFOLIO ATTRIBUTION SYSTEMS, RETURN-BASED STYLE ANALYSIS, AND
TRADE-EXECUTION ANALYSIS.
IF, IN THE JUDGMENT OF THE ADVISOR OR SUBADVISOR(S), THE FUND OR OTHER ACCOUNTS
MANAGED BY THEM WILL BE BENEFITED BY SUPPLEMENTAL RESEARCH SERVICES, THEY ARE
AUTHORIZED TO PAY BROKERAGE COMMISSIONS TO A BROKER FURNISHING SUCH SERVICES
WHICH ARE IN EXCESS OF COMMISSIONS WHICH ANOTHER BROKER MAY HAVE CHARGED FOR
EFFECTING THE SAME TRANSACTION. 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 SEPTEMBER 30, 1999, THE ADVISOR AND/OR
SUBADVISOR, DIRECTED BROKERAGE FOR RESEARCH SERVICES IN THE FOLLOWING AMOUNTS:
RELATED
AMOUNT OF TRANSACTIONS COMMISSIONS
INTERNATIONAL EQUITY $161,670,975 $417,688
THE PORTFOLIO TURNOVER RATES FOR THE LAST TWO FISCAL YEARS ARE AS FOLLOWS:
1998 1999
INTERNATIONAL EQUITY 84% 82%
PERSONAL SECURITIES TRANSACTIONS
--------------------------------
THE FUND, ITS ADVISORS, 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.
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
--------------------------------------
PRICEWATERHOUSECOOPERS LLP HAS BEEN SELECTED BY THE BOARD OF DIRECTORS TO
SERVE AS INDEPENDENT AUDITORS FOR FISCAL YEAR 2000. STATE STREET BANK & TRUST
COMPANY, N.A., 225 FRANKLIN STREET, BOSTON, MA 02110, SERVES AS CUSTODIAN OF THE
FUND'S INVESTMENTS. ALLFIRST FINANCIAL, INC., 25 SOUTH CHARLES STREET,
BALTIMORE, MARYLAND 21203 ALSO SERVES AS CUSTODIAN OF CERTAIN OF THE FUND'S CASH
ASSETS. THE CUSTODIANS HAVE NO PART IN DECIDING THE FUND'S INVESTMENT POLICIES
OR THE CHOICE OF SECURITIES THAT ARE TO BE PURCHASED OR SOLD FOR THE FUND.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
---------------------------------------------------
AS OF JANUARY 14, 2000, THE FOLLOWING SHAREHOLDERS OWNED 5% OR MORE OF THE
OUTSTANDING VOTING SECURITIES OF ANY CLASS OF THE FUND.
NAME & ADDRESS
PERCENT OF OWNERSHIP
CHARLES SCHWAB & CO. INC. 8.12% OF CLASS A
REINVEST ACCOUNT
MUTUAL FUND DEPARTMENT
101 MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4122
MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS
6.13% OF CLASS B
FUND ADMINISTRATION
4800 DEER LAKE DR. E FL 3
JACKSONVILLE, FL 32246-6484
DBTCO AS NOMINEE
56.86% OF CLASS I
DUBUQUE BANK & TRUST CO. TTEE
PO BOX 747
DUBUQUE, IA 52004-0747
ACACIA GROUP CAPITAL
43.14% OF CLASS I
ACCUMULATION PLAN
ATTN: LAURA PIERRON
7315 WISCONSIN AVENUE
BETHESDA, MD 20814-3202
GENERAL INFORMATION
-------------------
THE FUND IS AN OPEN-END DIVERSIFIED MANAGEMENT INVESTMENT COMPANY,
ORGANIZED AS A MARYLAND CORPORATION ON FEBRUARY 14, 1992. PRIOR TO JANUARY 31,
1997, THE FUND WAS KNOWN AS THE GLOBAL EQUITY FUND.
EACH SHARE REPRESENTS AN EQUAL PROPORTIONATE INTEREST WITH EACH OTHER SHARE
AND IS ENTITLED TO SUCH DIVIDENDS AND DISTRIBUTIONS OUT OF THE INCOME BELONGING
TO SUCH CLASS AS DECLARED BY THE BOARD. THE FUND OFFERS FOUR SEPARATE CLASSES OF
SHARES: CLASS A, CLASS B, CLASS C, AND CLASS I. EACH CLASS REPRESENTS INTERESTS
IN THE SAME PORTFOLIO OF INVESTMENTS BUT, AS FURTHER DESCRIBED IN THE
PROSPECTUS, EACH CLASS IS SUBJECT TO DIFFERING SALES CHARGES AND EXPENSES, WHICH
DIFFERENCES WILL RESULT IN DIFFERING NET ASSET VALUES AND DISTRIBUTIONS. UPON
ANY LIQUIDATION OF THE FUND, SHAREHOLDERS OF EACH CLASS ARE ENTITLED TO SHARE
PRO RATA IN THE NET ASSETS BELONGING TO THAT SERIES AVAILABLE FOR DISTRIBUTION.
THE FUND IS NOT REQUIRED TO HOLD ANNUAL SHAREHOLDER MEETINGS, BUT SPECIAL
MEETINGS MAY BE CALLED FOR CERTAIN PURPOSES SUCH AS ELECTING DIRECTORS, CHANGING
FUNDAMENTAL POLICIES, OR APPROVING A MANAGEMENT CONTRACT. AS A SHAREHOLDER, YOU
RECEIVE ONE VOTE FOR EACH SHARE YOU OWN, EXCEPT THAT MATTERS AFFECTING CLASSES
DIFFERENTLY, SUCH AS DISTRIBUTION PLANS, WILL BE VOTED ON SEPARATELY BY THE
AFFECTED CLASS(ES).
APPENDIX
--------
CORPORATE BOND AND COMMERCIAL PAPER RATINGS
CORPORATE BONDS:
DESCRIPTION OF MOODY'S INVESTORS SERVICE INC.'S/STANDARD & POOR'S 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.
COMMERCIAL PAPER:
MOODY'S INVESTORS SERVICE, INC.:
THE PRIME RATING IS THE HIGHEST COMMERCIAL PAPER RATING ASSIGNED BY
MOODY'S. AMONG THE FACTORS CONSIDERED BY MOODY'S IN ASSIGNING RATINGS ARE THE
FOLLOWING: (1) EVALUATION OF THE MANAGEMENT OF THE ISSUER; (2) ECONOMIC
EVALUATION OF THE ISSUER'S INDUSTRY OR INDUSTRIES AND AN APPRAISAL OF
SPECULATIVE-TYPE RISKS WHICH MAY BE INHERENT IN CERTAIN AREAS; (3) EVALUATION OF
THE ISSUER'S PRODUCTS IN RELATION TO COMPETITION AND CUSTOMER ACCEPTANCE; (4)
LIQUIDITY; (5) AMOUNT AND QUALITY OF LONG-TERM DEBT; (6) TREND OF EARNINGS OVER
A PERIOD OF TEN YEARS; (7) FINANCIAL STRENGTH OF A PARENT COMPANY AND THE
RELATIONSHIPS WHICH EXIST WITH THE ISSUER; AND (8) RECOGNITION BY MANAGEMENT OF
OBLIGATIONS WHICH MAY BE PRESENT OR MAY ARISE AS A RESULT OF PUBLIC INTEREST
QUESTIONS AND PREPARATIONS TO MEET SUCH OBLIGATIONS. ISSUERS WITHIN THIS PRIME
CATEGORY MAY BE GIVEN RATINGS 1, 2, OR 3, DEPENDING ON THE RELATIVE STRENGTHS OF
THESE FACTORS.
STANDARD & POOR'S CORPORATION:
COMMERCIAL PAPER RATED A BY STANDARD & POOR'S HAS THE FOLLOWING
CHARACTERISTICS: (I) LIQUIDITY RATIOS ARE ADEQUATE TO MEET CASH REQUIREMENTS;
(II) LONG-TERM SENIOR DEBT RATING SHOULD BE A OR BETTER, ALTHOUGH IN SOME CASES
BBB CREDITS MAY BE ALLOWED IF OTHER FACTORS OUTWEIGH THE BBB; (III) THE ISSUER
SHOULD HAVE ACCESS TO AT LEAST TWO ADDITIONAL CHANNELS OF BORROWING; (IV) BASIC
EARNINGS AND CASH FLOW SHOULD HAVE AN UPWARD TREND WITH ALLOWANCES MADE FOR
UNUSUAL CIRCUMSTANCES; AND (V) TYPICALLY THE ISSUER'S INDUSTRY SHOULD BE WELL
ESTABLISHED AND THE ISSUER SHOULD HAVE A STRONG POSITION WITHIN ITS INDUSTRY AND
THE RELIABILITY AND QUALITY OF MANAGEMENT SHOULD BE UNQUESTIONED. ISSUERS RATED
A ARE FURTHER REFERRED TO BY USE OF NUMBERS 1, 2 AND 3 TO DENOTE THE RELATIVE
STRENGTH WITHIN THIS HIGHEST CLASSIFICATION.
<PAGE>
LETTER OF INTENT
DATE
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
BETHESDA, MD 20814
LADIES AND GENTLEMEN:
BY SIGNING THIS LETTER OF INTENT, OR AFFIRMATIVELY MARKING THE LETTER OF
INTENT OPTION ON MY FUND ACCOUNT APPLICATION FORM, I AGREE TO BE BOUND BY THE
TERMS AND CONDITIONS APPLICABLE TO LETTERS OF INTENT APPEARING IN THE PROSPECTUS
AND THE STATEMENT OF ADDITIONAL INFORMATION FOR THE FUND AND THE PROVISIONS
DESCRIBED BELOW AS THEY MAY BE AMENDED FROM TIME TO TIME BY THE FUND. SUCH
AMENDMENTS WILL APPLY AUTOMATICALLY TO EXISTING LETTERS OF INTENT.
I INTEND TO INVEST IN THE SHARES OF:_____________________ (FUND OR
PORTFOLIO NAME) DURING THE THIRTEEN (13) MONTH PERIOD FROM THE DATE OF MY FIRST
PURCHASE PURSUANT TO THIS LETTER (WHICH CANNOT BE MORE THAN NINETY (90) DAYS
PRIOR TO THE DATE OF THIS LETTER OR MY FUND ACCOUNT APPLICATION FORM, WHICHEVER
IS APPLICABLE), AN AGGREGATE AMOUNT (EXCLUDING ANY REINVESTMENTS OF
DISTRIBUTIONS) OF AT LEAST FIFTY THOUSAND DOLLARS ($50,000) WHICH, TOGETHER WITH
MY CURRENT HOLDINGS OF THE FUND (AT PUBLIC OFFERING PRICE ON DATE OF THIS LETTER
OR MY FUND ACCOUNT APPLICATION FORM, WHICHEVER IS APPLICABLE), WILL EQUAL OR
EXCEED THE AMOUNT CHECKED BELOW:
__ $50,000 __ $100,000 __ $250,000 __ $500,000 __ $1,000,000
SUBJECT TO THE CONDITIONS SPECIFIED BELOW, INCLUDING THE TERMS OF ESCROW,
TO WHICH I HEREBY AGREE, EACH PURCHASE OCCURRING AFTER THE DATE OF THIS LETTER
WILL BE MADE AT THE PUBLIC OFFERING PRICE APPLICABLE TO A SINGLE TRANSACTION OF
THE DOLLAR AMOUNT SPECIFIED ABOVE, AS DESCRIBED IN THE FUND'S PROSPECTUS. "FUND"
IN THIS LETTER OF INTENT SHALL REFER TO THE FUND OR PORTFOLIO, AS THE CASE MAY
BE. 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
DATE SIGNATURE OF INVESTOR(S)
DATE SIGNATURE OF INVESTOR(S)
<PAGE>
INVESTMENT ADVISOR
CALVERT ASSET MANAGEMENT COMPANY, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
SHAREHOLDER SERVICE TRANSFER AGENT
CALVERT SHAREHOLDER SERVICES, INC. NATIONAL FINANCIAL DATA SERVICES, INC.
4550 MONTGOMERY AVENUE 330 WEST 9TH STREET
SUITE 1000N KANSAS CITY, MISSOURI 64105
BETHESDA, MARYLAND 20814
PRINCIPAL UNDERWRITER INDEPENDENT ACCOUNTANTS
CALVERT DISTRIBUTORS, INC. PRICEWATERHOUSECOOPERS LLP
4550 MONTGOMERY AVENUE 250 WEST PRATT STREET
SUITE 1000N BALTIMORE, MARYLAND 21201
BETHESDA, MARYLAND 20814
<PAGE>
13
CALVERT WORLD VALUES FUND, INC.
CAPITAL ACCUMULATION FUND
4550 MONTGOMERY AVENUE, BETHESDA, MARYLAND 20814
STATEMENT OF ADDITIONAL INFORMATION
JANUARY 31, 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 ("SAI") IS NOT A PROSPECTUS.
INVESTORS SHOULD READ THE STATEMENT OF ADDITIONAL INFORMATION IN CONJUNCTION
WITH THE FUND'S PROSPECTUS, DATED JANUARY 31, 2000. THE FUND'S AUDITED FINANCIAL
STATEMENTS 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 7
PURCHASE AND REDEMPTION OF SHARES 8
NET ASSET VALUE 8
CALCULATION OF TOTAL RETURN 9
ADVERTISING 10
DIVIDENDS, DISTRIBUTIONS AND TAXES 11
DIRECTORS AND OFFICERS 11
INVESTMENT ADVISOR 14
ADMINISTRATIVE SERVICES AGENT 15
METHOD OF DISTRIBUTION 15
TRANSFER AND SHAREHOLDER SERVICING AGENTS 17
PORTFOLIO TRANSACTIONS 17
PERSONAL SECURITIES TRANSACTIONS 18
INDEPENDENT ACCOUNTANTS AND CUSTODIANS 18
GENERAL INFORMATION 18
CONTROL PERSONS & PRINCIPAL HOLDERS OF SECURITIES 18
APPENDIX 19
<PAGE>
INVESTMENT POLICIES AND RISKS
-----------------------------
FOREIGN SECURITIES
INVESTMENTS IN FOREIGN SECURITIES MAY PRESENT RISKS NOT TYPICALLY INVOLVED
IN DOMESTIC INVESTMENTS. THE FUND MAY PURCHASE FOREIGN SECURITIES REPRESENTED BY
AMERICAN DEPOSITARY RECEIPTS ("ADRS"), OR OTHER RECEIPTS EVIDENCING OWNERSHIP OF
FOREIGN SECURITIES, SUCH AS INTERNATIONAL DEPOSITARY RECEIPTS AND GLOBAL
DEPOSITARY RECEIPTS. ADRS ARE US DOLLAR-DENOMINATED AND TRADED IN THE US ON
EXCHANGES OR OVER THE COUNTER. BY INVESTING IN ADRS RATHER THAN DIRECTLY IN
FOREIGN ISSUERS' STOCK, THE FUND MAY POSSIBLY AVOID SOME CURRENCY AND SOME
LIQUIDITY RISKS. HOWEVER, THE VALUE OF THE FOREIGN SECURITIES UNDERLYING THE ADR
MAY STILL BE IMPACTED BY FOREIGN FLUCTUATIONS. THE INFORMATION AVAILABLE FOR
ADRS IS SUBJECT TO THE MORE UNIFORM AND MORE EXACTING ACCOUNTING, AUDITING AND
FINANCIAL REPORTING STANDARDS OF THE DOMESTIC MARKET OR EXCHANGE ON WHICH THEY
ARE TRADED.
ADDITIONAL COSTS MAY BE INCURRED IN CONNECTION WITH INTERNATIONAL
INVESTMENT SINCE FOREIGN BROKERAGE COMMISSIONS AND THE CUSTODIAL COSTS
ASSOCIATED WITH MAINTAINING FOREIGN PORTFOLIO SECURITIES ARE GENERALLY HIGHER
THAN IN THE UNITED STATES. FEE EXPENSE MAY ALSO BE INCURRED ON CURRENCY
EXCHANGES WHEN THE FUND CHANGES INVESTMENTS FROM ONE COUNTRY TO ANOTHER OR
CONVERTS FOREIGN SECURITIES HOLDINGS INTO U.S. DOLLARS.
UNITED STATES GOVERNMENT POLICIES HAVE AT TIMES, IN THE PAST, THROUGH
IMPOSITION OF INTEREST EQUALIZATION TAXES AND OTHER RESTRICTIONS, DISCOURAGED
CERTAIN INVESTMENTS ABROAD BY UNITED STATES INVESTORS. IN ADDITION, FOREIGN
COUNTRIES MAY IMPOSE WITHHOLDING AND TAXES ON DIVIDENDS AND INTEREST.
SINCE INVESTMENTS IN SECURITIES OF ISSUERS DOMICILED IN FOREIGN COUNTRIES
USUALLY INVOLVE CURRENCIES OF THE FOREIGN COUNTRIES, AND SINCE THE FUND MAY
TEMPORARILY HOLD FUNDS IN FOREIGN CURRENCIES DURING THE COMPLETION OF INVESTMENT
PROGRAMS, THE VALUE OF THE ASSETS OF THE FUND AS MEASURED IN UNITED STATES
DOLLARS MAY BE AFFECTED FAVORABLY OR UNFAVORABLY BY CHANGES IN FOREIGN CURRENCY
EXCHANGE RATES AND EXCHANGE CONTROL REGULATIONS. FOR EXAMPLE, IF THE VALUE OF
THE FOREIGN CURRENCY IN WHICH A SECURITY IS DENOMINATED INCREASES OR DECLINES IN
RELATION TO THE VALUE OF THE U.S. DOLLAR, THE VALUE OF THE SECURITY IN U.S.
DOLLARS WILL INCREASE OR DECLINE CORRESPONDINGLY. THE FUND WILL CONDUCT ITS
FOREIGN CURRENCY EXCHANGE TRANSACTIONS EITHER ON A SPOT (I.E., CASH) BASIS AT
THE SPOT RATE PREVAILING IN THE FOREIGN EXCHANGE MARKET, OR THROUGH ENTERING
INTO FORWARD CONTRACTS TO PURCHASE OR SELL FOREIGN CURRENCIES. A FORWARD FOREIGN
CURRENCY CONTRACT INVOLVES AN OBLIGATION TO PURCHASE OR SELL A SPECIFIC CURRENCY
AT A FUTURE DATE WHICH MAY BE ANY FIXED NUMBER OF DAYS FROM THE DATE OF THE
CONTRACT AGREED UPON BY THE PARTIES, AT A PRICE SET AT THE TIME OF THE CONTRACT.
THESE CONTRACTS ARE TRADED IN THE INTERBANK MARKET CONDUCTED DIRECTLY BETWEEN
CURRENCY TRADERS (USUALLY LARGE, COMMERCIAL BANKS) AND THEIR CUSTOMERS. A
FORWARD FOREIGN CURRENCY CONTRACT GENERALLY HAS NO DEPOSIT REQUIREMENT, AND NO
COMMISSIONS ARE CHARGED AT ANY STAGE FOR TRADES.
THE FUND MAY ENTER INTO FORWARD FOREIGN CURRENCY CONTRACTS FOR TWO REASONS.
FIRST, THE FUND MAY DESIRE TO PRESERVE THE UNITED STATES DOLLAR PRICE OF A
SECURITY WHEN IT ENTERS INTO A CONTRACT FOR THE PURCHASE OR SALE OF A SECURITY
DENOMINATED IN A FOREIGN CURRENCY. THE FUND MAY BE ABLE TO PROTECT ITSELF
AGAINST POSSIBLE LOSSES RESULTING FROM CHANGES IN THE RELATIONSHIP BETWEEN THE
UNITED STATES DOLLAR AND FOREIGN CURRENCIES DURING THE PERIOD BETWEEN THE DATE
THE SECURITY IS PURCHASED OR SOLD AND THE DATE ON WHICH PAYMENT IS MADE OR
RECEIVED BY ENTERING INTO A FORWARD CONTRACT FOR THE PURCHASE OR SALE, FOR A
FIXED AMOUNT OF DOLLARS, OF THE AMOUNT OF THE FOREIGN CURRENCY INVOLVED IN THE
UNDERLYING SECURITY TRANSACTIONS.
SECOND, WHEN THE ADVISOR OR SUBADVISOR BELIEVES THAT THE CURRENCY OF A
PARTICULAR FOREIGN COUNTRY MAY SUFFER A SUBSTANTIAL DECLINE AGAINST THE UNITED
STATES DOLLAR, THE FUND ENTERS INTO A FORWARD FOREIGN CURRENCY CONTRACT TO SELL,
FOR A FIXED AMOUNT OF DOLLARS, THE AMOUNT OF FOREIGN CURRENCY APPROXIMATING THE
VALUE OF SOME OR ALL OF THE FUND'S SECURITIES DENOMINATED IN SUCH FOREIGN
CURRENCY. THE PRECISE MATCHING OF THE FORWARD FOREIGN CURRENCY CONTRACT AMOUNTS
AND THE VALUE OF THE FUND'S SECURITIES INVOLVED WILL NOT GENERALLY BE POSSIBLE
SINCE THE FUTURE VALUE OF THE SECURITIES WILL CHANGE AS A CONSEQUENCE OF MARKET
MOVEMENTS BETWEEN THE DATE THE FORWARD CONTRACT IS ENTERED INTO AND THE DATE IT
MATURES. THE PROJECTION OF SHORT-TERM CURRENCY MARKET MOVEMENT IS DIFFICULT, AND
THE SUCCESSFUL EXECUTION OF THIS SHORT-TERM HEDGING STRATEGY IS UNCERTAIN.
ALTHOUGH FORWARD FOREIGN CURRENCY CONTRACTS TEND TO MINIMIZE THE RISK OF LOSS
DUE TO A DECLINE IN THE VALUE OF THE HEDGED CURRENCY, AT THE SAME TIME THEY TEND
TO LIMIT ANY POTENTIAL GAIN WHICH MIGHT RESULT SHOULD THE VALUE OF SUCH CURRENCY
INCREASE. THE FUND DOES NOT INTEND TO ENTER INTO SUCH FORWARD CONTRACTS UNDER
THIS CIRCUMSTANCE ON A REGULAR OR CONTINUOUS BASIS.
EUROCURRENCY CONVERSION RISK. EUROPEAN COUNTRIES THAT ARE MEMBERS OF THE
EUROPEAN MONETARY UNION HAVE AGREED TO USE A COMMON CURRENCY UNIT, THE "EURO".
CURRENTLY, EACH OF THESE COUNTRIES HAS ITS OWN CURRENCY UNIT. ALTHOUGH THE
ADVISOR AND SUBADVISOR DO NOT ANTICIPATE ANY PROBLEMS IN CONVERSION FROM THE OLD
CURRENCIES TO THE EURO, THERE MAY BE ISSUES INVOLVED IN SETTLEMENT, VALUATION,
AND NUMEROUS OTHER AREAS THAT COULD IMPACT THE FUND. CALVERT HAS BEEN REVIEWING
ALL OF ITS COMPUTER SYSTEMS FOR EUROCURRENCY CONVERSION COMPLIANCE. THERE CAN BE
NO ASSURANCE THAT THERE WILL BE NO NEGATIVE IMPACT ON THE FUND, HOWEVER, THE
ADVISOR, SUBADVISOR AND CUSTODIAN HAVE ADVISED THE FUND THAT THEY HAVE BEEN
ACTIVELY WORKING ON ANY NECESSARY CHANGES TO THEIR COMPUTER SYSTEMS TO PREPARE
FOR THE CONVERSION, AND EXPECT THAT THEIR SYSTEMS, AND THOSE OF THEIR OUTSIDE
SERVICE PROVIDERS, WILL BE ADAPTED IN TIME FOR THAT EVENT.
TEMPORARY DEFENSIVE POSITIONS
FOR TEMPORARY DEFENSIVE PURPOSES - WHICH MAY INCLUDE A LACK OF ADEQUATE
PURCHASE CANDIDATES OR AN UNFAVORABLE MARKET ENVIRONMENT - THE FUND MAY INVEST
IN CASH OR CASH EQUIVALENTS. CASH EQUIVALENTS INCLUDE INSTRUMENTS SUCH AS, BUT
NOT LIMITED TO, U.S. GOVERNMENT AND AGENCY OBLIGATIONS, CERTIFICATES OF DEPOSIT,
BANKER'S ACCEPTANCES, TIME DEPOSITS COMMERCIAL PAPER, SHORT-TERM CORPORATE DEBT
SECURITIES, AND REPURCHASE AGREEMENTS.
REPURCHASE AGREEMENTS
THE FUND MAY PURCHASE DEBT SECURITIES SUBJECT TO REPURCHASE AGREEMENTS,
WHICH ARE ARRANGEMENTS UNDER WHICH THE FUND 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 FUND ENGAGES IN REPURCHASE AGREEMENTS
IN ORDER TO EARN A HIGHER RATE OF RETURN THAN IT 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 FUND 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
FUND WILL ONLY ENGAGE IN REPURCHASE AGREEMENTS WITH RECOGNIZED SECURITIES
DEALERS AND BANKS DETERMINED TO PRESENT MINIMAL CREDIT RISK BY THE ADVISOR. IN
ADDITION, THE FUND 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 FUND PURSUANT TO THE AGREEMENT, THE FUND 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 FUND 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 FUND MAY ALSO ENGAGE IN REVERSE REPURCHASE AGREEMENTS. UNDER A REVERSE
REPURCHASE AGREEMENT, THE FUND 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 FUND INVESTS THE PROCEEDS
FROM EACH REVERSE REPURCHASE AGREEMENT IN OBLIGATIONS IN WHICH IT IS AUTHORIZED
TO INVEST. THE FUND INTENDS TO ENTER INTO A REVERSE REPURCHASE AGREEMENT ONLY
WHEN THE INTEREST INCOME PROVIDED FOR IN THE OBLIGATION IN WHICH THE FUND
INVESTS THE PROCEEDS IS EXPECTED TO EXCEED THE AMOUNT THE FUND WILL PAY IN
INTEREST TO THE OTHER PARTY TO THE AGREEMENT PLUS ALL COSTS ASSOCIATED WITH THE
TRANSACTIONS. THE FUND DOES NOT INTEND TO BORROW FOR LEVERAGE PURPOSES. THE FUND
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 FUND
WILL MAINTAIN IN A SEGREGATED CUSTODIAL ACCOUNT AN AMOUNT OF CASH, U.S.
GOVERNMENT SECURITIES OR OTHER LIQUID, HIGH-QUALITY DEBT SECURITIES EQUAL IN
VALUE TO THE REPURCHASE PRICE. THE FUND 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 FUND'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
FUND 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 FUND UNDER THE
AGREEMENTS, THE FUND MAY HAVE BEEN BETTER OFF HAD IT NOT ENTERED INTO THE
AGREEMENT. HOWEVER, THE FUND WILL ENTER INTO REVERSE REPURCHASE AGREEMENTS ONLY
WITH BANKS AND DEALERS WHICH THE ADVISOR BELIEVES PRESENT MINIMAL CREDIT RISKS
UNDER GUIDELINES ADOPTED BY THE FUND'S BOARD OF DIRECTORS. IN ADDITION, THE FUND
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 FUND
TO POST ADDITIONAL COLLATERAL.
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. UNRATED DEBT SECURITIES
MAY FALL INTO THE LOWER QUALITY CATEGORY. UNRATED SECURITIES USUALLY ARE NOT
ATTRACTIVE TO AS MANY BUYERS AS RATED SECURITIES ARE, WHICH MAY MAKE THEM LESS
MARKETABLE.
THE QUALITY LIMITATION SET FORTH IN THE FUND'S INVESTMENT POLICY IS
DETERMINED IMMEDIATELY AFTER THE FUND'S ACQUISITION OF A GIVEN SECURITY.
ACCORDINGLY, ANY LATER CHANGE IN RATINGS WILL NOT BE CONSIDERED WHEN DETERMINING
WHETHER AN INVESTMENT COMPLIES WITH THE FUND'S INVESTMENT POLICY.
WHEN PURCHASING HIGH-YIELDING SECURITIES, RATED OR UNRATED, THE ADVISORS
PREPARE THEIR 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 FUND DIVERSIFICATION AND CREDIT ANALYSIS,
INVESTMENT RISK CAN BE REDUCED, ALTHOUGH THERE CAN BE NO ASSURANCE THAT LOSSES
WILL NOT OCCUR.
DERIVATIVES
THE FUND CAN USE VARIOUS TECHNIQUES TO INCREASE OR DECREASE ITS 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 FUND CAN USE THESE PRACTICES
EITHER AS SUBSTITUTION OR AS PROTECTION AGAINST AN ADVERSE MOVE IN THE FUND TO
ADJUST THE RISK AND RETURN CHARACTERISTICS OF THE FUND. IF THE ADVISOR AND/OR
SUBADVISOR JUDGES MARKET CONDITIONS INCORRECTLY OR EMPLOYS A STRATEGY THAT DOES
NOT CORRELATE WELL WITH A FUND'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 FUND 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 FUND 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 WHICH MEET THE FUND'S SOCIAL CRITERIA, AND
EMPLOY A VARIETY OF OTHER INVESTMENT TECHNIQUES. SPECIFICALLY, THE FUND MAY ALSO
ENGAGE IN THE PURCHASE AND SALE OF STOCK INDEX FUTURE CONTRACTS, FOREIGN
CURRENCY FUTURES CONTRACTS, INTEREST RATE FUTURES CONTRACTS, AND OPTIONS ON SUCH
FUTURES, AS DESCRIBED MORE FULLY BELOW.
THE FUND MAY ENGAGE IN SUCH TRANSACTIONS ONLY TO HEDGE THE EXISTING
POSITIONS. IT 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.
FUND MAY WRITE "COVERED OPTIONS" ON SECURITIES IN STANDARD CONTRACTS TRADED
ON NATIONAL SECURITIES EXCHANGES. THE FUND 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 FUND MAY PURCHASE PUT AND CALL OPTIONS, IN STANDARD
CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES, ON SECURITIES OF ISSUERS
WHICH MEET THE FUND'S SOCIAL CRITERIA. THE FUND WILL PURCHASE SUCH OPTIONS ONLY
TO HEDGE AGAINST CHANGES IN THE VALUE OF SECURITIES THE FUND HOLDS AND NOT FOR
THE PURPOSES OF SPECULATION OR LEVERAGE. BY BUYING A PUT, THE FUND 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 FUND MAY PURCHASE CALL OPTIONS ON SECURITIES WHICH THEY MAY INTEND TO
PURCHASE AND WHICH MEET THE FUND'S SOCIAL CRITERIA. 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 FUND INTENDS TO PURCHASE. 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 FUND MAY WRITE ONLY COVERED OPTIONS ON EQUITY AND DEBT
SECURITIES IN STANDARD CONTRACTS TRADED ON NATIONAL SECURITIES EXCHANGES. THIS
MEANS THAT, IN THE CASE OF CALL OPTIONS, SO LONG AS THE FUND IS OBLIGATED AS THE
WRITER OF A CALL OPTION, THE FUND WILL OWN THE UNDERLYING SECURITY SUBJECT TO
THE OPTION AND, IN THE CASE OF PUT OPTIONS, THE FUND 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 THE FUND WRITES A COVERED CALL OPTION, THE FUND 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 FUND 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 FUND AND THUS REDUCE DECLINES IN THE NET ASSET VALUE PER SHARE OF
THE FUND IF SECURITIES COVERED BY SUCH OPTIONS DECLINE IN VALUE. EXERCISE OF A
CALL OPTION BY THE PURCHASER HOWEVER WILL CAUSE THE FUND TO FOREGO FUTURE
APPRECIATION OF THE SECURITIES COVERED BY THE OPTION.
WHEN THE FUND 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 FUND 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 FUND 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 FUND 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 FUND. THE FUND'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 FUND HAS NOT ENTERED INTO A CLOSING PURCHASE
TRANSACTION.
RISKS RELATED TO OPTIONS TRANSACTIONS. THE FUND CAN CLOSE OUT ITS
RESPECTIVE POSITIONS IN EXCHANGE-TRADED OPTIONS ONLY ON AN EXCHANGE WHICH
PROVIDES A SECONDARY MARKET IN SUCH OPTIONS. ALTHOUGH THE FUND 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 FUND FROM CLOSING AN OPTIONS POSITION, WHICH COULD IMPAIR THE FUND'S
ABILITY TO HEDGE EFFECTIVELY. THE INABILITY TO CLOSE OUT A CALL POSITION MAY
HAVE AN ADVERSE EFFECT ON LIQUIDITY BECAUSE THE FUND MAY BE REQUIRED TO HOLD THE
SECURITIES UNDERLYING THE OPTION UNTIL THE OPTION EXPIRES OR IS EXERCISED.
FUTURES TRANSACTIONS. THE FUND MAY PURCHASE AND SELL FUTURES CONTRACTS, BUT ONLY
WHEN, IN THE JUDGMENT OF THE ADVISOR, SUCH A POSITION ACTS AS A HEDGE AGAINST
MARKET CHANGES WHICH WOULD ADVERSELY AFFECT THE SECURITIES HELD BY THE FUND.
THESE FUTURES CONTRACTS MAY INCLUDE, BUT ARE NOT LIMITED TO, MARKET INDEX
FUTURES CONTRACTS AND FUTURES CONTRACTS BASED ON U.S. GOVERNMENT OBLIGATIONS.
A FUTURES CONTRACT IS AN AGREEMENT BETWEEN TWO PARTIES TO BUY AND SELL A
SECURITY ON A FUTURE DATE WHICH HAS THE EFFECT OF ESTABLISHING THE CURRENT PRICE
FOR THE SECURITY. ALTHOUGH FUTURES CONTRACTS BY THEIR TERMS REQUIRE ACTUAL
DELIVERY AND ACCEPTANCE OF SECURITIES, IN MOST CASES THE CONTRACTS ARE CLOSED
OUT BEFORE THE SETTLEMENT DATE WITHOUT THE MAKING OR TAKING OF DELIVERY OF
SECURITIES. UPON BUYING OR SELLING A FUTURES CONTRACT, THE FUND DEPOSITS INITIAL
MARGIN WITH ITS CUSTODIAN, AND THEREAFTER DAILY PAYMENTS OF MAINTENANCE MARGIN
ARE MADE TO AND FROM THE EXECUTING BROKER. PAYMENTS OF MAINTENANCE MARGIN
REFLECT CHANGES IN THE VALUE OF THE FUTURES CONTRACT, WITH THE FUND BEING
OBLIGATED TO MAKE SUCH PAYMENTS IF ITS FUTURES POSITION BECOMES LESS VALUABLE
AND ENTITLED TO RECEIVE SUCH PAYMENTS IF ITS POSITIONS BECOME MORE VALUABLE.
THE FUND MAY ONLY INVEST IN FUTURES CONTRACTS TO HEDGE ITS EXISTING
INVESTMENT POSITIONS AND NOT FOR INCOME ENHANCEMENT, SPECULATION OR LEVERAGE
PURPOSES. ALTHOUGH SOME OF THE SECURITIES UNDERLYING A FUTURES CONTRACT MAY NOT
NECESSARILY MEET THE FUND'S SOCIAL CRITERIA, ANY SUCH HEDGE POSITION TAKEN BY
THE FUND WILL NOT CONSTITUTE A DIRECT OWNERSHIP INTEREST IN THE UNDERLYING
SECURITIES.
FUTURES CONTRACTS ARE DESIGNED BY BOARDS OF TRADE WHICH ARE DESIGNATED
"CONTRACTS MARKETS" BY THE COMMODITY FUTURES TRADING COMMISSION ("CFTC"). AS
SERIES OF A REGISTERED INVESTMENT COMPANY, THE FUND IS ELIGIBLE FOR EXCLUSION
FROM THE CFTC'S DEFINITION OF "COMMODITY POOL OPERATOR," MEANING THAT THE FUND
MAY INVEST IN FUTURES CONTRACTS UNDER SPECIFIED CONDITIONS WITHOUT REGISTERING
WITH THE CFTC. FUTURES CONTRACTS TRADE ON CONTRACTS MARKETS IN A MANNER THAT IS
SIMILAR TO THE WAY A STOCK TRADES ON A STOCK EXCHANGE AND THE BOARDS OF TRADE,
THROUGH THEIR CLEARING CORPORATIONS, GUARANTEE PERFORMANCE OF THE CONTRACTS.
OPTIONS ON FUTURES CONTRACTS. THE FUND MAY PURCHASE AND WRITE PUT OR CALL
OPTIONS AND SELL CALL OPTIONS ON FUTURES CONTRACTS IN WHICH THE FUND COULD
OTHERWISE INVEST AND WHICH ARE TRADED ON A U.S. EXCHANGE OR BOARD OF TRADE. THE
FUND MAY ALSO ENTER INTO CLOSING TRANSACTIONS WITH RESPECT TO SUCH OPTIONS TO
TERMINATE AN EXISTING POSITION; THAT IS, TO SELL A PUT OPTION ALREADY OWNED AND
TO BUY A CALL OPTION TO CLOSE A POSITION WHERE THE FUND HAS ALREADY SOLD A
CORRESPONDING CALL OPTION.
THE FUND MAY ONLY INVEST IN OPTIONS ON FUTURES CONTRACTS TO HEDGE THEIR
RESPECTIVE EXISTING INVESTMENT POSITIONS AND NOT FOR INCOME ENHANCEMENT,
SPECULATION OR LEVERAGE PURPOSES. ALTHOUGH SOME OF THE SECURITIES UNDERLYING THE
FUTURES CONTRACT UNDERLYING THE OPTION MAY NOT NECESSARILY MEET THE FUND'S
SOCIAL CRITERIA, ANY SUCH HEDGE POSITION TAKEN BY THE FUND WILL NOT CONSTITUTE A
DIRECT OWNERSHIP INTEREST IN THE UNDERLYING SECURITIES.
AN OPTION ON A FUTURES CONTRACT GIVES THE PURCHASER THE RIGHT, IN RETURN
FOR THE PREMIUM PAID, TO ASSUME A POSITION IN A FUTURES CONTRACT-A LONG POSITION
IF THE OPTION IS A CALL AND A SHORT POSITION IF THE OPTION IS A PUT-AT A
SPECIFIED EXERCISE PRICE AT ANY TIME DURING THE PERIOD OF THE OPTION. THE FUND
WILL PAY A PREMIUM FOR SUCH OPTIONS PURCHASED OR SOLD. IN CONNECTION WITH SUCH
OPTIONS BOUGHT OR SOLD, THE FUND WILL MAKE INITIAL MARGIN DEPOSITS AND MAKE OR
RECEIVE MAINTENANCE MARGIN PAYMENTS WHICH REFLECT CHANGES IN THE MARKET VALUE OF
SUCH OPTIONS. THIS ARRANGEMENT IS SIMILAR TO THE MARGIN ARRANGEMENTS APPLICABLE
TO FUTURES CONTRACTS DESCRIBED ABOVE.
PUT OPTIONS ON FUTURES CONTRACTS. THE PURCHASE OF PUT OPTIONS ON FUTURES
CONTRACTS IS ANALOGOUS TO THE SALE OF FUTURES CONTRACTS AND IS USED TO PROTECT
THE FUND AGAINST THE RISK OF DECLINING PRICES. THE FUND MAY PURCHASE PUT OPTIONS
AND SELL PUT OPTIONS ON FUTURES CONTRACTS THAT ARE ALREADY OWNED BY THE FUND.
THE FUND WILL ONLY ENGAGE IN THE PURCHASE OF PUT OPTIONS AND THE SALE OF COVERED
PUT OPTIONS ON MARKET INDEX FUTURES FOR HEDGING PURPOSES.
CALL OPTIONS ON FUTURES CONTRACTS. THE SALE OF CALL OPTIONS ON FUTURES CONTRACTS
IS ANALOGOUS TO THE SALE OF FUTURES CONTRACTS AND IS USED TO PROTECT THE FUND
AGAINST THE RISK OF DECLINING PRICES. THE PURCHASE OF CALL OPTIONS ON FUTURES
CONTRACTS IS ANALOGOUS TO THE PURCHASE OF A FUTURES CONTRACT. THE FUND MAY ONLY
BUY CALL OPTIONS TO CLOSE AN EXISTING POSITION WHERE THE FUND HAS ALREADY SOLD A
CORRESPONDING CALL OPTION, OR FOR A CASH HEDGE. THE FUND WILL ONLY ENGAGE IN THE
SALE OF CALL OPTIONS AND THE PURCHASE OF CALL OPTIONS TO COVER FOR HEDGING
PURPOSES.
WRITING CALL OPTIONS ON FUTURES CONTRACTS. THE WRITING OF CALL OPTIONS ON
FUTURES CONTRACTS CONSTITUTES A PARTIAL HEDGE AGAINST DECLINING PRICES OF THE
SECURITIES DELIVERABLE UPON EXERCISE OF THE FUTURES CONTRACT. IF THE FUTURES
CONTRACT PRICE AT EXPIRATION IS BELOW THE EXERCISE PRICE, THE FUND WILL RETAIN
THE FULL AMOUNT OF THE OPTION PREMIUM WHICH PROVIDES A PARTIAL HEDGE AGAINST ANY
DECLINE THAT MAY HAVE OCCURRED IN THE FUND'S SECURITIES HOLDINGS.
RISKS OF OPTIONS AND FUTURES CONTRACTS. IF THE FUND HAS SOLD FUTURES OR TAKES
OPTIONS POSITIONS TO HEDGE AGAINST DECLINE IN THE MARKET AND THE MARKET LATER
ADVANCES, THE FUND MAY SUFFER A LOSS ON THE FUTURES CONTRACTS OR OPTIONS WHICH
IT WOULD NOT HAVE EXPERIENCED IF IT HAD NOT HEDGED. CORRELATION IS ALSO
IMPERFECT BETWEEN MOVEMENTS IN THE PRICES OF FUTURES CONTRACTS AND MOVEMENTS IN
PRICES OF THE SECURITIES WHICH ARE THE SUBJECT OF THE HEDGE. THUS THE PRICE OF
THE FUTURES CONTRACT OR OPTION MAY MOVE MORE THAN OR LESS THAN THE PRICE OF THE
SECURITIES BEING HEDGED. WHERE THE FUND HAS SOLD FUTURES OR TAKEN OPTIONS
POSITIONS TO HEDGE AGAINST DECLINE IN THE MARKET, THE MARKET MAY ADVANCE AND THE
VALUE OF THE SECURITIES HELD IN THE FUND MAY DECLINE. IF THIS WERE TO OCCUR, THE
FUND MIGHT LOSE MONEY ON THE FUTURES CONTRACTS OR OPTIONS AND ALSO EXPERIENCE A
DECLINE IN THE VALUE OF ITS SECURITIES.
THE FUND CAN CLOSE OUT FUTURES POSITIONS ONLY ON AN EXCHANGE OR BOARD OF
TRADE WHICH PROVIDES A SECONDARY MARKET IN SUCH FUTURES. ALTHOUGH THE FUND
INTENDS TO PURCHASE OR SELL ONLY SUCH FUTURES FOR WHICH AN ACTIVE SECONDARY
MARKET APPEARS TO EXIST, THERE CAN BE NO ASSURANCE THAT SUCH A MARKET WILL EXIST
FOR ANY PARTICULAR FUTURES CONTRACT AT ANY PARTICULAR TIME. THIS MIGHT PREVENT
THE FUND FROM CLOSING A FUTURES POSITION, WHICH COULD REQUIRE THE FUND TO MAKE
DAILY CASH PAYMENTS WITH RESPECT TO ITS POSITION IN THE EVENT OF ADVERSE PRICE
MOVEMENTS.
OPTIONS ON FUTURES TRANSACTIONS BEAR SEVERAL RISKS APART FROM THOSE
INHERENT IN OPTIONS TRANSACTIONS GENERALLY. THE FUND'S ABILITY TO CLOSE OUT ITS
OPTIONS POSITIONS IN FUTURES CONTRACTS WILL DEPEND UPON WHETHER AN ACTIVE
SECONDARY MARKET FOR SUCH OPTIONS DEVELOPS AND IS IN EXISTENCE AT THE TIME THE
FUND SEEKS TO CLOSE ITS POSITIONS. THERE CAN BE NO ASSURANCE THAT SUCH A MARKET
WILL DEVELOP OR EXIST. THEREFORE, THE FUND MIGHT BE REQUIRED TO EXERCISE THE
OPTIONS TO REALIZE ANY PROFIT.
INVESTMENT RESTRICTIONS
-----------------------
FUNDAMENTAL INVESTMENT RESTRICTIONS
THE FUND 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 FUND.
(1) THE FUND MAY NOT MAKE ANY INVESTMENT INCONSISTENT WITH ITS CLASSIFICATION AS
A NONDIVERSIFIED INVESTMENT COMPANY UNDER THE 1940 ACT.
(2) THE FUND MAY NOT CONCENTRATE ITS INVESTMENTS IN THE SECURITIES OF ISSUERS
PRIMARILY ENGAGED IN ANY PARTICULAR INDUSTRY (OTHER THAN SECURITIES ISSUED OR
GUARANTEED BY THE U.S. GOVERNMENT OR ITS AGENCIES OR INSTRUMENTALITIES AND
REPURCHASE AGREEMENTS SECURED THEREBY).
(3) THE FUND MAY NOT ISSUE SENIOR SECURITIES OR BORROW MONEY, EXCEPT FROM BANKS
FOR TEMPORARY OR EMERGENCY PURPOSES AND THEN ONLY IN AN AMOUNT UP TO 33 1/3% OF
THE VALUE OF ITS TOTAL ASSETS OR AS PERMITTED BY LAW AND EXCEPT BY ENGAGING IN
REVERSE REPURCHASE AGREEMENTS, WHERE ALLOWED. IN ORDER TO SECURE ANY PERMITTED
BORROWINGS AND REVERSE REPURCHASE AGREEMENTS UNDER THIS SECTION, THE FUND MAY
PLEDGE, MORTGAGE OR HYPOTHECATE ITS ASSETS.
(4) THE FUND MAY NOT UNDERWRITE THE SECURITIES OF OTHER ISSUERS, EXCEPT AS
ALLOWED BY LAW OR TO THE EXTENT THAT THE PURCHASE OF OBLIGATIONS IN ACCORDANCE
WITH ITS INVESTMENT OBJECTIVE AND POLICIES, EITHER DIRECTLY FROM THE ISSUER, OR
FROM AN UNDERWRITER FOR AN ISSUER, MAY BE DEEMED AN UNDERWRITING.
(5) THE FUND MAY NOT INVEST DIRECTLY IN COMMODITIES OR REAL ESTATE, ALTHOUGH IT
MAY INVEST IN SECURITIES WHICH ARE SECURED BY REAL ESTATE OR REAL ESTATE
MORTGAGES AND SECURITIES OF ISSUERS WHICH INVEST OR DEAL IN COMMODITIES,
COMMODITY FUTURES, REAL ESTATE OR REAL ESTATE MORTGAGES.
(6) THE FUND MAY NOT MAKE LOANS, OTHER THAN THROUGH THE PURCHASE OF MONEY MARKET
INSTRUMENTS AND REPURCHASE AGREEMENTS OR BY THE PURCHASE OF BONDS, DEBENTURES OR
OTHER DEBT SECURITIES, OR AS PERMITTED BY LAW. THE PURCHASE OF ALL OR A PORTION
OF AN ISSUE OF PUBLICLY OR PRIVATELY DISTRIBUTED DEBT OBLIGATIONS IN ACCORDANCE
WITH THE FUND'S INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS, SHALL NOT
CONSTITUTE THE MAKING OF A LOAN.
NONFUNDAMENTAL INVESTMENT RESTRICTIONS
THE BOARD OF 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) THE FUND MAY NOT ENTER INTO REVERSE REPURCHASE AGREEMENTS IF THE AGGREGATE
PROCEEDS FROM OUTSTANDING REVERSE REPURCHASE AGREEMENTS, WHEN ADDED TO OTHER
OUTSTANDING BORROWINGS PERMITTED BY THE 1940 ACT, WOULD EXCEED 33 1/3% OF THE
FUND'S TOTAL ASSETS. THE FUND DOES NOT INTEND TO MAKE ANY PURCHASES OF
SECURITIES IF BORROWING EXCEEDS 5% OF TOTAL ASSETS.
(2) THE FUND MAY NOT INVEST, IN THE AGGREGATE, MORE THAN 15% OF ITS NET ASSETS
IN ILLIQUID SECURITIES.
(3) THE FUND MAY NOT MAKE SHORT SALES OF SECURITIES OR PURCHASE ANY SECURITIES
ON MARGIN EXCEPT AS PROVIDED WITH RESPECT TO OPTIONS, FUTURES CONTRACTS AND
OPTIONS ON FUTURE CONTRACTS.
(4) THE FUND MAY NOT ENTER INTO A FUTURES CONTRACT OR AN OPTION ON A FUTURES
CONTRACT IF THE AGGREGATE INITIAL MARGINS AND PREMIUMS REQUIRED TO ESTABLISH
THESE POSITIONS WOULD EXCEED 5% OF THE FUND'S NET ASSETS.
(5) THE FUND MAY NOT PURCHASE A PUT OR CALL OPTION ON A SECURITY (INCLUDING A
STRADDLE OR SPREAD) IF THE VALUE OF THAT OPTION PREMIUM, WHEN AGGREGATED WITH
THE PREMIUMS ON ALL OTHER OPTIONS ON SECURITIES HELD BY THE FUND, WOULD EXCEED
5% OF THE FUND'S TOTAL ASSETS.
(6) THE FUND MAY NOT PURCHASE THE OBLIGATIONS OF FOREIGN ISSUERS IF, AS A
RESULT, SUCH SECURITIES WOULD EXCEED 25% OF THE VALUE OF THE FUND'S ASSETS.
(7) THE FUND MAY NOT WRITE, PURCHASE OR SELL PUTS, CALLS OR COMBINATIONS THEREOF
EXCEPT AS PROVIDED WITH RESPECT TO OPTIONS, FUTURES CONTRACTS AND OPTIONS ON
FUTURES CONTRACTS.
ANY INVESTMENT RESTRICTION WHICH INVOLVES A MAXIMUM PERCENTAGE OF
SECURITIES OR ASSETS SHALL NOT BE CONSIDERED TO BE VIOLATED UNLESS AN EXCESS
OVER THE APPLICABLE PERCENTAGE OCCURS IMMEDIATELY AFTER AN ACQUISITION OF
SECURITIES OR UTILIZATION OF ASSETS AND RESULTS THEREFROM.
PURCHASE AND REDEMPTION 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.
AMOUNTS REDEEMED BY CHECK REDEMPTION MAY BE MAILED TO THE INVESTOR. CERTAIN
SHARES MAY BE SUBJECT TO A CONTINGENT DEFERRED SALES CHARGE WHICH IS SUBTRACTED
FROM THE REDEMPTION PROCEEDS (SEE PROSPECTUS, "CALCULATION OF CONTINGENT
DEFERRED SALES CHARGES AND WAIVER OF SALES CHARGES"). AMOUNTS OF MORE THAN $50
AND LESS THAN $300,000 MAY BE TRANSFERRED ELECTRONICALLY AT NO CHARGE TO THE
INVESTOR. AMOUNTS OF $1,000 OR MORE WILL BE TRANSMITTED BY WIRE WITHOUT CHARGE
BY THE FUND TO THE INVESTOR'S ACCOUNT AT A DOMESTIC COMMERCIAL BANK THAT IS A
MEMBER OF THE FEDERAL RESERVE SYSTEM OR TO A CORRESPONDENT BANK. A CHARGE OF $5
IS IMPOSED ON WIRE TRANSFERS OF LESS THAN $1,000. IF THE INVESTOR'S BANK IS NOT
A FEDERAL RESERVE SYSTEM MEMBER, FAILURE OF IMMEDIATE NOTIFICATION TO THAT BANK
BY THE CORRESPONDENT BANK COULD RESULT IN A DELAY IN CREDITING THE FUNDS TO THE
INVESTOR'S BANK ACCOUNT.
TELEPHONE REDEMPTION REQUESTS WHICH WOULD REQUIRE THE REDEMPTION OF SHARES
PURCHASED BY CHECK OR ELECTRONIC FUNDS TRANSFER WITHIN THE PREVIOUS 10 BUSINESS
DAYS MAY NOT BE HONORED. THE FUND RESERVES THE RIGHT TO MODIFY THE TELEPHONE
REDEMPTION PRIVILEGE.
NEW SHAREHOLDERS WISHING TO USE THE FUND'S TELEPHONE REDEMPTION PROCEDURE
MUST SO INDICATE ON THEIR INVESTMENT APPLICATIONS AND, IF DESIRED, DESIGNATE A
COMMERCIAL BANK OR SECURITIES BROKER AND ACCOUNT TO RECEIVE THE REDEMPTION
PROCEEDS. EXISTING SHAREHOLDERS WHO AT ANY TIME DESIRE TO ARRANGE FOR THE
TELEPHONE REDEMPTION PROCEDURE, OR TO CHANGE INSTRUCTIONS ALREADY GIVEN, MUST
SEND A WRITTEN NOTICE TO THE FUND, WITH A VOIDED CHECK FOR THE BANK WIRING
INSTRUCTIONS TO BE ADDED. IF A VOIDED CHECK DOES NOT ACCOMPANY THE REQUEST, THEN
THE REQUEST MUST BE SIGNATURE GUARANTEED BY A COMMERCIAL BANK, SAVINGS AND LOAN
ASSOCIATION, TRUST COMPANY, MEMBER FIRM OF ANY NATIONAL SECURITIES EXCHANGE, OR
CERTAIN CREDIT UNIONS. FURTHER DOCUMENTATION MAY BE REQUIRED FROM CORPORATIONS,
FIDUCIARIES, PENSION PLANS, AND INSTITUTIONAL INVESTORS.
THE FUND'S REDEMPTION CHECK NORMALLY WILL BE MAILED TO THE INVESTOR ON THE
NEXT BUSINESS DAY FOLLOWING THE DATE OF RECEIPT BY THE FUND OF THE WRITTEN OR
TELEPHONE REDEMPTION REQUEST. IF THE INVESTOR SO INSTRUCTS IN THE REDEMPTION
REQUEST, THE CHECK WILL BE MAILED OR THE REDEMPTION PROCEEDS WIRED TO A
PREDESIGNATED ACCOUNT AT THE INVESTOR'S BANK.
NET ASSET VALUE
---------------
THE NET ASSET VALUE PER SHARE OF THE FUND IS DETERMINED EVERY BUSINESS DAY
AS OF THE CLOSE OF THE REGULAR SESSION OF THE NEW YORK STOCK EXCHANGE
(GENERALLY, 4:00 P.M., EASTERN TIME). THE FUND 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.
THE PUBLIC OFFERING PRICE OF THE FUND'S SHARES IS THE NET ASSET VALUE PER
SHARE (PLUS, FOR CLASS A SHARES, THE APPLICABLE SALES CHARGE). THE NET ASSET
VALUE PER SHARE IS COMPUTED SEPARATELY FOR EACH CLASS BY DIVIDING THE VALUE OF
THE FUND'S TOTAL ASSETS, LESS ITS LIABILITIES, BY THE TOTAL NUMBER OF SHARES
OUTSTANDING FOR THAT CLASS. THE FUND'S SECURITIES ARE VALUED AS FOLLOWS: (A)
SECURITIES FOR WHICH MARKET QUOTATIONS ARE READILY AVAILABLE ARE VALUED AT THE
MOST RECENT CLOSING PRICE, MEAN BETWEEN BID AND ASKED PRICE, OR YIELD EQUIVALENT
AS OBTAINED FROM ONE OR MORE MARKET MAKERS FOR SUCH SECURITIES; (B) SECURITIES
MATURING WITHIN 60 DAYS ARE VALUED AT COST, PLUS OR MINUS ANY AMORTIZED DISCOUNT
OR PREMIUM, UNLESS THE BOARD OF DIRECTORS DETERMINES SUCH METHOD NOT TO BE
APPROPRIATE UNDER THE CIRCUMSTANCES; AND (C) ALL OTHER SECURITIES AND ASSETS FOR
WHICH MARKET QUOTATIONS ARE NOT READILY AVAILABLE ARE FAIRLY VALUED BY THE
ADVISOR IN GOOD FAITH UNDER THE SUPERVISION OF THE BOARD OF DIRECTORS.
NET ASSET VALUE AND OFFERING PRICE PER SHARE AS OF 9/30/99
NET ASSET VALUE PER SHARE
($102,507,927/3,961,602 SHARES) $25.88
MAXIMUM SALES CHARGE, CLASS A
(4.75% OF OFFERING PRICE) 1.29
OFFERING PRICE PER SHARE, CLASS A $26.17
CLASS B NET ASSET VALUE AND OFFERING PRICE PER SHARE
($9,444,965/370,951 SHARES) $25.46
CLASS C NET ASSET VALUE AND OFFERING PRICE PER SHARE
($9,021,078/364,413 SHARES) $24.76
CLASS I NET ASSET VALUE AND OFFERING PRICE PER SHARE
($2,546,594/97,990 SHARES) $25.99
CALCULATION OF TOTAL RETURN
---------------------------
THE FUND MAY, FROM TIME TO TIME, ADVERTISE "TOTAL RETURN." TOTAL RETURN IS
CALCULATED SEPARATELY FOR EACH CLASS. TOTAL RETURN DIFFERS FROM YIELD IN THAT
YIELD FIGURES MEASURE ONLY THE INCOME COMPONENT OF THE FUND'S INVESTMENTS, WHILE
TOTAL RETURN INCLUDES NOT ONLY THE EFFECT OF INCOME DIVIDENDS BUT ALSO ANY
CHANGE IN NET ASSET VALUE, OR PRINCIPAL AMOUNT, DURING THE STATED PERIOD. TOTAL
RETURN IS COMPUTED BY TAKING THE TOTAL NUMBER OF SHARES PURCHASED BY A
HYPOTHETICAL $1,000 INVESTMENT, AFTER DEDUCTING THE APPLICABLE SALES CHARGE FOR
CLASS A SHARES, ADDING ALL ADDITIONAL SHARES PURCHASED WITHIN THE PERIOD WITH
REINVESTED DIVIDENDS AND DISTRIBUTIONS, CALCULATING THE VALUE OF THOSE SHARES AT
THE END OF THE PERIOD, AND DIVIDING THE RESULT BY THE INITIAL $1,000 INVESTMENT.
NOTE: "TOTAL RETURN" WHEN QUOTED IN THE FINANCIAL HIGHLIGHTS SECTION OF THE
FUND'S PROSPECTUS AND THE ANNUAL REPORT TO SHAREHOLDERS, HOWEVER, PER SEC
INSTRUCTIONS, DOES NOT REFLECT DEDUCTION OF THE SALES CHARGE, AND CORRESPONDS TO
"RETURN WITHOUT MAXIMUM SALES LOAD" RETURN AS REFERRED TO HEREIN. FOR PERIODS OF
MORE THAN ONE YEAR, THE CUMULATIVE TOTAL RETURN IS THEN ADJUSTED FOR THE NUMBER
OF YEARS, TAKING COMPOUNDING INTO ACCOUNT, TO CALCULATE AVERAGE ANNUAL TOTAL
RETURN DURING THAT PERIOD.
TOTAL RETURN IS COMPUTED ACCORDING TO THE FOLLOWING FORMULA:
P(1 + T)N = ERV
WHERE P = A HYPOTHETICAL INITIAL PAYMENT OF $L,000 (LESS THE MAXIMUM SALES
CHARGE IMPOSED DURING THE PERIOD CALCULATED); T = TOTAL RETURN; N = NUMBER OF
YEARS; AND ERV = THE ENDING REDEEMABLE VALUE OF A HYPOTHETICAL $1,000 PAYMENT
MADE AT THE BEGINNING OF THE PERIOD.
PERFORMANCE IS HISTORICAL IN NATURE AND IS NOT INTENDED TO INDICATE FUTURE
PERFORMANCE. ALL TOTAL RETURN QUOTATIONS REFLECT THE DEDUCTION OF THE FUND'S
MAXIMUM SALES CHARGE, EXCEPT QUOTATIONS OF "RETURN WITHOUT MAXIMUM SALES LOAD"
OR "AT NAV" (OR "WITHOUT CDSC") WHICH DO NOT REFLECT DEDUCTION OF THE SALES
CHARGE. RETURN WITHOUT MAXIMUM SALES LOAD, WHICH WILL BE HIGHER THAN TOTAL
RETURN, 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. THUS, IN THE ABOVE FORMULA, FOR RETURN WITHOUT MAXIMUM
SALES LOAD, P = THE ENTIRE $1,000 HYPOTHETICAL INITIAL INVESTMENT AND DOES NOT
REFLECT DEDUCTION OF ANY SALES CHARGE. RETURN MAY BE ADVERTISED FOR OTHER
PERIODS, SUCH AS BY QUARTER, OR CUMULATIVELY FOR MORE THAN ONE YEAR. CLASS I
SHARES DO NOT HAVE A SALES CHARGE.
THE STANDARDIZED TOTAL RETURN FOR CLASS I SHARES IS "LINKED" TO THE CLASS A
TOTAL RETURN. THAT IS, CLASS I SHARES HAVE AN ACTUAL INCEPTION DATE OF 1999.
HOWEVER, CLASS A SHARES HAVE AN INCEPTION DATE OF SEVERAL YEARS EARLIER. IN THE
TABLE BELOW, PERFORMANCE RESULTS BEFORE THE CLASS I ACTUAL INCEPTION DATE ARE
FOR CLASS A AT NAV (I.E., THEY DO NOT REFLECT THE DEDUCTION OF THE CLASS A
FRONT-END SALES CHARGE.) BECAUSE CLASS A HAD HIGHER EXPENSES, ITS PERFORMANCE
WAS LOWER THAN THE CLASS I WOULD HAVE REALIZED IN THE SAME PERIOD.
NONSTANDARDIZED TOTAL RETURN FOR CLASS I SHARE MAY ALSO BE SHOWN FROM THE ACTUAL
CLASS I INCEPTION DATE; THIS FIGURE IS NOT LINKED TO CLASS A TOTAL RETURN.
RETURN FOR THE FUND'S SHARES ARE AS FOLLOWS, FOR THE PERIODS ENDED
SEPTEMBER 30, 1999:
PERIODS ENDED CLASS A CLASS B
SEPTEMBER 30, 1999 TOTAL RETURN TOTAL RETURN
WITH/WITHOUT MAXIMUM LOAD WITH/WITHOUT CDSC
CAPITAL ACCUMULATION FUND
ONE YEAR 9.36% 14.82% 8.90% 13.90%
SINCE INCEPTION 16.41% 17.57% -1.75% 0.91%
(OCTOBER 31, 1994, FOR CLASS A, AND CLASS C,
APRIL 1, 1998 FOR CLASS B, MARCH 1, 1999 FOR CLASS I)
PERIODS ENDED CLASS C CLASS I
SEPTEMBER 30, 1999 TOTAL RETURN TOTAL RETURN
WITH/WITHOUT CDSC LINKED/ACTUAL
CAPITAL ACCUMULATION FUND
ONE YEAR 12.93% 13.93% 15.36% N/A
SINCE INCEPTION 16.64% 16.64% 17.69% 0.08%
(OCTOBER 31, 1994, FOR CLASS A, AND CLASS C,
APRIL 1, 1998 FOR CLASS B, MARCH 1, 1999 FOR ACTUAL CLASS I)
TOTAL RETURN, LIKE NET ASSET VALUE PER SHARE, FLUCTUATES IN RESPONSE TO
CHANGES IN MARKET CONDITIONS. PERFORMANCE FOR ANY PARTICULAR PERIOD SHOULD NOT
BE CONSIDERED AN INDICATION OF FUTURE RETURN.
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.
DIVIDENDS, DISTRIBUTIONS, AND TAXES
-----------------------------------
THE FUND INTENDS TO QUALIFY AS REGULATED INVESTMENT COMPANIES UNDER
SUBCHAPTER M OF THE INTERNAL REVENUE CODE. IF FOR ANY REASON THE FUND SHOULD
FAIL TO QUALIFY, IT WOULD BE TAXED AS A CORPORATION AT THE FUND LEVEL, RATHER
THAN PASSING THROUGH ITS INCOME AND GAINS TO SHAREHOLDERS.
DISTRIBUTIONS OF REALIZED NET CAPITAL GAINS, IF ANY, ARE NORMALLY PAID ONCE
A YEAR; HOWEVER, THE FUND DOES NOT INTEND TO MAKE ANY SUCH DISTRIBUTIONS UNLESS
AVAILABLE CAPITAL LOSS CARRYOVERS, IF ANY, HAVE BEEN USED OR HAVE EXPIRED. AS OF
SEPTEMBER 30, 1999, THE FUND HAD TAX-LOSS CARRYFORWARDS OF $0.
GENERALLY, DIVIDENDS (INCLUDING SHORT-TERM CAPITAL GAINS) AND DISTRIBUTIONS
ARE TAXABLE TO THE SHAREHOLDER 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.
THE FUND IS REQUIRED TO WITHHOLD 31% OF ANY REPORTABLE DIVIDENDS AND
LONG-TERM CAPITAL GAIN DISTRIBUTIONS PAID AND 31% REPORTABLE OF EACH REDEMPTION
TRANSACTION IF: (A) THE SHAREHOLDER'S SOCIAL SECURITY NUMBER OR OTHER TAXPAYER
IDENTIFICATION NUMBER ("TIN") IS NOT PROVIDED OR AN OBVIOUSLY INCORRECT TIN IS
PROVIDED; (B) THE SHAREHOLDER DOES NOT CERTIFY UNDER PENALTIES OF PERJURY THAT
THE TIN PROVIDED IS THE SHAREHOLDER'S CORRECT TIN AND THAT THE SHAREHOLDER IS
NOT SUBJECT TO BACKUP WITHHOLDING UNDER SECTION 3406(A)(1)(C) OF THE INTERNAL
REVENUE 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 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 FUND IS REQUIRED TO REPORT TO THE INTERNAL REVENUE SERVICE
THE FOLLOWING INFORMATION WITH RESPECT TO EACH REDEMPTION TRANSACTION OCCURRING
IN THE FUND:(A) THE SHAREHOLDER'S NAME, ADDRESS, ACCOUNT NUMBER AND TAXPAYER
IDENTIFICATION NUMBER; (B) THE TOTAL DOLLAR VALUE OF THE REDEMPTIONS; AND (C)
THE FUND'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; FOREIGN CENTRAL
BANKS OF ISSUE. NON-RESIDENT ALIENS, CERTAIN FOREIGN PARTNERSHIPS AND FOREIGN
CORPORATIONS ARE GENERALLY NOT SUBJECT TO EITHER REQUIREMENT BUT MAY INSTEAD BE
SUBJECT TO WITHHOLDING UNDER SECTIONS 1441 OR 1442 OF THE INTERNAL REVENUE CODE.
SHAREHOLDERS CLAIMING EXEMPTION FROM BACKUP WITHHOLDING AND BROKER REPORTING
SHOULD CALL OR WRITE THE FUND FOR FURTHER INFORMATION.
MANY STATES DO NOT TAX THE PORTION OF THE FUND'S DIVIDENDS WHICH IS DERIVED
FROM INTEREST ON U.S. GOVERNMENT OBLIGATIONS. STATE LAW VARIES CONSIDERABLY
CONCERNING THE TAX STATUS OF DIVIDENDS DERIVED FROM U.S. GOVERNMENT OBLIGATIONS.
ACCORDINGLY, SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS ABOUT THE TAX STATUS
OF DIVIDENDS AND DISTRIBUTIONS FROM THE FUND IN THEIR RESPECTIVE JURISDICTIONS.
DIVIDENDS PAID BY THE FUND MAY BE ELIGIBLE FOR THE DIVIDENDS RECEIVED
DEDUCTION AVAILABLE TO CORPORATE TAXPAYERS. CORPORATE TAXPAYERS REQUIRING THIS
INFORMATION MAY CONTACT CALVERT.
DIRECTORS AND OFFICERS
----------------------
THE FUND'S BOARD OF DIRECTORS SUPERVISES THE FUND'S ACTIVITIES AND REVIEWS
ITS CONTRACTS WITH COMPANIES THAT PROVIDE IT WITH SERVICES.
JOHN G. GUFFEY, JR., 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.
MR. GUFFEY HAS BEEN ADVISED THAT THE SECURITIES AND EXCHANGE COMMISSION
("SEC") HAS ENTERED AN ORDER AGAINST HIM RELATING TO HIS FORMER SERVICE AS A
DIRECTOR OF COMMUNITY BANKERS MUTUAL FUND, INC. THIS FUND IS NOT CONNECTED WITH
ANY CALVERT FUND OR THE CALVERT GROUP AND CEASED OPERATIONS IN SEPTEMBER, 1994.
MR. GUFFEY CONSENTED TO THE ENTRY OF THE ORDER WITHOUT ADMITTING OR DENYING THE
FINDINGS IN THE ORDER. THE ORDER CONTAINS FINDINGS (1) THAT THE COMMUNITY
BANKERS MUTUAL FUND'S PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION WERE
MATERIALLY FALSE AND MISLEADING BECAUSE THEY MISSTATED OR FAILED TO STATE
MATERIAL FACTS CONCERNING THE PRICING OF FUND SHARES AND THE PERCENTAGE OF
ILLIQUID SECURITIES IN THE FUND'S PORTFOLIO AND THAT MR. GUFFEY, AS A MEMBER OF
THE FUND'S BOARD, SHOULD HAVE KNOWN OF THESE MISSTATEMENTS AND THEREFORE
VIOLATED THE SECURITIES ACT OF 1933; (2) THAT THE PRICE OF THE FUND'S SHARES
SOLD TO THE PUBLIC WAS NOT BASED ON THE CURRENT NET ASSET VALUE OF THE SHARES,
IN VIOLATION OF THE INVESTMENT COMPANY ACT OF 1940 (THE "INVESTMENT COMPANY
ACT"); AND (3) THAT THE BOARD OF THE FUND, INCLUDING MR. GUFFEY, VIOLATED THE
INVESTMENT COMPANY ACT BY DIRECTING THE FILING OF A MATERIALLY FALSE
REGISTRATION STATEMENT. THE ORDER DIRECTED MR. GUFFEY TO CEASE AND DESIST FROM
COMMITTING OR CAUSING FUTURE VIOLATIONS AND TO PAY A CIVIL PENALTY OF $5,000.
THE SEC PLACED NO RESTRICTIONS ON MR. GUFFEY'S CONTINUING TO SERVE AS A TRUSTEE
OR DIRECTOR OF MUTUAL FUNDS. DOB: 05/15/48. ADDRESS: 388 CALLE COLINA, SANTA FE,
NEW MEXICO 87501.
*BARBARA J. KRUMSIEK, PRESIDENT AND 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, AS WELL AS SENIOR VICE
PRESIDENT OF CALVERT SOCIAL INVESTMENT FUND. MS. KRUMSIEK IS ON THE BOARD OF
DIRECTORS OF THE 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.
TERRENCE J. MOLLNER, ED.D., DIRECTOR. DR. MOLLNER IS FOUNDER, CHAIRPERSON,
AND PRESIDENT OF TRUSTEESHIP INSTITUTE, INC., A DIVERSE FOUNDATION KNOWN
PRINCIPALLY FOR ITS CONSULTATION TO CORPORATIONS CONVERTING TO COOPERATIVE
EMPLOYEE-OWNERSHIP. HE IS ALSO A DIRECTOR OF CALVERT SOCIAL INVESTMENT FUND,
INC. HE SERVED AS A TRUSTEE OF THE COOPERATIVE FUND OF NEW ENGLAND, INC., AND IS
NOW A MEMBER OF ITS BOARD OF ADVISORS. IN ADDITION, DR. MOLLNER IS A FOUNDER AND
MEMBER OF THE BOARD OF TRUSTEES OF THE FOUNDATION FOR SOVIET-AMERICAN ECONOMIC
COOPERATION AND IS ON THE BOARD OF DIRECTORS OF THE CALVERT SOCIAL INVESTMENT
FOUNDATION.
ON OCTOBER 8, 1998, MR. MOLLNER DECLARED AND FILED FOR PERSONAL BANKRUPTCY
PROTECTION UNDER CHAPTER 7 OF THE FEDERAL BANKRUPTCY CODE. THE CAUSE OF MR.
MOLLNER'S FINANCIAL DIFFICULTIES WAS LOSSES SUSTAINED IN TRADING IN THE OPTIONS
AND FUTURES MARKET. DOB: 12/13/44. ADDRESS: 15 EDWARDS SQUARE, NORTHAMPTON,
MASSACHUSETTS 01060.
RUSTUM ROY, DIRECTOR. MR. ROY IS THE EVAN PUGH PROFESSOR OF THE SOLID STATE
GEOCHEMISTRY AT PENNSYLVANIA STATE UNIVERSITY, AND CORPORATION CHAIR, NATIONAL
ASSOCIATION OF SCIENCE, TECHNOLOGY, AND SOCIETY. DOB: 7/3/24. ADDRESS: 528 S.
PUGH STREET STATE COLLEGE, PA 16801.
*D. WAYNE SILBY, ESQ. 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, INC. HE IS THE
PRESIDENT OF CALVERT SOCIAL INVESTMENT 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 THE CALVERT SOCIAL INVESTMENT FOUNDATION. DOB: 7/20/48.
ADDRESS: 1715 18TH STREET, N.W., WASHINGTON, D.C. 20009.
TESSA TENNANT, DIRECTOR. MS. TENNANT IS THE HEAD OF GREEN AND ETHICAL
INVESTING FOR NATIONAL PROVIDENT INVESTMENT MANAGERS LTD. PREVIOUSLY, SHE WAS IN
CHARGE OF THE ENVIRONMENTAL RESEARCH UNIT OF JUPITER TYNDALL MERLIN LTD., AND
WAS THE DIRECTOR OF THE JUPITER TYNDALL MERLIN INVESTMENT MANAGERS. DOB:
5/29/59. ADDRESS: GLEN HOUSE INNERLEITHEN BORDERS, SCOTLAND EH44 6PX.
MOHAMMAD YUNUS, DIRECTOR. MR. YUNUS IS A MANAGING DIRECTOR OF GRAMEEN BANK
IN BANGLADESH. DOB: 6/28/40. ADDRESS: GRAMEEN BANK, MIRPUR TWO, DHAKA 1216,
BANGLADESH.
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.
WILLIAM M. TARTIKOFF, ESQ., VICE PRESIDENT AND ASSISTANT 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. DOB: 09/09/50.
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.
SUSAN WALKER BENDER, ESQ., ASSISTANT SECRETARY. MS. BENDER IS ASSOCIATE
GENERAL COUNSEL OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS. DOB: 01/29/59.
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.
IVY WAFFORD DUKE, ESQ., ASSISTANT SECRETARY. MS. DUKE IS ASSOCIATE GENERAL
COUNSEL OF CALVERT GROUP AND AN OFFICER OF EACH OF ITS SUBSIDIARIES AND
CALVERT-SLOAN ADVISERS, L.L.C. SHE IS ALSO AN OFFICER OF EACH OF THE OTHER
INVESTMENT COMPANIES IN THE CALVERT GROUP OF FUNDS AND SECRETARY AND PROVIDES
COUNSEL TO THE CALVERT SOCIAL INVESTMENT FOUNDATION. PRIOR TO WORKING AT CALVERT
GROUP, MS. DUKE WAS AN ASSOCIATE IN THE INVESTMENT MANAGEMENT GROUP OF THE
BUSINESS AND FINANCE DEPARTMENT AT DRINKER BIDDLE & REATH. DOB: 09/07/68.
DIRECTORS MARKED WITH AN *, ABOVE, ARE "INTERESTED PERSONS" OF THE FUND,
UNDER THE INVESTMENT COMPANY ACT OF 1940.
THE ADDRESS OF DIRECTORS AND OFFICERS, UNLESS OTHERWISE NOTED, IS 4550
MONTGOMERY AVENUE, BETHESDA, MARYLAND 20814. DIRECTORS AND OFFICERS AS A GROUP
OWN LESS THAN ONE PERCENT OF THE TOTAL OUTSTANDING SHARES OF THE FUND.
MESSRS. GUFFEY AND SILBY SERVE ON THE FUND'S HIGH SOCIAL IMPACT INVESTMENTS
COMMITTEE WHICH ASSISTS THE FUND IN IDENTIFYING, EVALUATING, AND SELECTING
INVESTMENTS IN SECURITIES THAT OFFER A RATE OF RETURN BELOW THE THEN-PREVAILING
MARKET RATE AND THAT PRESENT ATTRACTIVE OPPORTUNITIES FOR FURTHERING THE FUND'S
SOCIAL CRITERIA.
DURING FISCAL 1999, DIRECTORS OF THE FUND NOT AFFILIATED WITH THE FUND'S
ADVISOR WERE PAID AGGREGATE FEES AND EXPENSES OF $30,906.
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 DEFERRED COMPENSATION PLAN
DEFERRAL OF THE FEES IS DESIGNED TO MAINTAIN THE PARTIES IN THE SAME POSITION AS
IF THE FEES WERE PAID ON A CURRENT BASIS. MANAGEMENT BELIEVES THIS WILL HAVE A
NEGLIGIBLE EFFECT ON THE FUND'S ASSETS, LIABILITIES, NET ASSETS, AND NET INCOME
PER SHARE.
DIRECTOR COMPENSATION TABLE
FISCAL YEAR 1999 AGGREGATE COMPENSATION PENSION OR RETIREMENT TOTAL
COMPENSATION FROM
(UNAUDITED NUMBERS) FROM REGISTRANT FOR SERVICE BENEFITS ACCRUED AS PART
REGISTRANT AND FUND
AS DIRECTOR OF REGISTRANT EXPENSES* COMPLEX PAID TO
NAME OF DIRECTOR DIRECTOR**
JOHN G. GUFFEY, JR. $9,000 $1,751 $56,365
TERRENCE J. MOLLNER $9,000 $0 $33,830
RUSTUM ROY $9,000 $0 $11,300
D. WAYNE SILBY $8,000 $0 $60,831
TESSA TENNANT $9,000 $9,000 $9,000
MUHAMMAD YUNUS $7,000 $7,000 $7,000
* MS. TENNANT HAS CHOSEN TO DEFER A PORTION OF HER COMPENSATION. HER TOTAL
DEFERRED COMPENSATION, INCLUDING DIVIDENDS AND CAPITAL APPRECIATION, WAS
$47,536, AS OF SEPTEMBER 30, 1999. MESSRS. GUFFEY AND YUNUS HAVE ALSO CHOSEN TO
DEFER A PORTION OF THEIR COMPENSATION. THEIR TOTAL DEFERRED COMPENSATION,
INCLUDING DIVIDENDS AND CAPITAL APPRECIATION, WAS $11,022 AND $3,907,
RESPECTIVELY, AS OF SEPTEMBER 30, 1999.
** AS OF SEPTEMBER 30, 1999. THE FUND COMPLEX CONSISTS OF NINE (9) REGISTERED
INVESTMENT COMPANIES.
FROM TIME TO TIME THE FUND MAY MAKE CHARITABLE CONTRIBUTIONS TO GROUPS INTENDED
TO FURTHER THE FUND'S SOCIAL PURPOSE, INCLUDING BUT NOT LIMITED TO EDUCATING
INVESTORS ABOUT SOCIALLY RESPONSIBLE INVESTING.
INVESTMENT ADVISOR
------------------
THE FUND'S INVESTMENT ADVISOR IS CALVERT ASSET MANAGEMENT COMPANY, INC.,
4550 MONTGOMERY AVENUE, 1000N, BETHESDA, MARYLAND 20814, A SUBSIDIARY OF CALVERT
GROUP LTD., WHICH IS A SUBSIDIARY OF ACACIA LIFE INSURANCE COMPANY OF
WASHINGTON, D.C. ("ACACIA"). EFFECTIVE JANUARY 1, 1999, ACACIA MERGED WITH AND
BECAME A SUBSIDIARY OF AMERITAS ACACIA MUTUAL HOLDING COMPANY. UNDER THE
ADVISORY CONTRACT, THE ADVISOR PROVIDES INVESTMENT ADVICE TO THE FUND AND
OVERSEES ITS DAY-TO-DAY OPERATIONS, SUBJECT TO DIRECTION AND CONTROL BY THE
FUND'S BOARD OF DIRECTORS. THE ADVISOR 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 EMPLOYEES OF THE ADVISOR OR ITS AFFILIATES. THE FUND PAYS ALL OTHER
ADMINISTRATIVE AND OPERATING EXPENSES, INCLUDING: CUSTODIAL, REGISTRAR, DIVIDEND
DISBURSING AND TRANSFER AGENCY FEES; ADMINISTRATIVE SERVICE FEES; FEDERAL AND
STATE SECURITIES REGISTRATION FEES; SALARIES, FEES AND EXPENSES OF
TRUSTEES/DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES OF THE FUND, WHO ARE NOT
EMPLOYEES OF THE ADVISOR OR OF ITS AFFILIATES; INSURANCE PREMIUMS; TRADE
ASSOCIATION DUES; LEGAL AND AUDIT FEES; INTEREST, TAXES AND OTHER BUSINESS FEES;
EXPENSES OF PRINTING AND MAILING REPORTS, NOTICES, PROSPECTUSES, AND PROXY
MATERIAL TO SHAREHOLDERS; ANNUAL SHAREHOLDERS' MEETING EXPENSES; AND BROKERAGE
COMMISSIONS AND OTHER COSTS ASSOCIATED WITH THE PURCHASE AND SALE OF PORTFOLIO
SECURITIES.
UNDER THE ADVISORY AGREEMENT, THE ADVISOR RECEIVES AN ANNUAL BASE FEE,
PAYABLE MONTHLY, OF 0.65% OF THE FUND'S AVERAGE DAILY NET ASSETS. THERE WERE NO
EXPENSES REIMBURSED OR FEES VOLUNTARILY WAIVED.
BROWN CAPITAL MANAGEMENT, INC., THE FUND'S SUBADVISOR, IS CONTROLLED BY
EDDIE C. BROWN. IT RECEIVES A SUBADVISORY FEE, PAID BY THE ADVISOR, OF 0.25% OF
NET ASSETS.
THE FUND HAS RECEIVED AN EXEMPTIVE ORDER FROM THE SECURITIES AND EXCHANGE
COMMISSION TO PERMIT IT, PURSUANT TO APPROVAL BY THE BOARD OF
DIRECTORS/TRUSTEES, TO ENTER INTO AND MATERIALLY AMEND INVESTMENT SUBADVISORY
AGREEMENTS WITHOUT SHAREHOLDER APPROVAL. WITHIN 90 DAYS OF THE HIRING OF ANY
SUBADVISOR OR THE IMPLEMENTATION OF ANY PROPOSED MATERIAL CHANGE IN THE
INVESTMENT SUBADVISORY AGREEMENT, THE FUND WILL FURNISH ITS SHAREHOLDERS
INFORMATION ABOUT THE NEW SUBADVISOR OR INVESTMENT SUBADVISORY AGREEMENT THAT
WOULD BE INCLUDED IN A PROXY STATEMENT. SUCH INFORMATION WILL INCLUDE ANY CHANGE
IN SUCH DISCLOSURE CAUSED BY THE ADDITION OF A NEW SUBADVISOR OR ANY PROPOSED
MATERIAL CHANGE IN THE INVESTMENT SUBADVISORY AGREEMENT OF THE FUND. THE FUND
WILL MEET THIS CONDITION BY PROVIDING SHAREHOLDERS, WITHIN 90 DAYS OF THE HIRING
OF THE SUBADVISOR OR IMPLEMENTATION OF ANY MATERIAL CHANGE TO THE TERMS OF AN
INVESTMENT SUBADVISORY AGREEMENT, WITH AN INFORMATION STATEMENT TO THIS EFFECT.
THE ADVISORY FEES PAID TO THE ADVISOR BY THE FUND FOR THE FISCAL YEARS
ENDED SEPTEMBER 30, 1997, 1998, AND 1999 WERE $383,438, $593,353, AND $827,597,
RESPECTIVELY. FOR THOSE FUNDS WITH MULTIPLE CLASSES, INVESTMENT ADVISORY FEES
ARE ALLOCATED AS A PORTFOLIO-LEVEL EXPENSE BASED ON NET ASSETS.
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 ITS AFFAIRS, INCLUDING THE PREPARATION OF
REGULATORY FILINGS AND SHAREHOLDER REPORTS. FOR PROVIDING SUCH SERVICES, CASC
RECEIVES AN ANNUAL ADMINISTRATIVE SERVICE FEE PAYABLE MONTHLY (AS A PERCENTAGE
OF NET ASSETS) AS FOLLOWS:
CLASS A, B, AND C CLASS I
CAPITAL ACCUMULATION 0.25% 0.10%
FOR FISCAL YEARS 1997, 1998, AND 1999, CAPITAL ACCUMULATION PAID $48,182,
$74,654, AND $230,200 RESPECTIVELY, TO CASC IN ADMINISTRATIVE FEES.
ADMINISTRATIVE SERVICE FEES ARE ALLOCATED AS A CLASS-LEVEL EXPENSE, BASED ON NET
ASSETS.
METHOD OF DISTRIBUTION
----------------------
CALVERT DISTRIBUTORS, INC. ("CDI") 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.
PURSUANT TO RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT OF 1940, THE FUND
HAS ADOPTED DISTRIBUTION PLANS (THE "PLANS") WHICH PERMITS THE FUND TO PAY
CERTAIN EXPENSES ASSOCIATED WITH THE DISTRIBUTION OF ITS SHARES. SUCH EXPENSES
MAY NOT EXCEED, ON AN ANNUAL BASIS, 0.35% OF THE FUND'S CLASS A AVERAGE DAILY
NET ASSETS.
EXPENSES UNDER THE FUND'S CLASS B AND CLASS C PLANS MAY NOT EXCEED, ON AN
ANNUAL BASIS, 1.00% OF THE AVERAGE DAILY NET ASSETS OF CLASS B AND CLASS C,
RESPECTIVELY. CLASS A DISTRIBUTION PLANS REIMBURSE CDI ONLY FOR EXPENSES IT
INCURS, WHILE THE CLASS B AND C DISTRIBUTION PLANS COMPENSATE CDI AT A SET RATE
REGARDLESS OF CDI'S EXPENSES.
THE FUND'S DISTRIBUTION PLANS WERE APPROVED BY THE BOARD OF DIRECTORS,
INCLUDING THE 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 PLANS OR IN ANY AGREEMENTS
RELATED TO THE PLANS. THE SELECTION AND NOMINATION OF THE DIRECTORS WHO ARE NOT
INTERESTED PERSONS OF THE FUND IS COMMITTED TO THE DISCRETION OF SUCH
DISINTERESTED DIRECTORS. IN ESTABLISHING THE PLANS, THE DIRECTORS CONSIDERED
VARIOUS FACTORS INCLUDING THE AMOUNT OF THE DISTRIBUTION EXPENSES. THE DIRECTORS
DETERMINED THAT THERE IS A REASONABLE LIKELIHOOD THAT THE PLANS WILL BENEFIT THE
FUND AND ITS SHAREHOLDERS, INCLUDING ECONOMIES OF SCALE AT HIGHER ASSET LEVELS,
BETTER INVESTMENT OPPORTUNITIES, AND MORE FLEXIBILITY IN MANAGING A GROWING
PORTFOLIO.
THE PLANS MAY BE TERMINATED BY VOTE OF A MAJORITY OF THE NON-INTERESTED
DIRECTORS WHO HAVE NO DIRECT OR INDIRECT FINANCIAL INTEREST IN THE PLANS, OR BY
VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF THE AFFECTED CLASS OR FUND. IF
THE FUND SHOULD EVER SWITCH TO A NEW PRINCIPAL UNDERWRITER WITHOUT TERMINATING
THE CLASS B PLAN, THE FEE WOULD BE PRORATED BETWEEN CDI AND THE NEW PRINCIPAL
UNDERWRITER. ANY CHANGE IN THE PLANS THAT WOULD MATERIALLY INCREASE THE
DISTRIBUTION COST TO THE CLASS REQUIRES APPROVAL OF THE SHAREHOLDERS OF THE
AFFECTED CLASS; OTHERWISE, THE PLANS MAY BE AMENDED BY THE DIRECTORS, INCLUDING
A MAJORITY OF THE NON-INTERESTED DIRECTORS AS DESCRIBED ABOVE. THE PLANS WILL
CONTINUE IN EFFECT FOR SUCCESSIVE ONE-YEAR TERMS PROVIDED THAT SUCH CONTINUANCE
IS SPECIFICALLY APPROVED BY (I) THE VOTE OF A MAJORITY OF THE DIRECTORS WHO ARE
NOT PARTIES TO THE PLANS OR INTERESTED PERSONS OF ANY SUCH PARTY AND WHO HAVE NO
DIRECT OR INDIRECT FINANCIAL INTEREST IN THE PLANS, AND (II) THE VOTE OF A
MAJORITY OF THE ENTIRE BOARD OF DIRECTORS.
APART FROM THE PLANS, THE ADVISOR AND CDI, AT THEIR OWN EXPENSE, MAY INCUR
COSTS AND PAY EXPENSES ASSOCIATED WITH THE DISTRIBUTION OF SHARES OF THE FUND.
THE ADVISOR AND/OR CDI HAS AGREED TO PAY CERTAIN FIRMS COMPENSATION FOR THEIR
MARKETING AND DISTRIBUTION OF THE FUND SHARES, ABOVE THE USUAL SALES CHARGES AND
SERVICE FEES. THIS LIST MAY BE CHANGED FROM TIME TO TIME. AS OF DECEMBER 31,
1999, THE ADVISOR AND/OR CDI HAD SPECIAL ARRANGEMENTS WITH THE FOLLOWING FIRMS:
FIDELITY, 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'S RESPECTIVE CLASSES.
THESE FEES ARE PAID PURSUANT TO THE FUND'S DISTRIBUTION PLAN. TOTAL DISTRIBUTION
PLAN EXPENSES PAID TO CDI BY THE FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30,
1999 WERE $350,315 FOR CLASS A, $ 72,773 FOR CLASS B AND $91,074 FOR CLASS C.
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999, THE FUND'S DISTRIBUTION PLAN
EXPENSES FOR EACH CLASS WERE SPENT FOR THE FOLLOWING PURPOSES:
CAPITAL ACCUMULATION
CLASS A CLASS B CLASS C
COMPENSATION TO BROKER-DEALERS $210,916 $11,740 $55,619
COMPENSATION TO SALES PERSONNEL 50,931 28,524 12,954
ADVERTISING 61,713 34,562 15,697
PRINTING AND MAILING OF PROSPECTUSES
TO OTHER THAN CURRENT SHAREHOLDERS 26,755 14,984 6,805
CWVF CAPITAL ACCUMULATION FUND
CLASS A 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 % OF
INVESTMENT PRICE INVESTED OFFERING PRICE
LESS THAN $50,000 4.75% 4.99% 4.00%
$50,000 BUT LESS THAN $100,000 3.75% 3.90% 3.00%
$100,000 BUT LESS THAN $250,000 2.75% 2.83% 2.25%
$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%
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 NET
AMOUNT RETAINED BY CDI (I.E., NOT REALLOWED TO DEALERS) FOR THE LAST 3 FISCAL
YEARS ARE:
FISCAL YEAR 1997 1998 1999
CLASS A GROSS NET GROSS NET GROSS NET
CAPITAL ACCUMULATION $289,296 $93,429 $409,918 $138,540
FISCAL YEAR 1997 1998 1999
CLASS B
CAPITAL ACCUMULATION NA $387
FISCAL YEAR 1997 1998 1999
CLASS C
CAPITAL ACCUMULATION NA $1,089
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 (E.G., GROUP RETIREMENT PLANS) ARE
EXEMPT DUE TO ECONOMIES OF SCALE IN DISTRIBUTION. SEE EXHIBIT A TO THE
PROSPECTUS.
TRANSFER AND SHAREHOLDER SERVICING AGENTS
-----------------------------------------
NATIONAL FINANCIAL DATA SERVICES, INC. ("NFDS"), A SUBSIDIARY OF STATE
STREET BANK & TRUST, HAS BEEN RETAINED BY THE FUND TO ACT AS TRANSFER AGENT AND
DIVIDEND DISBURSING AGENT. THESE RESPONSIBILITIES INCLUDE: RESPONDING TO CERTAIN
SHAREHOLDER INQUIRIES AND INSTRUCTIONS, CREDITING AND DEBITING SHAREHOLDER
ACCOUNTS FOR PURCHASES AND REDEMPTIONS OF FUND SHARES AND CONFIRMING SUCH
TRANSACTIONS, AND DAILY UPDATING OF SHAREHOLDER ACCOUNTS TO REFLECT DECLARATION
AND PAYMENT OF DIVIDENDS.
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), A SUBSIDIARY OF CALVERT GROUP,
LTD., AND ACACIA, 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 CSSI RECEIVE A FEE BASED ON THE NUMBER OF
SHAREHOLDER ACCOUNTS AND TRANSACTIONS.
PORTFOLIO TRANSACTIONS
----------------------
PORTFOLIO TRANSACTIONS ARE UNDERTAKEN ON THE BASIS OF THEIR DESIRABILITY
FROM AN INVESTMENT STANDPOINT. THE FUND'S ADVISOR AND SUBADVISORS MAKE
INVESTMENT DECISIONS AND THE CHOICE OF BROKERS AND DEALERS UNDER THE DIRECTION
AND SUPERVISION OF THE FUND'S BOARD OF DIRECTORS.
BROKER-DEALERS WHO EXECUTE FUND 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, MARKET FAMILIARITY, RELIABILITY, INTEGRITY,
FINANCIAL CONDITION, SUBJECT TO THE ADVISOR/SUBADVISOR OBLIGATION TO SEEK BEST
EXECUTION. THE ADVISOR/SUBADVISOR MAY ALSO CONSIDER SALES OF FUND SHARES AS A
FACTOR IN THE SELECTION OF BROKERS.
FOR THE LAST THREE FISCAL YEARS, TOTAL BROKERAGE COMMISSIONS PAID ARE AS
FOLLOWS:
1997 1998 1999
CAPITAL ACCUMULATION $69,826 $103,709 $234,389
THE FUND DID NOT PAY ANY BROKERAGE COMMISSIONS TO AFFILIATED PERSONS DURING THE
LAST THREE FISCAL YEARS.
WHILE THE FUND'S ADVISOR AND SUBADVISOR(S) SELECT BROKERS PRIMARILY ON THE
BASIS OF BEST EXECUTION, IN SOME CASES THEY MAY DIRECT TRANSACTIONS TO BROKERS
BASED ON THE QUALITY AND AMOUNT OF THE RESEARCH AND RESEARCH-RELATED SERVICES
WHICH THE BROKERS PROVIDE TO THEM. THESE RESEARCH SERVICES INCLUDE ADVICE,
EITHER DIRECTLY OR THROUGH PUBLICATIONS OR WRITINGS, AS TO THE VALUE OF
SECURITIES, THE ADVISABILITY OF INVESTING IN, PURCHASING OR SELLING SECURITIES,
AND THE AVAILABILITY OF SECURITIES OR PURCHASERS OR SELLERS OF SECURITIES;
FURNISHING OF ANALYSES AND REPORTS CONCERNING ISSUERS, SECURITIES OR INDUSTRIES;
PROVIDING INFORMATION ON ECONOMIC FACTORS AND TRENDS; ASSISTING IN DETERMINING
PORTFOLIO STRATEGY; PROVIDING COMPUTER SOFTWARE USED IN SECURITY ANALYSES;
PROVIDING PORTFOLIO PERFORMANCE EVALUATION AND TECHNICAL MARKET ANALYSES; AND
PROVIDING OTHER SERVICES RELEVANT TO THE INVESTMENT DECISION MAKING PROCESS. IT
IS THE POLICY OF THE ADVISOR THAT SUCH RESEARCH SERVICES WILL BE USED FOR THE
BENEFIT OF THE FUND AS WELL AS OTHER CALVERT GROUP FUNDS AND MANAGED ACCOUNTS.
OTHER SUCH SERVICES ARE DESIGNED PRIMARILY TO ASSIST THE ADVISOR IN MONITORING
THE INVESTMENT ACTIVITIES OF THE SUBADVISOR(S) OF THE FUND. SUCH SERVICES
INCLUDE PORTFOLIO ATTRIBUTION SYSTEMS, RETURN-BASED STYLE ANALYSIS, AND
TRADE-EXECUTION ANALYSIS.
IF, IN THE JUDGMENT OF THE ADVISOR OR SUBADVISOR(S), THE FUND OR OTHER ACCOUNTS
MANAGED BY THEM WILL BE BENEFITED BY SUPPLEMENTAL RESEARCH SERVICES, THEY ARE
AUTHORIZED TO PAY BROKERAGE COMMISSIONS TO A BROKER FURNISHING SUCH SERVICES
WHICH ARE IN EXCESS OF COMMISSIONS WHICH ANOTHER BROKER MAY HAVE CHARGED FOR
EFFECTING THE SAME TRANSACTION.
FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1999, THE ADVISOR AND/OR
SUBADVISOR, DIRECTED BROKERAGE FOR RESEARCH SERVICES IN THE FOLLOWING AMOUNTS:
RELATED
AMOUNT OF TRANSACTIONS COMMISSIONS
CAPITAL ACCUMULATION $87,005,654 $66,042
THE PORTFOLIO TURNOVER RATES FOR THE LAST TWO FISCAL YEARS ARE AS FOLLOWS:
1998 1999
CAPITAL ACCUMULATION 77% 88%
PERSONAL SECURITIES TRANSACTIONS
--------------------------------
THE FUND, ITS ADVISORS, 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.
INDEPENDENT ACCOUNTANTS AND CUSTODIANS
--------------------------------------
PRICEWATERHOUSECOOPERS LLP HAS BEEN SELECTED BY THE BOARD OF DIRECTORS TO
SERVE AS INDEPENDENT ACCOUNTANTS FOR FISCAL YEAR 2000. STATE STREET BANK & TRUST
COMPANY, N.A., 225 FRANKLIN STREET, BOSTON, MA 02110, SERVES AS CUSTODIAN OF THE
FUND'S INVESTMENTS. ALLFIRST FINANCIAL, INC., 25 SOUTH CHARLES STREET,
BALTIMORE, MARYLAND 21203 ALSO SERVES AS CUSTODIAN OF CERTAIN OF THE FUND'S CASH
ASSETS. THE CUSTODIANS HAVE NO PART IN DECIDING THE FUND'S INVESTMENT POLICIES
OR THE CHOICE OF SECURITIES THAT ARE TO BE PURCHASED OR SOLD FOR THE FUND.
GENERAL INFORMATION
-------------------
THE CAPITAL ACCUMULATION FUND IS A NON-DIVERSIFIED SERIES OF CALVERT WORLD
VALUES FUND, INC., AN OPEN-END MANAGEMENT INVESTMENT COMPANY, ORGANIZED AS A
MARYLAND CORPORATION ON FEBRUARY 14, 1992.
EACH SHARE REPRESENTS AN EQUAL PROPORTIONATE INTEREST WITH EACH OTHER SHARE
AND IS ENTITLED TO SUCH DIVIDENDS AND DISTRIBUTIONS OUT OF THE INCOME BELONGING
TO SUCH CLASS AS DECLARED BY THE BOARD. THE FUND OFFERS FOUR SEPARATE CLASSES OF
SHARES: CLASS A, CLASS B, CLASS C, AND CLASS I. EACH CLASS REPRESENTS INTERESTS
IN THE SAME PORTFOLIO OF INVESTMENTS BUT, AS FURTHER DESCRIBED IN THE
PROSPECTUS, EACH CLASS IS SUBJECT TO DIFFERING SALES CHARGES AND EXPENSES, WHICH
DIFFERENCES WILL RESULT IN DIFFERING NET ASSET VALUES AND DISTRIBUTIONS. UPON
ANY LIQUIDATION OF THE FUND, SHAREHOLDERS OF EACH CLASS ARE ENTITLED TO SHARE
PRO RATA IN THE NET ASSETS BELONGING TO THAT SERIES AVAILABLE FOR DISTRIBUTION.
THE FUND IS NOT REQUIRED TO HOLD ANNUAL SHAREHOLDER MEETINGS, BUT SPECIAL
MEETINGS MAY BE CALLED FOR CERTAIN PURPOSES SUCH AS ELECTING DIRECTORS/TRUSTEES,
CHANGING FUNDAMENTAL POLICIES, OR APPROVING A MANAGEMENT CONTRACT. AS A
SHAREHOLDER, YOU RECEIVE ONE VOTE FOR EACH SHARE OF A FUND YOU OWN. MATTERS
AFFECTING CLASSES DIFFERENTLY, SUCH AS DISTRIBUTION PLANS, WILL BE VOTED ON
SEPARATELY BY CLASS.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
---------------------------------------------------
AS OF JANUARY 14, 2000, THE FOLLOWING SHAREHOLDERS OWNED 5% OR MORE OF THE
OUTSTANDING VOTING SECURITIES OF ANY CLASS OF THE FUND.
NAME & ADDRESS
PERCENT OF OWNERSHIP
CHARLES SCHWAB & CO. INC.
5.49% OF CLASS A
REINVEST ACCOUNT
MUTUAL FUND DEPARTMENT
101 MONTGOMERY STREET
SAN FRANCISCO, CA 94104-4122
MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS
5.77% OF CLASS B
FUND ADMINISTRATION
4800 DEER LAKE DR E FL 3
JACKSONVILLE, FL 32246-6484
MLPF&S FOR THE SOLE BENEFIT OF ITS CUSTOMERS
8.68% OF CLASS C
FUND ADMINISTRATION
4800 DEER LAKE DR E FL 3
JACKSONVILLE, FL 32246-6484
ACACIA GROUP CAPITAL ACCUMULATION PLAN
100% OF CLASS I
LAURA PIERRON
7315 WISCONSIN AVENUE
BETHESDA, MD 20814-3202
APPENDIX
--------
CORPORATE BOND RATINGS:
DESCRIPTION OF MOODY'S INVESTORS SERVICE INC.'S/STANDARD & POOR'S 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 HIGHER RATED CATEGORIES.
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. THE HIGHER THE DEGREE OF SPECULATION, THE LOWER THE RATING. WHILE
SUCH DEBT WILL LIKELY HAVE SOME QUALITY AND PROTECTIVE CHARACTERISTICS, THESE
ARE OUTWEIGHED BY LARGE UNCERTAINTIES OR MAJOR RISK EXPOSURE TO ADVERSE
CONDITIONS.
C/C: THIS RATING IS ONLY FOR INCOME BONDS ON WHICH NO INTEREST IS BEING
PAID.
D: DEBT IN DEFAULT; PAYMENT OF INTEREST AND/OR PRINCIPAL IS IN ARREARS.
COMMERCIAL PAPER RATINGS:
MOODY'S INVESTORS SERVICE, INC.:
THE PRIME RATING IS THE HIGHEST COMMERCIAL PAPER RATING ASSIGNED BY
MOODY'S. AMONG THE FACTORS CONSIDERED BY MOODY'S IN ASSIGNING RATINGS ARE THE
FOLLOWING: (1) EVALUATION OF THE MANAGEMENT OF THE ISSUER; (2) ECONOMIC
EVALUATION OF THE ISSUER'S INDUSTRY OR INDUSTRIES AND AN APPRAISAL OF
SPECULATIVE-TYPE RISKS WHICH MAY BE INHERENT IN CERTAIN AREAS; (3) EVALUATION OF
THE ISSUER'S PRODUCTS IN RELATION TO COMPETITION AND CUSTOMER ACCEPTANCE; (4)
LIQUIDITY; (5) AMOUNT AND QUALITY OF LONG-TERM DEBT; (6) TREND OF EARNINGS OVER
A PERIOD OF TEN YEARS; (7) FINANCIAL STRENGTH OF A PARENT COMPANY AND THE
RELATIONSHIPS WHICH EXIST WITH THE ISSUER; AND (8) RECOGNITION BY MANAGEMENT OF
OBLIGATIONS WHICH MAY BE PRESENT OR MAY ARISE AS A RESULT OF PUBLIC INTEREST
QUESTIONS AND PREPARATIONS TO MEET SUCH OBLIGATIONS. ISSUERS WITHIN THIS PRIME
CATEGORY MAY BE GIVEN RATINGS 1, 2, OR 3, DEPENDING ON THE RELATIVE STRENGTHS OF
THESE FACTORS.
STANDARD & POOR'S CORPORATION:
COMMERCIAL PAPER RATED A BY STANDARD & POOR'S HAS THE FOLLOWING
CHARACTERISTICS: (I) LIQUIDITY RATIOS ARE ADEQUATE TO MEET CASH REQUIREMENTS;
(II) LONG-TERM SENIOR DEBT RATING SHOULD BE A OR BETTER, ALTHOUGH IN SOME CASES
BBB CREDITS MAY BE ALLOWED IF OTHER FACTORS OUTWEIGH THE BBB; (III) THE ISSUER
SHOULD HAVE ACCESS TO AT LEAST TWO ADDITIONAL CHANNELS OF BORROWING; (IV) BASIC
EARNINGS AND CASH FLOW SHOULD HAVE AN UPWARD TREND WITH ALLOWANCES MADE FOR
UNUSUAL CIRCUMSTANCES; AND (V) TYPICALLY THE ISSUER'S INDUSTRY SHOULD BE WELL
ESTABLISHED AND THE ISSUER SHOULD HAVE A STRONG POSITION WITHIN ITS INDUSTRY AND
THE RELIABILITY AND QUALITY OF MANAGEMENT SHOULD BE UNQUESTIONED. ISSUERS RATED
A ARE FURTHER REFERRED TO BY USE OF NUMBERS 1, 2 AND 3 TO DENOTE THE RELATIVE
STRENGTH WITHIN THIS HIGHEST CLASSIFICATION.
<PAGE>
LETTER OF INTENT
DATE
CALVERT DISTRIBUTORS, INC.
4550 MONTGOMERY AVENUE
BETHESDA, MD 20814
LADIES AND GENTLEMEN:
BY SIGNING THIS LETTER OF INTENT, OR AFFIRMATIVELY MARKING THE LETTER OF
INTENT OPTION ON MY FUND ACCOUNT APPLICATION FORM, I AGREE TO BE BOUND BY THE
TERMS AND CONDITIONS APPLICABLE TO LETTERS OF INTENT APPEARING IN THE PROSPECTUS
AND THE STATEMENT OF ADDITIONAL INFORMATION FOR THE FUND AND THE PROVISIONS
DESCRIBED BELOW AS THEY MAY BE AMENDED FROM TIME TO TIME BY THE FUND. SUCH
AMENDMENTS WILL APPLY AUTOMATICALLY TO EXISTING LETTERS OF INTENT.
I INTEND TO INVEST IN THE SHARES OF: (FUND OR PORTFOLIO NAME)
DURING THE THIRTEEN (13) MONTH PERIOD FROM THE DATE OF MY FIRST PURCHASE
PURSUANT TO THIS LETTER (WHICH CANNOT BE MORE THAN NINETY (90) DAYS PRIOR TO THE
DATE OF THIS LETTER OR MY FUND ACCOUNT APPLICATION FORM, WHICHEVER IS
APPLICABLE), AN AGGREGATE AMOUNT (EXCLUDING ANY REINVESTMENTS OF DISTRIBUTIONS)
OF AT LEAST FIFTY THOUSAND DOLLARS ($50,000) WHICH, TOGETHER WITH MY CURRENT
HOLDINGS OF THE FUND (AT PUBLIC OFFERING PRICE ON DATE OF THIS LETTER OR MY FUND
ACCOUNT APPLICATION FORM, WHICHEVER IS APPLICABLE), WILL EQUAL OR EXCEED THE
AMOUNT CHECKED BELOW:
__ $50,000 __ $100,000 __ $250,000 __ $500,000 __ $1,000,000
SUBJECT TO THE CONDITIONS SPECIFIED BELOW, INCLUDING THE TERMS OF ESCROW,
TO WHICH I HEREBY AGREE, EACH PURCHASE OCCURRING AFTER THE DATE OF THIS LETTER
WILL BE MADE AT THE PUBLIC OFFERING PRICE APPLICABLE TO A SINGLE TRANSACTION OF
THE DOLLAR AMOUNT SPECIFIED ABOVE, AS DESCRIBED IN THE FUND'S PROSPECTUS. "FUND"
IN THIS LETTER OF INTENT SHALL REFER TO THE FUND OR PORTFOLIO, AS THE CASE MAY
BE. NO PORTION OF THE SALES CHARGE IMPOSED ON PURCHASES MADE PRIOR TO THE DATE
OF THIS LETTER WILL BE REFUNDED.
I AM MAKING NO COMMITMENT TO PURCHASE SHARES, BUT IF MY PURCHASES WITHIN
THIRTEEN MONTHS FROM THE DATE OF MY FIRST PURCHASE DO NOT AGGREGATE THE MINIMUM
AMOUNT SPECIFIED ABOVE, I WILL PAY THE INCREASED AMOUNT OF SALES CHARGES
PRESCRIBED IN THE TERMS OF ESCROW DESCRIBED BELOW. I UNDERSTAND THAT 4.75% OF
THE MINIMUM DOLLAR AMOUNT SPECIFIED ABOVE WILL BE HELD IN ESCROW IN THE FORM OF
SHARES (COMPUTED TO THE NEAREST FULL SHARE). THESE SHARES WILL BE HELD SUBJECT
TO THE TERMS OF ESCROW DESCRIBED BELOW.
FROM THE INITIAL PURCHASE (OR SUBSEQUENT PURCHASES IF NECESSARY), 4.75% OF
THE DOLLAR AMOUNT SPECIFIED IN THIS LETTER SHALL BE HELD IN ESCROW IN SHARES OF
THE FUND BY THE FUND'S TRANSFER AGENT. FOR EXAMPLE, IF THE MINIMUM AMOUNT
SPECIFIED UNDER THE LETTER IS $50,000, THE ESCROW SHALL BE SHARES VALUED IN THE
AMOUNT OF $2,375 (COMPUTED AT THE PUBLIC OFFERING PRICE ADJUSTED FOR A $50,000
PURCHASE). ALL DIVIDENDS AND ANY CAPITAL GAINS DISTRIBUTION ON THE ESCROWED
SHARES WILL BE CREDITED TO MY ACCOUNT.
IF THE TOTAL MINIMUM INVESTMENT SPECIFIED UNDER THE LETTER IS COMPLETED
WITHIN A THIRTEEN MONTH PERIOD, ESCROWED SHARES WILL BE PROMPTLY RELEASED TO ME.
HOWEVER, SHARES DISPOSED OF PRIOR TO COMPLETION OF THE PURCHASE REQUIREMENT
UNDER THE LETTER WILL BE DEDUCTED FROM THE AMOUNT REQUIRED TO COMPLETE THE
INVESTMENT COMMITMENT.
UPON EXPIRATION OF THIS LETTER, THE TOTAL PURCHASES PURSUANT TO THE LETTER
ARE LESS THAN THE AMOUNT SPECIFIED IN THE LETTER AS THE INTENDED AGGREGATE
PURCHASES, CALVERT DISTRIBUTORS, INC. ("CDI") WILL BILL ME FOR AN AMOUNT EQUAL
TO THE DIFFERENCE BETWEEN THE LOWER LOAD I PAID AND THE DOLLAR AMOUNT OF SALES
CHARGES WHICH I WOULD HAVE PAID IF THE TOTAL AMOUNT PURCHASED HAD BEEN MADE AT A
SINGLE TIME. IF NOT PAID BY THE INVESTOR WITHIN 20 DAYS, CDI WILL DEBIT THE
DIFFERENCE FROM MY ACCOUNT. FULL SHARES, IF ANY, REMAINING IN ESCROW AFTER THE
AFOREMENTIONED ADJUSTMENT WILL BE RELEASED AND, UPON REQUEST, REMITTED TO ME.
I IRREVOCABLY CONSTITUTE AND APPOINT CDI AS MY ATTORNEY-IN-FACT, WITH FULL
POWER OF SUBSTITUTION, TO SURRENDER FOR REDEMPTION ANY OR ALL ESCROWED SHARES ON
THE BOOKS OF THE FUND. THIS POWER OF ATTORNEY IS COUPLED WITH AN INTEREST.
THE COMMISSION ALLOWED BY CALVERT DISTRIBUTORS, INC. TO THE BROKER-DEALER
NAMED HEREIN SHALL BE AT THE RATE APPLICABLE TO THE MINIMUM AMOUNT OF MY
SPECIFIED INTENDED PURCHASES.
THE LETTER MAY BE REVISED UPWARD BY ME AT ANY TIME DURING THE
THIRTEEN-MONTH PERIOD, AND SUCH A REVISION WILL BE TREATED AS A NEW LETTER,
EXCEPT THAT THE THIRTEEN-MONTH PERIOD DURING WHICH THE PURCHASE MUST BE MADE
WILL REMAIN UNCHANGED AND THERE WILL BE NO RETROACTIVE REDUCTION OF THE SALES
CHARGES PAID ON PRIOR PURCHASES.
IN DETERMINING THE TOTAL AMOUNT OF PURCHASES MADE HEREUNDER, SHARES
DISPOSED OF PRIOR TO TERMINATION OF THIS LETTER WILL BE DEDUCTED. MY
BROKER-DEALER SHALL REFER TO THIS LETTER OF INTENT IN PLACING ANY FUTURE
PURCHASE ORDERS FOR ME WHILE THIS LETTER IS IN EFFECT.
DEALER NAME OF INVESTOR(S)
BY
AUTHORIZED SIGNER ADDRESS
DATE SIGNATURE OF INVESTOR(S)
DATE SIGNATURE OF INVESTOR(S)
<PAGE>
INVESTMENT ADVISOR
CALVERT ASSET MANAGEMENT COMPANY, INC.
4550 MONTGOMERY AVENUE
SUITE 1000N
BETHESDA, MARYLAND 20814
SHAREHOLDER SERVICE TRANSFER AGENT
CALVERT SHAREHOLDER SERVICES, INC. NATIONAL FINANCIAL DATA SERVICES, INC.
4550 MONTGOMERY AVENUE 1004 BALTIMORE
SUITE 1000N 6TH FLOOR
BETHESDA, MARYLAND 20814 KANSAS CITY, MISSOURI 64105
PRINCIPAL UNDERWRITER INDEPENDENT ACCOUNTANTS
CALVERT DISTRIBUTORS, INC. PRICEWATERHOUSECOOPERS LLP
4550 MONTGOMERY AVENUE 250 WEST PRATT STREET
SUITE 1000N BALTIMORE, MARYLAND 21201
BETHESDA, MARYLAND 20814
<PAGE>
PART C. OTHER INFORMATION
ITEM 23. EXHIBITS
99B.1 ARTICLES OF INCORPORATION INCORPORATED BY REFERENCE TO REGISTRANT'S
INITIAL REGISTRATION STATEMENT, FEBRUARY 18, 1992, FILED HEREWITH.
99B.2 BY-LAWS INCORPORATED BY REFERENCE TO REGISTRANT'S PRE-EFFECTIVE
AMENDMENT NO. 1, MAY 21, 1992, FILED HEREWITH.
99.B5 INVESTMENT ADVISORY AGREEMENT INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 1, MAY 21, 1992,
FILED HEREWITH.
99.B5.A INVESTMENT SUB-ADVISORY CONTRACT (MURRAY JOHNSTONE
INTERNATIONAL, LTD.) FILED HEREWITH.
99.B5.B INVESTMENT SUB-ADVISORY CONTRACT (BROWN CAPITAL
MANAGEMENT, INC.) FILED HEREWITH.
99.B6 UNDERWRITING AGREEMENT INCORPORATED BY REFERENCE TO POST-
EFFECTIVE AMENDMENT NO. 9, MARCH 31, 1998, FILED HEREWITH.
99.B7 DEFERRED COMPENSATION AGREEMENT INCORPORATED BY REFERENCE TO
REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 4, JANUARY 31, 1995,
FILED HEREWITH.
99.B8. CUSTODIAL CONTRACT, INCORPORATED BY REFERENCE TO REGISTRANT'S POST-
EFFECTIVE AMENDMENT NO. 8, JANUARY 28, 1998, FILED HEREWITH.
99.B9 TRANSFER AGENCY AGREEMENT AND SERVICE AGREEMENT,
INCORPORATED BY REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT
NO. 9, MARCH 31, 1998, FILED HEREWITH.
99.B9A SERVICING AGREEMENT FILED HEREWITH.
99.B9.B. ADMINISTRATIVE SERVICES AGREEMENT INCORPORATED BY REFERENCE TO
REGISTRANT'S PRE-EFFECTIVE AMENDMENT NO. 1, MAY 21, 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 INCORPORATED BY REFERENCE TO REGISTRANT'S
POST-EFFECTIVE AMENDMENT NO. 1, MAY 21, 1992 FOR CLASS A
AND POST-EFFECTIVE AMENDMENT NO. 9, MARCH 31, 1998 FOR
CLASS B AND C SHARE FILED HEREWITH.
99.B17.A MULTIPLE-CLASS PLAN PURSUANT TO INVESTMENT COMPANY ACT OF 1940 RULE
18F-3, AS AMENDED ON SEPTEMBER 12, 1999, FILED HEREWITH.
99.B17.B POWER OF ATTORNEY FORMS SIGNED BY EACH DIRECTOR/TRUSTEE, INCORPORATED
BY
REFERENCE TO REGISTRANT'S POST-EFFECTIVE AMENDMENT NO. 12, DATED
JANUARY 28, 1999, ACCESSION NUMBER 0000884110-99-000002
99.B18 CODE OF ETHICS FILED HEREWITH.
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. SANDS
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 25TH DAY OF JANUARY, 2000.
CALVERT WORLD VALUES 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 DIRECTOR 1/25/2000
BARBARA J. KRUMSIEK (PRINCIPAL EXECUTIVE OFFICER)
__________**____________ PRINCIPAL ACCOUNTING 1/25/2000
RONALD M. WOLFSHEIMER OFFICER
__________**____________ DIRECTOR 1/25/2000
JOHN G. GUFFEY, JR.
__________**____________ DIRECTOR 1/25/2000
TERRENCE MOLLNER
__________**____________ DIRECTOR 1/25/2000
RUSTUM ROY
__________**____________ DIRECTOR 1/25/2000
D. WAYNE SILBY
__________**____________ DIRECTOR 1/25/2000
TESSA TENNANT
__________**____________ DIRECTOR 1/25/2000
MOHAMMED YUNUS
**BY: SUSAN WALKER BENDER AS ATTORNEY-IN-FACT.
KS:\\CGLANSRV\STONER\CWVF\CWVF ARTICLES SUPP.DOC
5/6/96
ARTICLES SUPPLEMENTARY
CALVERT WORLD VALUES FUND, INC.
FIRST: CALVERT WORLD VALUES 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 GLOBAL
EQUITY FUND 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:
INTERNATIONAL EQUITY FUND
(FORMERLY KNOWN AS GLOBAL EQUITY FUND) 250,000,000
CALVERT CAPITAL ACCUMULATION FUND 250,000,000
UNALLOCATED SHARES 1,500,000,000
TOTAL SHARES AUTHORIZED 2,000,000,000
IN WITNESS WHEREOF, CALVERT WORLD VALUES 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 MAY, 1996. UNDER
PENALTIES OF PERJURY, THE MATTERS AND FACTS SET FORTH HEREIN ARE TRUE IN ALL
MATERIAL RESPECTS.
CALVERT WORLD VALUES FUND, INC.
ACKNOWLEDGMENT:
CLIFTON S. SORRELL, JR.
CHAIRMAN OF THE BOARD OF DIRECTORS
ATTEST:
WILLIAM M. TARTIKOFF
SECRETARY
BY-LAWS
OF
CALVERT WORLD VALUES FUND
MAY 6, 1992
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 WORLD
VALUES FUND (THE "FUND"), 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.
Investment Advisory Agreement
Calvert World Values Fund, Inc.
March 1, 1999
Page 3 of 7
INVESTMENT ADVISORY AGREEMENT
CALVERT WORLD VALUES FUND, INC.
INVESTMENT ADVISORY AGREEMENT, MADE THIS 1ST DAY OF MARCH, 1999, BY AND
BETWEEN CALVERT ASSET MANAGEMENT COMPANY, INC., A DELAWARE CORPORATION (THE
"ADVISOR"), AND CALVERT WORLD VALUES FUND, INC., A MARYLAND CORPORATION (THE
"CORPORATION"), BOTH HAVING THEIR PRINCIPAL PLACE OF BUSINESS AT 4550 MONTGOMERY
AVENUE, BETHESDA, MARYLAND.
WHEREAS, THE CORPORATION IS REGISTERED AS AN INVESTMENT COMPANY UNDER THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940 ACT"), FOR THE PURPOSE OF
INVESTING AND REINVESTING ITS ASSETS IN SECURITIES, AS SET FORTH IN ITS ARTICLES
OF INCORPORATION, ITS BYLAWS AND ITS REGISTRATION STATEMENTS UNDER THE 1940 ACT
AND THE SECURITIES ACT OF 1933 (THE "1933 ACT"), AS AMENDED; OFFERING SEPARATE
SERIES ("FUND(S)"), AND THE CORPORATION DESIRES TO AVAIL ITSELF OF THE SERVICES,
INFORMATION, ADVICE, ASSISTANCE AND FACILITIES OF AN INVESTMENT ADVISOR AND TO
HAVE AN INVESTMENT ADVISOR PERFORM FOR IT VARIOUS INVESTMENT ADVISORY, RESEARCH
SERVICES AND OTHER MANAGEMENT SERVICES; AND
WHEREAS, THE ADVISOR IS AN INVESTMENT ADVISOR REGISTERED UNDER THE
INVESTMENT ADVISERS ACT OF 1940, AS AMENDED, AND IS ENGAGED IN THE BUSINESS OF
RENDERING MANAGEMENT, AND INVESTMENT ADVISORY SERVICES TO INVESTMENT COMPANIES
AND DESIRES TO PROVIDE SUCH SERVICES TO THE CORPORATION;
NOW, THEREFORE, IN CONSIDERATION OF THE TERMS AND CONDITIONS HEREINAFTER
SET FORTH, IT IS AGREED AS FOLLOWS:
1. EMPLOYMENT OF THE ADVISOR. THE CORPORATION HEREBY EMPLOYS THE ADVISOR TO
MANAGE THE INVESTMENT AND REINVESTMENT OF THE CORPORATION ASSETS, SUBJECT TO THE
CONTROL AND DIRECTION OF THE CORPORATION'S BOARD OF DIRECTORS, FOR THE PERIOD
AND ON THE TERMS HEREINAFTER SET FORTH. THE ADVISOR HEREBY ACCEPTS SUCH
EMPLOYMENT AND AGREES DURING SUCH PERIOD TO RENDER THE SERVICES AND TO ASSUME
THE OBLIGATIONS IN RETURN FOR THE COMPENSATION HEREIN PROVIDED. THE ADVISOR
SHALL FOR ALL PURPOSES HEREIN BE DEEMED TO BE AN INDEPENDENT CONTRACTOR AND
SHALL, EXCEPT AS EXPRESSLY PROVIDED OR AUTHORIZED (WHETHER HEREIN OR OTHERWISE),
HAVE NO AUTHORITY TO ACT FOR OR REPRESENT THE CORPORATION IN ANY WAY OR
OTHERWISE BE DEEMED AN AGENT OF THE CORPORATION.
2. OBLIGATIONS OF AND SERVICES TO BE PROVIDED BY THE ADVISOR. THE ADVISOR
UNDERTAKES TO PROVIDE THE FOLLOWING SERVICES AND TO ASSUME THE FOLLOWING
OBLIGATIONS:
A. THE ADVISOR SHALL MANAGE THE INVESTMENT AND REINVESTMENT OF THE
CORPORATION'S ASSETS, SUBJECT TO AND IN ACCORDANCE WITH THE INVESTMENT
OBJECTIVES AND POLICIES OF EACH FUND, AND THE SOCIAL INVESTMENT SCREENING
CRITERIA, AS STATED IN THE REGISTRATION STATEMENT, AND ANY DIRECTIONS WHICH THE
CORPORATION'S BOARD OF DIRECTORS MAY ISSUE FROM TIME TO TIME. IN PURSUANCE OF
THE FOREGOING, THE ADVISOR SHALL MAKE ALL DETERMINATIONS WITH RESPECT TO THE
INVESTMENT OF THE CORPORATION'S ASSETS AND THE PURCHASE AND SALE OF PORTFOLIO
SECURITIES AND SHALL TAKE SUCH STEPS AS MAY BE NECESSARY TO IMPLEMENT THE SAME.
SUCH DETERMINATION AND SERVICES SHALL ALSO INCLUDE DETERMINING THE MANNER IN
WHICH VOTING RIGHTS, RIGHTS TO CONSENT TO CORPORATE ACTION, ANY OTHER RIGHTS
PERTAINING TO THE CORPORATION'S PORTFOLIO SECURITIES SHALL BE EXERCISED. THE
ADVISOR SHALL RENDER REGULAR REPORTS TO THE CORPORATION'S BOARD OF DIRECTORS
CONCERNING THE CORPORATION'S INVESTMENT ACTIVITIES.
B. THE ADVISOR SHALL, IN THE NAME OF THE CORPORATION, ON BEHALF OF EACH
FUND, PLACE ORDERS FOR THE EXECUTION OF PORTFOLIO TRANSACTIONS IN ACCORDANCE
WITH THE POLICIES WITH RESPECT THERETO SET FORTH IN THE CORPORATION'S CURRENT
REGISTRATION STATEMENT UNDER THE 1940 ACT AND THE 1933 ACT. IN CONNECTION WITH
THE PLACEMENT OF ORDERS FOR THE EXECUTION OF PORTFOLIO TRANSACTIONS THE ADVISOR
SHALL CREATE AND MAINTAIN ALL NECESSARY BROKERAGE RECORDS OF THE CORPORATION IN
ACCORDANCE WITH ALL APPLICABLE LAWS, RULES AND REGULATIONS, INCLUDING BUT NOT
LIMITED TO RECORDS REQUIRED BY SECTION 31(A) OF THE 1940 ACT. ALL RECORDS SHALL
BE THE PROPERTY OF THE CORPORATION AND SHALL BE AVAILABLE FOR INSPECTION AND USE
BY THE SEC, THE CORPORATION OR ANY PERSON RETAINED BY THE CORPORATION. WHERE
APPLICABLE, SUCH RECORDS SHALL BE MAINTAINED BY THE ADVISOR FOR THE PERIODS AND
THE PLACES REQUIRED BY RULE 31A-2 UNDER THE 1940 ACT.
C. THE ADVISOR SHALL BEAR ITS EXPENSES OF PROVIDING SERVICES TO THE
CORPORATION PURSUANT TO THIS AGREEMENT EXCEPT SUCH EXPENSES AS ARE UNDERTAKEN BY
THE CORPORATION. IN ADDITION, THE ADVISOR SHALL PAY THE SALARIES AND FEES OF ALL
DIRECTORS AND EXECUTIVE OFFICERS WHO ARE EMPLOYEES OF THE ADVISOR OR ITS
AFFILIATES ("ADVISOR EMPLOYEES").
D. IN PROVIDING THE SERVICES AND ASSUMING THE OBLIGATIONS SET FORTH HEREIN,
THE ADVISOR MAY, AT ITS OWN EXPENSE, EMPLOY ONE OR MORE SUBADVISORS, AS APPROVED
BY THE BOARD OF DIRECTORS.
E. THE ADVISOR IS RESPONSIBLE FOR SCREENING INVESTMENTS TO DETERMINE THAT
THEY MEET EACH FUND'S SOCIAL INVESTMENT SCREENING CRITERIA, AS MAY BE AMENDED
FROM TIME TO TIME WITH THE APPROVAL OF THE BOARD.
3. EXPENSES OF EACH FUND. EACH FUND SHALL PAY ALL EXPENSES OTHER THAN THOSE
EXPRESSLY ASSUMED BY THE ADVISOR. EXPENSES PAYABLE BY THE FUND SHALL INCLUDE,
BUT ARE NOT LIMITED TO:
A. FEES TO THE ADVISOR AS PROVIDED HEREIN;
B. LEGAL AND AUDIT EXPENSES;
C. FEES AND EXPENSES RELATED TO THE REGISTRATION AND QUALIFICATION OF THE
CORPORATION AND ITS SHARES FOR DISTRIBUTION UNDER FEDERAL AND STATE SECURITIES
LAWS;
D. EXPENSES OF THE ADMINISTRATIVE SERVICES AGENT, TRANSFER AGENT, REGISTRAR,
CUSTODIAN, DIVIDEND DISBURSING AGENT AND SHAREHOLDER SERVICING AGENT;
E. ANY TELEPHONE CHARGES ASSOCIATED WITH SHAREHOLDER SERVICING OR THE
MAINTENANCE OF THE FUNDS OR CORPORATION;
F. SALARIES, FEES AND EXPENSES OF DIRECTORS AND EXECUTIVE OFFICERS OF THE
CORPORATION, OTHER THAN ADVISOR EMPLOYEES;
G. TAXES AND CORPORATE FEES LEVIED AGAINST THE CORPORATION;
H. BROKERAGE COMMISSIONS AND OTHER EXPENSES ASSOCIATED WITH THE PURCHASE AND
SALE OF PORTFOLIO SECURITIES FOR THE CORPORATION;
I. EXPENSES, INCLUDING INTEREST, OF BORROWING MONEY;
J. EXPENSES INCIDENTAL TO MEETINGS OF THE CORPORATION'S SHAREHOLDERS AND THE
MAINTENANCE OF THE CORPORATION'S ORGANIZATIONAL EXISTENCE;
K. EXPENSES OF PRINTING STOCK CERTIFICATES REPRESENTING SHARES OF THE
CORPORATION AND EXPENSES OF PREPARING, PRINTING AND MAILING NOTICES, PROXY
MATERIAL, REPORTS TO REGULATORY BODIES AND REPORTS TO SHAREHOLDERS OF THE
CORPORATION;
L. EXPENSES OF PREPARING AND TYPESETTING OF PROSPECTUSES OF THE CORPORATION;
M. EXPENSES OF PRINTING AND DISTRIBUTING PROSPECTUSES TO SHAREHOLDERS OF THE
CORPORATION;
N. ASSOCIATION MEMBERSHIP DUES;
O. INSURANCE PREMIUMS FOR FIDELITY AND OTHER COVERAGE;
P. DISTRIBUTION PLAN EXPENSES, AS PERMITTED BY RULE 12B-1 UNDER THE 1940 ACT
AND AS APPROVED BY THE BOARD; AND
Q. SUCH OTHER LEGITIMATE CORPORATION EXPENSES AS THE BOARD OF DIRECTORS MAY
FROM TIME TO TIME DETERMINE ARE PROPERLY CHARGEABLE TO THE CORPORATION.
4. COMPENSATION OF ADVISOR.
A. AS COMPENSATION FOR THE SERVICES RENDERED AND OBLIGATIONS ASSUMED
HEREUNDER BY THE ADVISOR, THE TRUST SHALL PAY TO THE ADVISOR WITHIN TEN (10)
DAYS AFTER THE LAST DAY OF EACH CALENDAR MONTH A FEE EQUAL ON AN ANNUALIZED
BASIS AS SHOWN ON SCHEDULE A. ANY AMENDMENT TO THE SCHEDULE PERTAINING TO ANY
NEW OR EXISTING FUND SHALL NOT BE DEEMED TO AFFECT THE INTEREST OF ANY OTHER
FUND AND SHALL NOT REQUIRE THE APPROVAL OF THE SHAREHOLDERS OF ANY OTHER FUND.
B. SUCH FEE SHALL BE COMPUTED AND ACCRUED DAILY. UPON TERMINATION OF THIS
AGREEMENT BEFORE THE END OF ANY CALENDAR MONTH, THE FEE FOR SUCH PERIOD SHALL BE
PRORATED. FOR PURPOSES OF CALCULATING THE ADVISOR'S FEE, THE DAILY VALUE OF A
FUND'S NET ASSETS SHALL BE COMPUTED BY THE SAME METHOD AS THE FUND USES TO
COMPUTE THE VALUE OF ITS NET ASSETS IN CONNECTION WITH THE DETERMINATION OF THE
NET ASSET VALUE OF ITS SHARES.
C. THE ADVISOR RESERVES THE RIGHT (I) TO WAIVE ALL OR PART OF ITS FEE AND
ASSUME EXPENSES OF A FUND AND (II) TO MAKE PAYMENTS TO BROKERS AND DEALERS IN
CONSIDERATION OF THEIR PROMOTIONAL OR ADMINISTRATIVE SERVICES.
5. ACTIVITIES OF THE ADVISOR. THE SERVICES OF THE ADVISOR TO THE CORPORATION
HEREUNDER ARE NOT TO BE DEEMED EXCLUSIVE, AND THE ADVISOR SHALL BE FREE TO
RENDER SIMILAR SERVICES TO OTHERS. IT IS UNDERSTOOD THAT DIRECTORS AND OFFICERS
OF THE CORPORATION ARE OR MAY BECOME INTERESTED IN THE ADVISOR AS STOCKHOLDERS,
OFFICERS, OR OTHERWISE, AND THAT STOCKHOLDERS AND OFFICERS OF THE ADVISOR ARE OR
MAY BECOME SIMILARLY INTERESTED IN THE CORPORATION, AND THAT THE ADVISOR MAY
BECOME INTERESTED IN THE CORPORATION AS A SHAREHOLDER OR OTHERWISE.
6. USE OF NAMES. THE CORPORATION SHALL NOT USE THE NAME OF THE ADVISOR IN
ANY PROSPECTUS, SALES LITERATURE OR OTHER MATERIAL RELATING TO THE CORPORATION
IN ANY MANNER NOT APPROVED PRIOR THERETO BY THE ADVISOR; PROVIDED, HOWEVER, THAT
THE ADVISOR SHALL APPROVE ALL USES OF ITS NAME WHICH MERELY REFER IN ACCURATE
TERMS TO ITS APPOINTMENT HEREUNDER OR WHICH ARE REQUIRED BY THE SEC; AND,
PROVIDED, FURTHER, THAT IN NO EVENT SHALL SUCH APPROVAL BE UNREASONABLY
WITHHELD. THE ADVISOR SHALL NOT USE THE NAME OF THE CORPORATION OR ANY
CORPORATION IN ANY MATERIAL RELATING TO THE ADVISOR IN ANY MANNER NOT APPROVED
PRIOR THERETO BY THE CORPORATION; PROVIDED, HOWEVER, THAT THE CORPORATION SHALL
APPROVE ALL USES OF ITS NAME WHICH MERELY REFER IN ACCURATE TERMS TO THE
APPOINTMENT OF THE ADVISOR HEREUNDER OR WHICH ARE REQUIRED BY THE SEC; AND,
PROVIDE, FURTHER, THAT IN NO EVENT SHALL SUCH APPROVAL BE UNREASONABLY WITHHELD.
7. LIABILITY OF THE ADVISOR. ABSENT WILLFUL MISFEASANCE, BAD FAITH, GROSS
NEGLIGENCE, OR RECKLESS DISREGARD OF OBLIGATIONS OR DUTIES HEREUNDER ON THE PART
OF THE ADVISOR, THE ADVISOR SHALL NOT BE SUBJECT TO LIABILITY TO THE CORPORATION
OR TO ANY SHAREHOLDER OF THE CORPORATION FOR ANY ACT OR OMISSION IN THE COURSE
OF, OR CONNECTED WITH, RENDERING SERVICES HEREUNDER OR FOR ANY LOSSES THAT MAY
BE SUSTAINED IN THE PURCHASE, HOLDING OR SALE OF ANY SECURITY.
8. FORCE MAJEURE. THE ADVISOR SHALL NOT BE LIABLE FOR DELAYS OR ERRORS
OCCURRING BY REASON OF CIRCUMSTANCES BEYOND ITS CONTROL, INCLUDING BUT NOT
LIMITED TO ACTS OF CIVIL OR MILITARY AUTHORITY, NATIONAL EMERGENCIES, WORK
STOPPAGES, FIRE, FLOOD, CATASTROPHE, ACTS OF GOD, INSURRECTION, WAR, RIOT, OR
FAILURE OF COMMUNICATION OR POWER SUPPLY. IN THE EVENT OF EQUIPMENT BREAKDOWNS
BEYOND ITS CONTROL, THE ADVISOR SHALL TAKE REASONABLE STEPS TO MINIMIZE SERVICE
INTERRUPTIONS BUT SHALL HAVE NO LIABILITY WITH RESPECT THERETO.
9. RENEWAL, TERMINATION AND AMENDMENT. THIS AGREEMENT SHALL CONTINUE IN
EFFECT WITH RESPECT TO THE CORPORATION, UNLESS SOONER TERMINATED AS HEREINAFTER
PROVIDED, THROUGH DECEMBER 31, 1999, AND INDEFINITELY THEREAFTER IF ITS
CONTINUANCE SHALL BE SPECIFICALLY APPROVED AT LEAST ANNUALLY BY VOTE OF THE
HOLDERS OF A MAJORITY OF THE OUTSTANDING VOTING SECURITIES OF THE CORPORATION OR
BY VOTE OF A MAJORITY OF THE CORPORATION'S BOARD OF DIRECTORS; AND FURTHER
PROVIDED THAT SUCH CONTINUANCE IS ALSO APPROVED ANNUALLY BY THE VOTE OF A
MAJORITY OF THE DIRECTORS WHO ARE NOT PARTIES TO THIS AGREEMENT OR INTERESTED
PERSONS OF THE ADVISOR, CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF
VOTING ON SUCH APPROVAL, OR AS ALLOWED BY LAW. THIS AGREEMENT MAY BE TERMINATED
AT ANY TIME, WITHOUT PAYMENT OF ANY PENALTY, BY THE CORPORATION'S BOARD OF
DIRECTORS OR BY A VOTE OF THE MAJORITY OF THE OUTSTANDING VOTING SECURITIES OF
THE CORPORATION UPON 60 DAYS' PRIOR WRITTEN NOTICE TO THE ADVISOR AND BY THE
ADVISOR UPON 60 DAYS' PRIOR WRITTEN NOTICE TO THE CORPORATION. THIS AGREEMENT
MAY BE AMENDED AT ANY TIME BY THE PARTIES, SUBJECT TO APPROVAL BY THE
CORPORATION'S BOARD OF DIRECTORS AND, IF REQUIRED BY APPLICABLE SEC RULES AND
REGULATIONS, A VOTE OF A MAJORITY OF THE CORPORATION'S OUTSTANDING VOTING
SECURITIES. THIS AGREEMENT SHALL TERMINATE AUTOMATICALLY IN THE EVENT OF ITS
ASSIGNMENT. THE TERMS "ASSIGNMENT" AND "VOTE OF A MAJORITY OF THE OUTSTANDING
VOTING SECURITIES" SHALL HAVE THE MEANING SET FORTH FOR SUCH TERMS IN THE 1940
ACT.
10. SEVERABILITY. IF ANY PROVISION OF THIS AGREEMENT SHALL BE HELD OR MADE
INVALID BY A COURT DECISION, STATUTE, RULE OR OTHERWISE, THE REMAINDER OF THIS
AGREEMENT SHALL NOT BE AFFECTED THEREBY.
11. MISCELLANEOUS. EACH PARTY AGREES TO PERFORM SUCH FURTHER ACTIONS AND
EXECUTE SUCH FURTHER DOCUMENTS AS ARE NECESSARY TO EFFECTUATE THE PURPOSES
HEREOF. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF MARYLAND. THE CAPTIONS IN THIS AGREEMENT
ARE INCLUDED FOR CONVENIENCE ONLY AND IN NO WAY DEFINE OR DELIMIT ANY OF THE
PROVISIONS HEREOF OR OTHERWISE AFFECT THEIR CONSTRUCTION OR EFFECT.
IN WITNESS WHEREOF, THE PARTIES HAVE DULY EXECUTED THIS AGREEMENT AS OF THE
DATE FIRST WRITTEN ABOVE.
CALVERT WORLD VALUES FUND, INC.
BY:
TITLE:
CALVERT ASSET MANAGEMENT COMPANY, INC.
BY:
TITLE:
<PAGE>
INVESTMENT ADVISORY AGREEMENT
CALVERT ASSET MANAGEMENT COMPANY, INC.
CALVERT WORLD VALUES FUND, INC.
SCHEDULE A
AS COMPENSATION PURSUANT TO SECTION 4 OF THE INVESTMENT ADVISORY AGREEMENT
BETWEEN CALVERT ASSET MANAGEMENT COMPANY, INC. (THE "ADVISOR") AND CALVERT WORLD
VALUES FUND, INC. ("CWVF") DATED MARCH 1, 1999, WITH RESPECT TO EACH CWVF
PORTFOLIO, THE ADVISOR IS ENTITLED TO RECEIVE FROM EACH PORTFOLIO AN ANNUAL
ADVISORY FEE (THE "FEE") AS SHOWN BELOW. THE FEE SHALL BE COMPUTED DAILY AND
PAYABLE MONTHLY, BASED ON THE AVERAGE DAILY NET ASSETS OF THE APPROPRIATE
PORTFOLIO.
CWVF INTERNATIONAL EQUITY: 0.75% ON THE FIRST $250 MILLION
0.725% ON THE NEXT $250 MILLION
0.675% ABOVE $500 MILLION
CWVF CAPITAL ACCUMULATION 0.65%
INVESTMENT SUB-ADVISORY AGREEMENT
INVESTMENT SUB-ADVISORY AGREEMENT, MADE THIS 14 DAY OF MAY, 1992, BY AND
BETWEEN CALVERT ASSET MANAGEMENT COMPANY, INC., A DELAWARE CORPORATION
REGISTERED AS AN INVESTMENT ADVISOR UNDER THE INVESTMENT ADVISERS ACT OF 1940
(THE "ADVISOR"), AND MURRAY JOHNSTONE INTERNATIONAL, LTD. A SCOTTISH CORPORATION
(THE "SUB-ADVISOR").
WHEREAS, THE ADVISOR IS THE INVESTMENT ADVISOR TO CALVERT WORLD VALUES
FUND, INC., AN OPEN-END, DIVERSIFIED MANAGEMENT INVESTMENT COMPANY REGISTERED
UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940 ACT"); AND
WHEREAS, THE ADVISOR DESIRES TO RETAIN THE SUB-ADVISOR TO FURNISH IT WITH
CERTAIN INVESTMENT ADVISORY SERVICES IN CONNECTION WITH THE ADVISOR'S INVESTMENT
ADVISORY ACTIVITIES ON BEHALF OF THE GLOBAL EQUITY FUND SERIES OF CALVERT WORLD
VALUES FUND AND ANY ADDITIONAL SERIES OF CALVERT WORLD VALUES FUND, INC., FOR
WHICH SCHEDULES ARE ATTACHED HERETO (EACH SUCH SERIES REFERRED TO INDIVIDUALLY
AS THE "FUND");
NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND THE TERMS AND
CONDITIONS HEREINAFTER SET FORTH, IT IS AGREED AS FOLLOWS:
1. SERVICES TO BE RENDERED BY THE SUB-ADVISOR TO THE FUND.
(A) INVESTMENT PROGRAM. SUBJECT TO THE CONTROL OF THE FUND'S
BOARD OF DIRECTORS ("DIRECTORS") AND THE ADVISOR, THE SUB-ADVISOR AT ITS EXPENSE
CONTINUOUSLY WILL FURNISH TO THE FUND AN INVESTMENT PROGRAM FOR SUCH PORTION, IF
ANY, OF FUND ASSETS DESIGNATED BY THE ADVISOR FROM TIME TO TIME. WITH RESPECT
TO SUCH ASSETS, THE SUB-ADVISOR WILL MAKE INVESTMENT DECISIONS, APPLY INVESTMENT
SELECTION SOCIAL SCREENS, AS DESCRIBED MORE FULLY AT SECTION 1(G) OF THIS
AGREEMENT, TO DETERMINE THAT ALL INVESTMENTS MEET THE FUND'S SOCIAL CRITERIA,
AND WILL PLACE ALL ORDERS FOR THE PURCHASE AND SALE OF PORTFOLIO SECURITIES.
THE SUB-ADVISOR SHALL FOR ALL PURPOSES HEREIN BE DEEMED TO BE AN INDEPENDENT
CONTRACTOR AND SHALL, EXCEPT AS EXPRESSLY PROVIDED OR AUTHORIZED, HAVE NO
AUTHORITY TO ACT FOR OR REPRESENT THE FUND OR THE ADVISOR IN ANY WAY OR
OTHERWISE BE DEEMED AN AGENT OF THE FUND OR THE ADVISOR. IN THE PERFORMANCE OF
ITS DUTIES, THE SUB-ADVISOR WILL ACT IN THE BEST INTERESTS OF THE FUND AND WILL
COMPLY WITH (I) APPLICABLE LAWS AND REGULATIONS, INCLUDING, BUT NOT LIMITED TO,
THE 1940 ACT, (II) THE TERMS OF THIS AGREEMENT, (III) THE FUND'S ARTICLES OF
INCORPORATION, BYLAWS AND REGISTRATION STATEMENT AS FROM TIME TO TIME AMENDED,
(IV) RELEVANT UNDERTAKINGS PROVIDED TO STATE SECURITIES REGULATORS, (V) THE
STATED INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS OF THE FUND, AND (VI)
SUCH OTHER GUIDELINES AS THE DIRECTORS OR ADVISOR MAY ESTABLISH. THE ADVISOR
SHALL BE RESPONSIBLE FOR PROVIDING THE SUB-ADVISOR WITH CURRENT COPIES OF THE
MATERIALS SPECIFIED IN SUBSECTIONS (A)(III), (IV), (V) AND (VI) OF THIS SECTION
1.
(B) AVAILABILITY OF PERSONNEL. THE SUB-ADVISOR AT ITS EXPENSE
WILL MAKE AVAILABLE TO THE DIRECTORS AND ADVISOR AT REASONABLE TIMES ITS
PORTFOLIO MANAGERS AND OTHER APPROPRIATE PERSONNEL, EITHER IN PERSON, OR, AT THE
MUTUAL CONVENIENCE OF THE ADVISOR AND THE SUB-ADVISOR, BY TELEPHONE, IN ORDER TO
REVIEW THE FUND'S INVESTMENT POLICIES AND TO CONSULT WITH THE DIRECTORS AND
ADVISOR REGARDING THE FUND'S INVESTMENT AFFAIRS, INCLUDING ECONOMIC, STATISTICAL
AND INVESTMENT MATTERS RELEVANT TO THE SUB-ADVISOR'S DUTIES HEREUNDER, AND WILL
PROVIDE PERIODIC REPORTS TO THE ADVISOR RELATING TO THE INVESTMENT STRATEGIES IT
EMPLOYS.
(C) EXPENSES, SALARIES AND FACILITIES. THE SUB-ADVISOR WILL
PAY ALL EXPENSES INCURRED BY IT IN CONNECTION WITH ITS ACTIVITIES UNDER THIS
AGREEMENT, INCLUDING BUT NOT LIMITED TO ALL SALARIES OF PERSONNEL AND FACILITIES
REQUIRED FOR IT TO EXECUTE ITS DUTIES UNDER THIS AGREEMENT.
(D) COMPLIANCE REPORTS. THE SUB-ADVISOR AT ITS EXPENSE WILL
PROVIDE THE ADVISOR WITH SUCH COMPLIANCE REPORTS RELATING TO ITS DUTIES UNDER
THIS AGREEMENT AS MAY BE AGREED UPON BY SUCH PARTIES FROM TIME TO TIME.
(E) VALUATION. THE SUB-ADVISOR WILL ASSIST THE FUND AND ITS
AGENTS IN DETERMINING WHETHER PRICES OBTAINED FOR VALUATION PURPOSES ACCURATELY
REFLECT MARKET PRICE INFORMATION RELATING TO THE ASSETS OF THE FUND FOR WHICH
THE SUB-ADVISOR HAS RESPONSIBILITY ON A DAILY BASIS (UNLESS OTHERWISE AGREED
UPON BY THE PARTIES HERETO) AND AT SUCH OTHER TIMES AS THE ADVISOR SHALL
REASONABLY REQUEST.
(F) EXECUTING PORTFOLIO TRANSACTIONS. IN SELECTING BROKERS AND
DEALERS TO EXECUTE PURCHASES AND SALES OF INVESTMENTS FOR THE FUND, THE
SUB-ADVISOR WILL USE ITS BEST EFFORTS TO OBTAIN THE MOST FAVORABLE PRICE AND
EXECUTION AVAILABLE IN ACCORDANCE WITH THIS PARAGRAPH. THE SUB-ADVISOR AGREES
TO PROVIDE THE ADVISOR AND THE FUND WITH COPIES OF ITS POLICY WITH RESPECT TO
ALLOCATION OF BROKERAGE ON TRADES FOR THE FUND. SUBJECT TO REVIEW BY THE
DIRECTORS OF APPROPRIATE POLICIES AND PROCEDURES, THE SUB-ADVISOR MAY CAUSE THE
FUND TO PAY A BROKER A COMMISSION, FOR EFFECTING A PORTFOLIO TRANSACTION, IN
EXCESS OF THE COMMISSION ANOTHER BROKER WOULD HAVE CHARGED FOR EFFECTING THE
SAME TRANSACTION. IF THE FIRST BROKER PROVIDED BROKERAGE AND/OR RESEARCH
SERVICES, INCLUDING STATISTICAL DATA, TO THE SUB-ADVISOR, THE SUB-ADVISOR SHALL
NOT BE DEEMED TO HAVE ACTED UNLAWFULLY, OR TO HAVE BREACHED ANY DULY CREATED BY
THIS AGREEMENT, OR OTHERWISE, SOLELY BY REASON OF ACTING ACCORDING TO SUCH
AUTHORIZATION.
(G) SOCIAL SCREENING. THE SUB-ADVISOR IS RESPONSIBLE FOR
SCREENING ALL INVESTMENTS TO DETERMINE THAT ALL INVESTMENTS MEET THE FUND'S
SOCIAL INVESTMENT CRITERIA, AS MAY BE AMENDED FROM TIME TO TIME BY THE
DIRECTORS. THE ADVISOR MAY, BUT IS NOT REQUIRED TO, HIRE ADDITIONAL PARTIES AT
THE ADVISOR'S EXPENSE TO ASSIST WITH THE OVERSIGHT OF THE SOCIAL SCREENING
PROCESS, BUT THIS SHALL NOT RELIEVE THE SUB-ADVISOR OF ITS DUTIES HEREUNDER.
(H) VOTING PROXIES. THE SUB-ADVISOR AGREES TO VOTE ALL PROXIES
FOR THE FUND'S PORTFOLIO INVESTMENTS IN A TIMELY MANNER, SUBJECT TO THE
DIRECTION OF THE DIRECTORS.
(I) FURNISHING INFORMATION FOR THE FUND'S PROXIES. THE
SUB-ADVISOR AGREES TO PROVIDE THE ADVISOR IN A TIMELY MANNER WITH ALL
INFORMATION NECESSARY, INCLUDING THE SUB-ADVISOR'S CERTIFIED BALANCE SHEET AND
INFORMATION CONCERNING THE SUB-ADVISOR'S CONTROLLING PERSONS, FOR PREPARATION OF
THE FUND'S PROXY STATEMENTS, AS MAY BE NEEDED FROM TIME TO TIME.
2. BOOKS AND RECORDS. IN CONNECTION WITH THE PURCHASE AND SALE OF
THE FUND'S PORTFOLIO SECURITIES, THE SUB-ADVISOR SHALL ARRANGE FOR THE
TRANSMISSION TO THE FUND'S CUSTODIAN, ON A DAILY BASIS, OF SUCH CONFIRMATIONS,
TRADE TICKETS OR OTHER DOCUMENTATION AS MAY BE NECESSARY TO ENABLE THE ADVISOR
TO PERFORM ITS ACCOUNTING AND ADMINISTRATIVE RESPONSIBILITIES WITH RESPECT TO
THE MANAGEMENT OF THE FUND. PURSUANT TO RULE 31A-3 UNDER THE 1940 ACT, AND ANY
OTHER LAWS, RULES OR REGULATIONS REGARDING RECORDKEEPING, THE SUB-ADVISOR AGREES
THAT: (A) ALL RECORDS IT MAINTAINS FOR THE FUND ARE THE PROPERTY OF THE FUND;
(B) IT WILL SURRENDER PROMPTLY TO THE FUND OR ADVISOR ANY SUCH RECORDS UPON THE
FUND'S OR ADVISOR'S REQUEST; (C) IT WILL MAINTAIN FOR THE FUND THE RECORDS THAT
THE FUND IS REQUIRED TO MAINTAIN UNDER RULE 31A-1(B) INSOFAR AS SUCH RECORDS
RELATE TO THE INVESTMENT AFFAIRS OF THE FUND FOR WHICH THE SUB-ADVISOR HAS
RESPONSIBILITY UNDER THIS AGREEMENT; AND (D) IT WILL PRESERVE FOR THE PERIODS
PRESCRIBED BY RULE 31A-2 UNDER THE 1940 ACT THE RECORDS IT MAINTAINS FOR THE
FUND.
3. OTHER AGREEMENTS, EXCLUSIVITY. EACH PARTY AND ITS AFFILIATES MAY
HAVE ADVISORY, MANAGEMENT SERVICE OR OTHER AGREEMENTS WITH OTHER ORGANIZATIONS
AND PERSONS, AND MAY HAVE OTHER INTERESTS AND BUSINESSES; PROVIDED, HOWEVER,
THAT:
(A) NEITHER PARTY NOR ITS AFFILIATES WILL PROVIDE INVESTMENT
ADVISORY SERVICES TO ANY OTHER INVESTMENT COMPANY REGISTERED UNDER THE 1940 ACT
INVESTING PRIMARILY IN GLOBAL EQUITIES (A "GLOBAL EQUITY MUTUAL FUND") WITHOUT
THE PARTICIPATION OF THE OTHER UNTIL THE EARLIER OF I) TWO (2) YEARS FROM THE
EFFECTIVE DATE OF THE GLOBAL EQUITY FUND'S REGISTRATION STATEMENT WITH THE
SECURITIES AND EXCHANGE COMMISSION ("EFFECTIVE DATE"), OR II) THE DATE THE
GLOBAL EQUITY FUND SHALL FIRST REACH $100 MILLION IN NET ASSETS; AND
(B) NEITHER PARTY NOR ITS AFFILIATES WILL PROVIDE INVESTMENT
ADVISORY SERVICES TO ANY OTHER SOCIALLY SCREENED GLOBAL EQUITY MUTUAL FUND FOR
FIVE (5) YEARS FROM THE EFFECTIVE DATE IF THE FOLLOWING CONDITIONS ARE MET:
I) AFTER THE SECOND TWELVE MONTH PERIOD BEGINNING ON THE
EFFECTIVE DATE, CUMULATIVE GROSS SALES OF THE GLOBAL EQUITY FUND EXCEED $50
MILLION; AND
II) AFTER THE THIRD TWELVE MONTH PERIOD, CUMULATIVE GROSS SALES
OF THE GLOBAL EQUITY FUND EXCEED $75 MILLION; AND
III) AFTER THE FOURTH TWELVE MONTH PERIOD, CUMULATIVE GROSS SALES
OF THE GLOBAL EQUITY FUND EXCEED $100 MILLION.
4. COMPENSATION. THE ADVISOR WILL PAY TO THE SUB-ADVISOR AS
COMPENSATION FOR THE SUB-ADVISOR'S SERVICES RENDERED PURSUANT TO THIS AGREEMENT
AN ANNUAL SUB-ADVISORY FEE AS SPECIFIED IN ONE OR MORE SCHEDULES ATTACHED HERETO
AND MADE PART OF THIS AGREEMENT. SUCH FEES SHALL BE PAID BY THE ADVISOR (AND
NOT BY THE FUND). SUCH FEES SHALL BE PAYABLE FOR EACH MONTH WITHIN 15 BUSINESS
DAYS AFTER THE END OF SUCH MONTH. IF THE SUB-ADVISOR SHALL SERVE FOR LESS THAN
THE WHOLE OF A MONTH, THE COMPENSATION AS SPECIFIED SHALL BE PRORATED. THE
SCHEDULES MAY BE AMENDED FROM TIME TO TIME, PROVIDED THAT AMENDMENTS ARE MADE IN
CONFORMITY WITH APPLICABLE LAWS AND REGULATIONS AND THE ARTICLES AND BYLAWS OF
THE FUND. ANY CHANGE IN THE SCHEDULE PERTAINING TO ANY NEW OR EXISTING SERIES
OF THE FUND SHALL NOT BE DEEMED TO AFFECT THE INTEREST OF ANY OTHER SERIES OF
THE FUND AND SHALL NOT REQUIRE THE APPROVAL OF SHAREHOLDERS OF ANY OTHER SERIES
OF THE FUND. TO THE EXTENT THE ADVISOR IS ABLE TO RECAPTURE WAIVED FEES
PURSUANT TO THE ADVISORY AGREEMENT WITH THE FUND, THE ADVISOR WILL PAY THE
SUB-ADVISOR A SUB-ADVISORY FEE ON THE RECAPTURED ADVISOR'S FEE IN ACCORDANCE
WITH THE SCHEDULE FOR THE ASSET LEVEL AT THE TIME OF RECAPTURE.
5. ASSIGNMENT AND AMENDMENT OF AGREEMENT. THIS AGREEMENT
AUTOMATICALLY SHALL TERMINATE WITHOUT THE PAYMENT OF ANY PENALTY IN THE EVENT OF
ITS ASSIGNMENT OR IF THE INVESTMENT ADVISORY AGREEMENT BETWEEN THE ADVISOR AND
THE FUND SHALL TERMINATE FOR ANY REASON. THIS AGREEMENT SHALL NOT BE MATERIALLY
AMENDED UNLESS, IF REQUIRED BY SEC RULES AND REGULATIONS, SUCH AMENDMENT IS
APPROVED BY THE AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING SHARES OF THE
FUND, AND BY THE VOTE, CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF
VOTING ON SUCH APPROVAL, OF A MAJORITY OF THE DIRECTORS OF THE FUND WHO ARE NOT
INTERESTED PERSONS OF THE FUND, THE ADVISOR OR THE SUB-ADVISOR.
6. DURATION AND TERMINATION OF THE AGREEMENT. THIS AGREEMENT SHALL
BECOME EFFECTIVE UPON ITS EXECUTION; PROVIDED, HOWEVER, THAT THIS AGREEMENT
SHALL NOT BECOME EFFECTIVE WITH RESPECT TO ANY SERIES NOW EXISTING OR HEREAFTER
CREATED UNLESS IT HAS FIRST BEEN APPROVED (A) BY A VOTE OF THE MAJORITY OF THOSE
DIRECTORS OF THE FUND WHO ARE NOT PARTIES TO THIS AGREEMENT OR INTERESTED
PERSONS OF SUCH PARTY, CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF
VOTING ON SUCH APPROVAL, AND (B) BY A VOTE OF A MAJORITY OF THAT SERIES'
OUTSTANDING VOTING SECURITIES. THIS AGREEMENT SHALL REMAIN IN FULL FORCE AND
EFFECT CONTINUOUSLY THEREAFTER (UNLESS TERMINATED AUTOMATICALLY AS SET FORTH IN
SECTION 5) EXCEPT AS FOLLOWS:
(A) THE FUND MAY AT ANY TIME TERMINATE THIS AGREEMENT WITHOUT
PENALTY WITH RESPECT TO ANY OR ALL SERIES BY PROVIDING NOT MORE THAN 60 DAYS'
WRITTEN NOTICE DELIVERED OR MAILED BY REGISTERED MAIL, POSTAGE PREPAID, TO THE
ADVISOR AND THE SUB-ADVISOR. SUCH TERMINATION CAN BE AUTHORIZED BY THE
AFFIRMATIVE VOTE OF A MAJORITY OF THE (I) DIRECTORS OF THE FUND, OR (II)
OUTSTANDING VOTING SECURITIES OF THE APPLICABLE SERIES.
(B) THIS AGREEMENT WILL TERMINATE AUTOMATICALLY WITH RESPECT TO A
SERIES UNLESS, BY JANUARY 1, 1994, AND AT LEAST ANNUALLY THEREAFTER, THE
CONTINUANCE OF THE AGREEMENT IS SPECIFICALLY APPROVED BY (I) THE DIRECTORS OF
THE FUND OR THE SHAREHOLDERS OF SUCH SERIES BY THE AFFIRMATIVE VOTE OF A
MAJORITY OF THE OUTSTANDING SHARES OF SUCH SERIES, AND (II) A MAJORITY OF THE
DIRECTORS OF THE FUND WHO ARE NOT INTERESTED PERSONS OF THE FUND, ADVISOR OR
SUB-ADVISOR, BY VOTE CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF
VOTING ON SUCH APPROVAL. IF THE CONTINUANCE OF THIS AGREEMENT IS SUBMITTED TO
THE SHAREHOLDERS OF ANY SERIES FOR THEIR APPROVAL AND SUCH SHAREHOLDERS FAIL TO
APPROVE SUCH CONTINUANCE AS PROVIDED HEREIN, THE SUB-ADVISOR MAY CONTINUE TO
SERVE HEREUNDER IN A MANNER CONSISTENT WITH THE 1940 ACT AND THE RULES AND
REGULATIONS THEREUNDER.
(C) THE ADVISOR MAY AT ANY TIME TERMINATE THIS AGREEMENT WITH
RESPECT TO ANY OR ALL SERIES BY NOT LESS THAN 60 DAYS' WRITTEN NOTICE DELIVERED
OR MAILED BY REGISTERED MAIL, POSTAGE PREPAID, TO THE SUB-ADVISOR, AND THE
SUB-ADVISOR MAY AT ANY TIME TERMINATE THIS AGREEMENT WITH RESPECT TO ANY OR ALL
SERIES BY NOT LESS THAN 90 DAYS' WRITTEN NOTICE DELIVERED OR MAILED BY
REGISTERED MAIL, POSTAGE PREPAID, TO THE ADVISOR.
(D) PAYMENT TO SUB-ADVISOR UPON TERMINATION BY ADVISOR. IF THE
ADVISOR ELECTS, PURSUANT TO SECTION 6(C) ABOVE, TO TERMINATE THIS AGREEMENT
DURING THE FIRST TWO YEARS AFTER THE EFFECTIVE DATE, THEN THE ADVISOR (AND NOT
THE FUND) WILL PAY TO THE SUB-ADVISOR AN AMOUNT ("TERMINATION PAYMENT") EQUAL TO
50% OF THE SUB-ADVISORY FEES EARNED (GROSS OF ANY FEE WAIVER) BY THE SUB-ADVISOR
DURING THE 12 CALENDAR MONTHS PRECEDING TERMINATION OF THIS AGREEMENT. THE
ADVISOR WILL ALSO PAY THE TERMINATION PAYMENT TO THE SUB-ADVISOR IF THE ADVISOR
TERMINATES THIS AGREEMENT DURING THE THIRD, FOURTH OR FIFTH YEARS AFTER THE
EFFECTIVE DATE AND THE GLOBAL EQUITY FUND'S AVERAGE ANNUAL TOTAL RETURN, AS
DEFINED IN ITEM 22 TO SEC FORM N-1A, BUT NOT REFLECTING DEDUCTION OF THE SALES
CHARGE, FROM THE EFFECTIVE DATE THROUGH THE TERMINATION DATE EXCEEDS THE MORGAN
STANLEY CAPITAL INTERNATIONAL WORLD INDEX.
THE ADVISOR IS NOT REQUIRED TO PAY SUCH AMOUNT TO THE SUB-ADVISOR IF THE
AGREEMENT IS TERMINATED BY (I) THE FUND'S DIRECTORS, (II) THE FUND'S
SHAREHOLDERS OR (III) BY THE ADVISOR FOR CAUSE ("CAUSE" BEING HEREBY DEFINED AS
THE SUB-ADVISOR CEASING TO BE REGISTERED AS AN INVESTMENT ADVISOR UNDER THE
INVESTMENT ADVISERS ACT OF 1940, OR BEING FOUND BY A COURT OF COMPETENT
JURISDICTION TO HAVE VIOLATED ANY SECURITIES LAWS OR REGULATIONS, OR ANY OTHER
LAWS OR REGULATIONS REGARDING FRAUD OR BREACH OF TRUST), OR (IV) IF THE FUND IS
LIQUIDATED, OR MERGED INTO, OR ITS ASSETS TRANSFERRED TO, ANOTHER FUND.
UPON TERMINATION OF THIS AGREEMENT WITH RESPECT TO ANY SERIES, THE DUTIES OF THE
ADVISOR DELEGATED TO THE SUB-ADVISOR UNDER THIS AGREEMENT WITH RESPECT TO SUCH
SERIES AUTOMATICALLY SHALL REVERT TO THE ADVISOR.
7. NOTIFICATION OF THE ADVISOR. THE SUB-ADVISOR PROMPTLY SHALL
NOTIFY THE ADVISOR IN WRITING OF THE OCCURRENCE OF ANY OF THE FOLLOWING EVENTS:
(A) THE SUB-ADVISOR SHALL FAIL TO BE REGISTERED AS AN INVESTMENT
ADVISOR UNDER THE INVESTMENT ADVISERS ACT OF 1940, AS AMENDED, AND UNDER THE
LAWS OF ANY JURISDICTION IN WHICH THE SUB-ADVISOR IS REQUIRED TO BE REGISTERED
AS AN INVESTMENT ADVISOR IN ORDER TO PERFORM ITS OBLIGATIONS UNDER THIS
AGREEMENT;
(B) THE SUB-ADVISOR SHALL HAVE BEEN SERVED OR OTHERWISE HAVE NOTICE
OF ANY ACTION, SUIT, PROCEEDING, INQUIRY OR INVESTIGATION, AT LAW OR IN EQUITY,
BEFORE OR BY ANY COURT, PUBLIC BOARD OR BODY, INVOLVING THE AFFAIRS OF THE FUND;
OR
(C) ANY OTHER OCCURRENCE THAT MIGHT AFFECT THE ABILITY OF THE
SUB-ADVISOR TO PROVIDE THE SERVICES PROVIDED FOR UNDER THIS AGREEMENT.
8. DEFINITIONS. FOR THE PURPOSES OF THIS AGREEMENT, THE TERMS "VOTE
OF A MAJORITY OF THE OUTSTANDING SHARES," "AFFILIATED PERSON," "CONTROL,"
"INTERESTED PERSON" AND "ASSIGNMENT" SHALL HAVE THEIR RESPECTIVE MEANINGS AS
DEFINED IN THE 1940 ACT AND THE RULES AND REGULATIONS THEREUNDER SUBJECT,
HOWEVER, TO SUCH EXEMPTIONS AS MAY BE GRANTED BY THE SECURITIES AND EXCHANGE
COMMISSION UNDER SAID ACT; AND THE TERM "SPECIFICALLY APPROVE AT LEAST ANNUALLY"
SHALL BE CONSTRUED IN A MANNER CONSISTENT WITH THE 1940 ACT AND THE RULES AND
REGULATIONS THEREUNDER.
9. INDEMNIFICATION. THE SUB-ADVISOR SHALL INDEMNIFY AND HOLD
HARMLESS THE ADVISOR, THE FUND, THEIR RESPECTIVE, DIRECTORS, OFFICERS AND
SHAREHOLDERS FROM ANY AND ALL CLAIMS, LOSSES, EXPENSES, OBLIGATION AND
LIABILITIES (INCLUDING REASONABLE ATTORNEYS FEES) WHICH ARISE OR RESULT FROM THE
SUB-ADVISOR'S WILLFUL MISFEASANCE, BAD FAITH, OR GROSS NEGLIGENCE OR RECKLESS
DISREGARD OF ITS DUTIES HEREUNDER.
THE ADVISOR SHALL INDEMNIFY AND HOLD HARMLESS THE SUB-ADVISOR, THE FUND,
THEIR RESPECTIVE, DIRECTORS, OFFICERS AND SHAREHOLDERS FROM ANY AND ALL CLAIMS,
LOSSES, EXPENSES, OBLIGATION AND LIABILITIES (INCLUDING REASONABLE ATTORNEYS
FEES) WHICH ARISE OR RESULT FROM THE ADVISOR'S WILLFUL MISFEASANCE, BAD FAITH,
OR GROSS NEGLIGENCE OR RECKLESS DISREGARD OF ITS DUTIES HEREUNDER.
10. APPLICABLE LAW AND JURISDICTION. THIS AGREEMENT SHALL BE
GOVERNED BY MARYLAND LAW, AND ANY DISPUTE ARISING FROM THIS AGREEMENT OR THE
SERVICES RENDERED HEREUNDER SHALL BE RESOLVED THROUGH LEGAL PROCEEDINGS, WHETHER
STATE, FEDERAL, OR OTHERWISE, CONDUCTED IN THE STATE OF MARYLAND OR IN SUCH
OTHER MANNER OR JURISDICTION AS SHALL BE MUTUALLY AGREED UPON BY THE PARTIES
HERETO.
11. MISCELLANEOUS. EACH PARTY AGREES TO PERFORM SUCH FURTHER ACTS
AND EXECUTE SUCH FURTHER DOCUMENTS AS ARE NECESSARY TO EFFECTUATE THE PURPOSES
HEREOF. THE CAPTIONS IN THIS AGREEMENT ARE INCLUDED FOR CONVENIENCE ONLY AND IN
NO WAY DEFINE OR DELIMIT ANY OF THE PROVISIONS HEREOF OR OTHERWISE AFFECT THEIR
CONSTRUCTION OR EFFECT.
<PAGE>
IN WITNESS WHEREOF, AND HAVE EACH CAUSED THIS INSTRUMENT TO BE SIGNED IN
DUPLICATE ON ITS BEHALF BY ITS DULY AUTHORIZED REPRESENTATIVE, ALL AS OF THE DAY
AND YEAR FIRST ABOVE WRITTEN.
ATTEST: CALVERT ASSET MANAGEMENT COMPANY, INC.
BY: SUSAN WALKER BENDER BY: WILLIAM M. TARTIKOFF
ASSISTANT SECRETARY SENIOR VICE PRESIDENT
ATTEST: MURRAY JOHNSTONE INTERNATIONAL, LTD.
BY: SCOTT C. BLIM BY: GASIN R. DOBSON
VICE PRESIDENT PRESIDENT "CHIEF OPERATING OFFICER"
<PAGE>
SCHEDULE A
TO THE
INVESTMENT
SUB-ADVISORY AGREEMENT
BETWEEN
CALVERT ASSET MANAGEMENT COMPANY, INC.
AND
MURRAY JOHNSTONE INTERNATIONAL, LTD.
AS COMPENSATION PURSUANT TO SECTION 4 OF THE SUB-ADVISORY AGREEMENT BETWEEN
CALVERT ASSET MANAGEMENT COMPANY (THE "ADVISOR") AND MURRAY JOHNSTONE
INTERNATIONAL, LTD. (THE "SUB-ADVISOR"), THE ADVISOR SHALL PAY THE SUB-ADVISOR A
SUB-ADVISORY FEE, AT THE FOLLOWING PERCENTAGE RATES OF THE AVERAGE DAILY NET
ASSETS OF THE CALVERT WORLD VALUES FUND, INC., GLOBAL EQUITY FUND ("FUND") UNDER
MANAGEMENT BY THE SUB-ADVISOR:
0.45% OF ASSETS UP TO $250 MILLION;
0.425% OF THE NEXT $250 MILLION IN ASSETS; AND
0.400% OF THE ASSETS IN EXCESS OF $500 MILLION.
PROVIDED, HOWEVER, THAT, PRIOR TO JANUARY 1, 1993, THE SUB-ADVISOR SHALL
RECEIVE NO SUB-ADVISORY FEE UNTIL FUND NET ASSETS ARE AT LEAST $20 MILLION, AND
WHILE NET ASSETS ARE BETWEEN $20 MILLION AND $40 MILLION, SHALL RECEIVE ONLY
HALF OF THE SUB-ADVISORY FEES TO WHICH IT WOULD OTHERWISE BE ENTITLED.
5/14/92
BK:SB: MJ SUB-ADV. AGRMT - WORLD VAL
Brown Capital Management Subadvisory Agreement
Subadvisor for Calvert Capital Accumulation Fund
March 1, 1999
Page 8 of 8
CALVERT WORLD VALUES FUND, INC.
INVESTMENT SUBADVISORY AGREEMENT
BROWN CAPITAL MANAGEMENT, INC.
INVESTMENT SUBADVISORY AGREEMENT, MADE THIS 1ST DAY OF MARCH, 1999, BY AND
BETWEEN CALVERT ASSET MANAGEMENT COMPANY, INC., A DELAWARE CORPORATION
REGISTERED AS AN INVESTMENT ADVISOR UNDER THE INVESTMENT ADVISERS ACT OF 1940
(THE "ADVISOR"), AND BROWN CAPITAL MANAGEMENT, INC., A MARYLAND CORPORATION (THE
"SUBADVISOR").
WHEREAS, THE ADVISOR IS THE INVESTMENT ADVISOR TO CALVERT WORLD VALUES
FUND, INC. ("CWVF"), AN OPEN-END MANAGEMENT INVESTMENT COMPANY REGISTERED UNDER
THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940 ACT"); AND
WHEREAS, THE ADVISOR DESIRES TO RETAIN THE SUBADVISOR TO FURNISH IT WITH
CERTAIN INVESTMENT ADVISORY SERVICES IN CONNECTION WITH THE ADVISOR'S INVESTMENT
ADVISORY ACTIVITIES ON BEHALF OF THE CALVERT CAPITAL ACCUMULATION FUND (THE
"FUND") SERIES OF CWVF;
NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND THE TERMS AND
CONDITIONS HEREINAFTER SET FORTH, IT IS AGREED AS FOLLOWS:
1. SERVICES TO BE RENDERED BY THE SUBADVISOR TO THE FUND.
(A) INVESTMENT PROGRAM. SUBJECT TO THE CONTROL OF THE CWVF BOARD OF
DIRECTORS ("DIRECTORS") AND THE ADVISOR, THE SUBADVISOR AT ITS EXPENSE
CONTINUOUSLY WILL FURNISH TO THE FUND AN INVESTMENT PROGRAM FOR SUCH PORTION, IF
ANY, OF FUND ASSETS DESIGNATED BY THE ADVISOR FROM TIME TO TIME. WITH RESPECT TO
SUCH ASSETS, THE SUBADVISOR WILL MAKE INVESTMENT DECISIONS, WHICH IS SUBJECT TO
SECTION 1(G) OF THIS AGREEMENT, AND WILL PLACE ALL ORDERS FOR THE PURCHASE AND
SALE OF PORTFOLIO SECURITIES. THE SUBADVISOR WILL FOR ALL PURPOSES HEREIN BE
DEEMED TO BE AN INDEPENDENT CONTRACTOR AND SHALL, EXCEPT AS EXPRESSLY PROVIDED
OR AUTHORIZED, HAVE NO AUTHORITY TO ACT FOR OR REPRESENT THE FUND OR THE ADVISOR
IN ANY WAY OR OTHERWISE BE DEEMED AN AGENT OF THE FUND OR THE ADVISOR. IN THE
PERFORMANCE OF ITS DUTIES, THE SUBADVISOR WILL ACT IN THE BEST INTERESTS OF THE
FUND AND WILL COMPLY WITH (I) APPLICABLE LAWS AND REGULATIONS, INCLUDING, BUT
NOT LIMITED TO, THE 1940 ACT, AND SUBCHAPTER M OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, (II) THE TERMS OF THIS AGREEMENT, (III) THE FUND'S ARTICLES OF
INCORPORATION, BYLAWS AND REGISTRATION STATEMENT AS FROM TIME TO TIME AMENDED,
(IV) RELEVANT UNDERTAKINGS PROVIDED TO STATE SECURITIES REGULATORS, (V) THE
STATED INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS OF THE FUND, AND (VI)
SUCH OTHER GUIDELINES AS THE DIRECTORS OR ADVISOR MAY ESTABLISH. THE ADVISOR
SHALL BE RESPONSIBLE FOR PROVIDING THE SUBADVISOR WITH CURRENT COPIES OF THE
MATERIALS SPECIFIED IN SUBSECTIONS (A)(III), (IV), (V) AND (VI) OF THIS SECTION
1.
(B) AVAILABILITY OF PERSONNEL. THE SUBADVISOR AT ITS EXPENSE WILL MAKE
AVAILABLE TO THE DIRECTORS AND ADVISOR AT REASONABLE TIMES ITS PORTFOLIO
MANAGERS AND OTHER APPROPRIATE PERSONNEL, EITHER IN PERSON, OR, AT THE MUTUAL
CONVENIENCE OF THE ADVISOR AND THE SUBADVISOR, BY TELEPHONE, IN ORDER TO REVIEW
THE FUND'S INVESTMENT POLICIES AND TO CONSULT WITH THE DIRECTORS AND ADVISOR
REGARDING THE FUND'S INVESTMENT AFFAIRS, INCLUDING ECONOMIC, STATISTICAL AND
INVESTMENT MATTERS RELEVANT TO THE SUBADVISOR'S DUTIES HEREUNDER, AND WILL
PROVIDE PERIODIC REPORTS TO THE ADVISOR RELATING TO THE INVESTMENT STRATEGIES IT
EMPLOYS.
(C) EXPENSES, SALARIES AND FACILITIES. THE SUBADVISOR WILL PAY ALL EXPENSES
INCURRED BY IT IN CONNECTION WITH ITS ACTIVITIES UNDER THIS AGREEMENT (OTHER
THAN THE COST OF SECURITIES AND OTHER INVESTMENTS, INCLUDING ANY BROKERAGE
COMMISSIONS), INCLUDING BUT NOT LIMITED TO, ALL SALARIES OF PERSONNEL AND
FACILITIES REQUIRED FOR IT TO EXECUTE ITS DUTIES UNDER THIS AGREEMENT.
(D) COMPLIANCE REPORTS. THE SUBADVISOR AT ITS EXPENSE WILL PROVIDE THE
ADVISOR WITH SUCH COMPLIANCE REPORTS RELATING TO ITS DUTIES UNDER THIS AGREEMENT
AS MAY BE AGREED UPON BY SUCH PARTIES FROM TIME TO TIME.
(E) VALUATION. THE SUBADVISOR WILL ASSIST THE FUND AND ITS AGENTS IN
DETERMINING WHETHER PRICES OBTAINED FOR VALUATION PURPOSES ACCURATELY REFLECT
MARKET PRICE INFORMATION RELATING TO THE ASSETS OF THE FUND FOR WHICH THE
SUBADVISOR HAS RESPONSIBILITY ON A DAILY BASIS (UNLESS OTHERWISE AGREED UPON BY
THE PARTIES HERETO) AND AT SUCH OTHER TIMES AS THE ADVISOR SHALL REASONABLY
REQUEST.
(F) EXECUTING PORTFOLIO TRANSACTIONS.
I) BROKERAGE. IN SELECTING BROKERS AND DEALERS TO EXECUTE PURCHASES AND
SALES OF INVESTMENTS FOR THE FUND, THE SUBADVISOR WILL USE ITS BEST EFFORTS TO
OBTAIN THE MOST FAVORABLE PRICE AND EXECUTION AVAILABLE IN ACCORDANCE WITH THIS
PARAGRAPH. THE SUBADVISOR AGREES TO PROVIDE THE ADVISOR AND THE FUND WITH COPIES
OF ITS POLICY WITH RESPECT TO ALLOCATION OF BROKERAGE ON TRADES FOR THE FUND.
SUBJECT TO REVIEW BY THE DIRECTORS OF APPROPRIATE POLICIES AND PROCEDURES, THE
SUBADVISOR MAY CAUSE THE FUND TO PAY A BROKER A COMMISSION, FOR EFFECTING A
PORTFOLIO TRANSACTION, IN EXCESS OF THE COMMISSION ANOTHER BROKER WOULD HAVE
CHARGED FOR EFFECTING THE SAME TRANSACTION. IF THE FIRST BROKER PROVIDED
BROKERAGE AND/OR RESEARCH SERVICES, INCLUDING STATISTICAL DATA, TO THE
SUBADVISOR, THE SUBADVISOR SHALL NOT BE DEEMED TO HAVE ACTED UNLAWFULLY, OR TO
HAVE BREACHED ANY DULY CREATED BY THIS AGREEMENT, OR OTHERWISE, SOLELY BY REASON
OF ACTING ACCORDING TO SUCH AUTHORIZATION.
II) AGGREGATE TRANSACTIONS. IN EXECUTING PORTFOLIO TRANSACTIONS FOR THE
FUND, THE SUBADVISOR MAY, BUT WILL NOT BE OBLIGATED TO, AGGREGATE THE SECURITIES
TO BE SOLD OR PURCHASED WITH THOSE OF ITS OTHER CLIENTS WHERE SUCH AGGREGATION
IS NOT INCONSISTENT WITH THE POLICIES OF THE FUND, TO THE EXTENT PERMITTED BY
APPLICABLE LAWS AND REGULATIONS. IF THE SUBADVISOR CHOOSES TO AGGREGATE SALES OR
PURCHASES, IT WILL ALLOCATE THE SECURITIES AS WELL AS THE EXPENSES INCURRED IN
THE TRANSACTION IN THE MANNER IT CONSIDERS TO BE THE MOST EQUITABLE AND
CONSISTENT WITH ITS FIDUCIARY OBLIGATIONS TO THE FUND AND ITS OTHER CLIENTS
INVOLVED IN THE TRANSACTION.
III) DIRECTED BROKERAGE. THE ADVISOR MAY DIRECT THE SUBADVISOR TO USE A
PARTICULAR BROKER OR DEALER FOR ONE OR MORE TRADES IF, IN THE SOLE OPINION OF
THE ADVISOR, IT IS IN THE BEST INTEREST OF THE FUND TO DO SO.
IV) BROKERAGE ACCOUNTS. THE ADVISOR AUTHORIZES AND EMPOWERS THE SUBADVISOR TO
DIRECT THE FUND'S CUSTODIAN TO OPEN AND MAINTAIN BROKERAGE ACCOUNTS FOR
SECURITIES AND OTHER PROPERTY, INCLUDING FINANCIAL AND COMMODITY FUTURES AND
COMMODITIES AND OPTIONS THEREON (ALL SUCH ACCOUNTS HEREINAFTER CALLED "BROKERAGE
ACCOUNTS") FOR AND IN THE NAME OF THE FUND AND TO EXECUTE FOR THE FUND AS ITS
AGENT AND ATTORNEY-IN-FACT STANDARD CUSTOMER AGREEMENTS WITH SUCH BROKER OR
BROKERS AS THE SUBADVISOR SHALL SELECT AS PROVIDED ABOVE. THE SUBADVISOR MAY,
USING SUCH OF THE SECURITIES AND OTHER PROPERTY IN THE FUND AS THE SUBADVISOR
DEEMS NECESSARY OR DESIRABLE, DIRECT THE FUND'S CUSTODIAN TO DEPOSIT FOR THE
FUND ORIGINAL AND MAINTENANCE BROKERAGE AND MARGIN DEPOSITS AND OTHERWISE DIRECT
PAYMENTS OF CASH, CASH EQUIVALENTS AND SECURITIES AND OTHER PROPERTY INTO SUCH
BROKERAGE ACCOUNTS AND TO SUCH BROKERS AS THE SUBADVISOR DEEMS DESIRABLE OR
APPROPRIATE.
(G) SOCIAL SCREENING. THE ADVISOR IS RESPONSIBLE FOR SCREENING THOSE
INVESTMENTS SUBJECT TO SOCIAL SCREENING ("SECURITIES") TO DETERMINE THAT THE
SECURITIES INVESTMENTS MEET THE FUND'S SOCIAL INVESTMENT CRITERIA, AS MAY BE
AMENDED FROM TIME TO TIME BY THE DIRECTORS. THE SUBADVISOR WILL BUY ONLY THOSE
SECURITIES WHICH THE ADVISOR DETERMINES PASS THE FUND'S SOCIAL SCREENS.
(H) VOTING PROXIES. THE SUBADVISOR AGREES TO TAKE APPROPRIATE ACTION (WHICH
MAY INCLUDE VOTING) ON ALL PROXIES FOR THE FUND'S PORTFOLIO INVESTMENTS IN A
TIMELY MANNER. SUCH ACTION IS SUBJECT TO THE DIRECTION OF THE DIRECTORS AND
ADVISOR AND WILL BE CONSISTENT WITH THE SOCIAL SCREENS AND CRITERIA GOVERNING
INVESTMENT SELECTION FOR THE FUND.
(I) FURNISHING INFORMATION FOR THE FUND'S PROXIES. THE SUBADVISOR AGREES TO
PROVIDE THE ADVISOR IN A TIMELY MANNER WITH ALL INFORMATION NECESSARY, INCLUDING
THE SUBADVISOR'S CERTIFIED BALANCE SHEET AND INFORMATION CONCERNING THE
SUBADVISOR'S CONTROLLING PERSONS, FOR PREPARATION OF THE FUND'S PROXY
STATEMENTS, AS MAY BE NEEDED FROM TIME TO TIME.
2. BOOKS AND RECORDS.
A) IN CONNECTION WITH THE PURCHASE AND SALE OF THE FUND'S PORTFOLIO SECURITIES,
THE SUBADVISOR SHALL ARRANGE FOR THE TRANSMISSION TO THE FUND'S CUSTODIAN,
AND/OR THE ADVISOR ON A DAILY BASIS, OF SUCH CONFIRMATIONS, TRADE TICKETS OR
OTHER DOCUMENTATION AS MAY BE NECESSARY TO ENABLE THE ADVISOR TO PERFORM ITS
ACCOUNTING AND ADMINISTRATIVE RESPONSIBILITIES WITH RESPECT TO THE MANAGEMENT OF
THE FUND.
B) PURSUANT TO RULE 31A-3 UNDER THE 1940 ACT, RULE 204-2 UNDER THE INVESTMENT
ADVISERS ACT OF 1940 AND ANY OTHER LAWS, RULES OR REGULATIONS REGARDING
RECORDKEEPING, THE SUBADVISOR AGREES THAT: (I) ALL RECORDS IT MAINTAINS FOR THE
FUND ARE THE PROPERTY OF THE FUND; (II) IT WILL SURRENDER PROMPTLY TO THE FUND
OR ADVISOR ANY SUCH RECORDS UPON THE FUND'S OR ADVISOR'S REQUEST; (III) IT WILL
MAINTAIN FOR THE FUND THE RECORDS THAT THE FUND IS REQUIRED TO MAINTAIN UNDER
RULE 31A-1(B) INSOFAR AS SUCH RECORDS RELATE TO THE INVESTMENT AFFAIRS OF THE
FUND FOR WHICH THE SUBADVISOR HAS RESPONSIBILITY UNDER THIS AGREEMENT; AND (IV)
IT WILL PRESERVE FOR THE PERIODS PRESCRIBED BY RULE 31A-2 UNDER THE 1940 ACT THE
RECORDS IT MAINTAINS FOR THE FUND.
C) THE SUBADVISOR REPRESENTS THAT IT HAS ADOPTED A SUITABLE CODE OF ETHICS THAT
COVERS ITS ACTIVITIES WITH RESPECT TO ITS SERVICES TO THE FUND.
3. EXCLUSIVITY. EACH PARTY AND ITS AFFILIATES MAY HAVE ADVISORY, MANAGEMENT
SERVICE OR OTHER AGREEMENTS WITH OTHER ORGANIZATIONS AND PERSONS, AND MAY HAVE
OTHER INTERESTS AND BUSINESSES; PROVIDED, HOWEVER, THAT DURING THE TERM OF THIS
AGREEMENT, THE SUBADVISOR WILL NOT PROVIDE INVESTMENT ADVISORY SERVICES
("SERVICES") TO ANY INVESTMENT COMPANY REGISTERED UNDER THE 1940 ACT ("MUTUAL
FUND") INVESTING IN SOCIALLY SCREENED SECURITIES, OTHER THAN CALVERT-AFFILIATED
MUTUAL FUNDS.
4. COMPENSATION. THE ADVISOR WILL PAY TO THE SUBADVISOR AS COMPENSATION FOR
THE SUBADVISOR'S SERVICES RENDERED PURSUANT TO THIS AGREEMENT AN ANNUAL
SUBADVISORY FEE AS SPECIFIED IN ONE OR MORE SCHEDULES ATTACHED HERETO AND MADE
PART OF THIS AGREEMENT. SUCH FEES SHALL BE PAID BY THE ADVISOR (AND NOT BY THE
FUND). SUCH FEES SHALL BE PAYABLE FOR EACH MONTH WITHIN 15 BUSINESS DAYS AFTER
THE END OF SUCH MONTH. IF THE SUBADVISOR SHALL SERVE FOR LESS THAN THE WHOLE OF
A MONTH, THE COMPENSATION AS SPECIFIED SHALL BE PRORATED. THE SCHEDULES MAY BE
AMENDED FROM TIME TO TIME, PROVIDED THAT AMENDMENTS ARE MADE IN CONFORMITY WITH
APPLICABLE LAWS AND REGULATIONS AND THE ARTICLES OF INCORPORATION AND BYLAWS OF
THE FUND. ANY CHANGE IN THE SCHEDULE PERTAINING TO ANY NEW OR EXISTING SERIES OF
CWVF SHALL NOT BE DEEMED TO AFFECT THE INTEREST OF ANY OTHER SERIES AND SHALL
NOT REQUIRE THE APPROVAL OF SHAREHOLDERS OF ANY OTHER SERIES.
5. ASSIGNMENT AND AMENDMENT OF AGREEMENT. THIS AGREEMENT AUTOMATICALLY SHALL
TERMINATE WITHOUT THE PAYMENT OF ANY PENALTY IN THE EVENT OF ITS ASSIGNMENT OR
IF THE INVESTMENT ADVISORY AGREEMENT BETWEEN THE ADVISOR AND THE FUND SHALL
TERMINATE FOR ANY REASON. THIS AGREEMENT SHALL NOT BE MATERIALLY AMENDED UNLESS,
IF REQUIRED BY SECURITIES AND EXCHANGE COMMISSION RULES AND REGULATIONS, SUCH
AMENDMENT IS APPROVED BY THE AFFIRMATIVE VOTE OF A MAJORITY OF THE OUTSTANDING
SHARES OF THE FUND, AND BY THE VOTE, CAST IN PERSON AT A MEETING CALLED FOR THE
PURPOSE OF VOTING ON SUCH APPROVAL, OF A MAJORITY OF THE DIRECTORS OF CWVF WHO
ARE NOT INTERESTED PERSONS OF THE FUND, THE ADVISOR OR THE SUBADVISOR.
6. DURATION AND TERMINATION OF THE AGREEMENT. THIS AGREEMENT SHALL BECOME
EFFECTIVE UPON ITS EXECUTION; PROVIDED, HOWEVER, THAT THIS AGREEMENT SHALL NOT
BECOME EFFECTIVE WITH RESPECT TO ANY SERIES NOW EXISTING OR HEREAFTER CREATED
UNLESS IT HAS FIRST BEEN APPROVED (A) BY A VOTE OF THE MAJORITY OF THOSE
DIRECTORS OF CWVF WHO ARE NOT PARTIES TO THIS AGREEMENT OR INTERESTED PERSONS OF
SUCH PARTY, CAST IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING ON SUCH
APPROVAL, AND (B) BY A VOTE OF A MAJORITY OF THAT SERIES' OUTSTANDING VOTING
SECURITIES. THIS AGREEMENT SHALL REMAIN IN FULL FORCE AND EFFECT CONTINUOUSLY
THEREAFTER (UNLESS TERMINATED AUTOMATICALLY AS SET FORTH IN SECTION 5) EXCEPT AS
FOLLOWS:
(A) CWVF MAY AT ANY TIME TERMINATE THIS AGREEMENT WITHOUT PENALTY WITH
RESPECT TO ANY OR ALL FUNDS BY PROVIDING NOT LESS THAN 60 DAYS' WRITTEN NOTICE
DELIVERED OR MAILED BY REGISTERED MAIL, POSTAGE PREPAID, TO THE ADVISOR AND THE
SUBADVISOR. SUCH TERMINATION CAN BE AUTHORIZED BY THE AFFIRMATIVE VOTE OF A
MAJORITY OF THE (I) DIRECTORS OF CWVF OR (II) OUTSTANDING VOTING SECURITIES OF
THE APPLICABLE SERIES.
(B) THIS AGREEMENT WILL TERMINATE AUTOMATICALLY WITH RESPECT TO A SERIES
UNLESS, BY DECEMBER 31, 1999, AND AT LEAST ANNUALLY THEREAFTER, THE CONTINUANCE
OF THE AGREEMENT IS SPECIFICALLY APPROVED BY (I) THE DIRECTORS OF CWVF OR THE
SHAREHOLDERS OF SUCH SERIES BY THE AFFIRMATIVE VOTE OF A MAJORITY OF THE
OUTSTANDING SHARES OF SUCH SERIES, AND (II) A MAJORITY OF THE DIRECTORS OF CWVF,
WHO ARE NOT INTERESTED PERSONS OF THE FUND, ADVISOR OR SUBADVISOR, BY VOTE CAST
IN PERSON AT A MEETING CALLED FOR THE PURPOSE OF VOTING ON SUCH APPROVAL. IF THE
CONTINUANCE OF THIS AGREEMENT IS SUBMITTED TO THE SHAREHOLDERS OF ANY SERIES FOR
THEIR APPROVAL AND SUCH SHAREHOLDERS FAIL TO APPROVE SUCH CONTINUANCE AS
PROVIDED HEREIN, THE SUBADVISOR MAY CONTINUE TO SERVE HEREUNDER IN A MANNER
CONSISTENT WITH THE 1940 ACT AND THE RULES AND REGULATIONS THEREUNDER.
(C) THE ADVISOR MAY AT ANY TIME TERMINATE THIS AGREEMENT WITH RESPECT TO
ANY OR ALL FUNDS BY NOT LESS THAN 60 DAYS' WRITTEN NOTICE DELIVERED OR MAILED BY
REGISTERED MAIL, POSTAGE PREPAID, TO THE SUBADVISOR, AND THE SUBADVISOR MAY AT
ANY TIME TERMINATE THIS AGREEMENT WITH RESPECT TO ANY OR ALL SERIES BY NOT LESS
THAN 90 DAYS WRITTEN NOTICE DELIVERED OR MAILED BY REGISTERED MAIL, POSTAGE
PREPAID, TO THE ADVISOR, UNLESS OTHERWISE MUTUALLY AGREED IN WRITING.
UPON TERMINATION OF THIS AGREEMENT WITH RESPECT TO ANY FUND, THE DUTIES OF THE
ADVISOR DELEGATED TO THE SUBADVISOR UNDER THIS AGREEMENT WITH RESPECT TO SUCH
FUND AUTOMATICALLY SHALL REVERT TO THE ADVISOR.
7. NOTIFICATION TO THE ADVISOR. THE SUBADVISOR PROMPTLY SHALL NOTIFY THE
ADVISOR IN WRITING OF THE OCCURRENCE OF ANY OF THE FOLLOWING EVENTS:
(A) THE SUBADVISOR SHALL FAIL TO BE REGISTERED AS AN INVESTMENT ADVISOR
UNDER THE INVESTMENT ADVISERS ACT OF 1940, AS AMENDED, AND UNDER THE LAWS OF ANY
JURISDICTION IN WHICH THE SUBADVISOR IS REQUIRED TO BE REGISTERED AS AN
INVESTMENT ADVISOR IN ORDER TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT;
(B) THE SUBADVISOR SHALL HAVE BEEN SERVED OR OTHERWISE HAVE NOTICE OF ANY
ACTION, SUIT, PROCEEDING, INQUIRY OR INVESTIGATION, AT LAW OR IN EQUITY, BEFORE
OR BY ANY COURT, PUBLIC BOARD OR BODY, INVOLVING THE AFFAIRS OF THE FUND; OR
(C) A VIOLATION OF THE SUBADVISOR'S CODE OF ETHICS IS DISCOVERED AND,
AGAIN, WHEN ACTION HAS BEEN TAKEN TO RECTIFY SUCH VIOLATION; OR
(D) ANY OTHER EVENT THAT MIGHT AFFECT THE ABILITY OF THE SUBADVISOR TO
PROVIDE THE SERVICES PROVIDED FOR UNDER THIS AGREEMENT.
8. DEFINITIONS. FOR THE PURPOSES OF THIS AGREEMENT, THE TERMS "VOTE OF A
MAJORITY OF THE OUTSTANDING SHARES," "AFFILIATED PERSON," "CONTROL," "INTERESTED
PERSON" AND "ASSIGNMENT" SHALL HAVE THEIR RESPECTIVE MEANINGS AS DEFINED IN THE
1940 ACT AND THE RULES AND REGULATIONS THEREUNDER SUBJECT, HOWEVER, TO SUCH
EXEMPTIONS AS MAY BE GRANTED BY THE SECURITIES AND EXCHANGE COMMISSION UNDER
SAID ACT; AND THE TERM "SPECIFICALLY APPROVE AT LEAST ANNUALLY" SHALL BE
CONSTRUED IN A MANNER CONSISTENT WITH THE 1940 ACT AND THE RULES AND REGULATIONS
THEREUNDER.
9. INDEMNIFICATION. THE SUBADVISOR SHALL INDEMNIFY AND HOLD HARMLESS THE
ADVISOR, THE FUND AND THEIR RESPECTIVE DIRECTORS OR TRUSTEES, OFFICERS AND
SHAREHOLDERS FROM ANY AND ALL CLAIMS, LOSSES, EXPENSES, OBLIGATION AND
LIABILITIES (INCLUDING REASONABLE ATTORNEYS FEES) ARISING OR RESULTING FROM THE
SUBADVISOR'S WILLFUL MISFEASANCE, BAD FAITH, GROSS NEGLIGENCE OR RECKLESS
DISREGARD OF ITS DUTIES HEREUNDER.
THE ADVISOR SHALL INDEMNIFY AND HOLD HARMLESS THE SUBADVISOR, THE FUND,
THEIR RESPECTIVE DIRECTORS OR TRUSTEES, OFFICERS AND SHAREHOLDERS FROM ANY AND
ALL CLAIMS, LOSSES, EXPENSES, OBLIGATION AND LIABILITIES (INCLUDING REASONABLE
ATTORNEYS FEES) ARISING OR RESULTING FROM THE ADVISOR'S WILLFUL MISFEASANCE, BAD
FAITH, GROSS NEGLIGENCE OR RECKLESS DISREGARD OF ITS DUTIES HEREUNDER OR UNDER
ITS INVESTMENT ADVISORY AGREEMENT WITH THE FUND.
10. APPLICABLE LAW AND JURISDICTION. THIS AGREEMENT SHALL BE GOVERNED BY
MARYLAND LAW, AND ANY DISPUTE ARISING FROM THIS AGREEMENT OR THE SERVICES
RENDERED HEREUNDER SHALL BE RESOLVED THROUGH LEGAL PROCEEDINGS, WHETHER STATE,
FEDERAL, OR OTHERWISE, CONDUCTED IN THE STATE OF MARYLAND OR IN SUCH OTHER
MANNER OR JURISDICTION AS SHALL BE MUTUALLY AGREED UPON BY THE PARTIES HERETO.
11. MISCELLANEOUS. NOTICES OF ANY KIND TO BE GIVEN TO A PARTY HEREUNDER
SHALL BE IN WRITING AND SHALL BE DULY GIVEN IF MAILED, DELIVERED OR COMMUNICATED
BY ANSWER BACK FACSIMILE TRANSMISSION TO SUCH PARTY AT THE ADDRESS SET FORTH
BELOW, ATTENTION PRESIDENT, OR AT SUCH OTHER ADDRESS OR TO SUCH OTHER PERSON AS
A PARTY MAY FROM TIME TO TIME SPECIFY.
EACH PARTY AGREES TO PERFORM SUCH FURTHER ACTS AND EXECUTE SUCH FURTHER
DOCUMENTS AS ARE NECESSARY TO EFFECTUATE THE PURPOSES HEREOF. THE CAPTIONS IN
THIS AGREEMENT ARE INCLUDED FOR CONVENIENCE ONLY AND IN NO WAY DEFINE OR DELIMIT
ANY OF THE PROVISIONS HEREOF OR OTHERWISE AFFECT THEIR CONSTRUCTION OR EFFECT.
IN WITNESS WHEREOF, AND HAVE EACH CAUSED THIS INSTRUMENT TO BE SIGNED IN
DUPLICATE ON ITS BEHALF BY ITS DULY AUTHORIZED REPRESENTATIVE, ALL AS OF THE DAY
AND YEAR FIRST ABOVE WRITTEN.
/S/RENO MARTINI
SENIOR VICE PRESIDENT
CALVERT ASSET MANAGEMENT COMPANY, INC.
/S/EDDIE BROWN
PRESIDENT
BROWN CAPITAL MANAGEMENT, INC.
<PAGE>
SCHEDULE TO THE INVESTMENT SUBADVISORY AGREEMENT
BETWEEN CALVERT ASSET MANAGEMENT COMPANY, INC.
AND BROWN CAPITAL MANAGEMENT, INC.
AS COMPENSATION PURSUANT TO SECTION 4 OF THE SUBADVISORY AGREEMENT BETWEEN
CALVERT ASSET MANAGEMENT COMPANY, INC. (THE "ADVISOR") AND BROWN CAPITAL
MANAGEMENT, INC. (THE "SUBADVISOR"), THE ADVISOR SHALL PAY THE SUBADVISOR AN
ANNUAL SUBADVISORY FEE, COMPUTED DAILY AND PAYABLE MONTHLY, AT AN ANNUAL RATE OF
0.25% OF THE AVERAGE DAILY NET ASSETS OF THE CALVERT CAPITAL ACCUMULATION FUND.
\\SAREK\Legalshr\AGREEMENTS\Multi Fund Agmts\Distrib Agmt amd for Class T.doc
DISTRIBUTION AGREEMENT
THIS DISTRIBUTION AGREEMENT, DATED AS OF DECEMBER 2, 1998 BY AND BETWEEN
EACH CALVERT FUND LISTED IN THE SCHEDULE OF FUNDS ATTACHED HERETO AS SCHEDULE I
(EACH A "FUND" AND TOGETHER THE "FUNDS"), AS SUCH SCHEDULE MAY, FROM TIME TO
TIME BE AMENDED, AND CALVERT DISTRIBUTORS, INC., A DELAWARE CORPORATION (THE
"DISTRIBUTOR").
WHEREAS, EACH FUND IS REGISTERED AS AN OPEN-END INVESTMENT COMPANY UNDER
THE INVESTMENT COMPANY ACT OF 1940 (THE "1940 ACT") AND HAS REGISTERED ITS
SHARES, INCLUDING SHARES OF ITS SERIES PORTFOLIOS (THE "SERIES"), FOR SALE TO
THE PUBLIC UNDER THE SECURITIES ACT OF 1933 (THE "1933 ACT") AND VARIOUS STATE
SECURITIES LAWS;
WHEREAS, EACH FUND WISHES TO RETAIN THE DISTRIBUTOR AS THE PRINCIPAL
UNDERWRITER IN CONNECTION WITH THE OFFER AND SALE OF SHARES OF THE SERIES (THE
"SHARES") AND TO FURNISH CERTAIN OTHER SERVICES TO THE SERIES AS SPECIFIED IN
THIS AGREEMENT;
WHEREAS, THIS CONTRACT HAS BEEN APPROVED AND AMENDED AND RESTATED ON THIS
DAY BY THE TRUSTEES/DIRECTORS IN ANTICIPATION OF THE DISTRIBUTOR OFFERING CLASS
T SHARES;
WHEREAS, THE DISTRIBUTOR IS WILLING TO ACT AS PRINCIPAL UNDERWRITER AND TO
FURNISH SUCH SERVICES ON THE TERMS AND CONDITIONS HEREINAFTER SET FORTH;
NOW, THEREFORE, IN CONSIDERATION OF THE PROMISES AND MUTUAL COVENANTS
HEREIN CONTAINED, IT IS AGREED AS FOLLOWS:
<PAGE>
\\SAREK\Legalshr\AGREEMENTS\Multi Fund Agmts\Distrib Agmt amd for Class T.doc
-6-
1. EACH FUND HEREBY APPOINTS THE DISTRIBUTOR AS PRINCIPAL UNDERWRITER
IN CONNECTION WITH THE OFFER AND SALE OF ITS SHARES. THE DISTRIBUTOR SHALL, AS
AGENT FOR EACH FUND, SUBJECT TO APPLICABLE FEDERAL AND STATE LAW AND THE
DECLARATION OF TRUST OR ARTICLES OF INCORPORATION, AND BY-LAWS OF THE APPLICABLE
FUND AND IN ACCORDANCE WITH THE REPRESENTATIONS IN THE APPLICABLE FUND'S
REGISTRATION STATEMENT AND PROSPECTUS, AS SUCH DOCUMENTS MAY BE AMENDED FROM
TIME TO TIME: (A) PROMOTE THE SERIES; (B) ENTER INTO APPROPRIATE DEALER
AGREEMENTS WITH OTHER REGISTERED BROKER-DEALERS TO FURTHER DISTRIBUTION OF THE
SHARES; (C) SOLICIT ORDERS FOR THE PURCHASE OF THE SHARES SUBJECT TO SUCH TERMS
AND CONDITIONS AS THE APPLICABLE FUND MAY SPECIFY; (D) TRANSMIT PROMPTLY ORDERS
AND PAYMENTS FOR THE PURCHASE OF SHARES AND ORDERS FOR REDEMPTION OF SHARES TO
THE APPLICABLE FUND'S TRANSFER AGENT; AND (E) PROVIDE SERVICES AGREED UPON BY
THE APPLICABLE FUND TO SERIES SHAREHOLDERS; PROVIDED, HOWEVER, THAT THE
DISTRIBUTOR MAY SELL NO SHARES PURSUANT TO THIS AGREEMENT UNTIL THE DISTRIBUTOR
IS NOTIFIED THAT A FUND'S REGISTRATION STATEMENT UNDER THE 1933 ACT, AUTHORIZING
THE SALE OF SUCH SHARES THROUGH THE DISTRIBUTOR, HAS BECOME EFFECTIVE. THE
DISTRIBUTOR SHALL COMPLY WITH ALL APPLICABLE FEDERAL AND STATE LAWS AND OFFER
THE SHARES ON AN AGENCY OR "BEST EFFORTS" BASIS UNDER WHICH A FUND SHALL ONLY
ISSUE SUCH SHARES AS ARE ACTUALLY SOLD.
2. THE PUBLIC OFFERING PRICE OF THE SHARES SHALL BE THE NET ASSET VALUE
("NAV") PER SHARE (AS DETERMINED BY THE APPLICABLE FUND) OF THE OUTSTANDING
SHARES OF THE SERIES, PLUS THE APPLICABLE SALES CHARGE, IF ANY, AS SET FORTH IN
THE FUND'S THEN CURRENT PROSPECTUS. EACH FUND SHALL FURNISH THE DISTRIBUTOR
WITH A STATEMENT OF EACH COMPUTATION OF NAV AND OF THE DETAILS ENTERING INTO
SUCH COMPUTATION.
3. COMPENSATION.
A. DISTRIBUTION FEE.
I. CLASS A. IN CONSIDERATION OF THE DISTRIBUTOR'S SERVICES AS DISTRIBUTOR FOR
THE CLASS A SHARES OF A FUND, EACH FUND MAY PAY TO THE DISTRIBUTOR THE
DISTRIBUTION FEE AS SET FORTH IN SCHEDULE II TO THIS AGREEMENT THAT IS PAYABLE
PURSUANT TO THE FUND'S DISTRIBUTION PLAN.
II. CLASS B. IN CONSIDERATION OF THE DISTRIBUTOR'S SERVICES AS
DISTRIBUTOR FOR THE CLASS B SHARES OF A FUND, EACH FUND SHALL PAY TO THE
DISTRIBUTOR (OR ITS DESIGNEE OR TRANSFEREE) THE DISTRIBUTOR'S ALLOCABLE PORTION
OF THE DISTRIBUTION FEE; (AS SET FORTH IN SCHEDULE II TO THIS AGREEMENT) THAT IS
PAYABLE PURSUANT TO THE FUND'S DISTRIBUTION PLAN IN RESPECT OF THE CLASS B
SHARES OF A FUND. FOR PURPOSES OF THIS AGREEMENT, THE DISTRIBUTOR'S "ALLOCABLE
PORTION" OF THE DISTRIBUTION FEE SHALL BE 100% OF SUCH DISTRIBUTION FEE UNLESS
OR UNTIL THE FUND USES A PRINCIPAL UNDERWRITER OTHER THAN THE DISTRIBUTOR AND
THEREAFTER THE ALLOCABLE PORTION SHALL BE THE PORTION OF THE DISTRIBUTION FEE
ATTRIBUTABLE TO (I) CLASS B SHARES OF A FUND SOLD BY THE DISTRIBUTOR
("COMMISSION SHARES"), (II) CLASS B SHARES OF THE FUND ISSUED IN CONNECTION WITH
THE EXCHANGE OF COMMISSION SHARES OF ANOTHER FUND, AND (III) CLASS B SHARES OF
THE FUND ISSUED IN CONNECTION WITH THE REINVESTMENT OF DIVIDENDS AND CAPITAL
GAINS.
THE DISTRIBUTOR'S ALLOCABLE PORTION OF THE DISTRIBUTION FEE AND THE
CONTINGENT DEFERRED SALES CHARGES ARISING IN RESPECT OF CLASS B SHARES TAKEN
INTO ACCOUNT IN COMPUTING THE DISTRIBUTOR'S ALLOCABLE PORTION SHALL BE LIMITED
UNDER RULE 2830 OF THE CONDUCT RULES OR OTHER APPLICABLE REGULATIONS OF THE NASD
AS IF THE CLASS B SHARES TAKEN INTO ACCOUNT IN COMPUTING THE DISTRIBUTOR'S
ALLOCABLE PORTION THEMSELVES CONSTITUTED A SEPARATE CLASS OF SHARES OF A FUND.
THE SERVICES RENDERED BY THE DISTRIBUTOR FOR WHICH THE DISTRIBUTOR IS
ENTITLED TO RECEIVE THE DISTRIBUTOR'S ALLOCABLE PORTION OF THE DISTRIBUTION FEE
SHALL BE DEEMED TO HAVE BEEN COMPLETED AT THE TIME OF THE INITIAL PURCHASE OF
THE COMMISSION SHARES (WHETHER OF THE FUND OR ANOTHER FUND IN THE CALVERT GROUP
OF FUNDS) TAKEN INTO ACCOUNT IN COMPUTING THE DISTRIBUTOR'S ALLOCABLE PORTION.
NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, THE DISTRIBUTOR
SHALL BE PAID ITS ALLOCABLE PORTION OF THE DISTRIBUTION FEE NOTWITHSTANDING THE
DISTRIBUTOR'S TERMINATION AS PRINCIPAL UNDERWRITER OF THE CLASS B SHARES OF A
FUND, OR ANY TERMINATION OF THIS
<PAGE>
AGREEMENT OTHER THAN IN CONNECTION WITH A COMPLETE TERMINATION (AS DEFINED IN
THE DISTRIBUTION PLAN) OF THE CLASS B DISTRIBUTION PLAN AS IN EFFECT ON THE DATE
OF THIS AGREEMENT. EXCEPT AS PROVIDED IN THE PRECEDING SENTENCE, A FUND'S
OBLIGATION TO PAY THE DISTRIBUTION FEE TO THE DISTRIBUTOR 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 THE DISTRIBUTOR AND TO ENFORCE SUCH CLAIMS AGAINST ANY ASSETS
(OTHER THAN ITS RIGHTS TO BE PAID ITS ALLOCABLE PORTION OF THE DISTRIBUTION FEE
AND TO BE PAID THE CONTINGENT DEFERRED SALES CHARGES) OF THE DISTRIBUTOR.
III. CLASS C. IN CONSIDERATION OF THE DISTRIBUTOR'S SERVICES AS
DISTRIBUTOR FOR THE CLASS C SHARES OF A FUND, EACH FUND SHALL PAY TO THE
DISTRIBUTOR THE DISTRIBUTION FEE AS SET FORTH IN SCHEDULE II TO THIS AGREEMENT
THAT IS PAYABLE PURSUANT TO THE FUND'S DISTRIBUTION PLAN.
B. SERVICE FEE. AS ADDITIONAL COMPENSATION, FOR CLASS A, CLASS B, CLASS C
AND CLASS T SHARES OF EACH SERIES, APPLICABLE FUNDS SHALL PAY THE DISTRIBUTOR A
SERVICE FEE (AS THAT TERM IS DEFINED BY THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC. ("NASD")) AS SET FORTH IN SCHEDULE III TO THIS AGREEMENT THAT IS
PAYABLE PURSUANT TO THE FUND'S DISTRIBUTION PLAN.
C. FRONT-END SALES CHARGES. AS ADDITIONAL COMPENSATION FOR THE
SERVICES PERFORMED AND THE EXPENSES ASSUMED BY THE DISTRIBUTOR UNDER THIS
AGREEMENT, THE DISTRIBUTOR MAY, IN CONFORMITY WITH THE TERMS AND CONDITIONS SET
FORTH IN THE THEN CURRENT PROSPECTUS OF EACH FUND, IMPOSE AND RETAIN FOR ITS OWN
ACCOUNT THE AMOUNT OF THE FRONT-END SALES CHARGE, IF ANY, AND MAY REALLOW A
PORTION OF ANY FRONT-END SALES CHARGE TO OTHER BROKER-DEALERS, ALL IN ACCORDANCE
WITH NASD RULES.
D. CONTINGENT DEFERRED SALES CHARGE. EACH FUND WILL PAY TO THE DISTRIBUTOR
(OR ITS DESIGNEE OR TRANSFEREE) IN ADDITION TO THE FEES SET FORTH IN SECTION 3
HEREOF ANY CONTINGENT DEFERRED SALES CHARGE IMPOSED ON REDEMPTIONS OF THAT
FUND'S CLASS A, CLASS B AND CLASS C SHARES UPON THE TERMS AND CONDITIONS SET
FORTH IN THE THEN CURRENT PROSPECTUS OF THAT FUND. NOTWITHSTANDING ANYTHING TO
THE CONTRARY IN THIS AGREEMENT, THE DISTRIBUTOR SHALL BE PAID SUCH CONTINGENT
DEFERRED SALES CHARGES IN RESPECT OF CLASS B SHARES TAKEN INTO ACCOUNT IN
COMPUTING THE DISTRIBUTOR'S ALLOCABLE PORTION OF THE DISTRIBUTION FEE
NOTWITHSTANDING THE DISTRIBUTOR'S TERMINATION AS PRINCIPAL UNDERWRITER OF THE
CLASS B SHARES OF A FUND OR ANY TERMINATION OF THIS AGREEMENT OTHER THAN IN
CONNECTION WITH A COMPLETE TERMINATION OF THE CLASS B DISTRIBUTION PLAN AS IN
EFFECT ON THE DATE OF THIS AGREEMENT. EXCEPT AS PROVIDED IN THE PRECEDING
SENTENCE, A FUND'S OBLIGATION TO REMIT SUCH CONTINGENT DEFERRED SALES CHARGES TO
THE DISTRIBUTOR 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 THE DISTRIBUTOR AND TO ENFORCE SUCH CLAIMS AGAINST ANY ASSETS
(OTHER THAN THE DISTRIBUTOR'S RIGHT TO BE PAID ITS ALLOCABLE PORTION OF THE
DISTRIBUTION FEE AND TO BE PAID THE CONTINGENT DEFERRED SALES CHARGES) OF THE
DISTRIBUTOR. NO FUND WILL WAIVE ANY CONTINGENT DEFERRED SALES CHARGE EXCEPT
UNDER THE CIRCUMSTANCES SET FORTH IN THE FUND'S CURRENT PROSPECTUS WITHOUT THE
CONSENT OF THE DISTRIBUTOR (OR, IF RIGHTS TO PAYMENT HAVE BEEN TRANSFERRED, THE
TRANSFEREE), WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD.
4. PAYMENTS TO DISTRIBUTOR'S TRANSFEREES. THE DISTRIBUTOR MAY TRANSFER
THE RIGHT TO PAYMENTS HEREUNDER (BUT NOT ITS OBLIGATIONS HEREUNDER) IN ORDER TO
RAISE FUNDS TO COVER DISTRIBUTION EXPENDITURES, AND ANY SUCH TRANSFER SHALL BE
EFFECTIVE UPON WRITTEN NOTICE FROM THE DISTRIBUTOR TO THE FUND. IN CONNECTION
WITH THE FOREGOING, THE FUND IS AUTHORIZED TO PAY ALL OR A PART OF THE
DISTRIBUTION FEE AND/OR CONTINGENT DEFERRED SALES CHARGES IN RESPECT OF CLASS B
SHARES DIRECTLY TO SUCH TRANSFEREE AS DIRECTED BY THE DISTRIBUTOR.
5. CHANGES IN COMPUTATION OF FEE, ETC. AS LONG AS THE CLASS B
DISTRIBUTION PLAN IS IN EFFECT, A FUND SHALL NOT CHANGE THE MANNER IN WHICH THE
CLASS B DISTRIBUTION FEE IS COMPUTED (EXCEPT AS MAY BE 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 A FUND'S INDEPENDENT ACCOUNTANTS THAT ANY OF THE SALES CHARGES
IN RESPECT OF SUCH FUND, WHICH ARE NOT CONTINGENT DEFERRED SALES CHARGES AND
WHICH ARE NOT YET DUE AND PAYABLE, MUST BE ACCOUNTED FOR BY SUCH FUND AS A
LIABILITY IN ACCORDANCE WITH GAAP).
6. AS USED IN THIS AGREEMENT, THE TERM "REGISTRATION STATEMENT" SHALL
MEAN THE REGISTRATION STATEMENT MOST RECENTLY FILED BY A FUND WITH THE
SECURITIES AND EXCHANGE COMMISSION AND EFFECTIVE UNDER THE 1933 ACT, AS SUCH
REGISTRATION STATEMENT IS AMENDED BY ANY AMENDMENTS THERETO AT THE TIME IN
EFFECT, AND THE TERM "PROSPECTUS" SHALL MEAN THE FORM OF PROSPECTUS FILED BY A
FUND AS PART OF THE REGISTRATION STATEMENT.
7. THE DISTRIBUTOR SHALL PRINT AND DISTRIBUTE TO PROSPECTIVE INVESTORS
PROSPECTUSES, AND MAY PRINT AND DISTRIBUTE SUCH OTHER SALES LITERATURE, REPORTS,
FORMS, AND ADVERTISEMENTS IN CONNECTION WITH THE SALE OF THE SHARES AS COMPLY
WITH THE APPLICABLE PROVISIONS OF FEDERAL AND STATE LAW. IN CONNECTION WITH
SUCH SALES AND OFFERS OF SALE, THE DISTRIBUTOR SHALL GIVE ONLY SUCH INFORMATION
AND MAKE ONLY SUCH STATEMENTS OR REPRESENTATIONS, AND REQUIRE BROKER-DEALERS
WITH WHOM IT ENTERS INTO DEALER AGREEMENTS TO GIVE ONLY SUCH INFORMATION AND
MAKE ONLY SUCH STATEMENTS OR REPRESENTATIONS, AS ARE CONTAINED IN THE PROSPECTUS
OR IN INFORMATION FURNISHED IN WRITING TO THE DISTRIBUTOR BY A FUND. THE FUNDS
SHALL NOT BE RESPONSIBLE IN ANY WAY FOR ANY OTHER INFORMATION, STATEMENTS OR
REPRESENTATIONS GIVEN OR MADE BY THE DISTRIBUTOR, OTHER BROKER-DEALERS, OR THE
REPRESENTATIVES OR AGENTS OF THE DISTRIBUTOR OR SUCH BROKER-DEALERS. EXCEPT AS
SPECIFICALLY PERMITTED UNDER THE DISTRIBUTION PLAN UNDER RULE 12B-1 UNDER THE
1940 ACT, AS PROVIDED IN PARAGRAPH 3 OF THIS AGREEMENT, THE FUNDS SHALL BEAR
NONE OF THE EXPENSES OF THE DISTRIBUTOR IN CONNECTION WITH ITS OFFER AND SALE OF
THE SHARES.
8. EACH FUND AGREES AT ITS OWN EXPENSE TO REGISTER THE SHARES WITH THE
SECURITIES AND EXCHANGE COMMISSION, STATE AND OTHER REGULATORY BODIES, AND TO
PREPARE AND FILE FROM TIME TO TIME SUCH PROSPECTUSES, AMENDMENTS, REPORTS AND
OTHER DOCUMENTS AS MAY BE NECESSARY TO MAINTAIN THE REGISTRATION STATEMENT.
EACH FUND SHALL BEAR ALL EXPENSES RELATED TO PREPARING AND TYPESETTING ITS
PROSPECTUS(ES) AND OTHER MATERIALS REQUIRED BY LAW AND SUCH OTHER EXPENSES,
INCLUDING PRINTING AND MAILING EXPENSES RELATED TO THE FUND'S COMMUNICATIONS
WITH PERSONS WHO ARE SHAREHOLDERS OF SUCH FUND.
9. EACH FUND AGREES TO INDEMNIFY, DEFEND AND HOLD THE DISTRIBUTOR, ITS
SEVERAL OFFICERS AND DIRECTORS, AND ANY PERSON WHO CONTROLS THE DISTRIBUTOR
WITHIN THE MEANING OF SECTION 15 OF THE 1933 ACT, FREE AND HARMLESS FROM AND
AGAINST ANY AND ALL CLAIMS, DEMANDS, LIABILITIES AND EXPENSES (INCLUDING THE
COST OF INVESTIGATING OR DEFENDING SUCH CLAIMS, DEMANDS OR LIABILITIES AND ANY
COUNSEL FEES INCURRED IN CONNECTION THEREWITH) WHICH THE DISTRIBUTOR, ITS
OFFICERS OR DIRECTORS, OR ANY SUCH CONTROLLING PERSON MAY INCUR, UNDER THE 1933
ACT OR UNDER COMMON LAW OR OTHERWISE, ARISING OUT OF OR BASED UPON ANY ALLEGED
UNTRUE STATEMENT OF A MATERIAL FACT CONTAINED IN ITS REGISTRATION STATEMENT OR
PROSPECTUS OR ARISING OUT OF OR BASED UPON ANY ALLEGED OMISSION TO STATE A
MATERIAL FACT REQUIRED TO BE STATED IN EITHER THEREOF OR NECESSARY TO MAKE THE
STATEMENTS IN EITHER THEREOF NOT MISLEADING, PROVIDED THAT IN NO EVENT SHALL
ANYTHING CONTAINED IN THIS AGREEMENT BE CONSTRUED SO AS TO PROTECT THE
DISTRIBUTOR AGAINST ANY LIABILITY TO A FUND OR ITS SHAREHOLDERS TO WHICH THE
DISTRIBUTOR WOULD OTHERWISE BE SUBJECT BY REASON OF WILLFUL MISFEASANCE, BAD
FAITH, OR GROSS NEGLIGENCE, IN THE PERFORMANCE OF ITS DUTIES, OR BY REASON OF
ITS RECKLESS DISREGARD OF ITS OBLIGATIONS AND DUTIES UNDER THIS AGREEMENT.
10. THE DISTRIBUTOR AGREES TO INDEMNIFY, DEFEND AND HOLD EACH FUND,
THEIR SEVERAL OFFICERS AND DIRECTORS, AND ANY PERSON WHO CONTROLS A FUND WITHIN
THE MEANING OF SECTION 15 OF THE 1933 ACT, FREE AND HARMLESS FROM AND AGAINST
ANY AND ALL CLAIMS, DEMANDS, LIABILITIES AND EXPENSES (INCLUDING THE COST OF
INVESTIGATING OR DEFENDING SUCH CLAIMS, DEMANDS OR LIABILITIES AND ANY COUNSEL
FEES INCURRED IN CONNECTION THEREWITH) WHICH A FUND, ITS OFFICERS OR DIRECTORS,
OR ANY SUCH CONTROLLING PERSON MAY INCUR, UNDER THE 1933 ACT OR UNDER COMMON LAW
OR OTHERWISE, ARISING OUT OF OR BASED UPON ANY ALLEGED UNTRUE STATEMENT OR A
MATERIAL FACT CONTAINED IN INFORMATION FURNISHED IN WRITING BY THE DISTRIBUTOR
TO THE FUNDS FOR USE IN THE REGISTRATION STATEMENT OR PROSPECTUS(ES) OR ARISING
OUT OF OR BASED UPON ANY ALLEGED OMISSION TO STATE A MATERIAL FACT IN CONNECTION
WITH SUCH INFORMATION REQUIRED TO BE STATED IN THE REGISTRATION STATEMENT OR
PROSPECTUS(ES) OR NECESSARY TO MAKE SUCH INFORMATION NOT MISLEADING.
11. EACH FUND RESERVES THE RIGHT AT ANY TIME TO WITHDRAW ALL OFFERINGS
OF THE SHARES BY WRITTEN NOTICE TO THE DISTRIBUTOR AT ITS PRINCIPAL OFFICE.
12. THE DISTRIBUTOR IS AN INDEPENDENT CONTRACTOR AND SHALL BE AGENT FOR A
FUND ONLY IN RESPECT TO THE OFFER, SALE AND REDEMPTION OF THAT FUND'S SHARES.
13. THE SERVICES OF THE DISTRIBUTOR TO A FUND UNDER THIS AGREEMENT ARE
NOT TO BE DEEMED EXCLUSIVE, AND THE DISTRIBUTOR SHALL BE FREE TO RENDER SIMILAR
SERVICES OR OTHER SERVICES TO OTHERS SO LONG AS ITS SERVICES HEREUNDER ARE NOT
IMPAIRED THEREBY.
14. THE DISTRIBUTOR ACKNOWLEDGES THAT IT HAS RECEIVED NOTICE OF AND
ACCEPTS THE LIMITATIONS UPON THE LIABILITY OF ANY FUND ORGANIZED AS A BUSINESS
TRUST SET FORTH IN SUCH FUND'S DECLARATION OF TRUST. THE DISTRIBUTOR AGREES
THAT THE OBLIGATIONS OF SUCH FUNDS HEREUNDER IN ANY CASE SHALL BE LIMITED TO
SUCH FUNDS AND TO THEIR ASSETS AND THAT THE DISTRIBUTOR SHALL NOT SEEK
SATISFACTION OF ANY SUCH OBLIGATION FROM THE SHAREHOLDERS OF SUCH A FUND NOR
FROM ANY TRUSTEE, OFFICER, EMPLOYEE OR AGENT OF SUCH FUND.
15. THE FUNDS SHALL NOT USE THE NAME OF THE DISTRIBUTOR IN ANY
PROSPECTUS, SALES LITERATURE OR OTHER MATERIAL RELATING TO THE FUNDS IN ANY
MANNER NOT APPROVED PRIOR THERETO BY THE DISTRIBUTOR; PROVIDED, HOWEVER, THAT
THE DISTRIBUTOR SHALL APPROVE ALL USES OF ITS NAME WHICH MERELY REFER IN
ACCURATE TERMS TO ITS APPOINTMENT HEREUNDER OR WHICH ARE REQUIRED BY THE
SECURITIES AND EXCHANGE COMMISSION OR A STATE SECURITIES COMMISSION; AND,
PROVIDED FURTHER, THAT IN NO EVENT SHALL SUCH APPROVAL BE UNREASONABLY WITHHELD.
THE DISTRIBUTOR SHALL NOT USE THE NAME OF ANY FUND IN ANY MATERIAL RELATING TO
THE DISTRIBUTOR IN ANY MANNER NOT APPROVED PRIOR THERETO BY THE FUND; PROVIDED,
HOWEVER THAT THE FUNDS SHALL APPROVE ALL USES OF THEIR NAMES WHICH MERELY REFER
IN ACCURATE TERMS TO THE APPOINTMENT OF THE DISTRIBUTOR HEREUNDER OR WHICH ARE
REQUIRED BY THE SECURITIES AND EXCHANGE COMMISSION OR A STATE SECURITIES
COMMISSION; AND, PROVIDED FURTHER, THAT IN NO EVENT SHALL SUCH APPROVAL BE
UNREASONABLY WITHHELD.
16. THE DISTRIBUTOR SHALL PREPARE WRITTEN REPORTS FOR THE BOARD OF
TRUSTEES/DIRECTORS OF EACH FUND ON A QUARTERLY BASIS SHOWING INFORMATION
CONCERNING SERVICES PROVIDED AND EXPENSES INCURRED WHICH ARE RELATED TO THIS
AGREEMENT AND SUCH OTHER INFORMATION AS FROM TIME TO TIME SHALL BE REASONABLY
REQUESTED BY A FUND'S BOARD OF TRUSTEES/DIRECTORS.
17. AS USED IN THIS AGREEMENT, THE TERMS "ASSIGNMENT," "INTERESTED
PERSON," AND "MAJORITY OF THE OUTSTANDING VOTING SECURITIES" SHALL HAVE THE
MEANING GIVEN TO THEM BY SECTION 2(A) OF THE 1940 ACT, SUBJECT TO SUCH
EXEMPTIONS AS MAY BE GRANTED BY THE SECURITIES AND EXCHANGE COMMISSION BY ANY
RULE, REGULATION OR ORDER; PROVIDED, HOWEVER THAT, IN ORDER TO OBTAIN FINANCING,
THE DISTRIBUTOR MAY ASSIGN TO A LENDING INSTITUTION THE PAYMENTS DUE TO THE
DISTRIBUTOR UNDER THIS AGREEMENT WITHOUT IT CONSTITUTING AN ASSIGNMENT OF THE
AGREEMENT.
18. SUBJECT TO THE PROVISIONS OF SECTIONS 19 AND 20 BELOW, THIS
AGREEMENT WILL REMAIN IN EFFECT FOR TWO YEARS FROM THE DATE OF IS EXECUTION AND
FROM YEAR TO YEAR THEREAFTER, PROVIDED THAT THE DISTRIBUTOR DOES NOT NOTIFY A
FUND IN WRITING AT LEAST SIXTY (60) DAYS PRIOR TO THE EXPIRATION DATE IN ANY
YEAR THAT IT DOES NOT WISH CONTINUANCE OF THE AGREEMENT AS TO SUCH FUND FOR AN
ADDITIONAL YEAR.
19. TERMINATION. AS TO ANY PARTICULAR FUND (OR SERIES THEREOF), THIS
AGREEMENT SHALL AUTOMATICALLY TERMINATE IN THE EVENT OF ITS ASSIGNMENT AND MAY
BE TERMINATED AT ANY TIME WITHOUT THE PAYMENT OF ANY PENALTY BY A FUND OR BY THE
DISTRIBUTOR ON SIXTY (60) DAYS' WRITTEN NOTICE TO THE OTHER PARTY. A FUND MAY
EFFECT SUCH TERMINATION BY A VOTE OF (I) A MAJORITY OF THE BOARD OF
TRUSTEES/DIRECTORS OF THE FUND, (II) A MAJORITY OF THE TRUSTEES/DIRECTORS WHO
ARE NOT INTERESTED PERSONS OF THE FUND, WHO ARE NOT PARTIES TO THIS AGREEMENT OR
INTERESTED PERSONS OF SUCH PARTIES, AND WHO HAVE NO DIRECT OR INDIRECT FINANCIAL
INTEREST IN THE OPERATION OF THE DISTRIBUTION PLAN, IN THIS AGREEMENT OR IN ANY
AGREEMENT RELATED TO SUCH FUND'S DISTRIBUTION PLAN (THE "RULE 12B-1
TRUSTEES/DIRECTORS"), OR (III) A MAJORITY OF THE OUTSTANDING VOTING SECURITIES
OF THE RELEVANT SERIES.
20. THIS AGREEMENT SHALL BE SUBMITTED FOR RENEWAL TO THE BOARD OF
TRUSTEES/DIRECTORS OF EACH FUND AT LEAST ANNUALLY AND SHALL CONTINUE IN EFFECT
ONLY SO LONG AS SPECIFICALLY APPROVED AT LEAST ANNUALLY (I) BY A MAJORITY VOTE
OF THE FUND'S BOARD OF TRUSTEES/DIRECTORS, AND (II) BY THE VOTE OF THE MAJORITY
OF THE RULE 12B-1 TRUSTEES/DIRECTORS OF THE FUND, CAST IN PERSON AT A MEETING
CALLED FOR THE PURPOSE OF VOTING ON SUCH APPROVAL.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE
EXECUTED ON THE DATE FIRST ABOVE WRITTEN BY THEIR OFFICERS THEREUNTO DULY
AUTHORIZED.
ATTEST: EACH FUND LISTED IN THE
ATTACHED SCHEDULE I
BY:__________________________ BY:__________________________
WILLIAM M. TARTIKOFF
VICE PRESIDENT
ATTEST: CALVERT DISTRIBUTORS, INC.
BY:__________________________ BY:__________________________
RONALD M. WOLFSHEIMER
SENIOR VICE PRESIDENT
<PAGE>
SCHEDULE I
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 II
FEES ARE EXPRESSED AS A PERCENTAGE OF AVERAGE ANNUAL DAILY NET ASSETS, AND ARE
PAYABLE MONTHLY.
DISTRIBUTION FEE
CLASS A* CLASS B CLASS C CLASS I
THE CALVERT FUND
NEW VISION SMALL CAP FUND N/A 0.75 0.75
N/A
CALVERT INCOME FUND 0.25 0.75 0.75 N/A
CALVERT TAX-FREE RESERVES
MONEY MARKET PORTFOLIO N/A N/A N/A N/A
LIMITED-TERM PORTFOLIO N/A N/A N/A N/A
LONG-TERM PORTFOLIO 0.10 0.75 0.75
N/A
CALIFORNIA MONEY MARKET PORT. N/A N/A N/A
N/A
VERMONT MUNICIPAL N/A 0.75 0.75
N/A
CALVERT MUNICIPAL FUND
NATIONAL INTERMEDIATE FUND N/A 0.75 N/A
N/A
CALIFORNIA INTERMEDIATE FUND N/A 0.75 N/A
N/A
MARYLAND INTERMEDIATE FUND N/A 0.75 N/A N/A
VIRGINIA INTERMEDIATE FUND N/A 0.75 N/A N/A
CALVERT SOCIAL INVESTMENT FUND
MANAGED GROWTH PORTFOLIO 0.10 0.75 0.75
N/A
EQUITY PORTFOLIO 0.10 0.75 0.75 N/A
BOND PORTFOLIO 0.10 0.75 0.75 N/A
MANAGED INDEX PORTFOLIO N/A 0.75 0.75 N/A
MONEY MARKET PORTFOLIO N/A N/A N/A N/A
CALVERT WORLD VALUES FUND
CAPITAL ACCUMULATION FUND 0.10 0.75 0.75
N/A
INTERNATIONAL EQUITY FUND 0.10 0.75 0.75 N/A
CALVERT NEW WORLD FUND
CALVERT NEW AFRICA FUND N/A 0.75 0.75
N/A
FIRST VARIABLE RATE FUND
CALVERT FIRST GOVERNMENT
MONEY MARKET N/A 0.75 0.75 N/A
*DISTRIBUTOR RESERVES THE RIGHT TO WAIVE ALL OR A PORTION OF THE DISTRIBUTION
FEE FROM TIME TO TIME.
DATED: FEBRUARY 1998
<PAGE>
SCHEDULE III
FEES ARE EXPRESSED AS A PERCENTAGE OF AVERAGE ANNUAL DAILY NET ASSETS AND ARE
PAYABLE MONTHLY.
SERVICE FEE
CLASS A CLASS B CLASS C
CLASS I CLASS T
THE CALVERT FUND
NEW VISION SMALL CAP FUND 0.25 0.25 0.25
N/A
CALVERT INCOME FUND 0.25 0.25 0.25 N/A
CALVERT TAX-FREE RESERVES
MONEY MARKET PORTFOLIO N/A N/A N/A N/A
0.25%
LIMITED-TERM PORTFOLIO N/A N/A N/A N/A
LONG-TERM PORTFOLIO 0.25 0.25 0.25 N/A
CALIFORNIA MONEY MARKET PORT. N/A N/A N/A
N/A
VERMONT MUNICIPAL N/A 0.25 0.25
N/A
CALVERT MUNICIPAL FUND
NATIONAL INTERMEDIATE FUND 0.25 0.25 N/A
N/A
CALIFORNIA INTERMEDIATE FUND 0.25 0.25 N/A
N/A
MARYLAND INTERMEDIATE FUND 0.25 0.25 N/A N/A
VIRGINIA INTERMEDIATE FUND 0.25 0.25 N/A N/A
CALVERT SOCIAL INVESTMENT FUND
MANAGED GROWTH PORTFOLIO 0.25 0.25 0.25
N/A
EQUITY PORTFOLIO 0.25 0.25 0.25 N/A
BOND PORTFOLIO 0.25 0.25 0.25 N/A
MANAGED INDEX PORTFOLIO 0.25 0.25 0.25 N/A
MONEY MARKET PORTFOLIO 0.25 N/A N/A N/A
<PAGE>
CLASS A CLASS B CLASS C CLASS I CLASS T
CALVERT WORLD VALUES FUND
CAPITAL ACCUMULATION FUND 0.25 0.25 0.25
N/A
INTERNATIONAL EQUITY FUND 0.25 0.25 0.25 N/A
CALVERT NEW WORLD FUND
CALVERT NEW AFRICA FUND 0.25 0.25 0.25
N/A
FIRST VARIABLE RATE FUND
CALVERT FIRST GOVERNMENT
MONEY MARKET N/A 0.25 0.25 N/A
0.25%
DATED: DEC. 1998
Distributor reserves the right to waive all or a portion of the service fees
from time to time. For money market portfolios, Class A shall refer to Class O,
or if the portfolio does not have multiple classes, then to the portfolio
itself.
Distributor charges the service fee only on assets in excess of $30 million.
Distributor reserves the right to waive all or a portion of the service fees
from time to time. For money market portfolios, Class A shall refer to Class O,
or if the portfolio does not have multiple classes, then to the portfolio
itself.
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
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
CALVERT SHAREHOLDER SERVICES, INC.
AND
STATE STREET BANK AND TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. DUTIES OF THE BANK 1
2. FEES AND EXPENSES 3
3. WIRE TRANSFER OPERATING GUIDELINES 4
4. DATA ACCESS AND PROPRIETARY INFORMATION 5
5. INDEMNIFICATION 6
6. STANDARD OF CARE 8
7. COVENANTS OF THE TRANSFER AGENT AND THE BANK 8
8. REPRESENTATIONS AND WARRANTIES OF THE BANK 9
9. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT 9
10. TERMINATION OF AGREEMENT 10
11. ASSIGNMENT 10
12. AMENDMENT 10
13. MASSACHUSETTS LAW TO APPLY 10
14. FORCE MAJEURE 11
15. CONSEQUENTIAL DAMAGES 11
16. LIMITATION OF SHAREHOLDER LIABILITY 11
17. MERGER OF AGREEMENT 11
18. SURVIVAL 11
19. SEVERABILITY 11
20. COUNTERPARTS 12
<PAGE>
SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT MADE AS OF THE 15TH DAY OF AUGUST, 1996, BY AND
BETWEEN, CALVERT SHAREHOLDER SERVICES, INC. A CORPORATION, HAVING ITS
PRINCIPAL OFFICE AND PLACE OF BUSINESS AT 4550 MONTGOMERY AVE. SUITE
1000N, BETHESDA, MARYLAND, 20814 (THE "TRANSFER AGENT"), AND STATE
STREET BANK AND TRUST COMPANY, A MASSACHUSETTS TRUST COMPANY HAVING ITS
PRINCIPAL OFFICE AND PLACE OF BUSINESS AT 225 FRANKLIN STREET, BOSTON,
MASSACHUSETTS 02110 (THE "BANK");
WHEREAS, THE TRANSFER AGENT HAS BEEN APPOINTED BY EACH OF THE
INVESTMENT COMPANIES (INCLUDING EACH SERIES THEREOF) LISTED ON SCHEDULE
A (THE "FUND(S)"), EACH AN OPEN-END MANAGEMENT INVESTMENT COMPANY
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, AS
TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND SHAREHOLDER SERVICING
AGENT IN CONNECTION WITH CERTAIN ACTIVITIES, AND THE TRANSFER AGENT HAS
ACCEPTED EACH SUCH APPOINTMENT;
WHEREAS, THE TRANSFER AGENT HAS ENTERED INTO A TRANSFER AGENCY
AND SERVICE AGREEMENT WITH EACH OF THE FUNDS (INCLUDING EACH SERIES
THEREOF) LISTED ON SCHEDULE A PURSUANT TO WHICH THE TRANSFER AGENT IS
RESPONSIBLE FOR CERTAIN TRANSFER AGENCY AND DIVIDEND DISBURSING
FUNCTIONS FOR EACH FUND'S AUTHORIZED AND ISSUED SHARES OF COMMON STOCK
OR SHARES OF BENEFICIAL INTEREST AS THE CASE MAY BE ("SHARES") AND EACH
FUND'S SHAREHOLDERS ("SHAREHOLDERS") AND THE TRANSFER AGENT IS
AUTHORIZED TO SUBCONTRACT FOR THE PERFORMANCE OF ITS OBLIGATIONS AND
DUTIES THEREUNDER IN WHOLE OR IN PART WITH THE BANK;
WHEREAS, THE TRANSFER AGENT DESIRES TO APPOINT THE BANK AS ITS
SUB-TRANSFER AGENT, AND THE BANK DESIRES TO ACCEPT SUCH APPOINTMENT;
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANT HEREIN
CONTAINED, THE PARTIES HERETO AGREE AS FOLLOWS:
1. DUTIES OF THE BANK
1.1 SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THIS
AGREEMENT, THE BANK SHALL ACT AS THE TRANSFER AGENT'S SUB-TRANSFER
AGENT FOR SHARES IN CONNECTION WITH ANY ACCUMULATION PLAN, OPEN
ACCOUNT, DIVIDEND REINVESTMENT PLAN, RETIREMENT PLAN OR SIMILAR PLAN
PROVIDED TO SHAREHOLDERS AND SET OUT IN EACH FUND'S CURRENTLY EFFECTIVE
PROSPECTUS AND STATEMENT OF ADDITIONAL INFORMATION ("PROSPECTUS"),
INCLUDING WITHOUT LIMITATION ANY PERIODIC INVESTMENT PLAN OR PERIODIC
WITHDRAWAL PROGRAM. AS USED HEREIN THE TERM '"SHARES" MEANS THE
AUTHORIZED AND ISSUED SHARES OF COMMON STOCK, OR SHARES OF BENEFICIAL
INTEREST, AS THE CASE MAY BE, FOR EACH FUND LISTED IN SCHEDULE A. IN
ACCORDANCE WITH PROCEDURES ESTABLISHED FROM TIME TO TIME BY AGREEMENT
BETWEEN THE TRANSFER AGENT AND THE BANK, THE BANK SHALL PROVIDE THE
SERVICES LISTED IN THIS SECTION 1.
(A) THE BANK SHALL:
(I) RECEIVE FOR ACCEPTANCE, ORDERS FOR THE
PURCHASE OF SHARES, AND PROMPTLY DELIVER PAYMENT AND
APPROPRIATE DOCUMENTATION THEREOF TO THE CUSTODIAN OF
EACH FUND AUTHORIZED PURSUANT TO THE ARTICLES OF
INCORPORATION OR ORGANIZATION OF EACH FUND (THE
"CUSTODIAN");
(II) PURSUANT TO PURCHASE ORDERS, ISSUE THE
APPROPRIATE NUMBER OF SHARES AND HOLD SUCH SHARES IN
THE APPROPRIATE SHAREHOLDER ACCOUNT;
(III) RECEIVE FOR ACCEPTANCE REDEMPTION REQUESTS
AND REDEMPTION DIRECTIONS AND DELIVER THE APPROPRIATE
DOCUMENTATION THEREOF TO THE CUSTODIAN;
(IV) IN RESPECT TO THE TRANSACTIONS IN ITEMS (I),
(II) AND (III) ABOVE, THE BANK SHALL EXECUTE
TRANSACTIONS DIRECTLY WITH BROKER-DEALERS AUTHORIZED
BY EACH FUND;
(V) AT THE APPROPRIATE TIME AS AND WHEN IT
RECEIVES MONIES PAID TO IT BY THE CUSTODIAN WITH
RESPECT TO ANY REDEMPTION, PAY OVER OR CAUSE TO BE
PAID OVER IN THE APPROPRIATE MANNER SUCH MONIES AS
INSTRUCTED BY THE REDEEMING SHAREHOLDERS;
(VI) EFFECT TRANSFERS OF SHARES BY THE REGISTERED
OWNERS THEREOF UPON RECEIPT OF APPROPRIATE
INSTRUCTIONS;
(VII) PREPARE AND TRANSMIT PAYMENTS FOR DIVIDENDS
AND DISTRIBUTIONS DECLARED BY EACH FUND;
(VIII) ISSUE REPLACEMENT CERTIFICATES FOR THOSE
CERTIFICATES ALLEGED TO HAVE BEEN LOST, STOLEN OR
DESTROYED UPON RECEIPT BY THE BANK OF INDEMNIFICATION
SATISFACTORY TO THE BANK AND PROTECTING THE BANK AND
EACH FUND, AND THE BANK AT ITS OPTION, MAY ISSUE
REPLACEMENT CERTIFICATES IN PLACE OF MUTILATED STOCK
CERTIFICATES UPON PRESENTATION THEREOF AND WITHOUT
SUCH INDEMNITY;
(IX) MAINTAIN RECORDS OF ACCOUNT FOR AND ADVISE
THE TRANSFER AGENT AND ITS SHAREHOLDERS AS TO THE
FOREGOING; AND
(X) RECORD THE ISSUANCE OF SHARES OF EACH FUND
AND MAINTAIN PURSUANT TO RULE 17AD-10(E) OF THE
SECURITIES EXCHANGE ACT OF 1934 AS AMENDED (THE
"EXCHANGE ACT OF 1934") A RECORD OF THE TOTAL NUMBER
OF SHARES OF EACH FUND WHICH ARE AUTHORIZED, BASED
UPON DATA PROVIDED TO IT BY EACH FUND OR THE TRANSFER
AGENT, AND ISSUED AND OUTSTANDING. THE BANK SHALL
ALSO PROVIDE EACH FUND ON A REGULAR BASIS WITH THE
TOTAL NUMBER OF SHARES WHICH ARE AUTHORIZED AND
ISSUED AND OUTSTANDING AND SHALL HAVE NO OBLIGATION,
WHEN RECORDING THE ISSUANCE OF SHARES, TO MONITOR THE
ISSUANCE OF SUCH SHARES OR TO TAKE COGNIZANCE OF ANY
LAWS RELATING TO THE ISSUE OR SALE OF SUCH SHARES,
WHICH FUNCTIONS SHALL BE THE SOLE RESPONSIBILITY OF
EACH FUND OR THE TRANSFER AGENT.
1.2 (A) FOR REPORTS, THE BANK SHALL:
(I) MAINTAIN ALL SHAREHOLDER ACCOUNTS, PREPARE
MEETING, PROXY, AND MAILING LISTS, WITHHOLD TAXES ON
US RESIDENT AND NON-RESIDENT ALIEN ACCOUNTS, PREPARE
AND FILE US TREASURY DEPARTMENT REPORTS REQUIRED WITH
RESPECT TO INTEREST, DIVIDENDS AND DISTRIBUTIONS BY
FEDERAL AUTHORITIES FOR ALL SHAREHOLDERS, PREPARE
CONFIRMATION FORMS AND STATEMENTS OF ACCOUNT TO
SHAREHOLDERS FOR ALL PURCHASES AND REDEMPTIONS OF
SHARES AND OTHER CONFIRMABLE TRANSACTIONS IN
SHAREHOLDER ACCOUNT INFORMATION.
(B) FOR BLUE SKY REPORTING THE BANK SHALL PROVIDE A
SYSTEM THAT WILL ENABLE EACH FUND OR THE TRANSFER AGENT TO
MONITOR THE TOTAL NUMBER OF SHARES SOLD IN EACH STATE, AND
EACH FUND OR THE TRANSFER AGENT SHALL:
(I) IDENTIFY TO THE BANK IN WRITING THOSE
TRANSACTIONS AND ASSETS TO BE TREATED AS EXEMPT FROM
BLUE SKY REPORTING FOR EACH STATE; AND
(II) VERIFY THE ESTABLISHMENT OF TRANSACTIONS FOR
EACH STATE ON THE SYSTEM PRIOR TO THE ACTIVITY FOR
EACH STATE, THE RESPONSIBILITY OF THE BANK FOR EACH
FUND'S BLUE SKY STATE REGISTRATION STATUS IS SOLELY
LIMITED TO THE INITIAL ESTABLISHMENT OF TRANSACTIONS
SUBJECT TO BLUE SKY COMPLIANCE BY THE FUND OR THE
TRANSFER AGENT AND THE REPORTING OF SUCH TRANSACTIONS
TO THE FUND AS PROVIDED ABOVE.
1.3 PER THE ATTACHED SERVICE RESPONSIBILITY SCHEDULE PROCEDURES AS
TO WHO SHALL PROVIDE CERTAIN OF THESE SERVICES IN SECTION 1 MAY BE
ESTABLISHED FROM TIME TO TIME BY AGREEMENT BETWEEN THE TRANSFER AGENT
AND THE BANK. THE BANK MAY AT TIMES PERFORM ONLY A PORTION OF THESE
SERVICES AND THE TRANSFER AGENT MAY PERFORM THESE SERVICES ON EACH
FUND'S BEHALF.
1.4 THE BANK SHALL PROVIDE ADDITIONAL SERVICES ON BEHALF OF THE
TRANSFER AGENT (I.E., ESCHEAT SERVICES) THAT MAY BE AGREED UPON IN
WRITING BETWEEN THE BANK AND THE TRANSFER AGENT.
2. FEES AND EXPENSES
2.1 FOR THE PERFORMANCE BY THE BANK PURSUANT TO THIS AGREEMENT,
THE TRANSFER AGENT AGREES TO PAY THE BANK AN ANNUAL MAINTENANCE FEE FOR
EACH SHAREHOLDER ACCOUNT AS SET OUT IN THE INITIAL FEE SCHEDULE
ATTACHED HERETO. SUCH FEES AND OUT-OF-POCKET EXPENSES AND ADVANCES
IDENTIFIED UNDER SECTION 2.2 BELOW MAY BE CHANGED FROM TIME TO TIME
SUBJECT TO MUTUAL WRITTEN AGREEMENT BETWEEN THE TRANSFER AGENT AND THE
BANK.
2.2 IN ADDITION TO THE FEE PAID UNDER SECTION 2.1 ABOVE, THE
TRANSFER AGENT AGREES TO REIMBURSE THE BANK FOR OUT-OF-POCKET EXPENSES,
INCLUDING, BUT NOT LIMITED TO CONFIRMATION PRODUCTION, POSTAGE, FORMS,
TELEPHONE, MICROFILM, MICROFICHE, TABULATING PROXIES, RECORDS STORAGE,
OR ADVANCES INCURRED BY THE BANK FOR THE ITEMS SET OUT IN THE FEE
SCHEDULE ATTACHED HERETO. IN ADDITION, ANY OTHER EXPENSES INCURRED BY
THE BANK AT THE REQUEST OR WITH THE CONSENT OF THE TRANSFER AGENT, WILL
BE REIMBURSED BY THE TRANSFER AGENT.
2.3 THE TRANSFER AGENT AGREES TO PAY ALL FEES AND REIMBURSABLE
EXPENSES WITHIN FIFTEEN DAYS FOLLOWING THE RECEIPT OF THE RESPECTIVE
BILLING NOTICE. POSTAGE FOR MAILING OF DIVIDENDS, PROXIES, FUND REPORTS
AND OTHER MAILINGS TO ALL SHAREHOLDER ACCOUNTS SHALL BE ADVANCED TO THE
BANK BY THE TRANSFER AGENT AT LEAST SEVEN (7) DAYS PRIOR TO THE MAILING
DATE OF SUCH MATERIALS.
3. WIRE TRANSFER OPERATING GUIDELINES/ARTICLES 4A OF THE UNIFORM
COMMERCIAL CODE
3.1 THE BANK IS AUTHORIZED TO PROMPTLY DEBIT THE APPROPRIATE
TRANSFER AGENT ACCOUNT(S) UPON THE RECEIPT OF A PAYMENT ORDER IN
COMPLIANCE WITH THE SELECTED SECURITY PROCEDURE (THE "SECURITY
PROCEDURE") CHOSEN FOR FUNDS TRANSFER AND IN THE AMOUNT OF MONEY THAT
THE BANK HAS BEEN INSTRUCTED TO TRANSFER. THE BANK SHALL EXECUTE
PAYMENT ORDERS IN COMPLIANCE WITH THE SECURITY PROCEDURE AND WITH THE
TRANSFER AGENT'S INSTRUCTIONS ON THE EXECUTION DATE PROVIDED THAT SUCH
PAYMENT ORDER IS RECEIVED BY THE CUSTOMARY DEADLINE FOR PROCESSING SUCH
A REQUEST, UNLESS THE PAYMENT ORDER SPECIFIES A LATER TIME. ALL PAYMENT
ORDERS AND COMMUNICATIONS RECEIVED AFTER THIS TIME FRAME WILL BE DEEMED
TO HAVE BEEN RECEIVED THE NEXT BUSINESS DAY.
3.2 THE TRANSFER AGENT ACKNOWLEDGES THAT THE SECURITY PROCEDURE IT
HAS DESIGNATED ON THE TRANSFER AGENT SELECTION FORM WAS SELECTED BY THE
TRANSFER AGENT FROM SECURITY PROCEDURES OFFERED BY THE BANK. THE
TRANSFER AGENT SHALL RESTRICT ACCESS TO CONFIDENTIAL INFORMATION
RELATING TO THE SECURITY PROCEDURE TO AUTHORIZED PERSONS AS
COMMUNICATED TO THE BANK IN WRITING. THE TRANSFER AGENT MUST NOTIFY THE
BANK IMMEDIATELY IF IT HAS REASON TO BELIEVE UNAUTHORIZED PERSONS MAY
HAVE OBTAINED ACCESS TO SUCH INFORMATION OR OF ANY CHANGE IN THE
TRANSFER AGENT'S AUTHORIZED PERSONNEL. THE BANK SHALL VERIFY THE
AUTHENTICITY OF ALL SUCH INSTRUCTIONS ACCORDING TO THE SECURITY
PROCEDURE.
3.3 THE BANK SHALL PROCESS ALL PAYMENT ORDERS ON THE BASIS OF THE
ACCOUNT NUMBER CONTAINED IN THE PAYMENT ORDER. IN THE EVENT OF A
DISCREPANCY BETWEEN ANY NAME INDICATED ON THE PAYMENT ORDER AND THE
ACCOUNT NUMBER, THE ACCOUNT NUMBER SHALL TAKE PRECEDENCE AND GOVERN.
3.4 WHEN A TRANSFER AGENT INITIATES OR RECEIVES AUTOMATED CLEARING
HOUSE ("ACH") CREDIT AND DEBIT ENTRIES PURSUANT TO THESE GUIDELINES AND
THE RULES OF THE NATIONAL AUTOMATED CLEARING HOUSE ASSOCIATION AND THE
NEW ENGLAND CLEARING HOUSE ASSOCIATION, THE BANK WILL ACT AS AN
ORIGINATING DEPOSITORY FINANCIAL INSTITUTION AND/OR RECEIVING
DEPOSITORY FINANCIAL INSTITUTION, AS THE CASE MAY BE, WITH RESPECT TO
SUCH ENTRIES. CREDITS GIVEN BY THE BANK WITH RESPECT TO AN ACH CREDIT
ENTRY ARE PROVISIONAL UNTIL THE BANK RECEIVES FINAL SETTLEMENT FOR SUCH
ENTRY FROM THE FEDERAL RESERVE BANK. IF THE BANK DOES NOT RECEIVE SUCH
FINAL SETTLEMENT, THE TRANSFER AGENT AGREES THAT THE BANK SHALL RECEIVE
A REFUND OF THE AMOUNT CREDITED TO THE TRANSFER AGENT IN CONNECTION
WITH SUCH ENTRY, AND THE PARTY MAKING PAYMENT TO THE TRANSFER AGENT VIA
SUCH ENTRY SHALL NOT BE DEEMED TO HAVE PAID THE AMOUNT OF THE ENTRY.
3.5 THE BANK RESERVES THE RIGHT TO DECLINE TO PROCESS OR DELAY THE
PROCESSING OF A PAYMENT ORDER WHICH (A) IS IN EXCESS OF THE COLLECTED
BALANCE IN THE ACCOUNT TO BE CHARGED AT THE TIME OF THE BANK'S RECEIPT
OF SUCH PAYMENT ORDER, OR (B) IF THE BANK, IN GOOD FAITH, IS UNABLE TO
SATISFY ITSELF THAT THE TRANSACTION HAS BEEN PROPERLY AUTHORIZED.
3.6 THE BANK SHALL USE REASONABLE EFFORTS TO ACT ON ALL AUTHORIZED
REQUESTS TO CANCEL OR AMEND PAYMENT ORDERS RECEIVED IF REQUESTS ARE
RECEIVED IN A TIMELY MANNER AFFORDING THE BANK REASONABLE OPPORTUNITY
TO ACT. HOWEVER, THE BANK ASSUMES NO LIABILITY IF THE REQUEST FOR
AMENDMENT OR CANCELLATION CANNOT BE SATISFIED.
3.7 THE BANK SHALL ASSUME NO RESPONSIBILITY FOR FAILURE TO DETECT
ANY ERRONEOUS PAYMENT ORDER PROVIDED THAT THE BANK COMPLIES WITH THE
PAYMENT ORDER INSTRUCTIONS AS RECEIVED AND THE BANK COMPLIES WITH THE
SECURITY PROCEDURE. THE SECURITY PROCEDURE IS ESTABLISHED FOR THE
PURPOSE OF AUTHENTICATING PAYMENT ORDERS ONLY AND NOT FOR THE DETECTION
OF ERRORS IN PAYMENT ORDERS.
3.8 THE BANK SHALL ASSUME NO RESPONSIBILITY FOR LOST INTEREST WITH
RESPECT TO THE RETRANSFER AGENTABLE AMOUNT OF ANY UNAUTHORIZED PAYMENT
ORDER UNLESS THE BANK IS NOTIFIED OF THE UNAUTHORIZED PAYMENT ORDER
WITHIN THIRTY (30) DAYS OF NOTIFICATION BY THE BANK OF THE ACCEPTANCE
OF SUCH PAYMENT ORDER. IN NO EVENT (INCLUDING FAILURE TO EXECUTE A
PAYMENT ORDER) SHALL THE BANK BE LIABLE FOR SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
3.9 CONFIRMATION OF BANK'S EXECUTION OF PAYMENT ORDERS SHALL
ORDINARILY BE PROVIDED WITHIN 24 HOURS NOTICE OF WHICH MAY BE DELIVERED
THROUGH THE BANK'S PROPRIETARY INFORMATION SYSTEMS, OR BY FACSIMILE OR
CALL-BACK. CLIENT MUST REPORT ANY OBJECTIONS TO THE EXECUTION OF AN
ORDER WITHIN 30 DAYS.
4. DATA ACCESS AND PROPRIETARY INFORMATION
THE TRANSFER AGENT ACKNOWLEDGES THAT THE DATA BASES, COMPUTER PROGRAMS,
SCREEN FORMATS, REPORT FORMATS, INTERACTIVE DESIGN TECHNIQUES, AND
OTHER INFORMATION FURNISHED TO THE TRANSFER AGENT BY THE BANK ARE
PROVIDED SOLELY IN CONNECTION WITH THE SERVICES RENDERED UNDER THIS
AGREEMENT AND CONSTITUTE COPYRIGHTED TRADE SECRETS OR PROPRIETARY
INFORMATION OF SUBSTANTIAL VALUE TO THE BANK. SUCH DATABASES, PROGRAMS,
FORMATS, DESIGNS, TECHNIQUES AND OTHER INFORMATION ARE COLLECTIVELY
REFERRED TO BELOW AS "PROPRIETARY INFORMATION". THE TRANSFER AGENT
AGREES THAT IT SHALL TREAT ALL PROPRIETARY INFORMATION AS PROPRIETARY
TO THE BANK AND FURTHER AGREES THAT IT SHALL NOT DIVULGE ANY
PROPRIETARY INFORMATION TO ANY PERSON OR ORGANIZATION EXCEPT AS
EXPRESSLY PERMITTED HEREUNDER. THE TRANSFER AGENT AGREES FOR ITSELF AND
ITS EMPLOYEES AND AGENTS:
(A) TO USE SUCH PROGRAMS AND DATABASES (I) SOLELY ON THE
TRANSFER AGENT'S COMPUTERS, OR (II) SOLELY FROM EQUIPMENT AT
THE LOCATIONS AGREED TO BETWEEN THE TRANSFER AGENT AND THE
BANK AND (III) IN ACCORDANCE WITH THE BANK'S APPLICABLE USER
DOCUMENTATION;
(B) TO REFRAIN FROM COPYING OR DUPLICATING IN ANY WAY
(OTHER THAN IN THE NORMAL COURSE OF PERFORMING PROCESSING ON
THE TRANSFER AGENT'S COMPUTERS) ANY PART OF ANY PROPRIETARY
INFORMATION;
(C) TO REFRAIN FROM OBTAINING UNAUTHORIZED ACCESS TO ANY
PROGRAMS, DATA OR OTHER INFORMATION NOT OWNED BY THE TRANSFER
AGENT, AND IF SUCH ACCESS IS ACCIDENTALLY OBTAINED, TO RESPECT
AND SAFEGUARD THE SAME PROPRIETARY INFORMATION;
(D) TO REFRAIN FROM CAUSING OR ALLOWING PROPRIETARY
INFORMATION TRANSMITTED FROM THE BANK'S COMPUTER TO THE
TRANSFER AGENT'S TERMINAL TO BE RETRANSMITTED TO ANY OTHER
COMPUTER TERMINAL OR OTHER DEVICE EXCEPT AS EXPRESSLY
PERMITTED BY THE BANK, SUCH PERMISSION NOT TO BE UNREASONABLY
WITHHELD;
(E) THAT THE TRANSFER AGENT SHALL HAVE ACCESS ONLY TO
THOSE AUTHORIZED TRANSACTIONS AS AGREED TO BETWEEN THE
TRANSFER AGENT AND THE BANK; AND
(F) TO HONOR REASONABLE WRITTEN REQUESTS MADE BY THE BANK
TO PROTECT AT THE BANK'S EXPENSE THE RIGHTS OF THE BANK IN
PROPRIETARY INFORMATION AT COMMON LAW AND UNDER
APPLICABLE STATUTES.
EACH PARTY SHALL TAKE REASONABLE EFFORTS TO ADVISE ITS EMPLOYEES OF
THEIR OBLIGATIONS PURSUANT TO THIS SECTION 4.
5. INDEMNIFICATION
5.1 EXCEPT AS PROVIDED IN SECTION 6, HEREIN, THE BANK SHALL NOT BE
RESPONSIBLE FOR, AND THE TRANSFER AGENT SHALL INDEMNIFY AND HOLD THE
BANK HARMLESS FROM AND AGAINST, ANY AND ALL LOSSES, DAMAGES, COSTS,
CHARGES, COUNSEL FEES, PAYMENTS, EXPENSES AND LIABILITY ARISING OUT OF
OR ATTRIBUTABLE TO:
(A) ALL ACTIONS OF THE BANK OR ITS AGENT OR
SUBCONTRACTORS REQUIRED TO BE TAKEN PURSUANT TO THIS
AGREEMENT, PROVIDED THAT SUCH ACTIONS ARE TAKEN IN GOOD FAITH
AND WITHOUT NEGLIGENCE OR WILLFUL MISCONDUCT;
(B) THE TRANSFER AGENT'S LACK OF GOOD FAITH, NEGLIGENCE
OR WILLFUL MISCONDUCT;
(C) THE RELIANCE ON OR USE BY THE BANK OR ITS AGENTS OR
SUBCONTRACTORS OF INFORMATION, RECORDS, DOCUMENTS OR SERVICES
WHICH (I) ARE GIVEN TO THE BANK OR ITS AGENTS OR
SUBCONTRACTORS, AND (II) HAVE BEEN PREPARED, MAINTAINED OR
PERFORMED BY THE TRANSFER AGENT OR ANY OTHER PERSON OR FIRM ON
BEHALF OF THE TRANSFER AGENT INCLUDING BUT NOT LIMITED TO ANY
PREVIOUS TRANSFER AGENT OR REGISTRAR EXCLUDING THE BANK;
(D) THE RELIANCE ON, OR THE CARRYING OUT BY THE BANK OR
ITS AGENTS OR SUBCONTRACTORS OF ANY INSTRUCTIONS OR REQUESTS
OF THE TRANSFER AGENT; AND
(E) THE OFFER OR SALE OF SHARES IN VIOLATION OF ANY
REQUIREMENT UNDER THE FEDERAL SECURITIES LAWS OR REGULATIONS
OR THE SECURITIES LAWS OR REGULATIONS OF ANY STATE THAT SUCH
SHARES BE REGISTERED IN SUCH STATE OR IN VIOLATION OF ANY STOP
ORDER OR OTHER DETERMINATION OR RULING BY ANY FEDERAL AGENCY
OR ANY STATE WITH RESPECT TO THE OFFER OR SALE OF SUCH SHARES
IN SUCH STATE.
5.2 AT ANY TIME THE BANK MAY APPLY TO ANY OFFICER OF THE TRANSFER
AGENT FOR INSTRUCTIONS, AND MAY CONSULT WITH LEGAL COUNSEL WITH RESPECT
TO ANY MATTER ARISING IN CONNECTION WITH THE SERVICES TO BE PERFORMED
BY THE BANK UNDER THIS AGREEMENT, AND THE BANK AND ITS AGENTS OR
SUBCONTRACTORS SHALL NOT BE LIABLE AND SHALL BE INDEMNIFIED BY THE
TRANSFER AGENT FOR ANY ACTION TAKEN OR OMITTED BY IT IN RELIANCE UPON
SUCH INSTRUCTIONS OR UPON THE OPINION OF SUCH COUNSEL.
THE BANK, ITS AGENTS AND SUBCONTRACTORS SHALL BE PROTECTED AND
INDEMNIFIED IN ACTING UPON ANY PAPER OR DOCUMENT FURNISHED BY OR ON
BEHALF OF THE TRANSFER AGENT, REASONABLY BELIEVED BY THE BATIK AS BEING
IN GOOD ORDER AND TO HAVE BEEN SIGNED BY THE PROPER PERSON OR PERSONS,
OR UPON ANY INSTRUCTION, INFORMATION, DATA, RECORDS OR DOCUMENTS
PROVIDED THE BANK OR ITS AGENTS OR SUBCONTRACTORS BY MACHINE READABLE
INPUT, TELEX, CRT DATA ENTRY OR OTHER SIMILAR MEANS AUTHORIZED BY THE
TRANSFER AGENT, AND SHALL NOT BE HELD TO HAVE NOTICE OF ANY CHANGE OF
AUTHORITY OF ANY PERSON, UNTIL RECEIPT OF WRITTEN NOTICE THEREOF FROM
THE TRANSFER AGENT. THE BANK, ITS AGENTS AND SUBCONTRACTORS SHALL ALSO
BE PROTECTED AND INDEMNIFIED IN RECOGNIZING STOCK CERTIFICATES WHICH
ARE REASONABLY BELIEVED TO BEAR THE PROPER MANUAL OR FACSIMILE
SIGNATURES OF THE OFFICERS OF THE TRANSFER AGENT, AND THE PROPER
COUNTERSIGNATURE OF THE TRANSFER AGENT OR ANY FORMER TRANSFER AGENT OR
FORMER REGISTRAR, OR OF A CO-TRANSFER AGENT OR CO-REGISTRAR.
5.3 IN ORDER THAT THE INDEMNIFICATION PROVISIONS CONTAINED IN THIS
SECTION 5 SHALL APPLY, UPON THE ASSERTION OF A CLAIM FOR WHICH THE
TRANSFER AGENT MAY BE REQUIRED TO INDEMNIFY THE BANK, THE BANK SHALL
PROMPTLY NOTIFY THE TRANSFER AGENT OF SUCH ASSERTION, AND SHALL KEEP
THE TRANSFER AGENT ADVISED WITH RESPECT TO ALL DEVELOPMENTS CONCERNING
SUCH CLAIM. THE TRANSFER AGENT SHALL HAVE THE OPTION TO PARTICIPATE
WITH THE BANK IN THE DEFENSE OF SUCH CLAIM OR TO DEFEND AGAINST SAID
CLAIM IN ITS OWN NAME OR IN THE NAME OF THE BANK. THE BANK SHALL IN NO
CASE CONFESS ANY CLAIM OR MAKE ANY COMPROMISE IN ANY CASE IN WHICH THE
TRANSFER AGENT MAY BE REQUIRED TO INDEMNIFY THE BANK EXCEPT WITH THE
TRANSFER AGENT'S PRIOR WRITTEN CONSENT.
6. STANDARD OF CARE
6.1 THE BANK SHALL AT ALL TIMES ACT IN GOOD FAITH AND AGREES TO
USE ITS BEST EFFORTS WITHIN REASONABLE LIMITS TO INSURE THE ACCURACY OF
ALL SERVICES PERFORMED UNDER THIS AGREEMENT, BUT ASSUMES NO
RESPONSIBILITY AND SHALL NOT BE LIABLE FOR LOSS OR DAMAGE DUE TO ERRORS
UNLESS SAID ERRORS ARE CAUSED BY ITS NEGLIGENCE, BAD FAITH, OR WILLFUL
MISCONDUCT OR THAT OF ITS EMPLOYEES.
6.2 THE BANK SHALL WORK WITH THE TRANSFER AGENT TO ENSURE THAT A
FUND IS MADE WHOLE BY THE RESPONSIBLE PARTY FOR ANY MATERIAL LOSSES OR
DAMAGES RESULTING FROM ERRORS, MATERIAL UNRECONCILED ITEMS,
CARELESSNESS, NEGLIGENCE, BAD FAITH, OR WILLFUL MISCONDUCT BY THE BANK
OR ITS AGENTS OR SUBCONTRACTORS, OR THAT OF THEIR EMPLOYEES. NEITHER
THE BANK, ITS AGENTS OR SUBCONTRACTORS, NOR THE TRANSFER AGENT MAY
WAIVE FULL LIABILITY FOR LOSSES OR DAMAGES BASED ON THE ABOVE.
6.3 ERRORS IDENTIFIED AS CAUSED BY THE SUB-TRANSFER AGENT WILL NOT
BE CHARGED TO THE FUNDS IN THE MONTHLY BILLING.
7. COVENANTS OF THE TRANSFER AGENT AND THE BANK
7.1 THE BANK HEREBY AGREES TO ESTABLISH AND MAINTAIN FACILITIES
AND PROCEDURES REASONABLY ACCEPTABLE TO THE TRANSFER AGENT FOR
SAFEKEEPING OF STOCK CERTIFICATES, CHECK FORMS AND FACSIMILE SIGNATURE
IMPRINTING DEVICES, IF ANY; AND FOR THE PREPARATION OR USE, AND FOR
KEEPING ACCOUNT OF, SUCH CERTIFICATES, FORMS AND DEVICES.
7.2 THE BANK SHALL KEEP RECORDS RELATING TO THE SERVICES TO BE
PERFORMED HEREUNDER, IN THE FORM AND MANNER AS IT MAY DEEM ADVISABLE.
TO THE EXTENT REQUIRED BY SECTION 31 OF THE INVESTMENT COMPANY ACT OF
1940, AS AMENDED, AND THE RULES THEREUNDER, THE BANK AGREES THAT ALL
SUCH RECORDS PREPARED OR MAINTAINED BY THE BANK RELATING TO THE
SERVICES TO BE PERFORMED BY THE BANK HEREUNDER ARE THE PROPERTY OF THE
TRANSFER AGENT AND WILL BE PRESERVED, MAINTAINED AND MADE AVAILABLE IN
ACCORDANCE WITH SUCH SECTION AND RULES, AND WILL BE SURRENDERED
PROMPTLY TO THE TRANSFER AGENT ON AND IN ACCORDANCE WITH ITS REQUEST.
7.3 THE BANK AND THE TRANSFER AGENT AGREE THAT ALL BOOKS, RECORDS,
INFORMATION AND DATA PERTAINING TO THE BUSINESS OF THE OTHER PARTY
WHICH ARE EXCHANGED OR RECEIVED PURSUANT TO THE NEGOTIATION OR THE
CARRYING OUT OF THIS AGREEMENT SHALL REMAIN CONFIDENTIAL, AND SHALL NOT
BE VOLUNTARILY DISCLOSED TO ANY OTHER PERSON, EXCEPT AS MAY BE REQUIRED
BY LAW.
7.4 IN CASE OF ANY REQUESTS OR DEMANDS FOR THE INSPECTION OF THE
SHAREHOLDER RECORDS OF THE TRANSFER AGENT, THE BANK WILL ENDEAVOR TO
NOTIFY THE TRANSFER AGENT AND TO SECURE INSTRUCTIONS FROM AN AUTHORIZED
OFFICER OF THE TRANSFER AGENT AS TO SUCH INSPECTION. THE BANK RESERVES
THE RIGHT, HOWEVER, TO EXHIBIT THE SHAREHOLDER RECORDS TO ANY PERSON
WHENEVER IT IS ADVISED BY ITS COUNSEL THAT IT MAY BE HELD LIABLE FOR
THE FAILURE TO EXHIBIT THE SHAREHOLDER RECORDS TO SUCH PERSON.
8. REPRESENTATIONS AND WARRANTIES OF THE BANK
THE BANK REPRESENTS AND WARRANTS TO THE TRANSFER AGENT THAT:
(A) IT IS A TRUST COMPANY DULY ORGANIZED AND EXISTING AND
IN GOOD STANDING UNDER THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS;
(B) IT IS DULY QUALIFIED TO CARRY ON ITS BUSINESS IN THE
COMMONWEALTH OF MASSACHUSETTS;
(C) IT IS EMPOWERED UNDER APPLICABLE LAWS AND BY ITS
CHARTER AND BY-LAWS TO ENTER INTO AND PERFORM THIS AGREEMENT;
(D) ALL REQUISITE CORPORATE PROCEEDINGS HAVE BEEN TAKEN
TO AUTHORIZE IT TO ENTER INTO AND PERFORM THIS AGREEMENT;
(E) IT HAS AND WILL CONTINUE TO HAVE ACCESS TO THE
NECESSARY FACILITIES, EQUIPMENT AND PERSONNEL TO PERFORM ITS
DUTIES AND OBLIGATIONS UNDER THIS AGREEMENT; AND
(F) IT IS REGISTERED AS A TRANSFER AGENT UNDO SECTION
17A(C)(2) OF THE EXCHANGE ACT.
9. REPRESENTATIONS AND WARRANTIES OF THE TRANSFER AGENT
THE TRANSFER AGENT REPRESENTS AND WARRANTS TO THE BANK THAT:
(A) IT IS A CORPORATION DULY ORGANIZED AND EXISTING AND
IN GOOD STANDING UNDER THE LAWS OF THE STATE OF DELAWARE;
(B) IT IS EMPOWERED UNDER APPLICABLE LAWS AND BY ITS
ARTICLES OF INCORPORATION AND BY-LAWS TO ENTER INTO AND
PERFORM THIS AGREEMENT;
(C) ALL CORPORATE PROCEEDINGS REQUIRED BY SAID ARTICLES
OF INCORPORATION AND BY-LAWS HAVE BEEN TAKEN TO AUTHORIZE IT
TO ENTER INTO AND PERFORM THIS AGREEMENT.
(D) IT IS REGISTERED AS A TRANSFER AGENT UNDER SECTION
17A(C)(2) OF THE EXCHANGE ACT.
10. TERMINATION OF AGREEMENT
10.1 THIS AGREEMENT SHALL CONTINUE FOR A PERIOD OF FIVE YEARS (THE
"INITIAL TERM") AND BE RENEWED OR TERMINATED AS STATED BELOW.
10.2 THIS AGREEMENT SHALL TERMINATE UPON THE TERMINATION OF THE
TRANSFER AGENCY AGREEMENT BETWEEN THE FUNDS AND THE TRANSFER AGENT.
10.3 THIS AGREEMENT MAY BE TERMINATED OR RENEWED AFTER THE INITIAL
TERM BY EITHER PARTY UPON NINETY (90) DAYS WRITTEN NOTICE TO THE OTHER.
10.4 SHOULD THE TRANSFER AGENT EXERCISE ITS RIGHT TO TERMINATE, ALL
REASONABLE OUT-OF-POCKET EXPENSES ASSOCIATED WITH THE MOVEMENT OF
RECORDS AND MATERIAL WILL BE BORNE BY THE TRANSFER AGENT. ADDITIONALLY,
THE BANK RESERVES THE RIGHT TO CHARGE FOR ANY OTHER REASONABLE EXPENSES
ASSOCIATED WITH SUCH TERMINATION AND/OR A CHARGE EQUIVALENT TO THE
AVERAGE OF THREE (3) MONTHS' FEES.
11. ASSIGNMENT
11.1 EXCEPT AS PROVIDED IN SECTION 11.3 BELOW, NEITHER THIS
AGREEMENT NOR ANY RIGHTS OR OBLIGATIONS HEREUNDER MAY BE ASSIGNED BY
EITHER PARTY WITHOUT THE WRITTEN CONSENT OF THE OTHER PARTY.
11.2 THIS AGREEMENT SHALL INURE TO THE BENEFIT OF AND BE BINDING
UPON THE PARTIES AND THEIR RESPECTIVE PERMITTED SUCCESSORS AND ASSIGNS.
11.3 THE BANK WILL, WITHOUT FURTHER CONSENT ON THE PART OF THE
TRANSFER AGENT, SUBCONTRACT FOR THE PERFORMANCE HEREOF WITH NATIONAL
FINANCIAL DATA SERVICES, INC., A SUBSIDIARY OF BFDS DULY REGISTERED AS
A TRANSFER AGENT PURSUANT TO SECTION 17A(C)(2) PROVIDED, HOWEVER, THAT
THE BANK SHALL BE AS FULLY RESPONSIBLE TO THE TRANSFER AGENT FOR THE
ACTS AND OMISSIONS OF ANY SUBCONTRACTOR AS IT IS FOR ITS OWN ACTS AND
OMISSIONS.
12. AMENDMENT
THIS AGREEMENT MAY BE AMENDED OR MODIFIED BY A WRITTEN AGREEMENT
EXECUTED BY BOTH PARTIES.
13. MASSACHUSETTS LAW TO APPLY
THIS AGREEMENT SHALL BE CONSTRUED AND THE PROVISIONS THEREOF
INTERPRETED UNDER AND IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH
OF MASSACHUSETTS.
14. FORCE MAJEURE
IN THE EVENT EITHER PARTY IS UNABLE TO PERFORM ITS OBLIGATIONS UNDER
THE TERMS OF THIS AGREEMENT BECAUSE OF ACTS OF GOD, STRIKES, EQUIPMENT
OR TRANSMISSION FAILURE OR DAMAGE REASONABLY BEYOND ITS CONTROL, OR
OTHER CAUSES REASONABLY BEYOND ITS CONTROL, SUCH PARTY SHALL NOT BE
LIABLE FOR DAMAGES TO THE OTHER FOR ANY DAMAGES RESULTING FROM SUCH
FAILURE TO PERFORM OR OTHERWISE FROM SUCH CAUSES.
15. CONSEQUENTIAL DAMAGES
NEITHER PARTY TO THIS AGREEMENT SHALL BE LIABLE TO THE OTHER PARTY FOR
CONSEQUENTIAL DAMAGES UNDER ANY PROVISION OF THIS AGREEMENT OR FOR ANY
CONSEQUENTIAL DAMAGES ARISING OUT OF ANY ACT OR FAILURE TO ACT
HEREUNDER.
16. LIMITATIONS OF SHAREHOLDER LIABILITY
EACH PARTY HEREBY EXPRESSLY ACKNOWLEDGES THAT RECOURSE AGAINST THE
FUNDS SHALL BE SUBJECT TO THOSE LIMITATIONS PROVIDED BY GOVERNING LAW
AND THE DECLARATION OF TRUST OR ARTICLES OF INCORPORATION OF THE FUNDS,
AS APPLICABLE, AND AGREES THAT OBLIGATIONS ASSUMED BY THE FUNDS
PURSUANT TO THE TRANSFER AGENCY AGREEMENT SHALL BE LIMITED IN ALL CASES
TO THE FUNDS AND THEIR RESPECTIVE ASSETS. EACH PARTY SHALL NOT SEEK
SATISFACTION FROM THE SHAREHOLDERS OR ANY INDIVIDUAL SHAREHOLDER OF THE
FUNDS, NOR SHALL ANY PARTY SEEK SATISFACTION OF ANY OBLIGATIONS FROM
THE DIRECTORS\TRUSTEES OR ANY INDIVIDUAL DIRECTOR\TRUSTEE OF THE FUNDS.
17. MERGER OF AGREEMENT
THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES
HERETO AND SUPERSEDES ANY PRIOR AGREEMENT WITH RESPECT TO THE SUBJECT
MATTER HEREOF WHETHER ORAL OR WRITTEN.
18. SURVIVAL
ALL PROVISIONS REGARDING INDEMNIFICATION, WARRANTY, LIABILITY, AND
LIMITS THEREON, AND CONFIDENTIALITY AND/OR PROTECTION OF PROPRIETARY
RIGHTS AND TRADE SECRETS SHALL SURVIVE THE TERMINATION OF THIS
AGREEMENT.
19. SEVERABILITY
IF ANY PROVISION OR PROVISIONS OF THIS AGREEMENT SHALL BE HELD INVALID,
UNLAWFUL, OR UNENFORCEABLE, THE VALIDITY, LEGALITY AND ENFORCEABILITY
OF THE REMAINING PROVISIONS SHALL NOT IN ANY WAY BE AFFECTED OR
IMPAIRED.
20. COUNTERPARTS
THIS AGREEMENT MAY BE EXECUTED BY THE PARTIES HERETO ON ANY NUMBER OF
COUNTERPARTS, AND ALL OF SAID COUNTERPARTS TAKEN TOGETHER SHALL BE
DEEMED TO CONSTITUTE ONE AND THE SAME INSTRUMENT.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE
EXECUTED IN THEIR NAMES AND ON THEIR BEHALF BY AND THROUGH THEIR DULY
AUTHORIZED OFFICERS, AS OF THE DAY FIRST WRITTEN ABOVE.
CALVERT SHAREHOLDER SERVICES, INC.
BY: /S/ KAREN BECKER
TITLE: VICE PRESIDENT
ATTEST: KATHERINE STONER
STATE STREET BANK AND TRUST COMPANY
BY: /S/ RONALD E. LOGUE
TITLE: EXECUTIVE VICE PRESIDENT
ATTEST: FRANCINE HAYES
<PAGE>
AMENDMENT TO SUB-TRANSFER AGENCY AND SERVICE AGREEMENT
BETWEEN
CALVERT SHAREHOLDER SERVICES, INC.
AND
STATE STREET BANK AND TRUST COMPANY
GENERAL BACKGROUND:
CALVERT SHAREHOLDER SERVICES, INC. ("CSSI"), AND STATE STREET BANK AND
TRUST COMPANY ("STATE STREET") ENTERED INTO A SUB-TRANSFER AGENCY AND
SERVICE AGREEMENT ("AGREEMENT") DATED AUGUST 15, 1996.
FOR ACCOUNTING REASONS, CSSI DESIRES TO AMEND THE AGREEMENT BY
ASSIGNING THE CONTRACT FOR THE TRANSFER AGENT FUNCTIONS (EXCEPT FOR
SHAREHOLDER SERVICING) TO EACH CALVERT GROUP FUND. CSSI WILL CONTINUE
TO BE RESPONSIBLE FOR THE SHAREHOLDER SERVICING AND FOR ANY
RESPONSIBILITIES CURRENTLY SHOWN AS TRANSFER AGENT RESPONSIBILITIES IN
FUND SERVICE RESPONSIBILITIES ATTACHMENT TO THE AGREEMENT.
THE AGREEMENT MUST BE ASSIGNED TO THE CALVERT GROUP FUNDS FOR
ACCOUNTING PURPOSES.
CSSI AND STATE STREET MUST EACH CONSENT TO THIS ASSIGNMENT.
CHANGES CAUSED BY THIS ASSIGNMENT:
THE CURRENT SUBTRANSFER AGENT, NATIONAL FINANCIAL DATA SERVICES, INC.
("NFDS"), WILL BILL EACH CALVERT GROUP FUND, RATHER THAN CSSI, AND EACH
CALVERT GROUP FUND SHALL PAY STATE STREET OR ITS BILLING AGENT, NFDS,
ALL FEES AND EXPENSES INCURRED UNDER THE AGREEMENT ON BEHALF OF EACH
RESPECTIVE CALVERT GROUP FUND.
NFDS WILL BE SHOWN IN EACH CALVERT GROUP FUND PROSPECTUS AND STATEMENT
OF ADDITIONAL INFORMATION AS THE TRANSFER AGENT, WHILE CSSI WILL BE
SHOWN AS THE SHAREHOLDER SERVICING AGENT.
STATE STREET (NFDS) WILL CONTINUE TO PERFORM THOSE FUNCTIONS SHOWN IN
THE AGREEMENT AS BANK RESPONSIBILITIES.
CSSI WILL CONTINUE TO PERFORM THE TRANSFER AGENT RESPONSIBILITIES, AS
SHOWN IN THE FUND SERVICE RESPONSIBILITIES ATTACHMENT TO THE AGREEMENT.
THE ASSIGNMENT:
THIS AMENDMENT, DATED AS OF THE FIRST DAY OF JANUARY, 1998, BY AND
AMONG CSSI AND STATE STREET:
NOW, THEREFORE, CSSI AND STATE STREET EACH HEREBY AGREE THAT THE
AGREEMENT WILL BE BETWEEN EACH CALVERT GROUP FUND AND STATE STREET, AND
EACH HEREBY AGREES THAT THE AGREEMENT IS SO ASSIGNED.
IN WITNESS WHEREOF, CSSI AND STATE STREET HAVE CAUSED THIS AMENDMENT TO
BE EXECUTED BY THEIR DULY AUTHORIZED OFFICERS, EFFECTIVE AS OF JANUARY
1, 1998.
CALVERT SHAREHOLDER SERVICES, INC. STATE
STREET BANK AND TRUST COMPANY
BY: /S/ BY: /S/
NAME: KAREN BECKER NAME: RONALD E. LOGUE
TITLE: VICE PRESIDENT, OPERATIONS TITLE: EXECUTIVE VICE PRESIDENT
DATE: FEBRUARY 18, 1998 DATE: FEBRUARY 20, 1998
ACACIA CAPITAL CORPORATION
FIRST VARIABLE RATE FUND
CALVERT TAX-FREE RESERVES
CALVERT SOCIAL INVESTMENT FUND
CALVERT CASH RESERVES
THE CALVERT FUND BY: /S/
CALVERT MUNICIPAL FUND, INC. NAME: WILLIAM M. TARTIKOFF
CALVERT WORLD VALUES FUND, INC. TITLE: SENIOR VICE PRESIDENT AND SECRETARY
CALVERT NEW WORLD FUND, INC. DATE: FEBRUARY 18, 1998
SERVICING AGREEMENT
THIS AGENCY AGREEMENT, EFFECTIVE JANUARY 1, 1998, BY AND BETWEEN CALVERT
SHAREHOLDER SERVICES, INC., A DELAWARE CORPORATION HAVING ITS PRINCIPAL PLACE OF
BUSINESS IN BETHESDA, MARYLAND ("CSS"), AND REGISTERED INVESTMENT COMPANIES
SPONSORED BY CALVERT GROUP, LTD. AND ITS SUBSIDIARIES AND SET FORTH ON SCHEDULE
A ("CALVERT GROUP FUNDS" OR "FUNDS"). THE FUNDS HAVE ENTERED INTO A TRANSFER
AGENCY AND SERVICE AGREEMENT WITH THE STATE STREET BANK AND TRUST OF BOSTON,
MASSACHUSETTS ("STATE STREET") ("STATE STREET AGREEMENT").
1. APPOINTMENTS. THE FUNDS HEREBY APPOINTS CSS AS SERVICING AGENT,
AGENT AND SHAREHOLDER SERVICING AGENT FOR THE FUNDS, AND CSS HEREBY ACCEPTS SUCH
APPOINTMENT AND AGREES TO PERFORM THOSE DUTIES IN ACCORDANCE WITH THE TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT.
2. DOCUMENTATION. THE FUNDS WILL FURNISH CSS WITH ALL DOCUMENTS,
CERTIFICATES, CONTRACTS, FORMS, AND OPINIONS WHICH CSS, IN ITS DISCRETION, DEEMS
NECESSARY OR APPROPRIATE IN CONNECTION WITH THE PROPER PERFORMANCE OF ITS DUTIES
UNDER THIS AGREEMENT.
3. SERVICES TO BE PERFORMED. CSS WILL BE RESPONSIBLE FOR TELEPHONE
SERVICING FUNCTIONS, SYSTEM INTERFACE WITH STATE STREET AND OVERSIGHT OF STATE
STREET'S ADMINISTERING AND PERFORMING THEIR DUTIES PURSUANT TO THE STATE STREET
AGREEMENT. THE DETAILS OF THE OPERATING STANDARDS AND PROCEDURES TO BE FOLLOWED
WILL BE DETERMINED FROM TIME TO TIME BY AGREEMENT BETWEEN CSS AND THE FUNDS.
4. RECORDKEEPING AND OTHER INFORMATION. CSS WILL, COMMENCING ON THE
EFFECTIVE DATE OF THIS AGREEMENT, TO THE EXTENT NECESSARY CREATE AND MAINTAIN
ALL NECESSARY SHAREHOLDER ACCOUNTING RECORDS 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, AS AMENDED (THE "1940
ACT"), AND THE RULES THEREUNDER, AS AMENDED FROM TIME TO TIME. ALL SUCH RECORDS
WILL BE THE PROPERTY OF THE FUND AND WILL BE AVAILABLE FOR INSPECTION AND USE BY
SUCH FUND.
5. AUDIT, INSPECTION AND VISITATION. CSS 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 SEC, A
FUND OR ANY PERSON RETAINED BY A FUND.
6. COMPENSATION. THE FUNDS WILL COMPENSATE CSS ON A MONTHLY BASIS FOR
THE SERVICES PERFORMED PURSUANT TO THIS AGREEMENT, AT THE RATE OF COMPENSATION
SET FORTH IN SCHEDULE A. OUT OF POCKET EXPENSES INCURRED BY CSS AND NOT
INCLUDED IN SCHEDULE A WILL BE REIMBURSED TO CSS BY THE FUND, AS APPROPRIATE;
SUCH EXPENSES MAY INCLUDE, BUT ARE NOT LIMITED TO, SPECIAL FORMS AND POSTAGE FOR
MAILING THE FORMS. THESE CHARGES WILL BE PAYABLE IN FULL UPON RECEIPT OF A
BILLING INVOICE. IN LIEU OF REIMBURSING CSS FOR THESE EXPENSES, ANY FUND MAY,
IN ITS DISCRETION, DIRECTLY PAY THE EXPENSES.
7. USE OF NAMES. NO FUND WILL NOT USE THE NAME OF CSS IN ANY
PROSPECTUS, SALES LITERATURE OR OTHER MATERIAL RELATING TO THE FUND IN ANY
MANNER WITHOUT PRIOR APPROVAL BY CSS; PROVIDED, HOWEVER, THAT CSS WILL APPROVE
ALL USES OF ITS NAME THAT MERELY REFER IN ACCURATE TERMS TO ITS APPOINTMENT
UNDER THIS AGREEMENT OR THAT ARE REQUIRED BY THE SEC OR A STATE SECURITIES
COMMISSION; AND, PROVIDED, FURTHER, THAT IN NO EVENT WILL APPROVAL BE
UNREASONABLY WITHHELD.
8. SECURITY. CSS REPRESENTS AND WARRANTS THAT, TO THE BEST OF ITS
KNOWLEDGE, THE VARIOUS PROCEDURES AND SYSTEMS THAT CSS PROPOSES TO IMPLEMENT
WITH REGARD TO SAFEGUARDING FROM LOSS OR DAMAGE ATTRIBUTABLE TO FIRE, THEFT OR
ANY OTHER CAUSE (INCLUDING PROVISION FOR TWENTY-FOUR HOUR A DAY RESTRICTED
ACCESS) THE FUND'S, RECORDS AND OTHER DATA AND CSS'S RECORDS, DATA, EQUIPMENT,
FACILITIES AND OTHER PROPERTY USED IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER
THIS AGREEMENT ARE ADEQUATE AND THAT IT WILL IMPLEMENT THEM IN THE MANNER
PROPOSED AND MAKE SUCH CHANGES FROM TIME TO TIME AS IN ITS JUDGMENT ARE REQUIRED
FOR THE SECURE PERFORMANCE OF OBLIGATIONS UNDER THIS AGREEMENT.
9. LIMITATION OF LIABILITY. EACH FUND WILL INDEMNIFY AND HOLD CSS
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 SUCH FUND AS A
PARTY) OTHER THAN SUCH FUND NOT RESULTING FROM CSS'S BAD FAITH, WILLFUL
MISFEASANCE, RECKLESS DISREGARD OF ITS OBLIGATIONS AND DUTIES, OR NEGLIGENCE
ARISING OUT OF, OR IN CONNECTION WITH, CSS'S PERFORMANCE OF ITS OBLIGATIONS
UNDER THIS AGREEMENT.
TO THE EXTENT CSS HAS NOT ACTED WITH BAD FAITH, WILLFUL MISFEASANCE,
RECKLESS DISREGARD OF ITS OBLIGATIONS AND DUTIES, OR GROSS NEGLIGENCE, EACH FUND
WILL ALSO INDEMNIFY AND HOLD CSS HARMLESS AGAINST ANY LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR EXPENSES (INCLUDING REASONABLE COUNSEL FEES AND EXPENSES)
RESULTING FROM ANY CLAIM, DEMAND, ACTION OR SUIT RESULTING FROM THE NEGLIGENCE
OF SUCH FUND, OR CSS'S ACTING UPON ANY INSTRUCTIONS REASONABLY BELIEVED BY IT TO
HAVE BEEN EXECUTED OR COMMUNICATED BY ANY PERSON DULY AUTHORIZED BY SUCH FUND,
OR AS A RESULT OF CSS'S ACTING IN RELIANCE UPON ADVICE REASONABLY BELIEVED BY
CSS TO HAVE BEEN GIVEN BY COUNSEL FOR THE FUND, OR AS A RESULT OF CSS'S ACTING
IN RELIANCE UPON ANY INSTRUMENT REASONABLY BELIEVED BY IT TO HAVE BEEN GENUINE
AND SIGNED, COUNTERSIGNED OR EXECUTED BY THE PROPER PERSON.
CSS'S LIABILITY FOR ANY AND ALL CLAIMS OF ANY KIND, INCLUDING NEGLIGENCE,
FOR ANY LOSS OR DAMAGE ARISING OUT OF, CONNECTED WITH, OR RESULTING FROM THIS
AGREEMENT, OR FROM THE PERFORMANCE OR BREACH THEREOF, OR FROM THE DESIGN,
DEVELOPMENT, LEASE, REPAIR, MAINTENANCE, OPERATION OR USE OF DATA PROCESSING
SYSTEMS AND THE MAINTENANCE OF A FUNDS' SHAREHOLDER ACCOUNT RECORDS AS PROVIDED
FOR BY THIS AGREEMENT WILL IN THE AGGREGATE NOT EXCEED THE TOTAL OF CSS'S
COMPENSATION HEREUNDER FOR THE SIX MONTHS IMMEDIATELY PRECEDING THE DISCOVERY OF
THE CIRCUMSTANCES GIVING RISE TO SUCH LIABILITY.
IN NO EVENT WILL CSS BE LIABLE FOR INDIRECT, SPECIAL, OR CONSEQUENTIAL
DAMAGES (EVEN IF CSS 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 THE
SHAREHOLDER ACCOUNTING SYSTEM, COST OF CAPITAL, COST OF SUBSTITUTE FACILITIES,
PROGRAMS OR SERVICES, DOWNTIME COSTS, OR CLAIMS OF SHAREHOLDERS FOR SUCH DAMAGE.
10. LIMITATION OF LIABILITY OF THE FUND. CSS ACKNOWLEDGES THAT IT
ACCEPTS THE LIMITATIONS UPON THE LIABILITY OF THE FUNDS. CSS AGREES THAT EACH
FUND'S OBLIGATIONS UNDER THIS AGREEMENT IN ANY CASE WILL BE LIMITED TO SUCH FUND
AND TO ITS ASSETS AND THAT CSS WILL NOT SEEK SATISFACTION OF ANY OBLIGATION FROM
THE SHAREHOLDERS OF THE FUND NOR FROM ANY DIRECTOR, TRUSTEE, OFFICER, EMPLOYEE
OR AGENT OF SUCH FUND.
11. FORCE MAJEURE. CSS WILL NOT BE LIABLE FOR DELAYS OR ERRORS
OCCURRING BY REASON OF CIRCUMSTANCES BEYOND ITS CONTROL, INCLUDING BUT NOT
LIMITED TO ACTS OF CIVIL OR MILITARY AUTHORITY, NATIONAL EMERGENCIES, WORK
STOPPAGES, FIRE, FLOOD, CATASTROPHE, ACTS OF GOD, INSURRECTION, WAR, RIOT, OR
FAILURE OF COMMUNICATION OR POWER SUPPLY. IN THE EVENT OF EQUIPMENT BREAKDOWNS
BEYOND ITS CONTROL, CSS WILL TAKE REASONABLE STEPS TO MINIMIZE SERVICE
INTERRUPTIONS BUT WILL HAVE NO LIABILITY WITH RESPECT THERETO.
12. AMENDMENTS. CSS AND EACH FUND WILL REGULARLY CONSULT WITH EACH
OTHER REGARDING CSS'S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT. ANY
CHANGE IN A 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 PROSPECTUS WHICH WOULD REQUIRE A CHANGE IN CSS'S
OBLIGATIONS UNDER THIS AGREEMENT WILL BE SUBJECT TO CSS'S APPROVAL, WHICH WILL
NOT BE UNREASONABLY WITHHELD. 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.
13. TERMINATION. THIS AGREEMENT WILL CONTINUE IN EFFECT UNTIL JANUARY
1, 1999, AND THEREAFTER AS THE PARTIES MAY MUTUALLY AGREE; PROVIDED, HOWEVER,
THAT THIS AGREEMENT MAY BE TERMINATED AT ANY TIME BY EITHER PARTY UPON AT LEAST
SIXTY DAYS' PRIOR WRITTEN NOTICE TO THE OTHER PARTY; AND PROVIDED FURTHER THAT
THIS AGREEMENT MAY BE TERMINATED IMMEDIATELY AT ANY TIME FOR CAUSE EITHER BY ANY
FUND OR CSS IN THE EVENT THAT SUCH CAUSE REMAINS UNREMEDIED FOR NO LESS THAN
NINETY DAYS AFTER RECEIPT OF WRITTEN SPECIFICATION OF SUCH CAUSE. ANY SUCH
TERMINATION WILL NOT AFFECT THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
PARAGRAPHS 9 AND 10 HEREOF. IN THE EVENT THAT A FUND DESIGNATES A SUCCESSOR TO
ANY OF CSS'S OBLIGATIONS HEREUNDER, CSS WILL, AT THE EXPENSE AND DIRECTION OF
SUCH FUND, TRANSFER TO SUCH SUCCESSOR ALL RELEVANT BOOKS, RECORDS AND OTHER DATA
OF SUCH FUND ESTABLISHED OR MAINTAINED BY CSS UNDER THIS AGREEMENT.
15. 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 THE STATE OF MARYLAND. THE CAPTIONS IN THIS
AGREEMENT ARE INCLUDED FOR CONVENIENCE ONLY AND IN NO WAY DEFINE OR DELIMIT ANY
OF THE PROVISIONS HEREOF OR OTHERWISE AFFECT THEIR CONSTRUCTION OR EFFECT.
IN WITNESS WHEREOF, THE PARTIES HAVE DULY EXECUTED THIS AGREEMENT AS OF THE
DAY AND YEAR FIRST ABOVE WRITTEN.
CALVERT GROUP FUNDS
BY:
CALVERT SHAREHOLDER SERVICES, INC.
BY:
<PAGE>
SERVICING AGREEMENT
SCHEDULE A
FOR ITS SERVICES UNDER THIS SERVICING AGREEMENT, CALVERT SHAREHOLDER
SERVICES, INC., IS ENTITLED TO RECEIVE FROM THE CALVERT FUNDS (EXCEPT ACACIA
CAPITAL CORPORATION) FEES AS SET FORTH BELOW:
FUND AND PORTFOLIO ANNUAL ACCOUNT FEE*FOOT1 ACCOUNT FEES ARE
CHARGED MONTHLY BASED ON THE HIGHEST NUMBER OF NON-ZERO BALANCE ACCOUNTS
OUTSTANDING DURING THE MONTH. TRANSACTION FEE
FIRST VARIABLE RATE FUND
FIRST VARIABLE RATE FUND (D/B/A CALVERT FIRST $11.59 $.84
GOVERNMENT MONEY MARKET)
CALVERT TAX-FREE RESERVES
MONEY MARKET 13.35 .97
LIMITED-TERM 3.67 .42
LONG-TERM 2.67 .31
CALIFORNIA MONEY MARKET 12.74 .93
VERMONT MUNICIPAL 3.40 .39
CALVERT MUNICIPAL FUND, INC
CALIFORNIA INTERMEDIATE 3.48 .40
NATIONAL INTERMEDIATE 3.31 .38
MARYLAND INTERMEDIATE 4.64 .53
VIRGINIA INTERMEDIATE 3.35 .38
CALVERT CASH RESERVES
INSTITUTIONAL PRIME FUND 11.83 .86
<PAGE>
THE CALVERT FUND
INCOME 4.22 .48
NEW VISION SMALL CAP 5.90 .67
CALVERT SOCIAL INVESTMENT FUND
MONEY MARKET 11.92 .87
BOND 4.85 .55
MANAGED GROWTH 4.63 .53
EQUITY 5.24 .60
MANAGED INDEX 5.24 .60
CALVERT WORLD VALUES FUND, INC.
INTERNATIONAL EQUITY 5.36 .61
CAPITAL ACCUMULATION 6.26 .72
CALVERT NEW WORLD FUND
NEW AFRICA FUND 3.91 .45
ACACIA CAPITAL CORPORATION FEE IS AS FOLLOW:
.03% (THREE BASIS POINTS) ON THE FIRST $500 MILLION OF AVERAGE NET ASSETS
AND .02% (TWO BASIS POINTS) OVER $500 MILLION OF AVERAGE NET ASSETS, MINUS THE
FEES PAID BY ACACIA CAPITAL CORPORATION TO STATE STREET BANK AND TRUST PURSUANT
TO THE STATE STREET AGREEMENT (EXCEPT FOR OUT OF POCKET EXPENSES).
RESTATED JULY 1998
E:\AGREEMENTS\MULTI FUND AGMTS\CG OF FUNDS SERVICING _AGRMT_.DOC
*
Administrative Services Agreement
March 1, 1999
Page 3 of 5
ADMINISTRATIVE SERVICES AGREEMENT
CALVERT WORLD VALUES FUND, INC.
ADMINISTRATIVE SERVICES AGREEMENT, MADE THIS 1ST DAY OF MARCH, 1999, BY AND
BETWEEN CALVERT ADMINISTRATIVE SERVICES COMPANY, A DELAWARE CORPORATION
("CASC"), AND CALVERT WORLD VALUES FUND, INC., A MARYLAND CORPORATION (THE
"FUND"), EACH HAVING ITS PRINCIPAL PLACE OF BUSINESS AT 4550 MONTGOMERY AVENUE,
BETHESDA, MARYLAND, 20814.
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
DIRECTORS OF THE FUND AND OF ITS OFFICERS, AND TO THE TERMS OF ITS ARTICLES OF
INCORPORATION 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 DIRECTOR OF THE FUND IF PROPERLY ELECTED, OR
ENTER INTO ANY OTHER RELATIONSHIP WITH THE FUND APPROVED BY THE DIRECTORS, 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 DIRECTOR, 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 ANY 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
BY
TITLE
CALVERT WORLD VALUES FUND, INC.
BY
TITLE
<PAGE>
ADMINISTRATIVE SERVICES AGREEMENT
SCHEDULE A
LISTED BELOW ARE THE SERIES OF CALVERT WORLD VALUES FUND, INC. THAT ARE
ENTITLED TO RECEIVE ADMINISTRATIVE SERVICES FROM CALVERT ADMINISTRATIVE SERVICES
COMPANY ("CASC") UNDER THE ADMINISTRATIVE SERVICES AGREEMENT DATED MARCH 1,
1999, AND WHICH WILL PAY ANNUAL FEES TO CASC PURSUANT TO THE AGREEMENT.
INTERNATIONAL EQUITY FUND
CLASS A 0.35%
CLASS B 0.35%
CLASS C 0.35%
CLASS I 0.15%
CAPITAL ACCUMULATION 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 10
JANUARY 26, 2000
SECURITIES AND EXCHANGE COMMISSION
JUDICIARY PLAZA
450 FIFTH STREET, N.W.
WASHINGTON, D.C. 20549
RE: EXHIBIT 10, FORM N-1A
CALVERT WORLD VALUES FUND, INC.
FILE NUMBERS: 33-45829 AND 811-06563
LADIES AND GENTLEMEN:
AS COUNSEL TO CALVERT GROUP, LTD., IT IS MY OPINION THAT THE
SECURITIES BEING REGISTERED BY THIS POST-EFFECTIVE AMENDMENT NO. 13 WILL BE
LEGALLY ISSUED, FULLY PAID AND NON-ASSESSABLE WHEN SOLD. MY OPINION IS BASED
ON AN EXAMINATION OF DOCUMENTS RELATED TO CALVERT WORLD VALUES 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. 13 TO ITS REGISTRATION STATEMENT.
SINCERELY,
/S/SUSAN WALKER BENDER
ASSOCIATE GENERAL COUNSEL
CONSENT OF INDEPENDENT ACCOUNTANTS
WE CONSENT TO THE INCORPORATION BY REFERENCE IN POST EFFECTIVE
AMENDMENT NO. 13 TO THE REGISTRATION STATEMENT OF CALVERT WORLD VALUES FUND
(COMPRISED OF THE CAPITAL ACCUMULATION FUND AND WORLD VALUES INTERNATIONAL
EQUITY
FUND) ON FORM N-LA (FILE NUMBER 33-45829 AND 811-06563) OF OUR REPORTS DATED
NOVEMBER 10, 1999, ON OUR AUDIT OF THE FINANCIAL STATEMENTS AND FINANCIAL
HIGHLIGHTS OF
THE FUNDS, WHICH REPORTS ARE INCLUDED IN THE ANNUAL REPORT TO SHAREHOLDERS FOR
THE YEAR
ENDED SEPTEMBER 30, 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
JANUARY 26, 2000
E:\AGREEMENTS\12B1_PLANS_AND_SCHED\New BC Plan.doc
DISTRIBUTION PLAN
CLASS A
WHEREAS, THE CALVERT WORLD VALUES FUND (THE "FUND") INTENDS TO ENGAGE IN
BUSINESS AS AN OPEN-END MANAGEMENT INVESTMENT COMPANY AND IS REGISTERED AS SUCH
UNDER THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (THE "1940 ACT"); AND
WHEREAS, THE FUND INTENDS TO HAVE SEPARATE PORTFOLIOS OF SECURITIES
("PORTFOLIOS"), AS INDICATED IN THE ATTACHED SCHEDULE; AND
WHEREAS, THE FUND DESIRES TO ADOPT A DISTRIBUTION PLAN PURSUANT TO RULE
12B-1 UNDER THE 1940 ACT AND THE BOARD OF DIRECTORS HAS DETERMINED THAT THERE IS
A REASONABLE LIKELIHOOD THAT ADOPTION OF THIS DISTRIBUTION PLAN WILL BENEFIT THE
FUND, ITS PORTFOLIOS AND THEIR SHAREHOLDERS; AND
WHEREAS, THE FUND WILL ENTER INTO AN UNDERWRITING AGREEMENT UNDER WHICH
CERTAIN SERVICES WILL BE PROVIDED AND CERTAIN EXPENSES WILL BE INCURRED IN
CONNECTION WITH THE SALE AND RETENTION OF SHARES OF THE PORTFOLIOS;
NOW THEREFORE, THE FUND HEREBY ADOPTS THIS DISTRIBUTION PLAN (THE "PLAN")
IN ACCORDANCE WITH RULE 12B-1 UNDER THE 1940 ACT FOR EACH OF THE PORTFOLIOS ON
THE FOLLOWING TERMS AND CONDITIONS:
1. THE PORTFOLIOS MAY MAKE REIMBURSEMENT FOR EXPENSES RELATED TO THE
SALE AND RETENTION OF ITS SHARES AT THE ANNUAL RATE INDICATED IN THE ATTACHED
SCHEDULE.
2. REIMBURSEMENT WILL BE FOR EXPENSES RELATED TO THE SALE AND RETENTION
OF PORTFOLIO SHARES INCLUDING, BUT NOT LIMITED TO, ADVERTISING, ADMNISTRATION,
SALARIES AND OTHER EXPENSES RELATING TO SELLING OR SERVICING EFFORTS, EXPENSES
OF ORGANIZING AND CONDUCTING SALES SEMINARS, PRINTING OF PROSPECTUSES,
STATEMENTS OF ADDITIONAL INFORMATION, AND REPORTS FOR OTHER THAN EXISTING
SHAREHOLDERS, PREPARATION, PRINTING AND DISTRIBUTION OF ADVERTISING MATERIAL AND
SALES LITERATURE, STATE COMPLIANCE FEES, PAYMENTS FOR SERVICES TO FINANCIAL
INSTITUTIONS AND OTHER THIRD PARTIES AND SUCH OTHER ACTIVITIES AND EXPENSES
DEEMED DESIRABLE TO FURTHER THE SALE AND RETENTION OF PORTFOLIO SHARES. THE
PORTFOLIOS MAY ALSO MAKE REIMBURSEMENT FOR THE COST OF DEVELOPING AND PRINTING
SALES LITERATURE AND FOR OTHER SERVICES.
3. THIS PLAN WILL NOT TAKE EFFECT UNTIL IT HAS BEEN APPROVED BY A VOTE
OF AT LEAST A MAJORITY OF OUTSTANDING VOTING SECURITIES, AS DEFINED IN THE 1940
ACT.
4. THIS PLAN WILL NOT TAKE EFFECT FOR A FUND UNTIL IT HAS BEEN
APPROVED, TOGETHER WITH ANY RELATED AGREEMENTS, BY VOTE OF A MAJORITY OF BOTH
(A) THE BOARD OF DIRECTORS OF THE FUND, AND (B) THOSE DIRECTORS OF THE FUND WHO
ARE NOT "INTERESTED PERSONS" OF THE FUND, AS DEFINED IN THE 1940 ACT, AND WHO
HAVE NO DIRECT OR INDIRECT FINANCIAL INTEREST IN THE OPERATION OF THIS PLAN OR
ANY AGREEMENTS RELATED TO IT (THE "RULE 12B-1 DIRECTORS"), CAST IN PERSON AT
MEETING OR MEETINGS CALLED FOR THE PURPOSE OF VOTING ON THIS PLAN AND SUCH
RELATED AGREEMENTS.
5. THIS PLAN WILL CONTINUE IN EFFECT FOR SUCCESSIVE PERIODS OF ONE YEAR
FROM ITS ACCEPTANCE BY THE BOARD FOR SO LONG AS SUCH CONTINUANCE IS SPECIFICALLY
APPROVED AT LEAST ANNUALLY IN THE MANNER PROVIDED FOR APPROVAL OF THIS PLAN IN
PARAGRAPH 4.
6. ANY PERSON AUTHORIZED TO DIRECT THE DISPOSITION OF MONEY PAID OR
PAYABLE BY THE FUND PURSUANT TO THIS PLAN OR ANY RELATED AGREEMENT WILL PROVIDE
TO THE FUND'S BOARD OF DIRECTORS AND THE BOARD WILL REVIEW, AT LEAST QUARTERLY,
A WRITTEN REPORT OF THE AMOUNTS SO EXPENDED AND THE PURPOSES FOR WHICH SUCH
EXPENDITURES WERE MADE.
7. THIS PLAN MAY BE TERMINATED AT ANY TIME BY VOTE OF A MAJORITY OF THE
RULE 12B-1 DIRECTORS OR BY VOTE OF A MAJORITY OF THE OUTSTANDING VOTING
SECURITIES.
8. THIS PLAN MAY NOT BE AMENDED TO INCREASE MATERIALLY THE AMOUNT OF
DISTRIBUTION EXPENSES PROVIDED FOR IN PARAGRAPH 1 ABOVE UNLESS SUCH AMENDMENT IS
APPROVED IN THE MANNER PROVIDED FOR INITIAL APPROVAL IN PARAGRAPH 3 OF THIS
PLAN, AND NO MATERIAL AMENDMENT TO THE PLAN WILL BE MADE UNLESS SUCH AMENDMENT
IS APPROVED IN THE MANNER PROVIDED FOR INITIAL APPROVAL IN PARAGRAPH 4 ABOVE.
9. WHILE THIS PLAN IS IN EFFECT, THE SELECTION AND NOMINATION OF
DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE FUND, AS DEFINED IN THE 1940
ACT, WILL BE COMMITTED TO THE DISCRETION OF THE DIRECTORS WHO ARE THEMSELVES NOT
INTERESTED PERSONS.
<PAGE>
SCHEDULE
GLOBAL EQUITY FUND ("SERIES")
REIMBURSEMENTS FROM THE ABOVE-REFERENCED SERIES FOR EXPENSES IS LIMITED TO
0.35% OF THE SERIES' AVERAGE DAILY NET ASSETS.
<PAGE>
CLASS A DISTRIBUTION PLAN
SCHEDULE
CALVERT WORLD VALUES FUND
CALVERT CAPITAL ACCUMLATION FUND
CLASS A DISTRIBUTION PLAN EXPENSES INCURRED BY THE ABOVE PORTFOLIO
PURSUANT TO THIS PLAN MAY NOT EXCEED, ON AN ANNUAL BASIS, 0.35% OF THE FUND'S
AVERAGE DAILY NET ASSETS.
10/94
E/12B-1/CLASS A/CWVF
<PAGE>
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>
-10-
(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 6 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-1FEE
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-1FEE
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-1FEE 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
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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.
