UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ X ] PRE-EFFECTIVE AMENDMENT NO. 2 [ ] POST-EFFECTIVE AMENDMENT NO.__
(CHECK APPROPRIATE BOX OR BOXES)
CALVERT SOCIAL RESPONSIBILITY FUND, INC. REGISTRANT'S TELEPHONE NUMBER
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER) (301) 951-4800
ADDRESS OF PRINCIPAL EXECUTIVE OFFICES APPROX. DATE OF PROPOSED PUBLIC
4550 MONTGOMERY AVENUE OFFERING: OCT. 31, 2000
SUITE 1000N
BETHESDA, MD 20814
NAME AND ADDRESS OF AGENT FOR SERVICE:
WILLIAM M. TARTIKOFF, ESQ.
4550 MONTGOMERY AVE. SUITE 1000N
BETHESDA, MD 20814
Per Rule 481(a) of the 1933 Securities Act, please note that the registration
statement for the Calvert Large Cap Growth Fund shall be offered to the public
on October 31, 2000.
Bridgeway
September 25, 2000
Dear Shareholder,
I am writing to inform you of the upcoming special meeting of shareholders of
the Social Responsibility Portfolio of Bridgeway Fund, Inc., and to request that
you take a few minutes to read the enclosed material and to mail back the proxy
voting card.
You are being asked to vote on a proposal to exchange the assets of the Social
Responsibility Portfolio (hereinafter referred to by name or as "your Portfolio"
or "the Fund") for shares of equal value in the newly formed Calvert Large Cap
Growth Fund, a series of Calvert Impact Fund, Inc. The Board of Directors of
Bridgeway Fund, Inc., including myself, believe this change is in the best
interests of your Portfolio, and you, as its shareholders. We believe that this
exchange will significantly reduce expenses for current shareholders, broaden
the universe of socially responsible companies we consider for inclusion in the
Fund, improve the quality of the social research we use, and far exceed our
previous efforts in the areas of shareholder activism and community investing.
Accordingly, such a combination would be beneficial to shareholders.
Portfolio Management will continue to reside with Bridgeway Capital Management
as subadvisor, and I will continue managing the Fund.
Regardless of the number of shares you own, it is important that you take the
time to read the enclosed proxy, and complete and mail your voting card as soon
as you can. A postage paid envelope is enclosed. If Portfolio shareholders do
not return their proxies, the Portfolio may have to incur the expense of
additional solicitations. A speedy reply will lessen the necessity of Bridgeway
trying to contact you by phone. All shareholders benefit from the speedy return
of proxies, regardless of how they vote.
I appreciate the time you will take to review this important matter. The Q & A
that follows will assist you in understanding the proposal; however, if we may
be of any assistance, please call us at (800) 661-3550, extension 5 or 11.
Sincerely,
John N. Montgomery
President
Bridgeway Fund, Inc.
Social Responsibility Portfolio
5615 Kirby Drive, Suite 518
Houston, Texas 77005-2448
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be held on October 20, 2000
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders of the Social
Responsibility Portfolio of Bridgeway Fund, Inc., will be held in the offices of
Bridgeway Fund, Inc., 5615 Kirby Drive, Suite 518, Houston, Texas 77005-2448 at
10:00 a.m. on Friday, October 20, 2000 for the following purposes:
1. To consider and act on an Agreement and Plan of Reorganization, dated
September 22, 2000, providing for the transfer of substantially all of the
assets of the Social Responsibility Portfolio to the Calvert Large Cap Growth
Fund, along with the assumption of certain identified liabilities.
2. To transact any other business that may properly come before the meeting
or any adjournment or adjournments thereof.
Shareholders of record at the close of business on September 20, 2000 are
entitled to notice of and to vote at this meeting or any adjournment thereof.
By order of the Board or Directors,
Joanna Schima
Secretary
September 25, 2000
Please execute the enclosed proxy and return it promptly in the enclosed
envelope, thus enabling the Fund to avoid unnecessary expense and delay. You
may also vote by telephone or the internet. Your vote is extremely important,
no matter how large or small your holdings may be. No postage is required if
mailed in the United States. We would be happy to reimburse any international
postage; simply attach a note requesting this. The proxy is revocable and will
not affect your right to vote in person if you attend the Special Meeting.
IMPORTANT NOTICE TO
BRIDGEWAY FUND SHAREHOLDERS
IN THE SOCIAL RESPONSIBILITY PORTFOLIO
QUESTIONS & ANSWERS
Please read the complete text of the enclosed Prospectus/Proxy Statement. For
your convenience, we have provided a brief overview of the matters to be voted
upon. Your vote is important. If you have any questions regarding the
proposal, please call us at 800-661-3550, extension 5 or 11. We appreciate your
investing with Bridgeway Fund, and look forward to a continuing relationship,
whether the proposal is approved by shareholders and you become a shareholder of
the Calvert Large Cap Growth Fund, which will have Bridgeway Capital Management,
Inc. as its investment sub-advisor, and/or you continue to maintain an
investment in other portfolios of Bridgeway Fund, Inc.
Q. Why am I receiving a proxy statement?
A. The Social Responsibility Portfolio of Bridgeway Fund, Inc. is seeking
your approval of the acquisition of the assets of the Portfolio by the Calvert
Large Cap Growth Fund, a series of Calvert Impact Fund, Inc. (hereafter,
"Calvert Fund".)
Q. What are the effects of this acquisition?
A. The acquisition is structured so that it will be treated as a tax free
reorganization. The merger will affect your Portfolio by transferring all of
the assets of the Social Responsibility Portfolio to Calvert Fund. In turn, you
will receive shares equal in value to value of the respective shares of the
Social Responsibility Portfolio.
As a result of this transaction, it is anticipated that Calvert Fund will
enhance returns by using the combined services of Bridgeway's investment adviser
and those of Calvert's investment adviser in a Fund with nearly identical
investment objectives and policies.
Q. Is there a change in the management of these assets?
A. Yes and No. The investment adviser of Calvert Fund will be Calvert Asset
Management Company, Inc., and the sub-investment adviser will be Bridgeway
Capital Management, Inc., which manages the Portfolio now. Calvert will be
responsible for fund operations, social screening, and oversight of management
of Calvert Fund. Bridgeway will be responsible for choosing the securities to
buy and sell.
Q. Are there differences in the investment objective of the Portfolio and
Calvert Fund?
A. No, the investment objectives are the same.
Q. How do the expense structures and fees of the Portfolio and Calvert Fund
compare?
A. Current shareholder expenses will decline. The following table reflects
the current Bridgeway Portfolio expense structure and the proposed Calvert Fund
estimated expense structure expressed as a percentage of average annual net
assets:
Current Bridgeway Portfolio Calvert Fund
Minimum Maximum Minimum Maximum
Calvert advisory fees N/A N/A 0.25% 0.25%
Bridgeway subadvisory fees 0.20% 1.60% 0.20% 0.70%
Administrative fees N/A N/A 0.10% 0.10%
12b-1/Distribution 0.00% 0.00% 0.00% 0.00%
Other Expenses 1.04% 1.04% 0.56% 0.56%
Gross Fees 1.24% 2.64% 1.11% 1.61%
Fee Reimbursement N/A (0.64%) (0.46%) (0.46%)
Net Fees* 1.24% 2.00% 0.65% 1.15%
* The Advisor has agreed to limit operating expenses (net of expense offset
arrangements and exclusive of performance fee adjustments) to 0.90%.
The performance fee adjustment is +/- 0.25%
Since the Fund has a performance-based sub-advisory fee, the total fees may
vary in accordance with the minimum and maximum fees indicated by the table.
The "Current Bridgeway Portfolio Other Expenses" are based on Fiscal Year 2000
audited numbers. The advisory and administrative fees are based on the
respective management contracts. Calvert and Bridgeway have agreed to reimburse
expenses to maintain a maximum 0.90% expense ratio for Class I in the first year
(net of any expense offset arrangements and exclusive of any performance fee
adjustment), if necessary. While they are not legally obligated to thereafter,
they have no plans to change this reimbursement feature.
Bridgeway believes this plan to be a very attractive reduction of expenses
for current shareholders. Shareholders would be paying the same low expenses as
the large, institutional shareholders who will be in the same class of Calvert
Fund (Class I).
Q. Will you have to pay a sales load or 12b-1 (distribution) fee if you
purchase additional shares of Calvert Fund?
A. No. Present accounts of shareholders in the Portfolio that become
shareholder accounts of Calvert Fund with the same registration will hold the
institutional Class I, avoiding all sales loads and distribution fees on current
shares as well as any future shares they purchase in that class.
[/R]
New shareholder accounts (those established after the Reorganization) will
pay sales loads, distribution fees and other expenses as set forth in Calvert
Fund Prospectus.
[/R]
Q. Will the performance-based fee structure change?
A. Yes. The basic management fee and the performance fee will be smaller.
Also, the performance period could change. Bridgeway is seeking permission (in
the form of a "no action letter") from the Securities and Exchange Commission to
continue its current structure using a five-year performance period. If
Bridgeway does not receive a "no action letter" acceptable to Calvert (at its
sole discretion and determination) by June 30, 2001, then the Calvert Large Cap
Growth Fund will use a shorter one-year timeframe as the performance period and
the Lipper Large Cap Growth Index; though it will continue to use the S&P 500
Index in its investment objective.
Q. How does Calvert/Bridgeway expect to obtain efficiencies of scale?
A. Bridgeway has not been as successful as anticipated in bringing new
assets to the Portfolio. After six years, this low volatility, tax-efficient,
"five star" portfolio has attracted only $8 million in net assets.
Calvert Fund has a different distribution method than the one used by the
present Portfolio. The present Portfolio is a no load fund. Calvert Fund has
different classes of shares, which are sold by its distributor through a network
of financial advisors and retirement plan platforms. We believe that this
distribution approach will be more successful in adding assets to the fund than
the no load approach used now. We also believe that lower operating expenses
will result from having a larger base of assets under management, though this
cannot be guaranteed.
Q. What will Bridgeway Capital Management, the advisor to your current
portfolio, get out of this new arrangement?
A. Monetarily, Bridgeway Fund's advisor hopes to get "a smaller piece of a
bigger pie." The new fund will also allow Bridgeway to better fulfill the full
spectrum of its commitment to socially responsible investing, including: (1)
larger charitable donations (assuming the Calvert Fund is successful in
attracting new shareholders), (2) much more meaningful shareholder activism, and
(3) an outlet for community investing.
Q. What are the federal tax implications of the transaction?
A. The acquisition of the assets of the Portfolio will not be a taxable
event (i.e., no gain or loss will be recognized) to the Portfolio, Calvert Fund,
or to you as a shareholder.
Q. What if there are not enough votes to reach a quorum by the scheduled
special shareholder meeting date?
A. If enough shareholders do not vote, we will need to take further action.
We may contact you by mail, telephone, facsimile, or by personal interview.
Therefore, we encourage you to vote as soon as you review the enclosed proxy
materials in order to avoid additional mailings, telephone calls or other
solicitations.
Q. How will you determine the number of shares of Calvert Fund that I will
receive?
A. The Closing Date is scheduled for October 31, 2000, unless it is
postponed. As of 4:00 p.m. Eastern Standard Time on this date, you will receive
that number of full and fractional Calvert Fund shares equal in value to the
shares you hold in the Portfolio on that date.
Q. What impact will the merger have on the other portfolios of Bridgeway?
A. Virtually none. The expenses of operating each of the portfolios
comprising Bridgeway Fund, Inc. are allocated to the portfolio to which they
apply.
Q. Who is paying for the expenses related to the shareholders meeting?
A. The present Portfolio will pay for the expenses related to the
shareholder meeting. However, these expenses will be fully reimbursed by
Bridgeway Capital Management.
Q. Will Calvert and Bridgeway still survey shareholders to learn of the
social criteria preferences?
A. Calvert will seek shareholder preferences, concerns and interests from
time to time. A survey, per se, will no longer be used directly to weight and
rank companies. Bridgeway and Calvert both believe that the process will result
in a similar group of socially responsible companies. For example, Calvert
recently applied its social standards to Bridgeway's portfolio and found that
the large majority of the Portfolio companies would pass its criteria.
Calvert will select investments on the basis of their ability to contribute
to the dual objectives of financial soundness and social criteria. The Fund has
developed social criteria in the following areas for Calvert Fund:
- Environment
- Labor Relations
- Product Safety
- Animal Welfare
- Military Weapons
- Community Relations
- Human Rights
- Indigenous Peoples Rights
Q. How do the directors of Bridgeway Fund, Inc. suggest that I vote?
A. After careful consideration, the directors of your Fund unanimously
recommend that you vote "FOR" the item proposed on the enclosed proxy card.
Q. What are my investment alternatives?
A. Bridgeway Fund has other portfolios to consider that may meet your
investment objectives. However, before switching your Social Responsibility
holdings into one of the other Bridgeway
portfolios, please be aware that any such transaction is recognized as a sale
and purchase of securities for tax purposes. In other words, if the value of
your Social Responsibility holdings is more than you paid for them, you will
incur capital gain taxes on the profit you earn.
The Board is very confident with the proposed merger of the Portfolio into
Calvert Fund, with Calvert's strong history of investment management, its
proprietary social research methodology, and shareholder activism.
Q. How do I vote my shares?
A. You can vote your shares by completing and signing the enclosed proxy
card, and mailing it in the enclosed postage paid envelope or by telephone or
the internet. If you need any assistance, or have any questions regarding the
proposal or how to vote your shares please call us at (800) 661-3550, extension
5 or 11.
Q. Will my vote make a difference?
A. Your vote is needed to ensure that the proposals can be acted upon. Your
immediate response on the enclosed proxy card will help save on the costs of any
further solicitations for a shareholder vote. We encourage all shareholders to
participate in voting on this matter.
Q. How will this affect my account?
A. You can expect the same level of management expertise and high-quality
shareholder services to which you've grown accustomed, but now from Calvert and
Bridgeway. You will speak with Calvert's representative regarding future
shareholder account activity. However, you may still call Bridgeway with
questions regarding investment characteristics.
Q. How do I sign the proxy card?
A. Voting instruction forms must be executed properly. When forms are not
signed as required by law, you and the Fund must undertake the time and expense
to take steps to validate you vote. The following guide was prepared to help
you choose the proper format for signing your form:
1. Individual Accounts: Your name should be signed exactly as it appears in
the registration on the voting instruction form.
2. Joint Accounts: Either party may sign, but the name of the party signing
should conform exactly to a name shown in the registration.
3. All other accounts should show the capacity of the individual signing.
This can be shown either in the form of the account registration itself or by
the individual executing the voting instruction form. For example: A valid
signature for Save the Earth Corp. is any officer its by-laws or its Board of
Directors authorizes to sign its official documents.
Voting my mail is quick and easy. Everything you need is enclosed.
PROSPECTUS AND PROXY STATEMENT
September 25, 2000
Acquisition of the Assets of Social Responsibility Portfolio,
A series of Bridgeway Fund, Inc.
By an exchange for shares of Calvert Large Cap Growth Fund,
A series of Calvert Impact Fund, Inc.
This Prospectus and Proxy Statement relates to the proposed transfer of all of
the assets and the assumption of certain identified liabilities of the Social
Responsibility Portfolio of Bridgeway Fund, Inc. in exchange for shares of
Calvert Large Cap Growth Fund, a series of Calvert Impact Fund, Inc. Following
the transfer, Calvert Large Cap Growth Fund shares will be distributed to
shareholders of the Social Responsibility Portfolio in liquidation of that
Portfolio and the Portfolio will be dissolved. As a result of the proposed
transaction, each shareholder of the Social Responsibility Portfolio will
receive that number of Calvert Large Cap Growth Fund shares equal in value at
the date of the exchange to the value of such shareholder's respective shares of
the Social Responsibility Portfolio. The transaction will only occur if
shareholders vote in favor of the proposed transfer.
Calvert Large Cap Growth Fund (hereinafter referred to by name or "Calvert
Fund") is a series of Calvert Impact Fund, Inc., a newly formed open-end
diversified management investment company. The investment objective of the
Calvert Fund and the Social Responsibility Portfolio are the same: To exceed the
stock market total return (primarily through capital appreciation) at a level of
total risk roughly equal to that of the stock market over longer periods of time
(three years or more). The S&P 500 Index with dividends reinvested represents
the "stock market" in this objective.
Portfolio shares are sold to the public, with no sales charges as it is a series
of Bridgeway Fund, Inc., a no load fund. The shares of Calvert Fund will be
sold to the public with a maximum sales charge of 4.75% in a variety of Classes
(A, B, C and I). The sales charge is added to the purchase price of shares, but
will not be applied to shares issued in the Reorganization (See "Purchase
Procedures"). Both the Portfolio and Calvert Fund have 12b-1 plans which permit
these funds to pay certain expenses associated with the distribution of shares,
although under the terms of the Bridgeway Fund 12b-1 Plan, all such charges are
presently paid for by its Advisor, Bridgeway Capital Management, Inc.
This Prospectus and Proxy Statement is expected to be mailed to shareholders of
record on or about September 25, 2000.
This Prospectus and Proxy Statement, which should be retained for future
reference, sets forth concisely information about Calvert Fund that a
prospective investor should know before investing. Additional information has
been filed with the Securities and Exchange Commission and is available upon
oral or written request and without charge. A copy of the Prospectus and
Statement of Additional Information for the Bridgeway Portfolio may be obtained
without charge by writing the Portfolio at 5615 Kirby Drive, Suite 518, Houston,
TX 77005-2448, or by calling (800) 661-3550. Similar information about Calvert
Fund can be obtained without charge by writing the Fund at 4550 Montgomery
Avenue, Suite 1000N, Bethesda, Maryland 20814, or by calling (800) 368-2745.
These securities have not been approved or disapproved by the Securities and
Exchange Commission or any state securities commission, nor has the Securities
and Exchange Commission or any state securities commission passed on the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
The shares offered by this prospectus and proxy statement are not deposits or
obligations of, or guaranteed or endorsed by, any bank, and are not federally
insured or otherwise protected by the FDIC, the federal reserve board, or any
other agency. When investors sell shares of the funds, the value may be higher
or lower than the amount originally paid.
TABLE OF CONTENTS
Synopsis 9
Principal Risk Factors 9
Expense Comparisons 12
Reasons for the Reorganization 13
Comparison of Investment Policies 14
Information about the Reorganization 15
Information about Calvert Fund 18
Comparative Information on Shareholder
Rights 25
General Information about the Funds 26
Other Business 26
Voting Information 26
Adjournment 27
Exhibit A - Agreement and Plan of
Reorganization 29
SYNOPSIS
Proposed Transaction. The Directors of the Portfolio have authorized the
Portfolio and Calvert Fund to enter into an Agreement and Plan of Reorganization
(the "Agreement" or "Plan") providing for the transfer of all the assets and
certain identified liabilities of the Portfolio in exchange for like shares of
the Calvert Fund. Following the transfer, Calvert Fund shares will be
distributed to the shareholders of the Portfolio in liquidation and/or
dissolution of the Portfolio. As a result of the proposed transaction, each
shareholder of the Portfolio will receive that number of full and fractional
Calvert Fund shares equal in value at the date of the exchange to the value of
such shareholder's shares of the Portfolio. For the reasons stated above, the
Directors, including the independent Directors, have concluded that the
Reorganization would be in the best interests of the shareholders of the
Portfolio and recommend shareholder approval.
Principal Risk Factors. The risks attendant to investing in the Calvert Fund
are the same as those risks shareholders have assumed by investing in the
Portfolio. General risks in investing in any fund would be that shareholders
could lose money on their investment in a Fund, or the Fund could underperform.
Tax Consequences. It is the opinion of counsel to the Portfolio that no gain or
loss will be recognized by the Portfolio shareholders as a result of the
Reorganization. The tax basis of Calvert Fund shares received by a shareholder
of the Portfolio will be the same as the tax basis of the Portfolio
shareholder's shares prior to the Reorganization. See "Information about the
Reorganization."
Investment Objectives and Policies. Shareholders should consider that the
investment objectives and policies of both the Portfolio and Calvert Fund are
essentially the same. Both have the investment objective of seeking to exceed
the stock market total return (primarily through capital appreciation) at a
level of total risk roughly equal to that of the stock market over longer
periods of time (three years or more). The S&P 500 Index with dividends
reinvested represents the "stock market" in this objective.
While the Fund has the flexibility to invest in companies of all sizes,
typically 80% to 95% of the Fund will be invested in large U.S. companies traded
on the New York Stock Exchange, the American Stock Exchange, and NASDAQ.
Calvert Fund invests both in value and growth companies, although the Fund has a
strong bias toward growth companies. Value stocks are those priced cheaply
relative to some financial measures of worth. Growth stocks have faster
increasing sales and earnings. Growth companies are the "engine" of the Fund,
while value companies help lessen Fund volatility (short term risk)."
The sole difference between the investment policies of the Portfolio and Calvert
Fund is that the Portfolio's policies state that the social criteria of the
companies that it will invest in are generally in line with those of its
shareholders. The Calvert Fund investment policy contains no such statement and
reserves that judgment for its investment adviser and sub-adviser.
Both the Portfolio and Calvert Fund have a similar secondary portfolio strategy,
which is "to use exchange-traded, stock index options and futures." These
investments are intended to help keep the long term average market risk of the
Fund equal to the market itself. At any one point in time, however, the
Portfolio market exposure may be as high as 150% or as low as 50% of the market.
Calvert and Bridgeway believe that the use of these instruments will allow them
to better manage the Fund's level of risk; it does not try to leverage overall
market risk in the long term.
The fundamental investment restrictions of both the Portfolio and Calvert Fund
are essentially identical except that Calvert Fund has streamlined its
investment restrictions so that they are not more restrictive than the current
law, recognizing that the federal and state laws governing mutual funds have
been changed several times in the last few years. Under current Federal law,
the policies/restrictions that are required to be fundamental are those
concerning diversification, borrowing money, the issuance of senior securities,
underwriting of securities issued by other persons, the purchase and sale of
real estate and commodities, the policy about making loans to other persons, and
the concentration of investments in a particular industry or group of
industries.
Thus, Calvert Fund does not have a fundamental investment restriction governing
investing to exercise control as such a prohibition is no longer applicable.
Calvert Fund also 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 the Fund's total assets and except by engaging in reverse
repurchase agreements; whereas the Portfolio similarly may not issue senior
securities, except that it may borrow on a secured or unsecured basis from banks
up to 50% of net assets (not including the amount borrowed) for the purchase of
securities, and any Portfolio may borrow on a secured or unsecured basis from
banks up to 5% of its total assets on an unsecured basis from banks for
temporary or emergency purposes. Further, Calvert Fund also restricts buying or
selling real estate, but expands upon this restriction so that the Fund may not
invest directly in commodities or real estate, although the Fund may invest in
financial futures, and 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.
The last differences between the fundamental investment restrictions of the
Portfolio and Calvert Fund govern: (a) the purchase of securities on margin; (b)
short sales; (c) investing in options or futures on individual commodities; and
(d) investing in options or futures if the aggregate initial margins and
premiums required to establish such non-hedging positions exceed 5% of net
assets, which are nonfundamental investment restrictions for Calvert Fund.
Similarly, Calvert Fund has adopted nonfundamental restrictions that vary from
those of the Portfolio to the extent that an investment restriction has been
changed to better conform to the federal law. Thus, Calvert Fund does not have
nonfundamental investment restrictions governing: (a) investing in securities of
any issuer if, to the knowledge of the Fund, any officer or director of the Fund
or of the Adviser owns more than 1/2 of 1% of the outstanding securities of such
issuer, and such directors who own more than 1/2 of 1% own in the aggregate more
than 5% of the outstanding securities of such issuer; (b) investing in
unseasoned issuers; or (c) investing in oil, gas or mineral related programs,
partnerships or leases, as such prohibitions are no longer applicable.
Additionally, Calvert Fund has adopted nonfundamental investment restrictions
governing:
(a) illiquid securities, (b) reverse repurchase agreements; and (c) put or call
options.
Nonetheless, it is not anticipated that any of these differences in investment
restrictions will cause the Calvert Fund to be managed any differently than the
Portfolio is currently.
Purchases. Shares of the Portfolio are sold at net asset value with no sales
charge. Shares of Calvert Fund are sold on a continuous basis at net asset
value plus the appropriate sales charge. However, the exchange of shares of the
Portfolio and Calvert Fund will not result in any sales charge to Portfolio
shareholders.
Neither will these shareholders incur any sales charge on additional Calvert
Fund purchases in their Class I accounts either through direct purchase of
Calvert Fund Class I shares, dividend reinvestment or capital gains
distributions taken in the form of Calvert Fund Class I shares.
Other purchasers of Calvert Fund shares will incur sales charges. These charges
will vary depending on the series purchased, any rights of accumulation to which
they agree, group purchases, and letters of intent that investors may sign.
Exchange Privileges. Shareholders of the Portfolio can presently exchange their
shares for shares of several other portfolios of Bridgeway Fund, Inc. You
should be aware that any such exchange will be considered a taxable event
pursuant to the rules and regulations of the Internal Revenue Code, as any such
exchange represents a sale of shares, which may produce a gain or loss for tax
purposes. There is no additional charge for Bridgeway Fund exchanges, except
fees charged by some fund supermarkets or brokers.
After the Plan of Reorganization is affected, present Portfolio shareholders
will be shareholders of Calvert Fund Class I and will no longer have that right
to directly exchange their shares for those of other series of Bridgeway Fund,
Inc. However, such a transfer could be accomplished at most fund supermarkets
and some brokerage firms. In addition, you will have the ability to exchange
your shares for those of other portfolios in the Calvert Group Family of Funds.
As shareholders in Calvert Fund's Class I, the minimum investment requirement
will have been waived for shareholders opening accounts pursuant to the Plan as
of October 20, 2000. For these shareholders, additional accounts or exchanges
will not be honored in Class I. Any additional accounts must be established in
Class A, B or C with the applicable sales load. Additionally, no additional
services or automated features can be added to an existing account, they are
only available in accounts established in Class A, B or C. Exchange requests
will not be accepted on any day when Calvert is open but Calvert Fund's
custodian bank is closed (i.e., Columbus Day and Veteran's Day); these exchange
requests will be processed the next day that Calvert Fund's custodian bank is
open. Otherwise exchange privleges for the shareholders will not materially
change.
Like Bridgeway, Calvert Fund and the distributor reserve the right at any time
to reject or cancel any part of any purchases (including exchange purchases);
modify any terms or conditions of purchase of shares of any Fund; or withdraw
all or any part of the offering made by the prospectus. To protect the interest
of investors, Calvert Fund and the distributor may reject any order considered
market-timing activity.
Calvert Fund reserves the right to terminate or modify the exchange privilege
with 60 days' written notice.
Distribution Procedures. Shares of Calvert Fund will be sold by its
distributor, Calvert Distributors, Inc., through a network of financial advisors
and retirement plan platforms.
Redemption Procedures. As a Portfolio shareholder, you are aware that at any
time and in any amount, shares of the Portfolio may be redeemed by sending a
letter of instruction, including your name, account and fund number, the number
of shares or dollar amount, and where you want the money to be sent. This
letter of instruction must be signed by all required authorized signers.
Further documentation may be required from corporations, fiduciaries, pension
plans and institutional investors.
Shares may also be redeemed by telephone or though brokers. Calvert Fund may
impose a charge of $5 for wire transfers of less than $1,000.
EXPENSE COMPARISONS
Bridgeway Pro Forma
(Surviving
Calvert Class I)
Shareholder fees
Maximum sales charge (load)
imposed on purchases None None
(as a percentage of offering price)
Maximum deferred sales charge (load) None None
(as a percentage of purchase or
redemption proceeds, whichever is lower)
Annual fund operating expenses1
Management fees 1.09% 1.05%
Distribution and service (12b-1) fees None None
Other expenses 1.04% 0.56%
Total annual fund operating expenses 2.13% 1.61%
Fee waiver and/or expense reimbursement (0.63%) (0.46%)2
Net Expenses 1.50% 1.15%3
1 Expenses are based on estimates to reflect expenses expected to be incurred
for the upcoming fiscal year for Calvert Fund, unless otherwise indicated.
Management fees include a subadvisory fee, paid by the Fund to the Subadvisor.
The subadvisory fee for the Calvert Fund is subject to a performance fee
adjustment of +/- 0.25%, which could cause the fee to be as high as 0.70% for as
low as 0.20%, depending on the Calvert Fund's performance relative to its
performance index. Management fees also include an administrative fee paid by
Calvert Fund to Calvert Administrative Services Company, an affiliate of the
Advisor.
2 The Advisor has agreed to limit annual fund operating expenses (net of any
expense offset arrangements and exclusive of any performance fee adjustments)
through November 1, 2001.
For the purposes of this expense limit, operating expenses do not include
interest expense, brokerage commissions, extraordinary expenses, taxes and
capital items. Calvert Fund has an offset arrangement with its custodian bank
whereby the custodian and transfer agents fees may be paid indirectly by credits
on Calvert Fund's uninvested cash balances. These credits are used to reduce
Calvert Fund's expenses.
3 The contractual expense cap is 0.90%, exclusive of a performance fee
adjustment of +.25%. The contractual expense cap is shown as "Net expenses,"
this is the maximum amount of operating expenses that may be charged to Calvert
Fund through November 1, 2001.
Example. This example is intended to help you compare the cost of investing in
a fund with the cost of investing in other mutual funds. The example assumes
that:
- - You invest $10,000 in a Fund for the time periods indicated;
- - Your investment has a 5% return each year; and
- - The Fund's operating expenses remain the same.
Although your actual costs may be higher or lower, under these assumptions your
costs would be:
Fund (Unaudited) 1 Year 3 Years 5 Years 10 Years
Bridgeway Fund $158 $627 $1,122 $2,485
Calvert Fund Class I $117 $463 $833 $1,872
Reasons For the Reorganization
The Board of Directors of Bridgeway Fund, Inc., referred to herein as the
"Directors", believe that the proposed Reorganization would be in the best
interests of the shareholders of the Portfolio considering the small size of the
Portfolio. By combining with the Calvert Fund, the Directors believe that this
will allow the fund to:
1) Grow larger because of the different method of distribution that Calvert Fund
uses, which will lead to economies of scale in the future. Consequently, the
expenses of the Fund will fall from the current range of 1.5%-2.0% annually for
current Fund shareholders to a level of just 0.9% in Calvert Fund Class I.
2) Combining Bridgeway Capital Management portfolio manager expertise with the
social research facilities of Calvert may result in enhanced returns.
Specifically, Bridgeway believes that returns could be enhanced by applying its
financial models to a broader range of companies researched by Calvert.
Previously, Bridgeway had access to social research on less than 700 companies
whereas Calvert's universe is almost 7000 companies.
3) Bridgeway believes that Calvert has the industry's preeminent social research
capability and that the overall quality of our social research will thus
improve. Vanguard recently validated this opinion by choosing Calvert for their
social index fund.
4) To date, Bridgeway's small size has hampered its ability to engage in
shareholder activism. Current shareholders will benefit from Calvert's
considerable expertise in this area, while also gaining access to the Calvert
Social Investment Foundation for community investing.
To this end, the Directors recommend that shareholders of the Portfolio approve
the exchange of its assets to the Calvert Fund for shares of Calvert Fund, which
will be distributed to Portfolio shareholders upon the liquidation and/or
dissolution of the Portfolio.
In determining whether to recommend approval of the Reorganization to
shareholders of the Portfolio, the Directors considered a number of factors,
including, but not limited to: (1) the capabilities and resources of the Calvert
Fund, its Advisor and other service providers in the areas of investment,
marketing, and shareholder services: (2) the expenses and advisory fees
applicable to the Portfolio before the Reorganization and the estimated expense
ratios for shareholders in Calvert Fund after the Reorganization; (3) the
comparative investment performance of Bridgeway Capital Management, Inc. and the
performance record of other Calvert managed social responsibility funds; (4) the
comparative difference in their investment styles and investment and social
research capabilities; (5) the terms and conditions of the Agreement and Plan of
Reorganization and whether the Reorganization would result in dilution of
current Portfolio shareholders' interests; (6) the potential economies of scale
realizable as a result of the Reorganization; (7) the prospect of a lower
management and performance fee; (8) the service features available to
shareholders of both the Portfolio and the Calvert Fund; (9) the costs estimated
to be incurred to complete the Reorganization; (10) the future growth prospects
of the Calvert Fund after the Reorganization; and (11) the non-taxable treatment
of the Reorganization.
In this regard, the Directors reviewed information provided by Bridgeway Capital
Management, Inc. relating to the anticipated impact to the shareholders of the
Portfolio as a result of the Reorganization. The Directors considered the
probability that future increases in asset levels of the Calvert Fund are
expected to result in reduced per share expenses and achievement of economies of
scale, although there can, of course, be no assurances in this regard.
Combining the net assets of the Portfolio with those of Calvert Fund should lead
to a significant reduction of total operating expenses for shareholders of the
Portfolio on a per share basis due to an immediate reduction in the performance
fees applicable to Calvert Fund.
COMPARISON OF INVESTMENT POLICIES
As noted in the "Summary" above, the investment objectives of both the Portfolio
and Calvert Fund are identical. The Portfolio and Calvert Fund seek to exceed
the stock market total return (primarily through capital appreciation) at a
level of total risk roughly equal to that of the stock market over longer
periods of time (three years or more). The S&P 500 Index with dividends
reinvested represents the "stock market" in this objective.
Both the Portfolio and Calvert Fund invest in a diversified portfolio of common
stocks of companies that meet the Fund's investment and social criteria. While
both have the flexibility to invest in companies of all sizes, typically 80% to
95% of the portfolio will invest in large U.S. companies traded on the New York
Stock Exchange, the American Stock Exchange and NASDAQ. They also invest in
both value and growth companies. Both also employ a secondary portfolio
strategy of using exchange-traded, stock index options and futures.
Both the Portfolio and Calvert Fund actively apply social criteria in the
investment process. The Council on Economic Priorities (CEP) currently provides
the Portfolio with social data on 760 companies. Bridgeway management then
supplements this data with its own social research, while also surveying
shareholders to determine Portfolio weights of the social criteria. The Calvert
Fund applies similar social criteria utilizing Calvert's Social Research
Department. Calvert's in-house social research experts thus conduct their
analysis, using four key sources: (1) In-house files on almost 7,000 companies
wherein Calvert gathers information by using the Lexis -Nexis database, the
world's largest news and business information service, and by subscribing to
hundreds of specialty publications, ranging from industry publications to social
responsibility reports; (2) Conversations with company management as to what
challenges they face and what (if any) innovative programs they have that
contribute to best social practices within their industry; (3) Data from U.S.
environmental and social regulatory agencies; and (4) Discussions with advocacy
organizations such as environmental groups, consumer groups, labor unions, and
human rights organizations.
Calvert Fund also provides shareholders with the additional opportunity to
realize significant social return by making charitable and venture capital
investments. Through Calvert Fund's participation in the High Social Impact
Investments program, up to 1% of the Fund's assets are targeted 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. Participation in the Special
Equities investment program allows Calvert Fund to promote especially promising
approaches to social goals through privately placed investments. The investments
are generally venture capital investments in small, untried enterprises.
INFORMATION ABOUT THE REORGANIZATION
Plan of Reorganization. The proposed Agreement and Plan of Reorganization (the
"Agreement" or "Plan") provides that Calvert Fund will acquire all the assets
and certain liabilities of the Social Responsibility Portfolio of Bridgeway
Fund, Inc. in exchange for shares of Calvert Fund on October 31, 2000. A copy
of the Plan is attached as Exhibit A to this Proxy Statement. Discussion of the
Plan herein is qualified in its entirety by reference to the Plan in Exhibit A.
The number of full and fractional Calvert Fund shares to be issued to
shareholders of the Portfolio will equal the value of the shares of the
Portfolio outstanding immediately prior to the Reorganization. Portfolio
securities of the Portfolio will be valued in accordance with the valuation
practices of Calvert Fund (See, "About Calvert Fund"). At the time of the
Reorganization, the Portfolio will pay all of its obligations and liabilities
except those specified in the Plan, which will be paid by Calvert Fund. The
Reorganization will be accounted for by the method of accounting commonly used
by open end investment companies.
As soon as practicable after the Closing Date, the Portfolio will liquidate and
distribute pro rata to its shareholders of record as of the close of business on
October 31, 2000, the full and fractional shares of Calvert Fund at an aggregate
net asset value equal to the value of the shareholder's shares in the Portfolio
next determined after the effective time of the transaction. This method of
valuation is also consistent with interpretations of Rule 22c-1 under the
Investment Company Act of 1940 by the Securities and Exchange Commission's
Division of Investment Management. Such liquidation and distribution will be
accomplished by the establishment of accounts on the share records of the
Portfolio, representing the respective pro rata number of full and fractional
shares of Calvert Fund due shareholders of the Portfolio.
The consummation of the Plan is subject to the conditions set forth therein:
Shareholder Approval. The Plan shall have been approved by the affirmative vote
of the holders of a majority of the outstanding shares of capital stock of the
Portfolio.
Representations, Warranties and, Agreements. Both parties to the Reorganization
shall have complied with its respective responsibilities under the Plan, the
respective representations and warranties contained in this Plan shall be true
in all material respects, and there shall have been no material adverse change
in the financial condition, results of operations, business, properties, or
assets of either party since December 31, 1999. Both parties shall produce
certificates satisfactory in form and substance indicating that it has met the
terms of the Plan.
Regulatory Approval. The Registration Statement for Calvert Fund shall have
been declared effective by the Securities and Exchange Commission and all
necessary orders with respect to the transactions contemplated by the Plan shall
have been granted by the Securities and Exchange Commission; and all approvals,
registrations, and exemptions under federal and state laws considered to be
necessary shall have been obtained.
Tax Opinion. Both parties to the Reorganization shall have received opinions of
counsel, addressed to and in form and substance satisfactory, as to certain of
the federal income tax consequences of the Reorganization under the Internal
Revenue Code to the Portfolio and its shareholders. For purposes of rendering
its opinion, counsel may rely exclusively and without independent verification,
as to factual matters, on the statements made in the Plan, this proxy statement,
and on such other written representations as the Portfolio and Calvert Fund,
respectively, will have verified. The opinion of counsel will be to the effect
that, based on the facts and assumptions stated therein, for federal income tax
purposes:
(1) neither the Portfolio nor Calvert Fund will recognize any gain or loss upon
the transfer of the assets of the Portfolio to and the assumption of its
liabilities by Calvert Fund in exchange for Calvert Fund shares and upon the
distribution (whether actual or constructive) of Calvert Fund shares to its
shareholders in exchange for their shares of capital stock of the Portfolio;
(2) the shareholders of the Portfolio who receive Calvert Fund shares pursuant
to the Reorganization will not recognize any gain or loss upon the exchange
(whether actual or constructive) of their shares of the Portfolio for Calvert
Fund shares (including any fractional share interests they are deemed to have
received) pursuant to the Reorganization;
(3) the basis of Calvert Fund shares received by Portfolio shareholders will be
the same as the basis of the shares of capital stock of the Portfolio
surrendered in the exchange; and
(4) the basis of the Portfolio's assets acquired by Calvert Fund will be the
same as the basis of such assets to the Portfolio immediately prior to the
Reorganization.
The Plan may be terminated and the Reorganization abandoned at any time before
or after approval by Portfolio shareholders, prior to the Closing Date by mutual
consent of the parties, or by either, if any condition set forth in the Plan has
not been fulfilled or has been waived by the party entitled to its benefits. In
accordance with the Plan, the Portfolio and Calvert Fund will be responsible for
payment of their pro rata
expenses incurred in connection with the Reorganization.
Description of Calvert Fund Shares. Full and fractional shares of Calvert Fund
Class I will be issued to each shareholder in accordance with the procedures
under the Plan as described above. Each share will be fully paid and non
assessable when issued and transferable without restrictions and will have no
preemptive or conversion rights.
Federal Income Tax Consequences. The Plan is a tax-free reorganization pursuant
to Section 368(a)(1)(C) of the Code. It is the opinion of outside counsel to
the Portfolio and Calvert Fund that, on the basis of the existing provisions of
the Code, current administrative rules and court decisions, for federal income
tax purposes: (1) no gain or loss will be recognized by the Portfolio upon the
transfer of assets to and assumption of certain of its liabilities in exchange
for Calvert Fund shares (Section 1032(a)); (2) the basis and holding period
immediately after the Reorganization for Calvert Fund shareholders will be same
as the basis and holding period of the Portfolio shares held immediately prior
to the exchange (Section 354, 356); and (3) the basis and holding period of such
Portfolio assets acquired by Calvert Fund will be the same as the basis and
holding period of such assets of the Portfolio immediately prior to the
Reorganization (Section 362 (b), 1223(2)).
Opinions of Counsel are not binding on the Internal Revenue Service or the
Courts. If the Reorganization is consummated but does not qualify as a tax-free
reorganization under the Code, the consequences described above would not be
applicable. Shareholders of the Portfolio should consult their tax advisors
regarding the effect, if any, of the proposed reorganization in light of their
individual circumstances. Since the foregoing discussion relates only to the
federal income tax consequences of the Reorganization, shareholders of the
Portfolio should also consult their tax advisors as to the state and local tax
consequences, if any, of the Reorganization.
Capitalization. The following table shows the capitalization of the Portfolio
as of September 20, 2000 and on a pro forma basis the capitalization of Calvert
Fund as of the date of proposed acquisition of assets at net asset value.
Pro Forma
(Surviving
Bridgeway Calvert Calvert)*
Net Asset Value Per Share $35.96 $35.96 $35.96
Shares Outstanding 259,467.150 2,780.867 262,248.017
*The Pro Forma combined net assets do not reflect adjustments with respect to
distributions prior to the Reorganization. The actual exchange ratio will be
determined based on the relative net asset value per share on the acquisition
date.
INFORMATION ABOUT CALVERT FUND
Investment Objective. Calvert Fund seeks to exceed the stock market total
return (primarily through capital appreciation) at a level of total risk roughly
equal to that of the stock market over longer periods of time (three years or
more). The S&P 500 Index with dividends reinvested serves as a proxy for "stock
market" in this objective.
Principal Investment Strategies. Calvert Fund invests in a diversified
portfolio of common stocks of companies that meet the Fund's investment and
social criteria. While the Fund has the flexibility to invest in companies of
all sizes, typically 80% to 95% of the Fund has been invested in large U.S.
companies traded on the New York Stock Exchange, the American Stock Exchange and
NASDAQ. The Fund invests in both value and growth companies. Value stocks are
those priced cheaply relative to some financial measures of worth. Growth
stocks have faster increasing sales and earnings.
A secondary portfolio strategy is the use of exchange-traded, "traditional"
stock index options and futures. These investments help to keep the long-term
average market risk of the Fund roughly equal to the market itself. At any one
point in time however, the Portfolio market exposure may be as high as 150% or
as low as 50% of the market. Calvert believes that its use of these instruments
is conservative; it does not try to leverage overall market risk in the long
term.
Socially Responsible Investment Criteria. Investments are selected on the basis
of their ability to contribute to the dual objectives of financial soundness and
social criteria. The 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 Calvert. All social criteria may be changed by the Board of
Directors without shareholder approval.
Environment. The Fund will not invest in companies that have poor environmental
records, including significant compliance and waste management problems. The
Fund seeks to invest in companies that have strong programs that focus on
reducing overall environmental impact. Further, the Fund will not invest in
companies significantly engaged in nuclear power.
Labor Relations. The Fund will not invest in companies that have a record of
employment discrimination, anti-union activities or provide unsafe workplaces.
The Fund seeks to invest in companies that have a good record of labor
relations, including strong diversity programs.
Product Safety. The Fund will not invest in companies that primarily engage in
tobacco, alcohol, firearms or gambling. The Fund seeks to invest in companies
that produce healthy and safe products and services.
Animal Welfare. The Fund will not invest in companies that abuse animals
through methods of factory farming. The Fund seeks to invest in consumer
product companies that demonstrate a reduction in the use of animal testing, if
applicable.
Military Weapons. The Fund will not invest in companies that are primarily
engaged in weapons contracting with the Department of Defense.
Community Relations. The Fund will not invest in companies that are not
responsive to communities where they operate. The Fund seeks to invest in
companies that are responsible citizens in these communities.
Human Rights. The Fund will not invest in companies that directly contribute to
human rights violations worldwide. The Fund seeks to invest in companies that
have adopted human rights standards in their overseas operations.
Indigenous Peoples Rights. The Fund will not invest in companies that are
significantly engaged in a pattern and practice of violating the rights of
indigenous people. The Fund seeks to invest in companies that are engaged in
positive portrayals of Native Americans and other indigenous peoples.
With respect to U.S. government securities, the Fund invests primarily in debt
obligations issued or guaranteed by agencies or instrumentalities of the U.S.
Government whose purposes further or are compatible with the Fund'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.
Principal Risks. You could lose money on your investment in the Fund, or the
Fund could underperform, most likely for any of the following reasons:
- The stock market goes down
- The individual stocks in the Fund do not perform as well as expected
- The use of stock index futures and options could add to, rather than
decrease risk
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.
(No performance results are shown for Calvert Fund since it was recently
organized.)
For a discussion of Calvert Fund's fees and expenses, See "Expense Comparisons".
Distribution and Service Fees (For Calvert Fund Class A, B and C only) Calvert
Fund has adopted a plan under Rule 12b-1 of the Investment Company Act of 1940
that allows Calvert 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.
Investment Practices and Risks. The most concise description of the Fund's risk
profile is under the risk-return summary. The Fund is 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 these other principal investments and techniques, along with
their risks.
For each of the investment practices listed, the Fund's limitations are shown as
a percentage of its assets and the principal types of risk involved. (See the
pages following for a description of the types of risks).
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 higher transaction costs, such as
commissions and custodian and settlement fees, and may increase your 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 short-term interest-bearing securities. During
times of any temporary defensive positions, the Fund may not be able to achieve
its investment objective. Risks: Opportunity.
Conventional Securities
Stocks in General. The Fund is subject to stock market risk. Stock prices
overall may decline over short or even long periods. The Fund is also subject
to investment style risk, which is the chance that returns from
large-capitalization stocks will trail returns from other asset classes or the
overall stock market. Each type of stock tends to go through cycles of doing
better or worse than the stock market in general. Finally, individual stocks
may lose value for a variety of reasons, even when the overall stock market has
increased. Risks: Market.
Foreign Securities. Securities issued by companies located outside the U.S.
and/or traded primarily on a foreign exchange. The Fund does not expect to own
more than 10% of such securities. 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 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 BBB/Baa or higher or comparable unrated
bonds. Risks: Interest Rate, Market and Credit.
Below-investment 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. The Fund does not expect to own more than 20% of such
securities, excluding any high social impact investments). Risks: Credit,
Market, Interest Rate, Liquidity and Information.
Unrated debt securities. Bonds that have not been rated by a recognized rating
agency; the Advisor has determined the credit quality based on its own research.
Risks: Credit, Market, Interest Rate, Liquidity and Information.
Illiquid securities. Securities which cannot be readily sold because there is
no active market. The Fund does not expect to own more than 15% of such
securities. Risks: Liquidity, Market and Transaction.
Leveraged Derivative Instruments
Currency contracts. Contracts 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. 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 Fund will write call options only if
they already own the security (if it is "covered"). The Fund does not expect to
own more than 5% (based on net premium payments) of such securities. 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 future date. The Fund
does not expect to own more than 5% of such securities. Risks: Interest Rate,
Currency, Market, Leverage, Correlation, Liquidity and Opportunity.
High Social Impact Investments. Calvert Fund participates in the High Social
Impact Investments program that permits up to 1% of the Fund's assets to be
targeted 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 may be deemed 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 difference in our
communities. High Social Impact Investments are valued under the direction and
control of the Fund's Board.
Special Equities. Calvert Fund has 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 the 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.
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.
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 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.
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.
Shareholder Advocacy and Social Responsibility. As the Fund's advisor, Calvert
takes a proactive role to make a tangible positive contribution to our society
and that of future generations. Calvert seeks to positively influence corporate
behavior through its role as a shareholder by pushing companies toward higher
standards of social and environmental responsibility. Calvert's activities may
include but are not limited to:
Dialogue with companies. Calvert regularly initiates dialogue with management
as part of its social research process. After the Fund has become a
shareholder, Calvert often continues its dialogue with management through phone
calls, letters and in-person meetings. Through its interaction, Calvert learns
about management's successes and challenges and press for improvement on issues
of concern.
Proxy voting. As a shareholder in the various portfolio companies, the Fund is
guaranteed an opportunity each year to express its views on issues of corporate
governance and social responsibility at annual stock-
stockholder meetings. Calvert takes its voting responsibility seriously and
votes all proxies consistent with the financial and social objectives of the
Fund.
Shareholder resolutions. Calvert proposes resolutions on a variety of social
issues. It files shareholder resolutions when our dialogue with corporate
management proves unsuccessful to encourage a company to take action. In most
cases, Calvert's efforts have led to negotiated settlements with positive
results for shareholders and companies alike. For example, one of its
shareholder resolutions resulted in the company's first-ever disclosure of its
equal employment policies, programs and workforce demographics.
Management
Calvert Asset Management Company, Inc., 4550 Montgomery Avenue, Suite 1000N,
Bethesda, Maryland 20814, is the Calvert Fund's investment advisor. Calvert
provides the Fund with investment supervision and management and office space;
furnishes executive and other personnel to the Fund, an pays the salaries and
fees of all Directors who are affiliated persons of the Advisor. (Calvert's
management's advisory services are provided by a team.) 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 June 30, 2000, Calvert had over $6.6 billion in assets under
management.
Bridgeway Capital Management, Inc., 5615 Kirby Drive, Suite 518, Houston Texas
77005-2448 "), is the Calvert Fund's investment sub-advisor, has managed the
Fund (previously the Bridgeway Fund, Inc. Social Responsibility Portfolio) since
its inception in 1994.
John Montgomery, founder and President of Bridgeway Capital Management, Inc., is
responsible for selecting the securities that the Fund purchases and sells. Mr.
Montgomery holds bachelor degrees from Swarthmore College in both engineering
and philosophy and graduate degrees from MIT and Harvard Business School. He
worked with computer modeling and quantitative methods as a research engineer at
MIT in the late 70's. Later, as a student at Harvard, he investigated methods
to apply modeling to portfolio management. John began applying these methods to
his own investments in 1985. He left the transportation industry at the end of
1991 to perform full time research on his investment models.
The Fund has obtained an exemptive order from the Securities and Exchange
Commission to permit the Fund, pursuant to approval by the Board of Directors,
to enter into and materially amend contracts with the Fund's Subadvisor without
shareholder approval.
Advisory Fees. Calvert Fund's advisory agreement provides for the Fund to pay
the Advisor a fee of 0.25% of the Fund's average daily net assets. In addition,
the Fund's subadvisory agreement provides for the Fund to pay the Subadvisor a
fee of 0.45% of the Fund's average daily net assets. The Subadvisor may earn
(or have its base fee reduced by) a performance adjustment of plus or minus
0.25%, based on the extent to which performance of the Fund exceeds or trails
the Lipper Large Cap Growth Funds Average.
Shareholder Information
How Shares Are Priced. The price of shares is based on the Fund's net asset
value ("NAV"). NAV is computed by adding the value of the Fund's holdings plus
other assets, subtracting liabilities, and then dividing the result by the
number of shares outstanding. 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 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). Calvert Fund is open for business each day the NYSE is
open. Please note that there are some federal holidays, however, such as
Columbus Day and Veterans' Day, when the NYSE is open and the Fund is open but
purchases cannot be received because the banks and post offices are closed.
Calvert Fund may hold securities that are primarily listed on foreign exchanges
that trade on days when the NYSE is closed. The Fund does 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. A purchase will be processed at the NAV
next calculated after your order is received by the transfer agent in Kansas
City, MO (see addresses on preceding page). All purchases must be made in U.S.
dollars and indicate the Fund and Class. No cash or third party checks will be
accepted. No credit card or credit loan checks will be accepted. The 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 by
the Transfer Agent. You should note that the share price may change during this
period. 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 fee of $5 payable to the Fund. 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).
Dividends, Capital Gains and Taxes. Calvert Fund pays dividends from its net
investment income annually. Net investment income consists of interest income,
net short-term capital gains, if any, and dividends declared and paid on
investments, less expenses. Distributions of net short-term capital gains
(treated as dividends for tax purposes) and net long-term capital gains, if any,
are normally paid once a year; however, the Fund does not anticipate making any
such distributions unless available capital loss carryovers have been used or
have expired. Dividend and distribution payments will vary between classes.
Federal Taxes. In January, Calvert Fund will mail the Form 1099-DIV indicating
the federal tax status of dividends and any capital gain distributions paid
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 shareholders 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.
Shareholders may realize a capital gain or loss when they sell or exchange
shares. This capital gain or loss will be short- or long-term, depending on how
long the shareholder has owned the shares which were sold. In January, the Fund
will mail the Form 1099-B indicating the total amount of all sales, including
exchanges.
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.
How To Sell Shares. Shareholders may redeem all or a portion of their shares on
any day the Fund is open for business, provided the amount requested is not on
hold. When a purchase is made by check or with Calvert Money Controller
(electronic funds transfer), the purchase may be on hold for up to 10 business
days from the date of receipt. During the hold period, redemption proceeds will
not be sent until the Transfer Agent is reasonably satisfied that the purchase
payment has been collected. Shares will be redeemed at the NAV next calculated
(less any applicable CDSC) after the redemption request is received by the
transfer agent in good order. 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 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 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.
Sales Loads. Portfolio shares are sold to the public, with no sales charges as
it is a series of Bridgeway Fund, Inc., a no load fund. The share of Calvert
Fund will be sold to the public with a maximum sales charge of 4.75% in a
variety of Classes (A, B, C and I). The sales charge is added to the purchase
price of shares, but will not be applied to shares issued in the Reorganization
(see "Purchase Procedures"). Both the Portfolio and Calvert Fund have 12b-1
plans which permit these Funds to pay certain expenses associated with the
distribution of its shares, although under the terms of the Bridgeway Fund 12b-1
Plan, all such charges are presently paid for by its Advisor, Bridgeway Capital
Management, Inc.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
The Portfolio is a series of Bridgeway Fund, Inc., a Maryland Corporation.
Calvert Fund is a series of Calvert Impact Fund Inc., also a Maryland
Corporation. After a comparison of both funds' organizational documents (i.e.,
the Articles of Incorporation and By-laws), it is not anticipated that there are
any significant differences between the rights of shareholders of the Portfolio
and Calvert Fund.
GENERAL INFORMATION ABOUT THE FUNDS
Information about the Portfolio is included in the Bridgeway Fund, Inc.
prospectus, which all shareholders have received. Further information is
included in that Fund's Statement of Additional Information. Both that
Prospectus and Statement of Additional Information are hereby incorporated by
reference and are dated October 31, 1999. You may obtain additional copies by
calling or writing Bridgeway Fund, Inc. at the address and phone number
appearing below. Information about Calvert Fund is included in that Fund's
Prospectus and Statement of Additional Information to be declared effective on
October 31, 2000. Quarterly, semi annual and annual reports of Bridgeway Fund
are also available by writing the Fund at 5615 Kirby Drive, Suite 518, Houston,
Texas 77005-2448 or by calling the Fund's office at (800) 661-3550; and for
Calvert Fund are available by writing the Fund at 4550 Montgomery Avenue, Suite
1000N, Bethesda, Maryland 20814, or by calling (800) 368-2745. Bridgeway Fund
and Calvert Fund are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and the Investment Company Act of 1940, as
amended ("the 1940 Act"), and in accordance therewith, file proxy material,
reports and other information with the Securities and Exchange Commission.
These reports and other information filed by the funds can be inspected and
copied at the public reference facilities maintained by the Securities and
Exchange Commission in Washington, D.C. at 450 Fifth Street, N.W. Copies of such
material can be obtained from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549 at prescribed rates. In addition, the Securities and
Exchange Commission maintains a Web site (http://www.sec.gov) that contains
reports, other information and proxy statements filed by Bridgeway and Calvert
on behalf of the funds that they manage.
OTHER BUSINESS
The Directors of Bridgeway Fund, Inc. do not intend to present any other
business at the meeting. If, however, any other matters are properly brought
before the meeting, the persons named in the accompanying form of proxy will
vote thereon in accordance with their judgment.
VOTING INFORMATION
Proxies from the shareholders of the Portfolio are being solicited by the
Directors and Officers of Bridgeway Fund, Inc. for the Special Meeting of
Shareholders to be held in the conference room of Bridgeway Fund, Inc., 5615
Kirby Drive, Suite 518, Houston, Texas 77005 or at such later time or date made
necessary by adjournment. A proxy may be revoked at any time before the meeting
or during the meeting by oral or written notice to Joanna Schima, Secretary of
Bridgeway Fund, Inc. Unless revoked, all valid proxies will be voted in
accordance with the specification thereon or, in the absence of specification,
for approval of the Plan. Abstentions and broker non-votes will be counted as
shares present for purposes of determining whether a quorum is present, but will
not be voted for or against any adjournment or proposal. Accordingly,
abstentions and broker non-votes effectively will be a vote against adjournment
or against any proposal where the required vote is a percentage of the shares
present.
A majority of vote of the Portfolio shares are required to have a quorum at the
meeting; while a vote of 2/3 of the outstanding shares are necessary to pass the
proposal before Portfolio shareholders.
Proxies are solicited by mail. Additional solicitations may be made by
telephone, computer communications, facsimile or other such means, or by
personal contact by officers or employees of Bridgeway Fund, Inc. or by proxy
soliciting firms retained for this purpose. Shareholders of the Portfolio of
record at the close of business on September 20, 2000 (the "record date") are
entitled to notice of and to vote at the Special Meeting or any adjournment
thereof, are entitled to one vote for each share held. As of September 20,
2000, as shown on the books of the Portfolio, there were issued and outstanding
259,467.150 shares of the Portfolio. The votes of the shareholders of Calvert
Fund are not being solicited since their approval or consent is not necessary
for this transaction.
As of September 20, 2000, the officers and directors of Bridgeway Fund, Inc. as
a group beneficially owned less than 1% of the outstanding shares of the
Portfolio.
As of September 20, 2000, there were no persons owning of record 5% or more of
the shares of the Portfolio.
ADJOURNMENT
In the event that sufficient votes in favor of the proposals set forth in the
Notice of Meeting and Proxy Statement are not received by the time scheduled for
the meeting, the persons named as proxies may move one or more adjournments of
the meeting to permit further solicitation of proxies with respect to any such
proposals. Any such adjournment will require the affirmative vote of a majority
of the shares present at the meeting. The persons named as proxies will vote in
favor of such adjournment those shares that they are entitled to vote which have
voted in favor of such proposals. They will vote against any such adjournment
those proxies that have voted against any such proposals.
SHAREHOLDER PROPOSALS FOR FUTURE MEETINGS OF SHAREHOLDERS
Since there are no annual or further special meetings of shareholders of the
Portfolio planned unless required by applicable law or called by the Boards of
Directors, shareholders wishing to submit proposals that are intended to be
presented at any such future shareholder meeting, should submit the proposal(s)
in writing to the Secretary of Bridgeway Fund, Inc., 5615 Kirby Drive, Suite
518, Houston, Texas 77005-2448. Shareholder proposals should be received in a
reasonable time before the solicitation is made.
Submission of proposals by shareholders does not guarantee its inclusion in a
proxy statement since applicable state or federal rules apply. The Portfolio is
not obligated to call a shareholders meeting to consider any proposal which is
substantially the same as a matter voted upon by the shareholders during the
preceding twelve months, unless requested by holders of a majority of all shares
entitled to be voted at such meeting.
By Order of the Directors
Joanna Schima
Secretary
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION, dated as of September 22, 2000, is
between Bridgeway Social Responsibility Portfolio (the "Bridgeway Portfolio")
and the Calvert Large Cap Growth Fund ("Large Cap Growth Fund"). The Bridgeway
Portfolio is a series of Bridegway Fund, Inc. ("Bridgeway") and Calvert is a
series of Calvert Impact Fund, Inc. ("Calvert").
In consideration of the mutual promises contained in this Agreement, the parties
agree as follows:
1. SHAREHOLDER APPROVAL
Approval by Shareholders. A meeting of the shareholders of the Bridgeway
Portfolio shall be called and held for the purpose of acting on and authorizing
the transactions contemplated in this Agreement and Plan of Reorganization (the
"Agreement" or "Plan"). Large Cap Growth Fund shall furnish to the Bridgeway
Portfolio such data and information as shall be reasonably requested by the
Bridgeway Portfolio for inclusion in the information to be furnished to its
shareholders in connection with the meeting.
2. REORGANIZATION
(a) Plan of Reorganization. The Bridgeway Portfolio will convey, transfer,
and deliver to Large Cap Growth Fund all of the then-existing assets of the
Bridgeway Portfolio at the closing provided for in Section 2(b) of this
Agreement (the "Closing"). In consideration thereof, Large Cap Growth Fund
agrees at the Closing:
(i) to deliver to the Bridgeway Portfolio in exchange for the assets
the number of full and fractional shares of common stock of Large Cap Growth
Fund ("Large Cap Growth Fund Shares") to be determined as follows:
In accordance with Section 3 of this Agreement, the number of shares
shall be determined by dividing the per share net asset value of the Bridgeway
Portfolio Shares (rounded to the nearest millionth) by the net asset value per
share of Large Cap Growth Fund (rounded to the nearest millionth) and
multiplying the quotient by the number of outstanding shares of the Bridgeway
Portfolio as of the close of business on the closing date. It is expressly
agreed that there will be no sales charge to the Bridgeway Portfolio, or to any
of the shareholders of the Bridgeway Portfolio upon distribution of Large Cap
Growth Fund Shares to them; and
(ii) not to assume any of the Bridgeway Portfolio's obligations and
liabilities (except payment for unsettled trades), whether absolute, accrued,
contingent, or otherwise.
(b) Closing and Effective Time of the Reorganization. The Closing shall
occur at the Effective Time of the Reorganization, which shall be either:
(i) the later of receipt of all necessary regulatory approvals and the final
adjournment of the meeting of shareholders of the Bridgeway Portfolio at which
the Plan will be considered, or
(ii) such later date as the parties may mutually agree.
3. VALUATION OF NET ASSETS
(a) The value of the Bridgeway Portfolio's net assets to be transferred to
Large Cap Growth Fund under this Agreement shall be computed as of the close of
business on the business day immediately preceding the Closing Date (hereinafter
the "Valuation Date") using the valuation procedures as set forth in Large Cap
Growth Fund's prospectus.
(b) The net asset value per share of Large Cap Growth Fund Shares for
purposes of Section 2 of this Agreement shall be determined as of the close of
business on the Valuation Date by Large Cap Growth Fund's Controller using the
same valuation procedures as set forth in Large Cap Growth Fund's prospectus.
(c) A copy of the computation showing in reasonable detail the valuation of
the Bridgeway Portfolio's net assets to be transferred to Large Cap Growth Fund
pursuant to Section 2 of this Agreement, certified by the Chief Financial
Officer of the Bridgeway Portfolio, shall be furnished by the Bridgeway
Portfolio to Large Cap Growth Fund at the Closing. A copy of the computation
showing in reasonable detail the determination of the net asset value per share
of Large Cap Growth Fund Shares pursuant to Section 2 of this Agreement,
certified by the Controller of Large Cap Growth Fund, shall be furnished by
Large Cap Growth Fund to the Bridgeway Portfolio at the Closing.
4. LIQUIDATION AND DISSOLUTION
(a) As soon as practicable after the Closing Date, the Bridgeway Portfolio
will distribute pro rata to the Bridgeway Portfolio shareholders of record as of
the close of business on the Closing Date the shares of Large Cap Growth Fund
received by the Bridgeway Portfolio pursuant to this Section. Such liquidation
and distribution will be accompanied by the establishment of shareholder
accounts on the share records of Large Cap Growth Fund in the names of each such
shareholder of the Bridgeway Portfolio, representing the respective pro rata
number of full shares and fractional interests in shares of Large Cap Growth
Fund due to each. No such shareholder accounts shall be established by Large Cap
Growth Fund or its transfer agent for Large Cap Growth Fund except pursuant to
written instructions from the Bridgeway Portfolio, and the Bridgeway Portfolio
agrees to provide on the Closing Date instructions to transfer to a shareholder
account for each former the Bridgeway Portfolio shareholder a pro rata share of
the number of shares of Large Cap Growth Fund received pursuant to Section 2(a)
of this Agreement.
(b) Promptly after the distribution described in Section 4(a) above,
appropriate notification will be mailed by Large Cap Growth Fund or its transfer
agent to each shareholder of the Bridgeway Portfolio receiving such distribution
of shares of Large Cap Growth Fund informing such shareholder of the number of
such shares distributed to such shareholder and confirming the registration
thereof in such shareholder's name.
(c) Share certificates representing holdings of shares of Large Cap Growth
Fund shall not be issued unless requested by the shareholder and, if such a
request is made, share certificates of Large Cap Growth Fund will be issued only
for full shares of Large Cap Growth Fund and any fractional interests in shares
shall be credited in the shareholder's account with Large Cap Growth Fund.
(d) As promptly as is practicable after the liquidation of the Bridgeway
Portfolio, and in no event later than 12 months from the date of this Agreement,
the Bridgeway Portfolio shall be terminated pursuant to the provisions of the
Plan and Calvert's Articles of Incorporation.
(e) Immediately after the Closing Date, the share transfer books of the
Bridgeway Portfolio shall be closed and no transfer of shares shall thereafter
be made on those books.
5. ARTICLES AND BY-LAWS
(a) Articles of Incorporation. The Articles of Incorporation of Calvert,
which govern its series, Large Cap Growth Fund, as in effect immediately prior
to the Effective Time of the Reorganization shall continue to be the Articles of
Incorporation until amended as provided by law.
(b) By-laws. The By-laws of Calvert, which govern its series, Large Cap
Growth Fund, in effect at the Effective Time of the Reorganization shall
continue to be the By-laws until the same shall thereafter be altered, amended,
or repealed in accordance with the Trust Indenture or said By-laws.
6. REPRESENTATIONS AND WARRANTIES OF CALVERT FUND
(a) Organization, Existence, etc. Large Cap Growth Fund is a duly organized
series of Calvert, validly existing and in good standing under the laws of the
State of Maryland, and has the power to carry on its business as it is now being
conducted. Currently, Large Cap Growth Fund is not qualified to do business as a
foreign corporation under the laws of any jurisdiction. Large Cap Growth Fund
has all necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as now being conducted.
(b) Registration as Investment Company. Calvert, of which Large Cap Growth
Fund is a series, is registered under the Investment Company Act of 1940 (the
"Act") as an open-end diversified management investment company. Its
registration has not been revoked or rescinded and is in full force and effect.
(c) Capitalization. Large Cap Growth Fund has an unlimited number of shares
of beneficial interest, no par value, of which as of September 30, 2000,
250,000,000 shares were outstanding, and no shares were held in the treasury of
Large Cap Growth Fund. All of the outstanding shares of Large Cap Growth Fund
have been duly authorized and are validly issued, fully paid, and
non-assessable. Since Large Cap Growth Fund is a series of an open-end
investment company engaged in the continuous offering and redemption of its
shares, the number of outstanding shares may change prior to the Effective Time
of the Reorganization.
(d) Shares to be Issued Upon Reorganization. Large Cap Growth Fund Shares to
be issued in connection with the Reorganization have been duly authorized and
upon consummation of the Reorganization will be validly issued, fully paid and
non-assessable.
(e) Authority Relative to this Agreement. Calvert has the power to enter
into the Plan on behalf of its series Large Cap Growth Fund and to carry out its
obligations under this Agreement. The execution and delivery of the Plan and the
consummation of the transactions contemplated have been duly authorized by the
Board of Directors of Calvert and no other proceedings by Calvert are necessary
to authorize its officers to effectuate the Plan and the transactions
contemplated. Large Cap Growth Fund is not a party to or obligated under any
charter, by-law, indenture, or contract provision or any other commitment or
obligation, or subject to any order or decree which would be violated by its
executing and carrying out the Plan.
(f) Liabilities. There are no liabilities of Calvert on behalf of its series
Large Cap Growth Fund, whether or not determined or determinable, other than
liabilities disclosed or provided for in Large Cap Growth Fund Financial
Statements and liabilities incurred in the ordinary course of business
subsequent to September 30, 2000, or otherwise previously disclosed to the
Bridgeway Portfolio, none of which has been materially adverse to the business,
assets or results of operations of Large Cap Growth Fund.
(g) Litigation. To the knowledge of Large Cap Growth Fund there are no
claims, actions, suits, or proceedings, pending or threatened, which would
adversely affect Large Cap Growth Fund or its assets or business, or which would
prevent or hinder consummation of the transactions contemplated by this
Agreement.
(h) Contracts. Except for contracts and agreements previously disclosed to
the Bridgeway Portfolio under which no default exists, Large Cap Growth Fund is
not a party to or subject to any material contract, debt instrument, plan,
lease, franchise, license, or permit of any kind or nature whatsoever.
(i) Registration Statement. Large Cap Growth Fund shall have filed with the
Securities and Exchange Commission (the "Commission") a Registration Statement
under the Securities Act of 1933 ("Securities Act") relating to the shares of
capital stock of Large Cap Growth Fund issuable under this Agreement. At the
time the Registration Statement becomes effective, the Registration Statement:
(i) will comply in all material respects with the provisions of the
Securities Act and the rules and regulations of the Commission thereunder (the
"Regulations"), and
(ii) will not contain an untrue statement of material fact or omit to
state a material act required to be stated therein or necessary to make the
statements therein not misleading.
Further, at the time the Registration Statement becomes effective, at the time
of the shareholders' meeting referred to in Section 1, and at the Effective Time
of the Reorganization, the Prospectus and Statement of Additional Information
included therein, as amended or supplemented by any amendments or supplements
filed by Large Cap Growth Fund, will not contain an untrue statement of a
material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided, however,
that none of the representations and warranties in this subsection shall apply
to statements in or omissions from the Registration Statement or Prospectus and
Statement of Additional Information made in reliance upon and in conformity with
information furnished by the Bridgeway Portfolio for use in the Registration
Statement or Prospectus and Statement of Additional Information as provided in
Section 7(k).
7. REPRESENTATIONS AND WARRANTIES OF BRIDGEWAY FUND
(a) Organization, Existence, etc. The Bridgeway Portfolio is a duly
organized series of Bridegway, validly existing and in good standing under the
laws of the State of Maryland, and has power to carry on its business as it is
now being conducted. Currently, the Bridgeway Portfolio is not qualified to do
business as a foreign corporation under the laws of any jurisdiction other than
the State of Texas. The Bridgeway Portfolio has all necessary federal, state and
local authorization to own all of its properties and assets and to carry on its
business as now being conducted.
(b) Registration as Investment Company. Bridegway, of which the Bridgeway
Portfolio is a series, is registered under the Act as a no-load, open-end
diversified management investment company. Its registration has not been revoked
or rescinded and is in full force and effect.
(c) Capitalization. The Bridgeway Portfolio has a relatively unlimited
number of shares of beneficial interest, no par value, of which as of June 30,
2000, 204,600 Shares were outstanding, and no shares were held in the treasury
of the Bridgeway Portfolio. All of the outstanding shares of the Bridgeway
Portfolio have been duly authorized and are validly issued, fully paid, and
non-assessable. Since the Bridgeway Portfolio is a series of an open-end
investment company engaged in the continuous offering and redemption of its
shares, the number of outstanding shares of the Bridgeway Portfolio may change
prior to the Effective Date of the Reorganization.
(d) Financial Statements. The financial statements of the Bridgeway
Portfolio for the year ended June 30, 2000 ("the Bridgeway Portfolio Financial
Statements"), previously delivered to Large Cap Growth Fund, fairly present the
financial position of the Bridgeway Portfolio as of June 30, 2000 and the
results of its operations and changes in its net assets for the year then ended.
(e) Authority Relative to the Plan. Bridgeway has the power to enter into
the Plan on behalf of the Bridgeway Portfolio and to carry out its obligations
under this Agreement. The execution and delivery of the Plan and the
consummation of the transactions contemplated have been duly authorized by the
Directors of Bridgeway and, except for approval by the holders of its capital
stock, no other proceedings by Bridgeway are necessary to authorize its officers
to effectuate the Plan and the transactions contemplated. The Bridgeway
Portfolio is not a party to or obligated under any charter, by-law, indenture,
or contract provision or any other commitment or obligation, or subject to any
order or decree, which would be violated by its executing and carrying out the
Plan.
(f) Liabilities. There are no liabilities of the Bridgeway Portfolio whether
or not determined or determinable, other than liabilities disclosed or provided
for in the Bridgeway Portfolio Financial Statements and liabilities incurred in
the ordinary course of business subsequent to June 30, 2000, or otherwise
previously disclosed to Large Cap Growth Fund, none of which has been materially
adverse to the business, assets, or results of operations of the Bridgeway
Portfolio.
(g) Litigation. To the knowledge of the Bridgeway Portfolio there are no
claims, actions, suits, or proceedings, pending or threatened, which would
adversely affect the Bridgeway Portfolio or its assets or business, or which
would prevent or hinder consummation of the transactions contemplated by this
Agreement.
(h) Contracts. Except for contracts and agreements previously disclosed to
Large Cap Growth Fund under which no default exists, Bridgeway on behalf of the
Bridgeway Portfolio is not a party to or subject to any material contract, debt
instrument, plan, lease, franchise, license, or permit of any kind or nature
whatsoever.
(i) Taxes. The federal income tax returns of the Bridgeway Portfolio have
been filed for all taxable years to and including the taxable year ended June
30, 2000, and all taxes payable pursuant to such returns have been paid. The
Bridgeway Portfolio has qualified as a regulated investment company under the
Internal Revenue Code with respect to each past taxable year of the Bridgeway
Portfolio since commencement of its operations.
(j) Portfolio Securities. All securities to be listed in the schedule of
investments of the Bridgeway Portfolio as of the Effective Time of the
Reorganization will be owned by Bridgeway on behalf of the Bridgeway Portfolio
free and clear of any liens, claims, charges, options, and encumbrances, except
as indicated in the schedule. Except as so indicated, none of the securities is,
or after the Reorganization as contemplated by this Agreement will be, subject
to any legal or contractual restrictions on disposition (including restrictions
as to the public offering or sale of the securities under the Securities Act),
and all the securities are or will be readily marketable.
(k) Registration Statement. The Bridgeway Portfolio will cooperate with
Large Cap Growth Fund in connection with the Registration Statement referred to
in Section 6(i) of this Agreement, and will furnish to Large Cap Growth Fund the
information relating to the Bridgeway Portfolio required by the Securities Act
and its Regulations to be set forth in the Registration Statement (including the
Prospectus and Statement of Additional Information). At the time the
Registration Statement becomes effective, the Registration Statement, insofar as
it relates to the Bridgeway Portfolio:
(i) will comply in all material respects with the provisions of the
Securities Act and its regulations, and
(ii) will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
Further, at the time the Registration Statement becomes effective, at the time
of the shareholders' meeting referred to in Section 1 and at the Effective Time
of the Reorganization, the Prospectus and Statement of Additional Information,
as amended or supplemented by any amendments or supplements filed by Large
Cap Growth Fund, insofar as it relates to the Bridgeway Portfolio, will not
contain an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the
representations and warranties in this subsection shall apply only to statements
in or omissions from the Registration Statement or Prospectus and Statement of
Additional Information made in reliance upon and in conformity with information
furnished by the Bridgeway Portfolio for use in the Registration Statement or
Prospectus and Statement of Additional Information as provided in this Section
7(k).
8. CONDITIONS TO OBLIGATIONS OF CALVERT FUND
The obligations of Large Cap Growth Fund under this Agreement with respect to
the consummation of the Reorganization are subject to the satisfaction of the
following conditions:
(a) Representations, Warranties, and Agreements. As of the Effective Time of
the Reorganization, the Bridgeway Portfolio shall have complied with each of its
obligations under this Agreement, each of the representations and warranties
contained in this Agreement shall be true in all material respects, and there
shall have been no material adverse change in the financial condition, results
of operations, business, properties or assets of the Bridgeway Portfolio since
June 30, 2000. Large Cap Growth Fund shall have received a certificate from the
Bridgeway Portfolio satisfactory in form and substance to Large Cap Growth Fund
indicating that it has met the terms stated in this Section.
(b) Regulatory Approval. All necessary orders of exemption under the Act
with respect to the transactions contemplated by this Agreement shall have been
granted by the Commission, and all approvals, registrations, and exemptions
under state securities laws considered to be necessary shall have been obtained.
(c) Tax Opinion. Large Cap Growth Fund shall have received the opinion of
counsel, dated the Effective Time of the Reorganization, addressed to and in
form and substance satisfactory to Large Cap Growth Fund, as to certain of the
federal income tax consequences of the Reorganization under the Internal Revenue
Code to the Bridgeway Portfolio and the shareholders of the Bridgeway Portfolio.
For purposes of rendering its opinion, counsel may rely exclusively and without
independent verification, as to factual matters, on the statements made in the
Plan, the proxy statement which will be distributed to the shareholders of the
Bridgeway Portfolio in connection with the Reorganization, and on such other
written representations as the Bridgeway Portfolio and Large Cap Growth Fund,
respectively, will have verified as of the Effective Time of the Reorganization.
The opinion of counsel will be to the effect that, based on the facts and
assumptions stated therein, for federal income tax purposes:
(i) neither the Bridgeway Portfolio nor Large Cap Growth Fund will
recognize any gain or loss upon the transfer of the assets of the Bridgeway
Portfolio to, and the assumption of its liabilities by, Large Cap Growth Fund in
exchange for Large Cap Growth Fund Shares and upon the distribution (whether
actual or constructive) of Large Cap Growth Fund Shares to its shareholders in
exchange for their shares of beneficial interest of the Bridgeway Portfolio;
(ii) the shareholders of the Bridgeway Portfolio who receive Large Cap
Growth Fund Shares pursuant to the Reorganization will not recognize any gain or
loss upon the exchange (whether actual or constructive) of their shares of
capital stock of the Bridgeway Portfolio for Large Cap Growth Fund Shares
(including any fractional share interests they are deemed to have received)
pursuant to the Reorganization;
(iii) the basis of Large Cap Growth Fund Shares received by the
Bridgeway Portfolio's shareholders will be the same as the basis of the shares
of capital stock of the Bridgeway Portfolio surrendered in the exchange; and
(iv) the basis of the Bridgeway Portfolio assets acquired by Large Cap
Growth Fund will be the same as the basis of such assets to the Bridgeway
Portfolio immediately prior to the Reorganization.
(d) Opinion of Counsel. Large Cap Growth Fund shall have received the
opinion of counsel for the Bridgeway Portfolio, dated the Effective Time of the
Reorganization, addressed to and in form and substance satisfactory to Large Cap
Growth Fund, to the effect that:
(i) Bridgeway is an open-end management company registered under the
Securities Act of 1933 and the Investment Company Act of 1940, and is duly
organized and validly existing in good standing under the laws of the State of
Maryland;
(ii) the Bridgeway Portfolio is a series of Bridegway; and
(iii) The Agreement and Plan of Reorganization and the execution and
filing of the Plan have been duly authorized and approved by all requisite
action by the Board of Directors of Bridegway, and the Plan has been duly
executed and delivered by Bridegway and is a valid and binding obligation of
Bridegway and its series, the Bridgeway Portfolio.
9. CONDITIONS TO OBLIGATIONS OF BRIDGEWAY FUND
The obligations of the Bridgeway Portfolio under this Agreement with respect to
the consummation of the Reorganization are subject to the satisfaction of the
following conditions:
(a) Shareholder Approval. The Plan shall have been approved by the
affirmative vote of two thirds of all the votes entitled to be cast on the
matter.
(b) Representations, Warranties and, Agreements. As of the Effective Time of
the Reorganization, Large Cap Growth Fund shall have complied with each of its
responsibilities under this Agreement, each of the representations and
warranties contained in this Agreement shall be true in all material respects,
and there shall have been no material adverse change in the financial condition,
results of operations, business, properties, or assets of Large Cap Growth Fund
since September 30, 2000. As of the Effective Time of the Reorganization, the
Bridgeway Portfolio shall have received a certificate from Large Cap Growth Fund
satisfactory in form and substance to the Bridgeway Portfolio indicating that it
has met the terms stated in this Section.
(c) Regulatory Approval. The Registration Statement referred to in Section
6(i) shall have been declared effective by the Commission and no stop orders
under the Securities Act pertaining thereto shall have been issued; all
necessary orders of exemption under the Act with respect to the transactions
contemplated by this Agreement shall have been granted by the Commission; and
all approvals, registrations, and exemptions under federal and state laws
considered to be necessary shall have been obtained.
(d) Tax Opinion. The Bridgeway Portfolio shall have received the opinion of
counsel, dated the Effective Time of the Reorganization, addressed to and in
form and substance satisfactory to the Bridgeway Portfolio, as to certain of the
federal income tax consequences of the Reorganization under the Internal Revenue
Code to Large Cap Growth Fund and its shareholders. For purposes of rendering
its opinion, counsel may rely exclusively and without independent verification,
as to factual matters, on the statements made in the Plan, the proxy statement
which will be distributed to the shareholders of the Bridgeway Portfolio in
connection with the Reorganization, and on such other written representations as
the Bridgeway Portfolio and Large Cap Growth Fund, respectively, will have
verified as of the Effective Time of the Reorganization. The opinion of counsel
will be to the effect that, based on the facts and assumptions stated therein,
for federal income tax purposes:
(i) neither the Bridgeway Portfolio nor Large Cap Growth Fund will
recognize any gain or loss upon the transfer of the assets of the Bridgeway
Portfolio to and the assumption of its liabilities by Large Cap Growth Fund in
exchange for Large Cap Growth Fund Shares and upon the distribution (whether
actual or constructive) of Large Cap Growth Fund Shares to its shareholders in
exchange for their shares of capital stock of the Bridgeway Portfolio;
(ii) the shareholders of the Bridgeway Portfolio who receive Large Cap
Growth Fund Shares pursuant to the Reorganization will not recognize any gain or
loss upon the exchange (whether actual or constructive) of their shares of
capital stock of the Bridgeway Portfolio for Large Cap Growth Fund Shares
(including any fractional share interests they are deemed to have received)
pursuant to the Reorganization;
(iii) the basis of Large Cap Growth Fund Shares received by the
Bridgeway Portfolio's shareholders will be the same as the basis of the shares
of capital stock of the Bridgeway Portfolio surrendered in the exchange; and
(iv) the basis of the Bridgeway Portfolio assets acquired by Large Cap
Growth Fund will be the same as the basis of such assets to the Bridgeway
Portfolio immediately prior to the Reorganization.
(e) Opinion of Counsel. The Bridgeway Portfolio shall have received the
opinion of counsel for Large Cap Growth Fund, dated the Effective Time of the
Reorganization, addressed to and in form and substance satisfactory to the
Bridgeway Portfolio, to the effect that:
(i) Calvert is an open-end management company registered under the
Securities Act of 1933 and the Investment Company Act of 1940, and is duly
organized and validly existing in good standing under the laws of the State of
Maryland;
(ii) Large Cap Growth Fund is a series of Calvert;
(iii) The Agreement and Plan of Reorganization and the execution and
filing of the Plan have been duly authorized and approved by all requisite
action by the Board of Directors of Calvert, and the Plan has been duly executed
and delivered by Large Cap Growth Fund and is a valid and binding obligation of
Calvert and its series, Large Cap Growth Fund;
(iv) Large Cap Growth Fund shares to be issued pursuant to the
Reorganization have been duly authorized and upon issuance thereof in accordance
with the Plan will be validly issued, fully paid and non-assessable shares of
beneficial interest of Large Cap Growth Fund.
10. AMENDMENTS, TERMINATIONS, NON-SURVIVAL OF COVENANTS, WARRANTIES
AND REPRESENTATIONS
(a) The parties hereto may, by agreement in writing authorized by the Board
of Directors of either party, amend the Plan at any time before or after
approval of the Plan by shareholders of the Bridgeway Portfolio, but after such
approval, no amendment shall be made that substantially changes the terms of
this Agreement.
(b) At any time prior to the Effective Time of the Reorganization, any of
the parties may by written instrument signed by it: (i) waive any inaccuracies
in the representations and warranties made pursuant to this Agreement, and (ii)
waive compliance with any of the covenants or conditions made for its benefit
pursuant to this Agreement.
(c) the Bridgeway Portfolio may terminate the Plan at any time prior to the
Effective Time of the Reorganization by notice to Large Cap Growth Fund if: (i)
a material condition to its performance under this Agreement or a material
covenant of Large Cap Growth Fund contained in this Agreement is not fulfilled
on or before the date specified for the fulfillment thereof, or (ii) a material
default or material breach of the Plan is made by Large Cap Growth Fund.
(d) Large Cap Growth Fund may terminate the Plan at any time prior to the
Effective Time of the Reorganization by notice to the Bridgeway Portfolio if:
(i) a material condition to its performance under this Agreement or a material
covenant of the Bridgeway Portfolio contained in this Agreement is not fulfilled
on or before the date specified for the fulfillment thereof, or (ii) a material
default or material breach of the Plan is made by the Bridgeway Portfolio.
(e) The Plan may be terminated by either party at any time prior to the
Effective Time of the Reorganization upon notice to the other party, whether
before or after approval by the shareholders of the Bridgeway Portfolio, without
liability on the part of either party hereto or its respective directors,
officers, or shareholders, and shall be terminated without liability as of the
close of business on June 30, 2000 if the Effective Time of the Reorganization
is not on or prior to such date.
(f) No representations, warranties, or covenants in or pursuant to the Plan
shall survive the Reorganization.
(g) All notices and other communications under this Agreement shall be: (i)
in writing, (ii) delivered by hand, by registered or certified mail, return
receipt requested, by overnight delivery service or by facsimile transmission to
the address or facsimile number set forth below or such address of facsimile
number as either party shall specify by a written notice to the other and (iii)
deemed given upon receipt.
(i) Notice to Calvert: Calvert Group, Ltd.
4550 Montgomery Avenue, Suite 1000N
Bethesda, MD 20814
Attn: General Counsel
(ii) Notice to Bridgeway: Bridgeway Fund, Inc.
5615 Kirby Drive, Suite 518
Houston, TX 77005-2448
11. EXPENSES
The Bridgeway Portfolio and Large Cap Growth Fund will bear their own expenses
incurred in connection with this Reorganization.
12. GENERAL
This Plan supersedes all prior agreements between the parties (written or oral),
is intended as a complete and exclusive statement of the terms of the Plan
between the parties and may not be changed or terminated orally. The Plan may be
executed in one or more counterparts, all of which shall be considered one and
the same agreement, and shall become effective when one or more counterparts
have been executed by each party and delivered to each of the parties hereto.
The headings contained in the Plan are for reference purposes only and shall not
affect in any way the meaning or interpretation of the Plan. Nothing in the
Plan, expressed or implied, is intended to confer upon any other person any
rights or remedies by reason of the Plan.
IN WITNESS WHEREOF, the Bridgeway Portfolio and Large Cap Growth Fund have
caused the Plan to be executed on their behalf by their respective Chairman,
President, or a Vice President, and their seals to be affixed hereto and
attested by their respective Secretary or Assistant Secretary, all as of the day
and year first above written, and to be delivered as required.
(SEAL) BRIDGEWAY SOCIAL RESPONSIBILITY FUND
Attest:
By: /s/ John Montgomery
Name: John Montgomery
Title:
(SEAL) CALVERT LARGE CAP GROWTH FUND
By: /s/ Barbara J Krumsiek
Name: Barbara J. Krumsiek
Title: President
Calvert Impact Fund, Inc.
STATEMENT OF ADDITIONAL INFORMATION
September 22, 2000
Acquisition of the Assets of the
Social Responsibility Portfolio
(a series of the Bridgeway Fund, Inc.)
5615 Kirby Drive, Suite 518
Houston, TX 77005-2448
By and In Exchange for Shares of
Calvert Large Cap Growth Fund
(a series of the Calvert Impact Fund, Inc.)
4550 Montgomery Avenue, Suite 1000N
Bethesda, Maryland 20814
This Statement of Additional Information, relating specifically to the
proposed transfer of all or substantially all of the assets of the Social
Responsibility Portfolio in exchange for shares of the Calvert Large Cap Growth
Fund, consists of this cover page, the Pro Forma Financial Information, and the
Statement of Additional Information of the Calvert Large Cap Growth Fund, dated
September 22, 2000, attached hereto and incorporated by reference.
This Statement of Additional Information is not a prospectus. A
Prospectus/Proxy Statement dated September 25, 2000, relating to the
above-referenced matter may be obtained from Calvert Group, 4550 Montgomery
Avenue, Suite 1000N, Bethesda, Maryland 20814. This Statement of Additional
Information relates to, and should be read in conjunction with, such
Prospectus/Proxy Statement. For information about the Social Responsibility
Portfolio
The Prospectus and Statement of Additional Information of the Social
Responsibility Portfolio are hereby incorporated by reference and are dated
October 31, 1999. You may obtain copies by calling or writing Bridgeway Fund,
Inc. at 5615 Kirby Drive, Suite 518, Houston, Texas 77005-2448 or by calling the
Fund's office at (800) 661-3550.
The date of this Statement of Additional Information is September 22, 2000.
TABLE OF CONTENTS
Investment Policies and Risks 3
Investment Restrictions 11
Dividends, Distributions and Taxes 13
Net Asset Value 14
Calculation of Total Return 14
Purchase and Redemption of Shares 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 20
General Information 21
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 directly, on
foreign markets, or those represented by American Depositary Receipts ("ADRs"),
or other receipts evidencing ownership of foreign securities, such as
International Depository Receipts and Global Depositary Receipts. ADRs are U.S.
dollar-denominated and traded in the U.S. 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. 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 themselves
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 enter 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.
SMALL CAP ISSUERS
The securities of small cap issuers may be less actively traded than the
securities of larger issuers, may trade in a more limited volume, and may change
in value more abruptly than securities of larger companies.
Information concerning these securities may not be readily available so
that the companies may be less actively followed by stock analysts. Small-cap
issuers do not usually participate in market rallies to the same extent as more
widely-known securities, and they tend to have a relatively higher percentage of
insider ownership.
Investing in smaller, new issuers generally involves greater risk than
investing in larger, established issuers. Companies in which the Fund is likely
to invest may have limited product lines, markets or financial resources and may
lack management depth. The securities in such companies may also have limited
marketability and may be subject to more abrupt or erratic market movements than
securities of larger, more established companies or the market averages in
general.
TEMPORARY DEFENSIVE POSITIONS
For temporary defensive purposes, 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. The Fund may invest in money market
instruments of banks, whether foreign or domestic, including obligations of U.S.
branches of foreign banks ("Yankee" instruments) and obligations of foreign
branches of U.S. banks ("Eurodollar" instruments). All such instruments must be
high-quality, US dollar-denominated obligations. Although not subject to foreign
currency risk since they are US dollar-denominated, investments in foreign money
market instruments may involve risks that are different than investments in
securities of U.S. issuers. See "Foreign Securities" above. The Fund's
investments in temporary defensive positions are generally not FDIC insured,
even though a bank may be the issuer.
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. The Fund may have a decreased return
in a repurchase agreement if the repurchase rate is less than the return the
Fund might have received if it bought the instrument directly, although any cash
position invested in a repurchase agreement will not be exposed to market and
interest rate risk that the direct investment would have had. 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 portfolio 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.
HIGH SOCIAL IMPACT AND SPECIAL EQUITIES INVESTMENTS
The Fund will not purchase debt securities other than High Social Impact
Investments (or money market instruments). The High Social Impact Investments
program targets a percentage of the Fund's assets 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 securities are unrated - they are expected to be the
equivalent of non-investment grade debt securities - that is, 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.) The annual
return on High Social Impact Investments is between 0% and 4%. Thus, rather than
earning a higher rate, as would be expected, to compensate for higher the risk
(i.e., lower credit quality), they earn a rate of return that is lower than the
rate currently earned by high quality U.S. Treasury securities. There is no
secondary market for these securities.
The Fund expects to purchase all of its High Social Impact Investments in
notes issued by the Calvert Social Investment Foundation, 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. The Foundation
prepares its own careful credit analysis to attempt to identify those community
development issuers whose financial condition is adequate to meet future
obligations or is expected to be adequate in the future. Through portfolio
diversification and credit analysis, investment risk can be reduced, although
there can be no assurance that losses will not occur. The Foundation maintains a
certain required level of capital upon which the Fund could rely if a note were
ever to default.
With respect to the Special Equities program, the Fund has not set a
specific investment restriction or limit on the amount of such investments
although, as an illiquid security, the Fund will only make investments within
the 15% limit on illiquid securities (See, "Investment Restrictions" below), and
in fact, expects any such investments to be far below this limit.
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 non-investment grade debt securities, rated or unrated, the
Advisor and/or Subadvisor prepares its own careful credit analysis to attempt to
identify those issuers whose financial condition is adequate to meet future
obligations or is expected to be adequate in the future. Through portfolio
diversification and credit analysis, investment risk can be reduced, although
there can be no assurance that losses will not occur.
DERIVATIVES
The 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 investment objective, purchase put and call
options and engage in the writing of covered call options and secured put
options on securities, and employ a variety of other investment techniques.
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. They will not engage in such transactions for the purposes of
speculation or leverage. Such investment policies and techniques may involve a
greater degree of risk than those inherent in more conservative investment
approaches.
The 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. 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, a 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. 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 a Fund is obligated as the
writer of a call option, that Fund will own the underlying security subject to
the option and, in the case of put options, that 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 a 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 a 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 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.
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 a 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 its
existing investment positions and not for income enhancement, speculation or
leverage purposes.
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 its portfolio 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 a 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 portfolio securities. However, although
this might occur for a brief period or to a slight degree, the value of a
diversified portfolio will tend to move in the direction of the market
generally.
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 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 US 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 the Fund's total assets and except by engaging in reverse
repurchase agreements. 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 the Fund's investment objective and policies, either directly from the
issuer, or from an underwriter for an issuer, may be deemed an underwriting.
(5) The Fund may not invest directly in commodities or real estate, although the
Fund may invest in financial futures, and 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. 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.
Under current law, a diversified investment company, with respect to 75% of its
assets, can invest no more than 5% of its assets in the securities of any one
issuer, and may not acquire more than 10% of the voting securities of any
issuer. Under current law, "concentrate" means the Fund cannot invest 25% or
more in the securities of issuers primarily engaged in any one industry. Under
current law the Fund may underwrite securities only in compliance with the
conditions of Section 10(f) of the Investment Company Act and the rules
thereunder.
Nonfundamental Investment Restrictions
The Fund 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 purchase securities on margin, except such short-term
credits as may be necessary for the clearance of transactions.
(2) The Fund may not make short sales of securities or maintain a short position
if such sales or positions exceed 20% of total assets under management.
(3) 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.
(4) The Fund may not invest in options or futures on individual commodities if
the aggregate initial margins and premiums required to establish such positions
exceed 2% of the Fund's net assets.
(5) The Fund may not invest in more than 5% of the value of its net assets in
warrants (included in that amount, but not to exceed 2% of the value of the
Fund's net assets, may be warrants which are not listed on the New York or
American Stock Exchange).
(6) The Fund may not purchase illiquid securities if more than 15% of the value
of the Fund's net assets would be invested in such securities.
(7) 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 its total assets.
(8) 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.
(9) The Fund may not purchase the obligations of foreign issuers, if as a
result, foreign securities would exceed 10% of the value of the Fund's net
assets.
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.
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 and pay
taxes on its income and gains, rather than passing through its income and gains
to shareholders so that shareholders also would pay taxes on these same income
and gains.
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.
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% of each reportable 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 value fluctuates based on the respective value of the Fund's
investments. The net asset value per share for each class is determined every
business day at 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.
Calculation of total return
---------------------------
Total Return and Other Quotations
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 ("return with maximum load"), except quotations of return "without
maximum load," or "at NAV" (or "without CDSC") which do not deduct sales charge.
Thus, in the formula above, for return without maximum load, P = the entire
$1,000 hypothetical initial investment and does not reflect the deduction of any
sales charge; for return with maximum load, P = a hypothetical initial
investment of $1,000 less any sales charge actually imposed at the beginning of
the period for which the performance is being calculated. Class I shares do not
have a sales charge.
purchase and redemption of shares
---------------------------------
Share certificates will not be issued unless requested in writing by the
investor. If share certificates have been issued, then the certificate must be
delivered to the Fund's transfer agent with any redemption request. This could
result in delays. If the certificates have been lost, the shareholder will have
to pay to post an indemnity bond in case the original certificates are later
presented by another person. No certificates will be issued for fractional
shares.
The Fund has filed a notice of election under rule 18f-1 with the
Commission. The notice states that the Fund may honor redemptions that, during
any 90-day period, exceed $250,000 or 1% of the nest assets value of the Fund,
whichever is less, by redemptions-in-kind (distributions of a pro rata share of
the portfolio securities, rather than cash.)
Fund shares shall be distributed through the distributor and third party
brokers. See the prospectus for more details on purchases and redemptions.
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. Business information
is provided below about the Fund's Directors and Officers.
Principal
Occupation(s) During
Name, Address & Date of Birth Position with Fund Last 5 years
REBECCA ADAMSON, DOB: 9/10/47 Director President of the
National non-profit,
First Nations
Financial Project.
- --------
MILES DOUGLAS HARPER, III Director Gainer Donnelly &
Desroches since
January 1999.
Prior to that Mr.
Harper was Vice
President, Wood,
Harper, PC.
since 1991
- -----------
JOY V. JONES, Esq., DOB: 7/2/50 Director Attorney and
entertainment
manager in New
York City.
-------- -----------------------------------------------------------
* BARBARA J. KRUMSIEK, DOB: 08/09/52 Director President, Chief
Executive Officer
and Vice Chairman
of Calvert Group,
Ltd. Prior to
joining Calvert Group
in 1997, Ms. Krumsiek
had served as a
Managing Director of
Alliance Fund
Distributors, Inc.
since 1974.
-----------------------------------------------------------------------------
* D. Wayne Silby, DOB: 7/20/48 Director President of Calvert
Social Investment
Fund. Mr. Silby is
also Executive
Chairman of Group
Serve, Inc., an
internet company
focused on
community building
collaborative tools.
- ------------------------------------------
Reno J. Martini, DOB: 1/13/50 Officer Senior Vice President
of Calvert
Group, Ltd., Senior
Vice President and
Chief Investment
Officer of Calvert
Asset Management
Company, Inc., and
director and
President of
Calvert-Sloan
Advisers, L.L.C.
- ------
Ronald M. Wolfsheimer, CPA, DOB: 7/24/52 Officer Senior Vice President
and Chief Financial
Officer of Calvert
Group, Ltd.
--------------------------------------------------------
* William M. Tartikoff, Esq. DOB: 8/12/47. Director Senior Vice
President, Secretary,
and General Counsel
of Calvert Group,
Ltd.
----------------------------------------------------------------
SUSAN Walker Bender, Esq., DOB: 1/29/59. Officer Associate General
Counsel of Calvert
Group, Ltd.
-----------------------------
IVY WAFFORD DUKE, Esq., DOB: 09/07/68 Officer Associate General
Counsel of Calvert
Group, Ltd. Prior to
joining Calvert Group
in 1996, Ms. Duke had
been an Associate
in the Investment
Management Group of
the Business and
Finance Department
at Drinker Biddle
& Reath since 1993.
- -------------------------------------------------------
VICTOR FRYE, Esq., DOB: 10/15/58. Officer Counsel and Compliance
Officer of Calvert
Group, Ltd. Prior to
joining Calvert Group
in 1999, Mr. Frye had
been Counsel and
Manager of the
Compliance Department
at The Advisors Group
since 1986.
- -----
JENNIFER STREAKS, Esq., DOB: 08/02/71 Officer Assistant General
Counsel of Calvert
Group, Ltd. Prior to
joining Calvert Group
in 1999, Ms. Streaks
had been a
Regulatory Analyst
in the Market
Regulation Department
of the National
Association of
Securities Dealers
since 1997. Prior to
this, Ms. Streaks had
been a law clerk
to the Honorable
Maurice Foley at the
U.S. Tax Court for
the year since
graduating from
Howard University
School of Law, where
she was a student
1993-1996.
- -------------------
MICHAEL V. YUHAS JR., CPA DOB: 08/04/61 Officer Director of Fund
Administration of
Calvert Group, Ltd.
- -----------------------------------------
The address of Director and Officers, unless otherwise noted, is 4550
Montgomery Avenue, Suite 1000N, Bethesda, Maryland 20814. Directors and officers
of the Fund as a group own less than 1% of any class of each Portfolio's
outstanding shares. Directors marked with an *, above, are "interested persons"
of the Fund, under the Investment Company Act of 1940.
Directors of the Fund not affiliated with the Advisor presently receive an
annual fee of $5,000 for service as a member of the Board of Directors of the
Calvert Group of Funds.
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"). Acacia is 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 Fund with
investment supervision and management, and office space; furnishes executive and
other personnel to the Fund; and pays the salaries and fees of all 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; fund
accounting fees; federal and state securities registration fees; salaries, fees
and expenses of 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.
The Advisor has agreed to limit annual fund operating expenses (net of any
expense offset arrangements and exclusive of any performance fee adjustment)
through November 1, 2001. The contractual expense cap is 1.50% for Class A,
2.50% for Class B, 2.50% for Class C and 0.90% for Class I. For the purposes of
this expense limit, operating expenses do not include interest expense,
brokerage commissions, extraordinary expenses, taxes and capital items. The Fund
has an offset arrangement with the custodian bank whereby the custodian and the
transfer agent fees may be paid indirectly by credits on the Fund's uninvested
cash balances. These credits are used to reduce the Fund's expenses.
For its services, the Advisor receives an annual fee, payable monthly, of
0.25% of the Fund's average daily net assets. Advisory fees are allocated among
classes as a Portfolio-level expense based on net assets.
Subadvisor
Bridgeway Capital Management Inc. ("Bridgeway") is controlled by John
Montgomery and his family. The Subadvisor receives a subadvisory fee, paid by
the Fund. The subadvisory fee, payable monthly, is 0.45% of the Fund's average
annual daily net assets managed by the Subadvisor plus or minus a performance
fee adjustment of 0.25%.
The Fund has received an exemptive order 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.
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
0.20% 0.10%
Administrative services fee are allocated among classes 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 Fund, 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 of its shares. Such expenses
may not exceed, on an annual basis, 0.25% 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 I has no Distribution Plan. 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. Distribution
Plan expenses may be spent for advertising, printing and mailing of prospectuses
to persons who are not already Fund shareholders, compensation to
broker/dealers, underwriters, and salespersons, and, for Class B, interest and
finance charges.
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 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 a
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 may pay certain firms compensation based on sales of Fund
shares or on assets held in those Firm's accounts for their marketing and
distribution of the Fund shares, above the usual sales charges and service fees.
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 class. These fees are
paid pursuant to the Fund's Distribution Plan.
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.
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 (i.e., 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, CSSI receives a fee of $6 per shareholder account and
$0.65 per transaction.
portfolio transactions
----------------------
Fund transactions are undertaken on the basis of their desirability from an
investment standpoint. The Fund's Advisor and Subadvisor 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 portfolio transactions on behalf of the Fund are
selected on the basis of their execution capability and trading expertise
considering, among other factors, the overall reasonableness of the brokerage
commissions, current market conditions, size and timing of the order, difficulty
of execution, per share price, market familiarity, reliability, integrity, and
financial condition, subject to the Advisor/Subadvisor obligation to seek best
execution. The Advisor or Subadvisor may also consider sales of Fund shares as a
factor in the selection of brokers, again, subject to best execution (i.e., the
Fund will not "pay up" for such transactions.)
While the Fund's Advisor and Subadvisor 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 of the Fund. Such services include
portfolio attribution systems, return-based style analysis, and trade-execution
analysis.
The Advisor and/or Subadvisor may also direct selling concessions and/or
discounts in fixed-price offerings for research services.
If, in the judgment of the Advisor or Subadvisor, 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.
general information
-------------------
The Fund is a series of Calvert Impact Fund, Inc., an open-end management
investment company organized as a Maryland corporation on August 10, 2000. The
Fund is diversified. 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 of a Fund you own. Matters affecting classes
differently, such as Distribution Plans, will be voted on separately by class.
part c. Other information
Item 15. Indemnification (from calvert)
Item 16. Exhibits
1. Articles of incorporation.
2. By-laws
3. Inapplicable.
4. Agreement and plan of reorganization filed herewith--
exhibit a to the form n-14
5. Specimen stock certificate for calvert impact fund, inc.
6. Investment advisory contract and sub investment advisory contract
7. Underwriting agreement
8. Directors' deferred compensation agreement
9. Custodial contract
10. Plan of distribution
11. Inapplicable
12. Opinion and consent of counsel on tax matters to be filed by amendment
13. Transfer agency contract
14. Consent of independent auditors, to be filed by amendment
15. Inapplicable
16. Copies of power of attorney forms filed herewith
17. (a) current bridgeway fund, inc. Prospectus incorporated by reference
(b) current bridgeway fund, inc. Statement of additional information
Incorporated by reference.
18. Undertakings:
(1) the undersigned registrant agrees that prior to any public reoffering of
The securities registered through the use of a prospectus which is a part of
This registration statement by any person or party who is deemed to be an
Underwriter within the meaning of rule (145(c) of the securities act of 1933,
The reoccurring prospectus will contain the information called for by the
Applicable registration form for re offerings by persons who may be deemed
Underwriters, in addition to the information called for by the other items of
The applicable form.
(2) the undersigned registrant agrees that every prospectus that is filed
Under paragraph (1) above will be filed as a part of an amendment to the
Registration statement and will not be used until the amendment is effective,
And that, in determining any liability under the 1933 act, each post-effective
Amendment shall be deemed to be a new registration statement for the securities
Offered therein, and the offering of the securities at that time shall be deemed
To be the initial bona fide offering of them.
(3) the registrant hereby amends this registration statement on such date or
Dates as may be necessary to delay its effective date until the registrant shall
File a further amendment which specifically states that this registration
Statement shall thereafter become effective in accordance with section 8(a) of
The securities act of 1933 or until the registration statement shall become
Effective on such date as the commission acting pursuant to said section 8(a),
May determine.
signatures
Pursuant to the requirements of the securities act of 1933, this registration
Statement has been signed on behalf of the registrant by the undersigned,
Thereto duly authorized in the city of bethesda, and the state of maryland on
The 22nd day of august, 2000.
calvert impact fund, inc.
by: /s/ barbara krumsiek
barbara krumsiek, president