SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e) (2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CMG Fund Trust;
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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CMG Fund Trust CMG Fund Trust
CMG Core Bond Fund CMG Mortgage and Asset-Backed Securities Fund
CMG Enhanced S&P 500 Index Fund CMG Short Term Bond Fund
CMG High Yield Fund CMG Small Cap Fund
CMG International Stock Fund CMG Small Cap Growth Fund
CMG Large Cap Growth Fund CMG Small Cap Value Fund
CMG Large Cap Value Fund CMG Small/Mid Cap Fund
CMG Mid Cap Growth Fund CMG Strategic Equity Fund
CMG Mid Cap Value Fund CMG Ultra Short Term Bond Fund
(each, a "Fund"; and collectively, the "Funds")
One Financial Center
Boston, Massachusetts 02111-2621
(617) 426-3750
[ ], 2005
Dear Shareholder:
I am writing to you to ask for your vote on the following important
matters that affect your investment in the Funds: (1) the election of Trustees
for your Fund; (2) the approval of amendments to and the elimination of certain
fundamental investment restrictions of your Fund; and (3) the approval of a
change in legal entity for your Fund. If approved, each of these proposals will
serve to facilitate efficient administration of and compliance monitoring for
your Fund.
Included in this booklet is information about the upcoming meeting of
shareholders of the Funds (the "Special Meeting"):
- A NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF EACH OF THE FUNDS, which
summarizes the issues on which you are being asked to vote; and
- A PROXY STATEMENT FOR THE SPECIAL MEETING, which provides more detailed
information on the specific issues being considered at the Special
Meeting.
ALSO ENCLOSED ARE YOUR BALLOT AND POSTAGE-PAID RETURN ENVELOPE.
Although we would like very much to have each shareholder attend this
meeting, we realize that it may not be possible. Whether or not you plan to be
present, we need your vote. We urge you to record your voting instructions by
telephone, via the Internet or by completing, signing and returning the enclosed
proxy card(s) promptly. A postage-paid envelope is enclosed for mailing, and
Internet voting instructions are listed at the top of your proxy card(s).
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Your vote is important. A prompt response on your part will help to ensure
that your interests are represented. If you have any questions about the
proposals, please call a Columbia customer service representative at (800)
426-3750 or contact your financial advisor.
Sincerely yours,
Christopher L. Wilson
President
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CMG Fund Trust CMG Fund Trust
CMG Core Bond Fund CMG Mortgage and Asset-Backed Securities Fund
CMG Enhanced S&P 500 Index Fund CMG Short Term Bond Fund
CMG High Yield Fund CMG Small Cap Fund
CMG International Stock Fund CMG Small Cap Growth Fund
CMG Large Cap Growth Fund CMG Small Cap Value Fund
CMG Large Cap Value Fund CMG Small/Mid Cap Fund
CMG Mid Cap Growth Fund CMG Strategic Equity Fund
CMG Mid Cap Value Fund CMG Ultra Short Term Bond Fund
One Financial Center,
Boston, Massachusetts 02111-2621
(617) 426-3750
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 16, 2005
To the Shareholders of the Funds.
NOTICE IS HEREBY GIVEN that the Special Meeting of Shareholders of the Funds
will be held at the offices of the Funds at One Financial Center, Boston,
Massachusetts, on September 16, 2005, at 10:00 a.m. Boston time. The purpose of
the Meeting is to consider and act upon the following matters:
1. To elect your Fund's nominees for Trustees. (TO BE VOTED UPON BY THE
SHAREHOLDERS OF EACH FUND. ALL SHAREHOLDERS OF CMG FUND TRUST WILL VOTE
TOGETHER.)
2. To approve amendments to and the elimination of certain fundamental
investment restrictions of your Fund. (TO BE VOTED UPON BY THE
SHAREHOLDERS OF EACH AFFECTED FUND, VOTING SEPARATELY BY FUND AND
SEPARATELY ON EACH PROPOSED AMENDMENT OR ELIMINATION.)
3. To approve the reorganization of each Fund (a "Reorganization") into a
separate, corresponding series (a "New Fund") of [Columbia Institutional
Trust], a Massachusetts business trust (the "Acquiring Trust"), pursuant
to an Agreement and Plan of Reorganization (a "Plan") of the Fund
providing for, and the authorization of certain related actions involving,
(i) the transfer of all of the assets of the Fund to the corresponding New
Fund, in exchange for shares of the corresponding New Fund and the
assumption by the corresponding New Fund of all of the liabilities of the
Fund, and (ii) the distribution of such shares to the shareholders of the
Fund in complete liquidation of the Fund, and (iii) the dissolution under
state law of the Fund. (TO BE VOTED UPON BY THE SHAREHOLDERS OF EACH FUND,
VOTING SEPARATELY BY FUND.)
4. To transact such other business as may properly come before the Meeting,
or any adjournment(s) thereof.
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The Board of Trustees (the "Board") has fixed the close of business on July 8,
2005, as the record date for the determination of the shareholders of the Funds
entitled to notice of, and to vote at, the Meeting and any adjournments thereof.
THE BOARD RECOMMENDS THAT YOU VOTE FOR ALL OF THE PROPOSALS.
By order of the Board,
R. Scott Henderson
Secretary of the Funds
[ ], 2005
NOTICE: YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
PLEASE SEE THE ENCLOSED PROSPECTUS/PROXY STATEMENT AND OTHER MATERIALS FOR
INSTRUCTIONS ON HOW TO VOTE EASILY AND QUICKLY.
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CMG Fund Trust CMG Fund Trust
CMG Core Bond Fund (CBF) CMG Mortgage and Asset-Backed Securities Fund (MABSF)
CMG Enhanced S&P 500 Index Fund (ESPIF) CMG Short Term Bond Fund (STBF)
CMG High Yield Fund (HYF) CMG Small Cap Fund (SCF)
CMG International Stock Fund (ISF) CMG Small Cap Growth Fund (SCGF)
CMG Large Cap Growth Fund (LCGF) CMG Small Cap Value Fund (SCVF)
CMG Large Cap Value Fund (LCVF) CMG Small/Mid Cap Fund (SMCF)
CMG Mid Cap Growth Fund (MCGF) CMG Strategic Equity Fund (SEF)
CMG Mid Cap Value Fund (MCVF) CMG Ultra Short Term Bond Fund (USTBF)
One Financial Center,
Boston, Massachusetts 02111-2621
(617) 426-3750
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PROXY STATEMENT
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FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON SEPTEMBER 16, 2005
This Proxy Statement is being furnished in connection with the solicitation of
proxies by the Board of Trustees (the "Board" or the "Trustees") of the Funds
for use at the special meeting of the shareholders of the Funds (the "Meeting")
to be held at the offices of the Funds, One Financial Center, Boston,
Massachusetts, on September 16, 2005, at 10:00 a.m. Boston time, and at any
adjournment(s) thereof, for the purposes set forth in the accompanying Notice of
Special Meeting of Shareholders (the "Notice"). The Notice, this Proxy Statement
and the enclosed proxy card are first being mailed, or otherwise being made
available, to shareholders on or about July 28, 2005. Please read this Proxy
Statement and keep it for future reference.
The Meeting has been called for the purpose of having the shareholders of the
Funds consider and take action upon the proposals listed in the Notice (the
"Proposals"). This Proxy Statement contains information you should know before
voting on the Proposals. As described in greater detail below, while
shareholders are being asked to amend and eliminate certain "fundamental"
investment restrictions, this is being done solely to facilitate compliance
testing through standardization and to enhance future flexibility. The Funds'
investment advisor, Columbia Management Advisors, Inc. ("Columbia Management")
has no present intention of changing the way that the Funds are managed in
response to these proposals. The following is a list of the Proposals presented
in this Proxy Statement and the Funds that are affected by such Proposals:
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PROPOSAL AFFECTED FUNDS
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Proposal 1: To approve the election of TRUSTEES. All Funds
Proposal 2.A.: To approve an amendment to certain Funds' All Funds
fundamental investment restrictions with respect to
borrowing money, pledging assets and issuing senior
securities.
Proposal 2.B.: To approve an amendment to certain Funds' All Funds
fundamental investment restrictions with respect to
making loans.
Proposal 2.C.: To approve an amendment to certain Funds' CMG High Yield Fund
fundamental investment restrictions with respect to CMG International Stock Fund
diversification of investments. CMG Short Term Bond Fund
CMG Small Cap Fund
CMG Small/Mid Cap Fund
CMG Ultra Short Term Bond Fund
Proposal 2.D.: To approve an amendment to certain Funds' All Funds
fundamental investment restrictions with respect to
investments in commodities.
Proposal 2.E.: To approve an amendment to certain Funds' All Funds
fundamental investment restrictions with respect to
investments in real estate.
Proposal 2.F.: To approve an amendment to certain Funds' All Funds
fundamental investment restrictions with respect to
underwriting of securities.
Proposal 2.G.: To approve the elimination of certain CMG Core Bond Fund
Fund's fundamental investment restrictions with respect CMG High Yield Fund
to purchasing securities on margin. CMG Short Term Bond Fund
CMG Ultra Short Term Bond Fund
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Proposal 2.H.: To approve the elimination of certain CMG Core Bond Fund
Funds' fundamental investment restrictions with respect CMG High Yield Fund
to investing for the purpose of exercising control. CMG International Stock Fund
CMG Short Term Bond Fund
CMG Small Cap Fund
CMG Small/Mid Cap Fund
CMG Ultra Short Term Bond Fund
Proposal 2.I.: To approve the elimination of certain CMG Core Bond Fund
Funds' fundamental investment restrictions with respect CMG High Yield Fund
to short sales. CMG International Stock Fund
CMG Short Term Bond Fund
CMG Small Cap Fund
CMG Small/Mid Cap Fund
CMG Ultra Short Term Bond Fund
Proposal 2.J.: To approve an amendment to certain Funds' CMG Core Bond Fund
fundamental investment restrictions with respect to CMG Enhanced S&P 500 Index Fund
concentrating investments in an industry. CMG High Yield Fund
CMG International Stock Fund
CMG Large Cap Growth Fund
CMG Large Cap Value Fund
CMG Mid Cap Growth Fund
CMG Mid Cap Value Fund
CMG Short Term Bond Fund
CMG Small Cap Fund
CMG Small Cap Growth Fund
CMG Small Cap Value Fund
CMG Small/Mid Cap Fund
CMG Strategic Equity Fund
CMG Ultra Short Term Bond Fund
Proposal 2.K.: To approve the elimination of certain CMG Core Bond Fund
Funds' fundamental investment restrictions with respect CMG High Yield Fund
to purchasing securities of companies less than three CMG International Stock Fund
years old. CMG Short Term Bond Fund
CMG Small Cap Fund
CMG Small/Mid Cap Fund
CMG Ultra Short Term Bond Fund
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Proposal 2.L.: To approve the elimination of certain CMG High Yield Fund
Funds' fundamental investment restrictions with respect
to investing in securities of other investment companies.
Proposal 2.M.: To approve the elimination of certain CMG Core Bond Fund
Funds' fundamental investment restrictions with respect CMG High Yield Fund
to purchasing or holding the securities of any company, CMG Short Term Bond Fund
if securities of such company are owned by officers or CMG Ultra Short Term Bond Fund
directors of the fund and of its advisor.
Proposal 2.N.: To approve the elimination of certain CMG International Stock Fund
Funds' fundamental investment restrictions with respect CMG Small Cap Fund
to buying and selling puts and calls. CMG Small/Mid Cap Fund
Proposal 2.O.: To approve the elimination of certain CMG High Yield Fund
Fund's fundamental investment restrictions with respect
to purchasing illiquid securities.
Proposal 3: To approve the Reorganization of each Fund All Funds
pursuant to the Plan.
With respect to Proposal 1, all shareholders of CMG Fund Trust will vote
together on the election of Trustees. With respect to Proposal 2, the
shareholders of each Fund will vote separately by Fund and separately on each
Proposal 2.A. through 2.O. affecting the Fund. With respect to Proposal 3, the
shareholders of each Fund will vote separately by Fund on their Fund's Plan.
Timely, properly executed proxies will be voted as you instruct. If no
specification is made with respect to a Proposal, shares will be voted in
accordance with the recommendation of the Board as to that Proposal. The
solicitation is being made primarily by the mailing of this Proxy Statement and
the accompanying proxy card. Supplemental solicitations of proxies may be made
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by personal interview, mail, telephone, facsimile or electronic mail ("e-mail")
by officers and Trustees of your Fund, officers and employees of Columbia
Management and other representatives of your Fund, as described below. Columbia
Management will bear the costs incurred in connection with the solicitation of
proxies, the costs of holding the Meeting, and other expenses associated with
obtaining the approval of the Funds and their shareholders.
Shareholders of record at the close of business on July 8, 2005 (the "Record
Date") are entitled to receive notice of, and to vote at, the Meeting or any
adjournment(s) thereof. Shareholders of a Fund on the Record Date shall be
entitled to one vote for each whole share held, as to any matter on which they
are entitled to vote, and each fractional share shall be entitled to a
proportionate fractional vote. Shareholders of a Fund, regardless of the class
of shares held, will vote together as a single class.
I. PROPOSAL 1: ELECTION OF TRUSTEES
Mses. Kelly and Verville and Messrs. Hacker, Lowry, Mayer, Nelson, Neuhauser,
Simpson, Stitzel, Theobald and Woolworth (who have each agreed to serve) are
proposed for election as Trustees of your Fund.
The names and ages of the Trustees of the Funds, the year each was first
elected, their principal business occupations during at least the last five
years, the number of portfolios in the other registered investment companies
advised by Columbia Management (the "Fund Complex") overseen by each Trustee and
other directorships that each Trustee holds are shown below. The address of each
Trustee is One Financial Center, Boston, MA 02111-2621, unless otherwise
indicated.
NUMBER OF
PORTFOLIOS
PRINCIPAL IN FUND
POSITION YEAR FIRST OCCUPATION(S) COMPLEX
NAME/AGE AND WITH ELECTED DURING PAST FIVE OVERSEEN OTHER
ADDRESS FUNDS (1) YEARS BY TRUSTEE DIRECTORSHIPS HELD
- ----------------- --------- ---------- --------------------- ---------- ------------------
DISINTERESTED
TRUSTEES
Douglas A. Hacker Trustee 1996 Executive Vice 101 None
(Age 49) President-Strategy
of United Airlines
(airline) since
December, 2002
(formerly President
of UAL Loyalty
Services (airline)
from September, 2001
to December, 2002;
Executive Vice
President and Chief
Financial Officer of
United Airlines from
July, 1999 to
September, 2001;
Senior Vice
President - Finance
from March, 1993 to
July, 1999).
- 5 -
NUMBER OF
PORTFOLIOS
PRINCIPAL IN FUND
POSITION YEAR FIRST OCCUPATION(S) COMPLEX
NAME/AGE AND WITH ELECTED DURING PAST FIVE OVERSEEN OTHER
ADDRESS FUNDS (1) YEARS BY TRUSTEE DIRECTORSHIPS HELD
- ----------------- --------- ---------- --------------------- ---------- ------------------
Janet Langford Trustee 1996 Partner, Zelle, 101 None
Kelly Hofmann, Voelbel,
(Age 47) Mason & Gette LLP
(Law firm) since
2005; Adjunct
Professor of Law,
Northwestern
University, since
September, 2004;
(formerly Chief
Administration
Officer and Senior
Vice President,
Kmart Holding
Corporation
(consumer goods),
from September, 2003
to March, 2004;
Executive Vice
President-Corporate
Development and
Administration,
General Counsel and
Secretary, Kellogg
Company (food
manufacturer), from
September, 1999 to
August, 2003; Senior
Vice President,
Secretary and
General Counsel,
Sara Lee Corporation
(branded, packaged,
consumer-products
manufacturer) from
January, 1995 to
September, 1999).
- 6 -
NUMBER OF
PORTFOLIOS
PRINCIPAL IN FUND
POSITION YEAR FIRST OCCUPATION(S) COMPLEX
NAME/AGE AND WITH ELECTED DURING PAST FIVE OVERSEEN OTHER
ADDRESS FUNDS (1) YEARS BY TRUSTEE DIRECTORSHIPS HELD
- ----------------- --------- ---------- --------------------- ---------- ------------------
Richard W. Lowry Trustee 1995 Private Investor 103 None
(2) since August, 1987
(Age 69) (formerly Chairman
and Chief Executive
Officer, U.S.
Plywood Corporation
(building products
manufacturer)).
Charles R. Nelson Trustee 1981 Professor of 101 None
(Age 62) Economics,
University of
Washington, since
January, 1976; Ford
and Louisa Van
Voorhis Professor of
Political Economy,
University of
Washington, since
September, 1993;
(formerly Director,
Institute for
Economic Research,
University of
Washington, from
September, 2001 to
June, 2003; Adjunct
Professor of
Statistics,
University of
Washington, since
September, 1980;
Associate Editor,
Journal of Money
Credit and Banking,
since September,
1993; consultant on
econometric and
statistical matters).
John J. Neuhauser Trustee 1985 Academic Vice 103 Saucony, Inc.
(2) President and Dean (athletic footwear)
(Age 62) of Faculties since
August,
- 7 -
NUMBER OF
PORTFOLIOS
PRINCIPAL IN FUND
POSITION YEAR FIRST OCCUPATION(S) COMPLEX
NAME/AGE AND WITH ELECTED DURING PAST FIVE OVERSEEN OTHER
ADDRESS FUNDS (1) YEARS BY TRUSTEE DIRECTORSHIPS HELD
- ----------------- --------- ---------- --------------------- ----------- ------------------
1999, Boston
College (formerly
Dean, Boston College
School of Management
from September, 1977
to August, 1999).
Patrick J. Simpson Trustee 2000 Partner, Perkins 101 None
(Age 61) Coie, LLP (law firm).
- 8 -
NUMBER OF
PORTFOLIOS
PRINCIPAL IN FUND
POSITION YEAR FIRST OCCUPATION(S) COMPLEX
NAME/AGE AND WITH ELECTED DURING PAST FIVE OVERSEEN OTHER
ADDRESS FUNDS (1) YEARS BY TRUSTEE DIRECTORSHIPS HELD
- ----------------- --------- ---------- --------------------- ---------- ------------------
Thomas E. Stitzel Trustee 1998 Business Consultant 101 None
(Age 69) since 1999 (formerly
Professor of Finance
from 1975 to 1999;
College of Business,
Boise State
University);
Chartered Financial
Analyst.
Thomas C. Theobald Trustee 1996 Partner and Senior 101 Anixter
(3) Advisor, Chicago International
(Age 68) Growth Partners (network support
(private equity equipment
investing) since distributor);
September, 2004; Ventas Inc. (real
(formerly Managing estate investment
Director, William trust); Jones Lang
Blair Capital LaSalle (real
Partners (private estate management
equity investing) services) and
from September, Ambac Financial
1994 to September, Group (financial
2004). guarantee
insurance).
Anne-Lee Verville Trustee 1998 Retired since 1997 101 Chairman of the
(Age 59) (formerly General Board of
Manager, Global Directors, Enesco
Education Industry, Group, Inc.
(designer, importer
- 9 -
NUMBER OF
PORTFOLIOS
PRINCIPAL IN FUND
POSITION YEAR FIRST OCCUPATION(S) COMPLEX
NAME/AGE AND WITH ELECTED DURING PAST FIVE OVERSEEN OTHER
ADDRESS FUNDS (1) YEARS BY TRUSTEE DIRECTORSHIPS HELD
- ----------------- --------- ---------- --------------------- ---------- ------------------
IBM Corporation and distributor of
(computers and giftware and
technology) from collectibles).
1994 to 1997).
Richard L. Trustee 1991 Retired since 101 Northwest Natural
Woolworth December, 2003 Gas Company
(Age 64) (formerly Chairman (a natural gas
and Chief Executive service provider).
Officer, The Regence
Group (regional
health insurer);
Chairman and Chief
Executive Officer,
Blue Cross Blue
Shield of Oregon;
Certified Public
Accountant, Arthur
Young & Company).
INTERESTED TRUSTEE Trustee 1994 Partner, Park Avenue 103 Lee Enterprises
William E. Mayer Equity Partners (print media); WR
(2)(4) (private equity) Hambrecht + Co.
(Age 65) since February, (financial service
1999; (formerly provider); First
Partner, Development Health
Capital LLC from (healthcare);
November, 1996 to Readers Digest
February, (publisher);
- 10 -
NUMBER OF
PORTFOLIOS
PRINCIPAL IN FUND
POSITION YEAR FIRST OCCUPATION(S) COMPLEX
NAME/AGE AND WITH ELECTED DURING PAST FIVE OVERSEEN OTHER
ADDRESS FUNDS (1) YEARS BY TRUSTEE DIRECTORSHIPS HELD
- ----------------- --------- ---------- --------------------- ---------- ------------------
1999). OPENFIELD
Solutions (retail
industry
technology
provider).
(1) In October 2003, the trustees of the Liberty Funds and Stein Roe Funds
were elected to the boards of the Columbia Funds; simultaneous with that
election, Patrick J. Simpson and Richard L. Woolworth, who had been
directors/trustees of the Columbia Funds were appointed to serve as
trustees of the Liberty Funds and Stein Roe Funds. The date shown is the
earliest date on which a trustee/director was elected or appointed to the
board of a Fund in the Fund Complex.
(2) Messrs. Lowry, Neuhauser and Mayer each also serve as a director/trustee
of the All-Star Funds, currently consisting of 2 investment companies,
which are advised by an affiliate of Columbia Management.
(3) Mr. Theobald was appointed as Chairman of the Board effective December 10,
2003.
(4) Mr. Mayer is an "interested person" (as defined in the Investment Company
Act of 1940, as amended) of the Fund by reason of his affiliation with WR
Hambrecht + Co.
FOR INFORMATION REGARDING THE EXECUTIVE OFFICERS OF YOUR FUND, SEE APPENDIX A TO
THIS PROXY STATEMENT.
TRUSTEES' COMPENSATION
The members of the Board also serve as directors for certain other portfolios in
the Fund Complex. As of December 31, 2004, the Fund Complex consisted of 127
open-end funds and 11 closed-end management investment company portfolios.
Two-thirds of the Trustees' fees are allocated among the funds within the Fund
Complex based on the relative net assets of each fund and one-third of the fees
is divided equally among the funds within the Fund Complex.
- 11 -
FOR MORE INFORMATION REGARDING THE COMPENSATION OF THE TRUSTEES, SEE
APPENDIX B.1 AND APPENDIX B.2 TO THIS PROXY STATEMENT.
SHAREHOLDER COMMUNICATIONS
Shareholders may communicate with the Trustees as a group or individually. Any
such communications should be sent to the Fund's Board or an individual Trustee
in writing, c/o the Secretary of the Funds, One Financial Center, Boston, MA
02111-2621. The Secretary may determine not to forward to the Board or a Trustee
any letter that does not relate to the business of a Fund.
TRUSTEE SHARE OWNERSHIP
The table in Appendix C shows, as of December 31, 2004, the dollar range of
equity securities beneficially owned by each Trustee (i) in each of the Funds,
and (ii) in all funds overseen by the Trustee in the Fund Complex.
TRUSTEES' MEETINGS AND COMMITTEES
The Board is responsible for the overall management and supervision of your
Fund's affairs and for protecting the interests of your Fund's shareholders. For
the fiscal year ended July 31, 2004, your Fund held [ ] meetings ([ ] regular
joint Board meetings and [ ] special joint Board meetings). [The Funds do not
have a formal policy on Trustee attendance at meetings of shareholders.]
The Board has created several committees to perform specific functions on behalf
of the Funds. The members of each committee, along with a description of each
committee's functions, appear below, followed by a table that sets forth the
number of meetings held by each committee during the last fiscal year.
1. AUDIT COMMITTEE
Your Fund has an Audit Committee (the "Audit Committee") comprised of Trustees
who are not "interested persons" (as defined in the Investment Company Act of
1940, as amended (the "1940 Act")) of any Fund. Each member of the Audit
Committee must be financially literate and at least one member must have prior
accounting experience or related financial management expertise.
The Audit Committee serves as an independent and objective party to monitor your
Fund's accounting policies, financial reporting and internal control systems and
the work of your Fund's independent registered public accountant. The Audit
Committee also serves to provide an open avenue of communication between the
independent registered public accountants, Columbia Management Group, Inc.'s
("Columbia") internal accounting staff and the Board. The principal functions of
the Audit Committee are to assist Board oversight of (1) the integrity of your
Fund's
- 12 -
financial statements, (2) your Fund's compliance with legal and regulatory
requirements, (3) the independent registered public accountant's qualifications
and independence, (4) the performance of Columbia Management's internal audit
function, and (5) the independent registered public accountant. The Audit
Committee is directly responsible for the appointment, compensation, retention
and oversight of the work of the independent registered public accountants
(including the resolution of disagreements between management and the
independent registered public accountants regarding financial reporting) for the
purpose of preparing or issuing an audit report or performing other review or
attest services for your Fund.
The Funds' Audit Committee members are Ms. Verville and Messrs. Hacker, Stitzel
and Woolworth.
Based on the recommendation from the Audit Committee and on its own review, the
Board selected PricewaterhouseCoopers LLP ("PwC") as independent registered
public accountant for your Fund for its fiscal year. Representatives of PwC are
not expected to be at the Meeting, but have been given the opportunity to make a
statement if they so desire and will be available should any matter arise
requiring their presence.
2. GOVERNANCE COMMITTEE
Messrs. Lowry, Mayer, Simpson and Theobald are members of the Governance
Committee of each Fund. The Funds have no nominating or compensation committee.
The Governance Committee performs certain of the functions typically performed
by those committees. Among other things, the Governance Committee recommends to
the Board nominees for Trustee and nominees for appointment to various
committees; performs periodic evaluations of the effectiveness of the Board;
reviews and recommends to the Board policies and practices to be followed in
carrying out the Trustees' duties and responsibilities; and reviews and makes
recommendations to the Board regarding the compensation of the Trustees who are
not affiliated with Columbia. On February 9, 2005, the Governance Committee
adopted a written charter which sets forth the Governance Committee's structure,
duties and powers, and methods of operation. A copy of the Governance Committee
Charter is available at the website for the Funds at www.columbiafunds.com.
Three of the four Governance Committee members, Messrs. Lowry, Simpson and
Theobald, who are not "interested persons" (as defined in the 1940 Act) of any
Fund ("Governance Committee Independent Trustees"), participate in the
consideration, selection and nomination of Trustees. The Governance Committee
Independent Trustees will consider candidates for Trustee identified by any
reasonable source, including current Independent Trustees, Fund management, Fund
shareholders and other persons or entities. Shareholders of your Fund who wish
to nominate a candidate to your Fund's Board may send information regarding
prospective candidates to the Governance Committee, in care of the relevant
Fund, at One Financial Center, Boston, MA 02111-2621. The information should
include evidence of the shareholders' Fund ownership, a full listing of the
proposed candidate's education, experience, current employment, date of birth,
names and addresses of at least three professional references, information as to
whether the candidate is not an "interested person" under the 1940 Act and such
other information as may be helpful to the Governance Committee Independent
Trustees in evaluating the candidate. All satisfactorily completed
-13-
information packages regarding a candidate will be forwarded to a member of the
Governance Committee for consideration. Recommendations for candidates will be
evaluated in light of whether the number of Trustees of your Fund is expected to
be increased and anticipated vacancies. [All nominations from Fund shareholders
will be considered.] There may be times when the Governance Committee is not
recruiting new Board members. In that case, shareholder recommendations will be
maintained on file pending the active recruitment of Trustees.
When considering candidates for Trustee, the Governance Committee Independent
Trustees consider, among other things, whether prospective nominees have
distinguished records in their primary careers, personal and professional
integrity, and substantive knowledge in areas important to the Board's
operations, such as background or education in finance, auditing, securities
law, the workings of the securities markets, or investment advice. For
candidates to serve as Independent Trustees, independence from your Fund's
investment adviser, its affiliates and other principal service providers is
critical, as is an independent and questioning mind-set. In each case, the
Governance Committee Independent Trustees will evaluate whether a candidate is
an "interested person" under the 1940 Act. The Governance Committee Independent
Trustees also consider whether a prospective candidate's workload would be
consistent with regular attendance at Board meetings and would allow him or her
to be available for service on Board committees, and devote the additional time
and effort necessary to stay apprised of Board matters and the rapidly changing
regulatory environment in which the Funds operate. Different substantive areas
may assume greater or lesser significance at particular times, in light of a
Board's present composition and its perceptions about future issues and needs.
The Governance Committee Independent Trustees initially evaluate prospective
candidates on the basis of their resumes, considered in light of the criteria
discussed above. Those prospective candidates that appear likely to be able to
fill a significant need of the Board would be contacted by a Governance
Committee Independent Trustees by telephone to discuss the position; if there
appeared to be sufficient interest, an in-person meeting with one or more of the
Governance Committee Independent Trustees would be arranged. If a Governance
Committee Independent Trustee, based on the results of these contacts, believes
he or she has identified a viable candidate, he or she would air the matter with
the other Governance Committee Independent Trustees for input. Any request by
Fund management to meet with the prospective candidate would be given
appropriate consideration. The Funds have not paid a fee to third parties to
assist in finding nominees.
3. ADVISORY FEES & EXPENSES COMMITTEE
Ms. Kelly and Messrs. Mayer, Nelson and Neuhauser are members of the Advisory
Fees & Expenses Committee of each Fund. The Advisory Fees & Expenses Committee's
functions include reviewing and making recommendations to the Board as to
contracts requiring approval of a majority of the disinterested Trustees and as
to any other contracts that may be referred to the committee by the Board.
4. COMPLIANCE COMMITTEE
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Mses. Kelly and Verville, and Messrs. Nelson and Simpson are members of the
Compliance Committee of the Board of the Funds. The Compliance Committee's
functions include providing oversight of the monitoring processes and controls
regarding the Funds. The Committee supervises legal, regulatory and internal
rules, policies, procedures and standards other than those relating to
accounting matters and oversight of compliance by the Funds' investment adviser,
principal underwriter and transfer agent.
NUMBER OF
MEETINGS
FOR FISCAL YEAR
ENDED
JULY 31, 2004
---------------
Audit Committee 9
Governance Committee 4
Advisory Fees & Expenses
Committee 5
Compliance Committee 5
5. INVESTMENT OVERSIGHT COMMITTEES
Each Investment Oversight Committee ("IOC") is responsible for monitoring, on an
ongoing basis, a select group of Columbia Funds and gives particular
consideration to such matters as the Funds' adherence to their investment
mandates, historical performance, changes in investment processes and personnel,
and proposed changes to investment objectives. Investment personnel who manage
the Funds will attend IOC meetings from time to time to assist each IOC in its
review of the Funds. Each IOC meets four times a year. Investment Oversight
Committee 1 currently consists of Messrs. Lowry, Mayer and Neuhauser. Investment
Oversight Committee 2 currently consists of Mr. Hacker and Ms. Verville.
Investment Oversight Committee 3 currently consists of Ms. Kelley and Messrs.
Stitzel and Theobald. Investment Oversight Committee 4 currently consists of
Messrs. Nelson, Simpson and Woolworth.
AUDIT COMMITTEE PRE-APPROVAL OF INDEPENDENT ACCOUNTANT SERVICES
The Audit Committee is required to pre-approve the engagement of your Fund's
independent registered public accountant to provide audit and non-audit services
to your Fund and non-audit services to Columbia Management or any entity
controlling, controlled by or under common control with Columbia Management that
provides ongoing services to the Funds ("Columbia Affiliate"), if the engagement
relates directly to the operations or financial reporting of the Funds. The
engagement may be entered into pursuant to pre-approval policies and procedures
established by the Audit Committee.
The Audit Committee has adopted an Audit and Non-Audit Services Pre-Approval
Policy ("Policy"). The Policy sets forth the procedures and conditions pursuant
to which services to be performed by the Funds' independent registered public
accountant are to be pre-approved. Unless a type of service receives general
pre-approval under the Policy, it requires specific pre-approval by the Audit
Committee if it is to be provided by the independent registered public
accountant.
The Policy provides for the general pre-approval by the Audit Committee of
certain: (i) audit services to the Funds; (ii) audit-related services to the
Funds; (iii) tax services to the Funds; (iv)
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other services to the Funds; and (v) Fund-related services to Columbia
Affiliates. The Policy requires the Fund Treasurer and/or Director of Trustee
Administration to submit to the Audit Committee, at least annually, a schedule
of the types of services that are subject to general pre-approval. The
schedule(s) must provide a description of each type of service that is subject
to general pre-approval and, where possible, will provide projected fee caps for
each instance of providing each service. At least annually, the Audit Committee
will review and approve the types of services and review the projected fees for
the next year, and may add to, or subtract from, the list of pre-approved
services from time to time, based on subsequent determinations. In addition to
the fees for each individual service, the Audit Committee has the authority to
implement a fee cap on the aggregate amount of non-audit services provided to an
individual New Fund. The fee amounts listed on the schedules will be updated to
the extent necessary at each of the other regularly scheduled meetings of the
Audit Committee.
FEES PAID TO THE INDEPENDENT REGISTERED PUBLIC ACCOUNTANT
The table in Appendix D1 sets forth the aggregate fees billed by PwC for each
Fund's last two fiscal years for professional services rendered for (i) audit
services, including the audit of each Fund's financial statements and services
normally provided in connection with statutory and regulatory filings or
engagements for those fiscal years; (ii) audit-related services associated with
the review of the Funds' semi-annual financial statements; (iii) tax services
and, primarily, reviews of Fund tax returns; and (iv) other services. Please
note that the table includes amounts related to non-audit services that would
have been subject to pre-approval if Securities and Exchange Commission ("SEC")
rules relating to the pre-approval of non-audit services had been in effect at
that time.
All of the audit fees, audit-related fees, tax fees and other fees billed by PwC
for services provided to a Fund during its most recent fiscal year were
pre-approved by the Audit Committee. [There were no amounts billed by PwC in the
most recent fiscal year for audit-related services, tax services or other
services provided to Columbia or Columbia Affiliates for engagements that
related directly to the operations or financial reporting of each Fund.] The
table in Appendix D2 sets forth the aggregate fees billed by PwC for non-audit
services for the Funds, Columbia and Columbia Affiliates for the last two fiscal
years.
The Audit Committee has determined that the provision of the services described
above is compatible with maintaining the independence of PwC.
REQUIRED VOTE. If a quorum of shareholders is present at the Meeting, the eleven
nominees for election as Trustees who receive the greatest number of votes cast
at the Meeting will be elected Trustees. Abstentions and broker non-votes are
counted for purposes of determining whether a quorum exists at the annual
meeting, but will have no effect on the results of the vote.
II. PROPOSAL 2: ADOPTION OF STANDARDIZED FUNDAMENTAL INVESTMENT RESTRICTIONS
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As described in the following proposals, the Trustees recommend that
shareholders of the affected Funds approve the elimination of and revisions to
certain fundamental investment restrictions of such Funds. Generally, the
purpose of these proposed changes is to increase each Fund's investment
flexibility and reduce administrative and compliance burdens by simplifying and
making uniform these fundamental investment restrictions across all Funds.
BACKGROUND. The 1940 Act requires registered investment companies like the Funds
to have "fundamental" investment restrictions governing certain of their
investment practices. Investment companies may also voluntarily designate
restrictions relating to other investment practices as fundamental.
"Fundamental" investment restrictions can be changed only by a shareholder vote.
The proposed elimination of and revisions to certain of the fundamental
investment restrictions of the Funds are discussed below. Columbia Management
has indicated that it has no present intention of changing the manner in which
it manages the Funds in response to these proposals. By eliminating those
fundamental investment restrictions that are not required and revising those
fundamental investment restrictions that are required, however, the Trustees
believe that Columbia Management will be better able to manage the Funds in a
changing regulatory or investment environment. In addition, the process of
monitoring the Funds' compliance with investment restrictions will be
simplified.
The discussion below in Proposals 2.A. through 2.O. highlights the differences
between the Funds' current fundamental investment restrictions and, where
applicable, a proposed uniform fundamental investment restriction. However,
because the current fundamental investment restrictions vary among the Funds,
shareholders of each Fund should consider comparing their Fund's current
restrictions (contained in Exhibits 1 through 14) with the proposed
restrictions.
2.A. AMENDING FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO BORROWING
MONEY, PLEDGING ASSETS AND ISSUING SENIOR SECURITIES.
AFFECTED FUNDS: All Funds
The 1940 Act requires the Funds to state the extent to which they may borrow
money and issue senior securities. Under Section 18(f)(1) of the 1940 Act, an
open-end investment company may not issue senior securities, except that it may
borrow from banks, for any purpose, up to 33 1/3% of its total assets (including
the amount borrowed). EXHIBITS 1 and 2 list the current fundamental investment
restrictions of each of the affected Funds with respect to borrowing money,
pledging assets and issuing senior securities, respectively. Generally, the
Funds' current fundamental investment restrictions are more restrictive than
these 1940 Act requirements.
Accordingly, the Trustees recommend that each affected Fund amend its policy so
that it will allow each affected Fund to issue senior securities, pledging
assets or borrow money to the full extent permitted under applicable law. The
proposed changes would automatically conform each affected Fund's policy more
closely to the exact statutory and regulatory requirements, as they exist from
time to time, without incurring the time and expense of obtaining shareholder
approval to change the restriction. In addition, the proposed changes will
reduce administrative and compliance burdens
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by simplifying and making uniform the Funds' fundamental investment restrictions
with respect to borrowing money and issuing senior securities. The 1940 Act does
not require a fundamental restriction with respect to the ability to pledge
assets.
The proposed amended fundamental investment restriction is as follows:
"The fund may not. . . [b]orrow money or issue senior securities except to
the extent permitted by the 1940 Act, the rules and regulations thereunder
and any applicable exemptive relief."
2.B. AMENDING FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO MAKING LOANS.
AFFECTED FUNDS: All Funds
The 1940 Act requires the Funds to state the extent to which they intend to make
loans to other persons. The Trustees recommend that each Fund's fundamental
investment restriction with respect to making loans be revised to reflect a
standard restriction for all the Funds. The amendment would permit each Fund to
enter into repurchase agreements and securities loans to the extent permitted by
the 1940 Act and applicable rules and exemptive relief. EXHIBIT 3 lists the
current fundamental investment restriction of each Fund with respect to making
loans.
The proposed amended fundamental investment restriction is as follows:
"The fund may not. . . [m]ake loans, except to the extent permitted by the
1940 Act, the rules and regulations thereunder and any applicable
exemptive relief."
Following the amendment, each Fund may, consistent with the 1940 Act and its
investment objective and policies, enter into repurchase agreements and
securities loans without limit. The staff of the SEC has taken the position that
a Fund may not loan more than 1/3 of the total value of its assets (including
any collateral for such loans). As noted above, although Columbia Management has
no present intention of changing the way in which each Fund is managed, this
increased flexibility could assist each Fund, in the future, in achieving its
investment objective and responding to changes in applicable law or regulation.
The proposed change would also automatically conform each Fund's lending policy
more closely to the exact statutory and regulatory requirements, as they exist
from time to time, without incurring the time and expense of obtaining
shareholder approval to change the policy. In addition, these proposed changes
will reduce administrative and compliance burdens by simplifying and making
uniform the fundamental investment restrictions with respect to making loans.
When a Fund enters into a repurchase agreement, it typically purchases a
security for a relatively short period of time (usually not more than seven
days), which the seller agrees to repurchase at a fixed time and price,
representing the Fund's cost plus interest. When a Fund enters into a securities
loan, it lends certain of its portfolio securities to broker-dealers or other
parties, typically in exchange for a portion of the interest earned on the
collateral posted by the borrower or a fee from the borrower. The borrower may
also pay the Fund an amount equal to any interest, dividends or other
distributions payable on the securities lent. These transactions must be fully
collateralized at all times, but involve risk to the Fund if the seller, in the
case of
-18-
repurchase agreements, or the borrower, in the case of securities loans, should
default on its obligations. If the Fund's counterparty to these transactions
should become involved in bankruptcy or insolvency proceedings, it is possible
that the Fund may be treated as an unsecured creditor and may be required to
return the underlying securities or collateral, as applicable, to the
counterparty's estate.
2.C. AMENDING FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
DIVERSIFICATION OF INVESTMENTS.
AFFECTED FUNDS:
CMG High Yield Fund
CMG International Stock Fund
CMG Short Term Bond Fund
CMG Small Cap Fund
CMG Small/Mid Cap Fund
CMG Ultra Short Term Bond Fund
The Trustees recommend that each affected Fund's fundamental investment
restriction with respect to the diversification of its investments be revised to
reflect applicable law and a uniform policy for all of the affected Funds.
Each affected Fund is a "diversified" Fund as defined in the 1940 Act. Under the
1940 Act, a "diversified" Fund generally may not, with respect to 75% of its
total assets, invest more than 5% of its total assets in the securities of any
one issuer or own more than 10% of the outstanding voting securities of such
issuer (except U.S. Government securities, cash, cash items or the securities of
other investment companies). The remaining 25% of the Fund's total assets is not
subject to this restriction.
EXHIBIT 4 lists the current fundamental investment restrictions of each of the
affected Funds with respect to diversification of investments. The proposed
amended fundamental investment restriction is designed to track the statutory
definition of "diversified" company and read as follows:
"The fund may not ... [p]urchase securities (except securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities) of
any one issuer if, as a result, more than 5% of its total assets will be
invested in the securities of such issuer or it would own more than 10% of
the voting securities of such issuer, except that: (a) up to 25% of its
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total assets may be invested without regard to these limitations and (b) a
Fund's assets may be invested in the securities of one or more management
investment companies to the extent permitted by the 1940 Act, the rules
and regulations thereunder, or any applicable exemptive relief.
It is intended that the restriction will be interpreted in a manner consistent
with the statutory requirements, including rules adopted and interpretations
published by the SEC under Section 5 of the 1940 Act. For example, for purposes
of this restriction, in accordance with Rule 5b-2 of the 1940 Act, the value of
a guarantee or letter of credit may be excluded from the value of a Fund's
investments in the guarantor (or issuer of the letter of credit) if the
aggregate value of securities owned by the Fund and guaranteed by such guarantor
(plus any other investments in securities issued by the guarantor) does not
exceed 10% of the Fund's total assets.
The Trustees recommend that the affected Funds' current fundamental investment
restrictions with respect to diversification of investments be amended as
proposed in order to conform the affected Funds' restrictions to the statutory
requirements discussed above. These proposed changes will reduce administrative
and compliance burdens by simplifying and making uniform the fundamental
investment restrictions with respect to diversification of investments.
2.D. AMENDING FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO INVESTMENTS
IN COMMODITIES.
AFFECTED FUNDS: All Funds
The 1940 Act requires the Funds to state a fundamental investment restriction
regarding the purchase and sale of commodities. EXHIBIT 5 lists the current
fundamental investment restriction of each Fund with respect to investment in
commodities and commodity contracts (including, for one Fund, investments in
oil, gas or mineral development programs or leases). The Funds' current
restrictions generally prohibit them from purchasing commodities or commodity
contracts, but for certain of the Funds permit them to invest in certain futures
contracts.
The proposed amended fundamental investment restriction is as follows:
"The fund may not ... [p]urchase or sell commodities, except that a fund
may, to the extent consistent with its investment objective, invest in
securities of companies that purchase or sell commodities or which invest
in such programs, and purchase and sell options, forward contracts,
futures contracts, and options on futures contracts and enter into swap
contracts and other financial transactions relating to commodities. This
limitation does not apply to foreign currency transactions, including
without limitation forward currency contracts."
The Trustees recommend that the affected Funds' current fundamental investment
restrictions with respect to investments in commodities be amended as proposed.
The proposed amendment would make it clear that the Funds may utilize not only
certain futures, but also options, options on futures and other financial
transactions that do not involve physical commodities to the extent consistent
with the Funds' investment objectives and policies. The addition of financial
transactions relating to commodities is intended to give the Funds maximum
flexibility to invest in a relating to variety of modern financial instruments
that could technically be considered commodities, but which do not involve the
direct purchase and sale of physical commodities, which are the intended focus
of the restriction. Although Columbia Management has no present intention of
changing the way in which the Funds are managed as a result of this amendment,
this investment flexibility could, in the future, assist the Funds in achieving
their investment objectives, in part because such strategies may offer
opportunities for hedging and increased investment return. These proposed
changes will also reduce administrative and compliance burdens by simplifying
and making uniform the fundamental investment restrictions with respect to
commodities.
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2.E. AMENDING FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO INVESTMENTS
IN REAL ESTATE.
AFFECTED FUNDS: All Funds
The 1940 Act requires the Funds to state a fundamental policy regarding the
purchase and sale of real estate. EXHIBIT 6 lists the current fundamental
investment restriction of each Fund with respect to investment in real estate
and securities secured by and/or of companies that deal in real estate.
Currently, the Funds' investment policies restrict their ability to sell real
estate even when the Funds acquires ownership of the real estate as a result of
its permissible investments. For instance, it is possible that a Fund could, as
a result of an investment in debt securities of a company that deals in real
estate, come to hold an interest in real estate if the issuer defaulted on its
debt obligations. Accordingly, holding and the Trustees recommend that this
policy be modified to allow the holding and sale of real estate when ownership
of real estate results from the exercise of its rights as a holder of real
estate securities and to clarify that a Fund may invest in real estate-related
securities and real estate-backed securities or instruments.
The proposed amended fundamental investment restriction is as follows:
"The fund may not ... [p]urchase or sell real estate, except a fund may
purchase securities of issuers which deal or invest in real estate and may
purchase securities which are secured by real estate or interests in real
estate and it may hold and dispose of real estate or interests in real
estate acquired through the exercise of its rights as a holder of
securities which are secured by real estate or interests therein."
These proposed changes will also reduce administrative and compliance burdens by
simplifying and making uniform the fundamental investment restrictions with
respect to real estate.
2.F. AMENDING FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO UNDERWRITING
OF SECURITIES.
AFFECTED FUNDS: All Funds
The 1940 Act requires the Funds to state the extent to which they intend to
engage in the business of underwriting securities issued by other persons. Under
applicable law, a person or company generally is considered to be an underwriter
if the person or company participates in the public distribution of securities
of other issuers, which involves purchasing the securities from another issuer
with the intention of re-selling the securities to the public. From time to
time, a Fund may purchase securities in a private transaction for investment
purposes and later sell the securities to institutional investors. Under these
or other circumstances, a Fund could possibly be considered to be within the
technical definition of an underwriter under applicable law. The SEC staff has
issued interpretations that clarify that re-sales of privately placed securities
by institutional investors, such as funds, do not make the institutional
investor an underwriter in these circumstances.
-21-
EXHIBIT 7 lists the current fundamental investment restrictions with respect to
participation in the underwriting of securities of each of the affected Funds.
The proposed amended fundamental investment restriction is as follows:
"The fund may not ... [u]nderwrite any issue of securities issued by other
persons within the meaning of the [Securities Act of 1933][1933 Act]
except when it might be deemed to be an underwriter either: (a) in
connection with the disposition of a portfolio security; or (b) in
connection with the purchase of securities directly from the issuer
thereof in accordance with its investment objective. This restriction
shall not limit the fund's ability to invest in securities issued by other
registered investment companies."
The Trustees recommend that this policy be amended as proposed in order to
conform the affected Funds' policies to the statutory and related requirements
discussed above and to the policies of the other Funds. In addition, these
proposed changes will reduce administrative and compliance burdens by
simplifying and making uniform the fundamental investment restrictions with
respect to underwriting of securities.
2.G. ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
PURCHASING SECURITIES ON MARGIN
AFFECTED FUNDS:
CMG Core Bond Fund
CMG High Yield Fund
CMG Short Term Bond Fund
CMG Ultra Short Term Bond Fund
EXHIBIT 8 lists the current fundamental investment restriction of each of the
affected Funds with respect to purchasing securities on margin. Section 12
(a)(1) of the 1940 Act generally prohibits a fund from purchasing securities on
margin in contravention of any SEC rules. To date, however, the SEC has not
adopted any such rules. There are no SEC rules requiring, and the 1940 Act does
not require, that funds state a fundamental investment policy with respect to
purchasing securities on margin. As noted above, although Columbia Management
has no present intention of changing the way in which the affected Funds are
managed as a result of the elimination of these restrictions, the Trustees
believe it is not in the Funds' best interests to maintain fundamental policies
that are not required by applicable law. Accordingly, the Trustees recommend
that each affected Fund's fundamental investment restriction with respect to
purchasing securities on margin be eliminated.
2.H. ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
INVESTING FOR THE PURPOSE OF EXERCISING CONTROL
AFFECTED FUNDS:
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CMG Core Bond Fund
CMG High Yield Fund
CMG International Stock Fund
CMG Short Term Bond Fund
CMG Small Cap Fund
CMG Small/Mid Cap Fund
CMG Ultra Short Term Bond Fund
EXHIBIT 9 lists the current fundamental investment restriction of each of the
affected Funds with respect to investing for the purpose of exercising control.
Applicable regulations formerly required disclosure on this subject to the
extent that a fund intends to invest in companies for the purpose of exercising
control (as defined in the 1940 Act). There is no requirement, however, that a
fund have an affirmative policy on this subject, or that any policy that it does
have be categorized as fundamental. As noted above, although Columbia Management
has no present intention of changing the way in which the affected Funds are
managed as a result of the elimination of these restrictions, consistent with
the Trustees' belief that it is not in the Funds' best interests to maintain
fundamental investment restrictions that are not required by applicable law, the
Trustees recommend that each affected Fund's fundamental investment restriction
with respect to investing for the purpose of exercising control be eliminated.
2.I. ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO SHORT
SALES
AFFECTED FUNDS:
CMG Core Bond Fund
CMG High Yield Fund
CMG International Stock Fund
CMG Short Term Bond Fund
CMG Small Cap Fund
CMG Small/Mid Cap Fund
CMG Ultra Short Term Bond Fund
-23-
EXHIBIT 10 lists the current fundamental investment restriction of each of the
affected Funds with respect to short sales. There are no SEC rules requiring,
and the 1940 Act does not require, that funds state a fundamental investment
policy with respect to short sales. As noted above, although Columbia Management
has no present intention of changing the way in which the affected Funds are
managed as a result of the elimination of these restrictions, consistent with
the Trustees' belief that it is not in the Funds' best interests to maintain
fundamental investment restrictions that are not required by applicable law, the
Trustees recommend that each affected Fund's fundamental investment restriction
with respect to short sales be eliminated.
2.J. AMENDMENT TO FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
CONCENTRATING INVESTMENTS IN AN INDUSTRY
AFFECTED FUNDS:
CMG Core Bond Fund
CMG Enhanced S&P 500 Index Fund
CMG High Yield Fund
CMG International Stock Fund
CMG Large Cap Growth Fund
CMG Large Cap Value Fund
CMG Mid Cap Growth Fund
CMG Mid Cap Value Fund
CMG Short Term Bond Fund
CMG Small Cap Fund
CMG Small Cap Growth Fund
CMG Small Cap Value Fund
CMG Small/Mid Cap Fund
CMG Strategic Equity Fund
CMG Ultra Short Term Bond Fund
Under applicable law, an investment company may not concentrate its investments
in any industry or group of industries without shareholder approval, and must
concentrate its investments consistent with any policy to do so. Although
"concentration" is not defined in the 1940 Act, the SEC has generally regarded a
fund as concentrating its investments in an industry if the fund invests more
than 25% of its net assets in securities of issuers in that industry.
EXHIBIT 11 lists the affected Funds' current fundamental investment restrictions
with respect to concentrating investments in an industry. The proposed amended
fundamental investment restriction is as follows:
"The fund may not ... [p]urchase any securities which would cause 25% or
more of the value of its total assets at the time of purchase to be
invested in the securities of one or more issuers conducting their
principal business activities in the same industry, provided that: (a)
there is no limitation with respect to obligations issued or guaranteed by
the U.S. Government, any state or territory of the United States, or any
of their agencies, instrumentalities or political subdivisions; and (b)
notwithstanding this limitation or any other fundamental investment
limitation, assets may be invested in the securities of one or more
management investment companies to the extent permitted by the 1940 Act,
the rules and regulations thereunder and any applicable exemptive relief."
The Trustees recommend that this policy be amended as shown above to conform the
affected Funds' policies to the statutory and related requirements discussed
above and to the policies of the other Funds. In addition, these proposed
changes will reduce administrative and compliance burdens by simplifying and
making uniform the fundamental investment restrictions with respect to
concentrating investments in an industry.
2.K. ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
PURCHASING SECURITIES OF COMPANIES LESS THAN THREE YEARS OLD
AFFECTED FUNDS:
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CMG Core Bond Fund
CMG High Yield Fund
CMG International Stock Fund
CMG Short Term Bond Fund
CMG Small Cap Fund
CMG Small/Mid Cap Fund
CMG Ultra Short Term Bond Fund
EXHIBIT 12 lists the current fundamental investment restriction of each of the
affected Funds with respect to purchasing securities of companies that
(including predecessors and parents) are less than three years old. The 1940 Act
does not require the Funds to state a fundamental investment restriction on this
matter. As noted above, although Columbia Management has no present intention of
changing the way in which the affected Funds are managed as a result of the
elimination of these restrictions, the Trustees believe it is not in the Funds'
best interests to maintain fundamental policies that are not required by
applicable law. Accordingly, the Trustees recommend that each affected Fund's
fundamental investment restriction with respect to purchasing securities of
companies that (including predecessors and parents) are less than three years
old be eliminated.
2.L. ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
AFFECTED FUNDS:
CMG High Yield Fund
The affected Fund has a fundamental investment restriction stating that:
The Fund may not "[p]urchase securities of other open-end investment
companies."
Under the 1940 Act, a Fund's investment in investment companies is limited to,
subject to certain exceptions, (i) 3% of the total outstanding voting shares of
any one investment company, (ii) 5% of the Fund's total assets with respect to
shares of any one investment company, and (iii) 10% of the Fund's total assets
with respect to shares of investment companies in the aggregate. The 1940 Act,
however, does not require investment companies to maintain fundamental
investment policies with respect to investing in securities of other investment
companies. In
-25-
addition, the Securities and Exchange Commission has issued exemptive relief
that permits certain investment companies additional flexibility with respect to
investments in other investment companies. As noted above, although Columbia
Management has no present intention of changing the way in which the affected
Funds are managed as a result of the elimination of these restrictions,
consistent with the Trustees' belief that it is not in the Funds' best interests
to maintain fundamental investment restrictions that are not required by
applicable law, the Trustees recommend that each affected Fund's fundamental
investment restriction with respect to investing in securities of other
investment companies be eliminated.
2.M. ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
PURCHASING OR HOLDING THE SECURITIES OF ANY COMPANY, IF SECURITIES OF SUCH
COMPANY ARE OWNED BY OFFICERS OR DIRECTORS OF THE FUND AND OF ITS ADVISOR
AFFECTED FUNDS:
CMG Core Bond Fund
CMG High Yield Fund
CMG Short Term Bond Fund
CMG Ultra Short Term Bond Fund
EXHIBIT 13 lists the current fundamental investment restriction of each of the
affected Funds with respect to purchasing or holding the securities of any
company if securities of such company are owned by the officers and directors of
the Fund and of its advisor. This restriction tracks certain restrictions
formerly required by state regulators for investment companies, which are not
applicable to the affected Funds. As noted above, although Columbia Management
has no present intention of changing the way in which the Funds are managed as a
result of the elimination of these restrictions, consistent with the Trustees'
belief that it is not in the Funds' best interests to maintain unnecessary
fundamental investment restrictions, the Trustees recommend that each affected
Fund's fundamental investment restriction with respect to purchasing or holding
the securities of any company owned by officers or directors of the Fund and of
its Advisor be eliminated.
2.N. ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO BUYING
AND SELLING PUTS AND CALLS
AFFECTED FUNDS:
CMG International Stock Fund
CMG Small Cap Fund
CMG Small/Mid Cap Fund
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EXHIBIT 14 lists the current fundamental investment restriction of each of the
affected Funds with respect to buying and selling puts and calls. The Trustees
recommend that each affected Fund's fundamental investment restriction with
respect to buying and selling puts and calls be eliminated.
If this Proposal is approved, the affected Funds would be able to engage in a
variety of transactions involving the use of options to the extent consistent
with the Funds' investment objectives and policies. As noted above, although
Columbia Management has no present intention of changing the way in which the
Funds are managed as a result of the elimination of these restrictions, this
increased investment flexibility could, in the future, assist each affected Fund
in achieving its investment objective. Columbia Management also believes that
elimination of this investment restriction would reduce administrative and
compliance burdens by conforming each affected Fund's fundamental investment
restrictions with the other Funds which currently do not have a fundamental
investment restriction with respect to investments in options. For more
information regarding options on futures, see Proposal 2.D. above.
A Fund may purchase put options to protect its portfolio holdings in an
underlying security against a decline in market value. Such protection is
provided during the life of the put option since the Fund, as holder of the
option, is able to sell the underlying security at the put exercise price
regardless of any decline in the underlying security's market price. In order
for a put option to be profitable, the market price of the underlying security
must decline sufficiently below the exercise price to cover the premium and
transaction costs. By using put options in this manner, a fund will reduce any
profit it might otherwise have realized from appreciation of the underlying
security by the premium paid for the put option and by transaction costs.
A Fund may purchase call options to hedge against an increase in the price of
securities that the fund wants ultimately to buy. Such hedge protection is
provided during the life of the call option since the Fund, as holder of the
call option, is able to buy the underlying security at the exercise price
regardless of any increase in the underlying security's market price. In order
for a call option to be profitable, the market price of the underlying security
must rise sufficiently above the exercise price to cover the premium and
transaction costs.
The successful use of a Fund's options strategies depends on the ability of
Columbia Management to forecast correctly interest rate and market movements.
When a Fund purchases an option, it runs the risk that it will lose its entire
investment in the option in a relatively short period of time, unless the Fund
exercises the option or enters into a closing sale transaction before the
option's expiration. If the price of the underlying security does not rise (in
the case of a call) or fall (in the case of a put) to an extent sufficient to
cover the option premium and transaction costs, the Fund will lose part or all
of its investment in the option. This contrasts with an investment by the Fund
in the underlying security, since the Fund will not realize a loss if the
security's price does not change.
The effective use of options also depends on a Fund's ability to terminate
option positions at times when Columbia Management deems it desirable to do so.
There is no assurance that a Fund will be able to effect closing transactions at
any particular time or at an acceptable price.
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2.O. ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
PURCHASING ILLIQUID SECURITIES
AFFECTED FUND:
CMG High Yield Fund
The affected Fund has a fundamental investment restriction stating that:
The Fund may not "[p]urchase illiquid securities, if upon the
purchase more than 10% of the value of the Fund's net assets would consist
of these securities. See "DESCRIPTION OF THE FUNDS, INVESTMENT OBJECTIVES,
POLICIES AND RISKS" for a complete discussion of illiquid securities."
The 1940 Act does not require the Fund to state a fundamental investment
restriction on this matter, although the staff of the SEC has taken the position
that an open-end investment company may not invest more than 15% of its net
assets in illiquid securities (10% for money market funds). As noted above,
although Columbia Management has no present intention of changing the way in
which the affected Fund is managed as a result of the elimination of these
restrictions, the Trustees believe it is not in the Fund's best interests to
maintain fundamental policies that are not required by applicable law.
Accordingly, the Trustees recommend that the affected Fund's fundamental
investment restriction with respect to purchasing illiquid securities be
eliminated.
REQUIRED VOTE AND EFFECTIVE DATE. Shareholders of each Fund are entitled to vote
on each Proposal 2.A. through 2.O. if the Proposal affects their Fund, voting
separately by Fund. Approval of each of Proposals 2.A. through 2.O. requires the
affirmative vote of a "majority of the outstanding voting securities" of a Fund
entitled to vote on such Proposal. As defined by the 1940 Act, a "majority of
the outstanding voting securities" means the vote of (i) 67% or more of the
Fund's shares present at the Meeting, if the holders of more than 50% of the
outstanding shares of the Fund are represented at the Meeting in person or by
proxy, or (ii) more than 50% of the Fund's outstanding shares, whichever is
less. To the extent multiple Proposals apply to the same Fund, the adoption of
any of these Proposals is not contingent on the adoption of any other Proposal
by shareholders of the Fund. In addition, with respect to each Fund, the
adoption of any of these Proposals 2.A. through 2.O. is not contingent on
election of any Trustees pursuant to Proposal 1.
As noted above, if approved by shareholders at the Meeting, each Proposal 2.A.
through 2.O. will take effect on [___________], 2005.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE FOR PROPOSAL 2.A.
THROUGH 2.O., AS APPLICABLE.
III. PROPOSAL 3: REORGANIZATION OF THE FUNDS
At the Meeting, it is proposed that the shareholders of each Fund approve the
Reorganization of the Fund, which would become a separate, corresponding series
of the Acquiring Trust, a Massachusetts business trust. Each Reorganization
would be effected pursuant to a Plan which provides for the transfer of all of
the assets of the Fund to the New Fund in exchange for shares of the New Fund
and the assumption by the New Fund of all of the liabilities of the Fund,
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followed by the distribution to shareholders of the Fund of the New Fund shares
in complete liquidation of the Fund and dissolution under Oregon law.
The Trustees believe that the consolidation of the Funds into a single legal
entity will enhance the efficiency of compliance monitoring and administration.
The Reorganizations are currently expected to be effected in the first quarter
of 2006. The New Fund will have the same fundamental investment restrictions as
the Fund immediately prior to the Reorganization (which will reflect any
approvals of Proposals 2.A. through 2.O.). All of the Trustees of the Acquiring
Trust will serve as Trustees of the New Funds, even if one or more of such
Trustees are not elected pursuant to Proposal 1.
As described in more detail below in "Information About the Acquiring Trust",
the Acquiring Trust is a business trust governed by Massachusetts law and an
agreement and declaration of trust (the "Agreement and Declaration of Trust").
The Acquiring Trust has separate series representing different portfolios. Each
series of the Acquiring Trust will have shares representing beneficial interests
in the assets and liabilities belonging to that series, and shares of each
series will be further divided into separate classes. The New Funds will
continue the business of the Funds.
Each New Fund will have the same investment objectives, policies and
restrictions as the corresponding Fund (as amended by Proposal 2 to the extent
the amendments are approved by shareholders). In addition, each New Fund will be
managed by the same investment team as the corresponding Fund using the same
investment process, and will have the same management fees and expense structure
as, the corresponding Fund immediately prior to the Reorganization.
BACKGROUND AND REASONS FOR THE REORGANIZATIONS
At a meeting held on May 11, 2005, the Board, including all Trustees who are not
"interested persons" of the Fund (as defined in Section 2(a)(19) of the 1940
Act) (each, an "Independent Trustee") unanimously approved the Reorganization of
each Fund and recommended shareholder approval of each Reorganization. The Board
was assisted in its determination by independent legal counsel for the
Independent Trustees. The Board determined that each Reorganization would be in
the best interests of the relevant Fund, and that the interests of the Fund's
shareholders would not be diluted as a result of effecting the Reorganization.
The Board also took into account the fact that the expected costs of the
proposed Reorganizations, including the costs incurred in connection with the
solicitation of proxies, the costs of holding the Meeting, the fees associated
with creating the New Funds, accounting fees, and legal fees, would be borne by
Columbia Management and not the Funds.
The primary purpose of the Reorganizations is to facilitate compliance
monitoring and efficient administration.
AGREEMENT AND PLAN OF REORGANIZATION
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Each Plan provides that the relevant New Fund will acquire all of the assets of
the corresponding Fund in exchange for the assumption by the New Fund of all of
the liabilities of the Fund and for the issuance of the shares of the New Fund
("Reorganization Shares"), all as of the Exchange Date (defined in each Plan to
be the date next following shareholder approval or which the Fund's prospectus
is scheduled to be reprinted or such other date as may be agreed upon by the New
Fund and the Fund). The following discussion of the Plans is qualified in its
entirety by the full text of the Plan for each Fund, the form of which is
attached as Exhibit 15 to this Proxy Statement.
Each Fund will sell all of its assets attributable to each class of its shares
to the corresponding New Fund, and, in exchange, the New Fund will assume all of
the liabilities of the Fund and deliver to the Fund a number of full and
fractional shares of beneficial interest of the same class of the New Fund
having an aggregate net asset value equal to the value of the assets of the
Fund, less the value of the liabilities of the Fund assumed by the New Fund
attributable to such class.
For federal income tax purposes, all of the Reorganizations are expected to be
tax-free reorganizations. For more information about the tax consequences of the
proposed Reorganizations, see "Federal Income Tax Consequences of the
Reorganizations" below.
Upon consummation of the transactions proposed to occur on the Exchange Date,
each Fund will distribute pro rata to its shareholders of record of each class
as of the Exchange Date the full and fractional Reorganization Shares of such
class received by the Fund. Each holder of shares of the Fund will receive a
number of full and/or fractional Reorganization Shares having an aggregate net
asset value on the Exchange Date equal to the value of and of the same class as
the full and/or fractional shares of the Fund held by the shareholder as of the
Exchange Date. This distribution will be accomplished by the establishment of
accounts on the share records of the corresponding New Fund in the names of the
Fund shareholders, each account representing the respective number of full and
fractional Reorganization Shares due such shareholder.
The consummation of each Reorganization is subject to the conditions set forth
in the Plan, including receipt of opinions of counsel, any of which may be
waived. Each Plan may be terminated and the Reorganization abandoned at any
time, before or after approval by the shareholders of the relevant Fund, prior
to the Exchange Date, by mutual consent of the Trustees of the relevant Fund and
trustees of the New Fund or, if any condition set forth in the Plan has not been
fulfilled and has not been waived by the party entitled to its benefits, by such
party.
All fees and expenses, including legal and accounting expenses, portfolio
transfer taxes (if any) or other similar expenses incurred in connection with
the consummation by each New Fund and its corresponding Fund of the transactions
contemplated by the Plan will be borne by Columbia Management.
OTHER MATTERS
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The investment objectives, policies and restrictions of each Fund (as amended
by Proposal 2 to the extent the amendments are approved by shareholders) will be
adopted by each New Fund and will not change as a result of the Reorganizations.
In addition, Columbia Management will serve as the investment adviser of each
New Fund. Furthermore, the management fees and expense structures of each New
Fund will be the same as for the corresponding Fund.
Immediately prior to the Reorganizations, the New Funds will have nominal assets
and no liabilities, and Columbia Management will be the sole shareholder of each
New Fund.
INFORMATION ABOUT THE ACQUIRING TRUST. The Acquiring Trust is governed by an
Agreement and Declaration of Trust dated as of [ ] and as amended from time to
time thereafter (the "Declaration of Trust"), By-Laws dated as of [ ] and as
amended from time to time thereafter (the "By-Laws"), and its Board. The
Acquiring Trust is organized as a Massachusetts business trust governed by
Massachusetts and federal law.
The table below summarizes the significant differences between the Declaration
of Trust and By-Laws of the Acquiring Trust and the organizational documents
(and applicable provisions of Oregon law) for the Funds. For additional
information, shareholders of a Fund should refer directly to such documents,
copies of which may be obtained by contacting the Acquiring Trust at its address
listed on the cover page of this Proxy Statement.
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THE ACQUIRING TRUST THE FUNDS
-------------------------------- -----------------------------------------
SHAREHOLDER A shareholder or former Shareholders who have fully paid the
LIABILITY: shareholder held to be subscription price for their shares
personally liable solely by have no personal liability in excess of
reason of his or her being or their shares.
having been a shareholder is
entitled to be held harmless A shareholder or former shareholder
from and indemnified against held personally liable solely by reason
all loss and expense arising of being or having been a shareholder
from such liability. with respect to one or more series is
entitled to be held harmless from and
Every note, bond, contract, indemnified against all loss and
instrument, certificate or expense arising from that liability.
undertaking made or issued by
any Trustees or Trustee or by Every note, bond contract, instrument,
any officers or officer must certificate, or undertaking made or
recite that the same was issued on behalf of the Trust by the
executed or made by or on Trustees, by any officers or officer
behalf of the Trust and that may recite that the note, bond
obligations of such instrument contract, instrument, certificate, or
are not binding on any of them undertaking was executed or made on
or shareholders individually. behalf of the Trust or by them as
Trustees or as officers or otherwise
and that the obligations of such
instrument are not binding upon any of
them or shareholders individually.
Omission of such recital will not
operate to bind any Trustees, officers
or shareholders individually.
SHAREHOLDER Shareholders have the power to Shareholders have the power to vote
VOTING RIGHTS: vote only (i) for the election only (a) for the election and removal
or, to the extent required by of Trustees, (b) with respect to
law, removal of Trustees; (ii) whether a claim, proceeding or court
with respect to any action should or should not be brought
termination, by the or maintained derivatively or as a
shareholders, of the Trust or class action on behalf of the Trust or
series or class of the Trust; the shareholders, (c) with respect to
(iii) with respect to the termination of the Trust or any
derivative actions, to the series of the Trust, and (d) with
extent certain demand respect to any additional matters
requirements are met; and (iv) relating to the Trust as required by
with respect to any other the organizational documents, or any
matters required by law, the registration of the Trust with the
organizational documents or
deemed
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desirable by the Board Securities and Exchange Commission or
of Trustees. any state, or as the Trustees consider
necessary or desirable.
Each whole share (or fractional
share) outstanding on the On a record date, each whole share
record date is entitled to a outstanding is entitled to one vote as
number of votes on any matter to any matter on which it is entitled
which it is entitled to vote to vote, and each fractional share is
equal to the net asset value of entitled to a proportionate fractional
the share (or fractional share) vote.
in U.S. dollars determined at
the close of business on the On any matter submitted to a vote of
record date (for example, a the shareholders, all shareholders of
share having a net asset value all series will vote together except
of $10.50 would be entitled to (i) when required by the 1940 Act,
10.5 votes). shareholders of each series will vote
separately and (ii) when the Trustees
Shareholders will vote together determine that the matter affects only
with shareholders of the other the interests of one or more series,
series of the Trust on matters then only the shareholders of the
affecting the Trust as a whole, series will be entitled to vote on the
such as the election of matter.
Trustees.
SHAREHOLDERS Shareholders have no specific Shareholders have no specific right to
MEETINGS: right to call meetings, except call meetings. The 1940 Act provides
as may be required by that the trustees of a common-law trust
applicable law, including the shall promptly call a meeting of
Investment Company Act of 1940. shareholders for the purpose of voting
upon the question of removal of any
such trustee or trustees when requested
in writing so to do by the record holders
of not less than 10 per centum of the
outstanding shares.
SHAREHOLDER 30% of the shares entitled to 30% of the shares entitled to vote at
QUORUM: vote at the meeting. the meeting.
SHAREHOLDER Majority consent required for Majority consent is required for
CONSENT: shareholder action taken shareholder action taken without a
without a meeting. meeting.
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NOTICE TO Notice of shareholder meetings Notice of shareholder meetings must be
SHAREHOLDERS: is to be mailed, postage given no earlier than 70 days nor less
prepaid, or sent by facsimile than 10 days before the date of the
or other electronic submission meeting.
not less than seven days before
the date of such meeting. For any meeting of shareholders, the
notice must include a description of
Notice is not expressly the purpose(s) for which the meeting is
required to state the purpose called.
for which the meeting is called.
SHAREHOLDER Shareholders may put a proxy in Shareholders may appoint a proxy, and
PROXIES: place for a duration of up to an appointment is valid for eleven
six months. months unless a different period is
provided in the appointment form.
TRUSTEE'S POWER The Declaration of Trust may be The Declaration of Trust may be amended
TO AMEND amended at any time by an at any time by an instrument in writing
DECLARATION OF instrument in writing signed by signed by a majority of the Trustees;
TRUST: a majority of the then provided, however, that before adopting
Trustees, provided that, for any amendment adding, deleting,
non-ministerial amendments, replacing or otherwise modifying any
notice is mailed to provisions relating to the Trust's
shareholders upon the same day shares, the Trustees must determine
such amendment is effective. that shareholder approval is not
otherwise required by the 1940 Act or
other applicable law.
TERMINATION OF Shareholders have the right to Shareholders have the right to
TRUST: terminate the Trust, or series terminate the Trust by vote of at least
or class, upon approval of at two-thirds of the outstanding shares of
least 66 2/3% of the each series entitled to vote.
outstanding shares of the Trust Shareholders have the right to
or the affected series or class. terminate any series by vote of at
least two-thirds of the shares of that
Trustees may terminate the series.
Trust, or any series or class,
without shareholder approval by Trustees may terminate the Trust, or
written notice to shareholders. any series, without shareholder
approval by written notice to
shareholders.
MERGER OR The Declaration of Trust The Declaration of Trust provides that
CONSOLIDATION provides that a consolidation, any merger, consolidation, sale of
TRUST: merger or transfer may be assets, or share exchange approved by
authorized by vote of a the Trustees must be
majority of
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the Trustees then in office authorized by a vote of a majority of
without shareholder approval, the outstanding shares of the Trust as
unless otherwise required by a whole or any affected series, as may
law. be applicable.
REMOVAL OF Trustee may be removed, with or Any Trustee may be removed at any time
TRUSTEES: without cause, by a majority of by written instrument by at least
Trustees then in office. two-thirds of the number of Trustees
prior to removal, specifying the
effective date of removal.
Any Trustee may be removed at a special
meeting of shareholders by a vote of
two-thirds of the outstanding shares.
DIRECTOR/TRUSTEE Not limited. Committees consisting of two or more
COMMITTEES: trustees may exercise the powers and
authority of the Trustees to the extent
the Trustees determine.
TRUSTEE Trustees are not personally Trustees are not personally liable for
LIABILITY: liable for claims against the any neglect or wrongdoing of any
Trust or for any neglect or officer, agent, employee, manager or
wrongdoing of any officer, principal underwriter of the Trust, and
agent, employee, investment no Trustee is responsible for the act
adviser, or principal or omission of any other Trustee.
underwriter of the Trust. Each Trustees may be liable by reason of
Trustee is not responsible for willful misfeasance, bad faith, gross
the act or omission of any negligence, or
other Trustee
-35-
and may be liable only by reason reckless disregard of the duties
of willful misfeasance, bad involved in the conduct of his office.
faith, gross negligence or
reckless disregard of the duties
involved in the conduct of his
office.
TRUSTEE The By-Laws state that the The Declaration of Trust and Bylaws
INDEMNIFICATION: Trust will indemnify each of state that the Trust will indemnify, to
its Trustees and officers who the fullest extent not prohibited by
are not employees or officers law and the 1940 Act and related
of any investment adviser to regulations and interpretations of the
the Trust or any affiliated SEC, any current or former Trustee, or
person thereof and may officer of the Trust against any
indemnify each of its officers liability and all expenses reasonably
who are employees or officers incurred or paid or expected to be paid
of any investment adviser to in connection with any claim, action,
the Trust or any affiliated suit, or proceeding in which he or she
person thereof against all becomes involved by reason of the fact
liabilities and expenses, that such person is or was a Trustee,
including amounts paid in officer, employee or agent of the
satisfaction of judgments, in Trust.
compromise, as fines and
penalties, and as counsel fees,
reasonably incurred by such
person while in office or
thereafter, by reason of the
indemnified person's service as
a Trustee or officer. The Trust
will not indemnify its Trustees
and officers against any
liability to the Trust or to
its shareholders to which he or
she would otherwise be subject
by reason of willful
misfeasance, bad faith, gross
negligence or reckless
disregard of the duties
involved in the conduct of his
office.
Under the By-Laws, in the
absence of a final decision on
the merits by an adjudicating
body that such person has not
acted in good faith in the
reasonable belief that such
person's action was in the best
interests of the Trust or is
liable to the Trust or its
Shareholders by reason of
willful misfeasance, bad faith,
gross
-36-
negligence or reckless
disregard of the duties
involved in the conduct of his
or her office, indemnification
will be provided if (a)
approved, after notice that it
involves such indemnification,
by at least a majority of the
disinterested Trustees acting
on the matter (provided that a
majority of the disinterested
Trustees then in office act on
the matter) upon a
determination, based upon a
review of readily available
facts, that such person has
acted in good faith in the
reasonable belief that such
person's action was in the best
interests of the Trust and is
not liable to the Trust or its
shareholders by reason of
willful misfeasance, bad faith,
gross negligence or reckless
disregard of the duties
involved in the conduct of his
or her office or (b) there has
been obtained an opinion in
writing of independent legal
counsel, based upon a review of
readily available facts to the
effect that such person appears
to have acted in good faith in
the reasonable belief that such
person's action was in the best
interests of the Trust and that
such indemnification would not
protect such person against any
liability to the Trust to which
such person would otherwise be
subject by reason of willful
misfeasance, bad faith, gross
negligence or reckless
disregard of the duties
involved in the conduct of his
or her office.
LEGAL EXPENSES: The By-Laws state that legal The Trust will pay for or reimburse the
expenses may be paid from time reasonable expenses incurred by any
to time by the Trust in advance current or former Trustee or officer in
of the final disposition of any any proceeding in advance of the final
such proceeding if the Trust disposition of the
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receives a written undertaking proceeding to the fullest extent not
by the indemnified person to prohibited by law.
reimburse the Trust in the
event it is subsequently
determined that the indemnified
person is not entitled to such
indemnification and (a) the
indemnified person provides
security for his undertaking,
or (b) the Trust is insured
against losses arising by
reason of any lawful advances,
or (c) a majority of the
disinterested, non-party
Trustees or an independent
legal counsel, as expressed in
a written opinion, determines
that there is reason to believe
that the indemnified person
ultimately will be found
entitled to indemnification.
DIVIDENDS: Not limited. Not limited.
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FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATIONS
The Reorganizations are intended to be tax-free. As a condition to each Fund's
obligation to consummate the Reorganization, the Fund will receive an opinion
from Ropes & Gray LLP, counsel to each Fund, to the effect that, on the basis of
the existing provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), current administrative rules and court decisions, generally for federal
income tax purposes, except as noted below:
(i) the Reorganization will constitute a reorganization within the meaning of
Section 368(a) of the Code, and the Fund and the New Fund will each be a
"party to a reorganization" within the meaning of Section 368(b) of the
Code;
(ii) under Section 361 of the Code, no gain or loss will be recognized by the
Fund upon the transfer of its assets to the New Fund in exchange for
Reorganization Shares and the assumption by the New Fund of the Fund's
liabilities, or upon the distribution of such Reorganization Shares by the
Fund to the shareholders of the Fund in liquidation;
(iii) under Section 354 of the Code, the Fund shareholders will recognize no
gain or loss upon exchange of their shares of the Fund for the
Reorganization Shares;
(iv) under Section 358 of the Code, the aggregate tax basis of the
Reorganization Shares to be received by each shareholder of the Fund will
be the same as the aggregate tax basis of the shares of the Fund exchanged
therefor;
(v) under Section 1223(1) of the Code, the holding period of the
Reorganization Shares received by each shareholder of the Fund will
include the holding period for the Fund shares exchanged for the
Reorganization Shares; provided such shares of the Fund were held as a
capital asset on the date of the exchange;
(vi) under Section 1032 of the Code, no gain or loss will be recognized by the
New Fund upon receipt of the assets transferred to the New Fund pursuant
to the Plan in exchange for the Reorganization Shares and assumption by
the New Fund of the liabilities of the Fund;
(vii) under Section 362(b) of the Code, the New Fund's tax basis in the assets
that the New Fund receives from the Fund will be the same as the Fund's
tax basis in such assets immediately prior to such exchange;
(viii) under Section 1223(2) of the Code, the New Fund's holding period in such
assets will include the Fund's holding period in such assets;
(ix) under Section 381 of the Code, the New Fund will succeed to the capital
loss carryovers of the Fund, if any, but the use by the New Fund of any
such capital loss carryovers (and of capital loss carryovers of the New
Fund) may be subject to limitation under Sections 383 and 284 of the Code.
-39-
The opinion will be based on certain factual certifications made by officers of
the Funds and will also be based on customary assumptions. Each Fund has agreed
to make and provide additional representations to Ropes & Gray with respect to
each Fund that are reasonably requested by Ropes & Gray. Ropes & Gray LLP will
express no view with respect to the effect of the Reorganization on any
transferred asset as to which any unrealized gain or loss is required to be
recognized at the end of a taxable year (or on the termination or transfer
thereof) under federal income tax principles. The opinion is not a guarantee
that the tax consequences of the Reorganizations will be as described above.
VOTE REQUIRED. Approval of each Reorganization and dissolution under state law
requires the affirmative vote of holders of more than 50% of the outstanding
shares of the Fund.
IV. OTHER INFORMATION
Certain additional information regarding Columbia Management and the Meeting is
presented below.
MANAGEMENT
Columbia Management, located at One Financial Center, Boston, MA 02111, is the
Funds' investment adviser. Columbia Management, a registered investment adviser,
has been an investment adviser since 1969. Columbia Funds Distributor, Inc.
("CFD"), located at One Financial Center, Boston, MA 02111, is the Funds'
distributor. Columbia Management and CFD are wholly owned subsidiaries of
Columbia Management Group, Inc. ("CMG"), which is a wholly owned subsidiary of
Bank of America Corporation. Prior to April 1, 2004, CMG was an indirect wholly
owned subsidiary of Fleet Boston Financial Corporation. Effective April 1, 2004,
Fleet Boston Financial Corporation was acquired by Bank of America Corporation.
Bank of America is one of the world's largest financial institutions, serving
individual consumers, small businesses and large corporations and institutions
with a full range of banking, investing, asset management and other financial
and risk management products and services. CMG is located at One Financial
Center, Boston, MA 02111.
LEGAL PROCEEDINGS
On February 9, 2005, Columbia Management and CFD (collectively, the "Columbia
Group") entered into an Assurance of Discontinuance with the New York Attorney
General ("NYAG") (the "NYAG Settlement") and consented to the entry of a
cease-and-desist order by the Securities and Exchange Commission ("SEC") (the
"SEC Order"). The SEC Order and the NYAG Settlement are referred to collectively
as the "Settlements". The Settlements contain substantially the same terms and
conditions as outlined in the agreements in principle which Columbia Group
entered into with the SEC and NYAG in March 2004. Under the terms of the SEC
Order, the Columbia Group has agreed among other things, to: pay $70 million in
disgorgement and $70 million in civil money penalties; cease and desist from
violations of the antifraud provisions and certain other provisions of the
federal securities laws; maintain certain compliance and ethics oversight
structures; retain an independent
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consultant to review the Columbia Group's applicable supervisory, compliance,
control and other policies and procedures; and retain an independent
distribution consultant (see below). The Columbia Funds have also undertaken to
implement certain governance measures designed to maintain the independence of
their boards of trustees. The NYAG Settlement also, among other things, requires
Columbia and its affiliates, Banc of America Capital Management, LLC and BACAP
Distributors, LLC to reduce certain Columbia Funds, Nations Funds and other
mutual funds management fees collectively by $32 million per year for five
years, for a projected total of $160 million in management fee reductions.
Pursuant to the procedures set forth in the SEC order, the $140 million in
settlement amounts described above will be distributed in accordance with a
distribution plan to be developed by an independent distribution consultant, who
is acceptable to the SEC staff and the Columbia Funds' independent trustees. The
distribution plan must be based on a methodology developed in consultation with
the Columbia Group and the Fund's independent trustees and not unacceptable to
the staff of the SEC. "At this time, the distribution plan is still under
development. As such, any gain to the fund or its shareholders can not currently
be determined." As a result of these matters or any adverse publicity or other
development resulting from them, there may be increased redemptions or reduced
sales of fund shares, which could increase transaction costs or operating
expenses, or have other adverse consequences for the funds. A copy of the SEC
Order is available on the SEC website at http://www.sec.gov. A copy of the NYAG
Settlement is available as part of the Bank of America Corporation Form 8-K
filing on February 10, 2005.
On January 11, 2005, a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Fund
and Columbia. The lawsuit alleges that defendants violated common law duties to
fund shareholders as well as sections of the Investment Company Act of 1940, by
failing to ensure that the Fund and other affiliated funds participated in
securities class action settlements for which the funds were eligible.
Specifically, plaintiffs allege that defendants failed to submit proof of claims
in connection with settlements of securities class action lawsuits filed against
companies in which the funds held positions.
In 2004, certain Columbia funds, advisers and affiliated entities were named as
defendants in certain purported shareholder class and derivative actions making
claims, including claims under the Investment Company and the Investment
Advisers Acts of 1940 and state law. The suits allege, inter alia, that the fees
and expenses paid by the funds are excessive and that the advisers and their
affiliates inappropriately used fund assets to distribute the funds and for
other improper purpose. On March 2, 2005, the actions were consolidated in the
Massachusetts federal court as In re Columbia Entities Litigation. The
plaintiffs are expected to file a consolidated amended complaint in June 2005.
The Fund and the other defendants to these actions, including Columbia and
various of its affiliates, certain other mutual funds advised by Columbia and
its affiliates, and various directors of such funds, have denied these
allegations and are contesting the plaintiffs' claims. These proceedings are
ongoing, however, based on currently available information, Columbia believes
that these lawsuits are without merit, that the likelihood they will have a
material adverse impact on any fund is remote, and that the lawsuits are not
likely to materially affect its ability to provide investment management
services to its clients, including the Fund. In connection with events described
in detail above, various parties have filed suit against certain funds, their
Boards, FleetBoston Financial Corporation and its affiliated entities and/or
Bank of America Corporation and its affiliated entities. More than 300 cases
including those filed against entities unaffiliated with the funds, their
Boards, FleetBoston Financial Corporation and its affiliated entities and/or
Bank of America Corporation and its affiliated entities have been transferred to
the Federal District Court in Maryland and consolidated in a multi-district
proceeding (the "MDL"). On March 21, 2005 purported class action plaintiffs
filed suit in Massachusetts state court alleging that the conduct, including
market timing, entitles Class B shareholders in certain Columbia funds to an
exemption from contingent deferred sales charges upon early redemption (the
"CDSC Lawsuit"). The CDSC Lawsuit has been removed to federal court in
Massachusetts and the federal Judicial Panel has conditionally ordered its
transfer to the MDL. The MDL is ongoing. Accordingly, an estimate of the
financial impact of this litigation on any Fund, if any, can not currently be
made.
-41-
OTHER BUSINESS
The Meeting has been called to transact any business that properly comes before
it. The only business that management of the Funds intends to present or knows
that others will present is the Proposals. If any other matters properly come
before the Meeting, and on all matters incidental to the conduct of the Meeting,
the persons named as proxies intend to vote the proxies in accordance with their
judgment, unless the Secretary of the Funds has previously received written
contrary instructions from the shareholder entitled to vote the shares.
OUTSTANDING SHARES AND SIGNIFICANT SHAREHOLDERS
All shareholders of record at the close of business on July 8, 2005, are
entitled to one vote for each share held on that date and to fractional votes
for any fractional shares held on that date. The table in Appendix E lists for
each Fund the total number of shares outstanding as of the close of business on
July 8, 2005, for each class of a Fund's shares entitled to vote at the Meeting.
The table in Appendix F lists each holder of record of more than five percent of
any class of shares of each Fund as of the close of business on May 31, 2005.
The Trustees and officers of each Fund, in the aggregate, owned less than 1% of
each Fund's outstanding shares as of May 31, 2005.
INFORMATION ABOUT THE MEETING AND THE VOTING AND TABULATION OF PROXIES
All proxies solicited by or on behalf of the Board that are properly executed
and returned in time to be voted at the Meeting will be voted at the Meeting as
instructed on the proxy. If no instructions are given, the proxy will be voted
in favor of the Proposals.
Any proxy may be revoked at any time prior to its being exercised by written
notification received by the Funds' Secretary, by the execution of a later dated
proxy, or by attending the Meeting and voting in person.
For each Fund, a quorum for the conduct of business at the Meeting requires the
presence, in person or by proxy, of 30% of the outstanding shares of the CMG
Fund Trust as a whole, and, with respect to voting for each Fund on approval or
disapproval of proposals 2.A. through 2.O., as applicable, and proposal 3, 30%
of the outstanding shares of each Fund separately.
Approval of the eleven nominees for election as Trustees under Proposal 1 is by
a plurality of votes cast at the Meeting which means that if a quorum of
shareholders is present at the Meeting, the eleven nominees for election as
Trustees who receive the greatest
-42-
number of votes cast at the Meeting will be elected Trustees. Approval of each
of Proposals 2.A. through 2.O. requires the affirmative vote of a "majority of
the outstanding voting securities" of a Fund entitled to vote on such Proposal.
As defined by the 1940 Act, a "majority of the outstanding voting securities"
means the vote of (i) 67% or more of the Fund's shares present at the Meeting,
if the holders of more than 50% of the outstanding shares of the Fund are
represented at the Meeting in person or by proxy, or (ii) more than 50% of the
Fund's outstanding shares, whichever is less. Approval of Proposal 3 requires
the affirmative vote of holders of more than 50% of the outstanding shares of
the Fund. Only shareholders of record on July 8, 2005, may vote.
In determining whether a quorum is present, the Tellers will count shares
represented by proxies that reflect abstentions, and "broker non-votes," as
shares that are present and entitled to vote. With respect to Proposal 1,
withheld authority, abstentions and broker non-votes have no effect on the
outcome of voting. With respect to any other Proposals, withheld authority,
abstentions and broker non-votes have the effect of a vote "against" the
Proposal. "Broker non-votes" are shares held by brokers or nominees as to which
(i) the broker or nominee does not have discretionary voting power, and (ii) the
broker or nominee has not received instructions from the beneficial owner or
other person who is entitled to instruct how the shares will be voted.
ADJOURNMENTS
If a quorum is not present at the Meeting, the Meeting will be adjourned to
permit further solicitation of proxies. In the event that a quorum is present at
the Meeting but sufficient votes to approve any of the proposals have not been
received, the persons named as proxies may propose one or more adjournments of
the Meeting to permit further solicitation of proxies. A shareholder vote may be
taken on one or more of the proposals referred to above prior to such
adjournment if sufficient votes have been received and it is otherwise
appropriate. Any such adjournment will require the affirmative vote of a
majority of those shares voted at the Meeting (without regard to abstentions and
broker non-votes). If a quorum is present, the persons named as proxies will
vote those proxies that entitle them to vote for any such proposal in favor of
such adjournment and will vote those proxies that require them to vote for
rejection of any such proposal against any such adjournment.
SUBMISSION OF PROPOSALS FROM SHAREHOLDERS AT FUTURE MEETINGS
Your Fund does not regularly hold annual shareholder meetings, but may from time
to time schedule special meetings. In accordance with the regulations of the
SEC, in order to be eligible for inclusion in the Fund's proxy statement for
such a meeting, a shareholder proposal must be received a reasonable time before
the Fund prints and mails its proxy statement.
You may submit shareholder proposals c/o the Secretary of the Funds, One
Financial Center, Boston, Massachusetts 02111-2621.
OTHER INFORMATION
EACH FUND HAS PREVIOUSLY SENT ITS MOST RECENT ANNUAL REPORT AND SEMI-ANNUAL
REPORT FOR ANY SUBSEQUENT SEMI-ANNUAL PERIOD TO ITS SHAREHOLDERS. YOU MAY OBTAIN
A COPY OF THE
-43-
REPORT, FREE OF CHARGE, BY WRITING TO COLUMBIA AT ONE FINANCIAL
CENTER, BOSTON, MASSACHUSETTS 02111-2621, OR BY CALLING 1-800-426-3750.
-44-
APPENDIX A - OFFICER INFORMATION
The names and ages of the executive officers of the Funds, the year each was
first elected or appointed to office and their principal business occupations
during at least the last five years are shown below. The address of each officer
is One Financial Center, Boston, MA 02111-2621, unless otherwise indicated.
YEAR FIRST ELECTED
OFFICERS POSITION WITH OR APPOINTED TO
NAME/AGE AND ADDRESS FUNDS OFFICE PRINCIPAL OCCUPATION(s) DURING PAST FIVE YEARS
- --------------------- -------------- ------------------- -------------------------------------------------
Christopher L. Wilson Head of Mutual 2004 Head of Mutual Funds since August, 2004 and
(Age 47) Funds since Senior Vice President of the Advisor since
August 2004; January, 2005; President of the Columbia Funds,
President of Liberty Funds and Stein Roe Funds since
the Columbia October, 2004; President and Chief Executive
Funds since Officer of the Nations Funds since January,
October 2004 2005; Senior Vice President of BACAP
Distributors LLC since January, 2005; Director
of FIM Funding, Inc. since January, 2005;
Senior Vice President of Columbia Funds
Distributor, Inc. since January, 2005; Director
of Columbia Funds Services, Inc. since January,
2005 (formerly President and Chief Executive
Officer, CDC IXIS Asset Management Services,
Inc. from September, 1998 to August, 2004).
J. Kevin Connaughton Treasurer 2000 Treasurer of the Columbia Funds since October,
(Age 40) 2003 and of the Liberty Funds, Stein Roe Funds
and All-Star Funds since December, 2000; Vice
President of the Advisor since April, 2003
(formerly President of the Columbia Funds,
Liberty Funds and Stein Roe Funds from
February, 2004 to October, 2004; Chief
Accounting Officer and Controller of the
Liberty Funds and All-Star Funds from February,
1998 to October, 2000); Treasurer of the Galaxy
Funds since September, 2002 (formerly Treasurer
from December, 2002 to December, 2004
A-1
and President from February, 2004 to December, 2004
of the Columbia Management Multi-Strategy Hedge
Fund, LLC; Vice President of Colonial
Management Associates, Inc. from February, 1998
to October, 2000).
Mary Joan Hoene Senior Vice 2004 Senior Vice President and Chief Compliance
(Age 54) President and Officer of the Columbia Funds, Liberty Funds,
40 West 57th Street Chief Stein Roe Funds and All-Star Funds since
New York, NY 10019 Compliance August, 2004 (formerly Partner, Carter, Ledyard
Officer since & Milburn LLP from January, 2001 to August,
2004 2004; Counsel, Carter, Ledyard & Milburn LLP
from November, 1999 to December, 2000; Vice
President and Counsel, Equitable Life Assurance
Society of the United States from April, 1998
to November, 1999).
A-2
Michael G. Clarke Chief 2004 Chief Accounting Officer of the Columbia Funds,
(Age 35) Accounting Liberty Funds, Stein Roe Funds and All-Star
Officer since Funds since October, 2004 (formerly Controller
October 2004 of the Columbia Funds, Liberty Funds, Stein Roe
Funds and the All-Star Funds from May, 2004 to
October, 2004); Assistant treasurer from June,
2002 to May, 2004; Vice President, Product
Strategy & Development of the Liberty Funds
Group from February, 2001 to June, 2002;
Assistant Treasurer of the Liberty Funds Group
from February, 2001 to June, 2002; Assistant
Treasurer of the Liberty Funds, Stein Roe Funds
and the All-Star Funds from August, 1999 to
February, 2001; Audit Manager, Deloitte &
Touche LLP from May, 1997 to August, 1999.
Jeffrey R. Coleman Controller 2004 Controller of the Columbia Funds, Liberty
(Age 35) since October Funds, Stein Roe Funds and the All-Star Funds
2004 since October, 2004 (formerly Vice President of
CDC IXIS Asset Management Services, Inc. and
Deputy Treasurer of the CDC Nvest Funds and
Loomis Sayles Funds from February, 2003 to
September, 2004; Assistant Vice President of
CDC IXIS Asset Management Services, Inc. and
Assistant Treasurer of the CDC Nvest Funds from
August, 2000 to February, 2003; Tax Manager of
PFPC, Inc. from November, 1996 to August, 2000).
A-3
R. Scott Henderson Secretary since 2004 Secretary of the Columbia Funds, Liberty Funds
(Age 45) December 2004 and the Stein Roe Funds since December, 2004
(formerly Of Counsel Bingham McCutchen from
April 2001 to September 2004; Executive
Director and General Counsel, Massachusetts
Pension Reserves Investment Management Board
from September, 1997 to March, 2001).
A-4
APPENDIX B.1 - TRUSTEES' COMPENSATION
For the calendar year ended December 31, 2004, the Trustees received the
following compensation for serving as Trustees:
TOTAL COMPENSATION FROM THE
FUND COMPLEX PAID TO THE
PENSION OR RETIREMENT TRUSTEES FOR THE
BENEFITS ACCRUED AS PART CALENDAR YEAR ENDED
DISINTERESTED TRUSTEES OF FUND EXPENSES (1) DECEMBER 31, 2004
- ---------------------- ------------------------ ---------------------------
Douglas A. Hacker N/A $ 135,000
Janet Langford Kelly N/A $ 148,500
Richard W. Lowry N/A $ 150,700
Charles R. Nelson N/A $ 141,500
John J. Neuhauser N/A $ 158,284
Patrick J. Simpson (2) N/A $ 129,000
Thomas E. Stitzel N/A $ 149,000
Thomas C. Theobald (2) N/A $ 172,500
Anne-Lee Verville (2) N/A $ 157,000
Richard L. Woolworth N/A $ 131,000
INTERESTED TRUSTEE
William E. Mayer N/A $ 166,700
(1) The Funds do not currently provide pension or retirement plan benefits
to the Trustees.
(2) During the calendar year ended December 31, 2004, Mr. Simpson deferred
$129,000 of his total compensation pursuant to the deferred compensation
plan, Mr. Theobald deferred $90,000 of his total compensation pursuant to
the deferred compensation plan and Ms. Verville deferred $55,000 of her
total compensation pursuant to the deferred compensation plan.
B-1
APPENDIX B.2 -- TRUSTEES' COMPENSATION
For the last fiscal year, the Trustees received from each Fund the following
compensation for serving as Trustees:
AGGREGATE AGGREGATE
COMPENSATION AGGREGATE AGGREGATE AGGREGATE AGGREGATE AGGREGATE COMPENSATION
FROM COMPENSATION COMPENSATION AGGREGATE COMPENSATION COMPENSATION COMPENSATION FROM MCVF
CBF FOR THE FROM ESPIF FROM HYF FOR COMPENSATION FROM LCGF FOR FROM LCVF FOR FROM MCGF FOR THE FISCAL
FISCAL FOR THE FISCAL THE FISCAL FROM ISF THE FISCAL THE FISCAL THE FISCAL FOR
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
07/31/04 07/31/04 07/31/04 07/31/04 07/31/04 07/31/04 07/31/04 07/31/04
------------ -------------- ------------ ------------ ------------- ------------- ------------- ------------
DISINTERESTED TRUSTEE
Douglas A. Hacker (d) $ 329 $ $ 751 $ $ $ $ $
Janet Langford Kelly (d) 338 767
Richard W. Lowry (d) 311 699
Charles R. Nelson 336 757
John J. Neuhauser (d) 323 725
Patrick J. Simpson (a) 353 814
Thomas E. Stitzel (d) 357 787
Thomas C. Theobald (b)(d) 433 1040
Anne-Lee Verville (c)(d) 402 912
Richard L. Woolworth 382 869
INTERESTED TRUSTEE
William E. Mayer (d) 333 744
B-2
AGGREGATE AGGREGATE AGGREGATE AGGREGATE AGGREGATE
COMPENSATION AGGREGATE AGGREGATE COMPENSATION COMPENSATION COMPENSATION COMPENSATION AGGREGATE
FROM MABSF COMPENSATION COMPENSATION FROM SCGF FROM SCVF FROM SMCF FROM COMPENSATION
FOR FROM STBF FROM SCF FOR FOR THE FOR THE FOR THE SEF FOR THE FROM USTBF
THE FISCAL FOR THE FISCAL THE FISCAL FISCAL FISCAL FISCAL FISCAL FOR THE FISCAL
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
07/31/04 07/31/04 07/31/04 07/31/04 07/31/04 07/31/04 07/31/04 07/31/04
------------ -------------- ------------ ------------ ------------ ------------ ----------- --------------
DISINTERESTED TRUSTEE
Douglas A. Hacker (d) $ $ 553 $ $ $ $ $ none
Janet Langford Kelly (d) 566 none
Richard W. Lowry (d) 531 none
Charles R. Nelson 569 none
John J. Neuhauser (d) 552 none
Patrick J. Simpson (a) 594 none
Thomas E. Stitzel (d) 619 none
Thomas C. Theobald (b)(d) 676 none
Anne-Lee Verville (c)(d) 676 none
Richard L. Woolworth 649 none
INTERESTED TRUSTEE none
William E. Mayer (d) 570 none
(a) During the fiscal year ended July 31, 2004, Mr. Simpson deferred $594,
$814, and $353 of his compensation from STBF, HYF and CBF, respectively.
(b) During the fiscal year ended July 31, 2004, Mr. Theobald deferred $46,
$682, and $243 of his compensation from STBF, HYF and CBF, respectively.
(c) During the fiscal year ended July 31, 2004, Ms. Verville deferred $81,
$417, and $148 of her compensation from STBF, HYF and CBF, respectively.
(d) Each of Ms. Verville, Ms. Kelly and Messrs. Hacker, Lowry, Mayer,
Neuhauser, Stitzel and Theobald was elected a Trustee of the Trust on
October 7, 2003. The compensation amounts for each of them reflect their
total compensation paid for service during 2003 as a Trustee or director of
funds formerly known as the Liberty Funds and Stein Roe Funds that are now
part of the Columbia Funds Complex.
B-3
APPENDIX C - TRUSTEE SHARE OWNERSHIP
Disinterested Trustees:
<Table>
<Caption>
DOUGLAS A. JANET LANGFORD
NAME OF FUND HACKER KELLY RICHARD W. LOWRY
------------ ---------- -------------- ----------------
CMG Small/Mid Cap Fund None None None
CMG International Stock Fund None None None
CMG Enhanced S&P 500 Index Fund None None None
CMG Small Cap Value Fund None None None
CMG Small Cap Growth Fund None None None
CMG Mid Cap Value Fund None None None
CMG Mid Cap Growth Fund None None None
CMG Large Cap Growth Fund None None None
CMG Large Cap Value Fund None None None
AGGREGATE DOLLAR RANGE OF EQUITY OVER $100,000 OVER $100,000 OVER $100,000
SECURITIES OWNED IN ALL FUNDS
OVERSEEN BY TRUSTEE IN FUND
COMPLEX:
</Table>
<Table>
<Caption>
DR. CHARLES R.
NAME OF FUND NELSON JOHN J. NEUHAUSER
------------ -------------- -----------------
CMG Small/Mid Cap Fund None None
CMG International Stock Fund None None
CMG Enhanced S&P 500 Index Fund None None
CMG Small Cap Value Fund None None
CMG Small Cap Growth Fund None None
CMG Mid Cap Value Fund None None
CMG Mid Cap Growth Fund None None
CMG Large Cap Growth Fund None None
CMG Large Cap Value Fund None None
AGGREGATE DOLLAR RANGE OF EQUITY OVER $100,000 OVER $100,000
SECURITIES OWNED IN ALL FUNDS
OVERSEEN BY TRUSTEE IN FUND
COMPLEX:
</Table>
<Table>
<Caption>
PATRICK J.
NAME OF FUND SIMPSON THOMAS E. STITZEL
------------ ---------- -----------------
CMG Small/Mid Cap Fund None None
CMG International Stock Fund None None
CMG Enhanced S&P 500 Index Fund None None
CMG Small Cap Value Fund None None
CMG Small Cap Growth Fund None None
CMG Mid Cap Value Fund None None
CMG Mid Cap Growth Fund None None
CMG Large Cap Growth Fund None None
CMG Large Cap Value Fund None None
AGGREGATE DOLLAR RANGE OF EQUITY $50,001-$100,000 $50,001-$100,000
SECURITIES OWNED IN ALL FUNDS
OVERSEEN BY TRUSTEE IN FUND
COMPLEX:
</Table>
C-1
<Table>
<Caption>
THOMAS C. ANNE-LEE RICHARD W.
NAME OF FUND THEOBALD VERVILLE(1) WOOLWORTH
------------ -------- ----------- ---------
CMG Small/Mid Cap Fund None None None
CMG International Stock Fund None None None
CMG Enhanced S&P 500 Index Fund None None None
CMG Small Cap Value Fund None None None
CMG Small Cap Growth Fund None None None
CMG Mid Cap Value Fund None None None
CMG Mid Cap Growth Fund None None None
CMG Large Cap Growth Fund None None None
CMG Large Cap Value Fund None None None
AGGREGATE DOLLAR RANGE OF EQUITY OVER $100,000 $0 OVER $100,000
SECURITIES OWNED IN ALL FUNDS
OVERSEEN BY TRUSTEE IN FUND
COMPLEX:
</Table>
Interested Trustees:
<Table>
<Caption>
NAME OF FUND WILLIAM E. MAYER
------------ ----------------
CMG Small/Mid Cap Fund None
CMG International Stock Fund None
CMG Enhanced S&P 500 Index Fund None
CMG Small Cap Value Fund None
CMG Small Cap Growth Fund None
CMG Mid Cap Value Fund None
CMG Mid Cap Growth Fund None
CMG Large Cap Growth Fund None
CMG Large Cap Value Fund None
AGGREGATE DOLLAR RANGE OF EQUITY $50,001-$100,000
SECURITIES OWNED IN ALL FUNDS
OVERSEEN BY TRUSTEE IN FUND
COMPLEX:
</Table>
DISINTERESTED TRUSTEES:
<Table>
<Caption>
DOUGLAS A. JANET LANGFORD
NAME OF FUND HACKER KELLY RICHARD W. LOWRY
------------ ------------- ------------- ----------------
CMG Short Term Bond Fund None None None
CMG High Yield Fund None None None
CMG Core Bond Fund None None None
CMG Ultra Short Term Fund None None None
CMG Small Cap Fund None None None
CMG Mortgage and Asset-Backed None None None
Securities Fund
AGGREGATE DOLLAR RANGE OF EQUITY OVER $100,000 OVER $100,000 OVER $100,000
SECURITIES OWNED IN ALL FUNDS
OVERSEEN BY TRUSTEE IN FUND
COMPLEX:
</Table>
<Table>
<Caption>
DR. CHARLES R.
NAME OF FUND NELSON JOHN J. NEUHAUSER
------------ ----------------- -----------------
CMG Short Term Bond Fund None None
CMG High Yield Fund None None
CMG Core Bond Fund None None
CMG Ultra Short Term Fund None None
CMG Small Cap Fund None None
CMG Mortgage and Asset-Backed Securities None None
Fund
AGGREGATE DOLLAR RANGE OF EQUITY OVER $100,000 OVER $100,000
SECURITIES OWNED IN ALL FUNDS
OVERSEEN BY TRUSTEE IN FUND
COMPLEX:
</Table>
<Table>
<Caption>
NAME OF FUND PATRICK J. SIMPSON THOMAS E. STITZEL
------------ ------------------ -----------------
CMG Short Term Bond Fund None None
CMG High Yield Fund None None
CMG Core Bond Fund None None
CMG Ultra Short Term Fund None None
CMG Small Cap Fund None None
CMG Mortgage and Asset-Backed Securities None None
Fund
AGGREGATE DOLLAR RANGE OF EQUITY $50,001 - $100,000 $50,001 - $100,000
SECURITIES OWNED IN ALL FUNDS
OVERSEEN BY TRUSTEE IN FUND
COMPLEX:
</Table>
<Table>
<Caption>
THOMAS C. ANNE-LEE RICHARD W.
NAME OF FUND THEOBALD VERVILLE(1) WOOLWORTH
------------ -------- ----------- ---------
CMG Short Term Bond Fund None None None
CMG High Yield Fund None None None
CMG Core Bond Fund None None None
CMG Ultra Short Term Fund None None None
CMG Small Cap Fund None None None
CMG Mortgage and Asset-Backed Securities None None None
Fund
AGGREGATE DOLLAR RANGE OF EQUITY OVER $100,000 $0 OVER $100,000
SECURITIES OWNED IN ALL FUNDS
OVERSEEN BY TRUSTEE IN FUND
COMPLEX
</Table>
Interested Trustees:
<Table>
<Caption>
NAME OF FUND WILLIAM E. MAYER
------------ ----------------
CMG Short Term Bond Fund None
CMG High Yield Fund None
CMG Core Bond Fund None
CMG Ultra Short Term Fund None
CMG Small Cap Fund None
CMG Mortgage and Asset-Backed Securities None
Fund
AGGREGATE DOLLAR RANGE OF EQUITY $50,001 - $100,000
SECURITIES OWNED IN ALL FUNDS
OVERSEEN BY TRUSTEE IN FUND
COMPLEX:
</Table>
APPENDIX D1
AUDIT AUDIT-RELATED TAX ALL OTHER
FEES FEES FEES FEES
------ ------------- ---- ---------
2003
2004
2003
2004
2003
2004
2003
2004
2003
2004
2003
2004
2003
2004
2003
2004
D-1
APPENDIX D2
APPENDIX E - SHARES OUTSTANDING AND ENTITLED TO VOTE
APPENDIX F - OWNERSHIP OF SHARES
Class Registration Share Balance Percent Class Total
CMG CORE BOND FUND
Z BANK OF AMERICA NA 7,307,150.9480 98.59 7,411,552.7840
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
F-1
Class Registration Share Balance Percent Class Total
CMG ENHANCED S & P 500 INDEX FUND
Z BANK OF AMERICA NA 6,823,097.9240 100.00 6,823,097.9240
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
F-2
Class Registration Share Balance Percent Class Total
CMG HIGH YIELD FUND
Z BANK OF AMERICA NA 12,699,473.6910 34.80 36,487,685.2110
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
Z WELLS FARGO BANK NA 1,835,315.5740 5.03 36,487,685.2110
DENVER AREA MEAT CUTTERS &
EMPLOYERS PENSION PLAN
PO BOX 1533
MINNEAPOLIS MN 55480-1533
Z WELLS FARGO BANK NA 5,647,124.9030 15.48 36,487,685.2110
ROCKY MOUNTAIN UFCW UNIONS & EMPL
PEN PLAN
PO BOX 1533
MINNEAPOLIS MN 55480-1533
F-3
Class Registration Share Balance Percent Class Total
CMG INTERNATIONAL STOCK FUND
Z UNION BANK TR NOMINEE 549,193.6960 5.34 10,284,733.7470
FREIGHTLINER CORP PENSION PLAN
PO BOX 85484
SAN DIEGO CA 92186-5484
Z BANK OF AMERICA NA 9,416,650.0890 91.56 10,284,733.7470
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
F-4
Class Registration Share Balance Percent Class Total
CMG LARGE CAP GROWTH FUND
Z BANK OF AMERICA NA 3,458,930.9170 100.00 3,458,930.9170
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
F-5
Class Registration Share Balance Percent Class Total
CMG LARGE CAP VALUE FUND
Z BANK OF AMERICA NA 3,100,621.7930 100.00 3,100,621.7930
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
F-6
Class Registration Share Balance Percent Class Total
CMG MID CAP GROWTH FUND
Z BANK OF AMERICA NA 1,586,715.1180 100.00 1,586,715.1180
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
F-7
Class Registration Share Balance Percent Class Total
CMG MID CAP VALUE FUND
Z BANK OF AMERICA NA 1,563,178.7670 100.00 1,563,178.7670
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
F-8
Class Registration Share Balance Percent Class Total
CMG SHORT TERM BOND FUND
Z BANK OF AMERICA NA 4,868,704.8620 59.32 8,207,213.7680
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
Z PACIFICORP ENVIRONMENTAL 2,213,031.9940 26.96 8,207,213.7680
REMEDIATION COMPANY
825 NE MULTNOMAH STE 1900
PORTLAND OR 97232-2151
F-9
Class Registration Share Balance Percent Class Total
CMG SMALL CAP FUND
Z US TRUST COMPANY NA 653,178.3980 6.66 9,811,614.7820
OREGON COMMUNITY FOUNDATION
4380 SW MACADAM STE 450
PORTLAND OR 97239-6407
Z NORTHERN TRUST CO TTEE 1,573,379.6080 16.04 9,811,614.7820
FBO PPPI
PECHAINEY PLASTIC PACK & CONTAIN
50 S LASALLE ST
CHICAGO IL 60675-0001
Z WELLS FARGO BANK 3,580,319.7390 36.49 9,811,614.7820
MASTERCARD INTERNATIONAL PENS PL
ATTN JAMES NELSON
801 NICOLLET MALL STE 700
MINNEAPOLIS MN 55479-0001
Z BANK OF AMERICA NA 745,282.6520 7.60 9,811,614.7820
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
Z BANK OF NEW YORK 705,216.5910 7.19 9,811,614.7820
WASHINGTON MEAT INDUSTRY PEN TR
ATLANTIC TERMINAL
2 HANSON PL FL 7
BROOKLYN NY 11217-1431
F-10
Class Registration Share Balance Percent Class Total
CMG SMALL CAP GROWTH FUND
Z BANK OF AMERICA NA 2,744,784.3900 97.31 2,820,718.4180
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
F-11
Class Registration Share Balance Percent Class Total
CMG SMALL CAP VALUE FUND
Z BANK OF AMERICA NA 2,366,649.5290 97.27 2,432,977.4520
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
F-12
Class Registration Share Balance Percent Class Total
CMG SMALL/MID CAP FUND
Z US TRUST COMPANY NA 216,370.3590 6.33 3,417,966.2640
OREGON COMMUNITY FOUNDATION
4380 SW MACADAM STE 450
PORTLAND OR 97239-6407
Z MAC & CO 699,152.5420 20.46 3,417,966.2640
MICRON FOUNDATION
PO BOX 3198
PITTSBURGH PA 15230-3198
Z UNION BANK TR NOMINEE 322,033.7600 9.42 3,417,966.2640
FBO OREGON WASHINGTON CARPENTERS
EMPLOYERS PENSION TRUST FUND
PO BOX 85484
SAN DIEGO CA 92186-5484
Z UNION BANK TR NOMINEE 362,616.4950 10.61 3,417,966.2640
FREIGHTLINER CORP PENSION PLAN
PO BOX 85484
SAN DIEGO CA 92186-5484
F-13
Class Registration Share Balance Percent Class Total
CMG STRATEGIC EQUITY FUND
Z US BANK NATIONAL ASSOCIATION 5,272,581.3720 10.43 50,564,503.9020
OREGON RETAIL EMPLOYEES PEN TRUST
ATTN SHERRY GLANVILLE CRSP
P O BOX 3168 PL-6
PORTLAND OR 97208-3168
Z USB FBO 2,881,299.8480 5.70 50,564,503.9020
WILLAMETTE UNIVERSITY
PO BOX 1787
MILWAUKEE WI 53201-1787
Z USB FBO 6,526,336.0960 12.91 50,564,503.9020
ATU/TRIMET JOINT PENSION TRUST
PO BOX 1787
MILWAUKEE WI 53201-1787
Z GEORGE K & JOAN D AUSTIN 2,651,961.1940 5.24 50,564,503.9020
PO BOX 209
NEWBERG OR 97132-0209
Z MEYER MEMORIAL TRUST 3,725,451.4440 7.37 50,564,503.9020
C/O WAYNE PIERSON
425 NW 10TH AVE STE 400
PORTLAND OR 97209-3128
F-14
Class Registration Share Balance Percent Class Total
CMG ULTRA SHORT TERM BOND FUND
BANK OF AMERICA NA 8,819,305.9740 100.00 8,819,305.9740
ATTN JOAN WRAY/FUNDS ACCOUNTING
411 N AKARD ST
DALLAS TX 75201-3307
F-15
EXHIBIT 1
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO BORROWING
CMG Strategic Equity Fund
CMG Short Term Bond Fund
CMG Mortgage and Asset-Backed Securities Fund
CMG Small Cap Growth Fund
CMG Enhanced S&P 500 Index Fund
CMG Large Cap Value Fund
CMG Large Cap Growth Fund
CMG Mid Cap Value Fund
CMG Mid Cap Growth Fund
CMG Small Cap Value Fund
CMG Ultra Short Term Bond Fund
The Fund may not "[b]orrow money, except that (a) the Fund may
borrow from banks for temporary or emergency (not leveraging) purposes,
including the meeting of redemption requests that might otherwise require
the untimely disposition of securities and (b) the Fund may, to the extent
consistent with its investment policies, enter into reverse repurchase
agreements, [forward][dollar] roll transactions and similar investment
strategies and techniques. To the extent that it engages in transactions
described in (a) and (b), the Fund will be limited so that no more than 33
1/3 % of the value of its total assets (including the amount borrowed)
valued at the lesser of cost or market, less liabilities (not including
the amount borrowed) valued at the time the borrowing is made, is derived
from such transactions."
CMG Core Bond Fund
The Fund may not "[b]orrow money, issue senior securities, or
pledge, mortgage or hypothecate its assets, except that the Fund may (i)
borrow from banks, but only if immediately after each borrowing there is
asset coverage of 300%, (ii) enter into transactions in options, futures,
options on futures, and other derivative instruments as described in the
Prospectus and this Statement of Additional Information (the deposit of
assets in escrow in connection with the writing of covered put and call
options and the purchase of securities on a when-issued or delayed
delivery basis, collateral arrangements with respect to initial or
variation margin deposit for futures contracts and commitments entered
into under swap agreements or other derivative instruments, will not be
deemed to be pledges of the Fund's assets), (iii) enter into reverse
repurchase agreements, dollar roll transactions or economically similar
transactions to the extent its commitment under such transaction is
covered by the segregation of assets, and (iv) borrow money as a
-1-
temporary measure for extraordinary or emergency purposes provided that
such borrowings do not exceed 5% of the gross assets of the Fund valued at
the lesser of cost or market value, and the Fund does not pledge,
mortgage, or hypothecate assets valued at market to an extent greater than
10% of the gross assets valued at cost of the Fund."
CMG Small Cap Fund
CMG Small/Mid Cap Fund
The Fund may not "[b]orrow money in excess of 5% of its net asset
value. Any borrowing must only be temporary, from banks, and for
extraordinary or emergency purposes."
CMG International Stock Fund
The Fund may not "[b]orrow money, except temporarily for
extraordinary or emergency purposes. For all amounts borrowed, the Fund
will maintain an asset coverage of 300%. The Fund will not make any
additional investments while borrowings exceed 5% of the Fund's total
assets."
-2-
CMG High Yield Fund
The Fund may not "[b]orrow money except as a temporary measure for
extraordinary or emergency purposes. Its borrowings may not exceed 5% of
the gross assets of the Fund valued at the lesser of cost or market value,
nor may it pledge, mortgage or hypothecate assets valued at market to an
extent greater than 10% of the gross assets valued at cost of the Fund."
-3-
EXHIBIT 2
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO ISSUING SENIOR
SECURITIES
CMG Small Cap Fund
CMG Small/Mid Cap Fund
CMG International Stock Fund
CMG High Yield Fund
CMG Short Term Bond Fund
CMG Ultra Short Term Bond Fund
The Fund may not "[i]ssue senior securities, bonds, or debentures."
CMG Strategic Equity Fund
CMG Mortgage and Asset-Backed Securities Fund
CMG Small Cap Growth Fund
CMG Enhanced S&P 500 Index Fund
CMG Large Cap Value Fund
CMG Large Cap Growth Fund
CMG Mid Cap Value Fund
CMG Mid Cap Growth Fund
CMG Small Cap Value Fund
The Fund may not "[i]ssue any senior security (as defined in the
1940 Act) except that a Fund may (a) engage in transactions that may
result in the issuance of senior securities to the extent permitted under
regulations and interpretations of 1940 Act or an exemptive order or
interpretation of the staff of the [Securities and Exchange Commission
(the "SEC")][SEC]; (b) acquire other securities, the acquisition of which
may result in the issuance of a senior security, to the extent permitted
under regulations or interpretations of the 1940 Act; (c) subject to the
restrictions described in the Statement of Additional Information, borrow
money as authorized by the 1940 Act; and (d) issue multiple classes of
shares in accordance with regulations of the SEC."
-1-
CMG Core Bond Fund
The Fund may not "[b]orrow money, issue senior securities, or
pledge, mortgage or hypothecate its assets, except that the Fund may (i)
borrow from banks, but only if immediately after each borrowing there is
asset coverage of 300%, (ii) enter into transactions in options, futures,
options on futures, and other derivative instruments as described in the
Prospectus and this Statement of Additional Information (the deposit of
assets in escrow in connection with the writing of covered put and call
options and the purchase of securities on a when-issued or delayed
delivery basis, collateral arrangements with respect to initial or
variation margin deposit for futures contracts and commitments entered
into under swap agreements or other derivative instruments, will not be
deemed to be pledges of the Fund's assets), (iii) enter into reverse
repurchase agreements, dollar roll transactions or economically similar
transactions to the extent its commitment under such transaction is
covered by the segregation of assets, and (iv) borrow money as a temporary
measure for extraordinary or emergency purposes provided that such
borrowings do not exceed 5% of the gross assets of the Fund valued at the
lesser of cost or market value, and the Fund does not pledge, mortgage, or
hypothecate assets valued at market to an extent greater than 10% of the
gross assets valued at cost of the Fund."
-2-
EXHIBIT 3
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO MAKING LOANS
CMG Strategic Equity Fund
CMG Small Cap Fund
CMG International Stock Fund
CMG Core Bond Fund
CMG Short Term Bond Fund
CMG Mortgage and Asset-Backed Securities Fund
CMG Small Cap Growth Fund
CMG Small Cap Value Fund
CMG Enhanced S&P 500 Index Fund
CMG Large Cap Value Fund
CMG Large Cap Growth Fund
CMG Mid Cap Value Fund
CMG Mid Cap Growth Fund
CMG Ultra Short Term Bond Fund
The Fund may not "[m]ake loans, except that the Fund may (a)
purchase debt obligations which are consistent with its investment
objectives and policies; (b) enter into repurchase agreements; and (c)
loan its portfolio securities, to the fullest extent permitted under
[Investment Company Act of 1940 (the "1940 Act")][the 1940 Act].
CMG Small/Mid Cap Fund
The Fund may not "[m]ake loans to other persons (except by purchase
of short-term commercial paper, repurchase agreements, bonds, debentures,
or other debt securities constituting part of an issue). For purposes of
this restriction, the making of a
-1-
loan by the Fund will not include the purchase of a portion of an issue of
publicly distributed bonds, debentures, or other securities, whether or
not the purchase is made upon the original issuance of the securities."
CMG High Yield Fund
The Fund may not "[m]ake loans to other persons (except by purchase
of short-term commercial paper, bonds, debentures, repurchase agreements
or other debt securities constituting part of an issue). The Fund my lend
portfolio securities to broker-dealers or other institutional investors
if, as a result thereof, the aggregate value of all securities loaned does
not exceed 33 1/3% of its total assets."
-2-
EXHIBIT 4
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO DIVERSIFICATION
OF INVESTMENTS
CMG International Stock Fund
The Fund may not "[p]urchase the security of any issuer (including
any foreign government issuer) if the purchase, at the time thereof, would
cause more than 5% of the value of the total assets of the Fund at market
value to be invested in the securities of that issuer (other than
obligations of the U.S. Government and its agencies and
instrumentalities), with reference to 75% of the assets of the Fund."
CMG Small Cap Fund
CMG Small/Mid Cap Fund
CMG High Yield Fund
CMG Short Term Bond Fund
CMG Ultra Short Term Bond Fund
The Fund may not "[p]urchase the security of any issuer if the
purchase, at the time thereof, would cause more than 5% of the value of
[its total assets][the total assets of the Fund] at market value to be
invested in the securities of that issuer (other than obligations of the
U.S. Government and its [agencies and] instrumentalities), with reference
to 75% of the assets of the Fund."
-1-
EXHIBIT 5
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO INVESTMENTS IN
COMMODITIES
CMG Core Bond Fund
The Fund may not "[b]uy or sell commodities or commodities contracts
or oil, gas or mineral programs, except that the Fund may purchase, sell
or enter into financial futures contracts and options on future contracts,
foreign currency forward contracts, foreign currency options, or any
interest rate, securities-related or foreign currency related hedging
instrument, including swap agreements and other derivative instruments,
subject to compliance with any applicable provisions of the federal
securities or commodities laws."
CMG International Stock Fund
The Fund may not "[b]uy or sell commodities. However, the Fund may
invest in futures contracts or options on such contracts relating to
broadly based stock indices, subject to the restrictions set forth below
in restriction 13, and my enter into foreign currency transactions."
CMG High Yield Fund
The Fund may not "[i]nvest directly in oil, gas, or other mineral
development or exploration programs or leases; although, the Fund may own
securities of companies engaged in those businesses."
-1-
CMG High Yield Fund
CMG Ultra Short Term Bond Fund
The Fund may not "[b]uy or sell commodities or commodity futures
contracts."
CMG Strategic Equity Fund
CMG Mortgage and Asset-Backed Securities Fund
CMG Small Cap Growth Fund
CMG Enhanced S&P 500 Index Fund
CMG Large Cap Value Fund
CMG Large Cap Growth Fund
CMG Mid Cap Value Fund
CMG Mid Cap Growth Fund
CMG Small Cap Value Fund
The Fund may not "[b]uy or sell physical commodities or commodities
contracts or oil, gas or mineral programs, but the Fund may purchase, sell
or enter into financial futures contracts and options on financial futures
contracts, foreign currency forward contracts, foreign currency options,
or any interest rate, securities-related or foreign currency related
hedging instrument, including swap agreements and other derivative
instruments, subject to compliance with the federal securities and
commodities laws."
CMG Small Cap Fund
CMG Small/Mid Cap Fund
The Fund may not "[b]uy or sell commodities. The Fund may, however,
invest in futures contracts relating to broadly based stock indices,
subject to the restrictions set forth below in restriction [15][13]."
-2-
EXHIBIT 6
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO INVESTMENTS IN REAL
ESTATE
CMG Strategic Equity Fund
CMG Small Cap Fund
CMG Small/Mid Cap Fund
CMG Mortgage and Asset-Backed Securities Fund
CMG Small Cap Growth Fund
CMG Enhanced S&P 500 Index Fund
CMG Large Cap Value Fund
CMG Large Cap Growth Fund
CMG Mid Cap Value Fund
CMG Mid Cap Growth Fund
CMG Small Cap Value Fund
The Fund may not "[p]urchase or sell real estate unless acquired as
the result of direct ownership of securities or other instruments. This
restriction shall not prevent the Fund from investing in securities or
other instruments backed by real estate or securities of companies engaged
in the real estate business, including real estate investment trusts. This
restriction shall not preclude the Fund from buying securities backed by
mortgages on real estate or securities of companies engaged in these
activities. This restriction shall not prevent the Fund from investing in
real estate operating companies and companies engaged in other real estate
related businesses."
CMG International Stock Fund
The Fund may not "buy or sell real estate. However, the Fund may
purchase or hold readily marketable securities issued by companies, such
as real estate investment trusts, which operate in real estate or
interests therein."
-1-
CMG Core Bond Fund
CMG High Yield Fund
CMG Short Term Bond Fund
CMG Ultra Short Term Bond Fund
The Fund may not "buy or sell real estate. However, the Fund may
purchase or hold securities issued by companies, such as real estate
investment trusts, that deal in real estate or interests therein, and
participation interests in pools of real estate mortgage loans."
-2-
EXHIBIT 7
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO UNDERWRITING OF
SECURITIES
CMG Small/Mid Cap Fund
CMG International Stock Fund
CMG Short Term Bond Fund
The Fund may not "[u]nderwrite securities of other issuers, except
that the Fund may acquire portfolio securities in circumstances where, if
the securities are later publicly offered or sold by the Fund, it might be
deemed to be an underwriter for purposes of the the 1933 Act."
CMG Strategic Equity Fund
CMG Mortgage and Asset-Backed Securities Fund
CMG Small Cap Growth Fund
CMG Enhanced S&P 500 Index Fund
CMG Large Cap Value Fund
CMG Large Cap Growth Fund
CMG Mid Cap Value Fund
CMG Mid Cap Growth Fund
CMG Small Cap Value Fund
The Fund may not "[u]nderwrite securities issued by others, except
to the extent that a Fund may be considered an underwriter within the
meaning of the Securities Act of 1933, as amended[(the "Securities Act")],
when reselling securities held in its own portfolio."
CMG Small Cap Fund
CMG Core Bond Fund
CMG High Yield Fund
CMG Ultra Short Term Bond Fund
-1-
The Fund may not "[u]nderwrite securities of other issuers, except
the Fund may acquire portfolio securities in circumstances where, if the
securities are later publicly offered or sold by the Fund, it might be
deemed to be an underwriter for purposes of the Securities Act of 1933, as
amended [("1933 Act")]."
-2-
EXHIBIT 8
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO PURCHASING
SECURITIES ON MARGIN
CMG High Yield Fund
The Fund may not "[b]uy any securities or other property on margin,
except for short-term credits necessary for clearing transactions and
except that margin payments and other deposits in connection with
transactions in options, futures, and forward contracts shall not be
deemed to constitute purchasing securities on margin."
CMG Core Bond Fund
The Fund may not "[b]uy any securities or other property on margin
except for use of short-term credit necessary for clearance of purchases
and sales of portfolio securities, but the Fund may make margin deposits
in connection with transactions in options, futures, and options on
futures or purchase or sell puts or calls, or confirmations thereof."
CMG Short Term Bond Fund
CMG Ultra Short Term Bond Fund
The Fund may not "[b]uy any securities or other property on margin,
or purchase or sell puts or calls, or combinations thereof."
-1-
EXHIBIT 9
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO INVESTING FOR THE
PURPOSE OF EXERCISING CONTROL
CMG Small Cap Fund
CMG Small/Mid Cap Fund
CMG International Stock Fund
CMG High Yield Fund
The Fund may not "[p]urchase the securities of any issuer if the
purchase, at the time thereof, would cause more than 10% of the
outstanding voting securities of that issuer to be held in the Fund."
CMG Core Bond Fund
CMG High Yield Fund
CMG Short Term Bond Fund
CMG Ultra Short Term Bond Fund
The Fund may not "[i]nvest in companies to exercise control or
management."
CMG Small Cap Fund
-1-
CMG Small/Mid Cap Fund
CMG International Stock Fund
The Fund may not "[i]nvest in companies for the purpose of
exercising control or management."
-2-
EXHIBIT 10
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO SHORT SALES
CMG High Yield Fund
CMG Short Term Bond Fund
CMG Ultra Short Term Bond Fund
The Fund may not "[e]ngage in short sales of securities except to
the extent that it owns other securities convertible into an equivalent
amount of such securities. These short sales may only be made to protect a
profit in or to attempt to minimize a loss with respect to convertible
securities. In any event no more than 10% of the Fund's net assets valued
at market may, at any time, be held as collateral for such sales."
CMG Core Bond Fund
The Fund may not "[e]ngage in short sales, except as permitted in
this Statement of Additional Information."
-1-
CMG Small Cap Fund
CMG Small/Mid Cap Fund
The Fund may not "[e]ngage in short sales of securities except to
the extent that such sales are "against the box"; that is, only to the
extent the Fund owns the securities sold short or owns other securities
convertible into an equivalent amount of securities sold short. Such
transactions may only be made to protect a profit in or to attempt to
minimize a loss with respect to convertible securities. In any event, no
more than 10% of the value of the Fund's net assets may, at the time, be
held as collateral for such sales."
CMG International Stock Fund
The Fund may not "[e]ngage in short sales of securities except to
the extent that the Fund owns other securities convertible into an
equivalent amount of such securities. Such transactions may only be made
to protect a profit in or to attempt to minimize a loss with respect to
convertible securities. In any event, no more than 5% of the value of the
Fund's net assets taken at market may, at any time, be held as collateral
for such sales."
-2-
EXHIBIT 11
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO CONCENTRATING
INVESTMENTS IN AN INDUSTRY
CMG International Stock Fund
The Fund may not "[c]oncentrate investments in any industry.
However, the Fund may (a) invest up to 25% of the value of its [total]
assets in any one industry and (b) invest for temporary defensive purposes
up to 100% of the value of its assets in securities issued or guaranteed
by the United States or its agencies or instrumentalities."
CMG Strategic Equity Fund
CMG Short Term Bond Fund
CMG Corporate Bond Fund
CMG Small Cap Growth Fund
CMG Enhanced S&P 500 Index Fund
CMG Large Cap Value Fund
CMG Large Cap Growth Fund
CMG Mid Cap Value Fund
CMG Mid Cap Growth Fund
CMG Ultra Short Term Bond Fund
The Fund may not "[c]oncentrate investments in any industry. [It
may, however,][However, it may] (a) invest up to 25 % of the value of its
total assets in any one industry, (b) invest up to 100% of the value of
its total assets in securities issued or guaranteed by the U.S. Government
or its agencies or instrumentalities, and (c) invest for temporary
defensive purposes up to 80% of the value of its total assets in
certificates of deposit ("CDs") and bankers' acceptances with maturities
not greater than one year. CDs and bankers' acceptances will be limited to
domestic banks that have total assets in excess of $1 billion and are
subject to regulatory supervision by the U.S. Government or state
governments. Commitments to purchase securities issued or guaranteed by
the U.S. Government or its agencies or instrumentalities on a
"when-issued" basis may not exceed 20% of the total assets of the Fund.
[Emphasis on investments in securities of a particular industry will be
shifted whenever the advisor determines that such action is
-1-
desirable for investment reasons. The Trustees will periodically review
these decisions of the advisor.]"
CMG Core Bond Fund
The Fund may not "[c]oncentrate more than 25% of the value of its
total assets in any one industry (the SEC takes the position that
investments in government securities of a single foreign country represent
investments in a separate industry for these purposes)."
CMG High Yield Fund
The Fund may not "[c]oncentrate its investments in any industry.
However, it may invest up to 25% of the value of its total assets in any
one industry and more than 25% of the value of its total assets in cash,
cash equivalents, or securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities.
CMG Small Cap Fund
CMG Small/Mid Cap Fund
-2-
The Fund may not "[c]oncentrate investments in any industry. The
Fund, however, may (a) invest up to 25 % of the value of the total assets
in any one industry and (b) invest for temporary defensive purposes up to
100 % of the value of the total assets in securities issued or guaranteed
by the U.S. Government or its agencies or instrumentalities."
-3-
EXHIBIT 12
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO PURCHASING
SECURITIES OF COMPANIES LESS THAN THREE YEARS OLD
CMG Core Bond Fund
CMG Short Term Bond Fund
CMG Ultra Short Term Bond Fund
CMG High Yield Fund
The Fund may not "[i]nvest in the securities of any company if the
purchase, at the time thereof, would cause more than 5% of the value of
the Fund's total assets to be invested in companies which, including
predecessors and parents, have a record of less than three years
continuous operation."
CMG Small Cap Fund
CMG Small/Mid Cap Fund
The Fund may not "[i]nvest its assets in the securities of any
company if the purchase, at the time thereof, would cause more than 10% of
the value of the Fund's total assets to be invested in companies which
have a record of less than three years of continuous operation including
the operation of predecessors and parents."
CMG International Stock Fund
The Fund may not "[i]nvest its funds in the securities of any
company if the purchase would cause more than 5% of the value of the
Fund's total assets to be invested in companies which have a record of
less than three years of continuous operation, including operation of
predecessors and parents."
-1-
EXHIBIT 13
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO PURCHASING OR
HOLDING THE SECURITIES OF ANY COMPANY, IF SECURITIES OF SUCH COMPANY ARE
OWNED BY OFFICERS OR DIRECTORS OF THE FUND AND OF ITS ADVISOR
CMG High Yield Fund
The Fund may not "[p]urchase or retain securities of an issuer if
those officers or directors of the Fund or the Advisor who individually
own 1/2 of 1 percent of the outstanding securities of that issuer together
own more than 5 percent of such securities."
CMG Core Bond Fund
CMG Short Term Bond Fund
CMG Ultra Short Term Bond Fund
The Fund may not "[p]urchase or retain securities of an issuer, any
of whose officers or directors or security holders is an officer or
director of the Fund or of its advisor if, or so long as, the officers and
directors of the Fund and of its advisor together own beneficially more
than 5 percent of any class of securities of the issuer."
-1-
EXHIBIT 14
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO BUYING AND SELLING
PUTS AND CALLS
CMG Small Cap Fund
CMG Small/Mid Cap Fund
The Fund may not "[b]uy and sell puts and calls on stock index
futures, or financial futures or options on financial futures, unless such
options are written by other persons and the options or futures are
offered through the facilities of a national securities association or are
listed on a national securities or commodities exchange."
CMG International Stock Fund
The Fund may not "[b]uy and sell puts and calls on securities, stock
index futures, or options on stock index futures, or financial futures or
options on financial futures, unless such options are written by other
persons and the options or futures are offered through the facilities of a
recognized securities association or are listed on a recognized securities
or commodities exchange or similar entity."
-1-
EXHIBIT 15
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION dated as of ___________, 2005,
is by and among __________________ (the "Acquired Trust"), a Massachusetts
business trust, on behalf of _______________ (the "Acquired Fund");
______________ (the "Acquiring Trust"), a Massachusetts business trust on behalf
of ___________________ (the "Acquiring Fund"); and Columbia Management Advisors,
Inc. ("Columbia").
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Sections 361(a) and Section
368(a) of the United States Internal Revenue Code of 1986, as amended (the
"Code"), and any successor provision. The reorganization will consist of the
transfer of all of the assets of the Acquired Fund attributable to each class of
its shares in exchange for shares of the same class of shares of the Acquiring
Fund (the "Acquisition Shares"), and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund and the distribution of the Acquisition Shares
to the relevant shareholders of the Acquired Fund in liquidation of the Acquired
Fund, all upon the terms and conditions set forth in this Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF ACQUIRED FUND IN EXCHANGE FOR ASSUMPTION OF
LIABILITIES AND ACQUISITION SHARES AND LIQUIDATION OF ACQUIRED FUND.
1.1 Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein,
(a) The Acquired Fund will transfer and deliver to the Acquiring
Fund, and the Acquiring Fund will acquire, all the assets of
the Acquired Fund as set forth in paragraph 1.2;
(b) The Acquiring Fund will assume all of the Acquired Fund's
liabilities and obligations of any kind whatsoever, whether
absolute, accrued, contingent or otherwise, in existence on
the Closing Date (as defined in paragraph 1.2 hereof) (the
"Obligations"); and
(c) The Acquiring Fund will issue and deliver to the Acquired Fund
in exchange for the net assets attributable to each class of
its shares the number of Acquisition Shares of the
corresponding class (including fractional shares, if any)
determined by dividing the value of such net assets, computed
in the manner and as of the time and date set forth in
paragraph 2.1, by the net asset value of one Acquisition Share
of the applicable class computed in the manner and as of the
time and date set forth in paragraph 2.2. Such transactions
shall take place at the closing provided for in paragraph 3.1
(the "Closing").
1.2 The assets of the Acquired Fund to be acquired by the Acquiring Fund
shall consist of all cash, securities, dividends and interest
receivable, receivables for shares sold and all other assets which
are owned by the Acquired Fund on the closing date provided in
paragraph 3.1 (the "Closing Date") and any deferred expenses, other
than unamortized organizational expenses, shown as an asset on the
books of the Acquired Fund on the Closing Date. The Acquiring Fund
agrees that all rights to indemnification and all limitations of
liability existing in favor of the Acquired Fund's current and
former Trustees and officers, acting in their capacities as such,
under the Acquired Fund's organizational documents as in effect as
of the date of this Agreement shall survive the reorganization as
obligations of the Acquiring Fund and shall continue in full force
and effect, without any amendment thereto, and shall constitute
rights which may be asserted against the Acquiring Fund, its
successors or assigns.
-1-
1.3 As provided in paragraph 3.4, as soon after the Closing Date as is
conveniently practicable (the "Liquidation Date"), the Acquired Fund
will liquidate and distribute pro rata to shareholders of record of
each class of shares, determined as of the close of business on the
Valuation Date (as defined in paragraph 2.1), the Acquisition Shares
of the relevant class received by the Acquired Fund pursuant to
paragraph 1.1. Such liquidation and distribution will be
accomplished by the transfer of the Acquisition Shares then credited
to the account of the Acquired Fund on the books of the Acquiring
Fund to open accounts on the share records of the Acquiring Fund in
the names of the Acquired Fund shareholders and representing the
respective pro rata number of Acquisition Shares due such
shareholders. The Acquiring Fund shall not be obligated to issue
certificates representing Acquisition Shares in connection with such
exchange.
1.4 With respect to Acquisition Shares distributable pursuant to
paragraph 1.3 to an Acquired Fund shareholder holding a certificate
or certificates for shares of the Acquired Fund, if any, on the
Valuation Date, the Acquired Fund will not permit such shareholder
to receive Acquisition Share certificates therefor, exchange such
Acquisition Shares for shares of other investment companies, effect
an account transfer of such Acquisition Shares, or pledge or redeem
such Acquisition Shares until such Acquired Fund shareholder has
surrendered all his or her outstanding certificates for Acquired
Fund shares or, in the event of lost certificates, posted adequate
bond.
1.5 If applicable, as soon as practicable after the Closing Date, the
Acquired Trust shall file an application pursuant to Section 8(f) of
the Investment Company Act of 1940, as amended (the "1940 Act"), for
an order declaring that it has ceased to be an investment company
and, upon receipt of such order, shall make all filings and take all
other steps as shall be necessary and proper to effect its complete
termination under Massachusetts law. After the Closing Date, the
Acquired Fund shall not conduct any business except in connection
with its liquidation, deregistration (if applicable), and
termination.
2. VALUATION.
2.1 For the purpose of paragraph 1, the value of the Acquired Fund's
assets to be acquired by the Acquiring Fund hereunder shall be the
value of such assets computed as of the close of regular trading on
the New York Stock Exchange on the business day next preceding the
Closing (such time and date being herein called the "Valuation
Date") using the valuation procedures set forth in the
organizational documents of the Acquiring Fund and the then current
prospectus or prospectuses or statement or statements of additional
information of the Acquiring Fund (collectively, as amended or
supplemented from time to time, the "Acquiring Fund Prospectus") for
determining net asset value, [after deduction for the expenses of
the reorganization contemplated hereby to be paid by the Acquired
Fund pursuant to paragraph 9.2, and shall be certified by the
Acquired Fund.]
2.2 For the purpose of paragraph 2.1, the net asset value of an
Acquisition Share of each class shall be the net asset value per
share computed as of the close of regular trading on the New York
Stock Exchange on the Valuation Date, using the valuation procedures
set forth in the organizational documents of the Acquiring Fund and
the Acquiring Fund Prospectus.
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be on ______________, 2005, or on such other
date as the parties may agree. The Closing shall be held at
____________ p.m. at Columbia's offices, One Financial Center,
Boston, Massachusetts 02111, or at such other time and/or place as
the parties may agree.
3.2 The portfolio securities of the Acquired Fund shall be made
available by the Acquired Fund to the custodian for the Acquiring
Fund (the "Custodian"), for examination no later than five business
days preceding the Valuation Date. On the Closing Date, such
portfolio securities and all the Acquired Fund's cash shall be
delivered by the Acquired Fund to the Custodian for the account of
the Acquiring Fund, such portfolio securities to be duly endorsed in
proper form for transfer in
-2-
such manner and condition as to constitute good delivery thereof in
accordance with the custom of brokers or, in the case of portfolio
securities held in the U.S. Treasury Department's book-entry system
or by the Depository Trust Company, Participants Trust Company or
other third party depositories, by transfer to the account of the
Custodian in accordance with Rule 17f-4, Rule 17f-5 or Rule 17f-7,
as the case may be, under the 1940 Act and accompanied by all
necessary federal and state stock transfer stamps or a check for the
appropriate purchase price thereof. The cash delivered shall be in
the form of currency or certified or official bank checks, payable
to the order of "[Name of Custodian], custodian for [Name of
Acquiring Fund]."
3.3 In the event that on the Valuation Date (a) the New York Stock
Exchange shall be closed to trading or trading thereon shall be
restricted, or (b) trading or the reporting of trading on said
Exchange or elsewhere shall be disrupted so that accurate appraisal
of the value of the net assets of the Acquired Fund or the Acquiring
Fund is impracticable, the Closing Date shall be postponed until the
first business day after the day when trading shall have been fully
resumed and reporting shall have been restored; provided that if
trading shall not be fully resumed and reporting restored within
three business days of the Valuation Date, this Agreement may be
terminated by either the Acquired Fund or the Acquiring Fund upon
the giving of written notice to the other party.
3.4 At the Closing, the Acquired Fund or its transfer agent shall
deliver to the Acquiring Fund or its designated agent a list of the
names and addresses of the Acquired Fund shareholders and the number
of outstanding shares of each class of the Acquired Fund owned by
each Acquired Fund shareholder, all as of the close of business on
the Valuation Date, certified by any Vice President, Secretary or
Assistant Secretary of the Acquired Fund. The Trust will provide to
the Acquired Fund evidence satisfactory to the Acquired Fund that
the Acquisition Shares issuable pursuant to paragraph 1.1 have been
credited to the Acquired Fund's account on the books of the
Acquiring Fund. On the Liquidation Date, the Acquiring Fund will
provide to the Acquired Fund evidence satisfactory to the Acquired
Fund that such Acquisition Shares have been credited pro rata to
open accounts in the names of the Acquired Fund shareholders as
provided in paragraph 1.3.
3.5 At the Closing, each party shall deliver to the other such bills of
sale, instruments of assumption of liabilities, checks, assignments,
stock certificates, receipts or other documents as such other party
or its counsel may reasonably request in connection with the
transfer of assets, assumption of liabilities and liquidation
contemplated by paragraph 1.
4. REPRESENTATIONS AND WARRANTIES.
4.1 The Acquired Fund represents and warrants the following to the
Acquiring Fund as of the date hereof and agrees to confirm the
continuing accuracy and completeness in all material respects of the
following on the Closing Date:
(a) The Acquired Fund is a series of the Acquired Trust that is
duly organized, validly existing and in good standing under
the laws of The Commonwealth of Massachusetts;
(b) The Acquired Trust is a duly registered investment company
classified as a management company of the open-end type and
its registration with the Securities and Exchange Commission
as an investment company under the 1940 Act is in full force
and effect, and the Acquired Fund is a separate series thereof
duly designated in accordance with the applicable provisions
of the Declaration of Trust of the Acquired Trust and the 1940
Act;
(c) The Acquired Fund is not in violation in any material respect
of any provision of its organizational documents or of any
agreement, indenture, instrument, contract, lease or other
undertaking to which the Acquired Fund is a party or by which
the Acquired Fund is bound, and the execution, delivery and
performance of this Agreement will not result in any such
violation;
-3-
(d) The Acquired Fund has no material contracts or other
commitments (other than this Agreement and such other
contracts as may be entered into in the ordinary course of its
business) which if terminated may result in material liability
to the Acquired Fund or under which (whether or not
terminated) any material payments for periods subsequent to
the Closing Date will be due from the Acquired Fund;
(e) To the knowledge of the Acquired Fund, except as has been
disclosed in writing to the Acquiring Fund, no litigation or
administrative proceeding or investigation of or before any
court or governmental body is presently pending or threatened
as to the Acquired Fund, any of its properties or assets, or
any person whom the Acquired Fund may be obligated to
indemnify in connection with such litigation, proceeding or
investigation, and is not a party to or subject to the
provisions of any order, decree or judgment of any court or
governmental body, which materially and adversely affects its
business or its ability to consummate the transactions
contemplated hereby;
(f) The statement of assets and liabilities, the statement of
operations, the statement of changes in net assets, and the
schedule of investments of the Acquired Fund, as of and for
its most recently completed fiscal year, audited by
PricewaterhouseCoopers LLP (and, if applicable, an unaudited
statement of assets and liabilities, statement of operations,
statement of changes in net assets and schedule of investments
for any subsequent semiannual period following the most
recently completed fiscal year), copies of which have been
furnished to the Acquiring Fund, fairly reflect the financial
condition and results of operations of the Acquired Fund as of
such dates and for the periods then ended in accordance with
generally accepted accounting principles consistently applied,
and the Acquired Fund has no known liabilities of a material
amount, contingent or otherwise, other than those shown on the
statements of assets referred to above or those incurred in
the ordinary course of its business since the date of the
Acquired Fund's most recently completed fiscal year;
(g) Since the date of the Acquired Fund's most recently completed
fiscal year, there has not been any material adverse change in
the Acquired Fund's financial condition, assets, liabilities
or business (other than changes occurring in the ordinary
course of business), or any incurrence by the Acquired Fund of
indebtedness, except as disclosed in writing to the Acquiring
Fund. For the purposes of this subparagraph (g), distributions
of net investment income and net realized capital gains,
changes in portfolio securities, changes in the market value
of portfolio securities or net redemptions shall be deemed to
be in the ordinary course of business;
(h) As of the Closing Date, all federal and other tax returns and
reports of the Acquired Fund required by law to have been
filed by such date (giving effect to extensions) shall have
been filed, and all federal and other taxes shown to be due on
such returns and reports or on any assessment received shall
have been paid, or provisions shall have been made for the
payment thereof. All of the Acquired Fund's tax liabilities
will have been adequately provided for on its books. To the
best of the Acquired Fund's knowledge, it will not have had
any tax deficiency or liability asserted against it or
question with respect thereto raised, and it will not be under
audit by the Internal Revenue Service or by any state or local
tax authority for taxes in excess of those already paid;
(i) The Acquired Fund meets the requirements of subchapter M of
the Code for treatment as a "regulated investment company"
within the meaning of Section 851 of the Code, and will
continue meeting such requirements at all times through the
Closing Date. The Acquired Fund has not at any time since its
inception been liable for nor is now liable for any material
income or excise tax pursuant to Section 852 or 4982 of the
Code. The Acquired Fund has duly filed all federal, state,
local and foreign tax returns which are required to have been
filed, and all taxes of the Acquired Fund which are due and
payable have been paid except for amounts that alone or in the
aggregate would not reasonably be
-4-
expected to have a material adverse effect. The Acquired Fund
is in compliance in all material respects with applicable
regulations of the Internal Revenue Service pertaining to the
reporting of dividends and other distributions on and
redemptions of its capital stock and to withholding in respect
of dividends and other distributions to shareholders, and is
not liable for any material penalties which could be imposed
thereunder;
(j) Exhibit A attached hereto sets forth the authorized capital of
the Acquired Fund. All issued and outstanding shares of the
Acquired Fund are, and at the Closing Date will be, duly and
validly issued and outstanding, fully paid and non-assessable
(except as set forth in the Acquired Fund's then current
prospectus or prospectuses or statement or statements of
additional information (collectively, as amended or
supplemented from time to time, the "Acquired Fund
Prospectus")) by the Acquired Fund and will have been issued
in compliance with all applicable registration or
qualification requirements of federal and state securities
laws. Except as set forth on Exhibit A attached hereto, no
options, warrants or other rights to subscribe for or
purchase, or securities convertible into, any shares of common
stock of the Acquired Fund are outstanding and none will be
outstanding on the Closing Date;
(k) The Acquired Fund's investment operations from inception to
the date hereof have been in compliance in all material
respects with the investment policies and investment
restrictions set forth in the Acquired Fund Prospectus, except
as previously disclosed in writing to the Acquiring Fund;
(l) The execution, delivery and performance of this Agreement has
been duly authorized by the Trustees of the Acquired Fund,
and, upon approval thereof by the required majority of the
shareholders of the Acquired Fund, this Agreement will
constitute the valid and binding obligation of the Acquired
Fund enforceable in accordance with its terms except as the
same may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors'
rights generally and other equitable principles;
(m) The Acquisition Shares to be issued to the Acquired Fund
pursuant to paragraph 1 will not be acquired for the purpose
of making any distribution thereof other than to the Acquired
Fund shareholders as provided in paragraph 1.3;
(n) The information provided by the Acquired Fund for use in the
Proxy Statement referred to in paragraph 5.3 shall be accurate
and complete in all material respects and shall comply with
federal securities and other laws and regulations as
applicable thereto;
(o) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Acquired Fund of the transactions contemplated by this
Agreement, except such as may be required under the Securities
Act of 1933, as amended (the "1933 Act"), the Securities
Exchange Act of 1934, as amended (the "1934 Act"), the 1940
Act and state securities or "Blue Sky" laws (which terms used
herein shall include the laws of the District of Columbia and
of Puerto Rico);
(p) At the Closing Date, the Acquired Fund will have good and
marketable title to its assets to be transferred to the
Acquiring Fund pursuant to paragraph 1.1 and will have full
right, power and authority to sell, assign, transfer and
deliver the Investments (as defined below) and any other
assets and liabilities of the Acquired Fund to be transferred
to the Acquiring Fund pursuant to this Agreement. At the
Closing Date, subject only to the delivery of the Investments
and any such other assets and liabilities and payment therefor
as contemplated by this Agreement, the Acquiring Fund will
acquire good and marketable title thereto and will acquire the
Investments and any such other assets and liabilities subject
to no encumbrances, liens or security interests whatsoever and
without any restrictions upon the transfer thereof, except as
previously disclosed to the Acquiring
-5-
Fund. As used in this Agreement, the term "Investments" shall
mean the Acquired Fund's investments shown on the schedule of
its investments as of the date of its most recently completed
fiscal year, referred to in subparagraph 4.1(f) hereof, as
supplemented with such changes in the portfolio as the
Acquired Fund shall make, and changes resulting from stock
dividends, stock split-ups, mergers and similar corporate
actions through the Closing Date;
(q) [For Acquiring Funds that are "diversified" under Section
5(b)(i) of the 1940 Act only] [At the Closing Date, the
Acquired Fund will have sold such of its assets, if any, as
are necessary to assure that, after giving effect to the
acquisition of the assets of the Acquired Fund pursuant to
this Agreement, the Acquiring Fund will remain a "diversified
company" within the meaning of Section 5(b)(1) of the 1940 Act
and in compliance with such other mandatory investment
restrictions as are set forth in the Acquiring Fund
Prospectus, as amended through the Closing Date;] and
(r) No registration of any of the Investments would be required if
they were, as of the time of such transfer, the subject of a
public distribution by either of the Acquiring Fund or the
Acquired Fund, except as previously disclosed by the Acquired
Fund to the Acquiring Fund.
4.2 The Acquiring Fund represents and warrants the following to the
Acquired Fund as of the date hereof and agrees to confirm the
continuing accuracy and completeness in all material respects of the
following on the Closing Date:
(a) The Acquiring Fund is a series of the Acquiring Trust that is
duly organized, validly existing and in good standing under
the laws of The Commonwealth of Massachusetts;
(b) The Acquiring Trust is a duly registered investment company
classified as a management company of the open-end type and
its registration with the Securities and Exchange Commission
as an investment company under the 1940 Act is in full force
and effect, and the Acquiring Fund is a separate series
thereof duly designated in accordance with the applicable
provisions of the Declaration of Trust of the Acquiring Trust
and the 1940 Act;
(c) At the Closing Date, the Acquiring Fund Prospectus will
conform in all material respects to the applicable
requirements of the 1933 Act and the rules and regulations of
the Securities and Exchange Commission thereunder and will not
include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and
there will be no material contracts to which the Acquiring
Fund is a party that are not referred to in such Prospectus or
in the registration statement of which it is a part;
(d) At the Closing Date, the Acquiring Fund will have good and
marketable title to its assets;
(e) The Acquiring Fund is not in violation in any material respect
of any provisions of its organizational documents or of any
agreement, indenture, instrument, contract, lease or other
undertaking to which the Acquiring Fund is a party or by which
the Acquiring Fund is bound, and the execution, delivery and
performance of this Agreement will not result in any such
violation;
(f) To the knowledge of such counsel, except as has been disclosed
in writing to the Acquired Fund, no litigation or
administrative proceeding or investigation of or before any
court or governmental body is presently pending or threatened
as to the Acquiring Fund, any of its properties or assets, or
any person whom the Acquiring Fund may be obligated to
indemnify in connection with such litigation, proceeding or
investigation, and the Acquiring Fund is not a party to or
subject to the provisions of any order, decree
-6-
or judgment of any court or governmental body which materially
and adversely affects its business or its ability to
consummate the transactions contemplated hereby;
(g) Reserved;
(h) Reserved;
(i) As of the Closing Date, the Acquiring Fund shall have not been
required by law to have filed any federal or other tax returns
or reports. All of the Acquiring Fund's tax liabilities, if
any, will have been adequately provided for on its books. To
the best of the Acquiring Fund's knowledge, it will not have
not have had any tax deficiency or liability asserted against
it or question with respect thereto raised, and it will not be
under audit by the Internal Revenue Service or by any state or
local tax authority for taxes in excess of those already paid;
(j) The Acquiring Fund was established by the Trustees of the
Acquiring Trust in order to effect the transactions described
in this Agreement. It has not yet filed its first federal
income tax return and, thus, has not yet elected to be treated
as a "regulated investment company" for federal income tax
purposes. However, upon filing its first income tax return at
the completion of its first taxable year, the Acquiring Fund
will elect to be a "regulated investment company" and until
such time will take all steps necessary to ensure that it
qualifies for taxation as a "regulated investment company"
under Sections 851 and 852 of the Code.
(k) The Acquiring Fund has no shares of beneficial interest issued
and outstanding;
(l) Reserved;
(m) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action on the part of
the Acquiring Fund, and this Agreement constitutes the valid
and binding obligation of the Acquiring Fund enforceable in
accordance with its terms, except as the same may be limited
by bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights generally
and other equitable principles;
(n) The Acquisition Shares to be issued and delivered to the
Acquired Fund pursuant to the terms of this Agreement will at
the Closing Date have been duly authorized and, when so issued
and delivered, will be duly and validly issued shares in the
Acquiring Fund, and will be fully paid and non-assessable
(except as set forth in the Acquiring Fund Prospectus) by the
Acquiring Fund, and no shareholder of the Acquiring Fund will
have any preemptive right of subscription or purchase in
respect thereof;
(o) The information to be furnished by the Acquiring Fund for use
in the Proxy Statement referred to in paragraph 5.3 shall be
accurate and complete in all material respects and shall
comply with federal securities and other laws and regulations
applicable thereto; and
(p) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Acquiring Fund of the transactions contemplated by this
Agreement, except such as may be required under the 1933 Act,
the 1934 Act, the 1940 Act and state securities or "Blue Sky"
laws (which term as used herein shall include the laws of the
District of Columbia and of Puerto Rico).
5. COVENANTS OF THE ACQUIRED FUND AND THE ACQUIRING FUND.
The Acquired Fund and the Acquiring Fund each hereby covenants and agrees
with the other as follows:
-7-
5.1 Each of the Acquiring Fund and the Acquired Fund each will operate
its business in the ordinary course between the date hereof and the
Closing Date, it being understood that such ordinary course of
business will include regular and customary periodic dividends and
distributions.
5.2 The Acquired Fund will call a meeting of its shareholders to be held
prior to the Closing Date to consider and act upon this Agreement
and take all other reasonable action necessary to obtain the
required shareholder approval of the transactions contemplated
hereby.
5.3 In connection with the Acquired Fund shareholders' meeting referred
to in paragraph 5.2, the Acquired Fund will prepare a Proxy
Statement for such meeting, to be distributed to the Acquired Fund
shareholders pursuant hereto, all in compliance with the applicable
requirements of the 1934 Act and the 1940 Act.
5.4 The information to be furnished by the Acquired Fund and the
Acquiring Fund for use in the Proxy Statement, as referred to in
paragraph 5.3, shall be accurate and complete in all material
respects and shall comply with federal securities and other laws and
regulations thereunder applicable thereto.
5.5 The Acquiring Fund will advise the Acquired Fund promptly if at any
time prior to the Closing Date the assets of the Acquired Fund
include any securities which the Acquiring Fund is not permitted to
acquire.
5.6 Subject to the provisions of this Agreement, the Acquired Fund and
the Acquiring Fund will each take, or cause to be taken, all action,
and do or cause to be done, all things reasonably necessary, proper
or advisable to cause the conditions to the other party's
obligations to consummate the transactions contemplated hereby to be
met or fulfilled and otherwise to consummate and make effective such
transactions.
5.7 The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act
and such of the state securities or "Blue Sky" laws as it may deem
appropriate in order to continue its operations after the Closing
Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all the obligations to be performed by them hereunder on or
before the Closing Date and, in addition thereto, to the following further
conditions:
6.1 The Acquiring Fund shall have delivered to the Acquired Fund, a
certificate executed in its name by its President or a Vice
President and its Treasurer or an Assistant Treasurer, in form and
substance satisfactory to the Acquired Fund and dated as of the
Closing Date, to the effect that the representations and warranties
of the Acquiring Fund made in this Agreement are true and correct at
and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and that the Acquiring
Fund has complied with all the covenants and agreements and
satisfied all of the conditions on their parts to be performed or
satisfied under this Agreement at or prior to the Closing Date.
6.2 The Acquired Fund shall have received a favorable opinion of Ropes &
Gray LLP dated the Closing Date and, in a form satisfactory to the
Acquiring Fund, to the following effect:
(a) The Acquiring Trust is duly organized and validly existing
under the laws of The Commonwealth of Massachusetts and has
power to own all of its properties and assets and to carry on
its business as presently conducted;
-8-
(b) This Agreement has been duly authorized, executed and
delivered on behalf of the Acquiring Fund and, assuming the
Proxy Statement referred to in paragraph 5.3 complies with
applicable federal securities laws and assuming the due
authorization, execution and delivery of this Agreement by the
Acquired Fund is the valid and binding obligation of the
Acquiring Fund enforceable against the Acquiring Fund in
accordance with its terms, except as the same may be limited
by bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights generally
and other equitable principles;
(c) The Acquiring Fund has the power to assume the liabilities to
be assumed by it hereunder and upon consummation of the
transactions contemplated hereby the Acquiring Fund will have
duly assumed such liabilities;
(d) The Acquisition Shares to be issued for transfer to the
Acquired Fund shareholders as provided by this Agreement are
duly authorized and upon such transfer and delivery will be
validly issued and outstanding and fully paid and
nonassessable shares in the Acquiring Fund, and no shareholder
of the Acquiring Fund has any preemptive right of subscription
or purchase in respect thereof;
(e) The execution and delivery of this Agreement did not, and the
performance by the Acquiring Fund of its obligations hereunder
will not, violate the Acquiring Fund's organizational
documents, or any provision of any agreement known to such
counsel to which the Acquiring Fund is a party or by which it
is bound or, to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any
penalty under any agreement, judgment, or decree to which the
Acquiring Fund is a party or by which it is bound;
(f) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority
is required for the consummation by the Acquiring Fund of the
transactions contemplated by this Agreement except such as may
be required under state securities or "Blue Sky" laws or such
as have been obtained;
(g) Such counsel does not know of any legal or governmental
proceedings relating to the Acquiring Fund existing on or
before the date of mailing of the Proxy Statement referred to
in paragraph 5.3 or the Closing Date required to be described
in the Proxy Statement which are not described as required;
(h) The Acquiring Trust is registered with the Securities and
Exchange Commission as an investment company under the 1940
Act; and
(i) To the knowledge of such counsel, except as has been disclosed
in writing to the Acquired Fund, no litigation or
administrative proceeding or investigation of or before any
court or governmental body is presently pending or threatened
as to the Acquiring Fund or any of its properties or assets or
any person whom the Acquired Fund may be obligated to
indemnify in connection with such litigation, proceeding or
investigation, and the Acquiring Fund is not a party to or
subject to the provisions of any order, decree or judgment of
any court or governmental body, which materially and adversely
affects its business or its ability to consummate the
transaction contemplated hereby.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, to the following further
conditions:
-9-
7.1 The Acquired Fund shall have delivered to the Acquiring Fund a
certificate executed in its name by its President or a Vice
President and its Treasurer or an Assistant Treasurer, in form and
substance satisfactory to the Acquiring Fund and dated as of the
Closing Date, to the effect that the representations and warranties
of the Acquired Fund made in this Agreement are true and correct at
and as of the Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and that the Acquired
Fund have complied with all the covenants and agreements and
satisfied all of the conditions on their parts to be performed or
satisfied under this Agreement at or prior to the Closing Date;
7.2 The Acquiring Fund shall have received a favorable opinion of Ropes
& Gray LLP, dated the Closing Date and in a form satisfactory to the
Acquiring Fund, to the following effect:
(a) The Acquired Trust is duly organized and validly existing
under the laws of The Commonwealth of Massachusetts and has
power to own all of its properties and assets and to carry on
its business as presently conducted;
(b) This Agreement has been duly authorized, executed and
delivered on behalf of the Acquired Fund and, assuming the
Proxy Statement referred to in paragraph 5.3 comply with
applicable federal securities laws and, assuming the due
authorization, execution and delivery of this Agreement by the
Acquiring Fund, is the valid and binding obligation of the
Acquired Fund enforceable against the Acquired Fund in
accordance with its terms, except as the same may be limited
by bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights generally
and other equitable principles;
(c) The Acquired Fund has the power to sell, assign, transfer and
deliver the assets to be transferred by it hereunder, and,
upon consummation of the transactions contemplated hereby, the
Acquired Fund will have duly transferred such assets to the
Acquiring Fund;
(d) The execution and delivery of this Agreement did not, and the
performance by the Acquired Fund of its respective obligations
hereunder will not, violate the Acquired Fund's organizational
documents or any provision of any agreement known to such
counsel to which the Acquired Fund is a party or by which it
is bound or, to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any
penalty under any agreement, judgment, or decree to which the
Acquired Fund is a party or by which it is bound;
(e) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority
is required for the consummation by the Acquired Fund of the
transactions contemplated by this Agreement, except such as
have been obtained;
(f) Such counsel does not know of any legal or governmental
proceedings relating to the Acquired Fund existing on or
before the date of mailing of the Proxy Statement referred to
in paragraph 5.3 or the Closing Date required to be described
in the Registration Statement which are not described as
required;
(g) The Acquired Trust is registered with the Securities and
Exchange Commission as an investment company under the 1940
Act; and
(h) To the knowledge of such counsel, except as has been disclosed
in writing to the Acquiring Fund, no litigation or
administrative proceeding or investigation of or before any
court or governmental body is presently pending or threatened
as to the Acquired Fund or any of its properties or assets or
any person whom the Acquiring Fund may be obligated to
indemnify in connection with such litigation, proceeding or
investigation, and the Acquired Fund is not a party to or
subject to the provisions of any order, decree or
-10-
judgment of any court or governmental body, which materially
and adversely affects its business or its ability to
consummate the transaction contemplated thereby.
7.3 Reserved.
7.4 The Acquired Fund shall have furnished to the Acquiring Fund a
certificate, signed by the President (or any Vice President) and the
Treasurer of the Acquired Fund, as to the adjusted tax basis in the
hands of the Acquired Fund of the securities delivered to the
Acquiring Fund pursuant to this Agreement.
7.5 The custodian of the Acquired Fund shall have delivered to the
Acquiring Fund a certificate identifying all of the assets of the
Acquired Fund held by such custodian as of the Valuation Date.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE ACQUIRING FUND
AND THE ACQUIRED FUND.
The respective obligations of the Acquired Fund and the Acquiring Fund
hereunder are each subject to the further conditions that on or before the
Closing Date:
8.1 This Agreement and the transactions contemplated herein shall have
received all necessary shareholder approvals at the meeting of
shareholders of the Acquired Fund referred to in paragraph 5.2.
8.2 On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other relief in
connection with, this Agreement or the transactions contemplated
hereby.
8.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities
(including those of the Securities and Exchange Commission and of
state "Blue Sky" and securities authorities) deemed necessary by the
Acquired Fund or the Acquiring Fund to permit consummation, in all
material respects, of the transactions contemplated hereby shall
have been obtained, except where failure to obtain any such consent,
order or permit would not involve a risk of a material adverse
effect on the assets or properties of the Acquired Fund or the
Acquiring Fund.
8.4 Reserved.
8.5 The Acquired Fund shall have received a favorable opinion of Ropes &
Gray LLP satisfactory to the Acquired Fund, and the Acquiring Fund
shall have received a favorable opinion of Ropes & Gray LLP
satisfactory to the Acquiring Fund, each substantially to the effect
that, for federal income tax purposes:
(a) The transactions contemplated by this Agreement will
constitute a reorganization within the meaning of Section
368(a) of the Code, and the Acquired Fund and the Acquiring
Fund will each be "a party to a reorganization" within the
meaning of Section 368(b) of the Code;
(b) No gain or loss will be recognized by the Acquired Fund (i)
upon the transfer of its assets to the Acquiring Fund in
exchange for the Acquisition Shares and the assumption by the
-11-
Acquiring Fund of the liabilities of the Acquired Fund or (ii)
upon the distribution of the Acquisition Shares by the
Acquired Fund to its shareholders in liquidation, as
contemplated in paragraph 1 hereof;
(c) No gain or loss will be recognized by the Acquiring Fund upon
receipt of the assets of the Acquired Fund in exchange for the
assumption of liabilities and obligations and issuance of the
Acquisition Shares as contemplated in paragraph 1 hereof;
(d) The tax basis of the assets of the Acquired Fund acquired by
the Acquiring Fund will be the same as the tax basis of such
assets in the hands of the Acquired Fund immediately prior to
the transfer, and the holding period of the assets of the
Acquired Fund in the hands of the Acquiring Fund will include
the period during which those assets were held by the Acquired
Fund;
(e) The holding periods of the assets of the Acquired Fund in the
hands of the Acquiring Fund will include the periods during
which such assets were held by the Acquired Fund;
(f) No gain or loss will be recognized by the Acquired Fund
shareholders upon the exchange of all of their Acquired Fund
shares for the Acquisition Shares;
(g) The aggregate tax basis of the Acquisition Shares to be
received by each shareholder of the Acquired Fund will be the
same as the aggregate tax basis of the Acquired Fund shares
exchanged therefor;
(h) An Acquired Fund shareholder's holding period for the
Acquisition Shares to be received will include the period
during which the Acquired Fund shares exchanged therefor were
held, provided that the shareholder held the Acquired Fund
shares as a capital asset on the date of the exchange; and
(i) The Acquiring Fund will succeed to and take into account the
items of the Acquired Fund described in Section 381(c) of the
Code, subject to the conditions and limitations specified in
Sections 381, 382, 383 and 384 of the Code and the regulations
thereunder.
The opinion will be based on certain factual certifications made by
officers of the Acquired Fund and the Acquiring Fund and will also
be based on customary assumptions. The opinion is not a guarantee
that the tax consequences of the relevant Acquisition will be as
described above.
Ropes & Gray LLP will express no view with respect to the effect of
the Acquisition on any transferred asset as to which any unrealized
gain or loss is required to be recognized at the end of a taxable
year (or on the termination or transfer thereof) under federal
income tax principles.
8.6 At any time prior to the Closing, any of the foregoing conditions of
this Agreement may be waived jointly by the Board of each of the
Acquired Fund and the Acquiring Fund, if, in their judgment, such
waiver will not have a material adverse effect on the interests of
the shareholders of the Acquired Fund or the Acquiring Fund.
9. BROKERAGE FEES AND EXPENSES.
9.1 The Acquired Fund and the Acquiring Fund each represents and
warrants to the other that there are no brokers or finders entitled
to receive any payments in connection with the transactions provided
for herein.
9.2 All fees paid to governmental authorities for the registration or
qualification of the Acquisition Shares and all transfer agency
costs related to the other Acquisition Shares including without
limitation, fees and expenses shall be allocated to the Acquiring
Fund. All fees and expenses including without limitation, fees and
expenses related to printing, mailing, solicitation of proxies and
-12-
tabulation of votes of Acquired Fund shareholders shall be allocated
to the Acquired Fund. Accounting, legal and custodial expenses
contemplated by this Agreement shall be allocated to Columbia.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES.
10.1 The Acquired Fund and the Acquiring Fund agree that neither party
has made any representation, warranty or covenant not set forth
herein and that this Agreement constitutes the entire agreement
between the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in
connection herewith shall not survive the consummation of the
transactions contemplated hereunder except paragraphs 1.1, 1.3, 1.5,
5.4, 9, 10, 13 and 14.
11. TERMINATION.
11.1 This Agreement may be terminated by the mutual agreement of the
Acquired Fund and the Acquiring Fund. In addition, either the
Acquired Fund or the Acquiring Fund may at its option terminate this
Agreement at or prior to the Closing Date because:
(a) Of a material breach by the other of any representation,
warranty, covenant or agreement contained herein to be
performed by the other party at or prior to the Closing Date;
(b) A condition herein expressed to be precedent to the
obligations of the terminating party has not been met and it
reasonably appears that it will not or cannot be met; or
(c) Any governmental authority of competent jurisdiction shall
have issued any judgment, injunction, order, ruling or decree
or taken any other action restraining, enjoining or otherwise
prohibiting this Agreement or the consummation of any of the
transactions contemplated herein and such judgment,
injunction, order, ruling, decree or other action becomes
final and non-appealable; provided that the party seeking to
terminate this Agreement pursuant to this Section 11.1(c)
shall have used its reasonable best efforts to have such
judgment, injunction, order, ruling, decree or other action
lifted, vacated or denied.
If the transactions contemplated by this Agreement have not
been substantially completed by December 31, 2007, this
Agreement shall automatically terminate on that date unless a
later date is agreed to by both the Acquired Fund and the
Acquiring Fund.
11.2 If for any reason the transactions contemplated by this Agreement
are not consummated, no party shall be liable to any other party for
any damages resulting therefrom, including without limitation
consequential damages.
12. AMENDMENTS.
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the
Acquired Fund and the Acquiring Fund; provided, however, that following the
shareholders' meeting called by the Acquired Fund pursuant to paragraph 5.2 no
such amendment may have the effect of changing the provisions for determining
the number of the Acquisition Shares to be issued to shareholders of the
Acquired Fund under this Agreement to the detriment of such shareholders without
their further approval.
13. NOTICES.
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be
-13-
in writing and shall be given by prepaid telegraph, telecopy or certified mail
addressed to the Acquired Fund or the Acquiring Fund, One Financial Center,
Boston, Massachusetts 02111, Attention: Secretary.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; NON- RECOURSE.
14.1 The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with
the domestic substantive laws of The Commonwealth of Massachusetts,
without giving effect to any choice or conflicts of law rule or
provision that would result in the application of the domestic
substantive laws of any other jurisdiction.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent of
the other party. Nothing herein expressed or implied is intended or
shall be construed to confer upon or give any person, firm or
corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of
this Agreement.
14.5 A copy of the Declaration of Trust of the Acquiring Trust and the
Acquired Trust is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that no trustee, officer,
agent or employee of such fund shall have any personal liability
under this Agreement, and that this Agreement is binding only upon
the assets and properties of the such trust.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK.]
-14-
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be executed as a sealed instrument by its President, a Vice President or
Treasurer and its corporate seal to be affixed thereto and attested by its
Secretary or Assistant Secretary.
[Name of Acquired Fund]
By: _________________________________________________
Name: _______________________________________________
Title: ______________________________________________
[Name of Acquired Fund]
By: _________________________________________________
Name: _______________________________________________
Title: ______________________________________________
Solely for purposes of Paragraph 9.2 of the Agreement
COLUMBIA MANAGEMENT ADVISORS, INC.
By: _________________________________________________
Name: _______________________________________________
Title: ______________________________________________
EXHIBIT A
ACQUIRED FUND AUTHORIZED CAPITAL
- ------------- ------------------
- ------------- ------------------
- ------------- ------------------
- ---------
* Converts to Class A shares after the expiration of a period of time.
A-1
COLUMBIA MANAGEMENT FORM OF PROXY
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD SEPTEMBER 16, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES. The undersigned
hereby appoints Christopher L. Wilson, J. Kevin Connaughton, Michael G. Clarke,
Vincent P. Pietropaolo and Michelle H. Rhee, and each of them, with full power
of substitution to each, to vote all shares at the Special Meeting of
Shareholders to be held at One Financial Center, Boston, Massachusetts, on
September 9, 2005 at 2:00 p.m. Boston Time and at any and all adjournments, as
specified herein and in accordance with their best judgment, on any other
business that may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BELOW
AND, ABSENT DIRECTION, WILL BE VOTED FOR THE PROPOSAL LISTED BELOW. THIS PROXY
WILL BE VOTED IN ACCORDANCE WITH THE HOLDER'S BEST JUDGMENT AS TO ANY OTHER
MATTER.
VOTE VIA THE INTERNET:
HHTPS://VOTE.PROXY-DIRECT.COM
VOTE VIA THE TELEPHONE: 1-866-241-6192
NOTE: Please sign exactly as name or
names appear hereon. Joint owners
should each sign personally. When
signing as attorney, executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in corporate
name by President or other authorized
officer. If a partnership, please sign
in partnership name by authorized
person.
______________________________________
Shareholder sign here
______________________________________
Co-owner sign here
______________________________________
Date ORE_15350
FUNDS FUNDS FUNDS
- ----- ----------------- -----------------
Fundnames Drop In Fundnames Drop In Fundnames Drop In
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [ ]
[ ] To vote FOR ALL Funds on ALL Proposals mark this box. No other vote is
necessary.
1. TO ELECT TRUSTEES:
FOR ALL WITHHOLD FOR ALL
AUTHORITY EXCEPT
FOR ALL
01. Janet Langford Kelly 02. Ann-Lee Verville 03. Douglas A. Hacker
04. Richard W. Lowry 05. William E. Mayer 06. Charles R. Nelson [ ] [ ] [ ]
07. John J. Neuhauser 08. Patrick J. Simpson 09. Thomas E. Stitzel
10. Thomas C. Theobald 11. Richard L. Woolworth
To withhold authority to vote for one or more of the nominees, write the
corresponding number(s) of the nominee(s) on the line below.
2.a. TO APPROVE AN AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO BORROWING MONEY, PLEDGING ASSETS AND ISSUING SENIOR
SECURITIES.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.b. TO APPROVE AN AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO MAKING LOANS
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.c. TO APPROVE AN AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO DIVERSIFICATION OF INVESTMENTS
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.d. TO APPROVE AN AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO INVESTMENTS IN COMMODITIES
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.e. TO APPROVE AN AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO INVESTMENTS IN REAL ESTATE
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.f. TO APPROVE AN AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO UNDERWRITING OF SECURITIES
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.g. TO APPROVE THE ELIMINATION OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO PURCHASING SECURITIES ON MARGIN
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.h. TO APPROVE THE ELIMINATION OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO INVESTING FOR THE PURPOSE OF EXERCISING
CONTROL
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.i. TO APPROVE THE ELIMINATION OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO SHORT SALES
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.j. TO APPROVE AN AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO CONCENTRATING INVESTMENTS IN AN INDUSTRY
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.k. TO APPROVE THE ELIMINATION OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO PURCHASING SECURITIES OF COMPANIES LESS THAN
THREE YEARS OLD
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.l. TO APPROVE THE ELIMINATION OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO INVESTING IN SECURITIES OF OTHER INVESTMENT
COMPANIES
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.m. TO APPROVE THE ELIMINATION OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO PURCHASING OR HOLDING THE SECURITIES OF ANY
COMPANY, IF SECURITIES OF SUCH COMPANY ARE OWNED BY OFFICERS OR DIRECTORS
OF THE FUND AND OF ITS ADVISOR.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.n. TO APPROVE THE ELIMINATION OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO BUYING AND SELLING PUTS AND CALLS
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
2.o. TO APPROVE THE ELIMINATION OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO PURCHASING ILLIQUID SECURITIES
FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ]
3. TO APPROVE THE REORGANIZATION OF EACH FUND PURSUANT TO THE PLAN
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
ORE_15350