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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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-12
SteinRoe Variable Investment Trust; Liberty Variable Investment 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.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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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PERSONS WHO POTENTIALLY ARE TO RESPOND TO THE COLLECTION OF INFORMATION
CONTAINED IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
SEC 1913 (02-02)
SteinRoe Variable Investment Trust
Columbia Large Cap Growth Fund, Variable Series
Liberty Asset Allocation Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty Variable Investment Trust
Colonial Small Cap Value Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Columbia High Yield Fund, Variable Series
Columbia International Fund, Variable Series
Liberty Growth & Income Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
(each, a "Fund"; and collectively, the "Funds")
One Financial Center,
Boston, Massachusetts 02111-2621
1-866-348-1468
[ ], 2005
Dear Investor:
I am writing to you to ask for your voting instructions on the following
important matters that affect your investment in the Funds: (1) the election of
Trustees for your Fund; and (2) the approval of amendments to and the
elimination of certain fundamental investment restrictions of your Fund. As an
investor through a variable annuity contract or variable life insurance policy,
you can instruct your insurance company as to how to vote on these proposals. At
a special meeting of shareholders on November 30, 2005, your insurance company
will vote on the proposals as instructed by you and other investors. If
approved, these amendments to and eliminations of certain fundamental investment
restrictions 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 provide
voting instructions; and
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- 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 VOTING INSTRUCTION CARD AND POSTAGE-PAID
RETURN ENVELOPE.
We urge you to record your voting instructions by telephone, via the
Internet or by completing, signing and returning the enclosed voting instruction
card(s) promptly. A postage-paid envelope is enclosed for mailing, and Internet
voting instructions are listed at the top of your voting instruction card(s).
Your voting instructions are 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 (866) 348-1468 or contact your financial advisor.
Sincerely yours,
Christopher L. Wilson
President
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SteinRoe Variable Investment Trust
Columbia Large Cap Growth Fund, Variable Series
Liberty Asset Allocation Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty Variable Investment Trust
Colonial Small Cap Value Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Columbia High Yield Fund, Variable Series
Columbia International Fund, Variable Series
Liberty Growth & Income Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
(each, a "Fund"; and collectively, the "Funds")
One Financial Center,
Boston, Massachusetts 02111-2621
1-866-348-1468
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 30, 2005
Dear Investor:
As policy owner or contract owner of record at the close of business on
September 9, 2005 (the "Record Date"), you are entitled to instruct your
insurance company as to how it should vote on certain proposals to be considered
at the Special Meeting of Shareholders of the Funds (the "Meeting"), to be held
at the offices of the Funds at One Financial Center, Boston, Massachusetts, on
November 30, 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 ON SEPARATELY BY
ALL SHAREHOLDERS OF EACH TRUST, VOTING TOGETHER WITH SHAREHOLDERS OF ALL
FUNDS OF THAT TRUST.)
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 transact such other business as may properly come before the Meeting,
or any adjournment(s) thereof.
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Attached to this notice is the Proxy Statement of the Funds. You are urged
to read this statement carefully before completing your voting instruction card.
By order of the Board of Trustees,
R. Scott Henderson
Secretary of the Funds
[ ], 2005
IT IS IMPORTANT THAT YOUR POLICY OR CONTRACT BE REPRESENTED. PLEASE PROMPTLY
MARK YOUR VOTING INSTRUCTIONS ON THE ENCLOSED CARD; THEN, SIGN, DATE AND MAIL IT
IN THE ACCOMPANYING POSTAGE-PAID RETURN ENVELOPE. YOUR PROMPT RESPONSE WILL HELP
ENSURE THAT YOUR INTERESTS ARE REPRESENTED.
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SteinRoe Variable Investment Trust
Columbia Large Cap Growth Fund, Variable Series
Liberty Asset Allocation Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty Variable Investment Trust
Colonial Small Cap Value Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Columbia High Yield Fund, Variable Series
Columbia International Fund, Variable Series
Liberty Growth & Income Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
(each unitalicized entity, a "Trust"; each italicized entity, a "Fund")
One Financial Center,
Boston, Massachusetts 02111-2621
1-866-348-1468
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PROXY STATEMENT
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FOR THE SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 30, 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 Trusts
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 November 30, 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 [ ], 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
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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:
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 All Funds
Funds' fundamental investment restrictions with
respect to borrowing money, pledging assets and issuing
senior securities.
Proposal 2.B.: To approve an amendment to certain All Funds
Funds' fundamental investment restrictions with
respect to making loans.
Proposal 2.C.: To approve an amendment to certain Funds' Colonial Small Cap Value Fund, Variable Series
fundamental investment restrictions with respect to Colonial Strategic Income Fund, Variable Series
diversification of investments. Columbia High Yield Fund, Variable Series
Columbia Large Cap Growth Fund, Variable Series
Liberty Asset Allocation Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Growth & Income Fund, Variable Series
Liberty Money Market Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
Proposal 2.D.: To approve an amendment to certain Funds' Columbia High Yield Fund, Variable Series
fundamental investment restrictions with respect to Columbia Large Cap Growth Fund, Variable Series
investments in commodities. Liberty Asset Allocation Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Proposal 2.E.: To approve an amendment to certain All Funds
Funds' fundamental investment
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restrictions with respect to investments in real
estate.
Proposal 2.F.: To approve an amendment to certain All Funds
Funds' fundamental investment restrictions with
respect to underwriting of securities.
Proposal 2.G.: To approve the elimination of Columbia High Yield Fund, Variable Series
certain Fund's fundamental investment restrictions
with respect to purchasing securities on margin.
Proposal 2.H.: To approve the elimination of Colonial Small Cap Value Fund, Variable Series
certain Funds' fundamental investment restrictions Columbia High Yield Fund, Variable Series
with respect to investing for the purpose of Columbia Large Cap Growth Fund, Variable Series
exercising control. Liberty Asset Allocation Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
Proposal 2.I.: To approve the elimination of Columbia High Yield Fund, Variable Series
certain Funds' fundamental investment restrictions
with respect to short sales.
Proposal 2.J.: To approve an amendment to certain All Funds
Funds' fundamental investment restrictions with
respect to concentrating investments in an
industry.
Proposal 2.K.: To approve the elimination of Columbia High Yield Fund, Variable Series
certain Funds' fundamental investment restrictions
with respect to purchasing illiquid securities.
Proposal 2.L.: To approve the elimination of Columbia High Yield Fund, Variable Series
certain Funds' fundamental investment restrictions
with respect to investing in securities of other
investment companies.
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Proposal 2.M.: To approve the elimination of Colonial Small Cap Value Fund, Variable Series
certain Funds' fundamental investment restrictions Colonial Strategic Income Fund, Variable Series
with respect to buying and selling puts and calls. Columbia High Yield Fund, Variable Series
Columbia International Fund, Variable Series
Liberty Growth & Income Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
With respect to Proposal 1, the shareholders of each Fund in a Trust will vote
together with the shareholders of all other Funds of that Trust 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.M. affecting
the Fund.
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
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 the Record Date are entitled
to receive notice of, and to vote at, the Meeting or any adjournment(s) thereof.
Shareholders of a Fund that is a series of Liberty Variable Investment Trust on
the Record Date shall be entitled to one vote for each whole share held, as to
each matter on which they are entitled to vote, and each fractional share shall
be entitled to a proportionate fractional vote. Shareholders of a Fund that is a
series of SteinRoe Variable Investment Trust on the Record Date shall be
entitled to a number of votes on each matter on which they are entitled to vote
equal to the net asset value of the share (or fractional share) in United States
dollars determined at the close of business on the Record Date (for example, a
share having a net asset value of $10.50 would be entitled to 10.5 votes).
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 the Fund.
REQUIRED VOTE
The affirmative vote of a plurality of the holders of shares of beneficial
interest of each series of a Trust (voting together as a single class) present
at the Meeting in person or by proxy is required for the election of each such
Trustee. The names and ages of the Trustees of the Funds, the year
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each was first elected, their principal business occupations during at least the
last five years, the number of portfolios in 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.
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME/AGE POSITION YEAR FIRST PRINCIPAL OCCUPATION(s) OVERSEEN BY
AND ADDRESS WITH FUNDS ELECTED (1) DURING PAST FIVE YEARS DIRECTOR OTHER DIRECTORSHIPS HELD
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DISINTERESTED
DIRECTORS
Douglas A. Hacker Trustee 1996 Executive Vice President-Strategy of 101 Nash Finch Company
(Age 49) United Airlines (airline) since (food distributor)
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).
Janet Langford Trustee 1996 Partner, Zelle, Hofmann, Voelbel, 101 None
Kelly Mason & Gette LLP (Law firm) since
(Age 47) 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,
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NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME/AGE POSITION YEAR FIRST PRINCIPAL OCCUPATION(s) OVERSEEN BY
AND ADDRESS WITH FUNDS ELECTED (1) DURING PAST FIVE YEARS DIRECTOR OTHER DIRECTORSHIPS HELD
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Secretary and General Counsel, Sara
Lee Corporation (branded, packaged,
consumer-products manufacturer) from
January, 1995 to September, 1999).
Richard W. Lowry Trustee 1995 Private Investor since August, 1987 103 None
(2) (formerly Chairman and Chief
(Age 69) Executive Officer, U.S. Plywood
Corporation (building products
manufacturer)).
Charles R. Nelson Trustee 1981 Professor of Economics, University 101 None
(Age 62) 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 President and Dean of 103 Saucony, Inc.
(2) Faculties since August, 1999, Boston (athletic footwear)
(Age 62) College (formerly Dean, Boston
College School of Management from
September, 1977 to August, 1999).
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NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME/AGE POSITION YEAR FIRST PRINCIPAL OCCUPATION(s) OVERSEEN BY
AND ADDRESS WITH FUNDS ELECTED (1) DURING PAST FIVE YEARS DIRECTOR OTHER DIRECTORSHIPS HELD
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Patrick J. Trustee 2000 Partner, Perkins Coie, LLP 101 None
Simpson (law firm).
(Age 61)
Thomas E. Stitzel Trustee 1998 Business Consultant since 1999 101 None
(Age 69) (formerly Professor of Finance from
1975 to 1999; College of Business,
Boise State University); Chartered
Financial Analyst.
Thomas C. Trustee 1996 Partner and Senior Advisor, Chicago 101 Anixter International (network
Theobald (3) Growth Partners (private equity support equipment distributor);
(Age 68) investing) since September, 2004; Ventas Inc. (real estate investment
(formerly Managing Director, William trust); Jones Lang LaSalle (real
Blair Capital Partners (private estate management services) and
equity investing) from September, Ambac Financial Group (financial
1994 to September, 2004). guarantee insurance).
Anne-Lee Verville Trustee 1998 Retired since 1997 (formerly General 101 Chairman of the Board of Directors,
(Age 59) Manager, Global Education Industry, Enesco Group, Inc. (designer,
IBM Corporation (computers and importer and distributor of
technology) from 1994 to 1997). giftware and collectibles).
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NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME/AGE POSITION YEAR FIRST PRINCIPAL OCCUPATION(s) OVERSEEN BY
AND ADDRESS WITH FUNDS ELECTED (1) DURING PAST FIVE YEARS DIRECTOR OTHER DIRECTORSHIPS HELD
- ----------------- ---------- ----------- ------------------------------------ ------------- ------------------------
Richard L. Trustee 1991 Retired since December, 2003 101 NorthWest Natural (a natural gas
Woolworth (formerly Chairman and Chief service provider).
(Age 64) Executive 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 1994 Partner, Park Avenue Equity Partners 103 Lee Enterprises (print media); WR
DIRECTOR (private equity) since February, Hambrecht + Co. (financial service
William E. Mayer 1999; (formerly Partner, Development provider); First Health
(2)(4) Capital LLC from November, 1996 to (healthcare); Readers Digest
(Age 65) February, 1999). (publisher); 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 Funds by reason of his affiliation with WR
Hambrecht + Co.
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FOR INFORMATION REGARDING THE EXECUTIVE OFFICERS OF YOUR FUND, SEE APPENDIX A TO
THIS PROXY STATEMENT.
CONSOLIDATION OF LEGAL ENTITIES
The Trustees have also approved, subject to shareholder approval of the election
of all current Trustees, the reorganization of each Fund that is currently a
series of Liberty Variable Investment Trust as a series of SteinRoe Variable
Investment Trust, to be renamed [Columbia Variable Investment Trust] (the
"Combined Trust"). The Trustees believe that the consolidation of the Funds into
a single legal entity will enhance the efficiency of compliance monitoring and
administration. This consolidation is 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.M.). All of the Trustees of
the Combined Trust are expected to serve as Trustees of the New Funds, even if
one or more of such Trustees are no elected pursuant to Proposal 1.
The consolidation of legal entities (the "Reorganizations") would be effected
pursuant to a plan of reorganization that provides for the transfer of all of
the assets of each Fund to a corresponding series of the Combined Trust (a "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, followed by the liquidation of the Fund
(a "Plan").
As described in more detail below in "Information About the Combined Trust", the
Combined Trust, like Liberty Variable Investment Trust, is a business trust
governed by Massachusetts law and an agreement and declaration of trust (the
"Declaration of Trust"). The Combined Trust has separate series representing
different portfolios. Each series of the Combined 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.
Because each Reorganization would satisfy the provisions of Rule 17a-8 of the
Investment Company Act of 1940, as amended (the "1940 Act") that permits
reorganizations without a shareholder vote and none of the Declarations of Trust
of the Trusts requires a shareholder vote for such Reorganizations, no
shareholder vote is required to complete the Reorganizations.
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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 Funds (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 Trust or the Funds.
The primary purpose of the Reorganizations is to facilitate compliance
monitoring and efficient administration.
AGREEMENT AND PLAN OF REORGANIZATION
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 11 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
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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
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 COMBINED TRUST. The Combined Trust is governed by a
Declaration of Trust, By-Laws (the "By-Laws") and its Board. The Combined Trust
is organized as a Massachusetts business trust governed by Massachusetts and
federal law.
The table below summarizes the significant differences between the Declarations
of Trust and By-Laws of the Combined Trust and of the Trusts. For additional
information, shareholders of a Fund should refer directly to such documents,
copies of which may be obtained by contacting the Combined Trust at its address
listed on the cover page of this Proxy Statement.
THE COMBINED TRUST LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST
--------------------------------- --------------------------------- ----------------------------------
SHAREHOLDER LIABILITY: A shareholder or former A shareholder or former A shareholder or former
shareholder held to be shareholder held to be shareholder held to be
personally liable solely by personally liable solely by personally liable solely by
reason of his or her being or reason of his or her being or reason of his or her being or
having been a shareholder is having been a shareholder is having been a shareholder is
entitled to entitled to be held harmless entitled to be held harmless
from and indemnified from and indemnified
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be held harmless from and against all loss and expense against all loss and expense
indemnified against all loss and arising from such liability. arising from such liability.
expense arising from such
liability. Every note, bond, contract, Every note, bond, contract,
instrument, certificate or instrument, certificate or
Every note, bond, contract, undertaking made or issued by undertaking made or issued by
instrument, certificate or any Trustees or Trustee or by any Trustees or Trustee or by
undertaking made or issued by any officers or officer must any officers or officer must
any Trustees or Trustee or by recite that the same was recite that the same was
any officers or officer must executed or made by or on behalf executed or made by or on behalf
recite that the same was of the Trust and that of the Trust and that
executed or made by or on behalf obligations of such instrument obligations of such instrument
of the Trust and that are not binding on any of them are not binding on any of them
obligations of such instrument or shareholders individually. or shareholders individually.
are not binding on any of them
or shareholders individually.
SHAREHOLDER VOTING Shareholders have the power to Shareholders have the power to Shareholders have the power to
RIGHTS: vote only (i) for the election vote only (i) for the election vote only (i for the election or
or, to the extent required by or removal of Trustees; (ii) removal of Trustees; (ii with
law, removal of Trustees; (ii) with respect to any investment respect to any investment
with respect to any termination, adviser; (iii) with respect to adviser; (iii with respect to
by the shareholders, of the any termination, by the any termination, by the
Trust or series or class of the shareholders, of the Trust or shareholders, of the Trust or
Trust; (iii) with respect to series or class of the Trust; series or class of the Trust;
derivative actions, to the (iv) with respect to any (iv) with respect to any
extent certain demand amendment, by the Trustees that amendment, by the shareholders,
requirements are met; and (iv) requires shareholder to the Declaration of Trust; (v)
with respect to any other authorization; (v) with respect with respect to derivative
matters required by law, the to derivative actions similar to actions similar to a
organizational documents or a Massachusetts corporation; and Massachusetts corporation, to the
deemed desirable by the Board of (vi) with respect to any other extent certain demand
Trustees. matters required by law, the requirements are met; and (vi)
organizational documents, or with respect to any other
No shareholder may bring a deemed desirable by the Board of matters required by law, the
derivative claim without first Trustees. organizational documents or
requesting the Trustees to deemed desirable by the Board of
bring or maintain such action, On a record date, each Trustees.
proceeding or claim. Such demand outstanding share or fractional
shall be excused only when the share is entitled to one vote or Each whole share (or fractional
plaintiff makes a specific a proportional fractional vote. share) outstanding on the record
showing that irreparable injury date is entitled to a number of
to the Trust or series would Shareholders may vote together votes on any matter which it is
otherwise result. with shareholders of the other entitled to vote equal to the
series of the Trust on matters net asset value of the share (or
Each whole share (or fractional affecting the Trust as a whole, fractional share) in U.S.
share) outstanding on the record such as the election of dollars determined at the close
date is entitled to a number of Trustees. of business on the record date
votes on any matter which it is
entitled to vote equal to the
net asset value of the share (or
fractional share) in U.S.
dollars determined at the close
of business on the record date
(for example, a share having a
net asset value of $10.50 would
be entitled to 10.5 votes).
Shareholders will vote
-16-
together with shareholders of the (for example, a share having a
other series of the Trust on net asset value of $10.50 would
matters affecting the Trust as a be entitled to 10.5 votes).
whole, such as the election of
Trustees. Shareholders may vote together
with shareholders of the other
series of the Trust on matters
affecting the Trust as a whole,
such as the election of
Trustees.
SHAREHOLDER MEETINGS: Shareholders have no specific Shareholders have no specific Shareholders may call a meeting
right to call meetings, except right to call meetings, except upon written application of
as may be required by applicable as may be required by applicable shareholders holding at least
law, including the Investment law, including the Investment 10% of the outstanding shares,
Company Act of 1940. Company Act of 1940. or 10% of the outstanding shares
of any series or class (if
shareholders of such series or
class are entitled to vote by
individual series or class). The
application must state the
purpose of the meeting and the
matters to be acted upon.
SHAREHOLDER QUORUM: 30% of the shares entitled to 30% of the shares entitled to 30% of the shares entitled to
vote at the meeting. vote at the meeting. vote at the meeting.
SHAREHOLDER CONSENT: Majority consent required for Majority consent required for Majority consent required for
shareholder action taken without shareholder action taken without shareholder action taken without
a meeting. a meeting. a meeting.
NOTICE TO Notice of shareholder meetings Written notice of shareholder Notice of shareholder meetings
SHAREHOLDERS: is to be mailed, postage meetings must be given not less is to be mailed, postage
prepaid, or sent by facsimile or than seven days in advance. prepaid, not less than seven
other electronic submission not days before the date of such
less than seven days before the Notice is not expressly required meeting.
date of such meeting. to state the purpose for which
the meeting is called. Notice must include the purpose
Notice is not expressly required or purposes for which a meeting
to include the purpose for which is called.
the meeting is called.
SHAREHOLDER PROXIES: Shareholders may put a proxy in Shareholders may put a proxy in Shareholders may put a proxy in
place for a duration of up to place for a duration of up to place for a duration of up to
six months. six months. six months.
TRUSTEE'S POWER TO The Declaration of Trust may be The Declaration of Trust may be Except when otherwise required
AMEND DECLARATION OF amended at any time by an amended at any time by an by the Investment Company Act of
TRUST: instrument in writing signed by instrument in writing signed by 1940, the Declaration of Trust
a majority of the then Trustees, a majority of the then Trustees may be amended by a majority
provided that, for when authorized so to do by vote vote of the Trustees, provided
non-ministerial amendments, of a majority of the shares that, for non-ministerial
notice is promptly mailed to entitled to vote with respect to amendments, notice is mailed to
shareholders as of the day such such amendment, except that the shareholders upon the same
amendment is effective. shareholder authorization is not day such amendment is effective.
required for amendments to
change the name of the Trust,
supply any omission, cure any
-17-
ambiguity or cure, correct or
supplement any defective or
inconsistent provision.
TERMINATION OF TRUST: Shareholders have the right to Shareholders have the right to Shareholders have the right to
terminate the Trust, or series terminate the Trust or series terminate the Trust, or series
or class, upon approval of at upon approval of at least or class, upon approval of at
least 66 2/3% of the outstanding two-thirds of the outstanding least a majority of the
shares of the Trust or the shares of the Trust or the outstanding shares of the Trust
affected series or class. affected series. or the affected series or class.
Trustees may terminate the Trustees may terminate the Trust Trustees may terminate the
Trust, or any series or class, or series without shareholder Trust, or series or class,
without shareholder approval by approval by written notice to without shareholder approval by
written notice to shareholders. the shareholders. written notice to shareholders.
MERGER OR The Declaration of Trust Shareholders have no express Shareholders have no express
CONSOLIDATION TRUST: provides that a consolidation, right under the Declaration of right under the Declaration of
merger or transfer may be Trust to vote on mergers or Trust to vote on mergers or
authorized by vote of a majority consolidations. consolidations.
of the Trustees then in office
without shareholder approval,
unless otherwise required by
law.
REMOVAL OF TRUSTEES: Trustee may be removed, with or Trustee may be removed, with or Trustee may be removed, with or
without cause, by a majority of without cause, by (i) a majority without cause, by (i) a majority
Trustees then in office. of Trustees then in office or of Trustees then in office; (ii)
(ii) by a vote of two-thirds of by a vote of two-thirds of the
the holders of outstanding holders of outstanding shares at
shares, with, at a meeting a meeting called for the
called for the purpose. purpose; or (iii) by the holders
of two-thirds of the outstanding
shares by declaration in writing
filed with the custodian of the
Trust.
DIRECTOR/TRUSTEE Not limited. Not limited. Not limited.
COMMITTEES:
TRUSTEE LIABILITY: Trustees are not personally Trustees are not personally Trustees are not personally
liable for claims against the liable for claims against the liable for claims against the
Trust or for any neglect or Trust or for any neglect or Trust or for any neglect or
wrongdoing of any officer, wrongdoing of any officer, wrongdoing of any officer,
agent, employee, investment agent, employee, investment agent, employee, investment
adviser, or principal adviser, or principal adviser, or principal
underwriter of the Trust. Each underwriter of the Trust. Each underwriter of the Trust. Each
Trustee is not responsible for Trustee is not responsible for Trustee is not responsible for
the act or omission of any other the act or omission of any other the act or omission of any other
Trustee and may be liable only Trustee and may be liable only Trustee and may be liable only
by reason of willful by reason of willful by reason of willful
misfeasance, bad faith, gross misfeasance, bad faith, gross misfeasance, bad faith, gross
negligence or reckless disregard negligence or reckless disregard negligence or reckless disregard
of the duties involved in the of the duties involved in the of the duties involved in the
conduct of his office. conduct of his office. conduct of his office.
-18-
TRUSTEE The By-Laws state that the Trust The Declaration of Trust states The Declaration of Trust states
INDEMNIFICATION: will indemnify each of its that the Trust will indemnify that the Trust will indemnify
Trustees and officers who are each of its Trustees and each of its Trustees and
not employees or officers of any officers against all liabilities officers against all liabilities
investment adviser to the Trust and expenses, including amounts and expenses, including amounts
or any affiliated person thereof paid in satisfaction of paid in satisfaction of
and may indemnify each of its judgments, in compromise, as judgments, in compromise, as
officers who are employees or fines and penalties, and as fines and penalties, and as
officers of any investment counsel fees, reasonably counsel fees, reasonably
adviser to the Trust or any incurred by such person while in incurred by such person while in
affiliated person thereof office or thereafter, by reason office or thereafter, by reason
against all liabilities and of the indemnified person's of the indemnified person's
expenses, including amounts paid service as a Trustee or officer. service as a Trustee or officer.
in satisfaction of judgments, in The Trust will not indemnify its The Trust will not indemnify its
compromise, as fines and Trustees and officers against Trustees and officers against
penalties, and as counsel fees, any liability to the Trust or to any liability to the Trust or to
reasonably incurred by such its shareholders to which he or its shareholders to which he or
person while in office or she would otherwise be subject she would otherwise be subject
thereafter, by reason of the by reason of willful by reason of willful
indemnified person's service as misfeasance, bad faith, gross misfeasance, bad faith, gross
a Trustee or officer. The Trust negligence or reckless disregard negligence or reckless disregard
will not indemnify its Trustees of the duties involved in the of the duties involved in the
and officers against any conduct of such person's office. conduct of his office.
liability to the Trust or to its
shareholders to which he or she Under the Declaration of Trust, Under the Declaration of Trust,
would otherwise be subject by in the absence of a final in the absence of a final
reason of willful misfeasance, decision on the merits by an decision on the merits by an
bad faith, gross negligence or adjudicating body that such adjudicating body that such
reckless disregard of the duties person is liable by reason of person is not liable by reason
involved in the conduct of his willful misfeasance, bad faith, of willful misfeasance, bad
office. gross negligence or reckless faith, gross negligence or
disregard of the duties involved reckless disregard of the duties
Under the By-Laws, in the in the conduct of their office, involved in the conduct of their
absence of a final decision on indemnification will be provided office, no indemnification will
the merits by an adjudicating if (a) approved as in the best be provided unless such person
body that such person has not interests of the Trust, after is determined to be not liable
acted in good faith in the notice that it involves such by (a) a vote of a majority of
reasonable belief that such indemnification, by at least a the disinterested Trustees or
person's action was in the best majority of the disinterested (b) an independent legal counsel
interests of the Trust or is Trustees acting on the matter as expressed in a written
liable to the Trust or its (provided that a majority of the opinion.
Shareholders by reason of disinterested Trustees then in
willful misfeasance, bad faith, office act on the matter) upon a
gross negligence or reckless determination, based upon a
disregard of the duties involved review of readily available
in the conduct of his or her facts, that such person is not
office, indemnification will be liable to the Trust or its
provided if (a) approved, after shareholders by reason of
notice that it involves such willful misfeasance, bad faith,
indemnification, by at least a gross negligence or reckless
majority of the disinterested disregard of the duties involved
Trustees acting on the matter in the conduct of his or her
(provided that a majority of the office or (b) there has been
disinterested Trustees then in obtained an opinion in writing
office act on the matter) upon a of independent legal counsel to
determination, based upon a the effect that such
-19-
review of readily available indemnification would not
facts, that such person has protect such person against any
acted in good faith in the liability to the Trust to which
reasonable belief that such such person would otherwise be
person's action was in the best subject by reason of willful
interests of the Trust and is misfeasance, bad faith, gross
not liable to the Trust or its negligence or reckless disregard
shareholders by reason of of the duties involved in the
willful misfeasance, bad faith, conduct of his or her office.
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.
-20-
LEGAL EXPENSES: The By-Laws state that legal The Declaration of Trust states The Declaration of Trust states
expenses may be paid from time that legal expenses may be paid that legal expenses may be paid
to time by the Trust in advance from time to time by the Trust from time to time by the Trust
of the final disposition of any in advance of the final in advance of the final
such proceeding if the Trust disposition of any such disposition of any such
receives a written undertaking proceeding if the Trust receives proceeding if the Trust receives
by the indemnified person to a written undertaking by the a written undertaking by the
reimburse the Trust in the event indemnified person to reimburse indemnified person to reimburse
it is subsequently determined the Trust in the event it is the Trust (unless it is
that the indemnified person is subsequently determined that the determined that such person is
not entitled to such indemnified person is not ultimately entitled to
indemnification and (a) the entitled to such indemnification indemnification) and (a) the
indemnified person provides and (a) the indemnified person indemnified person provides
security for his undertaking, or provides security for his security for his undertaking, or
(b) the Trust is insured against undertaking, or (b) the Trust is (b) the Trust is insured against
losses arising by reason of any insured against losses arising losses arising by reason of any
lawful advances, or (c) a by reason of any lawful lawful advances, or (c) a
majority of the disinterested, advances, or (c) a majority of majority of the disinterested,
non-party Trustees or an the disinterested, non-party non-party Trustees or an
independent legal counsel, as Trustees or an independent legal independent legal counsel, as
expressed in a written opinion, counsel, as expressed in a expressed in a written opinion,
determines that there is reason written opinion, determines that determines that there is reason
to believe that the indemnified there is reason to believe that to believe that the indemnified
person ultimately will be found the indemnified person person ultimately will be found
entitled to indemnification. ultimately will be found entitled to indemnification.
entitled to indemnification.
DIVIDENDS: Not limited. Not limited. Not limited.
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 Trust, to the effect that, on the basis
of the existing provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), the Treasury regulations promulgated thereunder, 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;
-21-
(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.
The opinion will be qualified to reflect that the Code requires that certain
contracts or securities (including, in particular, futures contracts, certain
foreign currency contracts, "non-equity" options and investments in "passive
foreign investment companies") be marked-to-market (treated as sold for their
fair market value) at the end of a taxable year (or upon their termination or
transfer).
The opinion will be based on certain factual certifications made by officers of
each Trust and 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. The
opinion is not a guarantee that the tax consequences of the Reorganizations will
be as described above. The opinion will note and distinguish certain published
precedent. There is no assurance that the Internal Revenue Service or a court
would agree with the opinion.
-22-
TRUSTEES' COMPENSATION
The members of the Board of Trustees also serve as trustees for certain other
registered investment companies advised by Columbia Management (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.
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. Except as
shown in Appendix C, the Trustees did not, as of December 31, 2004 beneficially
own shares of the Funds.
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 December 31, 2004, your Fund held 18 meetings (5 regular
joint Board meetings and 13 special joint Board meetings). The Funds are not
required under their Declarations of Trust to hold annual meetings, but have
voluntarily undertaken to hold meetings to elect Trustees at least every five
years, beginning in 2005.
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 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.
-23-
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 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 attached as Appendix D
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
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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 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 Trustee 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
-25-
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
Mses. Kelly and Verville, and Messrs. Nelson, Simpson and Stitzel are members of
the Compliance Committee of the Board of Trustees 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
DECEMBER 31, 2004
-----------------
Audit Committee 11
Governance Committee 4
Advisory Fees & Expenses
Committee 7
Compliance Committee 6
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
-26-
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) 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 E1 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.
The amount billed by PwC in each of the last two fiscal years for audit-related
services provided to Columbia or Columbia Affiliates for engagements that
related directly to the operations or financial reporting of each Fund was
$95,000.
The table in Appendix E2 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. The affirmative vote of a plurality of the holders of shares of
beneficial interest of each Fund present at the Meeting in person or by proxy is
required for the election of each such Trustee.
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II. PROPOSAL 2: ADOPTION OF STANDARDIZED FUNDAMENTAL INVESTMENT RESTRICTIONS
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.M. 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,
pledge assets and issuing senior securities, respectively. Generally, the Funds'
current fundamental investment restrictions are more restrictive than these 1940
Act requirements.
The Trustees recommend that each affected Fund amend its policy so that it will
allow each affected Fund to issue senior securities, pledge assets or borrow
money to the full extent permitted under applicable law.
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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 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,
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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 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:
Colonial Small Cap Value Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Columbia High Yield Fund, Variable Series
Columbia Large Cap Growth Fund, Variable Series
Liberty Asset Allocation Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Growth & Income Fund, Variable Series
Liberty Money Market Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
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
guranteed 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
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more than 10% of the voting securities of such issuer, except that: (a) up
to 25% of its 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 this restriction will be interpreted in a manner consistent
with the statutory requirements, including rules adopted and interpretations of
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 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:
Columbia High Yield Fund, Variable Series
Columbia Large Cap Growth Fund, Variable Series
Liberty Asset Allocation Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
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. 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 variety of modern financial instruments that could
-31-
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.
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, many Funds' investment policies restrict their ability to sell real
estate even when the Fund 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, 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 excercise 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
-32-
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.
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 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:
Columbia High Yield Fund, Variable Series
The affected Fund has a fundamental investment restriction stating that:
The Fund may not "[p]urchase securities on margin (except such
short-term credits as may be necessary for the clearance of purchases),
make short sales of securities, or maintain a short position."
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. Section 12(a)(i) 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. 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
unnecessary fundamental policies. Accordingly, the Trustees and Directors
recommend that the 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
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AFFECTED FUNDS:
Colonial Small Cap Value Fund, Variable Series
Columbia High Yield Fund, Variable Series
Columbia Large Cap Growth Fund, Variable Series
Liberty Asset Allocation Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
EXHIBIT 8 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 FUND:
Columbia High Yield Fund, Variable Series
The affected Fund has a fundamental investment restriction stating that:
The Fund may not "[p]urchase securities on margin (except such
short-term credits as may be necessary for the clearance of purchases),
make short sales of securities, or maintain a short position."
There are no SEC rules requiring, and the 1940 Act does not require the Fund to
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 Fund is managed as a result of the elimination of these
restrictions, consistent with the Trustees' belief that it is not in the Fund's
best interests to maintain fundamental investment restrictions that are not
required by applicable law, the Trustees recommend that the affected Fund's
fundamental investment restriction with respect to short sales be eliminated.
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2.J. AMENDMENT TO FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
CONCENTRATING INVESTMENTS IN AN INDUSTRY
AFFECTED FUNDS: All Funds
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 9 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."
For Liberty Money Market Fund, Variable Series only, the proposed amended
fundamental investment restriction would also add: "This restriction shall not
apply to securities of issuers in the financial services industry."
For purposes of the amended fundamental investment restriction, wholly-owned
finance companies will be considered to be in the industries of their parents if
their activities are primarily related to financing the activities of the
parents, and utilities will be classified according to their services (for
example, gas, gas transmission, electric and gas, electric and telephone each
will be considered a separate industry). 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 ILLIQUID SECURITIES
AFFECTED FUND:
Columbia High Yield Fund, Variable Series
The affected Fund has a fundamental investment restriction stating that:
The Fund may not "[i]nvest more than 15% of the value of its net
assets in illiquid securities, including repurchase agreements with
remaining maturities in excess of seven days, time deposits with
maturities in excess of seven days, restricted securities, non-negotiable
time deposits and other securities which are not readily marketable."
-35-
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.
2.L. ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
INVESTING IN SECURITIES OF OTHER INVESTMENT COMPANIES
AFFECTED FUND:
Columbia High Yield Fund, Variable Series
The affected Fund has a fundamental investment restriction stating that:
The Fund may not "[p]urchase securities of other investment
companies except in connection with a merger, consolidation,
reorganization, or acquisition of assets; provided, however, that the Fund
may acquire such securities in accordance with the 1940 Act."
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 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 Fund is managed as a result of the elimination of these
restrictions, consistent with the Trustees' belief that it is not in the Fund's
best interests to maintain fundamental investment restrictions that are not
required by applicable law, the Trustees recommend that the 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 BUYING
AND SELLING PUTS AND CALLS
AFFECTED FUNDS:
Colonial Small Cap Value Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Columbia High Yield Fund, Variable Series
Columbia International Fund, Variable Series
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Liberty Growth & Income Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
EXHIBIT 10 lists the current fundamental investment restriction of each of the
affected Funds with respect to buying and selling puts and calls. The Trustees
and Directors 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, use 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.
-37-
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.
REQUIRED VOTE. Shareholders of each Fund are entitled to vote on each Proposal
2.A. through 2.M. if the Proposal affects their Fund, voting separately by Fund.
Approval of each of Proposals 2.A. through 2.M. 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.M. is not contingent on election of any Trustees pursuant to Proposal
1.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE FOR PROPOSALS 2.A.
THROUGH 2.M., AS APPLICABLE.
III. OTHER INFORMATION
Certain additional information regarding Columbia Management and the Meeting is
presented below.
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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 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 voluntarily 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 Management 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 Funds' 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 developments
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 Columbia 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.
In connection with events described in detail above, various parties have filed
suit against certain funds, the Trustees of the Columbia Funds, 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").(1) The MDL is ongoing.
On January 11, 2005, a putative class action lawsuit was filed in federal
district court in Massachusetts against, among others, the Trustees of the Funds
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 Funds 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.
-39-
In 2004, certain Columbia Funds, the Trustees of the Columbia Funds, advisers
and affiliated entities were named as defendants in certain purported
shareholder class and derivative actions(2) making claims, including claims
under the Investment Company and the Investment Advisers Acts of 1940 and state
law. The suits seek damages and 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 filed a
consolidated amended complaint on June 9, 2005.
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.
- --------------
(1) The derivative cases purportedly brought on behalf of the Columbia Funds in
the MDL have been consolidated under the lead case, Slaybe, et al. v. Columbia
Management Advisers, Inc. et al, No. 04-CV-1768 (D. Md. Sept. 29, 2004). The
fund derivative plaintiffs allege that the funds were harmed by market timing
and late trading activity and seek, among other things, removal of the trustees
of the funds, removal of Columbia Management and CFD, disgorgement of all
management fees and monetary damages.
(2) Cohen, et al. v. FleetBoston Financial Corporation, et al., (D. Mass. Aug.
2, 2004); Osburn, et al. v. FleetBoston Financial Corporation, et al., (D. Mass.
Aug. 10, 2004); Slick er, et al. v. FleetBoston Financial Corporation, et al.,
(D. Mass. Aug. 11, 2004); Simmonds, et al. v. FleetBoston Financial Corporation,
et al., (D. Mass. Sept. 8, 2004).
-40-
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
The table in Appendix F lists for each Fund the total number of shares
outstanding as of the close of business on June 28, 2005, for each class of a
Fund's shares entitled to vote at the Meeting.
The table in Appendix G 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.
Votes cast in person or by proxy at the Meeting will be counted by persons
appointed by the Funds as tellers for the Meeting (the "Tellers"). 30% of the
shares of the Fund outstanding on the record date and entitled to vote, present
at the Meeting in person or represented by proxy, constitutes a quorum for the
transaction of business by the shareholders of that Fund.
Approval of Proposal 1 is by a plurality of votes cast at the Meeting. Approval
of each of Proposals 2.A. through 2.M. 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. Only shareholders of record
on June 28, 2005, may vote.
-41-
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 REPORT, FREE OF CHARGE, BY WRITING TO COLUMBIA AT ONE FINANCIAL
CENTER, BOSTON, MASSACHUSETTS 02111-2621, OR BY CALLING 1-866-348-1468.
-42-
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 2004 Head of Mutual Funds since August, 2004 and Senior Vice
(Age 47) Mutual Funds President of the Advisor since January, 2005; President of
since August the Columbia Funds, Liberty Funds and Stein Roe Funds since
2004; October, 2004; President and Chief Executive Officer of the
President of Nations Funds since January, 2005; Senior Vice President of
the Columbia BACAP Distributors LLC since January, 2005; Director of FIM
Funds since Funding, Inc. since January, 2005; Senior Vice President of
October 2004 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, 2003 and of
(Age 40) 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
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 Officer of the
(Age 54) President Columbia Funds, Liberty Funds, Stein Roe Funds and All-Star
40 West 57th Street and Chief Funds since August, 2004 (formerly Partner, Carter, Ledyard
New York, NY 10019 Compliance & Milburn LLP from January, 2001 to August, 2004; Counsel,
Officer Carter, Ledyard & Milburn LLP from November, 1999 to
since December, 2000; Vice President and Counsel, Equitable Life
2004 Assurance Society of the United States from April, 1998 to
November, 1999).
Michael G. Clarke Chief 2004 Chief Accounting Officer of the Columbia Funds, Liberty
(Age 35) Accounting Funds, Stein Roe Funds and All-Star Funds since October,
Officer 2004 (formerly Controller of the Columbia Funds, Liberty
since Funds, Stein Roe Funds and the All-Star Funds from May, 2004
October 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 Funds, Stein Roe
(Age 35) since Funds and the All-Star Funds since October, 2004 (formerly
October 2004 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).
R. Scott Henderson Secretary 2004 Secretary of the Columbia Funds, Liberty Funds and the Stein
(Age 45) since Roe Funds since December, 2004 (formerly Of Counsel Bingham
December 2004 McCutchen from April 2001 to September 2004; Executive
Director and General Counsel, Massachusetts Pension Reserves
Investment Management Board from September, 1997 to March,
2001).
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.
APPENDIX B.2 -- TRUSTEES' COMPENSATION
For purposes of Appendix B.2, the following definitions apply:
Columbia Large Cap Growth Fund, Variable Series (CLCGF)
Liberty Asset Allocation Fund, Variable Series (LAAF)
Liberty Federal Securities Fund, Variable Series (LFSF)
Liberty Money Market Fund, Variable Series (LMMF)
Liberty Small Company Growth Fund, Variable Series (LSCGF)
Colonial Small Cap Value Fund, Variable Series (CSCVF)
Colonial Strategic Income Fund, Variable Series (CSIF)
Columbia High Yield Fund, Variable Series (CHYF)
Columbia International Fund, Variable Series (CIF)
Liberty Growth & Income Fund, Variable Series (LGIF)
Liberty Select Value Fund, Variable Series (LSVF)
Liberty S&P 500 Index Fund, Variable Series (LSPIF)
For the fiscal year ended December 31, 2004, the Trustees received from each
Fund the following compensation for serving as Trustees:
<Table>
<Caption>
AGGREGATE AGGREGATE AGGREGATE AGGREGATE AGGREGATE
COMPENSATION FROM COMPENSATION COMPENSATION FROM COMPENSATION COMPENSATION
LAAF FOR THE FROM LSCGF FOR THE CLCGF FOR THE FROM LFSF FOR THE FROM LMMF FOR THE
FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED
TRUSTEE DECEMBER 31, 2004 DECEMBER 31, 2004 DECEMBER 31, 2004 DECEMBER 31, 2004 DECEMBER 31, 2004
- ---------------------- ----------------- ----------------- ----------------- ----------------- -----------------
Douglas A. Hacker $790 $706 $686 $834 $893
Janet Langford Kelly 869 765 759 922 985
Richard W. Lowry 732 674 639 755 835
William E. Mayer 823 755 722 876 942
Charles R. Nelson 818 742 720 873 936
John J. Neuhauser 771 708 674 817 880
Patrick J. Simpson (a) 745 691 651 790 852
Thomas E. Stitzel 872 801 753 912 987
Thomas C. Theobald(b) 986 858 887 1,085 1,137
Anne-Lee Verville (c) 910 833 796 966 1,039
Richard L. Woolworth 767 721 656 795 866
</Table>
(a) During the calendar year ended December 31, 2004, Mr. Simpson deferred
$745, $691, $651, $790 and $852 of his compensation from LAAF, LSCGF,
CLCGF, LFSF and LMMF, respectively.
(b) During the calendar year ended December 31, 2004, Mr. Theobald deferred
$489, $359, $486, $606 and $589 of his compensation from LAAF, LSCGF,
CLCGF, LFSF and LMMF, respectively.
(c) During the calendar year ended December 31, 2004, Ms. Verville deferred
$299, $219, $297, $370 and $360 of her compensation from LAAF, LSCGF,
CLCGF, LFSF and LMMF, respectively.
<Table>
<Caption>
AGGREGATE AGGREGATE AGGREGATE AGGREGATE
COMPENSATION FROM COMPENSATION FROM COMPENSATION FROM COMPENSATION FROM
CIF FOR THE FISCAL YEAR LGIF FOR THE FISCAL CSIF FOR THE FISCAL CSCVF FOR THE FISCAL
ENDED YEAR ENDED YEAR ENDED YEAR ENDED
Trustee DECEMBER 31, 2004 DECEMBER 31, 2004 DECEMBER 31, 2004 DECEMBER 31, 2004
- ---------------------- ----------------------- ------------------- ------------------- --------------------
Douglas A. Hacker $569 $864 $705 $705
Janet Langford Kelly 627 961 781 781
Richard W. Lowry 532 801 656 656
William E. Mayer 600 907 741 741
Charles R. Nelson 597 906 739 741
John J. Neuhauser 561 845 691 739
Patrick J. Simpson (a) 543 816 668 691
Thomas E. Stitzel 628 944 773 668
Thomas C. Theobald(b) 727 1,125 913 773
Anne-Lee Verville(c) 662 1,000 817 913
Richard L. Woolworth 550 816 673 817
</Table>
<Table>
<Caption>
AGGREGATE AGGREGATE AGGREGATE
COMPENSATION FROM COMPENSATION FROM COMPENSATION FROM
CHYF FOR THE FISCAL LSVF FOR THE FISCAL LSPIF FOR THE FISCAL
YEAR ENDED YEAR ENDED YEAR ENDED
Trustee DECEMBER 31, 2004 DECEMBER 31, 2004 DECEMBER 31, 2004
- ---------------------- ------------------- ------------------- --------------------
Douglas A. Hacker $499 $486 $526
Janet Langford Kelly 552 536 580
Richard W. Lowry 466 455 494
William E. Mayer 526 513 557
Charles R. Nelson 523 510 553
John J. Neuhauser 491 479 520
Patrick J. Simpson (a) 476 464 504
Thomas E. Stitzel 552 538 584
Thomas C. Theobald(b) 634 619 665
Anne-Lee Verville(c) 580 566 614
Richard L. Woolworth 482 471 513
</Table>
(a) During the fiscal year ended December 31, 2004, Mr. Simpson deferred
his total compensation for each Fund pursuant to the deferred
compensation plan.
(b) During the fiscal year ended December 31, 2004, Mr. Theobald deferred
the following amounts of his compensation for each Fund listed: $381
for CIF, $633 for LGIF, $502 for CSIF, $502 for CSCVF, $328 for CHYF,
$321 for LSVF and $334 for LSPIF.
(c) During the fiscal year ended December 31, 2004, Ms. Verville deferred
the following amounts of her compensation for each Fund listed: $175
for CIF, $387 for LGIF, $307 for CSIF, $307 for CSCVF, $160 for CHYF,
$196 for LSVF and $204 for LSPIF.
APPENDIX C - TRUSTEE SHARE OWNERSHIP
<Table>
<Caption>
AGGREGATE DOLLAR
RANGE OF EQUITY
DOLLAR RANGE DOLLAR RANGE DOLLAR RANGE DOLLAR RANGE DOLLAR RANGE SECURITIES OWNED IN
OF EQUITY OF EQUITY OF EQUITY OF EQUITY OF EQUITY ALL FUNDS OVERSEEN
SECURITIES SECURITIES SECURITIES SECURITIES SECURITIES BY TRUSTEE IN THE
NAME OF TRUSTEE OWNED IN LAAF OWNED IN CLCGF OWNED IN LSCGF OWNED IN LFSF OWNED IN LMMF FUND COMPLEX
DISINTERESTED TRUSTEES
Douglas A. Hacker $0 $0 $0 $0 $0 Over $100,000
Janet Langford Kelly 0 0 0 0 0 Over $100,000
Richard W. Lowry 0 0 0 0 0 Over $100,000
Charles R. Nelson 0 0 0 0 0 Over $100,000
John J. Neuhauser 0 0 0 0 0 Over $100,000
Patrick J. Simpson 0 0 0 0 0 Over $100,000
Thomas E. Stitzel 0 0 0 0 0 Over $100,000
Thomas C. Theobald 0 0 0 0 0 Over $100,000
Anne-Lee Verville 0 0 0 0 0 Over $100,000
Richard L. Woolworth 0 0 0 0 0 Over $100,000
INTERESTED TRUSTEE
William E. Mayer 0 0 0 0 0 $50,001-$100,000
</Table>
<Table>
<Caption>
DOLLAR RANGE OF DOLLAR RANGE OF DOLLAR RANGE OF DOLLAR RANGE OF
EQUITY SECURITIES EQUITY SECURITIES EQUITY SECURITIES EQUITY SECURITIES
NAME OF TRUSTEE OWNED IN CIF OWNED IN LGIF OWNED IN CHYF OWNED IN CSCVF
DISINTERESTED TRUSTEES
Douglas A. Hacker $0 $0 $0 $0
Janet Langford Kelly $0 $0 $0 $0
Richard W. Lowry $0 $0 $0 $0
Charles R. Nelson $0 $0 $0 $0
John J. Neuhauser $0 $0 $0 $0
Patrick J. Simpson $0 $0 $0 $0
Thomas E. Stitzel $0 $0 $0 $0
Thomas C. Theobald $0 $0 $0 $0
Anne-Lee Verville (a) $0 $0 $0 $0
Richard L. Woolworth $0 $0 $0 $0
INTERESTED TRUSTEE
William E. Mayer $0 $0 $0 $0
</Table>
<Table>
<Caption>
AGGREGATE DOLLAR RANGE OF
EQUITY SECURITIES OWNED
DOLLAR RANGE OF DOLLAR RANGE OF DOLLAR RANGE OF IN ALL FUNDS OVERSEEN BY
EQUITY SECURITIES EQUITY SECURITIES EQUITY SECURITIES TRUSTEE IN THE FUND
NAME OF TRUSTEE OWNED IN CSIF OWNED IN LSVF OWNED IN LSPIF COMPLEX
DISINTERESTED TRUSTEES
Douglas A. Hacker $0 $0 $0 Over $100,000
Janet Langford Kelly $0 $0 $0 Over $100,000
Richard W. Lowry $0 $0 $0 Over $100,000
Charles R. Nelson $0 $0 $0 Over $100,000
John J. Neuhauser $0 $0 $0 Over $100,000
Patrick J. Simpson $0 $0 $0 Over $100,000
Thomas E. Stitzel $0 $0 $0 Over $100,000
Thomas C. Theobald $0 $0 $0 Over $100,000
Anne-Lee Verville (a) $0 $0 $0 Over $100,000
Richard L. Woolworth $0 $0 $0 Over $100,000
INTERESTED TRUSTEE
William E. Mayer $0 $0 $0 $50,001-100,000
</Table>
APPENDIX D
GOVERNANCE COMMITTEE CHARTER
The Governance Committee (the "Committee") of the Funds shall be composed
entirely of members of the Board of the Funds who are not affiliated with the
Funds' investment adviser, sub-advisers or principal underwriter.
The functions of the Committee are:
To make nominations for independent trustee membership on the Board of Trustees
when necessary and to consider candidates proposed for the Board of Trustees by
shareholders of the Funds;
To review periodically Board governance practices and procedures and any
recommendations of the Chief Compliance Officer of the Funds relating thereto,
and to recommend to the Board any changes it may deem appropriate;
To review periodically trustee compensation and to recommend to the independent
trustees any changes it may deem appropriate;
To review committee assignments on an annual basis;
To review on an annual basis the responsibilities and charter of each committee
of the Board, whether there is continuing need for each committee, whether there
is a need for additional committees of the Board, and whether committees should
be combined or reorganized, and to make recommendations for any such action to
the Board;
To plan and administer the Board's annual self-evaluation process;
To evaluate on at least an annual basis the independence of counsel to the
independent trustees, to make recommendations to the independent trustees
regarding their determination of such counsel's status as an "independent legal
counsel" under applicable SEC rules, and to supervise such counsel.
The Committee shall meet as frequently and at such times as circumstances
dictate. Minutes shall be kept of the Committee's meetings.
The Committee shall have the resources and authority appropriate to discharge
its responsibilities, including authority to retain special counsel and other
experts or consultants at the expense of the appropriate Fund.
The Committee shall review this charter at least annually and recommend to the
Board any changes it deems appropriate.
APPENDIX E1
<Table>
<Caption>
AUDIT AUDIT-RELATED TAX ALL OTHER
FUND NAME FYE FEES FEES FEES FEES TOTAL
- ------------------------------------- -------- --------- ------------ -------- --------- ------
Colonial Small Cap Value Fund, VS 12/31/04 17,570 3,700 4,110 -- 25,380
12/31/03 18,760 4,000 4,800 -- 27,560
Colonial Strategic Income Fund, VS 12/31/04 26,580 3,700 2,610 -- 32,890
12/31/03 28,250 4,000 2,500 -- 34,750
Columbia High Yield Fund, VS 12/31/04 18,730 3,700 2,610 -- 25,040
12/31/03 19,590 6,375 2,500 -- 28,465
Columbia International Fund, VS 12/31/04 21,750 3,700 2,610 -- 28,060
12/31/03 24,550 6,375 4,300 -- 35,225
Liberty Growth & Income Fund, VS 12/31/04 23,430 3,700 2,410 -- 29,540
12/31/03 26,850 4,000 4,000 -- 34,850
Liberty S&P 500 Index Fund, VS 12/31/04 17,260 3,700 2,410 -- 23,370
12/31/03 18,330 4,000 2,300 -- 24,630
Liberty Select Value Fund, VS 12/31/04 16,210 3,700 4,110 -- 24,020
12/31/03 17,280 4,000 2,300 -- 23,580
Liberty Asset Allocation Fund, VS 12/31/04 25,530 3,700 2,810 -- 32,040
12/31/03 28,840 6,375 2,700 -- 37,915
Liberty Federal Securities Fund, VS 12/31/04 25,530 3,700 3,010 -- 32,240
12/31/03 28,840 5,125 2,900 -- 36,865
Liberty Money Market Fund, VS 12/31/04 19,870 3,700 1,510 -- 25,080
12/31/03 22,990 5,125 1,400 -- 29,515
Liberty Small Company Growth Fund, VS 12/31/04 21,130 3,700 2,410 -- 27,240
12/31/03 24,370 5,125 2,300 -- 31,795
Columbia Large Cap Growth Fund, VS 12/31/04 22,380 3,700 2,410 -- 28,490
12/31/03 23,940 6,375 2,300 -- 32,615
</Table>
APPENDIX E2
<Table>
<Caption>
NON-AUDIT
FUND NAME FYE SERVICES
- ------------------------------------- -------- ----------
Colonial SmallCap Value Fund, VS 12/31/04 7,810
12/31/03 8,800
Colonial Strategic Income Fund, VS 12/31/04 6,310
12/31/03 6,500
Columbia High Yield Fund, VS 12/31/04 6,310
12/31/03 8,875
Columbia International Fund, VS 12/31/04 6,310
12/31/03 10,675
Liberty Growth & Income Fund, VS 12/31/04 6,110
12/31/03 8,000
Liberty S&P 500 Index Fund, VS 12/31/04 6,110
12/31/03 6,300
Liberty Select Value Fund, VS 12/31/04 7,810
12/31/03 6,300
Liberty Asset Allocation Fund, VS 12/31/04 6,510
12/31/03 9,075
Liberty Federal Securities Fund, VS 12/31/04 6,710
12/31/03 8,025
Liberty Money Market Fund, VS 12/31/04 5,210
12/31/03 6,525
Liberty Small Company Growth Fund, VS 12/31/04 6,110
12/31/03 7,425
Columbia Large Cap Growth Fund, VS 12/31/04 6,110
12/31/03 8,675
</Table>
The table above does not include $95,000 paid in both fiscal years to PWC by a
control affiliate related to internal controls review of the registrant's
transfer agent.
APPENDIX F - SHARES OUTSTANDING AND ENTITLED TO VOTE
APPENDIX G - OWNERSHIP OF SHARES
COLUMBIA LARGE CAP GROWTH VS-A
Class Registration Share Balance Percent Class Total
- ----- ------------ ------------- ------- -----------
A SUN LIFE ASSURANCE COMPANY 1,419,147.4500 26.51 5,352,804.3290
OF CANADA (U.S.)
C/O SUN LIFE FINANCIAL
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A SUN LIFE ASSURANCE COMPANY 1,410,558.5190 26.35 5,352,804.3290
OF CANADA (U.S.)
C/O SUN LIFE FINANCIAL
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B SUN LIFE ASSURANCE COMPANY 700,344.9910 81.43 860,075.6540
OF CANADA (U.S.)
C/O SUN LIFE FINANCIAL
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B KEYPORT 141,012.8630 16.40 860,075.6540
C/O SUN LIFE FINANCIAL
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A AMERICAN SKANDIA LIFE ASSURANCE CO 678,993.1020 12.68 5,352,804.3290
ATTN ALISON MITNICK
1 CORPORATE DRIVE
9TH FLOOR
SHELTON CT 06484-6208
A AMERICAN SKANDIA LIFE ASSURANCE CO 539,846.6010 10.09 5,352,804.3290
ATTN ALISON MITNICK
1 CORPORATE DRIVE
9TH FLOOR
SHELTON CT 06484-6208
A KEYPORT 862,652.1950 16.12 5,352,804.3290
C/O SUN LIFE FINANCIAL
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
1
LIBERTY ASSET ALLOCATION FUND VS-A
Class Registration Share Balance Percent Class Total
- ----- ------------ ------------- ------- -----------
A SUN LIFE ASSURANCE COMPANY 4,637,384.1600 33.47 13,855,762.6570
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A SUN LIFE ASSURANCE COMPANY 4,596,097.3290 33.17 13,855,762.6570
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B SUN LIFE ASSURANCE COMPANY 3,324,016.8490 73.52 4,521,487.5280
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B SUN LIFE FINANCIAL 474,217.2970 10.49 4,521,487.5280
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B KEYPORT 639,308.3460 14.14 4,521,487.5280
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A AMERICAN SKANDIA LIFE ASSURANCE CO 1,205,028.8730 8.70 13,855,762.6570
1 CORPORATE DRIVE
9TH FLOOR
SHELTON CT 06484-6208
A KEYPORT 1,581,744.8730 11.42 13,855,762.6570
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
2
LIBERTY FEDERAL SECURITIES FUND VS-A
Class Registration Share Balance Percent Class Total
- ----- ------------ ------------- ------- -----------
A SUN LIFE ASSURANCE COMPANY 3,750,829.8730 42.56 8,813,728.5340
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A SUN LIFE ASSURANCE COMPANY 1,552,527.8420 17.61 8,813,728.5340
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B SUN LIFE ASSURANCE COMPANY 7,112,033.4500 76.89 9,250,159.2790
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B KEYPORT 1,674,470.9210 18.10 9,250,159.2790
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A KEYPORT 1,757,228.6410 19.94 8,813,728.5340
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
3
LIBERTY MONEY MARKET FUND VS-A
Class Registration Share Balance Percent Class Total
- ----- ------------ ------------- ------- -----------
A SUN LIFE ASSURANCE COMPANY 126,915,133.251 59.04 214,982,198.064
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A SUN LIFE ASSURANCE COMPANY 28,696,646.1770 13.35 214,982,198.064
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A KEYPORT 31,189,923.5880 14.51 214,982,198.064
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
4
LIBERTY SMALL COMPANY GROWTH VS-A
Class Registration Share Balance Percent Class Total
- ----- ------------ ------------- ------- -----------
A SUN LIFE ASSURANCE COMPANY 647,355.1090 12.47 5,190,647.6450
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A SUN LIFE ASSURANCE COMPANY 3,394,210.2910 65.39 5,190,647.6450
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B FIM FUNDING INC 98.0100 100.00 98.0100
100 FEDERAL STREET
BOSTON MA 02110-1802
A KEYPORT 274,672.7050 5.29 5,190,647.6450
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
5
COLONIAL SMALL CAP VALUE FUND-A
<Table>
<Caption>
Class Registration Share Balance Percent Class Total
- ----- ------------ --------------- ------- ---------------
A SUN LIFE ASSURANCE COMPANY 533,361.3660 67.14 794,371.9790
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B SUN LIFE ASSURANCE COMPANY 1,122,868.2410 5.75 19,521,504.5900
OF CANADA (U.S)
PO BOX 9133
WELLESLEY HLS MA 02481-9133
A KEYPORT 77,438.0480 9.75 794,371.9790
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A LIBERTY LIFE ASSURANCE CO OF BOSTON 54,074.2850 6.81 794,371.9790
100 LIBERTY WAY
DOVER NH 03820
A TRANSAMERICA LIFE INSURANCE CO 69,029.9830 8.69 794,371.9790
4333 EDGEWOOD RD NE
CEDAR RAPIDS IA 52499-0001
B ING USA ANNUITY AND LIFE INSURANCE 17,590,887.1600 90.11 19,521,504.5900
COMPANY
1475 DUNWOODY DRIVE
WESTCHESTER PA 19380-1478
</Table>
6
COLONIAL STRATEGIC INCOME FUND-A
Class Registration Share Balance Percent Class Total
- ----- ------------ ------------- ------- -----------
A SUN LIFE ASSURANCE COMPANY 6,062,461.5220 63.43 9,558,262.6480
OF CANADA (U.S)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A SUN LIFE ASSURANCE COMPANY 1,688,197.3190 17.66 9,558,262.6480
OF CANADA (U.S)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B SUN LIFE ASSURANCE COMPANY 4,717,727.6530 79.67 5,921,708.2720
OF CANADA (U.S)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A KEYPORT 742,462.7410 7.77 9,558,262.6480
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B SUN LIFE FINANCIAL 332,580.2190 5.62 5,921,708.2720
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B KEYPORT 863,881.2780 14.59 5,921,708.2720
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
7
COLUMBIA HIGH YIELD FUND VS-A
Class Registration Share Balance Percent Class Total
- ----- ------------ ------------- ------- -----------
A SUN LIFE ASSURANCE COMPANY 605,901.1660 67.31 900,130.3830
OF CANADA (U.S)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B SUN LIFE ASSURANCE COMPANY 1,874,390.3750 17.09 10,966,960.8520
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A KEYPORT 103,288.7930 11.47 900,130.3830
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A AMERICAN SKANDIA LIFE ASSURANCE CO 88,760.2870 9.86 900,130.3830
1 CORPORATE DRIVE
9TH FLOOR
SHELTON CT 06484-6208
B AMERICAN EXPRESS - MANAGED ASSETS 6,460,616.0070 58.91 10,966,960.8520
TRUST: IDS LIFE INSURANCE COMPANY
1497 AXP FINANCIAL CTR
MINNEAPOLIS MN 55474-0014
A AMERICAN EXPRESS - MANAGED ASSETS 82,287.3180 9.14 900,130.3830
TRUST: AMERICAN ENTERPRISE LIFE INS
222 AXP FINANCIAL CENTER
MINNEAPOLIS MN 55474-0002
B AMERICAN EXPRESS - MANAGED ASSETS 1,748,221.1410 15.94 10,966,960.8520
TRUST: AMERICAN ENTERPRISE LIFE INS
1497 AXP FINANCIAL CENTER
MINNEAPOLIS MN 55474-0014
8
COLUMBIA INTERNATIONAL FUND VS-A
Class Registration Share Balance Percent Class Total
- ----- ------------ ------------- ------- -----------
A SUN LIFE ASSURANCE COMPANY 22,172,678.6020 64.93 34,147,822.7760
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
9
LIBERTY GROWTH AND INCOME FUND VS-A
Class Registration Share Balance Percent Class Total
- ----- ------------ ------------- ------- -----------
A SUN LIFE ASSURANCE COMPANY 7,607,370.6550 63.29 12,019,663.3010
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A SUN LIFE ASSURANCE COMPANY 2,563,127.0830 21.32 12,019,663.3010
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B SUN LIFE ASSURANCE COMPANY 2,283,192.4100 80.73 2,828,143.5920
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A KEYPORT 888,422.2740 7.39 12,019,663.3010
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B KEYPORT 458,225.1870 16.20 2,828,143.5920
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
10
LIBERTY SELECT VALUE FUND-A
Class Registration Share Balance Percent Class Total
- ----- ------------ ------------- ------- -----------
A SUN LIFE ASSURANCE COMPANY 8,566.3160 8.84 96,884.3670
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B SUN LIFE ASSURANCE COMPANY 1,935,197.9150 85.28 2,269,343.0370
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B KEYPORT 255,858.9030 11.27 2,269,343.0370
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
A TRANSAMERICA LIFE INSURANCE CO 44,026.2220 45.44 96,884.3670
4333 EDGEWOOD RD NE
CEDAR RAPIDS IA 52499-0001
A TRANSAMERICA LIFE INSURANCE CO 34,058.1200 35.15 96,884.3670
4333 EDGEWOOD RD NE
CEDAR RAPIDS IA 52499-0001
A TRANSAMERICA LIFE INSURANCE CO 9,190.8950 9.49 96,884.3670
4333 EDGEWOOD RD NE
CEDAR RAPIDS IA 52499-0001
11
LIBERTY S & P 500 INDEX FUND-A
Class Registration Share Balance Percent Class Total
- ----- ------------ ------------- ------- -----------
A SUN LIFE ASSURANCE COMPANY 8,694.9370 100.00 8,694.9370
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B SUN LIFE ASSURANCE COMPANY 3,999,307.3070 77.20 5,180,430.7610
OF CANADA (U.S.)
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B SUN LIFE FINANCIAL 291,024.8450 5.62 5,180,430.7610
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
B KEYPORT 833,471.0850 16.09 5,180,430.7610
PO BOX 9133
WELLESLEY HILLS MA 02481-9133
12
EXHIBIT 1
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
BORROWING
Series of SteinRoe Variable Investment Trust
Liberty Asset Allocation Fund, Variable Series
Columbia Large Cap Growth Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
The Fund may not "borrow[,] except from banks, other affiliated
funds and other entities to the extent permitted by the [1940
Act][Investment Company Act of 1940]."
Series of Liberty Variable Investment Trust
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
The Fund may "[b]orrow from banks, other affiliated funds and other
[entities][persons] to the extent permitted by applicable law, provided
[that][the][each] Fund's borrowings shall not exceed 33 1/3% of the value
of its total assets (including the amount borrowed) less liabilities
(other than borrowings) or such other percentage permitted by law."
Series of Liberty Variable Investment Trust
Columbia High Yield Fund, Variable Series
The Fund may not "[b]orrow money or issue senior securities, except
that the Fund may borrow from domestic banks for temporary purposes (such
as to obtain cash to meet redemption requests when the liquidation of
portfolio securities is deemed disadvantageous by the Advisor) and then in
amounts not in excess of 33% of the value of its total assets at the time
of such borrowing (provided that the Fund may borrow pursuant to reverse
repurchase agreements in accordance with its investment policies and in
amounts not in excess of 33% of the value of its total assets at the time
of such borrowing); or mortgage, pledge, or hypothecate any assets except
in connection with any such borrowing and in amounts not in excess of the
lesser of the dollar amounts borrowed or 33% of the value of the Fund's
total assets at the time of such borrowing; provided, however, that
mortgage dollar rolls entered into by the Fund that are not accounted for
as financings shall not constitute borrowings. The Fund will not purchase
securities while borrowings (including reverse repurchase agreements) in
excess of 5% of its total assets are outstanding. If the securities held
by the Fund should decline in value while borrowings are outstanding, the
net asset value of the Fund's outstanding shares will decline in value by
more than the proportionate decline in value suffered by the Fund's
securities."
EXHIBIT 2
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
ISSUING SENIOR SECURITIES
Series of Liberty Variable Investment Trust
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
The Fund may "[n]ot issue senior securities except as provided in
paragraph 1 above and to the extent permitted by the 1940 Act."
Series of Liberty Variable Investment Trust
Columbia International Fund, Variable Series
Liberty Growth & Income Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Colonial Small Cap Value Fund, Variable Series
The Fund may "[i]ssue senior securities only through borrowing money
from banks for temporary or emergency purposes up to 10% of its net
assets; however, [the Fund][it] will not purchase additional portfolio
securities while borrowings exceed 5% of net assets."
Series of Liberty Variable Investment Trust
Columbia High Yield Fund, Variable Series
The Fund may not "[b]orrow money or issue senior securities, except
that the Fund may borrow from domestic banks for temporary purposes (such
as to obtain cash to meet redemption requests when the liquidation of
portfolio securities is deemed disadvantageous by the Advisor) and then in
amounts not in excess of 33% of the value of its total assets at the time
of such borrowing(provided that the Fund may borrow pursuant to reverse
repurchase agreements in accordance with its investment policies and in
amounts not in excess of 33% of the value of its total assets at the time
of such borrowing); or mortgage, pledge, or hypothecate any assets except
in connection with any such borrowing and in amounts not in excess of the
lesser of the dollar amounts borrowed or 33% of the value of the Fund's
total assets at the time of such borrowing; provided, however, that
mortgage dollar rolls entered into by the Fund that are not accounted for
as financings shall not constitute borrowings. The Fund will not purchase
securities while borrowings (including reverse repurchase agreements) in
excess of 5% of its total assets are outstanding. If the securities held
by the Fund should decline in value while borrowings are outstanding, the
net asset value of the Fund's outstanding shares will decline in value by
more than the proportionate decline in value suffered by the Fund's
securities."
EXHIBIT 3
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
MAKING LOANS
Series of Liberty Variable Investment Trust
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
The Fund may "[m]ake loans (a) through lending of securities, (b)
through the purchase of debt instruments or similar evidences of
indebtedness typically sold privately to financial institutions, (c)
through an interfund lending program with other affiliated funds provided
that no such loan be made if, as a result, the aggregate of such loans
would exceed 33 1/3% of the value of its total assets (taken at market
value at the time of such loans) and (d) through repurchase agreements."
Series of SteinRoe Variable Investment Trust
Liberty Asset Allocation Fund, Variable Series
Columbia Large Cap Growth Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
The Fund may not "make loans, but this restriction shall not prevent
a Fund from (a) buying a part of an issue of bonds, debentures, or other
obligations which are publicly distributed, or from investing up to an
aggregate of 15% of its total assets (taken at market value at the time of
each purchase) in parts of issues of bonds, debentures or other
obligations of a type privately placed with financial institutions, (b)
investing in repurchase agreements, or (c) lending portfolio securities,
provided that it may not lend securities if, as a result, the aggregate
value of all securities loaned would exceed 15% of its total assets (taken
at market value at the time of such loan)."
Series of Liberty Variable Investment Trust
Columbia International Fund, Variable Series
Liberty Growth & Income Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Colonial Small Cap Value Fund, Variable Series
The Fund may "[m]ake loans through lending of securities not
exceeding 30% of total assets, through the purchase of debt instruments
and similar evidences of indebtedness typically sold privately to
financial institutions and through repurchase agreements."
Series of Liberty Variable Investment Trust
Columbia High Yield Fund, Variable Series
The Fund may not "[m]ake loans, except that (i) the Fund may
purchase or hold debt instruments in accordance with its investment
objective and policies, and may enter into repurchase agreements with
respect to portfolio securities, and (ii) the Fund may lend
portfolio securities against collateral consisting of cash or securities
which are consistent with the Fund's permitted investments, where the
value of the collateral is equal at all times to at least 100% of the
value of the securities loaned."
EXHIBIT 4
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
DIVERSIFICATION OF INVESTMENTS
Series of Liberty Variable Investment Trust
Liberty Growth & Income Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
The Fund may "[w]ith respect to 75% of total assets, not purchase
any security (other than obligations of the U.S. Government and cash items
including receivables) if as a result more than 5% of its total assets
would then be invested in securities of a single issuer or purchase the
voting securities of an issuer if, as a result of such purchases, the Fund
would own more than 10% of the outstanding voting shares of such issuer."
Series of Liberty Variable Investment Trust
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
The Fund may "[n]ot concentrate more than 25% of its total assets in
any one industry or[,] with respect to 75% of total assets[,] purchase any
security (other than obligations of the U.S. government and cash items
including receivables) if as a result more than 5% of its total assets
would then be invested in securities of a single issuer or purchase [the]
voting securities of an issuer if, as a result of such purchase[s],
[the][a] Fund would own more than 10% of the outstanding voting shares of
such issuer."
Series of SteinRoe Variable Investment Trust
Liberty Asset Allocation Fund, Variable Series
Columbia Large Cap Growth Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
The Fund may not "with respect to 75% of the value of the total
assts of a Fund, invest more than 5% of the value of its total assets,
taken at market value at the time of a particular purchase, in the
securities of any one issuer, except (a) securities issued or guaranteed
by the U.S. government or its agencies or instrumentalities, and (b) [with
respect to Money Market Fund only] certificates of deposit, bankers'
acceptances and repurchase agreements."
Series of Liberty Variable Investment Trust
Columbia High Yield Fund, Variable Series
The Fund may not "[p]urchase securities of any one issuer, other
than obligations issued or guaranteed by the U.S. Government, its agencies
or instrumentalities, if immediately after such purchase more than 5% of
the value of its total assets would be invested in such issuer (the "5%
Limitation"), except that up to 25% of the value of the total assets of
the Fund may be invested without regard to such 5% Limitation. With
respect to the above: (a) a security is considered to be issued by the
governmental entity
or entities whose assets and revenues back the security, or, with respect
to a private activity bond that is backed only by the assets and revenues
of a non-governmental user, such non-governmental user; (b) in certain
circumstances, the guarantor of a guaranteed security may also be
considered to be an issuer in connection with such guarantee; and (c)
securities issued or guaranteed by the U.S. Government, its agencies or
instrumentalities (including securities backed by the full faith and
credit of the United States) are deemed to be U.S. Government
obligations."
Series of Liberty Variable Investment Trust
Colonial Small Cap Value Fund, Variable Series
The Fund may not "[c]oncentrate more than 25% of its total assets in
any one industry or with respect to 75% of total assets purchase any
security (other than obligations of the U.S. government and cash items
including receivables) if as a result more than 5% of its total assets
would then be invested in securities of a single issuer, or purchase the
voting securities of an issuer if, as a result of purchase, the Fund would
own more than 10% of the outstanding voting shares of such issuer."
EXHIBIT 5
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
INVESTMENTS IN COMMODITIES
Series of SteinRoe Variable Investment Trust
Liberty Asset Allocation Fund, Variable Series
Columbia Large Cap Growth Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
The Fund may not "purchase or sell real estate (although it may
purchase securities secured by real estate or interests therein, or
securities issued by companies which invest in real estate or interests
therein), commodities, or commodity contracts, except that it may enter
into (a) futures and options on futures and (b) forward contracts."
Series of Liberty Variable Investment Trust
Columbia High Yield Fund, Variable Series
The Fund may not "[p]urchase or sell commodities or commodity
contracts, or invest in oil, gas or other mineral exploration or
development programs or mineral leases; provided, however, that the Fund
may enter into futures contracts and options on futures contracts."
EXHIBIT 6
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
INVESTMENTS IN REAL ESTATE
Series of Liberty Variable Investment Trust
Columbia International Fund, Variable Series
Liberty Growth & Income Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Colonial Small Cap Value Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
The Fund may "[o]nly own real estate acquired as the result of
owning securities and not more than 5% of total assets."
Series of SteinRoe Variable Investment Trust
Liberty Asset Allocation Fund, Variable Series
Columbia Large Cap Growth Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
The Fund may not "purchase or sell real estate (although it may
purchase securities secured by real estate or interests therein, or
securities issued by companies which invest in real estate or interests
therein), commodities, or commodity contracts, [(]except that it may enter
into (a) futures and options on futures and (b) forward contracts.[)]"
Series of Liberty Variable Investment Trust
Columbia High Yield Fund, Variable Series
The Fund may not "[p]urchase or sell real estate, except that the
Fund may purchase securities which are secured by real estate and
securities of issuers which deal in real estate or interests therein, and
may purchase or sell interests in real estate limited partnerships."
EXHIBIT 7
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
UNDERWRITING OF SECURITIES
Series of Liberty Variable Investment Trust
Columbia International Fund, Variable Series
Liberty Growth & Income Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Colonial Small Cap Value Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
The Fund may "[u]nderwrite securities issued by others
[only][except] when disposing of portfolio securities."
Series of SteinRoe Variable Investment Trust
Liberty Asset Allocation Fund, Variable Series
Columbia Large Cap Growth Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
The Fund may not "act as an underwriter of securities, except
insofar as it may be deemed an underwriter for purposes of the Securities
Act of 1933 on disposition of securities acquired subject to legal or
contractual restrictions on resale."
Series of Liberty Variable Investment Trust
Columbia High Yield Fund, Variable Series
The Fund may not "[a]ct as an underwriter within the meaning of the
1933 Act, except insofar as the Fund might be deemed to be an underwriter
upon disposition of restricted portfolio securities, and except to the
extent that the purchase of securities directly from the issuer thereof in
accordance with the Fund's investment objective, policies and limitations
may be deemed to be underwriting."
EXHIBIT 8
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
INVESTING FOR THE PURPOSE OF EXERCISING CONTROL
Series of Liberty Variable Investment Trust
Columbia High Yield Fund, Variable Series
The Fund may not "[i]nvest in companies for the purpose of
exercising control or management."
Series of SteinRoe Variable Investment Trust
Liberty Asset Allocation Fund, Variable Series
Columbia Large Cap Growth Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
The Fund may not "[p]urchase securities of any one issuer if more
than 10% of the outstanding voting securities of such issuer would at the
time be held by the Fund."
Series of Liberty Variable Investment Trust
Colonial Small Cap Value Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
The Fund may "[n]ot concentrate more than 25% of its total assets in
any one industry or with respect to 75% of total assets purchase any
security (other than obligations of the U.S. government and cash items
including receivables) if as a result more than 5% of its total assets
would then be invested in securities of a single issuer, or purchase the
voting securities of an issuer if, as a result of [such] purchase[s], the
Fund would own more than 10% of the outstanding voting shares of such
issuer."
EXHIBIT 9
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
CONCENTRATING INVESTMENTS IN AN INDUSTRY
Series of Liberty Variable Investment Trust
Columbia Small Cap Value Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
The Fund may "[n]ot concentrate more than 25% of its total assets in
any one industry or with respect to 75% of total assets purchase any
security (other than obligations of the U.S. government and cash items
including receivables) if as a result more than 5% of its total assets
would then be invested in securities of a single issuer, or purchase the
voting securities of an issuer if, as a result of [such] purchase[s], the
Fund would own more than 10% of the outstanding voting shares of such
issuer."
Series of Liberty Variable Investment Trust
Columbia International Fund, Variable Series
Liberty Growth & Income Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
The Fund may "[n]ot concentrate more than 25% of its total assets in
any one industry."
Series of SteinRoe Variable Investment Trust
Liberty Asset Allocation Fund, Variable Series
Columbia Large Cap Growth Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty Federal Securities Fund, Variable Series
Liberty Money Market Fund, Variable Series
The Fund may not "invest in a security if more than 25% of its total
assets (taken at market value at the time of a particular purchase) would
be invested in the securities of issuers in any particular industry,
except that this restriction does not apply to: (i) securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities,
(ii) [with respect to Money Market Fund only] certificates of deposit and
bankers' acceptances and repurchase agreements or (iii) [as to Money
Market Fund only] securities of issuers in the financial services
industry."
Series of Liberty Variable Investment Trust
Columbia High Yield Fund, Variable Series
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, however,
that (a) there is no limitation with respect to obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities, (b)
wholly-owned finance companies will be considered to be in the industries
of their parents if their
activities are primarily related to financing the activities of the
parents, and (c) utilities will be classified according to their services
(for example, gas, gas transmission, electric and gas, electric and
telephone each will be considered a separate industry)."
EXHIBIT 10
CURRENT FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
BUYING AND SELLING PUTS AND CALLS
Series of Liberty Variable Investment Trust
Columbia International Fund, Variable Series
Liberty Growth & Income Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Colonial Small Cap Value Fund, Variable Series
Liberty Select Value Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
The Fund "[m]ay purchase and sell futures contracts and related
options [so][as] long as the total initial margin and premiums on the
contracts do not exceed 5% of [its] total assets."
Series of Liberty Variable Investment Trust
Columbia High Yield Fund, Variable Series
The Fund may not "[i]nvest in or sell put options, call options,
straddles, spreads, or any combination thereof; provided, however, that
(i) the Fund may write covered call options with respect to their
portfolio securities that are traded on a national securities exchange,
and may enter into closing purchase transactions with respect to such
options if, at the time of the writing of such options, the aggregate
value of the securities subject to the options written by the Fund does
not exceed 25% of the value of its total assets; and (ii) the Fund may
purchase put and call options and sell or write secured put options to the
extent permitted by its investment objectives and policies."
EXHIBIT 11
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.
1.3. 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) Reserved; 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.
-7-
The Acquired Fund and the Acquiring Fund each hereby covenants and agrees
with the other as follows:
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 elect the Board of Trustees of the
Acquired Fund 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 Proxy 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
-10-
or 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. Shareholders of the Acquired Fund shall have elected the nominees
for Trustees of the Acquired Fund, set forth in the Proxy Statement.
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
Acquiring Fund of the liabilities of the Acquired Fund or (ii)
upon the distribution of the
-11-
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 and expenses incurred in connection with the transactions
contemplated herein shall be borne by Columbia.
-12-
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 Acquired Fund and the Acquiring
Fund.
[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 Acquiring 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 NOVEMBER 30, 2005
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. 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
November 30, 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:
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
FOR ALL WITHHOLD FOR ALL
AUTHORITY EXCEPT
FOR ALL
[ ] [ ] [ ]
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
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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 ILLIQUID 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.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 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 [ ] [ ] [ ]
ORE_15350