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
OCTOBER 7, 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; (2) in the case of shareholders of SteinRoe Variable
Investment Trust, the amendment of the Fund's by-laws; and (3) 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
- 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
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 your Fund's by-laws. (TO BE VOTED ON BY ALL
SHAREHOLDERS OF STEINROE VARIABLE INVESTMENT TRUST.)
3. 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.)
4. To transact such other business as may properly come before the Meeting, or
any adjournment(s) thereof.
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
October 7, 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.
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
PROXY STATEMENT
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 October 7, 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 by-law provisions
and "fundamental" investment restrictions, this is being done
1
solely to facilitate compliance testing through standardization and to enhance
future flexibility. The Funds' investment advisor, Columbia Management Advisors,
LLC ("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:
<Table>
<Caption>
PROPOSAL AFFECTED FUNDS
- -------- --------------
Proposal 1: To approve the All Funds
election of Trustees.
Proposal 2.A.: To approve an Columbia Large Cap Growth Fund, Variable
amendment to SteinRoe Variable Series
Investment Trust's by-laws with Liberty Asset Allocation Fund, Variable
respect to amendments requiring Series
approval by shareholders. Liberty Federal Securities Fund, Variable
Series
Liberty Money Market Fund, Variable Series
Liberty Small Company Growth Fund,
Variable Series
Proposal 2.B.: To approve the Columbia Large Cap Growth Fund, Variable
elimination of a SteinRoe Variable Series
Investment Trust by-law provision Liberty Asset Allocation Fund, Variable
with respect to lending Trust Series
assets to interested persons. Liberty Federal Securities Fund, Variable
Series
Liberty Money Market Fund, Variable Series
Liberty Small Company Growth Fund,
Variable Series
Proposal 2.C.: To approve the Columbia Large Cap Growth Fund, Variable
elimination of a SteinRoe Variable Series
Investment Trust by-law provision Liberty Asset Allocation Fund, Variable
with respect to restriction on Series
transferability of Trust shares. Liberty Federal Securities Fund, Variable
Series
Liberty Money Market Fund, Variable Series
Liberty Small Company Growth Fund,
Variable Series
Proposal 2.D.: To approve the Columbia Large Cap Growth Fund, Variable
elimination of a SteinRoe Variable Series
Investment Trust by-law provision Liberty Asset Allocation Fund, Variable
with respect to dealings with the Series
Trust by interested persons. Liberty Federal Securities Fund, Variable
Series
Liberty Money Market Fund, Variable Series
Liberty Small Company Growth Fund,
Variable Series
Proposal 3.A.: To approve an Columbia High Yield Fund, Variable Series
amendment to certain Funds' Columbia Large Cap Growth Fund, Variable
fundamental investment Series
restrictions with respect to Liberty Asset Allocation Fund, Variable
borrowing money. 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
</Table>
2
<Table>
<Caption>
PROPOSAL AFFECTED FUNDS
- -------- --------------
Proposal 3.B.: To approve an Colonial Small Cap Value Fund, Variable
amendment to certain Funds' Series
fundamental investment Colonial Strategic Income Fund, Variable
restrictions with respect to Series
issuing senior securities. 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
Proposal 3.C.: To approve the Columbia High Yield Fund, Variable Series
elimination of certain Fund's
fundamental investment restriction
with respect to pledging assets.
Proposal 3.D.: To approve an All Funds
amendment to certain Funds'
fundamental investment
restrictions with respect to
making loans.
Proposal 3.E.: To approve an Colonial Small Cap Value Fund, Variable
amendment to certain Funds' Series
fundamental investment Colonial Strategic Income Fund, Variable
restrictions with respect to 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 3.F.: To approve an Columbia High Yield Fund, Variable Series
amendment to certain Funds' Columbia Large Cap Growth Fund, Variable
fundamental investment Series
restrictions with respect to Liberty Asset Allocation Fund, Variable
investments in commodities. Series
Liberty Federal Securities Fund, Variable
Series
Liberty Money Market Fund, Variable Series
Liberty Small Company Growth Fund,
Variable Series
Proposal 3.G.: To approve an All Funds
amendment to certain Funds'
fundamental investment
restrictions with respect to
investments in real estate.
Proposal 3.H.: To approve an All Funds
amendment to certain Funds'
fundamental investment
restrictions with respect to
underwriting of securities.
Proposal 3.I.: To approve the Columbia High Yield Fund, Variable Series
elimination of certain Fund's
fundamental investment
restrictions with respect to
purchasing securities on margin.
</Table>
3
<Table>
<Caption>
PROPOSAL AFFECTED FUNDS
- -------- --------------
Proposal 3.J.: To approve the Colonial Small Cap Value Fund, Variable
elimination of certain Funds' Series
fundamental investment Columbia High Yield Fund, Variable Series
restrictions with respect to Columbia Large Cap Growth Fund, Variable
investing for the purpose of 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 3.K.: To approve the Columbia High Yield Fund, Variable Series
elimination of certain Funds'
fundamental investment
restrictions with respect to short
sales.
Proposal 3.L.: To approve an All Funds
amendment to certain Funds'
fundamental investment
restrictions with respect to
concentrating investments in an
industry.
Proposal 3.M.: To approve the Columbia High Yield Fund, Variable Series
elimination of certain Funds'
fundamental investment
restrictions with respect to
purchasing illiquid securities.
Proposal 3.N.: To approve the Columbia High Yield Fund, Variable Series
elimination of certain Funds'
fundamental investment
restrictions with respect to
investing in securities of other
investment companies.
Proposal 3.O.: To approve the Colonial Small Cap Value Fund, Variable
elimination of certain Funds' Series
fundamental investment Colonial Strategic Income Fund, Variable
restrictions with respect to Series
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
</Table>
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 in
SteinRoe Variable Investment Trust will vote together with the shareholders of
all other Funds of that Trust separately on each Proposal 2.A. through 2.D. With
respect to Proposal 3, the shareholders of each Fund will vote separately by
Fund and separately on each Proposal 3.A. through 3.O. 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
4
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 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.
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 Funds.
REQUIRED VOTE
The affirmative vote of a plurality of the holders of shares of beneficial
interest of each series of a Trust (voting together) present at the Meeting in
person or by proxy is required for the election of each such Trustee (i.e., the
eleven nominees who receive the most votes will be elected). The names and ages
of the Trustees of the Funds, the year each was first elected, their principal
business occupations during at least the last five years, the number of
portfolios in the Fund Complex overseen by each Trustee and other directorships
that each Trustee holds are shown below. The Trustees serve terms of indefinite
duration. The address of each Trustee is One Financial Center, Boston, MA
02111-2621.
5
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN
FUND
COMPLEX
POSITION YEAR FIRST PRINCIPAL OCCUPATION(S) OVERSEEN
NAME/AGE AND ADDRESS WITH FUNDS ELECTED(1) DURING PAST FIVE YEARS BY DIRECTOR
- ------------------------ ---------- ---------- --------------------------------------- -------------
DISINTERESTED TRUSTEES
Douglas A. Hacker Trustee 1996 Executive Vice President-Strategy of 101
(Age 49) United Airlines (airline) since
December, 2002 (formerly President of
UAL Loyalty Services (airline) from
September, 2001 to December, 2002;
Executive Vice President and Chief
Financial Officer of United Airlines
from July, 1999 to September, 2001;
Senior Vice President -- Finance from
March, 1993 to July, 1999).
Janet Langford Kelly Trustee 1996 Partner, Zelle, Hofmann, Voelbel, Mason 101
(Age 47) & Gette LLP (law firm) since March
2005; Adjunct Professor of Law,
Northwestern University, since
September, 2004; (formerly Chief
Administration Officer and Senior Vice
President, Kmart Holding Corporation
(consumer goods), from September, 2003
to March, 2004; Executive Vice
President-Corporate Development and
Administration, General Counsel and
Secretary, Kellogg Company (food
manufacturer), from September, 1999 to
August, 2003; Senior Vice President,
Secretary and General Counsel, Sara Lee
Corporation (branded, packaged,
consumer-products manufacturer) from
January, 1995 to September, 1999).
<Caption>
NAME/AGE AND ADDRESS OTHER DIRECTORSHIPS HELD
- ------------------------ -------------------------------
DISINTERESTED TRUSTEES
Douglas A. Hacker Nash Finch Company (food
(Age 49) distributor)
Janet Langford Kelly None
(Age 47)
</Table>
6
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN
FUND
COMPLEX
POSITION YEAR FIRST PRINCIPAL OCCUPATION(S) OVERSEEN
NAME/AGE AND ADDRESS WITH FUNDS ELECTED(1) DURING PAST FIVE YEARS BY DIRECTOR
- ------------------------ ---------- ---------- --------------------------------------- -------------
Richard W. Lowry(2) Trustee 1995 Private Investor since August, 1987 103
(Age 69) (formerly Chairman and Chief Executive
Officer, U.S. Plywood Corporation
(building products manufacturer)).
Charles R. Nelson Trustee 1981 Professor of Economics, University of 101
(Age 63) 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(2) Trustee 1985 Academic Vice President and Dean of 103
(Age 62) Faculties since August, 1999, Boston
College (formerly Dean, Boston College
School of Management from September,
1977 to August, 1999).
Patrick J. Simpson Trustee 2000 Partner, Perkins Coie, LLP (law firm). 101
(Age 61)
Thomas E. Stitzel Trustee 1998 Business Consultant since 1999 101
(Age 69) (formerly Professor of Finance from
1975 to 1999; College of Business,
Boise State University); Chartered
Financial Analyst.
<Caption>
NAME/AGE AND ADDRESS OTHER DIRECTORSHIPS HELD
- ------------------------ -------------------------------
Richard W. Lowry(2) None
(Age 69)
Charles R. Nelson None
(Age 63)
John J. Neuhauser(2) Saucony, Inc. (athletic
(Age 62) footwear)
Patrick J. Simpson None
(Age 61)
Thomas E. Stitzel None
(Age 69)
</Table>
7
<Table>
<Caption>
NUMBER OF
PORTFOLIOS IN
FUND
COMPLEX
POSITION YEAR FIRST PRINCIPAL OCCUPATION(S) OVERSEEN
NAME/AGE AND ADDRESS WITH FUNDS ELECTED(1) DURING PAST FIVE YEARS BY DIRECTOR
- ------------------------ ---------- ---------- --------------------------------------- -------------
Thomas C. Theobald(3) Trustee 1996 Partner and Senior Advisor, Chicago 101
(Age 68) Growth Partners (private equity
investing) since September, 2004;
(formerly Managing Director, William
Blair Capital Partners (private equity
investing) from September, 1994 to
September, 2004).
Anne-Lee Verville Trustee 1998 Retired since 1997 (formerly General 101
(Age 59) Manager, Global Education Industry, IBM
Corporation (computers and technology)
from 1994 to 1997).
Richard L. Woolworth Trustee 1991 Retired since December, 2003 (formerly 101
(Age 64) Chairman and Chief 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
William E. Mayer(2)(4) Trustee 1994 Partner, Park Avenue Equity Partners 103
(Age 65) (private equity) since February, 1999;
(formerly Partner, Development Capital
LLC from November, 1996 to February,
1999).
<Caption>
NAME/AGE AND ADDRESS OTHER DIRECTORSHIPS HELD
- ------------------------ -------------------------------
Thomas C. Theobald(3) Anixter International (network
(Age 68) support equipment distributor);
Ventas Inc. (real estate
investment trust); Jones Lang
LaSalle (real estate management
services) and Ambac Financial
Group (financial guarantee
insurance).
Anne-Lee Verville Chairman of the Board of
(Age 59) Directors, Enesco Group, Inc.
(designer, importer and
distributor of giftware and
collectibles).
Richard L. Woolworth NorthWest Natural (a natural
(Age 64) gas service provider).
INTERESTED TRUSTEE
William E. Mayer(2)(4) Lee Enterprises (print media);
(Age 65) WR Hambrecht + Co. (financial
service provider); First Health
(healthcare); Readers Digest
(publisher); OPENFIELD
Solutions (retail industry
technology provider).
</Table>
8
- ---------------
(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 serves 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.
9
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, expected to be renamed Columbia Variable Insurance 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, together with the name change of the
Combined Trust, is currently expected to be effected in the first quarter of
2006. The New Fund (as defined below) will have the same fundamental investment
restrictions as the Fund immediately prior to the Reorganization (which will
reflect any approvals of Proposals 3.A. through 3.O.).
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 newly-created corresponding series of the Combined
Trust with no prior operating history (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, an agreement and declaration of trust (the
"Declaration of Trust") and by-laws. 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 3 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.
10
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.
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 a date to be determined but currently
expected be in the first half of 2006. 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.
11
For federal income tax purposes, all of the Reorganizations are expected to be
tax-free reorganizations. For more information about the tax consequences of the
proposed Reorganizations, see "Federal Income Tax Consequences of the
Reorganizations" below.
Upon consummation of the transactions proposed to occur on the Exchange Date,
each Fund will distribute pro rata to its shareholders of record of each class
as of the Exchange Date the full and fractional Reorganization Shares of such
class received by the Fund. Each holder of shares of the Fund will receive a
number of full and/or fractional Reorganization Shares having an aggregate net
asset value on the Exchange Date equal to the value of and of the same class as
the full and/or fractional shares of the Fund held by the shareholder as of the
Exchange Date. This distribution will be accomplished by the establishment of
accounts on the share records of the corresponding New Fund in the names of the
Fund shareholders, each account representing the respective number of full and
fractional Reorganization Shares due such shareholder.
The consummation of each Reorganization is subject to the conditions set forth
in the Plan, including receipt of opinions of counsel, any of which may be
waived. Each Plan may be terminated and the Reorganization abandoned at any
time, before or after approval by the shareholders of the relevant Fund, prior
to the Exchange Date, by mutual consent of the Trustees of the relevant Fund and
trustees of the New Fund or, if any condition set forth in the Plan has not been
fulfilled and has not been waived by the party entitled to its benefits, by such
party.
All fees and expenses, including legal and accounting expenses, portfolio
transfer taxes (if any) or other similar expenses incurred in connection with
the consummation by each New Fund and its corresponding Fund of the transactions
contemplated by the Plan will be borne by Columbia Management.
OTHER MATTERS
The investment objectives, policies and restrictions of each Fund (as amended by
Proposal 3 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 advisor of each
New Fund. Furthermore, the management fees and expense structures of each New
Fund will be the same as for the corresponding Fund.
12
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, currently known as
SteinRoe Variable Investment 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 Board of SteinRoe Variable Investment Trust has approved amendments to that
Trust's Declaration of Trust and By-Laws. Certain changes to the By-Laws require
shareholder approval (see Proposals 2.A. through 2.D.). It is expected that the
amendments to the Declaration of Trust and By-Laws will be effective shortly
after the upcoming shareholder meeting. If shareholders do not approve the
By-Law amendments, the amendments to the Declaration of Trust and the amendments
to the By-Laws not requiring shareholder approval will nonetheless become
effective. The table below summarizes the significant differences between the
Declarations of Trust and By-Laws of the Combined Trust and of the Trusts. The
table assumes, in its presentation of the Combined Trust's Declaration of Trust
and By-Laws, that shareholders approve the By-Law amendments described in
Proposals 2.A. through 2.D. For additional information, shareholders of a Fund
should refer directly to such documents, copies of which may be obtained, free
of charge, by contacting the Combined Trust at its address listed on the cover
page of this Proxy Statement.
13
<Table>
<Caption>
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 personally shareholder held to be personally
personally liable solely by liable solely by reason of his or liable solely by reason of his or
reason of his or her being her being or having been a her being or having been a
or having been a shareholder shareholder is entitled to be shareholder is entitled to be held
and not because of his or held harmless from and harmless from and indemnified
her acts or omissions is indemnified against all loss and against all loss and expense
entitled out of the assets expense arising from such arising from such liability.
of the series (or liability.
attributable to the class) Every note, bond, contract,
of which he or she is a Every note, bond, contract, instrument, certificate or
shareholder or former instrument, certificate or undertaking made or issued by any
shareholder to be held undertaking made or issued by any Trustees or Trustee or by any
harmless from and Trustees or Trustee or by any officers or officer must recite
indemnified against all loss officers or officer must recite that the same was executed or made
and expense arising from that the same was executed or by or on behalf of the Trust and
such liability. made by or on behalf of the Trust that obligations of such
and that obligations of such instrument are not binding on any
Every note, bond, contract, instrument are not binding on any of them or shareholders
instrument, certificate or of them or shareholders individually.
undertaking made or issued individually.
by any Trustees or Trustee
or by any officers or
officer must recite that the
same was executed or made by
or on behalf of the Trust
and that obligations of such
instrument are not binding
on any of them or
shareholders individually.
</Table>
14
<Table>
<Caption>
THE COMBINED TRUST LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST
---------------------------- --------------------------------- ----------------------------------
SHAREHOLDER VOTING RIGHTS: Shareholders have the power Shareholders have the power to Shareholders have the power to
to vote only (i) for the vote only (i) for the election or vote only (i) for the election or
election or, to the extent removal of Trustees; (ii) with removal of Trustees; (ii) with
required by law, removal of respect to any investment respect to any investment adviser;
Trustees; (ii) with respect adviser; (iii) with respect to (iii) with respect to any
to any termination, by the any termination, by the termination, by the shareholders,
shareholders, of the Trust shareholders, of the Trust or of the Trust or series or class of
or series or class of the series or class of the Trust; the Trust; (iv) with respect to
Trust; (iii) with respect to (iv) with respect to any any amendment, by the
derivative actions, to the amendment, by the shareholders, shareholders, to the Declaration
extent certain demand to the Declaration of Trust; (v) of Trust; (v) with respect to
requirements are met; and with respect to derivative derivative actions, to the same
(iv) with respect to any actions, to the same extent as extent as shareholders of a
other matters required by shareholders of a Massachusetts Massachusetts business
law, the organizational business corporation; and (vi) corporation; and (vi) with respect
documents or deemed with respect to any other matters to any other matters required by
desirable by the Board of required by law, the law, the organizational documents,
Trustees. organizational documents, or or deemed desirable by the Board
deemed desirable by the Board of of Trustees.
No shareholder may bring a Trustees.
derivative claim without Each whole share outstanding on
first requesting the Each whole share outstanding on the record date is entitled to one
Trustees to bring or the record date is entitled to vote on any matter on which it is
maintain such action, one vote on any matter on which entitled to vote and each
proceeding or claim. Such it is entitled to vote and each fractional share is entitled to a
demand shall be excused only fractional share is entitled to a proportionate fractional vote.
when the plaintiff makes a proportionate fractional vote.
specific showing that
irreparable injury to the Shareholders shall vote together
Trust or series would as a single class without regard
otherwise result.
Each whole share (or
fractional share)
outstanding on the record
date is entitled to a number
of votes on any matter on
which it
</Table>
15
<Table>
<Caption>
THE COMBINED TRUST LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST
---------------------------- --------------------------------- ----------------------------------
is entitled to vote equal to to series or class of shares, Shareholders shall vote together
the net asset value of the except that (1) when required by as a single class without regard
share (or fractional share) the 1990 Act or other applicable to series or class of shares,
in U.S. dollars determined law or when the Trustees shall except that (1) when required by
at the close of business on have determined that the matter the 1990 Act or other applicable
the record date (for affects one or more series or law or when the Trustees shall
example, a share having a classes materially differently, have determined that the matter
net asset value of $10.50 shares shall be voted by affects one or more series or
would be entitled to 10.5 individual series or class and classes materially differently,
votes). (2) when the Trustees determine shares shall be voted by
that the matter affects only the individual series or class and (2)
Shareholders shall vote interests of one or more series when the Trustees determine that
together as a single class or classes, only shareholders of the matter affects only the
without regard to series or such series or classes shall be interests of one or more series or
class of shares, except that entitled to vote thereon. classes, only shareholders of such
(1) when required by the series or classes shall be
1990 Act or when the entitled to vote thereon.
Trustees shall have
determined that the matter
affects one or more series
or classes of shares
materially differently,
shares shall be voted by
individual series or class
and (2) when the matter
affects only the interests
of one or more series or
classes, only shareholders
of such series or classes
shall be entitled to vote
thereon.
</Table>
16
<Table>
<Caption>
THE COMBINED TRUST LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST
---------------------------- --------------------------------- ----------------------------------
SHAREHOLDER MEETINGS: Shareholders have no Shareholders may call a meeting Shareholders may call a meeting
specific right to call upon written application of upon written application of
meetings, except as may be shareholders holding at least 10% shareholders holding at least 10%
required by applicable law, of the outstanding shares of the of the outstanding shares of the
including the Investment Trust, or 10% of the outstanding Trust, or 10% of the outstanding
Company Act of 1940. shares of any series or class (if shares of any series or class (if
shareholders of such series or shareholders of such series or
class are entitled to vote by class are entitled to vote by
individual series or class). The individual series or class). The
application must state the application must state the purpose
purpose of the meeting and the of the meeting and the matters to
matters to be acted upon. be acted upon.
SHAREHOLDER QUORUM: 30% of the shares entitled 30% of the shares entitled to 30% of the shares entitled to vote
to vote at the meeting. vote at the meeting. at the meeting.
SHAREHOLDER CONSENT: Majority consent required Majority consent required for Majority consent required for
for shareholder action taken shareholder action taken without shareholder action taken without a
without a meeting. a meeting. meeting.
NOTICE TO SHAREHOLDERS: Notice of shareholder Notice of shareholder meetings is Notice of shareholder meetings is
meetings is to be mailed, to be mailed, postage prepaid, to be mailed, postage prepaid, not
postage prepaid, or sent by not less than seven days before less than seven days before the
facsimile or other the date of such meeting. date of such meeting.
electronic submission not
less than seven days before Notice must include the purpose Notice must include the purpose or
the date of such meeting. or purposes for which a meeting purposes for which a meeting is
is called. called.
Notice is not expressly
required to include the
purpose for which the
meeting is called.
</Table>
17
<Table>
<Caption>
THE COMBINED TRUST LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST
---------------------------- --------------------------------- ----------------------------------
TRUSTEE'S POWER TO AMEND The Declaration of Trust may Except when otherwise required by Except when otherwise required by
DECLARATION OF TRUST: be amended at any time by an the Investment Company Act of the Investment Company Act of
instrument in writing signed 1940, the Declaration of Trust 1940, the Declaration of Trust may
by a majority of the then may be amended by a majority vote be amended by a majority vote of
Trustees, provided that, for of the Trustees, provided that, the Trustees, provided that, for
non-ministerial amendments, for non- ministerial amendments, non- ministerial amendments,
notice is promptly mailed to notice is mailed to the notice is mailed to the
shareholders as of the day shareholders upon the same day shareholders upon the same day
such amendment is effective. such amendment is effective. such amendment is effective.
TRUSTEES' POWER TO AMEND The Trustees may amend the The Trustees or shareholders may, The Trustees or shareholders may,
BY-LAWS: By-Laws at any time. by majority vote, amend the by majority vote, amend the
By-Laws, provided that By-Laws, provided that shareholder
shareholder approval is required approval is required to amend the
to amend the provisions regarding provisions regarding amendments,
amendments, lending Trust assets lending Trust assets to certain
to certain interested persons, interested persons,
transferability of shares and transferability of shares and
dealings with the Trust by dealings with the Trust by certain
certain interested persons. interested persons.
</Table>
18
<Table>
<Caption>
THE COMBINED TRUST LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST
---------------------------- --------------------------------- ----------------------------------
TERMINATION OF TRUST: Shareholders have the right Trustees may terminate the Trust Trustees may terminate the Trust,
to terminate the Trust, or or series without shareholder or series or class, without
series or class, upon approval by written notice to the shareholder approval by written
approval of at least 66 2/3% shareholders. notice to shareholders.
of the outstanding shares of
the Trust or the affected
series or class.
Trustees may terminate the
Trust, or any series or
class, without shareholder
approval by written notice
to shareholders.
MERGER OR CONSOLIDATION The Declaration of Trust Shareholders have no express Shareholders have no express right
TRUST: provides that a right under the Declaration of under the Declaration of Trust to
consolidation, merger or Trust to vote on mergers or vote on mergers or consolidations.
transfer may be authorized consolidations.
by vote of a majority of the
Trustees then in office
without shareholder
approval, unless otherwise
required by law.
REMOVAL OF TRUSTEES: Trustee may be removed, with Trustee may be removed, with or Trustee may be removed, with or
or without cause, by a without cause, by (i) a majority without cause, by (i) a majority
majority of Trustees then in of Trustees then in office; (ii) of Trustees then in office; (ii)
office. by a vote of two-thirds of the by a vote of two- thirds of the
holders of outstanding shares at holders of outstanding shares at a
a meeting called for the purpose; meeting called for the purpose; or
or (iii) by the holders of two- (iii) by the holders of two-
thirds of the outstanding shares thirds of the outstanding shares
by declaration in writing filed by declaration in writing filed
with the custodian of the Trust. with the custodian of the Trust.
</Table>
19
<Table>
<Caption>
THE COMBINED TRUST LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST
---------------------------- --------------------------------- ----------------------------------
TRUSTEE LIABILITY: Trustees are not personally Trustees are not personally Trustees are not personally liable
liable for claims against liable for claims against the for claims against the Trust or
the Trust or for any neglect Trust or for any neglect or for any neglect or wrongdoing of
or wrongdoing of any wrongdoing of any officer, agent, any officer, agent, employee,
officer, agent, employee, employee, investment adviser, or investment adviser, or principal
investment adviser, or principal underwriter of the underwriter of the Trust. Each
principal underwriter of the Trust. Each Trustee is not Trustee is not responsible for the
Trust. Each Trustee is not responsible for the act or act or omission of any other
responsible for the act or omission of any other Trustee and Trustee and may be liable only by
omission of any other may be liable only by reason of reason of willful misfeasance, bad
Trustee and may be liable willful misfeasance, bad faith, faith, gross negligence or
only by reason of willful gross negligence or reckless reckless disregard of the duties
misfeasance, bad faith, disregard of the duties involved involved in the conduct of his
gross negligence or reckless in the conduct of his office. office.
disregard of the duties
involved in the conduct of
his office.
The appointment, designation
or identification of a
Trustee as the chairman of
the Board, the lead or
assistant lead independent
Trustee, a member or
chairman of a committee of
the Board, an expert on any
topic or in any area
(including an audit
committee financial expert)
or as having any other
special appointment,
designation or
identification shall not (a)
impose on that person any
duty, obligation or
liability that is greater
than the duties,
</Table>
20
<Table>
<Caption>
THE COMBINED TRUST LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST
---------------------------- --------------------------------- ----------------------------------
obligations and liabilities
imposed on that person as a
Trustee in the absence of
the appointment, designation
or identification or (b)
affect in any way such
Trustee's rights or
entitlement to
indemnification, and no
Trustee who has special
skills or expertise, or who
is appointed, designated or
identified as aforesaid,
shall (x) be held to a
higher standard of care by
virtue thereof or (y) be
limited with respect to any
indemnification to which
such Trustee would otherwise
be entitled.
</Table>
21
<Table>
<Caption>
THE COMBINED TRUST LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST
---------------------------- --------------------------------- ----------------------------------
TRUSTEE INDEMNIFICATION: The By-Laws state that the The Declaration of Trust states The Declaration of Trust states
Trust will indemnify each of that the Trust will indemnify that the Trust will indemnify each
its Trustees and officers each of its Trustees and officers of its Trustees and officers
who are not employees or against all liabilities and against all liabilities and
officers of any investment expenses, including amounts paid expenses, including amounts paid
adviser to the Trust or any in satisfaction of judgments, in in satisfaction of judgments, in
affiliated person thereof compromise, as fines and compromise, as fines and
and may indemnify each of penalties, and as counsel fees, penalties, and as counsel fees,
its officers who are reasonably incurred by such reasonably incurred by such person
employees or officers of any person while in office or while in office or thereafter, by
investment adviser to the thereafter, by reason of the reason of the indemnified person's
Trust or any affiliated indemnified person's service as a service as a Trustee or officer.
person thereof against all Trustee or officer. The Trust The Trust will not indemnify its
liabilities and expenses, will not indemnify its Trustees Trustees and officers against any
including amounts paid in and officers against any liability to the Trust or to its
satisfaction of judgments, liability to the Trust or to its shareholders to which he or she
in compromise, as fines and shareholders to which he or she would otherwise be subject by
penalties, and as counsel would otherwise be subject by reason of willful misfeasance, bad
fees, reasonably incurred by reason of willful misfeasance, faith, gross negligence or
such person while in office bad faith, gross negligence or reckless disregard of the duties
or thereafter, by reason of reckless disregard of the duties involved in the conduct of his
the indemnified person's involved in the conduct of such office.
service as a Trustee or person's office.
officer. The Trust will not Under the Declaration of Trust, in
indemnify its Trustees and Under the Declaration of Trust, the absence of a final decision on
officers against any in the absence of a final the merits by an adjudicating body
liability to the Trust or to decision on the merits by an that such person is not liable by
its shareholders to which he adjudicating body that such reason of willful misfeasance, bad
or she would otherwise be person is liable by reason of faith, gross negligence or
subject by reason of willful willful misfeasance, bad faith, reckless
misfeasance, bad faith, gross negligence or reckless
gross negligence or reckless
disregard of the duties
involved in the conduct of
his office.
</Table>
22
<Table>
<Caption>
THE COMBINED TRUST LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST
---------------------------- --------------------------------- ----------------------------------
Under the By-Laws, in the disregard of the duties involved disregard of the duties involved
absence of a final decision in the conduct of their office, in the conduct of their office, no
on the merits by an no indemnification will be indemnification will be provided
adjudicating body that such provided unless such person is unless such person is determined
person has not acted in good determined to be not liable by to be not liable by (a) a vote of
faith in the reasonable (a) a vote of a majority of the a majority of the disinterested
belief that such person's disinterested Trustees or (b) an Trustees or (b) an independent
action was in the best independent legal counsel as legal counsel as expressed in a
interests of the Trust or is expressed in a written opinion. written opinion.
liable to the Trust or its
Shareholders by reason of
willful misfeasance, bad
faith, gross negligence or
reckless disregard of the
duties involved in the
conduct of his or her
office, indemnification will
be provided if (a) approved,
after notice that it
involves such
indemnification, by at least
a majority of the
disinterested Trustees
acting on the matter
(provided that a majority of
the disinterested Trustees
then in office act on the
matter) upon a
determination, based upon a
review of readily available
facts, that such person has
acted in good faith in the
reasonable belief that such
person's action was in the
best interests of the Trust
and is not liable to the
</Table>
23
<Table>
<Caption>
THE COMBINED TRUST LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST
---------------------------- --------------------------------- ----------------------------------
Trust or its shareholders by
reason of willful
misfeasance, bad faith,
gross negligence or reckless
disregard of the duties
involved in the conduct of
his or her office or (b)
there has been obtained an
opinion in writing of
independent legal counsel,
based upon a review of
readily available facts to
the effect that such person
appears to have acted in
good faith in the reasonable
belief that such person's
action was in the best
interests of the Trust and
that such indemnification
would not protect such
person against any liability
to the Trust to which such
person would otherwise be
subject by reason of willful
misfeasance, bad faith,
gross negligence or reckless
disregard of the duties
involved in the conduct of
his or her office.
</Table>
24
<Table>
<Caption>
THE COMBINED TRUST LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST
---------------------------- --------------------------------- ----------------------------------
LEGAL EXPENSES: The By-Laws state that legal The Declaration of Trust states The Declaration of Trust states
expenses shall be paid from that legal expenses shall not be that legal expenses shall not be
time to time by the Trust in paid from time to time by the paid from time to time by the
advance of the final Trust in advance of the final Trust in advance of the final
disposition of any such disposition of any such disposition of any such proceeding
proceeding if the Trust proceeding unless the Trust unless the Trust receives a
receives a written receives a written undertaking by written undertaking by the
undertaking by the the indemnified person to indemnified person to reimburse
indemnified person to reimburse the Trust in the event the Trust (unless it is determined
reimburse the Trust in the it is subsequently determined that such person is ultimately
event it is subsequently that the indemnified person is entitled to indemnification) and
determined that the not entitled to such (a) the indemnified person
indemnified person is not indemnification and (a) the provides security for his
entitled to such indemnified person provides undertaking, or (b) the Trust is
indemnification and (a) the security for his undertaking, or insured against losses arising by
indemnified person provides (b) the Trust is insured against reason of any lawful advances, or
security for his losses arising by reason of any (c) a majority of the
undertaking, or (b) the lawful advances, or (c) a disinterested, non-party Trustees
Trust is insured against majority of the disinterested, or an independent legal counsel,
losses arising by reason of non-party Trustees or an as expressed in a written opinion,
any lawful advances, or (c) independent legal counsel, as determines that there is reason to
a majority of the expressed in a written opinion, believe that the indemnified
disinterested, non-party determines that there is reason person ultimately will be found
Trustees or an independent to believe that the indemnified entitled to indemnification.
legal counsel, as expressed person ultimately will be found
in a written opinion, entitled to indemnification.
determines that there is
reason to believe that the
indemnified person
ultimately will be found
entitled to indemnification.
</Table>
25
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;
(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;
26
(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.
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,
27
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 June 30, 2005, 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 June 30, 2005 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.
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
28
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
29
entities. Shareholders of your Fund who wish to nominate a candidate to your
Fund's Board may send information regarding prospective candidates to the
Governance Committee, in care of the relevant Fund, at One Financial Center,
Boston, MA 02111-2621. The information should include evidence of the
shareholders' Fund ownership, a full listing of the proposed candidate's
education, experience, current employment, date of birth, names and addresses of
at least three professional references, information as to whether the candidate
is not an "interested person" under the 1940 Act and such other information as
may be helpful to the Governance Committee Independent Trustees in evaluating
the candidate. All satisfactorily completed 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
30
position; if there appeared to be sufficient interest, an in-person meeting with
one or more of the Governance Committee Independent Trustees would be arranged.
If a Governance Committee Independent Trustee, based on the results of these
contacts, believes he or she has identified a viable candidate, he or she would
air the matter with the other Governance Committee Independent Trustees for
input. Any request by Fund management to meet with the prospective candidate
would be given appropriate consideration. The Funds have not paid a fee to third
parties to assist in finding nominees.
3. ADVISORY FEES & EXPENSES COMMITTEE
Ms. Kelly and Messrs. Mayer, Nelson and Neuhauser are members of the Advisory
Fees & Expenses Committee of each Fund. The Advisory Fees & Expenses Committee's
functions include reviewing and making recommendations to the Board as to
contracts requiring approval of a majority of the disinterested Trustees and as
to any other contracts that may be referred to the committee by the Board.
4. COMPLIANCE COMMITTEE
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.
<Table>
<Caption>
NUMBER OF
MEETINGS
FOR FISCAL
YEAR ENDED
DECEMBER 31, 2004
-----------------
Audit Committee 11
Governance Committee 4
Advisory Fees & Expenses Committee 7
Compliance Committee 6
</Table>
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
31
processes and personnel, and proposed changes to investment objectives.
Investment personnel who manage the Funds will attend IOC meetings from time to
time to assist each IOC in its review of the Funds. Each IOC meets four times a
year. Investment Oversight Committee 1 currently consists of Messrs. Lowry,
Mayer and Neuhauser. Investment Oversight Committee 2 currently consists of Mr.
Hacker and Ms. Verville. Investment Oversight Committee 3 currently consists of
Ms. Kelley and Messrs. Stitzel and Theobald. Investment Oversight Committee 4
currently consists of Messrs. Nelson, Simpson and Woolworth.
AUDIT COMMITTEE PRE-APPROVAL OF INDEPENDENT ACCOUNTANT SERVICES
The Audit Committee is required to pre-approve the engagement of your Fund's
independent registered public accountant to provide audit and non-audit services
to your Fund and non-audit services to Columbia Management or any entity
controlling, controlled by or under common control with Columbia Management that
provides ongoing services to the Funds ("Columbia Affiliate"), if the engagement
relates directly to the operations or financial reporting of the Funds. The
engagement may be entered into pursuant to pre-approval policies and procedures
established by the Audit Committee.
The Audit Committee has adopted an Audit and Non-Audit Services Pre-Approval
Policy ("Policy"). The Policy sets forth the procedures and conditions pursuant
to which services to be performed by the Funds' independent registered public
accountant are to be pre-approved. Unless a type of service receives general
pre-approval under the Policy, it requires specific pre-approval by the Audit
Committee if it is to be provided by the independent registered public
accountant.
The Policy provides for the general pre-approval by the Audit Committee of
certain: (i) audit services to the Funds; (ii) audit-related services to the
Funds; (iii) tax services to the Funds; (iv) 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
32
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.
II. PROPOSAL 2: ADOPTION OF AMENDED BY-LAWS
As described in the following proposals, the Trustees recommend that
shareholders of the affected Funds approve revisions to and the elimination of
certain provisions of the by-laws of SteinRoe Variable Investment Trust.
Generally, the purpose of these proposed changes is to increase the affected
Funds' investment flexibility and reduce administrative and compliance
33
burdens by simplifying and making more uniform by-law provisions across all
Columbia Funds.
2.A. AMENDING STEINROE VARIABLE INVESTMENT TRUST'S BY-LAW PROVISION WITH RESPECT
TO AMENDMENTS REQUIRING APPROVAL BY SHAREHOLDERS.
AFFECTED FUNDS:
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
Article IX of SteinRoe Variable Investment Trust's by-laws states:
"Section 9.01. General. Except as provided in Section 9.02 hereof, all
By-Laws of the Trust, whether adopted by the Board of Trustees or the
shareholders, shall be subject to amendment, alteration, or repeal, and new
By-Laws may be made, by the affirmative vote of a majority of either:
(a) the holders of record of the outstanding shares of the Trust
entitled to vote at any meeting, the notice or waiver of notice
of which shall have specified or summarized the proposed
amendment, alteration, repeal, or new By-Law; or
(b) the Trustees, at any regular or special meeting.
Section 9.02. By Shareholders Only.
(a) No amendment of any section of these By-Laws shall be made except by
the shareholders of the Trust, if the By-Laws provide that such
section may not be amended, altered or repealed except by the
shareholders.
(b) From and after the effectiveness of the Trust's registration
statement under the Securities Act of 1933, no amendment of this
Article IX or Article X* shall be made except by the
shareholders of the Trust."
The Trustees recommend that Article IX of SteinRoe Variable Investment Trust's
by-laws be amended as described below. The proposed changes will reduce
administrative and compliance burdens by increasing the uniformity of the
Columbia Funds' by-laws. The proposed changes will also permit the
- ------------------------------
* The text of Article X is shown below in Proposals 2.B., 2.C. and 2.D.
34
Trustees to amend the by-laws from time to time as necessary, without incurring
the time and expense of obtaining shareholder approval.
The proposed amended by-law provision regarding amendments is as follows:
"ARTICLE 10
AMENDMENTS TO THE BYLAWS
10.1 General. These Bylaws may be amended or repealed, in whole or in part,
by a majority of the Trustees then in office at any meeting of the
Trustees, or by written consent in lieu thereof."
2.B.: ELIMINATION OF A STEINROE VARIABLE INVESTMENT TRUST BY-LAW PROVISION WITH
RESPECT TO LENDING TRUST ASSETS TO INTERESTED PERSONS.
AFFECTED FUNDS:
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
Section 10.01(a) of SteinRoe Variable Investment Trust's by-laws states:
"The Trust shall not lend assets of the Trust to any officer or Trustee of
the Trust or to any officer, director, or stockholder (or partner of a
stockholder) of, or person financially interested in, the investment
adviser or any underwriter of the Trust, or to the investment adviser of
the Trust or to any underwriter of the Trust."
In essence, this provision prevents the Trust from lending assets to affiliated
persons of the Trust. While Columbia Management has no present intention of
lending assets of the Trust to any of the persons specified above, or otherwise
changing the way in which the affected Funds are managed, the Trust's by-laws
are not required to contain such a restriction. In addition, Section 17 of the
1940 Act generally prohibits affiliated persons of a registered investment
company from borrowing money or other property from such investment company.
Given the restrictions on affiliated transactions imposed by Section 17 of the
1940 Act, the Trustees believe it is not in the Funds' best interests to
maintain unnecessary by-law provisions. Accordingly, the Trustees recommend that
Section 10.01(a) of SteinRoe Variable Investment Trust's by-laws be eliminated.
If approved, the elimination of this provision would allow the Trust to lend
assets to affiliated persons only to the extent consistent with applicable law,
including Section 17 of the 1940 Act.
35
2.C.: ELIMINATION OF A STEINROE VARIABLE INVESTMENT TRUST BY-LAW PROVISION WITH
RESPECT TO RESTRICTION ON TRANSFERABILITY OF TRUST SHARES.
AFFECTED FUNDS:
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
Section 10.01(b) of SteinRoe Variable Investment Trust's by-laws states:
"The Trust shall not restrict the transferability or negotiability of the
shares of the Trust, except in conformity with the statements with respect
thereto contained in the Trust's Registration Statement, and not in
contravention of such rules and regulations as the SEC may prescribe."
In essence, this provision prevents the Trust from restricting the
transferability or negotiability of its shares. While the Trustees have no
present intention of restricting the transferability or negotiability of the
Trust's shares, the Trust's by-laws are not required to contain such a
restriction. The Trustees believe it is not in the Funds' best interests to
maintain unnecessarily restrictive by-law provisions. Accordingly, the Trustees
recommend that Section 10.01(b) of SteinRoe Variable Investment Trust's by-laws
be eliminated. If approved, the elimination of this provision would allow the
Trust to restrict the transferability or negotiability of its shares to the
extent consistent with applicable law.
2.D.: ELIMINATION OF A STEINROE VARIABLE INVESTMENT TRUST BY-LAW PROVISION WITH
RESPECT TO DEALINGS WITH THE TRUST BY INTERESTED PERSONS.
AFFECTED FUNDS:
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
Section 10.01(c) of SteinRoe Variable Investment Trust's by-laws states:
"The Trust shall not permit any officer or Trustee of the Trust, or any
officer, director, or stockholder (or partner of a stockholder) of the
investment adviser or any underwriter of the Trust to deal for or on
36
behalf of the Trust with himself as principal or agent, or with any
partnership, association, or trust in which he has a financial interest;
provided that the foregoing provisions shall not prevent, to the extent
consistent with applicable securities laws: (1) officers and Trustees of
the Trust from buying, holding, redeeming, or selling shares in the Trust,
or from being officers, directors, or stockholders (or partners of a
stockholder) of or otherwise financially interested in the investment
adviser or any underwriter of the Trust; (2) purchases or sales of
securities or other property by the Trust from or to an affiliated person
or to the investment adviser or any underwriter of the Trust, if such
transactions are not prohibited by the 1940 Act or have been exempted by
SEC order from the prohibitions of the 1940 Act; (3) purchases of
investments for the portfolio of the Trust through a securities dealer who
is, or one or more of whose partners, stockholders, officers, or directors
is, an officer or Trustee of the Trust, if such transactions are handled in
the capacity of broker only and commissions charged do not exceed customary
brokerage charges for such services; (4) employment of legal counsel,
registrar, transfer agent, dividend disbursing agent, or custodian who is,
or has a partner, stockholder, officer, or director who is, an officer or
Trustee of the Trust, if only customary fees are charged for services to
the Trust; (5) sharing statistical, research, legal and management expenses
and office hire and expenses with any other investment company in which an
officer or Trustee of the Trust is an officer, trustee, or director or
otherwise financially interested."
In essence, this provision prevents the Trust from engaging in transactions with
interested persons of the Trust except in the limited circumstances described
above. While Columbia Management has no present intention of engaging in
transactions with affiliates of the Trust other than under the circumstances
specified above, or otherwise changing the way in which the affected Funds are
managed, the Trust's by-laws are not required to contain such a restriction. In
addition, Section 17 of the 1940 Act generally limits the extent to which
affiliated persons of a registered investment company may engage in transactions
with a registered investment company. Given the restrictions on affiliated
transactions imposed by Section 17 of the 1940 Act, the Trustees believe it is
not in the Funds' best interests to maintain unnecessary by-law provisions.
Accordingly, the Trustees recommend that Section 10.01(c) of SteinRoe Variable
Investment Trust's by-laws be eliminated. If approved, the elimination of this
provision would allow the Trust to engage in transactions with its affiliated
persons to the extent consistent with applicable law, including Section 17 of
the 1940 Act.
37
REQUIRED VOTE. Each of the Funds of SteinRoe Variable Investment Trust vote
together on each of the Proposals 2.A. through 2.D. To be approved, each of
these Proposals requires the affirmative vote of a majority of the outstanding
shares eligible to vote at the Meeting. The adoption of any of these Proposals
is not contingent upon the adoption of any other Proposal, including the
election of Trustees pursuant to Proposal 1.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS OF STEINROE VARIABLE
INVESTMENT TRUST VOTE FOR PROPOSALS 2.A. THROUGH 2.D.
II. PROPOSAL 3: 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 3.A. through 3.O. highlights the differences
between the Funds' current fundamental investment restrictions and, where
applicable, a proposed uniform fundamental investment restriction. However,
because the current fundamental investment restrictions vary among the Funds,
shareholders of each Fund should consider comparing their Fund's current
restrictions (contained in EXHIBITS 1 through 10) with the proposed
restrictions.
38
3.A. AMENDING FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO BORROWING
MONEY.
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 Select Value Fund, Variable Series
Liberty Small Company Growth Fund, Variable Series
Liberty S&P 500 Index Fund, Variable Series
The 1940 Act requires that the Funds to state the extent to which they may
borrow money. Under Section 18(f)(1) of the 1940 Act, an open-end investment
company may borrow from banks, for any purpose, up to 33 1/3% of its total
assets (including the amount borrowed). EXHIBIT 1 lists the current fundamental
investment restrictions of each of the affected Funds with respect to borrowing
money. Some of the Funds' current fundamental investment restrictions are more
restrictive than the 1940 Act requirements.
The Trustees recommend that each affected Fund amend its policy so as to permit
each affected Fund to borrow money to the full extent permitted under applicable
law.
The proposed changes would automatically conform each affected Fund's policy
more closely to the exact statutory and regulatory requirements, as they exist
from time to time, without incurring the time and expenses 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.
The proposed amended fundamental investment restriction is as follows:
"The fund may not . . . [b]orrow money . . . except to the extent permitted
by the 1940 Act, the rules and regulations thereunder and any applicable
exemptive relief."
3.B. AMENDING FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO ISSUING SENIOR
SECURITIES.
AFFECTED FUNDS:
Colonial Small Cap Value Fund, Variable Series
Colonial Strategic Income Fund, Variable Series
Columbia High Yield Fund, Variable Series
39
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
The 1940 Act requires that the Funds to state the policy with regard to the
issuance of 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). EXHIBIT 2 lists the current fundamental investment
restrictions of each of the affected Funds with respect to issuing senior
securities. Some of the Funds' current fundamental investment restrictions are
more restrictive than the 1940 Act requirements.
The Trustees recommend that each affected Fund amend its policy so as to permit
each affected Fund to issue senior securities to the full extent permitted under
applicable law.
The proposed changes would automatically conform each affected Fund's policy
more closely to the exact statutory and regulatory requirements, as they exist
from time to time, without incurring the time and expenses 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
issuing senior securities.
The proposed amended fundamental investment restriction is as follows:
"The fund may not . . . [i]ssue senior securities except to the extent
permitted by the 1940 Act, the rules and regulations thereunder and any
applicable exemptive relief."
3.C. ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO PLEDGING
ASSETS
AFFECTED FUND:
Columbia High Yield Fund, Variable Series
The affected Fund has a fundamental investment restriction stating that:
The Fund may not "[m]ortgage, 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."
40
The 1940 Act does not require the Fund to state a fundamental investment
restriction on this matter. 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 this restriction, 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 pledging assets be
eliminated.
3.D. 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
an open-end investment company 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.
41
When a Fund enters into a repurchase agreement, it typically purchases a
security for a relatively short period of time (usually not more than seven
days), which the seller agrees to repurchase at a fixed time and price,
representing the Fund's cost plus interest. When a Fund enters into a securities
loan, it lends certain of its portfolio securities to broker-dealers or other
parties, typically in exchange for a portion of the interest earned on the
collateral posted by the borrower or a fee from the borrower. The borrower may
also pay the Fund an amount equal to any interest, dividends or other
distributions payable on the securities lent. These transactions must be fully
collateralized at all times, but involve risk to the Fund if the seller, in the
case of 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.
3.E. 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
42
securities of other investment companies). The remaining 25% of the fund's total
assets is not subject to this restriction.
EXHIBIT 4 lists the current fundamental investment restrictions of each of the
affected Funds with respect to diversification of investments. The proposed
amended fundamental investment restriction is designed to track the statutory
definition of "diversified" company and read as follows:
"The fund may not . . . [p]urchase securities (except securities issued or
guaranteed by the U.S. Government, its agencies or instrumentalities) of
any one issuer if, as a result, more than 5% of its total assets will be
invested in the securities of such issuer or it would own more than 10% of
the voting securities of such issuer, except that: (a) up to 25% of its
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.
43
3.F. 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
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
44
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.
3.G. 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 exercise of its rights as a holder of real estate
securities and to clarify that a Fund may invest in real estate-related
securities and real estate-backed securities or instruments.
The proposed amended fundamental investment restriction is as follows:
"The fund may not . . . [p]urchase or sell real estate, except a fund may
purchase securities of issuers which deal or invest in real estate and may
purchase securities which are secured by real estate or interests in real
estate and it may hold and dispose of real estate or interests in real
estate acquired through the exercise of its rights as a holder of
securities which are secured by real estate or interests therein."
These proposed changes will also reduce administrative and compliance burdens by
simplifying and making uniform the fundamental investment restrictions with
respect to real estate.
3.H. 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.
45
Under applicable law, a person or company generally is considered to be an
underwriter if the person or company participates in the public distribution of
securities of other issuers, which involves purchasing the securities from
another issuer with the intention of re-selling the securities to the public.
From time to time, a Fund may purchase securities in a private transaction for
investment purposes and later sell the securities to institutional investors.
Under these or other circumstances, a Fund could possibly be considered to be
within the technical definition of an underwriter under applicable law. The SEC
staff has issued interpretations that clarify that re-sales of privately placed
securities by institutional investors, such as open-end investment companies, 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.
3.I. 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."
46
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 recommend that the
affected Fund's fundamental investment restriction with respect to purchasing
securities on margin be eliminated.
3.J. ELIMINATION OF FUNDAMENTAL INVESTMENT RESTRICTIONS WITH RESPECT TO
INVESTING FOR THE PURPOSE OF EXERCISING CONTROL
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.
47
3.K. 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.
3.L. 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
48
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.
3.M. 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."
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
49
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.
3.N. 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 SEC 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.
50
3.O. 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
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, see Proposal 3.F. 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.
51
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.
A fund's successful use of options strategies depends on the ability of its
advisor to forecast correctly interest rate and market movements. When a fund
purchases an option, it runs the risk that it will lose its entire investment in
the option in a relatively short period of time, unless the fund exercises the
option or enters into a closing sale transaction before the option's expiration.
If the price of the underlying security does not rise (in the case of a call) or
fall (in the case of a put) to an extent sufficient to cover the option premium
and transaction costs, the fund will lose part or all of its investment in the
option. This contrasts with an investment by the fund in the underlying
security, since the fund will not realize a loss if the security's price does
not change.
The effective use of options also depends on a Fund's ability to terminate
option positions at times when Columbia Management deems it desirable to do so.
There is no assurance that a Fund will be able to effect closing transactions at
any particular time or at an acceptable price.
REQUIRED VOTE. Shareholders of each Fund are entitled to vote on each Proposal
3.A. through 3.O. if the Proposal affects their Fund, voting separately by Fund.
Approval of each of Proposals 3.A. through 3.O. requires the affirmative vote of
a "majority of the outstanding voting securities" of a Fund entitled to vote on
such Proposal. As defined by the 1940 Act, a "majority of the outstanding voting
securities" means the vote of (i) 67% or more of the Fund's shares present at
the Meeting, if the holders of more than 50% of the outstanding shares of the
Fund are represented at the Meeting in person or by proxy, or (ii) more than 50%
of the Fund's outstanding shares, whichever is less. To the extent multiple
Proposals apply to the same Fund, the adoption of any of these Proposals is not
contingent on the adoption of any other Proposal by shareholders of the Fund. In
addition, with respect to each Fund, the adoption of any of these Proposals 3.A.
through 3.O. is not contingent on election of any Trustees pursuant to Proposal
1.
52
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE FOR PROPOSALS 3.A.
THROUGH 3.O., AS APPLICABLE.
IV. OTHER INFORMATION
Certain additional information regarding Columbia Management and the Meeting is
presented below.
MANAGEMENT
Columbia Management, located at One Financial Center, Boston, MA 02111, is the
Funds' investment adviser. Columbia Management, a registered investment adviser,
has been an investment adviser since 1969. Columbia Management Distributors,
Inc. ("CMD," formerly named Columbia Funds Distributor, Inc.), located at One
Financial Center, Boston, MA 02111, is the Funds' distributor. Columbia
Management is a wholly owned subsidiary of Columbia Management Group, LLC
("CMG"), which is a wholly owned subsidiary of Bank of America Corporation. CMD
is an indirectly owned subsidiary of CMG. Prior to June 15, 2005, CMG was a
corporation. Effective June 15, 2005, CMG converted to a limited liability
company. 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
53
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.
- ------------------------------
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 CMD, disgorgement of
all management fees and monetary damages.
54
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 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 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.
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 transferred to the MDL.
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 September 9, 2005, for each class of
a Fund's shares entitled to vote at the Meeting.
55
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 a contract owner simply signs and returns the voting
instruction card, it will be treated as an instruction to vote the shares
represented thereby in favor of the Proposals. The shares for which no voting
instruction cards are returned will be voted in the same proportion as the
shares for which voting instruction cards are returned.
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.D. requires the affirmative vote of a
majority of the outstanding shares of the Funds of SteinRoe Variable Investment
Trust, voting together. Approval of each of Proposals 3.A. through 3.O. requires
the affirmative vote of a "majority of the outstanding voting securities" of a
Fund entitled to vote on such Proposal. As defined by the 1940 Act, a "majority
of the outstanding voting securities" means the vote of (i) 67% or more of the
Fund's shares present at the Meeting, if the holders of more than 50% of the
outstanding shares of the Fund are represented at the Meeting in person or by
proxy, or (ii) more than 50% of the Fund's outstanding shares, whichever is
less. Only shareholders of record on September 9, 2005, may vote.
In determining whether a quorum is present, the Tellers will count shares
represented by proxies that reflect abstentions, and "broker non-votes," as
shares that are present and entitled to vote. With respect to Proposal 1,
withheld authority, abstentions and broker non-votes have no effect on the
outcome of voting. With respect to any other Proposals, withheld authority,
abstentions and broker non-votes have the effect of a vote "against" the
Proposal. "Broker non-votes" are shares held by brokers or nominees as to which
(i) the broker or nominee does not have discretionary voting power, and
56
(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.
57
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.
OFFICERS
<Table>
<Caption>
YEAR FIRST ELECTED
OR APPOINTED
NAME/AGE AND ADDRESS POSITION WITH FUNDS TO OFFICE
- ------------------------ ------------------------- ------------------
Christopher L. Wilson Head of Mutual Funds 2004
(Age 48) since August 2004;
President of the Columbia
Funds since October 2004
<Caption>
NAME/AGE AND ADDRESS PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ------------------------ ------------------------------------------------------------
Christopher L. Wilson Head of Mutual Funds since August, 2004 and Senior Vice
(Age 48) President of the Advisor since January, 2005; President of
the Columbia Funds, Liberty Funds and Stein Roe Funds since
October, 2004; President and Chief Executive Officer of the
Nations Funds since January, 2005; President of the Galaxy
Funds since April 2005; Director of Bank of America Global
Liquidity Funds, plc since May 2005; Director of Bank of
America Capital Management (Ireland), Limited since May
2005; Senior Vice President of BACAP Distributors LLC since
January, 2005; Director of FIM Funding, Inc. since January,
2005; Senior Vice President of Columbia Management
Distributors, 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).
</Table>
A-1
<Table>
<Caption>
YEAR FIRST ELECTED
OR APPOINTED
NAME/AGE AND ADDRESS POSITION WITH FUNDS TO OFFICE
- ------------------------ ------------------------- ------------------
J. Kevin Connaughton Treasurer 2000
(Age 41)
Mary Joan Hoene Senior Vice President and 2004
(Age 56) Chief Compliance Officer
40 West 57th Street since 2004
New York, NY 10019
Michael G. Clarke Chief Accounting Officer 2004
(Age 35) since October 2004
<Caption>
NAME/AGE AND ADDRESS PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ------------------------ ------------------------------------------------------------
J. Kevin Connaughton Treasurer of the Columbia Funds since October, 2003 and of
(Age 41) 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 President and Chief Compliance Officer of the
(Age 56) Columbia Funds, Liberty Funds, Stein Roe Funds and All-Star
40 West 57th Street Funds since August, 2004; Chief Compliance Officer of the
New York, NY 10019 Columbia Management Multi-Strategy Hedge Fund, LLC since
August 2004; Chief Compliance Officer of the BACAP
Alternative Multi-Strategy Hedge Fund LLC since October 2004
(formerly Partner, Carter, Ledyard & Milburn LLP from
January, 2001 to August, 2004; Counsel, Carter, Ledyard &
Milburn LLP from November, 1999 to December, 2000; Vice
President and Counsel, Equitable Life Assurance Society of
the United States from April, 1998 to November, 1999).
Michael G. Clarke Chief Accounting Officer of the Columbia Funds, Liberty
(Age 35) Funds, Stein Roe Funds and All-Star Funds since October,
2004 (formerly Controller of the Columbia Funds, Liberty
Funds, Stein Roe Funds and the All-Star Funds from May, 2004
to October, 2004); Assistant treasurer from June, 2002 to
May, 2004; Vice President, Product Strategy & Development of
the Liberty Funds Group from February, 2001 to June, 2002;
Assistant Treasurer of the Liberty Funds Group from
February, 2001 to June, 2002; Assistant Treasurer of the
Liberty Funds, Stein Roe Funds and the All-Star Funds from
August, 1999 to February, 2001; Audit Manager, Deloitte &
Touche LLP from May, 1997 to August, 1999.
</Table>
A-2
<Table>
<Caption>
YEAR FIRST ELECTED
OR APPOINTED
NAME/AGE AND ADDRESS POSITION WITH FUNDS TO OFFICE
- ------------------------ ------------------------- ------------------
Jeffrey R. Coleman Controller since October 2004
(Age 35) 2004
R. Scott Henderson Secretary since December 2004
(Age 45) 2004
<Caption>
NAME/AGE AND ADDRESS PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- ------------------------ ------------------------------------------------------------
Jeffrey R. Coleman Controller of the Columbia Funds, Liberty Funds, Stein Roe
(Age 35) Funds and the All-Star Funds since October, 2004 (formerly
Vice President of CDC IXIS Asset Management Services, Inc.
and Deputy Treasurer of the CDC Nvest Funds and Loomis
Sayles Funds from February, 2003 to September, 2004;
Assistant Vice President of CDC IXIS Asset Management
Services, Inc. and Assistant Treasurer of the CDC Nvest
Funds from August, 2000 to February, 2003; Tax Manager of
PFPC, Inc. from November, 1996 to August, 2000).
R. Scott Henderson Secretary of the Columbia Funds, Liberty Funds and the Stein
(Age 45) Roe Funds since December, 2004 (formerly Of Counsel Bingham
McCutchen from April 2001 to September 2004; Executive
Director and General Counsel, Massachusetts Pension Reserves
Investment Management Board from September, 1997 to March,
2001).
</Table>
A-3
APPENDIX B.1 -- TRUSTEES' COMPENSATION
For the calendar year ended December 31, 2004, the Trustees received the
following compensation for serving as Trustees:
<Table>
<Caption>
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
</Table>
(1) The Funds do not currently provide pension or retirement plan benefits to
the Trustees.
(2) During the calendar year ended December 31, 2004, Mr. Simpson deferred
$129,000 of his total compensation pursuant to the deferred compensation
plan, Mr. Theobald deferred $90,000 of his total compensation pursuant to
the deferred compensation plan and Ms. Verville deferred $55,000 of her
total compensation pursuant to the deferred compensation plan.
B-1
APPENDIX B.2 -- TRUSTEES' COMPENSATION
For purposes of Appendix B.2 and Appendix C, the following definitions apply:
<Table>
Columbia Large Cap Liberty Asset Liberty Federal
Growth Fund, Variable Allocation Fund, Securities Fund,
Series (CLCGF) Variable Series (LAAF) Variable Series (LFSF)
Liberty Money Market Liberty Small Company Colonial Small Cap
Fund, Variable Series Growth Fund, Variable Value Fund, Variable
(LMMF) Series (LSCGF) Series (CSCVF)
Colonial Strategic Columbia High Yield Columbia International
Income Fund, Variable Fund, Variable Series Fund, Variable Series
Series (CSIF) (CHYF) (CIF)
Liberty Growth & Liberty Select Value Liberty S&P 500 Index
Income Fund, Variable Fund, Variable Series Fund, Variable Series
Series (LGIF) (LSVF) (LSPIF)
</Table>
B-2
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 COMPENSATION COMPENSATION COMPENSATION COMPENSATION
FROM LAAF FROM LSCGF FROM CLCGF FROM LFSF FROM LMMF
FOR THE FISCAL FOR THE FISCAL FOR THE FISCAL FOR THE FISCAL FOR THE FISCAL
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 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 732 674 639 775 835
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.
B-3
<Table>
<Caption>
AGGREGATE AGGREGATE AGGREGATE AGGREGATE AGGREGATE AGGREGATE
COMPENSATION COMPENSATION COMPENSATION COMPENSATION COMPENSATION COMPENSATION
FROM CIF FOR FROM LGIF FROM CSIF FROM CSCVF FROM CHYF FROM LSVF
THE FISCAL FOR THE FISCAL FOR THE FISCAL FOR THE FISCAL FOR THE FISCAL FOR THE FISCAL
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
TRUSTEE 2004 2004 2004 2004 2004 2004
- ------- ------------ -------------- -------------- -------------- -------------- --------------
Douglas A. Hacker $569 $ 864 $705 $705 $499 $486
Janet Langford Kelly 627 961 781 781 552 536
Richard W. Lowry 532 801 656 656 466 455
William E. Mayer 600 907 741 741 526 513
Charles R. Nelson 597 906 739 739 523 510
John J. Neuhauser 561 845 691 691 491 479
Patrick J. Simpson(a) 543 816 668 668 476 464
Thomas E. Stitzel 628 944 773 773 552 538
Thomas C. Theobald(b) 727 1,125 913 913 634 619
Anne-Lee Verville(c) 662 1,000 817 817 580 566
Richard L. Woolworth 550 816 673 673 482 471
<Caption>
AGGREGATE
COMPENSATION
FROM LSPIF
FOR THE FISCAL
YEAR ENDED
DECEMBER 31,
TRUSTEE 2004
- ------- --------------
Douglas A. Hacker $526
Janet Langford Kelly 580
Richard W. Lowry 494
William E. Mayer 557
Charles R. Nelson 553
John J. Neuhauser 520
Patrick J. Simpson(a) 504
Thomas E. Stitzel 584
Thomas C. Theobald(b) 665
Anne-Lee Verville(c) 614
Richard L. Woolworth 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.
B-4
APPENDIX C -- TRUSTEE SHARE OWNERSHIP
<Table>
<Caption>
DOLLAR RANGE OF DOLLAR RANGE OF DOLLAR RANGE OF DOLLAR RANGE OF DOLLAR RANGE OF
EQUITY SECURITIES EQUITY SECURITIES EQUITY SECURITIES EQUITY SECURITIES EQUITY SECURITIES
NAME OF TRUSTEE OWNED IN LAAF OWNED IN CLCGF OWNED IN LSCGF OWNED IN LFSF OWNED IN LMMF
- -------------------- ----------------- ----------------- ----------------- ----------------- -----------------
DISINTERESTED
TRUSTEES
Douglas A. Hacker $0 $0 $0 $0 $0
Janet Langford Kelly 0 0 0 0 0
Richard W. Lowry 0 0 0 0 0
Charles R. Nelson 0 0 0 0 0
John J. Neuhauser 0 0 0 0 0
Patrick J. Simpson 0 0 0 0 0
Thomas E. Stitzel 0 0 0 0 0
Thomas C. Theobald 0 0 0 0 0
Anne-Lee Verville 0 0 0 0 0
Richard L. Woolworth 0 0 0 0 0
INTERESTED TRUSTEE
William E. Mayer 0 0 0 0 0
<Caption>
AGGREGATE DOLLAR
RANGE OF EQUITY
SECURITIES OWNED
IN ALL FUNDS
OVERSEEN BY
TRUSTEE IN THE
NAME OF TRUSTEE FUND COMPLEX
- -------------------- ----------------
DISINTERESTED
TRUSTEES
Douglas A. Hacker Over $100,000
Janet Langford Kelly Over $100,000
Richard W. Lowry Over $100,000
Charles R. Nelson Over $100,000
John J. Neuhauser Over $100,000
Patrick J. Simpson Over $100,000
Thomas E. Stitzel Over $100,000
Thomas C. Theobald Over $100,000
Anne-Lee Verville Over $100,000
Richard L. Woolworth Over $100,000
INTERESTED TRUSTEE
William E. Mayer $50,001-$100,000
</Table>
C-1
<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>
C-2
<Table>
<Caption>
AGGREGATE DOLLAR
RANGE OF EQUITY
SECURITIES OWNED
IN ALL FUNDS
DOLLAR RANGE OF DOLLAR RANGE OF DOLLAR RANGE OF OVERSEEN BY
EQUITY SECURITIES EQUITY SECURITIES EQUITY SECURITIES TRUSTEE IN THE
NAME OF TRUSTEE OWNED IN CSIF OWNED IN LSVF OWNED IN LSPIF FUND 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>
C-3
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.
D-1
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>
E-1
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.
E-2
APPENDIX F -- SHARES OUTSTANDING AND ENTITLED TO VOTE
For each class of the Funds' shares entitled to vote at the Meeting, the number
of shares outstanding as of September 9, 2005 was as follows:
<Table>
<Caption>
NUMBER OF SHARES
FUND OUTSTANDING AND
CLASS ENTITLED TO VOTE
----- ----------------
Liberty Federal Securities Fund, Variable Series
A 8,165,193.2950
B 8,872,283.4790
Columbia High Yield Fund, Variable Series
A 851,981.3840
B 13,574,136.3680
Columbia International Fund, Variable Series
A 31,438,710.1660
B 3,055,836.0380
Liberty Asset Allocation Fund, Variable Series
A 13,099,181.5200
B 4,322,271.6040
Liberty Growth and Income Fund, Variable Series
A 11,076,833.8050
B 2,664,319.5330
Liberty Small Company Growth Fund, Variable
Series
A 4,836,388.6060
B 98.0100
Liberty Money Market Fund, Variable Series
A 217,042,772.9040
Liberty Select Value Fund, Variable Series
A 99,314.1390
B 2,179,482.6630
Liberty S&P 500 Index Fund, Variable Series
A 8,694.9370
B 5,003,413.2770
Colonial Small Cap Value Fund, Variable Series
A 786,026.0190
B 21,028,016.0400
Colonial Strategic Income Fund, Variable Series
A 8,951,451.2600
B 5,995,086.0900
Columbia Large Cap Growth Fund, Variable Series
A 4,930,889.6170
B 807,262.0760
</Table>
F-1
APPENDIX G -- OWNERSHIP OF SHARES
<Table>
<Caption>
CLASS REGISTRATION SHARE BALANCE PERCENT CLASS TOTAL
- ----- ------------------------------ --------------- ------- ---------------
COLUMBIA LARGE CAP GROWTH VS
A Sun Life Assurance Company of 1,419,147.4500 26.51 5,352,804.3290
Canada (U.S.)
C/O Sun Life Financial
PO Box 9133
Wellesley Hills, MA 02481-9133
A Sun Life Assurance Company of 1,410,558.5190 26.35 5,352,804.3290
Canada (U.S.)
C/O Sun Life Financial
PO Box 9133
Wellesley Hills, MA 02481-9133
B Sun Life Assurance Company of 700,344.9910 81.43 860,075.6540
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 678,993.1020 12.68 5,352,804.3290
Assurance Co
Attn Alison Mitnick
1 Corporate Drive
9th Floor
Shelton, CT 06484-6208
A American Skandia Life 539,846.6010 10.09 5,352,804.3290
Assurance Co
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
LIBERTY ASSET ALLOCATION FUND VS
A Sun Life Assurance Company of 4,637,384.1600 33.47 13,855,762.6570
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
</Table>
G-1
<Table>
<Caption>
CLASS REGISTRATION SHARE BALANCE PERCENT CLASS TOTAL
- ----- ------------------------------ --------------- ------- ---------------
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 1,205,028.8730 8.70 13,855,762.6570
Assurance Co
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
LIBERTY FEDERAL SECURITIES FUND VS
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
LIBERTY MONEY MARKET FUND VS
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
</Table>
G-2
<Table>
<Caption>
CLASS REGISTRATION SHARE BALANCE PERCENT CLASS TOTAL
- ----- ------------------------------ --------------- ------- ---------------
A Keyport 31,189,923.5880 14.51 214,982,198.064
PO Box 9133
Wellesley Hills, MA 02481-9133
LIBERTY SMALL COMPANY GROWTH VS
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
COLONIAL SMALL CAP VALUE FUND
A Sun Life Assurance Company
of Canada (U.S.) 533,361.3660 67.14 794,371.9790
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 Hills, 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 54,074.2850 6.81 794,371.9790
Boston
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 17,590,887.1600 90.11 19,521,504.5900
Insurance Company
1475 Dunwoody Drive
Westchester, PA 19380-1478
COLONIAL STRATEGIC INCOME FUND
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
</Table>
G-3
<Table>
<Caption>
CLASS REGISTRATION SHARE BALANCE PERCENT CLASS TOTAL
- ----- ------------------------------ --------------- ------- ---------------
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
COLUMBIA HIGH YIELD FUND VS
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 88,760.2870 9.86 900,130.3830
Assurance Co
1 Corporate Drive
9th Floor
Shelton, CT 06484-6208
B American Express -- Managed 6,460,616.0070 58.91 10,966,960.8520
Assets
Trust: IDS Life Insurance
Company
1497 AXP Financial Ctr
Minneapolis, MN 55474-0014
A American Express -- Managed 82,287.3180 9.14 900,130.3830
Assets
Trust: American Enterprise
Life Ins
222 AXP Financial Center
Minneapolis, MN 55474-0002
</Table>
G-4
<Table>
<Caption>
CLASS REGISTRATION SHARE BALANCE PERCENT CLASS TOTAL
- ----- ------------------------------ --------------- ------- ---------------
B American Express -- Managed 1,748,221.1410 15.94 10,966,960.8520
Assets
Trust: American Enterprise
Life Ins
1497 AXP Financial Center
Minneapolis, MN 55474-0014
COLUMBIA INTERNATIONAL FUND VS
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
LIBERTY GROWTH AND INCOME FUND VS
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
LIBERTY SELECT VALUE FUND
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
</Table>
G-5
<Table>
<Caption>
CLASS REGISTRATION SHARE BALANCE PERCENT CLASS TOTAL
- ----- ------------------------------ --------------- ------- ---------------
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
LIBERTY S & P 500 INDEX FUND
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
</Table>
G-6
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); ... The Fund will not purchase
securities while borrowings (including reverse repurchase agreements) in excess
of 5% of its total assets are outstanding."
1
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)."
1
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."
1
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."
2
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 assets 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."
1
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."
2
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."
1
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."
1
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."
1
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."
1
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."
1
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)."
2
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."
1
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
1
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
2
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
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 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
4
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,
5
delivery and performance of this Agreement will not result in any
such violation;
(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;
6
(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 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
7
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
8
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 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.
9
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
10
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 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
11
may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights
generally and other equitable principles;
(n) The Acquisition Shares to be issued and delivered to the Acquired
Fund pursuant to the terms of this Agreement will at the Closing
Date have been duly authorized and, when so issued and delivered,
will be duly and validly issued shares in the Acquiring Fund, and
will be fully paid and non-assessable (except as set forth in the
Acquiring Fund Prospectus) by the Acquiring Fund, and no shareholder
of the Acquiring Fund will have any preemptive right of subscription
or purchase in respect thereof;
(o) The information to be furnished by the Acquiring Fund for use in the
Proxy Statement referred to in paragraph 5.3 shall be accurate and
complete in all material respects and shall comply with federal
securities and other laws and regulations applicable thereto; and
(p) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Acquiring Fund of the transactions contemplated by this Agreement,
except such as may be required under the 1933 Act, the 1934 Act, the
1940 Act and state securities or "Blue Sky" laws (which term as used
herein shall include the laws of the District of Columbia and of
Puerto Rico).
5. COVENANTS OF THE ACQUIRED FUND AND THE ACQUIRING FUND.
The Acquired Fund and the Acquiring Fund each hereby covenants and agrees with
the other as follows:
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
12
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
13
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;
(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
14
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:
7.1 The Acquired Fund shall have delivered to the Acquiring Fund a
certificate executed in its name by its President or a Vice
15
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
16
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 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.
17
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 Acquisition Shares by the
18
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
19
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.
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
20
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.
21
13. NOTICES.
Any notice, report, statement or demand required or permitted by any provisions
of this Agreement shall be 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.]
22
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:
23
EXHIBIT A
<Table>
<Caption>
ACQUIRED FUND AUTHORIZED CAPITAL
- ---------------------------- ----------------------------
- ---------------------------- ----------------------------
- ---------------------------- ----------------------------
</Table>
* 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
and Vincent P. Pietropaolo, 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 10:00 a.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: HTTPS://VOTE.PROXY-DIRECT.COM
VOTE VIA THE TELEPHONE: 1-866-235-4258
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. Anne-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 STEINROE VARIABLE INVESTMENT TRUST BY-LAWS
WITH RESPECT TO AMENDMENTS REQUIRING APPROVAL BY SHAREHOLDERS.
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 THE ELIMINATION OF A STEINROE VARIABLE INVESTMENT TRUST BY-LAW
PROVISION WITH RESPECT TO LENDING TRUST ASSETS TO INTERESTED PERSONS.
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.C. TO APPROVE THE ELIMINATION OF A STEINROE VARIABLE INVESTMENT TRUST BY-LAW
PROVISION WITH RESPECT TO RESTRICTION ON TRANSFERABILITY OF TRUST SHARES.
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 THE ELIMINATION OF A STEINROE VARIABLE INVESTMENT TRUST BY-LAW
PROVISION WITH RESPECT TO DEALINGS WITH THE TRUST BY INTERESTED PERSONS.
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 [ ] [ ] [ ]
3.A. TO APPROVE AN AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO BORROWING MONEY.
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 [ ] [ ] [ ]
3.B. TO APPROVE AN AMENDMENT TO CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO ISSUING SENIOR SECURITIES.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
3.C. TO APPROVE THE ELIMINATION OF CERTAIN FUND'S FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO PLEDGING ASSETS.
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 [ ] [ ] [ ]
3.D. 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 [ ] [ ] [ ]
3.E. 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 [ ] [ ] [ ]
3.F. 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 [ ] [ ] [ ]
3.G. 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 [ ] [ ] [ ]
3.H. 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 [ ] [ ] [ ]
3.I. 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 [ ] [ ] [ ]
3.J. 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
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Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
3.K. TO APPROVE THE ELIMINATION OF CERTAIN FUNDS' FUNDAMENTAL INVESTMENT
RESTRICTIONS WITH RESPECT TO SHORT SALES.
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 [ ] [ ] [ ]
3.L. 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
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Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
3.M. 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
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Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ] Fundname Drop In [ ] [ ] [ ]
3.N. 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
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3.O. 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
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ORE_15350