SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e) (2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Columbia Common Stock Fund, Inc. Columbia Growth Fund, Inc. Columbia International Stock Fund, Inc.
Columbia Special Fund, Inc. Columbia Small Cap Fund, Inc. Columbia Real Estate Equity Fund, Inc.
Columbia Balanced Fund, Inc. Columbia Daily Income Company Columbia Short Term Bond Fund, Inc.
Columbia Fixed Income Securities Fund, Inc. Columbia Oregon Municipal Bond Fund, Inc. Columbia High Yield Fund, Inc.
Columbia National Municipal Bond Fund, Inc. Columbia Technology Fund, Inc. Columbia Strategic Value Fund, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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IMPORTANT NEWS FOR COLUMBIA FUNDS SHAREHOLDERS
Dear Columbia Funds Shareholder,
The Columbia Funds (the "Funds") will hold a special meeting of shareholders on
October 7, 2003 at 10:30 a.m. (Pacific Coast Time). At this meeting, you will be
asked to vote on proposals regarding your fund(s). The first proposal is to
elect nine new directors and [three] of the now-serving directors of the boards
of the Funds. Because of the increase in size and complexity of the Funds and
the increase in responsibility of board members imposed by recent legislative
and regulatory actions, the board believes it would be appropriate to increase
the size of the board. To facilitate the expansion, the Board is proposing that
the Board be consolidated with the Liberty Funds board. The Liberty Funds are a
mutual fund complex advised by the same investment adviser that advises the
Columbia Funds, Columbia Management Advisors, Inc. Two of the Funds' directors,
Mr. Simpson and Mr. Woolworth, will be joining the Liberty Fund's board of
directors; one, Mr. Nelson, is already a Liberty director. The consolidation
would allow the Columbia Funds to expand the board with individuals possessing a
broad wealth of experience in the mutual fund industry, as well as with issues
of concern to the Columbia Funds at this time.
For shareholders holding shares in the Columbia Special Fund, Columbia Small Cap
Fund and Columbia Strategic Value Fund, you are also being asked to vote on a
proposal to change the name of the Fund. The second proposal is to change the
name of the Columbia Special Fund to "Columbia Mid Cap Growth Fund, Inc." The
third proposal is to change the name of the Columbia Strategic Value Fund to
"Columbia Strategic Investors Fund, Inc." The fourth and final proposal is to
change the name of the Columbia Small Cap Fund to "Columbia Small Cap Growth
Fund, Inc." The Board believes passage of these proposals will reduce potential
confusion with other Funds managed by Columbia Management Advisors, Inc., as
well as better describe each Fund's investment strategy. As a shareholder you
will only be asked to vote on those proposals applicable to the Funds in which
you hold shares.
THE BOARD OF DIRECTORS OF EACH FUND RECOMMENDS THAT YOU VOTE FOR EACH OF THE
PROPOSALS
This special meeting will be held at the Portland Art Museum's Whitsell
Auditorium (located at SW Park and SW Madison, Portland, Oregon). It is very
important that you vote your shares at your earliest convenience. Your fund has
retained the services of Georgeson Shareholder Communications, Inc. to assist
shareholders with the voting process. As we get closer to October 7th,
shareholders who have not yet voted may receive a call from Georgeson
Shareholders Communications reminding them to vote.
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. YOU CAN VOTE
EASILY AND QUICKLY BY MAIL, OR IN PERSON. A SELF-ADDRESSED, POSTAGE-PAID
ENVELOPE HAS BEEN ENCLOSED FOR YOUR CONVENIENCE. PLEASE HELP YOUR FUND AVOID THE
EXPENSE OF A FOLLOW-UP MAILING BY VOTING TODAY!
If you have any questions regarding the Proxy Statement, please call Georgeson
Shareholders Communications at (866)238-4083.
We appreciate your participation and prompt response in these matters and thank
you for your continued support.
Sincerely,
Jeff B. Curtis
President
Q&A
VOTING THE PROPOSALS UNDER THE COLUMBIA FUNDS PROXY SOLICITATION
The following questions and answers provide an overview of the key features of
the proposals and of the information contained in this Proxy Statement. Please
review the full Proxy Statement prior to casting your vote.
1. WHAT IS BEING PROPOSED?
PROPOSAL NO. 1: The Board of Directors (each a "Board" and collectively the
"Boards") of the Columbia Funds (each a "Fund" and collectively the "Funds") are
proposing the election of nine new directors as well as [three] of the
now-serving directors of each Fund's Board.
PROPOSALS NO. 2, 3 AND 4: Shareholders of the Columbia Special Fund, the
Columbia Strategic Value Fund and the Columbia Small Cap Fund will be asked to
vote on a separate proposal to change the name of their Fund. The Board is
proposing changing the name of the Special Fund to "Columbia Mid Cap Growth
Fund, Inc.," the name of the Strategic Value Fund to "Columbia Strategic
Investors Fund, Inc.," and the Small Cap Fund to "Columbia Small Cap Growth
Fund, Inc."
2. WHY IS THE ELECTION OF DIRECTORS BEING PROPOSED?
Each Fund's Board currently has four directors (Messrs. Patrick J. Simpson,
Richard L. Woolworth, Charles R. Nelson and James C. George). Pursuant to the
Funds retirement policy, Mr. George will resign from the Boards after the
regular meeting scheduled to be held July 2004.
Due to the size and complexity of the Funds, as well as recent legislative and
regulatory changes, the Board believes it would be appropriate to increase the
size of the Boards. It proposes that the expansion be accomplished by electing
to the Board of each of the Funds the current directors/trustees of the Liberty
Funds, a mutual fund complex also advised by Columbia Management Advisors, the
Funds' adviser. The new directors would, among other things, add to the Board's
experience in evaluating distribution and consolidation issues that are of
importance to the Funds. Two of the Funds' directors, Mr. Simpson and Mr.
Woolworth, will be joining the Liberty Fund's board of directors; one, Mr.
Nelson, is already a Liberty director. In addition, legislative and regulatory
changes have increased the responsibility of mutual fund boards. By expanding
the Board, the directors will have the flexibility to appoint special committees
to focus on specific matters.
Please review the Proposal No. 1 section of this Proxy for more information
regarding directors' terms and the rights of the Boards of the Funds regarding
the election of directors.
3. HOW MANY VOTES ARE REQUIRED TO ELECT THE NEW DIRECTORS?
If a quorum of shareholders is present at the Special Meeting, the 12 nominees
who receive the greatest number of votes cast at that meeting will be elected
directors. Please note that if you send in a signed proxy card but you give no
voting instructions, your shares will be voted FOR the nominees proposed by the
Board.
Each Fund's Board of directors recommends that you vote "FOR" the election of
each of the nominees under proposal 1.
4. WHY ARE THE FUND NAME CHANGES BEING PROPOSED FOR THE SMALL CAP FUND, SPECIAL
FUND AND COLUMBIA STRATEGIC VALUE FUND?
The Funds' Boards believe the proposed new fund names will reduce potential
confusion with other similarly named funds also managed by the Adviser and
distributed by the same underwriter for the three funds being renamed. In
addition, the Board believes the proposed names more accurately reflect the
investment strategy of the Fund.
5. HOW MANY VOTES ARE REQUIRED TO PASS PROPOSALS NO. 2, 3 AND 4?
If a quorum of shareholders is present at the Special meeting, proposals 2, 3
and 4 will be approved if the votes cast in favor of the proposal exceed the
votes cast against it for the respective fund.
Each Fund's Board of directors recommends that you vote "FOR" proposals 2, 3 and
4.
6. WHY SHOULD I VOTE ON THESE PROPOSALS?
As part owner of the Funds, it is important that you are represented in the
voting. For this reason, the services of a professional proxy solicitor have
been retained to contact all Columbia Fund shareholders. If we do not receive a
ballot from you, it is possible that you will receive a call or letter from our
solicitor requesting you to vote.
7. HAVE THE BOARDS OF DIRECTORS APPROVED THESE PROPOSALS?
Yes, the Board of each Fund has reviewed the proposal(s) applicable to its Fund
and believes they are in the best interests of the shareholders. They
unanimously recommend that you vote "FOR" for all proposals before you.
6. WHOM DO I CALL FOR MORE INFORMATION?
You may call a representative at (866) 238-4083 for assistance.
COLUMBIA COMMON STOCK FUND, INC.
COLUMBIA GROWTH FUND, INC.
COLUMBIA INTERNATIONAL STOCK FUND, INC.
COLUMBIA SPECIAL FUND, INC.
COLUMBIA SMALL CAP FUND, INC.
COLUMBIA REAL ESTATE EQUITY FUND, INC.
COLUMBIA BALANCED FUND, INC.
COLUMBIA DAILY INCOME COMPANY
COLUMBIA SHORT TERM BOND FUND, INC.
COLUMBIA FIXED INCOME SECURITIES FUND, INC.
COLUMBIA OREGON MUNICIPAL BOND FUND, INC.
COLUMBIA HIGH YIELD FUND, INC.
COLUMBIA NATIONAL MUNICIPAL BOND FUND, INC.
COLUMBIA TECHNOLOGY FUND, INC.
COLUMBIA STRATEGIC VALUE FUND, INC.
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NOTICE OF JOINT SPECIAL MEETINGS OF SHAREHOLDERS
-------------------------------
To the Shareholders:
Notice is given that a Joint Special Meeting of Shareholders (the
"Special Meeting") of each of the mutual funds identified above, each an Oregon
corporation (each a "Fund" and together the "Funds") will be held at the
Portland Art Museum's Whitsell Auditorium (located at SW Park and SW Madison,
Portland, Oregon) on October 7, 2003 at 10:30 a.m., Pacific Time, for the
following purposes:
1. To elect 12 directors to each of the Funds.
2. To change the name of the Columbia Special Fund, Inc. to the
Columbia Mid Cap Growth Fund, Inc.
3. To change the name of the Columbia Strategic Value Fund, Inc.
to the Columbia Strategic Investors Fund, Inc.
4. To change the name of the Columbia Small Cap Fund, Inc. to the
Columbia Small Cap Growth Fund, Inc.
5. Other Business. To transact any other business that properly
comes before the Special Meeting or any adjournment or
adjournments thereof.
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Shareholders of record at the close of business on August ___, 2003 are
entitled to receive notice of and to vote at the Funds' Special Meeting and any
adjournment thereof.
By Order of the Boards of Directors
/s/ MARK A. WENTZIEN
Mark A. Wentzien
Secretary
________________, 2003
Portland, Oregon
YOUR VOTE IS IMPORTANT
SHAREHOLDERS OF A FUND WILL VOTE SEPARATELY ON EACH PROPOSAL THAT APPLIES TO
THAT FUND. YOU WILL RECEIVE A PROXY CARD FOR EACH FUND IN WHICH YOU ARE
INVESTED. THE BOARD OF DIRECTORS OF YOUR FUND RECOMMENDS THAT YOU VOTE "FOR" THE
NOMINEES AND "FOR" EACH PROPOSAL.
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INSTRUCTIONS FOR EXECUTING PROXY CARD
The following general rules for signing proxy cards may be of
assistance to you and may help to avoid the time and expense involved in
validating your vote if you fail to sign your proxy card[s] properly.
1. INDIVIDUAL ACCOUNTS: Sign your name exactly as it appears on the proxy card.
2. JOINT ACCOUNTS: Either party may sign, but the name of the party signing
should conform exactly to a name shown on the proxy card.
3. ALL OTHER ACCOUNTS: The capacity of the individual signing the proxy card
should be indicated unless it is reflected in the name on the proxy card. For
example:
Registration Valid Signature
CORPORATE ACCOUNTS
(1) ABC Corp.............................John Doe, Treasurer
(2) ABC Corp
c/o John Doe, Treasurer............John Doe, Treasurer
(3) ABC Corp. Profit Sharing Plan........John Doe, Trustee
TRUST ACCOUNTS
(1) ABC Trust............................Jane Doe, Trustee
(2) Jane Doe, Trustee
u/t/d 12/28/78...................Jane Doe
CUSTODIAL OR ESTATE ACCOUNTS
(1) John Smith, Cust
f/b/o John Smith, Jr. UGMA.......John Smith
(2) John Smith Jr.........................John Smith Jr., Executor
3
COLUMBIA COMMON STOCK FUND, INC.
COLUMBIA GROWTH FUND, INC.
COLUMBIA INTERNATIONAL STOCK FUND, INC.
COLUMBIA SPECIAL FUND, INC.
COLUMBIA SMALL CAP FUND, INC.
COLUMBIA REAL ESTATE EQUITY FUND, INC.
COLUMBIA BALANCED FUND, INC.
COLUMBIA DAILY INCOME COMPANY
COLUMBIA SHORT TERM BOND FUND, INC.
COLUMBIA FIXED INCOME SECURITIES FUND, INC.
COLUMBIA OREGON MUNICIPAL BOND FUND, INC.
COLUMBIA HIGH YIELD FUND, INC.
COLUMBIA NATIONAL MUNICIPAL BOND FUND, INC.
COLUMBIA TECHNOLOGY FUND, INC.
COLUMBIA STRATEGIC VALUE FUND, INC.
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JOINT PROXY STATEMENT
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SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON OCTOBER 7, 2003
This Joint Proxy Statement and form of proxy enclosed are furnished in
connection with a solicitation of proxies by the Boards of Directors of each of
the mutual funds identified above, each an Oregon corporation (each a "Fund" and
collectively the "Funds"), to be voted at the Special Meeting of Shareholders
(the "Special Meeting") of the Fund to be held on October 7, 2003 at 10:30 a.m.,
at the Portland Art Museum's Whitsell Auditorium (located at SW Park and SW
Madison, Portland, Oregon), for the purposes set forth in the accompanying
Notice of Joint Special Meetings of Shareholders.
If the enclosed proxy card or proxy cards are properly executed and
returned in time to be voted at the Special Meeting, the proxies named in the
proxy cards will vote the shares represented by the proxy in accordance with the
instructions marked on the proxy cards. Executed proxies that are unmarked will
be voted for approval of the proposals described in this Joint Proxy Statement.
This Joint Proxy Statement and the related Notice of Joint Special
Meetings of Shareholders are expected to be first mailed to shareholders of
record on or about ________________, 2003. The principal executive offices of
the Funds are located at 1301 SW Fifth Avenue, Portland, Oregon 97201-5601.
Copies of the Funds' most recent Annual and Semi-Annual Reports are available
upon request, without charge, by (i) writing to the Funds at
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Liberty Funds Distributor, Inc., One Financial Center, Boston, MA 02111-2621,
(ii) calling toll free 1-800-426-3750, or (iii) visiting the Fund's Web site at
www.columbiafunds.com or the Securities and Exchange Commission's Web site at
www.sec.gov.
PROPOSALS APPLICABLE TO EACH FUND
The following table summarizes the proposals applicable to each Fund:
PROPOSAL # PROPOSAL DESCRIPTION APPLICABLE FUND(S) PAGE
- ---------- -------------------- ------------------ ----
1. To elect as directors the nominees All [ ]
presented in proposal 1
2. To change the name of the Columbia Columbia Special Fund, Inc. [ ]
Special Fund, Inc.
3. To change the name of the Columbia Columbia Strategic Value Fund, Inc. [ ]
Strategic Value Fund, Inc.
4. To change the name of the Columbia Columbia Small Cap Fund, Inc. [ ]
Small Cap Fund, Inc.
SHARES ENTITLED TO VOTE AND QUORUM
The holders of record of shares (the "Shareholders") of each Fund as of
the close of business on August [__], 2003, the record date for the
determination of Shareholders entitled to notice of and to vote at the Special
Meeting (the "Record Date"), are entitled to one vote for each share held and a
fractional vote for each fractional share. The table below sets forth the number
of shares by class outstanding for each Fund as of the Record Date.
NAME OF FUND AND CLASS OF SHARES NUMBER OF SHARES
OUTSTANDING
Columbia Common Stock Fund, Inc.: Class A
Class B
Class D
Class Z
Columbia Growth Fund, Inc.: Class A
Class B
Class D
Class G
Class Z
Columbia International Stock Fund, Inc.: Class A
Class B
Class D
Class Z
Columbia Special Fund, Inc.: Class A
Class B
Class D
2
Class G
Class T
Class Z
Columbia Small Cap Fund, Inc.: Class Z
Columbia Real Estate Equity Fund, Inc.: Class A
Class B
Class D
Class Z
Columbia Balanced Fund, Inc.: Class A
Class B
Class D
Class Z
Columbia Daily Income Company: Class Z
Columbia Short Term Bond Fund, Inc.: Class A
Class B
Class D
Class G
Class T
Class Z
Columbia Fixed Income Securities Fund, Inc.: Class A
Class B
Class D
Class Z
Columbia Oregon Municipal Bond Fund, Inc.: Class A
Class B
Class D
Class Z
Columbia High Yield Fund, Inc.: Class A
Class B
Class D
Class Z
Columbia National Municipal Bond Fund, Inc.: Class A
Class B
Class D
Class Z
Columbia Technology Fund, Inc.: Class A
Class B
Class D
Class Z
Columbia Strategic Value Fund, Inc. Class A
Class B
Class D
Class Z
3
A quorum for the conduct of business at the Special Meeting of each
Fund requires the presence, in person or by proxy, of holders of a majority of
the outstanding shares of that Fund. If a quorum to transact business or the
vote required to approve any proposal described in this Joint Proxy Statement is
not present at the Special Meeting for a Fund, the persons named as proxies may
propose one or more adjournments of the Special Meeting for a total of not more
than 120 days in the aggregate to obtain a quorum or to permit further
solicitation of proxies. Any such adjournment may be approved by the affirmative
vote of the holders of a majority of the Fund's shares present in person or by
proxy at the Special Meeting, even though less than a quorum. The persons named
as proxies will vote the shares represented by the proxy upon such proposal as
determined in their discretion.
If a proxy is properly executed and returned and includes instructions
to withhold authority to vote, represents a broker "non-vote" (that is, a proxy
from a broker or nominee indicating that such person has not received
instructions from the beneficial owner or other person entitled to vote Fund
shares on a particular matter with respect to which the broker or nominee does
not have a discretionary power) or is marked with an abstention (collectively,
"abstentions"), the Fund shares represented thereby will be considered to be
present at the Special Meeting for purposes of determining the existence of a
quorum for the transaction of business. Abstentions will not constitute a vote
"for" or "against" any proposal or adjournment to permit further solicitation of
proxies.
All classes of a Fund will vote together as a single class on each
applicable proposal.
Shareholders can vote by marking the enclosed proxy card(s) and
returning the card(s) in the postage-paid envelope or by following the
instructions on the enclosed voter instruction insert. Any shareholder who has
given a proxy has the right to revoke the proxy any time prior to its exercise:
o By written notice of the proxy's revocation to Mark A. Wentzien,
Secretary of each Fund, at the above address prior to the Special
Meeting;
o By the subsequent execution and return of another proxy prior to the
Special Meeting; or
o By voting in person at the Special Meeting and giving oral notice of
revocation to the Chairman of the Special Meeting.
A shareholder who attends the Special Meeting, however, is not required
to revoke the proxy and vote in person. Each valid, unrevoked proxy will be
voted at the Special Meeting in accordance with the instructions given in the
proxy. If no instructions are given, shares represented by the proxy will be
voted for the nominees for director named in this Joint Proxy Statement and for
Proposals 2, 3 and 4.
PRINCIPAL SHAREHOLDERS AND SHARES HELD BY MANAGEMENT
Attached as Exhibit A is a list of all persons known by the Funds to be
the record or beneficial owners of 5% or more of the outstanding shares of any
Fund as of the Record Date. Exhibit A also shows the number of shares of each
Fund owned by each director and nominee and by all directors, nominees and
officers of the Funds as a group as of the Record Date.
4
SOLICITATION OF PROXIES
Columbia Management Advisors, Inc. (the "Adviser"), located at 1301 SW
Fifth Avenue, Portland, Oregon 97201, serves as the investment adviser for each
of the Funds.
In addition to solicitations of proxies by mail, proxies may be
solicited by officers and employees of the Adviser, personally or by telephone
or electronically, without additional compensation. Copies of solicitation
materials will be furnished to fiduciaries, custodians, and brokerage houses for
forwarding to beneficial owners of the shares held in their names. In addition,
the Funds have hired an unaffiliated proxy solicitor, Georgeson Shareholder
Communications, Inc. ("Georgeson"), to assist in the solicitation of proxies.
The estimated costs of Georgeson's services to the Funds ranges from
approximately $152,000 to $335,000, depending upon the extent of services
provided. All costs of printing and mailing proxy materials and the costs and
expenses of holding the Special Meeting, including all amounts paid to
Georgeson, will be paid by the [Adviser/Funds].
5
PROPOSAL NO. 1: TO ELECT DIRECTORS OF THE FUND
ALL FUNDS
The first proposal to be considered at the Special Meeting is the
election of directors of each Fund. The purpose of the proposal is to elect nine
new directors, as well as [three] of the incumbent directors, to each Fund's
Board of Directors (each a "Board" and together the "Boards"). None of the
nominees listed below, except for Messrs. Charles R. Nelson, Patrick J. Simpson
and Richard L. Woolworth, now serves as a director of any Fund. Each of the
incumbent directors was previously elected to the Boards by the shareholders of
the Funds and currently oversees the 15 Funds and the 14 portfolios of the CMG
Fund Trust (together, the "Columbia Funds"). The CMG Fund Trust is also managed
by the Adviser. Each of Mr. Nelson and the proposed nine new directors now serve
on the Boards of Trustees of funds and portfolios managed by the Adviser or
affiliates of the Adviser (the "Liberty Funds").
The Boards currently have four directors. Under the Boards' retirement
policy, each director of the Funds must agree to resign as of the end of the
first regular Board meeting following the director's 72nd birthday. Pursuant to
this policy, Mr. J. Jerry Inskeep, Jr. resigned from the Boards on April 30,
2003, and Mr. James C. George is required to resign from the Boards after the
regular Board meeting currently scheduled to be held in July 2004. As a result,
absent further action, the number of directors on the Board will be reduced to
three by July 2004.
The Boards believe that it would be appropriate to replace the two
retiring directors. In addition, because of the increase in size and complexity
of the Columbia Funds over the past year and because of the increase in the
responsibilities of fund directors generally imposed by recent legislative and
regulatory actions, the Boards believe that it would be appropriate to augment
the size of the Boards beyond five directors. The Boards recognize that the
identification, recruitment and assimilation of additional qualified directors
would likely take significant time and require an increase in the directors'
current compensation levels.
To facilitate the expansion of the Boards, the Adviser has suggested
that the members of the Columbia Funds boards be combined with those of the
Liberty Funds boards. The combination would be accomplished by electing the nine
members of the Liberty Funds boards to the Columbia Funds boards and electing
Messrs. Simpson and Woolworth to the Liberty Funds boards. The end result would
be to have the same members serve on each of the several boards of the Columbia
Funds and the Liberty Funds.
The proposed combination would permit the boards of the Columbia Funds
and the Liberty Funds to meet concurrently and to develop uniform policies and
procedures. The nine new directors would add to the Boards their expertise and
the experience they have gained from serving on the boards of the Liberty Funds,
including their experience in evaluating distribution and consolidation issues
that are of importance to the Funds. Although the combined board would have more
funds to oversee, the larger boards would have the flexibility to appoint
special committees to focus on specific matters. For example, it is anticipated
that the consolidated boards would delegate certain responsibilities to
6
separate audit, governance, contracts and investments committees. Additionally,
combining the boards may result in economies of scale, reducing fixed costs
associated with the Boards. Accordingly, it is expected that the combined boards
would require only one independent counsel and that the Funds' share of the
compensation paid to the directors and trustees of the combined boards would be
lower than the compensation that would be payable to the directors of the Funds
if there were no consolidation and additional directors were added.
Following the consolidation, the nine new directors would represent 75%
of each of the Boards. Since Board action normally requires a majority vote, the
new nominees would effectively control the Boards. Matters on which fund boards
typically vote include changes to the adviser and the advisory contract,
agreements with the transfer agent, custodian, administrator and other service
providers, appointment of independent auditors and counsel, adoption of
investment and other policies, and approval of fund mergers. Although Messrs.
Nelson, Simpson and Woolworth would continue as members of the combined Boards,
they would no longer be able to carry the vote on any of these or other matters.
Of course, the new directors would have the same fiduciary duty to the Funds'
shareholders as the continuing members, and approval of certain of the matters
described above would require separate shareholder approval.
To provide assurance to the shareholders of the Funds, Columbia
Management Group ("CMG"), the parent of the Adviser, has represented to the
Funds, among other things, that there will be no material change in the
investment management, distribution, administrative or shareholder services
provided to the Funds as a result of the proposed combination, without prior
discussion with the Board. Additionally, when the combination is completed, Mr.
George has agreed to resign. CMG has agreed to pay Mr. George a retirement
payment equal to ___________.
The Boards met in person or by telephone on [seven] occasions from
January 30, 2003 to August ___, 2003 to discuss the proposed consolidation.
Members of the Boards, including a special committee comprised of Messrs.
Simpson and Woolworth, also met with members of the Liberty Funds boards on May
6 and 7, 2003 and August 12 and 13, 2003. On the basis of these meetings and the
information and representations provided by the Adviser and its parents, the
Boards unanimously approved the combination and determined to recommend the
combination to the shareholders of the Funds.
The Investment Company Act of 1940 (the "1940 Act") generally provides
that at all times a majority of directors of each Fund's Board must be elected
by shareholders and that new directors cannot be elected by a board of directors
to fill vacancies unless, after the election, two-thirds of the directors have
been elected by shareholders. To assure compliance with the two-thirds
requirement of the 1940 Act, shareholders are being asked to elect the [three]
incumbent directors and the nine new nominees.
7
Each of the nominees has agreed to serve if elected. If a nominee
declines to serve before the meeting or otherwise becomes unavailable for
election, the proxy confers discretionary power on the persons named therein to
vote in favor of a substitute nominee. If elected, the nominees will hold office
until the next meeting of shareholders at which directors are elected and until
their successors are elected and qualified. Mr. George plans to resign as a
director on the date the nominees are elected.
As permitted under Oregon law, the Funds are not required to hold, and
do not anticipate holding, annual meetings. Thus, the directors will be elected
for indefinite terms. Any director may resign, however, and any director may be
removed at any meeting of shareholders called for that purpose by at least a
majority of the votes entitled to be cast for the election of directors. If a
vacancy exists for any reason, the remaining directors may fill the vacancy by
electing another director so long as two-thirds of the directors have been
elected by shareholders. If at any time less than a majority of the directors
holding office have been elected by shareholders, the directors then in office
will call a shareholders' meeting within 60 days for the purpose of electing
directors. As a condition to election as a director, in accordance with the
Board's retirement policy, each nominee will be required to submit in writing a
resignation as a director that becomes effective as of the adjournment of the
first regularly scheduled meeting of the directors following the director's 72nd
birthday.
The Board of each Fund (other than the International Stock Fund) met
eight times during 2002, and each incumbent director attended all of these
meetings. The International Stock Fund met nine times, and each incumbent
director attended all of the meetings of the International Stock Fund. The Board
of each Fund has three standing committees composed exclusively of all the
Fund's disinterested directors, the Audit Committee, the Compensation Committee
and the Nominating Committee. The Audit Committee considers and engages, on an
annual basis, the Funds' independent auditors, reviews with management and the
independent auditors the financial statements included in the Fund's Annual
Report to Shareholders, and generally oversees the audit process. The Audit
Committee held one meeting in 2002. The Compensation Committee is responsible
for determining director compensation. The Compensation Committee held one
meeting in 2002. The Nominating Committee is responsible for selecting and
nominating candidates for election to serve as directors. The Nominating
Committee held one meeting in 2002 and will not consider nominees recommended by
Fund shareholders.
Set forth below are the 12 nominees for election as directors of each
Fund (the "Nominees"), together with information about them. Other directorships
include positions of director, general partner or trustee of companies that are
required to file reports with the Securities and Exchange Commission (the
"SEC"), other than registered investment companies in the Fund Complex.
DISINTERESTED DIRECTORS OR NOMINEES
- -----------------------------------
8
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, ADDRESS AND AGE POSITION(S) TERM OF OFFICE PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER
HELD WITH FUNDS AND LENGTH OF DURING PAST 5 YEARS DIRECTOR OR DIRECTORSHIPS
TIME SERVED* NOMINEE HELD BY DIRECTOR
Douglas A. Hacker (1) New Nominee N/A Executive Vice President - 114 None
P.O. Box 66100 Strategy of United Airlines
Chicago, IL 60666 (airline) since December
(47 years old) 2002 (formerly President of
UAL Loyalty Services from
September 2001 to December
2002; Executive Vice
President and Chief
Financial Officer of United
Airlines from March 1993 to
September 2001).
Janet Langford Kelly (1) New Nominee N/A Executive Vice President - 114 None
One Kellogg Square Corporate Development and
Battle Creek, MI 49016 Administration, General
(45 years old) Counsel and Secretary,
Kellogg Company (food
manufacturer) since
September 1999; (formerly
Senior Vice President,
Secretary and General
Counsel, Sara Lee
Corporation (branded,
packaged, consumer-products
manufacturer) from January
1995 to September 1999).
Richard W. Lowry (1)(2) New Nominee N/A Private investor since 116 None
10701 Charleston Dr. August 1987 (formerly
Vero Beach, FL 32963 Chairman and Chief Executive
(67 years old) Officer, U.S. Plywood
Corporation (building
products manufacturer)).
Charles R. Nelson (1) Director Served for Professor of Economics, 114 None
Department of Economics 1 year University of Washington,
University of Washington since January 1976; Ford and
Seattle, WA 98195 Louisa Van Voorhis Professor
(60 years old) of Political Economy,
University of Washington,
since September 1993;
Director, Institute for
Economic Research,
University of Washington,
since September 2001;
Adjunct Professor of
Statistics, University of
Washington since September
1980; Associate Editor,
Journal of Money Credit and
Banking,
9
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, ADDRESS AND AGE POSITION(S) TERM OF OFFICE PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER
HELD WITH FUNDS AND LENGTH OF DURING PAST 5 YEARS DIRECTOR OR DIRECTORSHIPS
TIME SERVED* NOMINEE HELD BY DIRECTOR
since September 1993;
consultant on econometric
and statistical matters.
John J. Neuhauser (1)(2)(3) New Nominee N/A Academic Vice President and 117 Saucony, Inc.
84 College Road Dean of Faculties since (athletic
Chestnut Hill, MA 02467-3838 August 1999, Boston College footwear);
(60 years old) (formerly Dean, Boston SkillSoft Corp.
College School of Management (E-Learning).
from September 1977 to
September 1999).
Patrick J. Simpson (1) Director Served for 3 Lawyer, Perkins Coie LLP 114 None
1211 S.W. 5th Avenue Years
Suite 1500
Portland, OR 97204
(58 years old)
Thomas E. Stitzel (1) New Nominee N/A Business consultant since 114 None
2208 Tawny Woods Pl. 1999 (formerly Professor of
Boise, ID 83706 Finance from 1975 to 1999
(67 years old) and Dean from 1977 to 1991,
College of Business, Boise
State University); Chartered
Financial Analyst.
Thomas C. Theobald (1) New Nominee N/A Managing Director, William 114 Anixter
27 West Monroe Street, Blair Capital Partners International
Suite 3500 (private equity investing) (network support
Chicago, IL 60606 since September 1994. equipment
(68 years old) distributor),
Jones
Lang
LaSalle
(real
estate
management
services)
and
MONY
Group
(life
insurance).
Anne-Lee Verville (1)(3) New Nominee N/A Author and speaker on 115 Chairman of the
359 Stickney Hill Road educational systems needs Board, Enesco
Hopkinton, NH 03229 (formerly General Manager, Group, Inc.
(58 years old) Global Education Industry designed,
from 1994 to 1997, and imported and
President, Applications distributed
Solutions Division from 1991 giftware and
to 1994, IBM Corporation collectibles).
(global education and global
applications).
10
NUMBER OF
PORTFOLIOS IN
FUND COMPLEX
NAME, ADDRESS AND AGE POSITION(S) TERM OF OFFICE PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER
HELD WITH FUNDS AND LENGTH OF DURING PAST 5 YEARS DIRECTOR OR DIRECTORSHIPS
TIME SERVED* NOMINEE HELD BY DIRECTOR
Richard L. Woolworth(1) Director Served for 12 Chairman/CEO, The Regence 114 The Regence
100 S.W. Market St. #1500 Years Group Group, Regence
Portland, OR 97207 BlueCross
(62 years old) BlueShield of
Oregon; NW
Natural, a
natural gas
service provider
INTERESTED NOMINEES
- -------------------
NUMBER OF
PORTFOLIOS IN
POSITION(S) TERM OF OFFICE FUND COMPLEX OTHER
NAME, ADDRESS AND AGE HELD WITH AND LENGTH OF PRINCIPAL OCCUPATION(S) OVERSEEN BY DIRECTORSHIPS
FUNDS TIME SERVED DURING PAST 5 YEARS DIRECTOR HELD BY DIRECTOR
William E. Mayer (1)(2)(4) New Nominee N/A Managing Partner, Park 116 Lee Enterprises
399 Park Avenue Avenue Equity Partners (print media),
Suite 3204 (private equity) since WR Hambrecht +
New York, NY, 10022 February 1999 (formerly Co. (financial
(62 years old) Founding partner, service
Development Capital LLC from provider) and
November 1996 to February First Health
1999. (healthcare).
Joseph R. Palombo (2)(4) New Nominee; Vice President Executive Vice President and 115 None
One Financial Center Vice since January Chief Operating Officer of
Boston, MA 02111 President 2003 CMG since December 2001;
(50 years old) Director, Executive Vice
President and Chief
Operating Officer of the
Adviser since April 2003;
Vice President of the
Columbia Funds since January
2003 (formerly Chief
Operations Officer of Mutual
Funds, Liberty Financial
Companies, Inc. from August
2000 to November, 2001;
Executive Vice President of
Stein Roe & Farnham
Incorporated (Stein Roe)
from April 1999 to April
2003; Director of Colonial
Management Associates, Inc.
(Colonial) from April 1999
to April 2003; Director of
Stein Roe from September
2000 to
11
April 2003); President of
Liberty Funds and Galaxy Funds
since February 2003 (formerly
Vice President from September
2002 to February 2003; Manager
of Stein Roe Floating Rate Limited
Liability Company since
October 2000 (formerly Vice
President of the Liberty
Funds from April, 1999 to
August 2000; Chief Operating
Officer and Chief Compliance
Officer, Putnam Mutual Funds
from December 1993 to March
1999).
There is no family relationship between any of the directors or nominees listed
above.
* Each director serves for an indefinite term until the date the director
resigns, retires or is removed in accordance with the Bylaws of each Fund.
(1) Includes service as a director or trustee of the CMG Fund Trust (14 funds)
and the Liberty Funds (85 funds).
(2) Mr. Lowry, Mr. Neuhauser and Mr. Mayer each serve as director/trustee of
the Liberty All-Star Funds, currently consisting of 2 funds, which are
advised by an affiliate of the Adviser.
(3) Mr. Neuhauser and Mrs. Verville serve as disinterested directors of
Columbia Management Multi-Strategy Hedge Fund, LLC, which is advised by the
Adviser. Mr. Palombo is an interested director of the Columbia Management
Hedge Fund, LLC.
(4) "Interested person" as defined by the 1940 Act. Mr. Mayer is an interested
person because of his affiliation with WR Hambrecht + Co. WR Hambrecht +
Co. is a registered broker-dealer and over the past six months the Funds
have, from time to time, used WR Hambrecht + Co. to execute portfolio
transactions. Mr. Palombo is an interested person as a director and officer
of the Adviser and shareholder of the ultimate parent of the Adviser.
Share Ownership. The following table sets forth the dollar range of
shares owned by each director and nominee for director of the Funds as of June
30, 2003 of (i) each individual Fund and (ii) all of the funds in the Fund
Complex:
DISINTERESTED DIRECTORS OR NOMINEES:
- -----------------------------------
NAME OF FUND DOUGLAS A. HACKER JANET LANGFORD KELLY RICHARD W. LOWRY
Common Stock Fund None None None
Balanced Fund None None None
Growth Fund None None None
Special Fund None None None
Small Cap Fund None None None
International Stock Fund None None None
Real Estate Equity Fund None None None
Strategic Value Fund None None None
Technology Fund None None None
Columbia Daily Income Company None None None
Fixed Income Securities Fund None None None
Short Term Bond Fund None None None
High Yield Fund None None None
Oregon Municipal Bond Fund None None None
12
National Municipal Bond Fund None None None
AGGREGATE DOLLAR RANGE OF FUND SHARES
IN FUNDS OVERSEEN BY DIRECTOR OR
NOMINEE IN FUND COMPLEX:
$10,001-$50,000 $10,001-$50,000 OVER $100,000
NAME OF FUND CHARLES R. NELSON JOHN J. NEUHAUSER
Common Stock Fund None None
Balanced Fund None None
Growth Fund None None
Special Fund $10,001-$50,000 None
Small Cap Fund None None
International Stock Fund $10,001-$50,000 None
Real Estate Equity Fund None None
Strategic Value Fund None None
Technology Fund None None
Columbia Daily Income Company None None
Fixed Income Securities Fund None None
Short Term Bond Fund None None
High Yield Fund None None
Oregon Municipal Bond Fund None None
National Municipal Bond Fund None None
AGGREGATE DOLLAR RANGE OF FUND SHARES
IN FUNDS OVERSEEN BY DIRECTOR OR
NOMINEE IN FUND COMPLEX:
$10,001 -$50,000 OVER $100,000
NAME OF FUND PATRICK J. SIMPSON THOMAS E. STITZEL
Common Stock Fund None None
Balanced Fund $1-$10,000 None
Growth Fund $50,001-$100,000 None
Special Fund $1-$10,000 None
Small Cap Fund None None
International Stock Fund None None
Real Estate Equity Fund None None
Strategic Value Fund None None
Technology Fund None None
Columbia Daily Income Company None None
Fixed Income Securities Fund None None
Short Term Bond Fund None None
High Yield Fund None None
Oregon Municipal Bond Fund None None
National Municipal Bond Fund None None
AGGREGATE DOLLAR RANGE OF FUND SHARES
IN FUNDS OVERSEEN BY DIRECTOR OR
NOMINEE IN FUND COMPLEX:
OVER $100,000 $50,001-$100,000
13
NAME OF FUND THOMAS C. THEOBALD ANNE-LEE VERVILLE RICHARD W. WOOLWORTH
Common Stock Fund None None $10,001-$50,000
Balanced Fund None None None
Growth Fund None None $1-$10,000
Special Fund None None $1-$10,000
Small Cap Fund None None $1-$10,000
International Stock Fund None None $1-$10,000
Real Estate Equity Fund None None $1-$10,000
Strategic Value Fund None None $1-$10,000
Technology Fund None None None
Columbia Daily Income Company None None $10,001-$50,000
Fixed Income Securities Fund None None None
Short Term Bond Fund None None None
High Yield Fund None None None
Oregon Municipal Bond Fund None None $1-$10,000
National Municipal Bond Fund None None None
AGGREGATE DOLLAR RANGE OF FUND SHARES
IN FUNDS OVERSEEN BY DIRECTOR OR
NOMINEE IN FUND COMPLEX:
OVER $100,000 NONE* $10,001-$50,000
INTERESTED NOMINEES:
- -------------------
NAME OF FUND WILLIAM E. MAYER JOSEPH A. PALOMBO
Common Stock Fund None None
Balanced Fund None None
Growth Fund None None
Special Fund None None
Small Cap Fund None None
International Stock Fund None None
Real Estate Equity Fund None None
Strategic Value Fund None None
Technology Fund None None
Columbia Daily Income Company None None
Fixed Income Securities Fund None None
Short Term Bond Fund None None
High Yield Fund None None
Oregon Municipal Bond Fund None None
National Municipal Bond Fund None None
AGGREGATE DOLLAR RANGE OF FUND SHARES
IN FUNDS OVERSEEN BY DIRECTOR OR
NOMINEE IN FUND COMPLEX:
OVER $100,000 $1-10,000
* Because Ms. Verville's share ownership in the Liberty Funds is held through
her deferred compensation plan, her ownership is not required to be
disclosed.
As of July 31, 2003, none of the disinterested directors or nominees or
members of their immediate families owned any securities of the Adviser or any
other entity directly or indirectly controlling, controlled by, or under common
control with the Adviser.
14
COMPENSATION OF DIRECTORS
Each disinterested director receives an annual aggregate fee of $30,000 for his
services as a director of the Funds and trustee of the CMG Fund Trust, plus an
additional $4,000 for each regular board meeting attended and $1,000 for each
special board meeting attended, and is reimbursed for expenses incurred in
attending all meetings. Each disinterested director also receives $500 for each
board committee meeting in which the director participates. Each disinterested
director serving on the Audit Committee (other than any chairman of the Audit
Committee) is entitled to an additional annual aggregate fee in the amount of
$1,000 for his services in this capacity, and any chairman of the Audit
Committee is entitled to an additional aggregate fee in the amount of $2,000.
None of the directors receives any form of pension or retirement benefit
compensation from the Funds. One-third of the foregoing directors' fees and
expenses are allocated equally among the Columbia Funds and the portfolios of
the CMG Fund Trust, and the remaining directors' fees and expenses are allocated
in proportion to each fund's average daily net assets for the preceding fiscal
quarter. The following table sets forth compensation received by each Fund's
directors for 2002 who are standing for reelection. No officer of the Funds
received any compensation from the Funds in 2002. [Upon approval of proposal no.
1, the new Boards will set the compensation levels of the Liberty Funds and
Columbia Funds board of directors/trustees. (For the current fiscal year, a
director of the Liberty Funds is paid in the aggregate, approximately
$_____________.) The combined amount of compensation paid to the Columbia Funds
Board will be more than the amount of compensation received now. However, it is
expected that each Fund will pay less on a pro rata basis.]
AGGREGATE COMPENSATION FROM FUND PATRICK J. SIMPSON RICHARD L. WOOLWORTH CHARLES R. NELSON
- ---------------------------------------- ------------------------- ---------------------- ------------------------
Common Stock Fund $3,330 $3,330 $1,601
Growth Fund $5,203 $5,203 $2,917
International Stock Fund $2,916 $2,916 $ 373
Special Fund $3,804 $3,804 $1,934
Small Cap Fund $3,533 $3,533 $1,743
Real Estate Fund $4,076 $4,076 $2,125
Balanced Fund $4,482 $4,482 $2,411
Columbia Daily Income Company $6,046 $6,046 $3,509
Short Term Bond Fund $1,393 $1,393 $ 240
Fixed Income Securities Fund $3,032 $3,032 $1,392
Oregon Municipal Bond Fund $3,092 $3,092 $1,434
High Yield Fund $2,655 $2,655 $1,127
National Municipal Bond Fund $1,108 $1,108 $ 40
Strategic Value Fund $2,189 $2,189 $ 799
Technology Fund $1,092 $1,092 $ 28
TOTAL COMPENSATION FROM
FUND COMPLEX(1)(2) $57,000 $57,000 $120,182(2)
(1) These amounts reflect the total compensation paid to each director for his
service to the Columbia Funds (which was comprised in 2002 of the 15 Funds
and 7 portfolios of the CMG Fund Trust) for the calendar year ended
December 31, 2002. Mr. Nelson was elected as a director of each of the Funds
in July 2002. Information includes compensation Messrs. Woolworth and
Simpson received as trustees of CMG Fund Trust which is also advised by the
Adviser. Mr. Nelson was elected as a trustee of CMG Fund Trust on January
27, 2003 and
15
received no compensation from CMG Fund Trust in 2002. Messrs. Woolworth and
Simpson did not receive compensation from any of the Liberty Funds in 2002.
(2) Mr. Nelson's total compensation includes compensation for his service in
2002 as an independent trustee of the Liberty Funds.
REQUIRED VOTE
If a quorum of shareholders is present for a Fund at the Special
Meeting, the 12 nominees for election as directors who receive the greatest
number of votes cast at the Special Meeting will be elected directors of the
Fund. If your shares are represented at the meeting but you give no voting
instructions, your shares will be voted FOR all nominees named herein. If the
nominees are not approved by shareholders of a Fund, the Board of Directors will
consider what further action should be taken.
EACH FUND'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF
EACH OF THE NOMINEES UNDER PROPOSAL 1.
PROPOSAL NO. 2: TO CHANGE THE NAME OF THE COLUMBIA SPECIAL FUND, INC. TO THE
COLUMBIA MID CAP GROWTH
SPECIAL FUND
At a meeting of the Board of Directors of the Columbia Special Fund,
Inc. (the "Special Fund") on _______________, the Board voted unanimously to
change the name of the Special Fund to "Columbia Mid Cap Growth Fund, Inc.",
subject to approval by the Special Fund's shareholders. This change is being
made to reflect more clearly the Fund's principal investment strategy. The
Fund's investment objective and investment policies and restrictions as set
forth in the Fund's Prospectus and Statement of Additional Information will not
change, except that the Fund will be required to invest 80% of its assets in the
stocks of mid-cap companies, i.e., those stocks with a market capitalization
substantially similar to the market capitalization of stocks in the Russell
Midcap Index. The Fund is required to provide 60 days' notice to shareholders if
it decides to change this policy. The 80% investment requirement will not
materially affect the current investment practices of the Special Fund.
If the Fund's shareholders approve this proposal 2, the Special Fund's
Amended and Restated Articles of Incorporation would be amended to reflect the
change of name from "Columbia Special Fund, Inc." to "Columbia Mid Cap Growth
Fund, Inc." The 80% investment requirement will be effective upon appropriate
disclosure being made in the Special Fund's prospectus and statement of
additional information.
REQUIRED VOTE
If a quorum of shareholders is present at the Special Meeting, proposal
2 will be approved if the votes cast in favor of the proposal exceed the votes
cast against it.
THE FUND'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL
2.
16
PROPOSAL NO. 3: TO CHANGE THE NAME OF THE COLUMBIA STRATEGIC VALUE FUND, INC.
TO THE COLUMBIA STRATEGIC INVESTORS FUND, INC.
STRATEGIC VALUE FUND
At a meeting of the Board of Directors of the Columbia Strategic Value
Fund Inc. (the "Strategic Value Fund") on _______________, the board voted
unanimously to change the name of the Strategic Value Fund to "Columbia
Strategic Investors Fund, Inc.", subject to approval by the Strategic Value
Fund's shareholders. The Fund's Board believes the proposed new name will
eliminate potential confusion with other funds in the Columbia Funds Complex. In
addition, the Adviser believes that this new name better reflects the investment
style of the portfolio managers. While the portfolio managers focus on
purchasing undervalued companies, there is more attention devoted to the growth
and earnings of the companies they evaluate than normally associated with a
strict value fund. The Fund's investment objective and investment policies and
restrictions as set forth in the Fund's Prospectus and Statement of Additional
Information will not change.
If the Fund's shareholders approve this proposal 3, the Fund's Amended
and Restated Articles of Incorporation would be amended to reflect the change of
name from "Columbia Strategic Value Fund, Inc." to "Columbia Strategic Investors
Fund, Inc."
REQUIRED VOTE
If a quorum of shareholders is present at the Special Meeting, proposal
3 will be approved if the votes cast in favor of the proposal exceed the votes
cast against it.
THE FUND'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL
3.
PROPOSAL NO. 4: TO CHANGE THE NAME OF THE COLUMBIA SMALL CAP FUND, INC. TO THE
COLUMBIA SMALL CAP GROWTH FUND, INC.
SMALL CAP FUND
At a meeting of the Board of Directors of the Columbia Small Cap Fund
Inc. (the "Small Cap Fund") on _______________, the Board voted unanimously to
change the name of the Small Cap Fund to "Columbia Small Cap Growth Fund, Inc.",
subject to approval by the Small Cap Fund's shareholders. This change is being
made to reflect more clearly the Fund's principal investment strategy. The
Fund's investment objective and investment policies and restrictions as set
forth in the Fund's Prospectus and Statement of Additional Information will not
change, except that the Fund will be required to invest 80% of its assets in the
stocks of small-cap companies, i.e., those stocks with a market capitalization
substantially similar to the market capitalization of stocks in the Russell 2000
Index. The Fund is required to provide 60 days' notice to shareholders if it
decides to change this policy. The 80% investment requirement will not
materially affect the current investment practices of the Small Cap Fund.
This change is also being made to differentiate the Fund's name from
that of a similarly-named fund in the Columbia Funds Complex. The Adviser has
undertaken an effort to rebrand each
17
Fund under the "Columbia" name. Accordingly, the Fund would have a name which
would be identical to that of the Liberty Small Cap Fund, after rebranding is
completed. Changing the name of the Fund pursuant to this proposal will help to
identify the Fund and avoid possible confusion with a similarly-named fund.
If the Fund's shareholders approve this proposal 4, the Fund's Amended
and Restated Articles of Incorporation would be amended to reflect the change of
name from "Columbia Small Cap Fund, Inc." to "Columbia Small Cap Growth Fund,
Inc." The 80% investment requirement will be effective upon appropriate
disclosure being made in the Small Cap Fund's prospectus and statement of
additional information.
REQUIRED VOTE
If a quorum of shareholders is present at the Special Meeting, proposal
4 will be approved if the votes cast in favor of the proposal exceed the votes
cast against it.
THE FUND'S BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL
4.
INFORMATION ON THE INDEPENDENT ACCOUNTANTS
The 1940 Act provides that every registered investment company shall be
audited at least once each year by independent public accountants selected by a
majority of the directors of the investment company who are not interested
persons of the investment company or its investment adviser.
The Board of each Fund, including a majority of the independent
directors, has selected PricewaterhouseCoopers LLP to be the Fund's independent
public accountants to audit and certify the Fund's financial statements for the
fiscal year ending August 31, 2003.
The independent accountants examine annual financial statements for the
Funds and provide other non-audit and tax-related services to the Funds.
Representatives of PricewaterhouseCoopers LLP are not expected to be present at
the Special 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.
PricewaterhouseCoopers LLP has no direct or material indirect financial
interest in any Fund or in the Adviser, other than receipt of fees for services
to the Funds. PricewaterhouseCoopers LLP or one of its predecessors has been the
independent public accountants for the Funds since 1967.
FEES PAID TO PRICEWATERHOUSECOOPERS LLP
Audit Fees. For the fiscal year ended December 31, 2002, the
approximate fee for professional services rendered for the audit of the annual
financial statements of each of the Funds was as follows:
18
FUND NAME 2002
Columbia Common Stock Fund $29,900
Columbia Growth Fund $31,700
Columbia International Stock Fund $36,800
Columbia Special Fund $33,500
Columbia Small Cap Fund $28,900
Columbia Real Estate Equity Fund $24,500
Columbia Technology Fund $27,400
Columbia Strategic Value Fund $28,600
Columbia Balanced Fund $33,900
Columbia Short Term Bond Fund $26,500
Columbia Fixed Income Securities Fund $32,000
Columbia National Municipal Bond Fund $27,100
Columbia Oregon Municipal Bond Fund $33,200
Columbia High Yield Fund $25,400
Columbia Daily Income Company $26,100
TOTAL AUDIT FEES $445,500
Audit-Related Fees. For the fiscal year ended December 31, 2002,
PricewaterhouseCoopers was paid approximately $55,500 for assurance and related
services in connection with its performance of each audit. These services
related to the review of SEC filings and certain procedures performed relating
to fund mergers.
Tax Fees. For the fiscal year ended December 31, 2002,
PricewaterhouseCoopers LLP was paid approximately $58,700 for tax-related
services rendered to the Funds. These amounts include services for tax reporting
and documentation, tax compliance and tax advice.
All Other Fees. For the fiscal year ended December 31, 2002,
PricewaterhouseCoopers LLP was paid approximately $87,000 for all other services
rendered to the Funds. These services included non-audit procedures performed
upon the conversion of the Funds' accounting system. In addition, for the fiscal
year ended December 31, 2002, PricewaterhouseCoopers LLP was paid approximately
$239,000 for all other non-audit services rendered to the Adviser and any entity
controlling, controlled by, or under common control with the Adviser that
provides ongoing services to the Funds. These fees primarily relate to the
audits of the Funds' Adviser and distributor and required internal control
reports for the Funds' transfer agent. The Funds changed their transfer agent
and distributor and the fees paid by those additional entities are included
above.
Audit Committee's Pre-Approval Policies and Procedures. The Funds'
Audit Committee adopted a Policy for Engagement of Independent Auditors For
Audit and Non-Audit Services on July 30, 2003 (the "Policy") which establishes
the policies and procedures for pre-approval of audit and non-audit services
provided to any Fund, its Adviser and certain of its Adviser's affiliates by the
Fund's independent auditors. The Policy uses a combination of specific and
general pre-approval procedures.
19
On a yearly basis, at a regularly scheduled meeting of the Audit
Committee, each Fund's Chief Financial Officer or Treasurer submits to the
committee schedules of the types of services to be provided for the next fiscal
year that are subject to general pre-approval. The schedules provide a
description of each type of service that is subject to general pre-approval and,
where possible, fee caps for each service. The Audit Committee then reviews and
approves the types of services to be provided for the next fiscal year and may
add to, or subtract from, the list of general pre-approved services from time to
time.
If, subsequent to the approval of the schedules of pre-approved
services, a Fund or Adviser determines that it would like to the engage the
independent auditors to perform a service not included on the pre-approved
schedule, the Fund will need specific approval. The Fund's management is
required to provide the Audit Committee a written explanation detailing the
proposed engagement and why the work is being proposed to be performed by the
independent auditor. The Fund's Chief Financial Officer or Treasurer is required
to arrange for a discussion of the proposed service at the next scheduled Audit
Committee meeting. In the event timing for the project is critical and needs to
be considered before the next meeting of the Audit Committee, a pre-designated
committee member may approve or deny the request on behalf of the Audit
Committee. In the pre-designated member's discretion, a special meeting of the
Audit Committee may be called to consider the proposal. In any case, the
independent auditor may not commence any such project unless and until specific
approval has been given.
Because the audit committee's pre-approval policies and procedures were
implemented after the completion of the audit for the last fiscal year, none of
the non-audit fees described above was pre-approved by the audit committee. The
Adviser and Audit Committee of each Fund considered whether these non-audit
services rendered by PricewaterhouseCoopers LLP were compatible with maintaining
the independence of PricewaterhouseCoopers LLP in its audit of the Funds.
PricewaterhouseCoopers LLP, in accordance with Independence Standards Board
Standard No. 1, has confirmed to the Audit Committee for each Fund in a letter
dated April 22, 2003 that they are independent accountants (within the meaning
of federal securities laws) with respect to the Fund.
EXECUTIVE OFFICERS OF THE FUNDS
The officers of the Funds are listed below, together with their
addresses, ages and principal business occupations. The officers hold office
indefinitely, except that any officer may resign or may be removed by a vote of
a majority of the directors at any regular meeting or special meeting of the
directors. All officers are "interested persons" as defined by the 1940 Act and
receive no fees or salaries from any of the Funds. Unless stated otherwise, the
business address of each officer is 1300 SW Sixth Avenue, Portland, Oregon
97201.
POSITION(S)
HELD WITH LENGTH OF TIME
NAME AND AGE FUNDS SERVED PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- --------------------------------- --------------- --------------------- ------------------------------------------------
J. Kevin Connaughton (38) Chief Since December 2002 Treasurer of Liberty Funds, Liberty All-Star
245 Summer Street Financial Funds, Stein Roe Funds and Galaxy Funds;
Boston, MA 02110 Officer Senior Vice President of Liberty Funds Group
20
LLC. Prior to his current positions, Mr.
Connaughton was Controller of Liberty Funds,
Liberty All-Star Funds and Stein Roe Funds;
Vice President of Liberty Funds Group LLC and
Colonial Management Associates, Inc.; Senior
Tax Manager, Coopers & Lybrand LLP.
Jeff B. Curtis (49) President and 3 Years Managing Director, Executive Vice President
Assistant and Chief Operating Officer-West Coast of the
Secretary Adviser. Prior to his current positions with
the Adviser, Mr. Curtis was President, Senior
Vice President and General Counsel of the
Adviser. Mr. Curtis is also currently the
President of Columbia Trust Company and
Columbia Financial Center Incorporated,
affiliates of the Adviser.
Richard J. Johnson (45) Chief Since January 2003 Head of Equities/Portland and Senior Vice
Investment President of the Adviser; Chief Investment
Officer and Officer and Senior Vice President of Columbia
Senior Vice Trust Company. Prior to his current positions
President with the Adviser, Mr. Johnson was Chief
Investment Officer and Vice President of the
Adviser.
Joseph A. Palombo (50) Vice President Since January 2003 Chief Operating Officer of Columbia Management
One Financial Center Group, Inc., the parent of the Adviser, since
Boston, MA 02111 December 2001; Director, Executive Vice
President and Chief Operating Officer of the
Adviser since April 2003; (formerly Chief
Operations Officer of Mutual Funds, Liberty
Financial Companies, Inc. from August 2000 to
November, 2001; Executive Vice President of
Stein Roe & Farnham Incorporated (Stein Roe)
from April 1999 to April 2003; Director of
Colonial Management Associates, Inc. from
April 1999 to April 2003; Director of Stein
Roe from September 2000 to April 2003);
President of Liberty Funds since February
2003; Manager of Stein Roe Floating Rate
Limited Liability Company since October 2000
(formerly Vice President of Liberty Funds
from April, 1999 to August 2000; Chief
Operating Officer and Chief Compliance
Officer, Putnam Mutual Funds from December
1993 to March 1999).
21
Mark A. Wentzien (43) Secretary 3 Years Vice President of the Adviser. Prior to his
current positions, Mr. Wentzien was Associate
Counsel of the Adviser.
ADDITIONAL INFORMATION
Liberty Funds Distributor, Inc., One Financial Center, Boston,
Massachusetts 02111-2621, is the principal underwriter for each of the Funds and
is authorized under a distribution agreement with each Fund to sell shares of
the Fund.
Liberty Funds Services, Inc., One Financial Center, Boston,
Massachusetts 02111, is the Funds' transfer and dividend crediting agent.
State Street Bank & Trust Co., 225 Franklin Street, Boston,
Massachusetts 02101, acts as the Funds' general custodian for both domestic and
foreign securities.
The Adviser is the Funds' administrator.
OTHER MATTERS TO COME BEFORE THE SPECIAL MEETING
AND SHAREHOLDER PROPOSALS
Although the Notice of Special Meeting of Shareholders provides for the
transaction of any other business that properly comes before the meeting, the
Board of Directors has no knowledge of any matters to be presented at the
meeting other than the matters described in this Joint Proxy Statement. The
enclosed proxy, however, gives discretionary authority to the proxy holders to
vote in accordance with their judgment if any other matters are presented.
None of the Fund's Bylaws require that a Fund hold an annual meeting of
shareholders. A Fund will be required, however, to call special meetings of
shareholders in accordance with the requirements of the 1940 Act to seek
approval of, among other matters, new investment advisory contracts or changes
in the Fund's fundamental policies, such as its investment objective or
investment restrictions.
Because none of the Funds holds regular meetings of shareholders, the
anticipated date of the next shareholders meeting cannot be provided.
Shareholders who wish to submit a proposal for consideration at a meeting of
shareholders must deliver notice of the proposal within a reasonable time before
the Fund mails its proxy materials. As of ____________, 2003, the Funds had not
received any shareholder proposals and thus none is included in these proxy
materials.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. SHAREHOLDERS WHO DO
NOT EXPECT TO ATTEND THE SPECIAL MEETING IN PERSON ARE URGED TO COMPLETE, SIGN,
DATE AND RETURN THEIR PROXY CARDS IN THE ENCLOSED POSTAGE-PAID ENVELOPE, OR BY
FOLLOWING THE INSTRUCTIONS ON THE ENCLOSED VOTER INSTRUCTION INSERT.
22
By Order of the Board of Directors,
/s/ MARK A. WENTZIEN
Mark A. Wentzien
Secretary
Portland, Oregon
______________, 2003
23
[INSERT NAME OF FUND]
This proxy is solicited on behalf of the Board of Directors of the Fund. The
Fund's Board of Directors recommends that you vote IN FAVOR of [each/the]
Proposal. This proxy, when properly executed, will be voted in the manner
directed herein and absent direction will be voted "FOR" each item below. This
proxy will be voted in accordance with the holder's best judgement as to any
other matter.
PLEASE MARK VOTES AS IN THIS EXAMPLE:
1. Election of Directors: To elect 12 directors to the Fund:
01. Douglas A. Hacker 02. Janet Langford Kelly 03. Richard W. Lowry FOR WITHHOLD FOR ALL
04. William E. Mayer 05. Charles R. Nelson 06. John J. Neuhauser ALL ALL EXCEPT
07. Joseph A. Palombo 08. Patrick J. Simpson 09. Thomas E. Stitzel [ ] [ ] [ ]
10. Thomas C. Theobald 11. Anne-Lee Verville 12. Richard L. Woolworth
To withhold authority to vote for any nominee(s) mark "For All Except" and write
the nominee number(s) on the line provided.
- ----------------------------------------------------------------------------------------------------------------------
[INCLUDE APPLICABLE
PROPOSAL BELOW FOR
Columbia Special
Fund, Inc./ Columbia
Strategic Value
Fund, Inc./ Columbia
Small Cap Fund,
Inc., AS APPLICABLE]
- ----------------------------------------------------------------------------------------------------------------------
2. To change the name of the Columbia Special Fund, Inc. to the "Columbia Mid
Cap Growth Fund, Inc."
FOR AGAINST ABSTAIN
Special Fund [ ] [ ] [ ]
3. To change the name of the Columbia Strategic Value Fund, Inc. to the
"Columbia Strategic Investors Fund, Inc."
FOR AGAINST ABSTAIN
Strategic Value Fund [ ] [ ] [ ]
4. To change the name of the Columbia Small Cap Fund, Inc. to the "Columbia
Small Cap Growth Fund, Inc."
FOR AGAINST ABSTAIN
Small Cap Fund [ ] [ ] [ ]
Note: Please sign exactly as your name appears on this proxy
card. When signing as executor, administrator, attorney,
trustee, guardian, or as custodian for a minor, please give
your full title as such. If you are signing for a corporation,
please sign the full corporate name and indicate the signer's
office. If the shareholder is a partner, please sign in the
partnership's name.
--------------------------------------------------------------
Signature
--------------------------------------------------------------
Signature (if held jointly)
--------------------------------------------------------------
Date
PLEASE VOTE PROMPTLY
------
Your vote is important, no matter how many share you own. Please vote on the
reverse side of this proxy card and sign in the space(s) provided. Return your
completed proxy card in the enclosed envelope today.
You may receive additional proxies for other accounts. These are not duplicates:
you should sign and return each proxy card in order for your votes to be
counted.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. The signers of this
proxy hereby appoint each of Joseph R. Palombo, Jeff B. Curtis, and Mark A.
Wentzien proxies of the signers, with power of substitution, to vote at the
Special Meeting of Shareholders to be held in Portland, Oregon, on Tuesday,
October 7, 2003, and at any adjournments, as specified herein and in accordance
with their best judgment, on any other business that may properly come before
this meeting.
AFTER CAREFUL REVIEW, THE BOARD OF DIRECTORS UNANIMOUSLY HAS RECOMMENDED A VOTE
"FOR" ALL MATTERS.
EXHIBIT A
PRINCIPAL SHAREHOLDERS OF THE FUNDS
At August [__], 2003, each director and all officers and directors, as
a group, owned of record or beneficially less than 1% of each Fund, other than
for the following Funds:
FUND NUMBER OF FUND SHARES PERCENT HELD
COLUMBIA TECHNOLOGY FUND
[Name]
[Title]
TOTAL
COLUMBIA NATIONAL MUNICIPAL BOND FUND
[Name]
[Title]
TOTAL
[OTHER FUNDS?]
At August [__], 2003, to the knowledge of the Funds, no person owned of
record or beneficially more than 5% of the outstanding shares of any Fund except
the following record owners:
COLUMBIA COMMON STOCK FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
COLUMBIA GROWTH FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
A-1
COLUMBIA INTERNATIONAL STOCK FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
COLUMBIA SPECIAL FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
COLUMBIA SMALL CAP FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
COLUMBIA REAL ESTATE EQUITY FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
COLUMBIA BALANCED FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
A-2
COLUMBIA DAILY INCOME COMPANY
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
COLUMBIA SHORT TERM BOND FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
COLUMBIA FIXED INCOME SECURITIES FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
COLUMBIA OREGON MUNICIPAL BOND FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
A-3
COLUMBIA HIGH YIELD FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
COLUMBIA NATIONAL MUNICIPAL BOND FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
COLUMBIA TECHNOLOGY FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
COLUMBIA STRATEGIC VALUE FUND
NAME AND ADDRESS SHARES OWNED OF RECORD AT _________, 2003
- ---------------- -----------------------------------------
A-4