SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
LIBERTY FUNDS TRUST I
Liberty High Yield Securities Fund
Liberty Income Fund
Liberty Strategic Income Fund
Liberty Tax-Managed Aggressive Growth Fund
Liberty Tax-Managed Value Fund
LIBERTY FUNDS TRUST II
Liberty Intermediate Government Fund
Liberty Money Market Fund
Liberty Newport Greater China Fund
Liberty Newport Japan Opportunities Fund
LIBERTY FUNDS TRUST III
Liberty Contrarian Fund
Liberty Contrarian Equity Fund
Liberty Contrarian Income Fund
Liberty Federal Securities Fund
Liberty Newport Global Utilities Fund
Liberty Newport International Equity Fund
Liberty Real Estate Fund
Liberty Select Value Fund
The Liberty Fund
Liberty Special Fund
LIBERTY FUNDS TRUST IV
Liberty Counselor Balanced Portfolio
Liberty Counselor Growth Portfolio
Liberty Counselor Income Portfolio
Liberty High Yield Municipal Fund
Liberty Tax-Exempt Fund
Liberty Tax-Exempt Insured Fund
Liberty Municipal Money Market Fund
Liberty Utilities Fund
LIBERTY FUNDS TRUST V
Colonial California Tax-Exempt Fund
Colonial Connecticut Tax-Exempt Fund
Colonial Massachusetts Tax-Exempt Fund
Colonial New York Tax-Exempt Fund
Colonial Ohio Tax-Exempt Fund
LIBERTY FUNDS TRUST VI
Liberty Growth & Income Fund
Liberty Newport Asia Pacific Fund
LIBERTY FUNDS TRUST VII
Liberty Newport Europe Fund
Liberty Newport Tiger Fund
LIBERTY FLOATING RATE ADVANTAGE FUND
------------------------------------------
(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.
[ ] 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:
2) Aggregate number of securities to which transaction applies:
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):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
<PAGE>
[ ] 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:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
<PAGE>
LIBERTY MUTUAL FUNDS
ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111
Dear Shareholder:
Your Fund will hold a special meeting on December 27, 2000 at 10:00 a.m. Eastern
time, at the offices of Colonial Management Associates, Inc. (Colonial). A
formal Notice of Special Meetings of Shareholders appears on the next few pages,
and is followed by the proxy statement which explains in more detail the
proposals to be considered. We hope that you can attend the Meeting in person;
however, we urge you in any event to vote your shares at your earliest
convenience.
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. YOU CAN VOTE
EASILY AND QUICKLY BY MAIL, BY FAX (NOT AVAILABLE FOR ALL SHAREHOLDERS; REFER TO
ENCLOSED PROXY INSERT), BY PHONE 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!
Your Fund is using Shareholder Communications Corporation (SCC), a professional
proxy solicitation firm, to assist shareholders in the voting process. As the
date of the special meeting approaches, if we have not yet received your vote,
you may receive a telephone call from SCC reminding you to exercise your right
to vote.
Please take a few moments to review the details of each proposal. If you have
any questions regarding the proxy statement, please feel free to call SCC toll
free at 1-877-518-9416 between the hours of 9:00 a.m. and 11:00 p.m. Eastern
time. Our hearing impaired shareholders may call Liberty Funds Services, Inc.,
the Liberty Mutual Funds' transfer agent, at 1-800-528-6979 if you have special
TTD equipment.
We appreciate your participation and prompt response in these matters and thank
you for your continued support.
Sincerely,
/s/ Stephen E. Gibson
Stephen E. Gibson, President
November 17, 2000
G-60/598D-1000
<PAGE>
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON DECEMBER 27, 2000
LIBERTY FUNDS TRUST I
Liberty High Yield Securities Fund
Liberty Income Fund
Liberty Strategic Income Fund
Liberty Tax-Managed Aggressive Growth Fund
Liberty Tax-Managed Value Fund
LIBERTY FUNDS TRUST II
Liberty Intermediate Government Fund
Liberty Money Market Fund
Liberty Newport Greater China Fund
Liberty Newport Japan Opportunities Fund
LIBERTY FUNDS TRUST III
Liberty Contrarian Fund
Liberty Contrarian Equity Fund
Liberty Contrarian Income Fund
Liberty Federal Securities Fund
Liberty Newport Global Utilities Fund
Liberty Newport International Equity Fund
Liberty Real Estate Fund
Liberty Select Value Fund
The Liberty Fund
Liberty Special Fund
LIBERTY FUNDS TRUST IV
Liberty Counselor Balanced Portfolio
Liberty Counselor Growth Portfolio
Liberty Counselor Income Portfolio
Liberty High Yield Municipal Fund
Liberty Tax-Exempt Fund
Liberty Tax-Exempt Insured Fund
Liberty Municipal Money Market Fund
Liberty Utilities Fund
LIBERTY FUNDS TRUST V
Liberty California Tax-Exempt Fund
Liberty Connecticut Tax-Exempt Fund
Liberty Massachusetts Tax-Exempt Fund
Liberty New York Tax-Exempt Fund
Liberty Ohio Tax-Exempt Fund
LIBERTY FUNDS TRUST VI
Liberty Growth & Income Fund
Liberty Newport Asia Pacific Fund
LIBERTY FUNDS TRUST VII
Liberty Newport Europe Fund
Liberty Newport Tiger Fund
LIBERTY FLOATING RATE ADVANTAGE FUND
1
<PAGE>
NOTICE IS HEREBY GIVEN that Special Meetings of Shareholders of the Liberty
Mutual Funds listed above will be held at 10:00 a.m. Eastern time on Wednesday,
December 27, 2000, at the offices of Colonial Management Associates, Inc., One
Financial Center, Boston, Massachusetts 02111-2621 for these purposes:
1. SHAREHOLDERS OF EACH LIBERTY MUTUAL FUND: To elect a Board of Trustees
of the Trust of which such Liberty Mutual Fund is a series;
2. SHAREHOLDERS OF LIBERTY NEWPORT GLOBAL UTILITIES FUND AND LIBERTY
NEWPORT INTERNATIONAL EQUITY FUND: To approve a new portfolio
management agreement for each Fund with Newport Fund Management, Inc.;
3. SHAREHOLDERS OF THE LIBERTY FUND: To approve a sub-advisory agreement
with Unibank Securities, Inc.;
4. SHAREHOLDERS OF LIBERTY MONEY MARKET FUND AND LIBERTY MUNICIPAL MONEY
MARKET FUND: To authorize the Funds to cast votes for the election of a
Board of Trustees of the SR&F Base Trust; and
5. To consider and act upon any other matters that properly come before
the meeting and any adjourned session of the meeting.
Shareholders of record at the close of business on September 29, 2000, are
entitled to notice of and to vote at the meeting and any adjourned session.
By order of the Board of Trustees,
William J. Ballou, Secretary
November 17, 2000
NOTICE: YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. YOU
CAN VOTE EASILY AND QUICKLY BY PHONE, BY MAIL, BY FAX (NOT AVAILABLE
FOR ALL SHAREHOLDERS; REFER TO ENCLOSED PROXY INSERT) OR IN PERSON.
PLEASE HELP YOUR FUND AVOID THE EXPENSE OF A FOLLOW-UP MAILING BY
VOTING TODAY!
2
<PAGE>
SPECIAL MEETINGS OF SHAREHOLDERS
LIBERTY MUTUAL FUNDS
PROXY STATEMENT
GENERAL INFORMATION
November 17, 2000
This proxy statement, which is divided into the following four parts, is a
combined proxy statement for all of the Liberty Mutual Funds listed in the
Notice of Special Meetings of Shareholders:
<TABLE>
<S> <C> <C>
Part 1. Overview. Page 3
Part 2. Proposals. Page 6
Part 3. Information Regarding Voting and Shareholder
Meetings. Page 33
Part 4. Fund Information. Page 36
</TABLE>
If at any time you have any questions regarding the information contained in the
proxy statement, please call SCC toll free at 1-877-518-9416 between the hours
of 9:00 a.m. and 11:00 p.m. Eastern time. This proxy statement was first mailed
to shareholders on or about November 17, 2000.
PART 1. OVERVIEW.
The Boards of Trustees of the Trusts listed on the Notice of Special Meetings of
Shareholders (Trusts) and of the SR&F Base Trust have called Special Meetings of
Shareholders for 10:00 a.m. Eastern time, Wednesday, December 27, 2000, for the
purposes described in the accompanying Notice of Special Meetings of
Shareholders and as summarized below. The purpose of this proxy statement is to
provide you with additional information regarding the proposals to be voted on
at the meeting and to request your proxy to vote in favor of the proposals.
Throughout this proxy statement, the Funds listed on the Notice of Special
Meetings of Shareholders are referred to collectively as the "Liberty Mutual
Funds" and the Trusts listed on the Notice of Special Meetings of Shareholders
are referred to collectively as the "Trusts."
The following table lists the proposals, the affected Funds and the page of the
proxy statement the proposals are discussed in greater detail:
3
<PAGE>
<TABLE>
<CAPTION>
LIBERTY MUTUAL FUND WHOSE
SHAREHOLDERS ARE ENTITLED TO TABLE OF
PROPOSALS VOTE CONTENTS
<S> <C> <C>
1. To elect a Board of Trustees Each Liberty Mutual Fund listed Page 6
of each Trust. on the Notice of Special
Meetings
2. To approve new portfolio Liberty Newport Global Page 13
management agreements with Newport Utilities Fund and Liberty
Fund Management, Inc. Newport International Equity
Fund
3. To approve a sub-advisory The Liberty Fund Page 21
agreement with Unibank Securities,
Inc.
4. To authorize Liberty Money Liberty Money Market Fund Page 27
Market Fund and Liberty Municipal and Liberty Municipal Money
Money Market Fund to cast votes Market Fund
for the election of a Board of
Trustees of the SR&F Base Trust.
</TABLE>
VOTING PROCESS.
You can vote in any one of the following four ways:
a. By mail, by filling out and returning the enclosed proxy card;
b. By phone, by calling toll free 1-877-518-9416 between the
hours of 9:00 a.m. and 11:00 p.m. Eastern time;
c. By fax (not available for all shareholders; refer to enclosed
proxy insert); or
d. In person at the Meeting.
Shareholders who owned shares on the record date, September 29, 2000,
are entitled to vote at the meeting. Shareholders are entitled to cast one vote
for each share owned on the record date. If you choose to vote by mail or by
fax, and you are an individual account owner, please sign exactly as your name
appears on the proxy card. Either owner of a joint account may sign the proxy
card, but the signer's name must exactly match the name that appears on the
card. Whichever method you choose, please carefully read the proxy statement
which outlines in more detail the proposals you are asked to vote on.
Set forth below is a summary of each proposal that the Boards of Trustees
recommend that you consider:
PROPOSAL 1. ELECT A BOARD OF TRUSTEES OF EACH TRUST.
4
<PAGE>
We ask that you consider the election of eleven nominees as members of the Board
of Trustees of each Trust. These eleven nominees, if elected, will serve as
Trustees of each of the Trusts until the next meeting of shareholders or until a
successor is elected, or until death, resignation, removal or retirement.
PROPOSAL 2. APPROVE NEW PORTFOLIO MANAGEMENT AGREEMENTS WITH NEWPORT
FUND MANAGEMENT, INC. (LIBERTY NEWPORT GLOBAL UTILITIES FUND
AND LIBERTY NEWPORT INTERNATIONAL EQUITY FUND).
We ask that you approve new portfolio management agreements with Newport Fund
Management, Inc. for Liberty Newport Global Utilities Fund and Liberty Newport
International Equity Fund.
PROPOSAL 3. APPROVE A SUB-ADVISORY AGREEMENT WITH UNIBANK SECURITIES, INC.
(THE LIBERTY FUND).
We ask that you approve a new sub-advisory agreement with Unibank Securities,
Inc. for The Liberty Fund.
PROPOSAL 4. AUTHORIZE LIBERTY MONEY MARKET FUND AND LIBERTY MUNICIPAL
MONEY MARKET FUND TO CAST VOTES FOR THE ELECTION OF A BOARD OF
TRUSTEES OF THE SR&F BASE TRUST (LIBERTY MONEY MARKET FUND AND
LIBERTY MUNICIPAL MONEY MARKET FUND).
We ask that you consider the election of eleven nominees as members of the Board
of Trustees of the SR&F Base Trust. Each nominee, if elected, will serve as a
Trustee of the SR&F Base Trust until the next meeting of shareholders or until a
successor is elected, or until death, resignation, removal or retirement.
PART 2. PROPOSALS.
PROPOSAL 1. ELECT A BOARD OF TRUSTEES.
The purpose of this proposal is to elect four new members as well as seven of
the currently serving members of the Boards of Trustees of the Trusts. All of
the nominees listed below, except for the proposed four new members (Ms. Kelly
and Messrs. Hacker, Nelson and Theobald), are currently members of the Boards
5
<PAGE>
of Trustees of the Trusts, as well as eight Liberty closed-end funds and, in the
case of Messrs. Lowry, Mayer and Neuhauser, one other Liberty open-end trust and
eleven Liberty closed-end trusts (collectively, the "Liberty Fund Complex"), and
have served in that capacity continuously since originally elected or appointed.
All of the currently serving members, other than Mr. Palombo, have been
previously elected to those Boards by the shareholders of the Liberty Fund
Complex. The proposed four new members currently serve on the Boards of Trustees
of two Stein Roe closed-end funds and seven Stein Roe open-end trusts
(collectively, the "Stein Roe Funds"), and were recommended for election as
Trustees of the Trusts by the Boards of Trustees of each of the Trusts at
meetings held on October 25-26, 2000. Each of the nominees elected will serve as
a Trustee of each of the Trusts until the next meetings of shareholders of the
Liberty Mutual Funds called for the purpose of electing a Board of Trustees, and
until a successor is elected and qualified or until death, retirement,
resignation or removal.
Currently, two different boards of trustees are responsible for overseeing
substantially all of the Liberty Fund Complex and Stein Roe Funds. The Trustees
of the Liberty Fund Complex and of the Stein Roe Funds; and Liberty Financial
Companies, Inc. (Liberty Financial), the indirect parent of the investment
advisors to the Liberty Fund Complex and the Stein Roe Funds, have agreed that
shareholder interests can more effectively be represented by a single board with
responsibility for overseeing substantially all of the Liberty Fund Complex and
Stein Roe Funds. Creation of a single, consolidated board should also provide
certain administrative efficiencies for Liberty Financial and potential future
cost savings for the Liberty Fund Complex, Stein Roe Funds and Liberty
Financial. The nominees listed below will be the members of the single,
consolidated Board of Trustees. The persons named in the enclosed proxy card
intend to vote at the Meetings in favor of the election of the nominees named
below as Trustees (if so instructed). If any nominee listed below becomes
unavailable for election, the enclosed proxy card may be voted for a substitute
nominee in the discretion of the proxy holder(s).
INFORMATION ABOUT THE NOMINEES
Set forth below is information concerning each of the nominees. Each nominee, if
elected, will serve as a Trustee of each Trust.
6
<PAGE>
<TABLE>
<CAPTION>
NOMINEE NAME & AGE PRINCIPAL OCCUPATION (1) AND DIRECTORSHIPS TRUSTEE SINCE
------------------ ------------------------------------------ -------------
<S> <C> <C>
Douglas A. Hacker Executive Vice President and Chief New nominee
(43) Financial Officer of UAL, Inc. (airline)
since July, 1999; Senior Vice President
and Chief Financial Officer of UAL, Inc.
prior thereto.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
NOMINEE NAME & AGE PRINCIPAL OCCUPATION (1) AND DIRECTORSHIPS TRUSTEE SINCE
------------------ ------------------------------------------ -------------
<S> <C> <C>
Janet Langford Kelly Executive Vice President-Corporate New nominee
(41) Development, General Counsel and
Secretary of Kellogg Company (food,
beverage and tobacco producer) since
September 1999; Senior Vice President,
Secretary and General Counsel of Sara Lee
Corporation (branded, packaged,
consumer-products manufacturer) prior
thereto.
Richard W. Lowry Private Investor since 1987 (formerly 1995
(64) Chairman and Chief Executive Officer of
U.S. Plywood Corporation (building
products producer) from August 1985 to
August 1987).
Salvatore Macera Private Investor since 1981 (formerly 1998
(69) Executive Vice President and Director of
Itek Corporation (electronics) from 1975
to 1981).
William E. Mayer(2) Partner, Park Avenue Equity Partners 1994
(60) (venture capital) since November 1996;
Dean, College of Business and Management,
University of Maryland, prior thereto;
Director, Johns Manville (building
products producer), Lee Enterprises
(print and on-line media) and WR
Hambrecht + Co. (financial service
provider).
Charles R. Nelson Van Voorhis Professor, Department of New nominee
(57) Economics, University of Washington;
consultant on economic and statistical
matters.
John J. Neuhauser Academic Vice President and Dean of 1985
(57) Faculties, Boston College, since August,
1999; Dean, Boston College School of
Management prior thereto.
Joseph R. Palombo(3) Trustee of the Liberty Fund Complex since 2000
(47) August 2000; Trustee of the Stein Roe
Funds since October 2000; Vice President
of the Liberty Mutual Funds and Stein Roe
Funds from April, 1999 to October, 2000;
Executive Vice President and Director of
Colonial and Stein Roe & Farnham
Incorporated; Executive Vice President
and Chief Administrative Officer of
Liberty Funds Group LLC since April,
1999; Director of Alpha Trade Inc.
(broker-dealer), Colonial Advisory
Services, Inc. Liberty Funds Distributor,
Inc. and Liberty Funds Services, Inc.
since April, 2000. Chief Operating
Officer, Putnam Mutual Funds prior
thereto.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
NOMINEE NAME & AGE PRINCIPAL OCCUPATION (1) AND DIRECTORSHIPS TRUSTEE SINCE
------------------ ------------------------------------------ -------------
<S> <C> <C>
Thomas E. Stitzel Business Consultant since 1999; Professor 1998
(64) of Finance and Dean, College of Business,
Boise State University prior thereto;
Chartered Financial Analyst.
Thomas C. Theobald Managing Director, William Blair Capital New nominee
(62) Partners (private equity investing) since
1994; Chief Executive Officer and
Chairman of the Board of Directors,
Continental Bank Corporation (banking
services) prior thereto.
Anne-Lee Verville Consultant since 1997; General manager, 1998
(55) Global Education Industry (global
education applications) prior thereto;
formerly President, Applications
Solutions Division, IBM Corporation
(global education and global applications)
from 1991 to 1994.
</TABLE>
---------------------------
(1) Except as otherwise noted, each individual has held the office
indicated or other offices in the same company for the last five years.
(2) Mr. Mayer is not affiliated with Liberty Financial, but is an
"interested person," as defined in the Investment Company Act of 1940,
as amended (1940 Act), because of his affiliation with WR Hambrecht +
Co. (a registered broker-dealer).
(3) Mr. Palombo is an "interested person," as defined in the 1940 Act,
because of his affiliation with Liberty Financial, the parent company
of the advisors to the Funds and an indirect majority-owned subsidiary
of Liberty Mutual Insurance Company.
The following persons who are currently serving on each Board of Trustees are
not standing for reelection:
<TABLE>
<CAPTION>
NOMINEE NAME & AGE PRINCIPAL OCCUPATION (1) AND DIRECTORSHIPS TRUSTEE SINCE
------------------ ------------------------------------------ -------------
<S> <C> <C>
Tom Bleasdale Retired (formerly Chairman of the Board 1987
(70) and Chief Executive Officer, Shore Bank &
Trust Company (banking services) from 1992
to 1993); Director, Empire Co. (food
distributor).
Lora S. Collins Attorney (formerly Attorney, Kramer, Levin 1991
(65) Naftalis & Frankel (law firm) from 1986 to
1996).
James E. Grinnell Private investor since November 1988. 1995
(72)
James L. Moody, Jr. Retired (formerly Chairman of the Board,
Hannaford Bros. Co. (food retailer) from
1984 to 1997 and Chief Executive Officer
prior thereto).
</TABLE>
9
<PAGE>
(1) Except as otherwise noted, each individual has held the office indicated
or other offices in the same company for the last five years.
TRUSTEES' COMPENSATION; MEETINGS AND COMMITTEES
A. TRUSTEES' COMPENSATION.
The members of the Board of Trustees of each Trust will serve as Trustees of the
Liberty Fund Complex and Stein Roe Funds, for which service each Trustee, except
for Mr. Palombo, will receive an annual retainer of $45,000, and attendance fees
of $8,000 for each regular joint Board meeting and $1,000 for each special joint
Board meeting. The Board of Trustees is expected to hold six regular joint Board
meetings each year. Committee chairs will receive an additional annual retainer
of $5,000. Other Committee members will receive an additional annual retainer of
$1,000, and receive $1,000 for each special meeting attended on a day other than
a regular joint Board meeting day. Two-thirds of the Trustees' fees are
allocated among the Liberty Fund Complex and Stein Roe Funds based on their
relative net assets, and one-third of the fees is divided equally among the
Liberty Fund Complex and Stein Roe Funds.
The Liberty Mutual Funds do not currently provide pension or retirement plan
benefits to the Trustees. However, certain Trustees currently serving on the
Board of Trustees of the Liberty Mutual Funds who are not continuing on the
combined Board of Trustees of the Liberty Mutual and Stein Roe Funds will
receive payments at an annual rate equal to their 1999 Trustee compensation for
the lesser of two years or until the date they would otherwise have retired at
age 72. These payments will be made quarterly, beginning in 2001. Liberty
Financial and the Liberty Fund Complex will each bear one-half of the cost of
the payments; the Liberty Fund Complex portion of the payments will be allocated
among the Liberty Fund Complex based on each fund's share of the Trustee fees
for 2000.
Further information concerning the Trustees' compensation is disclosed under
Part 4. Fund Information on page 37.
B. MEETINGS AND CERTAIN COMMITTEES.
COMPOSITION. The current Board of Trustees of each Trust consists of two
interested and nine non-interested Trustees. Mr. Mayer is not affiliated with
Liberty Financial or any of its investment advisor affiliates, but is considered
interested as a result of his affiliation with a broker-dealer. Mr. Palombo is
an interested person because of his affiliation with Liberty Financial.
10
<PAGE>
AUDIT COMMITTEE. The Audit Committee of each Trust, consisting of Ms. Verville
(Chairperson) and Messrs. Bleasdale, Grinnell, Lowry Macera and Moody, all of
whom are non-interested Trustees, recommends to the Board of Trustees the
independent accountants to serve as auditors, reviews with the independent
accountants the results of the auditing engagement and internal accounting
procedures and considers the independence of the independent accountants the
range of their audit services and their fees.
COMPENSATION COMMITTEE. The Compensation Committee of each Trust, consisting of
Messrs. Neuhauser (Chairperson), Grinnell and Stitzel and Ms. Collins, all of
whom are non-interested Trustees, reviews compensation of the Board of Trustees.
GOVERNANCE COMMITTEE. The Governance Committee of each Trust, consisting of
Messrs. Bleasdale (Chairperson), Lowry, Mayer and Moody and Ms. Verville, all of
whom are non-interested Trustees, except for Mr. Mayer (Mr. Mayer is interested
as a result of his affiliation with a broker-dealer, but is not affiliated with
Liberty Financial), recommends to the Board of Trustees, among other things,
nominees for Trustee and for appointments to various committees. The Committee
will consider candidates for trustee recommended by shareholders. Written
recommendations with supporting information should be directed to the Committee
in care of the applicable Trust, Attention: Secretary, One Financial Center,
11th Floor, Boston, Massachusetts 02111-2621.
The Boards of Trustees and the Committees held meetings during the following
fiscal years ended:
November 30, 1999 for Liberty Counselor Balanced Portfolio, Liberty Counselor
Growth Portfolio, Liberty Counselor Income Portfolio, Liberty High Yield
Municipal Fund, Liberty Tax-Exempt Fund, Liberty Tax-Exempt Insured Fund and
Liberty Utilities Fund (Liberty Funds Trust IV)
<TABLE>
<S> <C>
Board of Trustees 6
Audit Committee 3
Compensation Committee 2
Governance Committee 4
</TABLE>
December 31, 1999 for Liberty High Yield Securities Fund, Liberty Income Fund,
Liberty Strategic Income Fund (Liberty Funds Trust I), Liberty Newport Tiger
Fund (Liberty Funds Trust VII)
11
<PAGE>
<TABLE>
<S> <C>
Board of Trustees 6
Audit Committee 3
Compensation Committee 2
Governance Committee 4
</TABLE>
January 31, 2000 for Liberty California Tax-Exempt Fund, Liberty Connecticut
Tax-Exempt Fund, Liberty Massachusetts Tax-Exempt Fund, Liberty New York
Tax-Exempt Fund and Liberty Ohio Tax-Exempt Fund (Liberty Funds Trust V)
<TABLE>
<S> <C>
Board of Trustees 6
Audit Committee 3
Compensation Committee 1
Governance Committee 4
</TABLE>
June 30, 2000 for Liberty Money Market Fund (Liberty Funds Trust II), Liberty
Municipal Money Market Fund (Liberty Funds Trust IV), Liberty Growth & Income
Fund and Liberty Newport Asia Pacific Fund (Liberty Funds Trust VI)
<TABLE>
<S> <C>
Board of Trustees 6
Audit Committee 4
Compensation Committee 2
Governance Committee 6
</TABLE>
August 31, 2000 for Liberty Intermediate Government Fund, Liberty Newport
Greater China Fund and Liberty Newport Japan Opportunities Fund (Liberty Funds
Trust II), Liberty Federal Securities Fund (Liberty Funds Trust III), Liberty
Newport Europe Fund (Liberty Funds Trust VII) and Liberty Floating Rate
Advantage Fund
<TABLE>
<S> <C>
Board of Trustees 6
Audit Committee 4
Compensation Committee 2
Governance Committee 6
</TABLE>
October 31, 2000 for Liberty Tax-Managed Aggressive Growth Fund and Liberty
Tax-Managed Value Fund (Liberty Funds Trust I), Liberty Contrarian Fund, Liberty
Contrarian Equity Fund, Liberty Contrarian Income Fund, Liberty Newport Global
Utilities Fund, Liberty Newport International Equity Fund, Liberty Real Estate
Fund, Liberty Select Value Fund, The Liberty Fund and Liberty Special Fund
(Liberty Funds Trust III)
<TABLE>
<S> <C>
Board of Trustees 6
Audit Committee 4
</TABLE>
12
<PAGE>
<TABLE>
<S> <C>
Compensation Committee 2
Governance Committee 5
</TABLE>
During the most recently completed fiscal years, each of the current Trustees
attended more than 75% of the meetings of the Board of Trustees of each Trust
and the committees of which such Trustee was a member.
THE BOARDS OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF EACH LIBERTY MUTUAL
FUND VOTE FOR EACH NOMINEE IN PROPOSAL 1.
REQUIRED VOTE FOR PROPOSAL 1
Shareholders of each Liberty Mutual Fund vote together with the shareholders of
the other series of the applicable Trust for the election of Trustees. A
plurality of the votes of each Trust cast at the Meetings, if a quorum is
represented, is required for the election of each Trustee to the Board of
Trustees of each Trust. Since the number of Trustees has been fixed at eleven,
this means that the eleven persons receiving the highest number of votes will be
elected.
PROPOSAL 2. APPROVE NEW PORTFOLIO MANAGEMENT
13
<PAGE>
AGREEMENTS WITH NEWPORT FUND MANAGEMENT, INC. (NEWPORT)
(LIBERTY NEWPORT GLOBAL UTILITIES FUND AND LIBERTY NEWPORT
INTERNATIONAL EQUITY FUND - HEREIN REFERRED TO FOR PURPOSES OF
THIS PROPOSAL 2 AS EACH A "FUND" OR COLLECTIVELY THE "FUNDS")
A. DESCRIPTION OF PROPOSAL. The Board of Trustees of Liberty Funds Trust
III proposes that the shareholders of each Fund approve a new Management
Agreement, substantially in the form set forth in Appendix A to this proxy
statement, between the Trust, on behalf of each Fund, and Newport. Newport is an
affiliate of Colonial, the current investment advisor of Liberty Newport
International Equity Fund, and Stein Roe & Farnham Incorporated (Stein Roe), the
current investment advisor of Liberty Newport Global Utilities Fund. The new
Management Agreements are identical to the existing Management Agreements,
except that Newport will now provide investment management services to each of
the Funds. With respect to Liberty Newport International Equity Fund, Newport
will engage Colonial at Newport's own expense to provide administrative services
to the Fund. With respect to the Liberty Newport Global Utilities Fund, the
current portfolio managers are dual employees of Stein Roe and Newport and will
continue to manage the Fund as employees of Newport. If the new Management
Agreement for Liberty Newport Global Utilities Fund is not approved, the current
portfolio managers are expected to continue to manage the Fund and will remain
dual employees of Stein Roe and Newport. It is important to note that the annual
rates payable by the Funds for investment management and administrative services
will not increase or decrease as a result of the Trust entering into new
Management Agreements on behalf of the Funds.
The existing Management Agreement for Liberty Newport International Equity Fund,
dated October 1, 1997, was most recently approved by the shareholders of the
Fund on February 15, 1995. The existing Management Agreement for Liberty Newport
Global Utilities Fund, dated February 26, 1999, was most recently approved by
shareholders of the Fund on February 4, 1993.
The existing Management Agreements for Liberty Newport International Equity Fund
and Liberty Newport Global Utilities Fund provide for monthly fees at the annual
rate of 0.75% and 0.40%, respectively, of each Fund's average daily net assets.
For the fiscal year ended October 31, 1999, the aggregate fees paid by Liberty
Newport International Equity Fund to Colonial under the existing Management
Agreement were approximately $861,000, and the aggregate fee paid by Liberty
Newport Global Utilities Fund to Stein Roe under the existing Management
Agreement were approximately $484,000.
14
<PAGE>
Colonial currently provides administrative services to Liberty Newport Global
Utilities Fund under a separate Administration Agreement for an annual fee of
0.25% of the Fund's average daily net assets. For the fiscal year ended October
31, 1999, the aggregate fees paid by Liberty Newport Global Utilities Fund to
Colonial under the existing Administration Agreement were approximately
$363,000.
Upon shareholder approval of the new Management Agreements, Newport will provide
investment management services to Liberty Newport International Equity Fund and
Liberty Newport Global Utilities Fund, and be responsible for providing
administrative services to Liberty Newport International Equity Fund. Newport
will be paid at the same annual rate for providing these services as each Fund's
investment advisor was paid under the existing Management Agreement. With
respect to Liberty Newport Global Utilities Fund, the current Administration
Agreement with Colonial will remain in effect.
B. CONSIDERATION BY THE BOARD OF TRUSTEES.
The Board of Trustees met on December 15-16, 1999, to consider, among other
things, the proposed change of each Fund's investment advisor. After due
consideration, the Board of Trustees, including all Trustees who were not
interested and who had no direct or indirect financial interests in the
operation of the new Management Agreements or in any agreements related thereto,
unanimously approved the new Management Agreements, subject to shareholder
approval. The Board of Trustees concluded that the new Management Agreements are
fair and reasonable, and are in the best interest of shareholders of each Fund.
During the course of their deliberations, the Board of Trustees considered a
variety of factors. The Board of Trustees considered the fact that the new
Management Agreements with Newport would not impact the current fee structure of
the existing Management Agreements, and that the current expense waivers would
continue until further notice. The Board of Trustees, however, focused
specifically on the experience and size of Newport's international investment
management team, Newport's growth investment style, Newport's expertise and
proven performance as an investment advisor of international and global growth
funds similar to the Funds, as well as the increased complexity of the
international securities markets.
15
<PAGE>
C. COMPARISON AND IMPACT OF THE EXISTING AND NEW MANAGEMENT AGREEMENTS.
For each of the Funds, the new Management Agreement is identical to the existing
Management Agreement except for its initial term and the named investment
advisor. The new Management Agreements do not differ from the existing
Management Agreements with respect to the investment advisor's responsibilities
or duties to the Funds, or the fees payable to the investment advisor for
providing those services.
Compensation under the existing and new Management Agreements is subject to
reduction if in any year the expenses of a Fund exceed the limits on investment
company expenses imposed by any statute or regulatory authority of any
jurisdiction in which shares of the Fund are qualified for offer and sale. No
such limits currently are in effect.
Both the existing and new Management Agreements provide that, subject to the
Board of Trustees' supervision, the investment advisor will manage the assets of
each Fund in accordance with its Prospectus and Statement of Additional
Information, purchase and sell securities and other investments on behalf of the
Fund, and report results to the Board of Trustees periodically. With respect to
Liberty Newport International Equity Fund, the existing and new Management
Agreements also require the investment advisor to furnish, at its expense: (a)
office space, supplies, facilities and equipment; (b) executive and other
personnel for managing the affairs of the Fund (excluding custodial, transfer
agency, pricing and certain record keeping services); and (c) compensation to
Trustees who are directors, officers of or employees of the advisor or its
affiliates. Any liability of the investment advisor to the Trust, the Fund
and/or its shareholders is limited to situations involving the advisor's own
willful misfeasance, bad faith, gross negligence or reckless disregard of its
duties.
Each new Management Agreement provides that it will continue in effect for an
initial term ending June 30, 2002, and thereafter so long as it is approved
annually in accordance with the 1940 Act. The existing and new Management
Agreements may be terminated at any time by Newport, by the Board of Trustees or
by vote of a majority of the outstanding voting securities of any Fund without
penalty on 60 days' written notice, and shall automatically terminate upon any
"assignment" (as that term is defined in the 1940 Act). Each new Management
Agreement may be amended only by the affirmative vote of the holders of a
"majority of the outstanding voting securities" of the Fund (as defined in the
1940 Act).
16
<PAGE>
D. COMPARISON OF INVESTMENT OBJECTIVES AND STRATEGIES.
In the case of Liberty Newport Global Utilities Fund, Newport will not change
the investment objective or strategy of the Fund. In the case of Liberty Newport
International Equity Fund, Newport will not change the Fund's investment
objective, but will change its investment strategy. Colonial's investment
strategy in selecting stocks for Liberty Newport International Equity Fund has
been to choose companies in industries and markets which Colonial believes will
react favorably to inflation in the U.S. economy. Inflation-sensitive companies
in which Liberty Newport International Equity Fund has invested include
companies engaged in the development and processing of natural resources and
companies engaged in consumer-oriented business. As the new advisor to Liberty
Newport International Equity Fund, Newport will no longer focus on
inflation-sensitive stocks and will select stocks of international companies
with long-term, above average growth potential. These are companies with proven
management, predictable growth rates and low levels of debt. Newport may sell a
stock if there is a deterioration in a company's fundamentals or a change in a
company's management style, or if Newport identifies a different company with
more attractive growth prospects. The Board of Trustees has approved this change
to the investment strategy of Liberty Newport International Equity Fund. The
change in the investment strategy of Liberty Newport International Equity Fund
is not a change to a fundamental policy of the Fund and therefore, shareholder
approval of this change is not required. This change also does not affect
Liberty Newport International Equity Fund's investment goal, which is to seek
the preservation of capital purchasing power and long-term growth.
E. INFORMATION CONCERNING COLONIAL, STEIN ROE, NEWPORT AND THEIR
AFFILIATES.
COLONIAL MANAGEMENT ASSOCIATES, INC. AND STEIN ROE & FARNHAM INCORPORATED
As of September 30, 2000, LFC Management Corporation owned 71.12% of Liberty
Financial. Liberty Financial is a diversified and integrated asset management
organization which provides insurance and investment products to individuals and
institutions. The principal executive offices of Liberty Financial, LFC
Management Corporation, Liberty Corporate Holdings, Inc. and LFC Holdings, Inc.
are located at 600 Atlantic Avenue, 24th Floor, Boston, Massachusetts
02210-2214. Liberty Mutual is an underwriter of workers' compensation insurance
and a property and casualty insurer in the United States, organized under the
laws of Massachusetts in 1912. The principal business activities of Liberty
Mutual's subsidiaries other than Liberty Financial are property-casualty
insurance, insurance services and life insurance (including group life and
health insurance products) marketed through its own sales force.
17
<PAGE>
The principal executive offices of Liberty Mutual and Liberty Mutual Equity
Corporation are located at 175 Berkeley Street, Boston, Massachusetts 02117.
On November 1, 2000, Liberty Financial announced that it had retained CS First
Boston to help explore strategic alternatives, including the possible sale of
Liberty Financial.
Colonial and/or its affiliate, Colonial Advisory Services, Inc. (CASI), has
rendered investment advisory services to investment company, institutional and
other clients since 1931. Colonial currently serves as investment advisor or
administrator for 70 open-end and 9 closed-end management investment company
portfolios. As of September 30, 2000, Colonial managed and/or administered over
$18 billion in assets.
The directors of Colonial are Stephen E. Gibson and Joseph R. Palombo. Mr.
Gibson is the President and Chief Executive Officer of Colonial. Mr. Palombo is
the Executive Vice President and Chief Administrative Officer of Colonial. The
business address of the directors and officers of Colonial is One Financial
Center, Boston, Massachusetts 02111-2621.
In addition, the following individuals who are officers or Trustees of the
Funds' Trusts are also officers or directors of Colonial: William J. Ballou,
Suzan M. Barron, Michael G. Clarke, Stephen E. Gibson, Ellen Harrington, Russell
L. Kane, Kevin M. Carome, Gail E. Knudsen, Pamela A. McGrath, Joseph R. Palombo,
Dianne Paras, Vincent P. Pietropaolo and Glenn M. Wolfset.
Stein Roe and its predecessor have been providing investment advisory services
since 1932. Stein Roe acts as investment advisor to wealthy individuals,
trustees, pension and profit sharing plans, charitable organizations and other
institutional investors. The sole director of Stein Roe is C. Allen Merritt, Jr.
Mr. Merritt is Chief Operating Officer of Liberty Financial. Stephen E. Gibson
is President of Stein Roe's Mutual Funds division and William E. Rankin is
President of Stein Roe's Private Capital Management division. The business
address of Mr. Merritt is 600 Atlantic Avenue, Federal Reserve Plaza, Boston,
Massachusetts 02210-2214; that of Mr. Gibson is One Financial Center, Boston,
Massachusetts 02111-2621; and that of Mr. Rankin is One South Wacker Drive,
Chicago, Illinois 60606.
In addition, the following individuals who are officers or Trustees of the
Funds' Trusts are also officers or directors of Stein Roe: Stephen E. Gibson and
Joseph R. Palombo.
18
<PAGE>
Colonial provides, and after shareholder approval of the new Management
Agreement, will continue to provide, pricing and bookkeeping services to each of
the Funds pursuant to a Pricing and Bookkeeping Agreement, which will continue
after each Management Agreement is approved. For each Fund, Colonial is paid a
monthly fee of $2,250 plus the following percentages of the Fund's average daily
net assets over $50 million:
0.035% annually on the next $950 million;
0.025% annually on the next $1 billion;
0.015% annually on the next $1 billion;
and 0.001% annually on the excess over $3 billion
For the fiscal year ended October 31, 1999, the pricing and bookkeeping fees
paid by Liberty Newport International Equity Fund and Liberty Newport Global
Utilities Fund to Colonial under the Pricing and Bookkeeping Agreement were
approximately $50,000 and $65,000, respectively.
Liberty Funds Services, Inc. (LFSI), a subsidiary of LFG, located at One
Financial Center, Boston, Massachusetts 02111-2621, is the Funds' investor
servicing agent (transfer, plan and dividend disbursing agent, and shareholder
services provider), for which it receives monthly fees paid by each Fund, which
will continue to be paid after each Management Agreement is approved. The fee
paid to LFSI is based on the average daily net assets of each Fund, charges
based on the number of shareholder accounts and transactions and reimbursement
for certain out-of-pocket expenses. For the fiscal year ended October 31, 1999,
the aggregate fees paid to LFSI on behalf of Liberty Newport International
Equity Fund and Liberty Newport Global Utilities Fund were approximately
$395,000 and $509,000, respectively.
Liberty Funds Distributor, Inc. (LFDI), a subsidiary of Colonial, located at One
Financial Center, Boston, Massachusetts 02111-2621, acts as distributor for each
Fund under a distribution agreement, which will continue after each Management
Agreement is approved. The Trustees have approved a 12b-1 plan (Plan) for each
Fund pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, each Fund pays
LFDI a service fee at an annual rate of 0.25% of the Fund's net assets
attributable to Classes A, B and C. Each Fund also pays a monthly distribution
fee at an annual rate of 0.75% of the average daily net assets attributable to
Class B and Class C Shares. For the fiscal year ended October 31, 1999, the
aggregate fees paid by the Funds to LFDI were as follows:
12b-1 FEES PAID TO LFDI FOR THE FISCAL YEAR ENDED OCTOBER 31, 1999
19
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
LIBERTY NEWPORT LIBERTY NEWPORT
INTERNATIONAL GLOBAL UTILITIES
FEES (APPROXIMATE) EQUITY FUND FUND
--------------------------------------------------------------------------------
<S> <C> <C>
SERVICE FEES $280,000(a) $457,000(c)
--------------------------------------------------------------------------------
DISTRIBUTION FEES $420,000(b) $56,000(d)
--------------------------------------------------------------------------------
</TABLE>
(a) $139,000 were attributable to Class A Shares; $138,000 were
attributable to Class B Shares; $3,000 were attributable to Class C
Shares.
(b) $411,000 were attributable to Class B Shares; $9,000 were attributable
to Class C Shares.
(c) $438,000 were attributable to Class A Shares; $16,000 were attributable
to Class B Shares; $3,000 were attributable to Class C Shares.
(d) $48,000 were attributable to Class B Shares; $8,000 were attributable
to Class C Shares.
Colonial and Stein Roe may continue to use the services of AlphaTrade Inc.
(AlphaTrade), a registered broker-dealer subsidiary of Colonial, when buying or
selling certain equity securities for a Fund's portfolio pursuant to procedures
adopted by the Trustees and Rule 17e-1 under the 1940 Act. For the fiscal year
ended October 31, 1999, the aggregate commissions paid by Colonial to AlphaTrade
on behalf of Liberty Newport International Equity Fund was $25,135, which
constituted 15.6% of the Fund's aggregate brokerage commissions. No commissions
were paid by Stein Roe to AlphaTrade on behalf of Liberty Newport Global
Utilities Fund for the fiscal year ended October 31, 1999.
In addition to the fees described above, each Fund pays all of its expenses not
assumed by its advisor or administrator, including, without limitation, fees and
expenses of the independent Trustees, interest charges, taxes, brokerage
commissions, expenses of issue or redemption of shares, fees and expenses of
registering and qualifying shares of each Fund for distribution under federal
and state laws and regulations, custodial, auditing and legal expenses, expenses
of determining net asset value of each Fund's shares, expenses of providing
reports to shareholders, proxy statements and proxies to existing shareholders,
and its proportionate share of insurance premiums and professional association
dues or assessments. Each Fund also is responsible for such non-recurring
expenses as may arise, including litigation in which each Fund may be a party,
and other expenses as determined by the Board of Trustees. Each Fund may have an
obligation to indemnify its officers and Trustees with respect to litigation.
NEWPORT FUND MANAGEMENT, INC.
20
<PAGE>
Newport is a direct majority-owned subsidiary of Newport Pacific Management,
Inc. (Newport Pacific), 580 California Street, San Francisco, California 94104.
Newport Pacific is a direct wholly-owned subsidiary of Liberty Newport Holdings,
Limited (Liberty Newport), which in turn is a direct wholly-owned subsidiary of
Liberty Financial.
The directors of Newport are Lindsay Cook, J. Andrew Hilbert, John M. Mussey and
Thomas R. Tuttle. Mr. Cook is an Executive Vice President of Liberty Financial.
Mr. Hilbert is Chief Financial Officer of Liberty Financial. Mr. Mussey is Vice
Chairman of Newport and Newport Pacific. Mr. Tuttle is the President and Chief
Executive Officer of Newport. He also is President of Newport Pacific. The
business address of Mr. Cook and Mr. Hilbert is 600 Atlantic Avenue, Federal
Reserve Plaza, Boston, Massachusetts 02210-2214; and that of Messrs. Mussey and
Tuttle is 580 California Street, San Francisco, California 94104.
F. OTHER FUNDS MANAGED BY NEWPORT. In addition to the services proposed to be
provided by Newport to each of the Funds, Newport also provides management and
other services and facilities to other investment companies. Information with
respect to the assets of and management fees payable to Newport by funds having
investment objectives similar to those of the Funds is set forth below:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
TOTAL NET ASSETS
ANNUAL 9/30/00
FUND MANAGEMENT FEE (IN MILLIONS)
--------------------------------------------------------------------------------
<S> <C> <C>
Liberty Newport Tiger Fund 1.00%(a) $954.9
--------------------------------------------------------------------------------
Stein Roe Small Cap Tiger Fund 1.15%(b) 10.4
--------------------------------------------------------------------------------
Liberty Newport Japan Opportunities Fund 0.95%(b) 90.5
--------------------------------------------------------------------------------
Liberty Newport Greater China Fund 1.15%(b) 66.8
--------------------------------------------------------------------------------
Liberty Newport Asia Pacific Fund 1.00%(b) 17.7
--------------------------------------------------------------------------------
Liberty Newport Europe Fund 0.70%(c) 13.0
--------------------------------------------------------------------------------
Stein Roe Asia Pacific Fund 0.55%(d) 5.3
--------------------------------------------------------------------------------
</TABLE>
(a) The management fee is 1.00% for the first $100 million of average net
assets; 0.75% for the next $1.4 billion; 0.70% for the next $1 billion;
and 0.65% over $2.5 billion.
(b) Newport has voluntarily agreed to waive a certain portion of the
management fee and reimburse the fund for certain expenses. Newport may
terminate the fee waiver and expense reimbursement arrangement at any
time.
21
<PAGE>
(c) The fund commenced operations on November 1, 1999 and has not paid
management fees to Newport.
(d) Stein Roe & Farnham Incorporated is the advisor to the fund and
receives an annual fee of 0.95%. Newport receives 0.55% as sub-advisor
to the fund.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF EACH APPLICABLE
LIBERTY MUTUAL FUND VOTE FOR PROPOSAL 2.
REQUIRED VOTE FOR PROPOSAL 2
Approval of the new Management Agreement for each Fund will require the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund (as defined in the 1940 Act), which means the affirmative vote of the
lesser of (1) more than 50% of the outstanding shares of the Fund or (2) 67% or
more of the shares of the Fund present at the Meeting if more than 50% of the
outstanding shares of the Fund are represented at the Meeting in person or by
proxy.
PROPOSAL 3. APPROVE A SUB-ADVISORY AGREEMENT WITH UNIBANK SECURITIES,
INC. (THE LIBERTY FUND - HEREIN REFERRED TO FOR PURPOSES OF
THIS PROPOSAL 3 AS THE "FUND")
A. DESCRIPTION OF PROPOSAL.
The Board of Trustees of Liberty Funds Trust III (Trust) proposes that the
shareholders of the Fund approve a Sub-Advisory Agreement, substantially in the
form set forth in Appendix B, among Colonial, the investment advisor to the
Fund, Unibank Securities, Inc., which does business in the U.S. as Unibank
Investment Management (Unibank), and the Trust, on behalf of the Fund. Under the
terms of the Sub-Advisory Agreement, Unibank will manage a portion of the assets
of the Fund, as determined by Colonial, in accordance with the investment
objectives, policies and limitations of the Fund as set forth in the Fund's
Prospectus and Statement of Additional Information (as modified to take into
account the Fund's acquisition of Liberty Strategic Balanced Fund (Balanced
Fund), which is subject to the approval of the shareholders of the Balanced
Fund). Unibank will invest primarily in large capitalization, non-U.S. equity
securities for the Fund. Approval of the Sub-Advisory Agreement will not affect
the amount of management fees paid by the Fund to Colonial; Colonial, not the
Fund, pays sub-advisory fees to Unibank under the Sub-Advisory Agreement.
Currently, Colonial manages the investment of the assets of the Fund pursuant to
a Management Agreement between the Trust, on behalf of the Fund, and Colonial,
dated March 27, 1995, as amended , which was most recently approved
22
<PAGE>
by the shareholders of the Fund on February 15, 1995. Colonial receives monthly
fees at the annual rate of 0.55% for the first $1 billion of the average daily
net assets of the Fund and 0.50% of assets in excess of $1 billion. For the
fiscal year ended October 31, 1999, the aggregate fees paid by the Fund to
Colonial under the Management Agreement were approximately $8,985,000.
B. CONSIDERATION BY THE BOARD OF TRUSTEES.
The Board of Trustees met on October 25-26, 2000, to consider, among other
things, the proposed retention by Colonial of Unibank as a sub-advisor to the
Fund, which will have the ability to invest in foreign securities after its
merger with Liberty Strategic Balanced Fund. After due consideration, the Board
of Trustees, including all Trustees who were not interested and who had no
direct or indirect financial interest in the operation of the Sub-Advisory
Agreement or in any agreements related thereto, unanimously approved the
Sub-Advisory Agreement, subject to shareholder approval. The Board of Trustees
concluded that the Sub-Advisory Agreement is fair and reasonable, and is in the
best interest of the shareholders of the Fund. During the course of their
deliberations, the Board of Trustees focused on the experience and proven
performance of Unibank as an investment advisor to international and global
funds as well as on the increased complexity of the international securities
markets. The Board of Trustees also considered a variety of factors, including
that the Sub-Advisory Agreement with Unibank will not affect the fees paid by
the Fund under the Management Agreement.
C. DESCRIPTION OF SUB-ADVISORY AGREEMENT.
Pursuant to the terms of the Sub-Advisory Agreement, Unibank, under the
supervision of the Board of Trustees and Colonial, will: (a) manage the
investment of a portion of the assets of the Fund, as determined by Colonial, in
accordance with the investment objectives, policies and limitations of the Fund
as stated in the Fund's then current Prospectus and Statement of Additional
Information; (b) place purchase and sale orders for portfolio transactions for
the Fund; (c) evaluate such economic, statistical and financial information and
undertake such investment research as it shall deem advisable; (d) employ
professional portfolio managers to provide research services to the Fund; and
(e) report results to the Board of Trustees. For the services to be rendered by
Unibank under the Sub-Advisory Agreement, Colonial will pay Unibank a monthly
fee at the annual rate of 0.40% of the average daily net asset value of that
portion of the Fund's assets under management by Unibank. Any liability of
Unibank to the Trust, the Fund and/or its shareholders is limited to situations
involving Unibank's own willful misfeasance, bad faith or gross negligence in
the performance of its duties.
23
<PAGE>
The Sub-Advisory Agreement provides that it will remain in effect for an initial
term ending June 30, 2002, and from year to year thereafter so long as its
continuance is specifically approved at least annually by the Board of Trustees
or by vote of a majority of the outstanding voting securities of the Fund. The
Sub-Advisory Agreement may be terminated at any time without penalty on sixty
days' written notice to Unibank by vote of the Board of Trustees, by vote of a
majority of the outstanding voting securities of the Fund, or by Colonial or by
Unibank on ninety days' written notice to Colonial and the Trust. The
Sub-Advisory Agreement will terminate automatically in the event of its
assignment or in the event that the Management Agreement for the Fund shall have
terminated for any reason. The Sub-Advisory Agreement may be amended only in
accordance with the applicable provisions of 1940 Act.
The preceding description of the proposed Sub-Advisory Agreement is qualified in
its entirety by reference to the form of Sub-Advisory Agreement that is set
forth in Appendix B to this proxy statement.
D. INFORMATION CONCERNING COLONIAL, UNIBANK AND THEIR AFFILIATES.
COLONIAL MANAGEMENT ASSOCIATES, INC.
Colonial, located at One Financial Center, Boston, Massachusetts 02111-2621, is
a wholly-owned subsidiary of Liberty Funds Group, LLC (LFG), which in turn is an
indirect wholly-owned subsidiary of Liberty Financial. Liberty Financial is a
direct majority-owned subsidiary of LFC Management Corporation, which in turn is
a direct wholly-owned subsidiary of Liberty Corporate Holdings, Inc., which in
turn is a direct wholly-owned subsidiary of LFC Holdings, Inc., which in turn is
a direct wholly-owned subsidiary of Liberty Mutual Equity Corporation, which in
turn is a direct wholly-owned subsidiary of Liberty Mutual Insurance Company
(Liberty Mutual). As of September 30, 2000, LFC Management Corporation owned
71.12% of Liberty Financial. Liberty Financial is a diversified and integrated
asset management organization which provides insurance and investment products
to individuals and institutions. The principal executive offices of Liberty
Financial, LFC Management Corporation, Liberty Corporate Holdings, Inc., and LFC
Holdings, Inc. are located at 600 Atlantic Avenue, 24th Floor, Boston,
Massachusetts 02210-2214. Liberty Mutual is an underwriter of workers'
compensation insurance and a property and casualty insurer in the United States,
organized under the laws of Massachusetts in 1912. The principal business
activities of Liberty Mutual's subsidiaries other than Liberty Financial are
property-casualty insurance, insurance services and life insurance (including
group life and health insurance products) marketed through its own sales force.
The principal executive offices of Liberty Mutual and
24
<PAGE>
Liberty Mutual Equity Corporation are located at 175 Berkeley Street, Boston,
Massachusetts 02117.
On November 1, 2000, Liberty Financial announced that it had retained CS First
Boston to help explore strategic alternatives, including the possible sale of
Liberty Financial.
Colonial and/or its affiliate, Colonial Advisory Services, Inc. (CASI), has
rendered investment advisory services to investment company, institutional and
other clients since 1931. Colonial currently serves as investment advisor or
administrator for 70 open-end and 9 closed-end management investment company
portfolios. As of September 30, 2000, Colonial managed and/or administered over
$18 billion in assets.
The directors of Colonial are Stephen E. Gibson and Joseph R. Palombo. Mr.
Gibson is the President and Chief Executive Officer of Colonial. Mr. Palombo is
the Executive Vice President and Chief Administrative Officer of Colonial. The
business address of the directors and officers of Colonial is One Financial
Center, Boston, Massachusetts 02111-2621.
In addition, the following individuals who are officers or Trustees of the
Funds' Trusts are also officers or directors of Colonial: William J. Ballou,
Suzan M. Barron, Michael G. Clarke, Stephen E. Gibson, Ellen Harrington, Russell
L. Kane, Kevin M. Carome, Gail E. Knudsen, Pamela A. McGrath, Joseph R. Palombo,
Dianne Paras, Vincent P. Pietropaolo and Glenn M. Wolfset.
Colonial provides, pricing and bookkeeping services to the Fund pursuant to a
Pricing and Bookkeeping Agreement, which will continue after the Sub-Advisory
Agreement is approved. Colonial is paid a monthly fee of $2,250 plus the
following percentages of the Fund's average daily net assets over $50 million:
0.035% annually on the next $950 million;
0.025% annually on the next $1 billion;
0.015% annually on the next $1 billion; and
0.001% annually on the excess over $3 billion
For the fiscal year ended October 31, 1999, the pricing and bookkeeping fees
paid by the Fund to Colonial under the Pricing and Bookkeeping Agreement were
approximately $534,000.
25
<PAGE>
Liberty Funds Services, Inc. (LFSI), a subsidiary of LFG located at One
Financial Center, Boston, Massachusetts 02111-2621, is the Trust's investor
servicing agent (transfer, plan and dividend disbursing agent, and shareholder
services provider), for which it receives monthly fees paid by the Trust, which
will continue to be paid after the Sub-Advisory Agreement is approved. The fee
paid to LFSI is based on the average daily net assets of the Fund, charges based
on the number of shareholder accounts and transactions, and reimbursement for
certain out-of-pocket expenses. For the fiscal year ended October 31, 1999, the
aggregate fees paid to LFSI on behalf of the Fund were approximately $4,728,000.
Liberty Funds Distributor, Inc. (LFDI), a subsidiary of Colonial located at One
Financial Center, Boston, MA 02111-2621, acts as distributor for the Fund under
a distribution agreement, which will continue after the Sub-Advisory Agreement
is approved. The Trustees have approved a 12b-1 plan (Plan) for the Fund
pursuant to Rule 12b-1 under the 1940 Act. Under the Plan, the Fund pays LFDI a
service fee at an annual rate of 0.25% of the Fund's net assets attributable to
Classes A, B and C. The Fund also pays a monthly distribution fee at an annual
rate of 0.75% of the average daily net assets attributable to Class B and Class
C Shares. For the fiscal year ended October 31, 1999, the aggregate fees paid by
the Fund to LFDI were as follows:
12b-1 FEES PAID TO LFDI FOR THE FISCAL YEAR ENDED OCTOBER 31, 1999
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
FEES (APPROXIMATE) THE LIBERTY FUND
--------------------------------------------------------------------------------
<S> <C>
SERVICE FEES $4,082,000(a)
--------------------------------------------------------------------------------
DISTRIBUTION FEES $5,370,000(b)
--------------------------------------------------------------------------------
</TABLE>
(a) Classes A, B, and C.
(b) $5,311,000 were attributable to Class B Shares; $59,000 were
attributable to Class C Shares.
Colonial may continue to use the services of AlphaTrade Inc. (AlphaTrade), a
registered broker-dealer subsidiary of Colonial, when buying or selling certain
equity securities for the Fund's portfolio pursuant to procedures adopted by the
Trustees and Rule 17e-1 under the 1940 Act. For the fiscal year ended October
31, 1999, Colonial did not pay any commissions to AlphaTrade on behalf of the
Fund.
In addition to the fees described above, the Fund pays all of its expenses not
assumed by its advisor, including, without limitation, fees and expenses of the
independent Trustees, interest charges, taxes, brokerage commissions, expenses
26
<PAGE>
of issue or redemption of shares, fees and expenses of registering and
qualifying shares of the Fund for distribution under federal and state laws and
regulations, custodial, auditing and legal expenses, expenses of determining net
asset value of the Fund's shares, expenses of providing reports to shareholders,
proxy statements and proxies to existing shareholders, and its proportionate
share of insurance premiums and professional association dues or assessments.
The Fund also is responsible for such non-recurring expenses as may arise,
including litigation in which the Fund may be a party, and other expenses as
determined by the Board of Trustees. The Fund may have an obligation to
indemnify its officers and Trustees with respect to litigation.
UNIBANK SECURITIES, INC.
Unibank is located at 13-15 West 54th Street, New York, New York, 10019. Unibank
offers a range of equity investment products and services to institutional
clients, including private and public retirement funds, unions, endowments,
foundations and insurance companies, as well as to mutual fund sponsors on a
sub-advisory basis. Unibank often structures portfolios to meet benchmarks
established by the client, or tailored to standard Morgan Stanley Capital
International (MSCI) benchmarks such as the MSCI EAFE Index. Unibank is a direct
wholly-owned subsidiary of Unibank A/S, one of Scandinavia's leading financial
institutions, which in turn is a direct wholly-owned subsidiary of Unidanmark
A/S, which in turn is a direct wholly-owned subsidiary of Nordic Baltic Holding
AB. The principal executive offices of Unibank A/S are located at Torvegade 2
DK-1786 Copenhagen V, Denmark. The principal executive offices of Unidanmark A/S
are located at Strandgrade 3 DK-1786 Copenhagen V., Denmark. The principal
executive offices of Nordic Baltic Holding AB are located at Hamngatan 10,
SE-105 71 Stockholm, Sweden.
The directors of Unibank Securities, Inc. are Henrik Bak, Ole Jacobsen, Jerry
Murphy, Peter Nyegaard and Finn Pedersen. Mr. Bak is President and Chairman of
the Board of Unibank Securities, Inc. Mr. Jacobsen is Managing Director and Head
of Unibank Investment Management. Mr. Murphy is Head of Administration, Nordic
Baltic Holding, New York. Mr. Nyegaard is Head of Markets, Nordic Baltic Holding
AB. Mr. Pedersen is Head of Equities, Aros Maizel. The business address of each
of Messrs. Bak, Nyegaard, Murphy, Jacobsen and Pedersen is 13-15 West 54th
Street, New York, New York, 10019.
In addition to the services proposed to be provided by Unibank to the Fund,
Unibank also provides sub-advisory and other services and facilities to other
investment companies. Information with respect to the assets of and management
fees payable to Unibank by funds having objectives similar to the Fund is set
forth below:
27
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
TOTAL NET ASSETS
ANNUAL MANAGEMENT 9/30/00
FUND FEE (IN THOUSANDS)
--------------------------------------------------------------------------------
<S> <C> <C>
UM International Equity Fund 0.60%(a) $15,697
--------------------------------------------------------------------------------
</TABLE>
(a) The management fee is 0.95%, which is paid to Undiscovered Managers,
LLC, the investment advisor to the Fund. Unibank is the sub-advisor to
the Fund and receives a sub-advisory fee of 0.60% for the first $200
million of average net assets, 0.55% for the next $100 million, and
0.50% for assets in excess of $300 million.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF THE LIBERTY FUND VOTE
FOR PROPOSAL 3.
REQUIRED VOTE FOR PROPOSAL 3
Approval of a new Sub-Advisory Agreement for any Fund will require the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund (as defined in the 1940 Act), which means the affirmative vote of the
lesser of (1) more than 50% of the outstanding shares of the Fund or (2) 67% or
more of the shares of the Fund present at the Meeting if more than 50% of the
outstanding shares of the Fund are represented at the Meeting in person or by
proxy.
PROPOSAL 4. AUTHORIZE LIBERTY MONEY MARKET FUND AND LIBERTY MUNICIPAL
MONEY MARKET FUND TO CAST VOTES FOR THE ELECTION OF A
BOARD OF TRUSTEES OF THE SR&F BASE TRUST (LIBERTY MONEY
MARKET FUND AND LIBERTY MUNICIPAL MONEY MARKET FUND -
HEREIN REFERRED TO FOR PURPOSES OF THIS PROPOSAL 4 AS EACH
A "FUND" OR COLLECTIVELY THE "FUNDS")
In addition to voting for members of the Board of Trustees of your respective
Trust, you are also being asked to authorize your Fund to cast votes for the
election of the same candidates for a Board of Trustees of the SR&F Base Trust
(Base Trust) as for your respective Trust. Rather than investing directly in
portfolio securities, each of Liberty Money Market Fund and Liberty Municipal
Money Market Fund is a feeder fund that invests all of its assets in a master
fund. The master fund for Liberty Money Market Fund is SR&F Cash Reserves
Portfolio and the master fund for Liberty Municipal Money Market Fund is SR&F
Municipal Money Market Portfolio (each, a "Portfolio"). Each Portfolio is a
28
<PAGE>
series of the Base Trust. Each of the Funds, as a Portfolio investor, has been
requested by the Base Trust to vote on the election of trustees of the Base
Trust. Therefore, each Fund is soliciting proxies from its shareholders relating
to the authorization of each Fund to cast votes for the election of trustees of
the Base Trust. If you vote for this Proposal, your approval or disapproval of
each nominee in Proposal 1 will be voted in the same manner for or against each
nominee in this Proposal.
All of the nominees listed below, except for the proposed six new members (Ms.
Verville and Messrs. Lowry, Macera, Mayer, Neuhauser and Stitzel), are currently
members of the Board of Trustees of the Base Trust, as well as two Stein Roe
closed-end funds and seven other Stein Roe open-end trusts (collectively, the
"Stein Roe Funds"), and have served in that capacity continuously since
originally elected or appointed. All of the currently serving members, other
than Ms. Kelly and Mr. Palombo, have been previously elected by the shareholders
of the Base Trust. The proposed six new members currently serve on the Boards of
Trustees of ten Liberty closed-end funds and a number of Liberty open-end trusts
(collectively, the "Liberty Fund Complex") and were recommended for election as
Trustees of the Base Trust by the Board of Trustees of the Base Trust at a
special meeting held on October 17, 2000. Each of the nominees elected will
serve as a Trustee of the Base Trust until the next meeting of shareholders of
the Funds called for the purpose of electing a Board of Trustees, and until a
successor is elected and qualified or until death, retirement, resignation or
removal.
Currently, two different boards of trustees are responsible for overseeing
substantially all of the Liberty Fund Complex and Stein Roe Funds. Liberty
Financial and the Trustees of the Liberty Fund Complex and Stein Roe Funds have
agreed that shareholder interests can more effectively be represented by a
single board with responsibility for overseeing substantially all of the Liberty
Fund Complex and Stein Roe Funds. Creation of a single, consolidated board
should also provide certain administrative efficiencies (such as the elimination
of six board meetings as a result of the consolidation and the corresponding
elimination of the need to prepare duplicative board materials) and potential
future cost savings for the Liberty Fund Complex, Stein Roe Funds and Liberty
Financial. The nominees listed below will be the members of the single,
consolidated Board of Trustees. The persons named in the enclosed proxy card
intend to vote at the Meetings in favor of the election of the nominees named
below as Trustees (if so instructed). If any nominee listed below becomes
unavailable for election, the enclosed proxy card may be voted for a substitute
nominee in the discretion of the proxy holder(s).
29
<PAGE>
The following table sets forth certain information about each nominee. Each
nominee, if elected, will serve as a Trustee of the Base Trust.
<TABLE>
<CAPTION>
YEAR OF
ELECTION OR
RECOMMENDED
FOR ELECTION
NOMINEE NAME & AGE PRINCIPAL OCCUPATION (1) AND DIRECTORSHIPS AS TRUSTEE
------------------ ------------------------------------------ ------------
<S> <C> <C>
Douglas A. Hacker Executive Vice President and Chief 1996
(43) Financial Officer of UAL, Inc. (airline)
since July, 1999; Senior Vice President
and Chief Financial Officer of UAL, Inc.
prior thereto.
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
YEAR OF
ELECTION OR
RECOMMENDED
FOR ELECTION
NOMINEE NAME & AGE PRINCIPAL OCCUPATION (1) AND DIRECTORSHIPS AS TRUSTEE
------------------ ------------------------------------------ ------------
<S> <C> <C>
Janet Langford Kelly Executive Vice President-Corporate 1996
(41) Development, General Counsel and
Secretary of Kellogg Company (food,
beverage and tobacco producer) since
September 1999; Senior Vice President,
Secretary and General Counsel, Sara Lee
Corporation (branded, packaged,
consumer-products manufacturer) prior
thereto.
Richard W. Lowry Private Investor 1987 (formerly Chairman New nominee
(64) and Chief Executive Officer, U.S. Plywood
Corporation (building products producer)
from August 1985 to August 1987).
Salvatore Macera Private Investor since 1981 (formerly New nominee
(69) Executive Vice President and Director of
Itek Corporation (electronics) from 1975
to 1981).
William E. Mayer(2) Partner, Park Avenue Equity Partners New nominee
(60) (venture capital) since November 1996;
Dean, College of Business and Management,
University of Maryland, prior thereto;
Director, Johns Manville (building
products producer), Lee Enterprises (print
and on-line media) and WR Hambrecht + Co.
(financial service provider).
Charles R. Nelson Van Voorhis Professor, Department of 1987
(57) Economics, University of Washington;
consultant on economic and statistical
matters.
John J. Neuhauser Academic Vice President and Dean of New nominee
(57) Faculties, Boston College, since August,
1999; Dean, Boston College School of
Management prior thereto.
</TABLE>
31
<PAGE>
<TABLE>
<CAPTION>
YEAR OF
ELECTION OR
RECOMMENDED
FOR ELECTION
NOMINEE NAME & AGE PRINCIPAL OCCUPATION (1) AND DIRECTORSHIPS AS TRUSTEE
------------------ ------------------------------------------ ------------
<S> <C> <C>
Joseph R. Palombo(3) Trustee of the Liberty Fund Complex since 2000
(47) August 2000; Trustee of the Stein Roe
Funds since October 2000; Vice President
of the Liberty Mutual Funds and SteinRoe
Funds from April, 1999 to October, 2000;
Executive Vice President and Director of
Colonial and Stein Roe & Farnham
Incorporated; Executive Vice President
and Chief Administrative Officer of
Liberty Funds Group LLC since April,
1999; Director of Alpha-Trade Inc.
(broker-dealer), Colonial Advisory
Services, Inc., Liberty Funds
Distributor, Inc. and Liberty Funds
Services, Inc. since April, 2000. Chief
Operating Officer, Putnam Mutual Funds
prior thereto.
Thomas E. Stitzel Business Consultant since 1999; New nominee
(64) Professor of Finance and Dean, College of
Business, Boise State University prior
thereto; Chartered Financial Analyst.
Thomas C. Theobald Managing Director, William Blair Capital 1996
(62) Partners (private equity investing) since
1994; Chief Executive Officer and Chairman
of the Board of Directors, Continental
Bank Corporation (banking services) prior
thereto.
Anne-Lee Verville Consultant since 1997; General Manager, New nominee
(55) Global Education Industry (global
education applications) prior thereto;
formerly President, Applications Solutions
Division, IBM Corporation (global
education and global applications)
from 1991 to 1994.
</TABLE>
---------------------------
(1) Except as otherwise noted, each individual has held the office indicated
or other offices in the same company for the last five years.
(2) Mr. Mayer is an "interested person," as defined in the Investment
Company Act of 1940 (1940 Act) because of his affiliation with WR
Hambrecht + Co. (a registered broker-dealer).
(3) Mr. Palombo is an "interested person," as defined in the 1940 Act
because of his affiliation with Liberty Financial, the parent company of
the advisors to the Funds and an indirect majority-owned subsidiary of
Liberty Mutual Insurance Company.
32
<PAGE>
The following persons who are currently serving on each Board of Trustees are
not standing for reelection:
<TABLE>
<CAPTION>
ELECTION AS
NOMINEE NAME & AGE PRINCIPAL OCCUPATION (1) AND DIRECTORSHIPS TRUSTEE
<S> <C> <C>
John A. Bacon Jr. Private Investor. 1998
(72)
William W. Boyd Chairman and Director of Sterling 1994
(72) Plumbing (manufacturer of plumbing
products).
Lindsay Cook (2) Executive Vice President of Liberty 1994
(47) Financial since March 1997; Senior Vice
President prior thereto.
</TABLE>
---------------------------
(1) Except as otherwise noted, each individual has held the office indicated
or other offices in the same company for the last five years.
(2) Mr. Cook is an "interested person," as defined in the 1940 Act, because
he is an officer of Liberty Financial.
TRUSTEES' COMPENSATION; MEETINGS AND COMMITTEES
A. TRUSTEES' COMPENSATION. The Board of Trustees will serve as Trustees of the
Liberty Fund Complex and Stein Roe Funds for which each Trustee, except for Mr.
Palombo, will receive an additional annual retainer of $45,000, and attendance
fees of $8,000 for each regular joint Board meeting and $1,000 for each special
joint Board meeting. The Board is expected to hold six regular joint Board
meetings each year. Committee chairs will receive an annual retainer of $5,000.
Other Committee members will receive an additional annual retainer of $1,000,
and receive $1,000 for each special meeting attended on a day other than a
regular joint meeting day. Two-thirds of the Trustees' fees are allocated among
the Liberty Fund Complex and Stein Roe Funds based on their relative net assets,
and one-third of the fees are divided equally among the Liberty Fund Complex and
Stein Roe Funds.
The Stein Roe Funds do not currently provide pension or retirement plan benefits
to the Trustees. However, Messrs. Bacon and Boyd, two of the Trustees currently
serving on the Boards of Trustees of the Stein Roe Funds who are not continuing
on the Boards, will receive certain payments after completing their service on
the Boards. Mr. Boyd will receive a payment of $50,000 upon his departure. Mr.
Bacon will receive payments at an annual rate equal to the 1999 compensation of
the Trustees of the Stein Roe
33
<PAGE>
Funds until he would otherwise have retired at age 74 on December 31, 2001. The
payments to Mr. Bacon will be made quarterly, beginning in 2001. Liberty
Financial and Stein Roe Funds will each bear one-half of the cost of the
payments to Messrs. Boyd and Bacon; the Stein Roe Funds' portion of the payments
will be allocated among the Stein Roe Funds based on each fund's share of the
Trustee fees for 2000.
Further information concerning the Trustees' compensation is included in Part 4.
Fund Information on page 36.
B. MEETINGS AND COMMITTEES. The current Board of Trustees of the Stein
Roe Funds consists of one interested and six non-interested Trustees.
AUDIT COMMITTEE. The Audit Committee of the Stein Roe Funds, consisting of
Messrs. Hacker (Chairperson), Bacon, Boyd, Nelson and Theobald and Ms. Kelly,
all of whom are non-interested Trustees, recommends to the Board of Trustees the
independent accountants to serve as auditors, reviews with the independent
accountants the results of the auditing engagement and internal accounting
procedures and considers the independence of the independent accountants, the
range of their audit services and their fees.
COMPENSATION COMMITTEE. The Compensation Committee of the Stein Roe Funds,
consisting of Messrs. Boyd and Nelson, both of whom are non-interested Trustees,
reviews compensation of the board members who are not affiliated with the
investment adviser.
NOMINATING COMMITTEE. The Nominating Committee of the Stein Roe Funds,
consisting of Messrs. Boyd and Nelson, both of whom are non-interested Trustees,
recommends to the Board of Trustees, among other things, nominees for trustee
and for appointments to various committees. The Committee will consider
candidates for trustee recommended by shareholders. Written recommendations with
supporting information should be directed to the Committee in care of your Fund,
Attention: Secretary, One Financial Center, 11th Floor, Boston, Massachusetts
02111-2621.
EXECUTIVE COMMITTEE. The Executive Committee of the Stein Roe Funds, consisting
of Mr. Boyd, a non-interested Trustee, and Mr. Cook, an interested Trustee, is
authorized to take certain actions delegated to it by the full Board of Trustees
and to exercise the full powers of the Board of Trustees, with some exceptions,
between Board meetings.
RECORD OF BOARD AND COMMITTEE MEETINGS. During the fiscal year ended
34
<PAGE>
June 30, 2000, the Board of Trustees of the Base Trust held six meetings, the
Audit Committee held four meetings, the Compensation Committee held one meeting,
the Nominating Committee did not hold any meetings and the Executive Committee
held two meetings.
During the most recently completed fiscal years, each of the current Trustees
attended more than 75% of the meetings of the Board of Trustees and the
committees of which such Trustee is a member.
If any nominee listed above becomes unavailable for election, the enclosed proxy
card may be voted for a substitute nominee in the discretion of the proxy
holder(s).
THE BOARD OF TRUSTEES OF THE BASE TRUST RECOMMENDS THAT THE SHAREHOLDERS OF EACH
FUND VOTE FOR EACH NOMINEE IN PROPOSAL 4.
REQUIRED VOTE FOR PROPOSAL 4
Shareholders of each Fund vote together with the shareholders of the other
feeder funds of the respective Portfolios and with the shareholders of the other
master funds of the Base Trust for the election of Trustees of the Base Trust. A
plurality of the votes cast at the Meetings for the Base Trust, if a quorum is
represented, is required for the election of each Trustee to the Board of
Trustees of the Base Trust.
PART 3. INFORMATION REGARDING VOTING AND SHAREHOLDER MEETINGS.
This section provides further information regarding the methods of voting and
shareholder meetings.
In Parts 3 and 4, the following acronym codes will be used to identify the
Liberty Mutual Funds:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
CODE LIBERTY MUTUAL FUND CODE LIBERTY MUTUAL FUND
--------------------------------------------------------------------------------
<S> <C> <C> <C>
LHYSF Liberty High Yield LCBP Liberty Counselor Balanced
Securities Fund Portfolio
--------------------------------------------------------------------------------
LIF Liberty Income Fund LCGP Liberty Counselor Growth
Portfolio
--------------------------------------------------------------------------------
LSIF Liberty Strategic Income LCIP Liberty Counselor Income
Fund Portfolio
--------------------------------------------------------------------------------
LTMAGF Liberty Tax-Managed LHYMF Liberty High Yield
Aggressive Growth Fund Municipal Fund
--------------------------------------------------------------------------------
LTMVF Liberty Tax-Managed Value LITEF Liberty Intermediate
</TABLE>
35
<PAGE>
<TABLE>
<S> <C> <C> <C>
Fund Tax-Exempt Fund
--------------------------------------------------------------------------------
LIGF Liberty Intermediate LTEF Liberty Tax-Exempt Fund
Government Fund
--------------------------------------------------------------------------------
LMMF Liberty Money Market Fund LTEIF Liberty Tax-Exempt Insured
Fund
--------------------------------------------------------------------------------
LNGCF Liberty Newport Greater LMMMF Liberty Municipal Money
China Fund Market Fund
--------------------------------------------------------------------------------
LNJOF Liberty Newport Japan LUF Liberty Utilities Fund
Opportunities Fund
--------------------------------------------------------------------------------
LCF Liberty Contrarian Fund LCATEF Liberty California
Tax-Exempt Fund
--------------------------------------------------------------------------------
LCEF Liberty Contrarian LCTTEF Liberty Connecticut
Equity Fund Tax-Exempt Fund
--------------------------------------------------------------------------------
LCIF Liberty Contrarian LMATEF Liberty Massachusetts
Income Fund Tax-Exempt Fund
--------------------------------------------------------------------------------
LFSF Liberty Federal LNYTEF Liberty New York
Securities Fund Tax-Exempt Fund
--------------------------------------------------------------------------------
LNGUF Liberty Newport Global LOHTEF Liberty Ohio Tax-Exempt
Utilities Fund Fund
--------------------------------------------------------------------------------
LNIEF Liberty Newport LGIF Liberty Growth & Income
International Fund
Equity Fund
--------------------------------------------------------------------------------
LREF Liberty Real Estate Fund LNAPF Liberty Newport Asia
Pacific Fund
--------------------------------------------------------------------------------
LSVF Liberty Select Value Fund LNEF Liberty Newport Europe Fund
--------------------------------------------------------------------------------
LSF Liberty Special Fund LNTF Liberty Newport Tiger Fund
--------------------------------------------------------------------------------
TLF The Liberty Fund LFRAF Liberty Floating Rate
Advantage Fund
--------------------------------------------------------------------------------
</TABLE>
A. PROXY SOLICITATION. Shareholders of the Liberty Mutual Funds entitled to vote
at the Meetings will receive proxy materials in the mail. The Funds have engaged
the services of SCC to assist in the solicitation of proxies for the Liberty
Newport Global Utilities Fund (LNGUF), the Liberty Newport International Equity
Fund (LNIEF) and The Liberty Fund (TLF). Liberty Financial will bear the cost of
the solicitation which are estimated at $15,000, $15,000 and $100,000 for LNGUF,
LNIEF and TLF, respectively. As the date approaches, if your vote is not
received, you may receive a call from SCC reminding you to exercise your right
to vote. At this time, you may elect to vote your shares telephonically.
36
<PAGE>
B. RECORD DATE AND QUORUM. Each shareholder of record of any Liberty Mutual Fund
at the close of business on September 29, 2000 (Record Date) will have one vote
for each share held. Holders of 30% of the shares of each Liberty Mutual Fund
voting on a Proposal outstanding on the Record Date constitute a quorum and must
be present in person or represented by proxy for business to be transacted at
the Meetings on Proposals 2 and 3. With respect to Proposal 1, shareholders of
each Liberty Mutual Fund vote together with the shareholders of the other series
of the applicable Trust for the election of Trustees; 30% of the outstanding
shares of the Trust constitutes a quorum for voting on the election of Trustees.
With respect to Proposal 4, the shareholders of each of Liberty Money Market
Fund and Liberty Municipal Money Market Fund vote together with the shareholders
of the other feeder funds of the respective Portfolios and with the shareholders
of the other master funds of the Base Trust for the election of Trustees of the
Base Trust; 30% of the outstanding shares of the Base Trust constitutes a quorum
for voting on the election of Trustees. Regardless of how you vote ("For",
"Against" or "Abstain"), your shares will be counted as present and entitled to
vote for purposes of determining the presence of a quorum. If a shareholder
withholds authority or abstains, or the proxy reflects a "broker non-vote"
(i.e., shares held by brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or persons entitled to vote and (ii)
the broker or nominee does not have discretionary voting power on a particular
matter), it will have the effect of votes (a) present for purposes of
determining a quorum for each proposal and (b) against Proposals 2 and 3. With
respect to the election of Trustees (Proposals 1 and 4), withheld authority,
abstentions and broker non-votes have no effect on the outcome of the voting.
37
<PAGE>
C. REVOKING YOUR PROXY. You may revoke your proxy at any time up until the
voting results are announced at the Meetings. You may revoke your proxy by
writing to the Secretary of the Liberty Mutual Funds, Attn: William J. Ballou,
One Financial Center, 11th Floor, Boston, Massachusetts 02111-2621. You may also
revoke your proxy by voting again by using one of the following three ways: (a)
by using your enclosed proxy card; (b) by fax (not available for all
shareholders; refer to the enclosed proxy insert) or (c) voting in person at the
Meetings. You may also revoke your vote telephonically by calling SCC at
1-800-732-3683.
D. SHAREHOLDER PROPOSALS. Proposals of shareholders which are intended to be
considered for inclusion in the Liberty Mutual Funds' proxy statement must be
received within a reasonable amount of time prior to any meetings. The Liberty
Mutual Funds do not currently intend to hold shareholder meetings in 2001. You
may submit shareholder proposals to the Secretary of the Liberty Mutual Funds,
Attention: William J. Ballou, One Financial Center, 11th Floor, Boston,
Massachusetts 02111-2621.
E. ANNUAL/SEMIANNUAL REPORTS. FURTHER INFORMATION CONCERNING A LIBERTY MUTUAL
FUND IS CONTAINED IN ITS MOST RECENT ANNUAL AND/OR SEMIANNUAL REPORT TO
SHAREHOLDERS, WHICH IS OBTAINABLE FREE OF CHARGE BY WRITING COLONIAL MANAGEMENT
ASSOCIATES, INC. AT ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111-2621 OR BY
CALLING 1-800-426-3750.
F. OTHER MATTERS. As of the date of this proxy statement, only the business
mentioned in proposals 1 through 4 of the Notice of the Special Meetings of
Shareholders is contemplated to be presented. If any procedural or other matters
come before the Meetings, your proxy shall be voted in accordance with the best
judgement of the proxy holder(s).
G. ADJOURNMENT. If sufficient votes in favor of any of the proposals set forth
in the Notice of Special Meetings of Shareholders are not received by the time
scheduled for the meeting, the persons named as proxies may propose adjournments
of the meeting for a period or periods of not more than 90 days in the aggregate
to permit further solicitation of proxies with respect to those proposals. Any
adjournment will require the affirmative vote of a majority of the votes cast on
the question in person or by proxy at the session of the meeting to be
adjourned. The persons named as proxies will vote in favor of adjournment those
proxies that are entitled to vote in favor of such proposals. They will vote
against adjournment those proxies required to be voted against such proposals.
Any proposals for which sufficient favorable votes have been received by the
time of the meeting may be acted upon and considered final regardless of
38
<PAGE>
whether the meeting is adjourned to permit additional solicitation with respect
to any other proposal.
H. COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934 (LIBERTY
FLOATING RATE ADVANTAGE FUND ONLY). Section 16(a) of the Securities Exchange Act
of 1934, as amended, and Section 30(h) of the 1940 Act, as amended, require the
Fund's Board and certain other persons (Section 16 reporting persons), to file
with the Securities and Exchange Commission (SEC) initial reports of ownership
and reports of changes in ownership of the Fund's shares and to furnish the Fund
with copies of all Section 16(a) forms they file. None of the persons have
made such Section 16(a) filings for the fiscal year ended August 31, 2000.
PART 4. FUND INFORMATION.
For each class of each Liberty Mutual Fund's shares and each Trust's shares
entitled to vote at the Meetings, the number of shares outstanding as of
September 29, 2000 was as follows:
39
<PAGE>
<TABLE>
<CAPTION>
LIBERTY OUTSTANDING OUTSTANDING OUTSTANDING
MUTUAL FUND CLASS A SHARES CLASS B SHARES CLASS C SHARES
<S> <C> <C> <C>
LIF 16,148,249.120 5,552,405.321 427,097.942
LMMF 239,005,963.398 71,961,717.385 4,112,265.135
LCF 331,485.813 74,278.688 4,412.855
LNGUF 10,348,066.451 930,888.097 62,594.830
LSF 4,884,506.242 0.000 0.000
LCIP 298,986.212 250,776.121 187,015.430
LHYMF 5,788,695.741 9,226,892.968 303,956.972
LTEF 144,371,138.034 15,870,162.790 389,499.862
LTEIF 16,346,727.166 3,265,663.585 73,256.843
LMMMF 11,693,512.056 560,889.127 222,996.360
LCATEF 9,320,321.743 8,710,410.880 486,216.731
LCTTEF 27,046,330.054 9,976,521.288 689,904.308
LMATEF 18,851,864.727 5,901,995.294 177,799.580
LNYTEF 6,334,227.330 6,049,749.324 80,177.473
LOHTEF 6,563,828.390 3,997,235.115 40,882.573
</TABLE>
<TABLE>
<CAPTION>
OUTSTANDING
LIBERTY CLASS A OUTSTANDING OUTSTANDING OUTSTANDING
MUTUAL FUND SHARES CLASS B SHARES CLASS C SHARES CLASS I SHARES
<S> <C> <C> <C> <C>
LCEF 4,080,501.791 28,816.534 608.519 591,404.515
</TABLE>
<TABLE>
<CAPTION>
OUTSTANDING
LIBERTY CLASS A OUTSTANDING OUTSTANDING OUTSTANDING
MUTUAL FUND SHARES CLASS B SHARES CLASS C SHARES CLASS Z SHARES
<S> <C> <C> <C> <C>
LHYSF 76,049,963.256 85,000,541.081 9,484,939.401 94,118.705
LTMAGF 314,282.990 1,118,558.394 76,151.548 10,377.487
LTMVF 1,155,286.572 4,127,766.734 835,535.857 103.950
LIGF 76,405,556.013 26,876,141.566 307,789.366 966,002.020
LNGCF 3,189,764.828 320,194.813 71,303.235 8,143.287
LNIEF 3,368,778.377 3,420,523.691 88,370.612 479,140.841
LFSF 57,933,053.043 5,154,093.185 353,058.312 102.664
LREF 530,746.385 92,439.873 13,527.014 33,788.089
LSVF 17,344,993.683 13,474,790.485 1,043,774.270 47,566.852
TLF 85,501,505.934 60,443,270.570 640,428.421 313.575
LCBP 777,227.095 1,152,133.755 470,120.394 53,994.765
LCGP 909,246.217 1,164,332.097 499,742.022 81,282.092
LUF 16,651,725.002 28,643,739.600 200,553.719 14,549.200
LGIF 15,676,398.992 38,455,709.768 1,403,147.563 52.015
LNAPF 425,886.313 236,850.346 52,040.187 91,432.893
LNEF 796,834.961 261,794.817 41,326.596 3,031.573
LFRAF 6,284,360.530 1,850,429.620 1,454,213.709 221,897.853
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
LIBERTY OUTSTANDING OUTSTANDING OUTSTANDING OUTSTANDING
MUTUAL FUND CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS J SHARES
<S> <C> <C> <C> <C>
LSIF 91,129,446.697 120,605,548.331 7,289,349.992 90,370,760.596
</TABLE>
<TABLE>
<CAPTION>
LIBERTY OUTSTANDING
MUTUAL FUND CLASS Z SHARES
<S> <C>
LSIF 793,964.353
</TABLE>
<TABLE>
<CAPTION>
LIBERTY OUTSTANDING OUTSTANDING OUTSTANDING OUTSTANDING
MUTUAL FUND CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS I SHARES
<S> <C> <C> <C> <C>
LCIF 441,733.547 23,503.966 2,671.810 10,601.265
</TABLE>
<TABLE>
<CAPTION>
LIBERTY OUTSTANDING
MUTUAL FUND CLASS Z SHARES
<S> <C>
LCIF 363,381.320
</TABLE>
<TABLE>
<CAPTION>
LIBERTY OUTSTANDING OUTSTANDING OUTSTANDING OUTSTANDING
MUTUAL FUND CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS T SHARES
<S> <C> <C> <C> <C>
LNTF 27,808,356.182 25,782,765.785 4,131,642.676 4,311,916.152
</TABLE>
<TABLE>
<CAPTION>
LIBERTY OUTSTANDING
MUTUAL FUND CLASS Z SHARES
<S> <C>
LNTF 14,660,618.823
</TABLE>
<TABLE>
<CAPTION>
LIBERTY OUTSTANDING OUTSTANDING OUTSTANDING OUTSTANDING
MUTUAL FUND CLASS A SHARES CLASS B SHARES CLASS C SHARES CLASS J SHARES
<S> <C> <C> <C> <C>
LNJOF 1,189,572.229 1,547,061.523 621,308.594 90.000
</TABLE>
<TABLE>
<CAPTION>
LIBERTY OUTSTANDING OUTSTANDING
MUTUAL FUND CLASS N SHARES CLASS Z SHARES
<S> <C> <C>
LNJOF 375,473.000 293,020.205
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
LIBERTY TRUST OUTSTANDING SHARES
<S> <C>
Liberty Funds Trust I 559,435,280.400*
Liberty Funds Trust II 432,208,774.200
Liberty Funds Trust III 297,679,032.823
Liberty Funds Trust IV 262,368,102.700
Liberty Funds Trust V 125,847,396.700
Liberty Funds Trust VI 72,651,977.750
Liberty Funds Trust VII 77,798,287.540
Liberty Floating Rate Advantage Fund 9,810,901.712
</TABLE>
* Includes outstanding shares for Liberty Tax-Managed Growth Fund and Liberty
Tax-Managed Growth Fund II, two series of Liberty Funds Trust I, that will
elect Trustees of the Trust at the Meetings but which are included in a
separate proxy statement.
As of September 29, 2000, the following shareholders of record owned 5% or more
of the applicable outstanding Class(es) of shares of the following Liberty
Mutual Funds:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LHYSF B & C Merrill Lynch, Pierce, 9,086,380.550(B) 10.69%
Fenner & Smith, Inc. 1,173,308.314(C) 12.37%
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
3rd Floor
Jacksonville, FL 32216
LHYSF C Banc One Securities Corp 2,829,878.142 29.84%
FBO The One Select
Portfolio
733 Greencrest Drive
Westerville, OH 43081
LIF B & C Merrill Lynch, Pierce, 565,392.653(B) 10.18%
Fenner & Smith, Inc. 55,606.580(C) 13.02%
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LSIF B & C Merrill Lynch, Pierce, 6,688,700.666(B) 5.55%
Fenner & Smith, Inc. 880,929.778(C) 12.09%
BankBoston NA Custodian
4800 Deer Lake Drive E.
3rd Floor
Jacksonville, FL 32216
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LSIF J Tokai Maruman 90,370,760.596 100.00% (*)
Securities
1-10, Nihonbashi
2-Chome
Chuo-Ku
Tokyo, Japan 103-0027
LSIF Z Colonial Counselor 472,038.079 59.45%
Growth Portfolio
245 Summer Street
Boston, MA 02111
LSIF Z Colonial Counselor 111,036.292 13.99%
Income Portfolio
245 Summer Street
Boston, MA 02111
LSIF Z Colonial Counselor 210,726.507 26.54%
Balanced Portfolio
245 Summer Street
Boston, MA 02111
LTMAGF A, C & Colonial Management 141,666.667(A) 45.08%
Z Associates, Inc. 8,333.333(C) 10.94%
One Financial Center 8,333.333(Z) 80.30%
Boston, MA 02111
LTMAGF B & C Merrill Lynch, Pierce, 103,822.973(B) 9.28%
Fenner & Smith, Inc. 17,189.750(C) 22.57%
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LTMAGF C Cranford Construction 7,105.584 9.33%
Company Inc.
c/o Selengut
1678 45th Street
Brooklyn, NY 11204
LTMAGF C Pegge Ann Wall Trustee 7,283.321 9.56%
U/W F Willard Wall
Trust 1
32394 Pleasant Oaks Drive
Springville, CA 93265
LTMAGF Z Margery L. Hayward 2,044.154 19.70%
7327 W. Lafayette Place
Mequon, WI 53092
LTMVF A & C Merrill Lynch, Pierce, 99,831.558(A) 8.64%
Fenner & Smith, Inc. 78,582.051(C) 9.40%
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
</TABLE>
43
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LTMVF Z Colonial Management 103.950 100.00%
Associates, Inc.
One Financial Center
Boston, MA 02111
LIGF B & C Merrill Lynch, Pierce, 1,950,512.625 7.26%
Fenner & Smith, Inc.(B) 38,310.617(C) 12.45%
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LIGF C Cynthia D. Frankel 17,236.089 5.60%
P.O. Box 25003
Asheville, NC 28813
LIGF C The Reese Family 16,307.041 5.30%
Partnership
17317 Wood Road
Bow, WA 98232
LIGF Z Colonial Counselor 333,593.438 34.53%
Income Portfolio
245 Summer Street
Boston, MA 02111
LIGF Z Colonial Counselor 632,244.524 65.45%
Balanced Portfolio
245 Summer Street
Boston, MA 02111
LMMF A Colonial Investment 27,288,167.790 11.42%
Services, Inc.
One Financial Center
Boston, MA 02111
LMMF B Susan P. Ryan 209,009.300 5.08%
8 Burlington Road
Harwinton CT 06791
LMMF B Investors Bank & Trust 388,665.500 9.45%
Company Custodian
Michael Lutsky IRA
4601 Brewster Lane
Tarzana, CA 91356
LNGCF A, B & Merrill Lynch, Pierce, 559,280.470(A) 17.53%
C Fenner & Smith, Inc. 67,086.595(B) 20.95%
For the Sole Benefit 15,761.287(C) 22.10%
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
</TABLE>
44
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LNGCF Z Colonial Management 7,616.387 93.53%
Associates, Inc.
One Financial Center
Boston, MA 02111
LNJOF A, B & Merrill Lynch, Pierce, 76,377.274(A) 6.42%
C Fenner & Smith, Inc. 208,250.199(B) 13.46%
For the Sole Benefit 99,225.535(C) 15.97%
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LNJOF Z Thomas C. Theobald 16,910.764 5.77%
55 Railroad Avenue
Plaza Level
Greenwich, CT 06830
LNJOF Z Mitra & Co. 233,736.059 79.77%
c/o Marshall & Ilsley
Trust Company
1000 N. Water Street
Milwaukee, WI 53202
LCF A James E. Crabbe Trustee 200,000.000 60.33% (*)
James E. Crabbe Trust
121 SW Morrison
Portland, OR 97204
LCF A Richard S. Huson 100,000.000 30.17%
Yvonne M. Huson Trustee
Richard S. Huson Trust
2480 NW Tower Rock Rd.
Bend, OR 97701
LCF B Advest Bank Trustee 8,287.934 11.16%
Jacob Levinson Mar
Trust
FBO M. Levinson
Attn: Trust Division
90 State House Square
Hartford, CT 06103
LCF C Orville B. Lamb 274.163 6.21%
Edna M. Lamb
Orville Paul Lamb
101 Honeysuckle
Casper, WY 82604
LCEF B Investors Bank & Trust 1,479.255 5.13%
Company Custodian
Morris E. Kinghorn IRA
P.O. Box 83
Pocatello, ID 83204
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LCEF B Investors Bank & Trust 1,616.486 5.61%
Company Trustee
Arms Inc. 401(k) Plan
2447 E. Sunshine Drive
Boise, ID 83712
LCEF C Investors Bank & Trust 284.402 46.74%
Company Custodian
Clyde Williams SARSEP
Plan
Burnt Ranch Road
Cherry Creek Ranch
Mitchell, OR 97750
LCEF C Investors Bank & Trust 41.083 6.75%
Company Custodian
Susan C. Williams
SARSEP Plan
43861 Burnt Ranch Road
Mitchell, OR 97750
LCEF C Colonial Management 62.691 10.30%
Associates, Inc.
One Financial Center
Boston, MA 02111
LCEF C Investors Bank & Trust 75.327 12.38%
Company Trustee
Morgan Franklin
Corporation 401(k)
Retirement Plan
47042 Dixon Court
Lexington Park, MD
20653
LCEF C Investors Bank & Trust 31.998 5.26%
Company Trustee
Morgan Franklin
Corporation 401(k)
Retirement Plan
45803 Spruce Drive
Lexington Park, MD
20653
LCEF C Don A. McKee 89.993 14.79%
Molly McKee
3917 Oakwood Drive N.
Pearlanad, TX 77581
</TABLE>
46
<PAGE>
<TABLE>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LCEF I Northwestern Trust 470,458.694 79.55%
Company Custodian
FBO IBEW Local 76
Supplemental Income
Fund
1201 3rd Ave. Ste. 2010
Seattle, WA 98101
LCEF I Northwestern Trust 113,624.910 19.21%
Company Custodian
FBO IBEW Local 76
Supplemental Income Fund
1201 3rd Avenue
Ste. 2010
Seattle, WA 98101
LCIF A & B Merrill Lynch, Pierce, 49,929.317(A) 11.30%
Fenner & Smith, Inc. 13,433.080(B) 57.15%
Merrill Lynch
Financial Data Service
Attn: Service Team
4800 Deer Lake Drive E.
3rd Floor
Jacksonville, FL 32246
LCIF A Ibak & Co. 116,525.561 26.38%
P.O. Box 1700
102 South Clinton
Iowa City, IA 52244
LCIF B Raymond James & 1,284.876 5.47%
Associates Inc. CSDN
Norma B. Porche IRA
127 W. McKennon
Bixby, OK 74008
LCIF B Jan C. Brueckmann 2,535.358 10.79%
4510 Church Road
Hampstead, MD 21074
LCIF I Colonial Management 10,601.265 100.00%
Associates, Inc.
One Financial Center
Boston, MA 02111
LCIF Z Colonial Counselor 103,003.279 28.35%
Income Portfolio
245 Summer Street
Boston, MA 02111
LCIF Z Colonial Counselor 260,272.153 71.63% (*)
Balanced Portfolio
245 Summer Street
Boston, MA 02111
</TABLE>
47
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LFSF A, B & Merrill Lynch, Pierce, 3,625,214.954(A) 6.26%
C Fenner & Smith, Inc. 588,410.739(B) 11.42%
For the Sole Benefit 23,307.294(C) 6.60%
of its Customers
4800 Deer Lake Drive E.
3rd Floor
Jacksonville, FL 32216
LFSF C The Simsbury Fire 54,313.566 15.38%
District
871 Hopmeadow Street
Simsbury, CT 86070
LFSF C Dental Laboratory 23,051.755 6.53%
Assoc of the State of
New York
A Corporation
c/o Mark Polevoy
#1 Barstow Rd. Ste. P20
Great Neck, NY 11021
LFSF Z Colonial Management 102.664 100.00%
Associates, Inc.
One Financial Center
Boston, MA 02111
LNGUF C Merrill Lynch, Pierce, 11,159.305 17.83%
Fenner & Smith, Inc.
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LNIEF B & C Merrill Lynch, Pierce, 363,249.908(B) 10.62%
Fenner & Smith, Inc. 5,020.230(C) 5.68%
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LNIEF C Colonial Management 9,733.271 11.01%
Associates, Inc.
One Financial Center
Boston, MA 02111
LNIEF Z Colonial Counselor 325,486.231 67.93%
Growth Portfolio
245 Summer Street
Boston, MA 02111
LNIEF Z Colonial Counselor 153,570.425 32.05%
Balanced Portfolio
245 Summer Street
Boston, MA 02111
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LREF A Enele & Co 46,972.293 8.85%
Dividend Reinvest
c/o Copper Mountain
Trust
601 SW Second Avenue
Suite 1800
Portland, OR 97204
LREF A Charles Schwab & Co. 185,632.640 34.98% (*)
Inc.
Special Custody A/C
for Benefit of
Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
LREF B Investors Bank & Trust 4,917.683 5.32%
Company Custodian
Joseph M. Gnesin IRA
11 Beach Street
New York, NY 10013
LREF B First Trust 5,329.694 5.77%
Corporation Custodian
17 Tobey Village
Office Park
Pittsford, NY 14534
LREF C Daniel Keilitz 886.783 6.56%
17100 Bridgestone
Court #207
Ft. Myers, FL 33908
LREF C Raymond James & 898.473 6.64%
Associates, Inc.
Custodian
880 Carillon Parkway
St. Peters, FL 33716
LREF I Colonial Counselor 33,681.108 99.68%
Income Portfolio
245 Summer Street
Boston, MA 02111
LSVF B & C Merrill Lynch, Pierce, 716,672.622(B) 5.32%
Fenner & Smith, Inc. 145,989.764(C) 13.99%
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LSVF C Banc One Securities 240,769.130 23.07%
Corp
FBO The One Select
Portfolio
733 Greencrest Drive
Westerville, OH 43081
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LSVF C AG Edwards & Sons 88,068.956 11.85%
One North Jefferson
Avenue
St. Louis, MO 63103
LSF A FTC & Co. 577,726.047 11.83%
Attn: Datalynx #203
P.O. Box 173736
Denver, CO 80217
LSF A Charles Schwab & Co. 1,109,976.285 22.72%
Inc.
Special Custody A/C
for Benefit of
Customers
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
TLF Z Louis A. Volante Jr. 313.574 100.00%
RoseMarie A. Volante
32 Sheparo Avenue
N. Providence, RI 02904
LCBP A Daughters of Mary of 55,791.904 7.18%
the Immaculate
Conception Manor
Convent
50 Pulaski Street
New Britian, CT 06053
LCBP A Newtown Square Fire 90,931.449 11.70%
Company
Commonwealth Bank CSA
8 N Newtown St. Rd.
P.O. Box 453
Newtown Square, PA
19073
LCBP C Robert T. Buchanan 26,811.273 5.70%
Sara M. Buchanan
Trustee
Kangaroo Court
Restaurants Texas, Inc.
102 W. Crocket St. #800
San Antonio, TX 78205
LCBP C The Trustees for the 74,330.937 15.81%
Plan of McAllen Bolt &
Screw Inc. Profit
Sharing Retirement Plan
A/C Master Account
P.O. Box 1090
McAllen, TX 78505
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LCBP C Bruno A. Schiavo 31,688.134 6.74%
Michelina Schiavo
Trustee
B&M Schiavo Nominee
Trust
79 Walker Road
Westwood, MA 02090
LCGP A International 97,875.461 10.76%
BancShares Corporation
Employee Profit
Sharing Plan
1200 San Bernardo Ave.
Laredo, TX 78042
LCGP A International Bank of 90,252.165 9.93%
Commerce Trustee
Abraham Rigal Trust
1200 San Bernardo Ave.
Laredo, TX 78042
LCGP C Roberto & Soila Garcia 26,683.094 5.34%
Family Ltd Partnership
304 Sunflower Street
McAllen, TX 78504
LCGP C Liberty Securities C 65,974.144 13.20%
c/o Independent
Financial Mark
100 Manhattanville Road
Puchase, NY 10577
LCGP C William A. Schuchmann 26,837.065 5.37%
56 North Prospect
Street
Ansonia, CT 06401
LCGP C Lazaro Geideshman 93,476.850 18.71%
302 Convent
Laredo, TX 78040
LCGP C Tommy L. Davis 28,293.777 5.66%
Joan A. Davis
1012 Petra Drive
Napa, CA 94558
LCIP A Margaret Bagdigian 24,958.481 8.35%
19 Batterson Park Road
Farmington, CT 06032
LCIP A Investors Bank & Trust 21,821.714 7.30%
Company Custodian
Donald W. Hofsess IRA
865 South Adams Street
Denver, CO 80209
LCIP A Valerie Parker 15,989.166 5.35%
252 Lexington Road
Concord, MA 01742
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LCIP A Bernard Dathe 43,355.603 14.50%
Margaret Dathe
265 Oak Park Lane
Pleasant Hill, CA 94523
LCIP A Investors Bank & Trust 16,761.822 5.61%
Company Custodian
Sylvan B. Baer IRA
3770 S. Albion Street
Englewood, CO 80110
LCIP B Investors Bank & Trust 28,781.052 11.48%
Company Custodian
Donald L. Noblit IRA
563 Pochassic Road
Westfield, MA 01085
LCIP C John Fertig Jr. 11,955.780 6.39%
Janice Nardona-Clews
Trustees
Sophie S. Nardona Trust
24 Gilbert Street
Waterbury, CT 06702
LCIP C Estelle Mosko Trustee 13,718.446 7.34%
Estelle Mosko Trust
390 Forest Street
Denver, CO 80220
LCIP C Laredo Childrens Museum 11,980.902 6.41%
West End Washington St.
Laredo, TX 78040
LCIP C International Bank of 13,272.595 7.10%
Commerce Trustee
Belia R. Munoz Guerra
Trust
1200 San Bernardo Ave.
Laredo, TX 78042
LCIP C Mary Louise Johnican 21,191.795 11.33%
Rhonda Rochelle Herndon
3221 8th Street
Bay City, TX 77414
LCIP C Ella Bocock 9,664.357 5.17%
P.O. Box 513A
Port Lavaca, TX 77979
LCIP C Bobby W. Neuman 9,694.920 5.18%
110 Blackstone
Port Lavaca, TX 77979
LCIP C Jess C. Sanford 18,529.038 9.91%
27 Oak Circle
Bay City, TX 77414
</TABLE>
52
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LCIP C Joycelyn L. Handel 10,855.621 5.80%
2725 E. Fir Unit #94
Mount Vernon, WA 98273
LCIP C Stephen H. Tontini 17,071.413 9.13%
Ana I Solloso Blanco
Lockheed Martin
Bethesda Mail Pouch #52
Attn: S. Tontini/6801
Rockledge Drive
Bethesda, MD 20817
LHYMF B & C Merrill Lynch, Pierce, 864,860.035(B) 9.37%
Fenner & Smith, Inc. 21,965.601(C) 7.23%
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LHYMF C Bost & Co 47,303.690 15.56%
Mellon Private Asset
Management
Attn: Mutual Fund
Operations
P.O. Box 534005
Pittsburgh, PA 15253
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LTEF B Merrill Lynch, Pierce, 1,048,557.256 6.61%
Fenner & Smith, Inc.
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LTEF C Terry Collins 203,886.537 52.35%
RoseMary Collins
306 Jester Court
Petaluma, CA 94954
LTEIF B & C Merrill Lynch, Pierce, 229,841.980(B) 7.04%
Fenner & Smith, Inc. 17,692.177(C) 24.15%
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LTEIF C Don C. Fisher Trustee 6,730.574 9.19%
Don C. Fisher Living
Trust
P.O. Box 701
Jackson, WY 83001
LTEIF C Francis E. Torr 12,742.951 17.39%
Florence J. Torr
Trustees
Torr Family Trust
1 Bear Creek Road
Novato, CA 94947
LMMMF A Billy Gene Yarbrough 2,035,235.050 17.40%
Louise Yarbrough
Trustees
Yarbrough Family Trust
97 Dobbins Street
Vacaville, CA 95688
LMMMF B RSBCO 80,700.693 14.39%
FBO Julianne F. Cole
P.O. Drawer 1410
Ruston, LA 71273
LMMMF B Vincent Dellaquilla 32,071.970 5.72%
Yolanda Dellaquilla
Joann Lendroth
33 Wolcott Street
New Haven, CT 06513
LMMMF B Charles R. Matties 94,190.420 16.79%
Laura B. Matties
84 Overbrook Road
West Hartford, CT 06107
</TABLE>
54
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LMMMF C David M. Sutcliffe 15,949.950 7.15%
Trustee
DCR Trust
P.O. Box 220
Wrentham, MA 02093
LMMMF C Colonial Management 108,381.860 48.60%
Associates, Inc.
One Financial Center
Boston, MA 02111
LUF B & C Merrill Lynch, Pierce, 4,602,211.650(B) 16.07%
Fenner & Smith, Inc. 30,528.279(C) 15.22%
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
3rd Floor
Jacksonville, FL 32216
LUF Z Colonial Counselor 14,497.353 99.64%
Income Portfolio
245 Summer Street
Boston, MA 02111
LCATEF A, B & Merrill Lynch, Pierce, 2,068,678.383(A) 7.65%
C Fenner & Smith, Inc. 566,811.317(B) 5.68%
For the Sole Benefit 193,373.004(C) 28.03%
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LCTTEF A, B & Merrill Lynch, Pierce, 1,119,185.003(A) 12.01%
C Fenner & Smith, Inc. 1,323,067.710(B) 15.19%
For the Sole Benefit 99,985.017(C) 20.56%
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LMATEF C Sybil N. Wetzler 12,581.399 7.08%
Teresa A. Wetzler-Finn
Steven A. Finn Trustee
Sybil N. Wetzler Rev
Trust
5 Tallyho Lane
Andover, MA 01810
LMATEF C Merrill Lynch, Pierce, 39,366.697 22.14%
Fenner & Smith, Inc.
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
</TABLE>
55
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LMATEF C Teresa A. Wetzler-Finn 11,318.347 6.37%
Lawrence A. Wetzler
Trustees
U/W Jacob Neumann
5 Tallyho Lane
Andover, MA 01810
LMATEF C Emily M. Robinson 12,601.336 7.09%
Barrett F. Robinson
405 Winter Street
North Andover, MA 01845
LNYTEF A & B Merrill Lynch, Pierce, 735,457.793(A) 11.61%
Fenner & Smith, Inc. 1,075,058.659(B) 17.77%
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LNYTEF C Joan Parrotta 4,386.483 5.47%
262-17 Grand Central
Parkway
Little Neck, NY 11362
LNYTEF C Abe Weinstein 14,653.813 18.28%
Laura Weinstein
David Weinstein
Linda Marine
92-30 56 Avenue #1K
Elmhurst, NY 11373
LNYTEF C Howard Read 7,163.801 8.93%
Acct #2
25 Eagle Street
c/o Read & Laniado
Albany, NY 12207
LNYTEF C Dino Gobbo 5,813.756 7.25%
Marita Gobbo
76-11 175 Street
Flushing, NY 11366
LNYTEF C Read & Laniado 14,499.362 18.08%
A Partnership
25 Eagle Street
Albany, NY 12207
LOHTEF A, B & Merrill Lynch, Pierce, 388,168.470(A) 5.91%
C Fenner & Smith, Inc. 302,536.402(B) 7.57%
For the Sole Benefit 4,353.684(C) 10.65%
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LOHTEF C Virginia Royko Trustee 2,127.959 5.21%
Howard W. Rose
Irrevocable Trust
7450 Little Mountain
Road
Mentor, OH 44060
LGIF C Merrill Lynch, Pierce, 91,069.436 6.49%
Fenner & Smith, Inc.
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LGIF C Banc One Securities 93,538.117 6.67%
Corp.
FBO The One Select
Portfolio
733 Greencrest Drive
Westerville, OH 43081
LGIF Z Colonial Management 52.015 100.00%
Associates, Inc.
One Financial Center
Boston, MA 02111
LNAPF A & C Colonial Management 244,505.198(A) 57.41%
Associates, Inc. 10,605.322(C) 20.38%
One Financial Center
Boston, MA 02111
LNAPF C Merrill Lynch, Pierce, 8,378.478 16.10%
Fenner & Smith, Inc.
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LNAPF Z Colonial Counselor 61,928.635 67.73%
Growth Portfolio
245 Summer Street
Boston, MA 02111
LNAPF Z Colonial Counselor 29,225.670 31.96%
Balanced Portfolio
245 Summer Street
Boston, MA 02111
LNEF A, C & Colonial Management 479,324.792(A) 60.15% (*)
Z Associates, Inc. 10,000.000(C) 24.20%
One Financial Center 10,000.000(Z) 32.99%
Boston, MA 02111
</TABLE>
57
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LNEF A Newport Fund 157,211.210 19.73%
Management, Inc.
580 California St.
#1960
San Francisco, CA 94104
LNEF C Merrill Lynch, Pierce, 4,221.835 10.22%
Fenner & Smith, Inc.
For the Sole Benefit
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LNEF Z Michael Ellis 546.610 18.03%
Kirsty Ellis
346 Woodside Avenue
Mill Valley, CA 94941
LNEF Z John J. Harrell 570.211 18.81%
P.O. Box 965
Lyle, WA 98635
LNEF Z Thomas R. Tuttle 711.238 23.46%
Sylvia C. Tuttle
Trustee
Tuttle Revocable Trust
440 Davis Court #1621
San Francisco, CA 94111
LNTF A Pershing Custodian 1,672,700.730 6.02%
One Pershing Plaza
Jersey City, NJ 07399
LNTF A, B & Merrill Lynch, Pierce, 1,580,581.891(A) 5.69%
C Fenner & Smith, Inc. 3,773,008.783(B) 14.63%
For the Sole Benefit 1,186,974.366(C) 28.73%
of its Customers
4800 Deer Lake Drive E.
2nd Floor
Jacksonville, FL 32246
LNTF A & Z Charles Schwab & Co 2,629,110.834(A) 9.45%
Inc. 2,639,505.544(Z) 18.00%
Attn: Mutual Fund
Operations 333/4
101 Montgomery Street
San Francisco, CA 94104
LNTF Z The Northern Trust 3,206,009.472 21.87%
Company Trustee
Liberty Mutual 401(k)
Retirement Plan
P.O. Box 92956
Chicago, IL 60607
</TABLE>
58
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
LIBERTY CLASS OUTSTANDING OUTSTANDING
MUTUAL FUND OF NAME AND ADDRESS OF SHARES OF SHARES OF CLASS
SHARES SHAREHOLDER CLASS OWNED OWNED
<S> <C> <C> <C> <C>
LNTF Z Wendel & Co 1,433,450.350 9.78%
c/o Bank of New York
Mutual Funds/Reorg
Dept.
P.O. Box 1066
Wall Street Station
New York, NY 10268
LNTF Z The James Irvine 3,157,673.131 21.54%
Foundation
One Market Steuart
Tower
Suite 2500
San Francisco, CA 94105
LNTF Z Fidelity Investments 1,081,495.535 7.38%
Institutional
Operations Company Inc.
Agent for Certain
Employee Benefits Plan
100 Magellan Way
Mail Zone KW1C
Covington, KY 41015
LFRAF A, B, Keyport Life Insurance 881,812.317(A) 13.97%
C & Z Company 880,110.800(B) 47.30%
c/o Chris Westfall 220,384.088(C) 15.08%
125 High Street 221,499.132(Z) 99.01%
Boston, MA 02101
</TABLE>
* Entity owned 25% or more of the outstanding shares of beneficial
interest of named Fund, and therefore may be presumed to "control" such Fund, as
that term is defined in the 1940 Act.
As of the Record Date, the executive officers and the current Boards of Trustees
as a group were known to beneficially own less than 1% of each of the
outstanding Class(es) of shares of each of the Liberty Mutual Funds.
59
<PAGE>
The following table sets forth certain information about the executive officers
of each Liberty Mutual Fund:
<TABLE>
<CAPTION>
EXECUTIVE OFFICER OFFICE WITH THE LIBERTY MUTUAL FUNDS; YEAR OF ELECTION AS
NAME & AGE PRINCIPAL OCCUPATION EXECUTIVE OFFICER
---------- -------------------- -----------------
<S> <C> <C>
Stephen E. Gibson (46) President of the Liberty Funds Complex 1998
since June, 1998, President of the Stein
Roe Funds since November, 1999; Chairman
of the Board since July, 1998, Chief
Executive Officer and President since
December, 1996 and Director, since July,
1996 of the Colonial (formerly Executive
Vice President from July, 1996 to
December, 1996); Director, Chief
Executive Officer and President of
Liberty Funds Group LLC (LFG) since
December, 1998 (formerly Director, Chief
Executive Officer and President of The
Colonial Group, Inc. (TCG) from December,
1996 to December, 1998); President and
Vice Chairman of Stein Roe since January,
2000; (formerly Assistant Chairman and
Executive Vice President from August,
1998 to January, 2000; Managing Director
of Marketing of Putnam Investments, June,
1992 to July, 1996.)
Pamela A. McGrath (46) Treasurer and Chief Financial Officer of 1999
the Liberty Funds Complex and Liberty
All-Star Funds since April, 2000;
Treasurer of the Stein Roe Funds since
April 2000; Treasurer and Chief Financial
Officer since December, 1999 and Senior
Vice President of LFG since April, 2000;
Chief Financial Officer, Treasurer and
Senior Vice President of Colonial since
December, 1999; Director of Offshore
Accounting for Putnam Investments from
May, 1998 to October, 1999; Managing
Director of Scudder Kemper Investments
prior thereto.
Glenn M. Wolfset (37) Controller and Chief Accounting Officer 2000
of the Liberty Funds since October,
2000; Senior Vice President of Colonial
and LFG since March, 2000; Senior Vice
President from 1999 to 2000 and Vice
President from 1994 to 1999 of Scudder
Kemper Investments.
</TABLE>
60
<PAGE>
<TABLE>
<CAPTION>
EXECUTIVE OFFICER OFFICE WITH THE LIBERTY MUTUAL FUNDS; YEAR OF ELECTION AS
NAME & AGE PRINCIPAL OCCUPATION EXECUTIVE OFFICER
---------- -------------------- -----------------
<S> <C> <C>
Kevin M. Carome (44) Executive Vice President of Liberty Funds 2000
Complex and Liberty All-Star Funds since
October, 2000; Executive Vice President of
the Stein Roe Funds since May 1999;
formerly Vice President from April, 1998
to May 1999, Assistant Secretary from
April 1998 to February, 2000 and Secretary
from February, 2000 to May, 2000); Chief
Legal Officer, Liberty Financial since
August, 2000; Senior Vice President,
Legal, LFG since January, 1999; General
Counsel and Secretary of Stein Roe since
January, 1998; Associate General Counsel
and Vice President of Liberty Financial
prior thereto.
William J. Ballou (35) Secretary of the Liberty Funds Complex and 2000
Liberty All-Star Funds since October,
2000; Assistant Secretary from October,
1997 to October, 2000 of the Liberty Funds
Complex; Assistant Secretary of the Stein
Roe Funds from May, 2000 to November,
2000; Vice President, Assistant Secretary
and Counsel of Colonial since October,
1997; Vice President and Counsel since
April, 2000 and Assistant Secretary since
December, 1998 of LFG; Associate Counsel;
Massachusetts Financial Services Company
from May, 1995 to September, 1997;
Associate, Ropes & Gray from September,
1991 to May, 1995).
</TABLE>
(1) Except as otherwise noted, each individual has held the office indicated
or other offices in the same company for the last five years.
61
<PAGE>
The current Board of Trustees received the following compensation from each
Liberty Mutual Fund as of each Fund's fiscal year end and for the calendar year
ended December 31, 1999:
62
<PAGE>
<TABLE>
<CAPTION>
LIBERTY MUTUAL FUND LCF LCEF LCIF LNGUF
--------------------------------------------------------------------------------------------------------
FISCAL YEAR END 10/31/99 10/31/99 10/31/99 10/31/99
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRUSTEE:
Mr. Bleasdale $456(1) $1,146(2) $541(3) $1,387(4)
Ms. Collins 427 1,077 509 1,164
Mr. Grinnell 445 1,123 530 1,213
Mr. Lowry 432 1,088 514 1,176
Mr. Macera 423 1,078 510 1,294
Mr. Mayer 451 1,105 523 1,176
Mr. Moody 403(5) 993(6) 472(7) 1,094(8)
Mr. Neuhauser 454 1,139 540 1,230
Mr. Stitzel 423 1,078 510 1,294
Ms. Verville 422(9) 1,066(10) 503(11) 1,316(12)
</TABLE>
--------
(1) Includes $234 payable in later years as deferred compensation.
(2) Includes $593 payable in later years as deferred compensation.
(3) Includes $276 payable in later years as deferred compensation.
(4) Includes $636 payable in later years as deferred compensation.
(5) Total compensation of $403 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(6) Total compensation of $993 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(7) Total compensation of $472 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(8) Total compensation of $1,094 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(9) Total compensation of $422 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(10) Total compensation of $1,066 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(11) Total compensation of $503 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(12) Total compensation of $1,316 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
63
<PAGE>
<TABLE>
<CAPTION>
LIBERTY MUTUAL FUND LNIEF LREF LSVF LSF
-------------------------------------------------------------------------------------------------
FISCAL YEAR END 10/31/99 10/31/99 10/31/99 10/31/99
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRUSTEE:
Mr. Bleasdale $1,104(13) $570(14) $3,590(15) $796(16)
Ms. Collins 937 536 3,093 748
Mr. Grinnell 976 558 3,224 779
Mr. Lowry 946 542 3,126 756
Mr. Macera 1,039 537 3,376 749
Mr. Mayer 945 552 3,133 768
Mr. Moody 879(17) 497(18) 2,906(19) 694(20)
Mr. Neuhauser 989 568 3,260 791
Mr. Stitzel 1,039 537 3,376 749
Ms. Verville 1,055(21) 530(22) 3,429(23) 768(24)
</TABLE>
--------
(13) Includes $511 payable in later years as deferred compensation.
(14) Includes $291 payable in later years as deferred compensation.
(15) Includes $1,697 payable in later years as deferred compensation.
(16) Includes $409 payable in later years as deferred compensation.
(17) Total compensation of $879 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(18) Total compensation of $497 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(19) Total compensation of $2,906 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(20) Total compensation of $694 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(21) Total compensation of $1,055 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(22) Total compensation of $530 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(23) Total compensation of $3,429 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(24) Total compensation of $768 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
64
<PAGE>
<TABLE>
<CAPTION>
LIBERTY MUTUAL FUND TLF LTMAGF
---------------------------------------------------------------
FISCAL YEAR END 10/31/99 10/31/99(25)
---------------------------------------------------------------
<S> <C> <C>
TRUSTEE:
Mr. Bleasdale $7,468(26) $451(27)
Ms. Collins 6,387 433
Mr. Grinnell 6,657 451
Mr. Lowry 6,453 433
Mr. Macera 6,971 433
Mr. Mayer 6,460 451
Mr. Moody 6,007(28) 451(29)
Mr. Neuhauser 6,728 455
Mr. Stitzel 6,971 433
Ms. Verville 7,088(30) 451(31)
</TABLE>
--------
(25) Since the Fund has not completed its first full fiscal year,
compensation is estimated based upon future payments to be made and upon
estimated relative Fund net assets.
(26) Includes $3,508 payable in later years as deferred compensation.
(27) Includes $232 payable in later years as deferred compensation.
(28) Total compensation of $6,007 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(29) Total compensation of $451 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(30) Total compensation of $7,088 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(31) Total compensation of $451 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
65
<PAGE>
<TABLE>
<CAPTION>
LIBERTY MUTUAL FUND LTMVF LTEF LTEIF LHYMF
----------------------------------------------------------------------------------------------------
FISCAL YEAR END 10/31/99 11/30/99 11/30/99 11/30/99
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRUSTEE:
Mr. Bleasdale $153(32) $10,598(33) $1,312(34) $1,303(35)
Ms. Collins 145 9,974 1,235 1,227
Mr. Grinnell 145 10,396 1,287 1,278
Mr. Lowry 147 10,109 1,247 1,239
Mr. Macera 144 9,985 1,241 1,232
Mr. Mayer 151 10,048 1,244 1,237
Mr. Moody 129(36) 9,384(37) 1,160(38) 1,153(39)
Mr. Neuhauser 83 10,504 1,304 1,295
Mr. Stitzel 144 9,985 1,241 1,232
Ms. Verville 144(40) 9,869(41) 1,222(42) 1,214(43)
</TABLE>
--------
(32) Includes $73 payable in later years as deferred compensation.
(33) Includes $5,487 payable in later years as deferred compensation.
(34) Includes $675 payable in later years as deferred compensation.
(35) Includes $670 payable in later years as deferred compensation.
(36) Total compensation of $129 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(37) Total compensation of $9,384 for the fiscal year ended November 30,
1999, will be payable in later years as deferred compensation.
(38) Total compensation of $1,160 for the fiscal year ended November 30,
1999, will be payable in later years as deferred compensation.
(39) Total compensation of $1,153 for the fiscal year ended November 30,
1999, will be payable in later years as deferred compensation.
(40) Total compensation of $144 for the fiscal year ended October 31, 1999,
will be payable in later years as deferred compensation.
(41) Total compensation of $9,869 for the fiscal year ended November 30,
1999, will be payable in later years as deferred compensation.
(42) Total compensation of $1,222 for the fiscal year ended November 30,
1999, will be payable in later years as deferred compensation.
(43) Total compensation of $1,214 for the fiscal year ended November 30,
1999, will be payable in later years as deferred compensation.
66
<PAGE>
<TABLE>
<CAPTION>
LIBERTY MUTUAL FUND LUF LHYSF LIF LSIF
------------------------------------------------------------------------------------------------------
FISCAL YEAR END 11/30/99 12/31/99 12/31/99 12/31/99
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRUSTEE:
Mr. Bleasdale $4,649(44) $5,056(45) $1,156(46) $6,723(47)
Ms. Collins 4,375 4,711 1,077 6,271
Mr. Grinnell 4,560 4,909 1,123 6,489
Mr. Lowry 4,420 4,760 1,088 6,347
Mr. Macera 4,379 4,692 1,076 6,260
Mr. Mayer 4,423 4,958 1,134 6,562
Mr. Moody 4,112(48) 4,485(49) 1,022(50) 5,851(51)
Mr. Neuhauser 4,608 4,962 1,138 6,566
Mr. Stitzel 4,379 4,692 1,076 6,260
Ms. Verville 4,328(52) 4,710(53) 1,076(54) 6,301(55)
</TABLE>
--------
(44) Includes $2,405 payable in later years as deferred compensation.
(45) Includes $2,573 payable in later years as deferred compensation.
(46) Includes $594 payable in later years as deferred compensation.
(47) Includes $2,832 payable in later years as deferred compensation.
(48) Total compensation of $4,112 for the fiscal year ended November 30,
1999, will be payable in later years as deferred compensation.
(49) Total compensation of $4,485 for the fiscal year ended December 31,
1999, will be payable in later years as deferred compensation.
(50) Total compensation of $1,022 for the fiscal year ended December 31,
1999, will be payable in later years as deferred compensation.
(51) Total compensation of $5,851 for the fiscal year ended December 31,
1999, will be payable in later years as deferred compensation.
(52) Total compensation of $4,328 for the fiscal year ended November 30,
1999, will be payable in later years as deferred compensation.
(53) Total compensation of $4,710 for the fiscal year ended December 31,
1999, will be payable in later years as deferred compensation.
(54) Total compensation of $1,076 for the fiscal year ended December 31,
1999, will be payable in later years as deferred compensation.
(55) Total compensation of $6,301 for the fiscal year ended December 31,
1999, will be payable in later years as deferred compensation.
67
<PAGE>
<TABLE>
<CAPTION>
LIBERTY MUTUAL FUND LNTF LCATEF LCTTEF LMATEF
----------------------------------------------------------------------------------------------------
FISCAL YEAR END 12/31/99 1/31/00 1/31/00 1/31/00
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRUSTEE:
Mr. Bleasdale $3,615(56) $1,779(57) $1,173(58) $1,398(59)
Ms. Collins 3,369 1,658 1,093 1,480
Mr. Grinnell 3,509 1,728 1,139 1,358
Mr. Lowry 3,405 1,675 1,105 1,317
Mr. Macera 3,357 1,645 1,084 1,292
Mr. Mayer 3,542 1,746 1,151 1,372
Mr. Moody 3,198(60) 1,568(61) 1,035(62) 1,233(63)
Mr. Neuhauser 3,546 1,750 1,155 1,376
Mr. Stitzel 3,357 1,645 1,084 1,292
Ms. Verville 3,372(64) 1,661(65) 1,095(66) 1,305(67)
</TABLE>
----------------------------------------------------
(56) Includes $1,820 payable in later years as deferred compensation.
(57) Includes $903 payable in later years as deferred compensation.
(58) Includes $595 payable in later years as deferred compensation.
(59) Includes $709 payable in later years as deferred compensation.
(60) Total compensation of $3,198 for the fiscal year ended December 31,
1999, will be payable in later years as deferred compensation.
(61) Total compensation of $1,568 for the fiscal year ended January 31, 2000,
will be payable in later years as deferred compensation.
(62) Total compensation of $1,035 for the fiscal year ended January 31, 2000,
will be payable in later years as deferred compensation.
(63) Total compensation of $1,233 for the fiscal year ended January 31, 2000,
will be payable in later years as deferred compensation.
(64) Total compensation of $3,372 for the fiscal year ended December 31,
1999, will be payable in later years as deferred compensation.
(65) Total compensation of $1,661 for the fiscal year ended January 31, 2000,
will be payable in later years as deferred compensation.
(66) Total compensation of $1,095 for the fiscal year ended January 31, 2000,
will be payable in later years as deferred compensation.
(67) Total compensation of $1,305 for the fiscal year ended January 31, 2000,
will be payable in later years as deferred compensation.
68
<PAGE>
<TABLE>
<CAPTION>
LIBERTY MUTUAL FUND LNYTEF LOHTEF LGIF LNAPF
-----------------------------------------------------------------------------------------------
FISCAL YEAR END 1/31/00 1/31/00 6/30/00 6/30/00
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRUSTEE:
Mr. Bleasdale $948(68) $916(69) $5,278(70) $588(71)
Ms. Collins 883 854 4,787 533
Mr. Grinnell 920 889 4,989 555
Mr. Lowry 893 863 4,931 549
Mr. Macera 876 847 4,761 530
Mr. Mayer 930 898 4,989 555
Mr. Moody 836(72) 807(73) 5,029(74) 561(75)
Mr. Neuhauser 934 903 5,040 564
Mr. Stitzel 876 847 4,809 536
Ms. Verville 885(76) 855(77) 4,748(78) 528(79)
</TABLE>
--------
(68) Includes $479 payable in later years as deferred compensation.
(69) Includes $463 payable in later years as deferred compensation.
(70) Includes $2,576 payable in later years as deferred compensation.
(71) Includes $290 payable in later years as deferred compensation.
(72) Total compensation of $836 for the fiscal year ended January 31, 2000,
will be payable in later years as deferred compensation.
(73) Total compensation of $807 for the fiscal year ended January 31, 2000,
will be payable in later years as deferred compensation.
(74) Total compensation of $5,029 for the fiscal year ended June 30, 2000,
will be payable in later years as deferred compensation.
(75) Total compensation of $561 for the fiscal year ended June 30, 2000, will
be payable in later years as deferred compensation.
(76) Total compensation of $885 for the fiscal year ended January 31, 2000,
will be payable in later years as deferred compensation.
(77) Total compensation of $855 for the fiscal year ended January 31, 2000,
will be payable in later years as deferred compensation.
(78) Total compensation of $4,748 for the fiscal year ended June 30, 2000,
will be payable in later years as deferred compensation.
(79) Total compensation of $528 for the fiscal year ended June 30, 2000, will
be payable in later years as deferred compensation.
69
<PAGE>
<TABLE>
<CAPTION>
LIBERTY MUTUAL FUND LMMF LMMMF LFRAF LIGF
-------------------------------------------------------------------------------------------------
FISCAL YEAR END 6/30/00 6/30/00 8/31/00 8/31/00
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRUSTEE:
Mr. Bleasdale $1,608(80) $602(81) $239(82) $3,484(83)
Ms. Collins 1,456 546 204 3,162
Mr. Grinnell 1,517 569 216 3,327
Mr. Lowry 1,501 562 221 3,253
Mr. Macera 1,449 543 210 3,182
Mr. Mayer 1,517 569 213 3,296
Mr. Moody 1,532(84) 573(85) 233(86) 3,312(87)
Mr. Neuhauser 1,535 577 217 3,333
Mr. Stitzel 1,464 548 210 3,183
Ms. Verville 1,311(88) 541(89) 207(90) 3,206(91)
</TABLE>
(80) Includes $792 payable in later years as deferred compensation.
(81) Includes $300 payable in later years as deferred compensation.
(82) Includes $77 payable in later years as deferred compensation.
(83) Includes $1,752 payable in later years as deferred compensation.
(84) Total compensation of $1,532 for the fiscal year ended June 30, 2000, will
be payable in later years as deferred compensation.
(85) Total compensation of $573 for the fiscal year ended June 30, 2000, will
be payable in later years as deferred compensation.
(86) Total compensation of $233 for the fiscal year ended August 31, 2000, will
be payable in later years as deferred compensation.
(87) Total compensation of $3,312 for the fiscal year ended August 31, 2000,
will be payable in later years as deferred compensation.
(88) Total compensation of $1,311 for the fiscal year ended June 30, 2000, will
be payable in later years as deferred compensation.
(89) Total compensation of $541 for the fiscal year ended June 30, 2000, will
be payable in later years as deferred compensation.
(90) Total compensation of $207 for the fiscal year ended August 31, 2000, will
be payable in later years as deferred compensation.
(91) Total compensation of $3,206 for the fiscal year ended August 31, 2000,
will be payable in later years as deferred compensation.
70
<PAGE>
<TABLE>
<CAPTION>
LIBERTY MUTUAL FUND LNGCF LNJOF LFSF LNEF
---------------------------------------------------------------------------------------------------
FISCAL YEAR END 8/31/00 8/31/00 8/31/00 8/31/00
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRUSTEE:
Mr. Bleasdale $773(92) $811(93) $3,250(94) $361(95)
Ms. Collins 700 733 2,949 321
Mr. Grinnell 736 772 2,638 339
Mr. Lowry 722 757 3,035 336
Mr. Macera 705 740 2,968 326
Mr. Mayer 729 763 3,074 334
Mr. Moody 736(96) 776(97) 3,093(98) 354(99)
Mr. Neuhauser 875 775 3,105 341
Mr. Stitzel 705 740 2,969 326
Ms. Verville 709(100) 744(101) 2,990(102) 326(103)
</TABLE>
(92) Includes $384 payable in later years as deferred compensation.
(93) Includes $394 payable in later years as deferred compensation.
(94) Includes $1,629 payable in later years as deferred compensation.
(95) Includes $162 payable in later years as deferred compensation.
(96) Total compensation of $736 for the fiscal year ended August 31, 2000, will
be payable in later years as deferred compensation.
(97) Total compensation of $776 for the fiscal year ended August 31, 2000, will
be payable in later years as deferred compensation.
(98) Total compensation of $3,093 for the fiscal year ended August 31, 2000,
will be payable in later years as deferred compensation.
(99) Total compensation of $354 for the fiscal year ended August 31, 2000, will
be payable in later years as deferred compensation.
(100) Total compensation of $709 for the fiscal year ended August 31, 2000, will
be payable in later years as deferred compensation.
(101) Total compensation of $744 for the fiscal year ended August 31, 2000, will
be payable in later years as deferred compensation.
(102) Total compensation of $2,990 for the fiscal year ended August 31, 2000,
will be payable in later years as deferred compensation.
(103) Total compensation of $326 for the fiscal year ended August 31, 2000, will
be payable in later years as deferred compensation.
71
<PAGE>
<TABLE>
<CAPTION>
TOTAL COMPENSATION PAID FROM LIBERTY
FUND COMPLEX TO THE BOARD OF TRUSTEES
LIBERTY MUTUAL FUND FOR THE CALENDAR YEAR ENDED*
-----------------------------------------------------------------
<S> <C>
TRUSTEE:
Mr. Bleasdale $103,000(104)
Ms. Collins 96,000
Mr. Grinnell 100,000
Mr. Lowry 97,000
Mr. Macera 95,000
Mr. Mayer 101,000
Mr. Moody 91,000(105)
Mr. Neuhauser 101,252
Mr. Stitzel 95,000
Ms. Verville 96,000(106)
</TABLE>
(104) Includes $52,000 payable in later years as deferred compensation.
(105) Total compensation of $91,000 for the calendar year ended December 31,
1999, will be payable in later years as deferred compensation.
(106) Total compensation of $96,000 for the calendar year ended December 31,
1999, will be payable in later years as deferred compensation.
* Includes compensation from Liberty Tax-Managed Growth Fund and Liberty
Tax-Managed Growth Fund II, two series of Liberty Funds Trust I that will
elect Trustees of the Trust at the Meetings but which are included in a
separate proxy statement.
72
<PAGE>
The following table sets forth the compensation paid to certain Trustees in
their capacities as Trustees or Directors of the Liberty All-Star Equity Fund,
the Liberty All-Star Growth Fund, Inc. and Liberty Funds Trust IX (together,
Liberty All-Star Funds) for service during the calendar year ended December 31,
1999:
<TABLE>
<CAPTION>
-----------------------------------------------------------
TOTAL COMPENSATION PAID TO THE
TRUSTEES FROM THE LIBERTY ALL-STAR
FUNDS FOR THE CALENDAR YEAR ENDED
TRUSTEE DECEMBER 31, 1999(107)
-----------------------------------------------------------
<S> <C>
James E. Grinnell 25,000
Richard W. Lowry 25,000
William E. Mayer 25,000
John J. Neuhauser 25,000
</TABLE>
(107) The Liberty All-Star Funds are advised by Liberty Asset Management Company
(LAMCO). LAMCO is an indirect wholly-owned subsidiary of Liberty Financial
Companies, Inc. (an intermediate parent of the Colonial).
73
<PAGE>
APPENDIX A
FORM OF MANAGEMENT AGREEMENT
AGREEMENT dated as of [ ], 2000, between LIBERTY FUNDS TRUST III, a
Massachusetts business trust (Trust), with respect to [NAME OF FUND] (Fund), and
NEWPORT FUND MANAGEMENT, INC., a Virginia corporation (Adviser).
In consideration of the promises and covenants herein, the parties agree as
follows:
1. The Adviser will manage the investment of the assets of the Fund in
accordance with its prospectus and statement of additional information and
will perform the other services herein set forth, subject to the
supervision of the Board of Trustees of the Trust. The Adviser may
delegate its investment responsibilities to a sub-adviser.
2. In carrying out its investment management obligations, the Adviser shall:
(a) evaluate such economic, statistical and financial information and
undertake such investment research as it shall believe advisable; (b)
purchase and sell securities and other investments for the Fund in
accordance with the procedures described in its prospectus and statement
of additional information; and (c) report results to the Board of Trustees
of the Trust.
3. The Adviser shall furnish at its expense the following:
(a) office space, supplies, facilities and equipment; (b) executive and
other personnel for managing the affairs of the Fund (including preparing
financial information of the Fund and reports and tax returns required to
be filed with public authorities, but exclusive of those related to
custodial, transfer, dividend and plan agency services, determination of
net asset value and maintenance of records required by Section 31(a) of
the Investment Company Act of 1940, as amended, and the rules thereunder
(1940 Act)); and (c) compensation of Trustees who are directors,
officers, partners or employees of the Adviser or its affiliated persons
(other than a regulated investment company).
4. The Adviser shall be free to render similar services to others so long as
its services hereunder are not impaired thereby.
A-1
<PAGE>
5. The Fund shall pay the Adviser monthly a fee at the annual rate of [ %] of
the average daily net assets of the Fund.
6. The Adviser may waive its compensation (and bear expenses of the Fund) to
the extent that expenses of the Fund exceed any expense limitation the
Adviser declares to be effective.
7. This Agreement shall become effective as of the date of its execution, and
(a) unless otherwise terminated, shall continue until June 30, 2002, and
from year to year thereafter so long as approved annually in accordance
with the 1940 Act; (b) may be terminated without penalty on sixty days'
written notice to the Adviser either by vote of the Board of Trustees of
the Trust or by vote of a majority of the outstanding shares of the Fund;
(c) shall automatically terminate in the event of its assignment; and (d)
may be terminated without penalty by the Adviser on sixty days' written
notice to the Trust.
8. This Agreement may be amended in accordance with the 1940 Act.
A-2
<PAGE>
9. For the purpose of the Agreement, the terms "vote of a majority of the
outstanding shares", "affiliated person" and "assignment" shall have their
respective meanings defined in the 1940 Act and exemptions and
interpretations issued by the Securities and Exchange Commission under the
1940 Act.
10. In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Adviser, or reckless disregard of its obligations and
duties hereunder, the Adviser shall not be subject to any liability to the
Trust or the Fund, to any shareholder of the Trust or the Fund or to any
other person, firm or organization, for any act or omission in the course
of, or connected with, rendering services hereunder.
LIBERTY FUNDS TRUST III on behalf of
[NAME OF FUND]
By: __________________________
Name:
Title:
NEWPORT FUND MANAGEMENT, INC.
By: __________________________
Name:
Title:
A copy of the document establishing the Trust is filed with the Secretary of The
Commonwealth of Massachusetts. This Agreement is executed by officers not as
individuals and is not binding upon any of the Trustees, officers or
shareholders of the Trust individually but only upon the assets of the Fund.
A-3
<PAGE>
APPENDIX B
SUB-ADVISORY AGREEMENT
SUB-ADVISORY AGREEMENT, dated this [ ] day of [ ], by and between COLONIAL
MANAGEMENT ASSOCIATES, INC. a Massachusetts corporation (the "Adviser"), UNIBANK
SECURITIES, INC., d/b/a "UNIBANK INVESTMENT MANAGEMENT," a company incorporated
under the laws of the State of Delaware (the "Sub-Adviser") and LIBERTY FUNDS
TRUST III (the "Trust"), on behalf of THE LIBERTY FUND (the "Fund").
WITNESSETH:
WHEREAS, the Adviser provides the Fund, a series of the Trust, an open-end
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), business services pursuant to the terms and conditions
of an investment advisory agreement dated March 27, 1995, as amended October 1,
1997 (the "Advisory Agreement"), between the Adviser and the Trust, on behalf of
the Fund; and
WHEREAS, the Sub-Adviser is willing to provide services to the Adviser on
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements of
the parties hereto as herein set forth, the parties covenant and agree as
follows:
1. Duties of the Sub-Adviser. Subject to the supervision of the Trustees
of the Trust and the Adviser, the Sub-Adviser will: (a) manage the investment of
a portion of the assets of the Fund, as determined by the Adviser, in accordance
with the Fund's investment objectives, policies and limitations as stated in the
Fund's then current Prospectus (the "Prospectus") and Statement of Additional
Information (the "Statement"), and in compliance with the 1940 Act and the
rules, regulations and orders thereunder; (b) place purchase and sale orders for
portfolio transactions for the Fund; (c) evaluate such economic, statistical and
financial information and undertake such investment research as it shall believe
advisable; (d) employ professional portfolio managers to provide research
services to the Fund; and (e) report results to the Board of Trustees of the
Trust. The Adviser agrees to provide the Sub-Adviser with such assistance as may
be
B-1
<PAGE>
reasonably requested by the Sub-Adviser in connection with its activities under
this Agreement, including, without limitation, information concerning the Fund,
its funds available, or to become available, for investment and generally as to
the conditions of the Fund's affairs.
Should the Trustees of the Trust or the Adviser at any time make any
determination as to investment policy and notify the Sub-Adviser thereof in
writing, the Sub-Adviser shall be bound by such determination for the period, if
any, specified in such notice or until notified that such determination has been
revoked. Further, the Adviser or the Trustees of the Trust may at any time, upon
written notice to the Sub-Adviser, suspend or restrict the right of the
Sub-Adviser to determine what assets of the Fund shall be purchased or sold and
what portion, if any, of the Fund's assets shall be held uninvested. It is
understood that the Adviser undertakes to discuss with the Sub-Adviser any such
determinations of investment policy and any such suspension or restrictions on
the right of the Sub-Adviser to determine what assets of the Fund shall be
purchased or sold or held uninvested, prior to the implementation thereof.
2. Certain Information to the Sub-Adviser. Copies of the Prospectus and
the Statement have been delivered to the Sub-Adviser. The Adviser agrees to
notify the Sub-Adviser of each change in the investment policies of the Fund and
to provide to the Sub-Adviser as promptly as practicable copies of all
amendments and supplements to the Prospectus and the Statement. In addition, the
Adviser will promptly provide the Sub-Adviser with any procedures applicable to
the Sub-Adviser adopted from time to time by the Trustees of the Trust and
agrees to provide promptly to the Sub-Adviser copies of all amendments thereto.
3. Execution of Certain Documents. Subject to any other written
instructions of the Adviser and the Trustees of the Trust, the Sub-Adviser is
hereby appointed the Adviser's and the Trust's agent and attorney-in-fact to
execute account documentation, agreements, contracts and other documents as the
Sub-Adviser shall be requested by brokers, dealers, counterparties and other
persons in connection with its management of the assets of the Fund.
4. Reports. The Sub-Adviser shall furnish to the Trustees of the Trust or
the Adviser, or both, as may be appropriate, quarterly reports of its activities
on behalf of the Fund, as required by applicable law or as otherwise requested
from time to time by the Trustees of the Trust or the Adviser, and such
additional information, reports, evaluations, analyses and opinions as the
Trustees of the Trust or the Adviser, as appropriate, may request from time to
time.
B-2
<PAGE>
5. Compensation of the Sub-Adviser. For the services to be rendered by the
Sub-Adviser under this Agreement, the Adviser shall pay to the Sub-Adviser
compensation, computed and paid monthly in arrears in U.S. dollars, at an annual
rate of 0.40% of the average daily net asset value of the portion of the Fund's
assets under management by the Sub-Adviser. If the Sub-Adviser shall serve for
less than the whole of any month, the compensation payable to the Sub-Adviser
with respect to the Fund will be prorated. The Sub-Adviser will pay its expenses
incurred in performing its duties under this Agreement. Neither the Trust nor
the Fund shall be liable to the Sub-Adviser for the compensation of the
Sub-Adviser. For the purpose of determining fees payable to the Sub-Adviser, the
value of the Fund's net assets shall be computed at the times and in the manner
specified in the Prospectus and/or Statement.
6. Limitation of Liability of the Sub-Adviser. The Sub-Adviser shall not
be liable for any error of judgment or mistake of law or for any loss arising
out of any investment or for any act or omission in the execution and management
of the Fund, except for willful misfeasance, bad faith or gross negligence in
the performance of its duties and obligations hereunder. The Trust, on behalf of
the Fund, may enforce any obligations of the Sub-Adviser under this Agreement
and may recover directly from the Sub-Adviser for any liability it may have to
the Fund.
7. Activities of the Sub-Adviser. The services of the Sub-Adviser to the
Fund are not deemed to be exclusive, the Sub-Adviser being free to render
investment advisory and/or other services to others.
8. Covenants of the Sub-Adviser. The Sub-Adviser agrees that it (a) will
not deal with itself, "affiliated persons" of the Sub-Adviser, the Trustees of
the Trust or the Fund's distributor, as principals, agents, brokers or dealers
in making purchases or sales of securities or other property for the account of
the Fund, except as permitted by the 1940 Act and the rules, regulations and
orders thereunder and subject to the prior written approval of the Adviser, and
except in accordance with Rule 17e-1 procedures as approved by the Trustees from
time to time and (b) will comply with all other provisions of the then-current
Prospectus and Statement relative to the Sub-Adviser and its trustees, officers,
employees and affiliates.
9. Representations, Warranties and Additional Agreements of the
Sub-Adviser. The Sub-Adviser represents, warrants and agrees that:
(a) It (i) is registered as an investment adviser under the U.S.
Investment Advisers Act of 1940 (the "Advisers Act"), is authorized to undertake
investment business in the U.S. and is registered under the laws of any
B-3
<PAGE>
jurisdiction in which the Sub-Adviser is required to be registered as an
investment adviser in order to perform its obligations under this Agreement, and
will continue to be so registered for so long as this Agreement remains in
effect; (ii) is not prohibited by the 1940 Act or the Advisers Act from
performing the services contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any other
applicable Federal or State requirements, or the applicable requirements of any
regulatory or industry self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has the authority to
enter into and perform the services contemplated by this Agreement; (v) will
immediately notify the Adviser in writing of the occurrence of any event that
would disqualify the Sub-Adviser from serving as an investment adviser of an
investment company pursuant to Section 9(a) of the 1940 Act or otherwise; and
(vi) will immediately notify the Adviser in writing of any change of control of
the Sub-Adviser or any parent of the Sub-Adviser resulting in an "assignment" of
this Agreement.
(b) It will maintain, keep current and preserve on behalf of the Fund, in
the manner and for the periods of time required or permitted by the 1940 Act and
the rules, regulations and orders thereunder and the Advisers Act and the rules,
regulations and orders thereunder, records relating to investment transactions
made by the Sub-Adviser for the Fund as may be reasonably requested by the
Adviser or the Fund from time to time. The Sub-Adviser agrees that such records
are the property of the Fund, and will be surrendered to the Fund promptly upon
request.
(c) The Sub-Adviser has adopted a written code of ethics complying with
the requirements of Rule 17j-1 under the 1940 Act and, if it has not already
done so, will provide the Adviser and the Trust with a copy of such code of
ethics, and upon any amendment to such code of ethics, promptly provide such
amendment. At least annually the Sub-Adviser will provide the Trust and the
Adviser with a certificate signed by the chief compliance officer (or the person
performing such function) of the Sub-Adviser certifying, to the best of his or
her knowledge, compliance with the code of ethics during the immediately
preceding twelve (12) month period, including any material violations of or
amendments to the code of ethics or the administration thereof.
(d) It has provided the Adviser and the Trust with a copy of its Form ADV
as most recently filed with the Securities and Exchange Commission (the "SEC")
and will, promptly after filing any amendment to its Form ADV with the SEC,
furnish a copy of such amendment to the Adviser and the Trust.
B-4
<PAGE>
10. Duration and Termination of this Agreement. This Agreement shall
become effective on the date first above written and shall govern the relations
between the parties hereto thereafter, and shall remain in force until June 30,
2002 and from year to year thereafter but only so long as its continuance is
"specifically approved at least annually" by the Board of Trustees of the Trust
or by "vote of a majority of the outstanding voting securities" of the Fund.
This Agreement may be terminated at any time without penalty on sixty days'
written notice to the Sub-Adviser by vote of the Board of Trustees of the Trust,
by "vote of a majority of the outstanding voting securities" of the Fund, or by
the Adviser. This Agreement also may be terminated at any time without penalty
by the Sub-Advisor on ninety days' written notice to the Adviser and Trust. This
Agreement shall automatically terminate in the event of its "assignment" or in
the event that the Advisory Agreement shall have terminated for any reason.
11. Amendments to this Agreement. This Agreement may be amended in
accordance with the 1940 Act.
12. Certain Definitions. The terms "specifically approved at least
annually", "vote of a majority of the outstanding voting securities",
"assignment", "control", "affiliated persons" and "interested person", when used
in this Agreement, shall have the respective meanings specified, and shall be
construed in a manner consistent with, the 1940 Act and the rules, regulations
and orders thereunder, subject, however, to such exemptions as may be granted by
the SEC under the 1940 Act.
13. Survival of Representations and Warranties; Duty to Update
Information. All representations and warranties made by the Sub-Adviser pursuant
to Section 9 hereof shall survive for the duration of this Agreement and the
Sub-Adviser shall immediately notify, but in no event later than five (5)
business days, the Adviser in writing upon becoming aware that any of the
foregoing representations and warranties are no longer true.
14. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the internal laws of The Commonwealth of Massachusetts. All
notices provided for by this Agreement shall be in writing and shall be deemed
given when received, against appropriate receipt, by the Sub-Adviser's Secretary
in the case of the Sub-Adviser, the Adviser's General Counsel in the case of the
Adviser, and the Trust's Secretary in the case of the Fund, or such other person
as a party shall designate by notice to the other parties. This Agreement
constitutes the entire agreement among the parties hereto and supersedes any
prior agreement among the parties relating to the subject matter hereof. The
section headings of this Agreement are for convenience of reference and do not
constitute a part hereof.
B-5
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered in their names and on their behalf by the undersigned, thereunto
duly authorized, and their respective seals to be hereto affixed, all as of the
day and year first written above.
COLONIAL MANAGEMENT ASSOCIATES, INC.
By:
-----------------------------------
Name:
Title:
UNIBANK SECURITIES, INC.
By:
------------------------------------
Name:
Title:
LIBERTY FUNDS TRUST III, on behalf
of The Liberty Fund
By:
------------------------------------
Name:
Title:
B-6
<PAGE>
<PAGE>
<PAGE>
PLEASE VOTE PROMPTLY
*********************************
Your vote is important, no matter how many shares 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 Trustees. The signers of this
proxy hereby appoint William J. Ballou, Suzan M. Barron, Stephen E. Gibson,
Russell L. Kane, Pamela A. McGrath, and Vincent P. Pietropaolo, each of them
proxies of the signers, with power of substitution to vote at the Special
Meeting of Shareholders to be held at Boston, Massachusetts, on
Wednesday, December 27, 2000, and at any adjournments, as specified herein, and
in accordance with their best judgement, on any other business that may properly
come before this meeting.
After careful review, the Board of Trustees unanimously has recommended a vote
"FOR" all matters.
<PAGE>
[Liberty Logo] LIBERTY
Liberty Funds Services, Inc.
Liberty Income Fund
Liberty Strategic Income Fund
Liberty High Yield Securities Fund
Liberty Intermediate Government Fund
Liberty Federal Securities Fund
Liberty Ohio Tax-Exempt Fund
Liberty Connecticut Tax-Exempt Fund
Liberty New York Tax-Exempt Fund
Liberty California Tax-Exempt Fund
Liberty Tax-Exempt Insured Fund
Liberty Massachusetts Tax-Exempt Fund
Liberty Tax-Exempt Fund
Liberty High Yield Municipal Fund
Liberty Select Value Fund
Liberty Growth & Income Fund
Liberty Utilities Fund
Liberty Newport Japan Opportunities Fund
Liberty Newport Greater China Fund
Liberty Newport Tiger Fund
Liberty Newport Asia Pacific Fund
Liberty Newport Europe Fund
Liberty Tax-Managed Value Fund
Liberty Tax-Managed Aggressive Growth Fund
Liberty Special Fund
Liberty Real Estate Fund
Liberty Contrarian Equity Fund
Liberty Contrarian Income Fund
Liberty Contrarian Fund
Liberty Counselor Income Portfolio
Liberty Counselor Balanced Portfolio
Liberty Counselor Growth Portfolio
Liberty Floating Rate Advantage Fund
This proxy, when properly executed, will be voted in the manner directed herein
and, absent direction, will be voted FOR Item 1 below. This proxy will be voted
in accordance with the holder's best judgement as to any other matter.
The Board of Trustees recommends a vote FOR the following Item:
1. To elect eleven Trustees (Item 1 of the Notice).
(01) Douglas A. Hacker
(02) Janet Langford Kelly
(03) Richard W. Lowry
(04) Salvatore Macera
(05) William E. Mayer
(06) Charles Nelson
(07) John J. Neuhauser
(08) Joseph R. Palombo
(09) Thomas E. Stitzel
(10) Thomas C. Theobald
(11) Anne-Lee Verville
INSTRUCTION: to withhhold authority to vote for any individual nominee(s),
mark the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).
For Withheld For All
All From All Nominees
Nominees Nominees Except as
Noted
__ __ __
|__| |__| |__|
MARK BOX AT RIGHT FOR ADDRESS CHANGE
AND NOTE AT LEFT |__|
PLEASE MARK, SIGN DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE. 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 corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Please be sure to sign and date this Proxy Date_________________
------------------------- ---------------------
Shareholder sign here Co-owner sign here
<PAGE>
PLEASE VOTE PROMPTLY
*********************************
Your vote is important, no matter how many shares 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 Trustees. The signers of this
proxy hereby appoint William J. Ballou, Suzan M. Barron, Stephen E. Gibson,
Russell L. Kane, Pamela A. McGrath, and Vincent P. Pietropaolo, each of them
proxies of the signers, with power of substitution to vote at the Special
Meeting of Shareholders to be held at Boston, Massachusetts, on
Wednesday, December 27, 2000, and at any adjournments, as specified herein, and
in accordance with their best judgement, on any other business that may properly
come before this meeting.
After careful review, the Board of Trustees unanimously has recommended a vote
"FOR" all matters.
<PAGE>
[Liberty Logo] LIBERTY
Liberty Funds Services, Inc.
THE LIBERTY FUND
This proxy, when properly executed, will be voted in the manner directed herein
and, absent direction, will be voted FOR Item 1 below. This proxy will be voted
in accordance with the holder's best judgement as to any other matter.
The Board of Trustees recommends a vote FOR the following Item:
1. To elect eleven Trustees (Item 1 of the Notice).
(01) Douglas A. Hacker
(02) Janet Langford Kelly
(03) Richard W. Lowry
(04) Salvatore Macera
(05) William E. Mayer
(06) Charles Nelson
(07) John J. Neuhauser
(08) Joseph R. Palombo
(09) Thomas E. Stitzel
(10) Thomas C. Theobald
(11) Anne-Lee Verville
INSTRUCTION: to withhhold authority to vote for any individual nominee(s),
mark the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).
For Withheld For All
All From All Nominees
Nominees Nominees Except as
Noted
__ __ __
|__| |__| |__|
2. To approve or disapprove a sub-advisory agreement with
Unibank Securities, Inc. (Item 3 of the Notice).
For Against Abstain
__ __ __
|__| |__| |__|
MARK BOX AT RIGHT FOR ADDRESS CHANGE
AND NOTE AT LEFT |__|
PLEASE MARK, SIGN DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
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 corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Please be sure to sign and date this Proxy Date_________________
------------------------- ----------------------
Shareholder sign here Co-owner sign here
<PAGE>
PLEASE VOTE PROMPTLY
*********************************
Your vote is important, no matter how many shares 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 Trustees. The signers of this
proxy hereby appoint William J. Ballou, Suzan M. Barron, Stephen E. Gibson,
Russell L. Kane, Pamela A. McGrath, and Vincent P. Pietropaolo, each of them
proxies of the signers, with power of substitution to vote at the Special
Meeting of Shareholders to be held at Boston, Massachusetts, on
Wednesday, December 27, 2000, and at any adjournments, as specified herein, and
in accordance with their best judgement, on any other business that may properly
come before this meeting.
After careful review, the Board of Trustees unanimously has recommended a vote
"FOR" all matters.
<PAGE>
[Liberty Logo] LIBERTY
Liberty Funds Services, Inc.
Liberty Newport Global Utilities Fund
Liberty Newport International Equity Fund
This proxy, when properly executed, will be voted in the manner directed herein
and, absent direction, will be voted FOR Item 1 below. This proxy will be voted
in accordance with the holder's best judgement as to any other matter.
The Board of Trustees recommends a vote FOR the following Item:
1. To elect eleven Trustees (Item 1 of the Notice).
(01) Douglas A. Hacker
(02) Janet Langford Kelly
(03) Richard W. Lowry
(04) Salvatore Macera
(05) William E. Mayer
(06) Charles Nelson
(07) John J. Neuhauser
(08) Joseph R. Palombo
(09) Thomas E. Stitzel
(10) Thomas C. Theobald
(11) Anne-Lee Verville
INSTRUCTION: to withhhold authority to vote for any individual nominee(s),
mark the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).
For Withheld For All
All From All Nominees
Nominees Nominees Except as
Noted
__ __ __
|__| |__| |__|
2. To approve or disapprove a new portfolio management agreement with
Newport Fund Management (Item 2 of the Notice).
For Against Abstain
__ __ __
|__| |__| |__|
MARK BOX AT RIGHT FOR ADDRESS CHANGE
AND NOTE AT LEFT |__|
PLEASE MARK, SIGN DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE. 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 corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
Please be sure to sign and date the Proxy. Date_________________
------------------------- ----------------------
Shareholder sign here Co-owner sign here
<PAGE>
PLEASE VOTE PROMPTLY
*********************************
Your vote is important, no matter how many shares 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 Trustees. The signers of this
proxy hereby appoint William J. Ballou, Suzan M. Barron, Stephen E. Gibson,
Russell L. Kane, Pamela A. McGrath, and Vincent P. Pietropaolo, each of them
proxies of the signers, with power of substitution to vote at the Special
Meeting of Shareholders to be held at Boston, Massachusetts, on
Wednesday, December 27, 2000, and at any adjournments, as specified herein, and
in accordance with their best judgement, on any other business that may properly
come before this meeting.
After careful review, the Board of Trustees unanimously has recommended a vote
"FOR" all matters.
<PAGE>
[Liberty Logo] LIBERTY
Liberty Funds Services, Inc.
Liberty Money Market Fund
Liberty Municipal Money Market Fund
This proxy, when properly executed, will be voted in the manner directed herein
and, absent direction, will be voted FOR Item 1 below. This proxy will be voted
in accordance with the holder's best judgement as to any other matter.
The Board of Trustees recommends a vote FOR the following Item:
1. To elect eleven Trustees (Item 1 of the Notice).
(01) Douglas A. Hacker
(02) Janet Langford Kelly
(03) Richard W. Lowry
(04) Salvatore Macera
(05) William E. Mayer
(06) Charles Nelson
(07) John J. Neuhauser
(08) Joseph R. Palombo
(09) Thomas E. Stitzel
(10) Thomas C. Theobald
(11) Anne-Lee Verville
INSTRUCTION: to withhhold authority to vote for any individual nominee(s),
mark the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).
For Withheld For All
All From All Nominees
Nominees Nominees Except as
Noted
__ __ __
|__| |__| |__|
2. To authorize the Fund to cast vote for the same nominees for the
election of a Board of Trustees of SR&F Base Trust for whom you voted
above (Item 4 of the Notice).
For Against Abstain
__ __ __
|__| |__| |__|
MARK BOX AT RIGHT FOR ADDRESS CHANGE
AND NOTE at LEFT |__|
PLEASE MARK, SIGN DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
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 corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Please be sure to sign and date this Proxy Date_________________
_________________________ ______________________
Shareholder sign here Co-owner sign here
<PAGE>
TWO CONVENIENT WAYS TO VOTE YOUR PROXY
The enclosed proxy statement provides details on important issues affecting your
Liberty Funds. The Board of Trustees recommends that you vote for
all proposals.
We are offering two additional ways to vote: by telephone or fax. These methods
may be faster and more convenient than the traditional method of mailing back
your proxy card.
If you are voting by telephone or fax, you SHOULD NOT mail your proxy card.
Vote by Telephone:
o Read the proxy statement and have your proxy card available.
o When you are ready to vote, call toll free 1-877-518-9416 between 9:00 a.m.
and 11:00 p.m. EST.
o Following the instructions provided to cast your vote. A representative
will be available to answer questions.
Vote by Fax:
o Read the proxy statement
o Complete the enclosed proxy card.
o Fax your proxy card to 1-800-733-1885.
YOUR PROXY VOTE IS IMPORTANT!
SHM-43/623D-1000 (11/00) 00/2027