SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Columbia Common Stock Fund, Inc.
Columbia Special Fund, Inc.
Columbia Balanced Fund, Inc.
Columbia Fixed Income Securities Fund, Inc.
Columbia Growth Fund, Inc.
Columbia Small Cap Fund, Inc.
Columbia Daily Income Company
Columbia Municipal Bond Fund, Inc.
Columbia International Stock Fund, Inc.
Columbia Real Estate Equity Fund, Inc.
Columbia U.S. Government Securities Fund, Inc.
Columbia High Yield Fund, Inc.
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(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:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: Set forth the amount on which
the filing fee is calculated and state how it was determined.
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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Dear Columbia Fund Shareholder:
As you may know, on August 14, 1997 Columbia Funds Management Company ("CFMC"),
the investment advisor to the Columbia Funds, entered into an acquisition
agreement under which it will become a subsidiary of Fleet Financial Group, Inc.
("Fleet"), a diversified financial services company based in Boston,
Massachusetts. As a result of this transaction, it is necessary for the
shareholders of each of the Columbia Funds to approve a new investment advisory
contract with CFMC.
The new investment advisory contracts will not alter your Columbia Funds
investments in any way. With respect to each of the Columbia Funds, the name,
fee structure and underlying expenses for the shares you own will not change
because of the acquisition. In addition, the investment managers of the Funds
have all signed employment contracts to remain with CFMC, and the individuals
responsible for providing your account services will remain the same. You will
continue to receive the high quality investment management and shareholder
services that you have come to expect over the years.
The Board of Directors of each Columbia Fund, including the independent
directors that are not affiliated with CFMC or Fleet, met on September 26 to
consider the approval of the new investment advisory contracts. After careful
consideration of the shareholders' best interests, each Board of Directors
unanimously approved a new investment advisory contract and recommended that it
be submitted to the shareholders for approval. They encourage you to vote FOR
the proposal on your enclosed ballot. Before voting, however, please be sure to
read the attached Joint Proxy Statement, which provides complete details of the
transaction and additional information about Fleet.
Please cast your vote, and return your ballot in the postage paid envelope as
soon as possible. Shareholders with multiple Columbia Fund accounts may find
more than one ballot enclosed. Please be sure to vote on every ballot you
receive. Remember, your vote really does make a difference.
If you have any questions about this proxy, the transaction with Fleet, or
voting your shares, please do not hesitate to contact us toll-free at
1-800-547-1707 or at 222-3606 in Portland.
As always, we appreciate your continuing investment in Columbia Funds, and we
look forward to serving your needs in the months and years to come.
Sincerely,
John A. Kemp
President
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IMPORTANT NEWS
FOR COLUMBIA FUNDS SHAREHOLDERS
We encourage you to read the full text of the enclosed Joint Proxy
Statement. The following questions and answers give you a brief overview of the
proposal to be voted upon at the Special Meeting of Shareholders.
Q&A: Questions and Answers
WHAT IS HAPPENING?
Columbia Funds Management Company ("CFMC") -- not the Columbia Funds -- has
entered into an acquisition agreement to become a subsidiary of Fleet Financial
Group, Inc. ("Fleet"). The acquisition will result in a change of control of
CFMC. For CFMC to continue to serve as the investment advisor to each of the
Columbia Funds, it is necessary for each Fund's shareholders to approve a new
investment advisory contract with CFMC. The accompanying materials are designed
to provide you with the necessary information to make an informed decision on
that approval. The Directors of each of the Funds, including those Directors not
affiliated with any of the Funds or CFMC, have unanimously recommended that you
vote for approval of each of the new contracts.
WHY AM I BEING ASKED TO VOTE?
The Investment Company Act of 1940, which regulates investment companies such as
the Columbia Funds, and each Fund's current investment advisory contract require
shareholders to approve a new investment advisory contract whenever there is a
change in control of a Fund's investment advisor.
HOW WILL THE CFMC-FLEET TRANSACTION AFFECT ME AS A SHAREHOLDER?
Each of the Columbia Funds and their investment objectives will remain the same.
The Columbia Funds will still be located in Portland, Oregon, and the Columbia
name, fee structure of the Funds and underlying expenses will not change because
of this transaction. The primary consequence is that CFMC will change from a
privately owned company to a subsidiary of Fleet. The agreement with Fleet calls
for CFMC to be run as an autonomous business unit. Moreover, all key employees
responsible for managing and servicing the Columbia Funds, including portfolio
managers, have signed employment contracts to remain with CFMC following the
acquisition. Shareholders will continue to receive the same level of services
that they have come to expect over the years.
WHY DID CFMC ENTER INTO THIS AGREEMENT?
Over the years, CFMC and its affiliates have been approached by numerous
companies about a strategic relationship. Recently, it became apparent that such
a relationship could help the Columbia organization better serve its clients and
investors. Many of our Funds' shareholders have been with the firm since it was
founded over 30 years ago, and serving their best interests was an important
priority in this decision. As discussed in more detail in
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the enclosed materials, the agreement with Fleet enables Columbia to preserve
its culture and autonomy while providing additional opportunities for growth,
expanded services and new professional opportunities for employees.
WILL THE INVESTMENT ADVISORY FEES BE THE SAME?
Yes, the investment advisory fees paid by the Funds to CFMC will remain the
same.
WILL I CONTINUE TO BE ABLE INVEST IN THE COLUMBIA FUNDS WITHOUT SALES CHARGES OR
12B-1 FEES?
Yes, you will continue to be able to purchase Fund shares without sales charges
or 12b-1 fees.
IS MY VOTE IMPORTANT?
Yes, it is important that as many shareholders as possible be represented in the
voting process. CFMC has retained the services of a professional proxy
solicitor, Shareholder Communications Corporation, to help us contact the
Columbia Funds' shareholders. If we do not receive your ballot, you may receive
a call from Shareholder Communications Corporation requesting you to vote.
WHO IS PAYING FOR THIS PROXY SOLICITATION AND THE COST OF THE TRANSACTION WITH
FLEET?
All costs of the proxy solicitation and the Special Shareholder Meeting will be
paid by CFMC and its affiliates and Fleet. None of the legal costs associated
with the transaction will be borne by any of the Columbia Funds.
WHOM DO I CALL FOR MORE INFORMATION?
As always, when you have questions about the Columbia Funds, or if you have
questions about this proxy solicitation, you may call us toll-free at
1-800-547-1707 and one of our Investor Services Representatives will be happy to
assist you.
ABOUT THE PROXY CARD
If you have a single account holding shares of multiple Columbia Funds, you
will receive a single proxy card for your account and only one Joint Proxy
Statement. If you have accounts under more than one name but with the same
address and social security number, you will receive a separate proxy card for
each of your accounts, but only one Joint Proxy Statement. PLEASE SIGN AND
RETURN ALL THE PROXY CARDS YOU RECEIVE AS PROMPTLY AS POSSIBLE.
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COLUMBIA COMMON STOCK FUND, INC.
COLUMBIA GROWTH FUND, INC.
COLUMBIA INTERNATIONAL STOCK FUND, INC.
COLUMBIA SPECIAL FUND, INC.
COLUMBIA SMALL CAP FUND, INC.
COLUMBIA REAL ESTATE EQUITY FUND, INC.
COLUMBIA BALANCED FUND, INC.
COLUMBIA DAILY INCOME COMPANY
COLUMBIA U.S. GOVERNMENT SECURITIES FUND, INC.
COLUMBIA FIXED INCOME SECURITIES FUND, INC.
COLUMBIA MUNICIPAL BOND FUND, INC.
COLUMBIA HIGH YIELD FUND, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 4, 1997
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of each Columbia Fund listed above (each a "Fund" and collectively
the "Funds") will be held jointly at ____________________________________, on
December 4, 1997, at ______ _.m., Pacific Time, for the following purposes:
1. For the shareholders of each Fund to approve or disapprove a new
Investment Advisory Contract between the Fund and Columbia Funds
Management Company (the "Advisor"); and
2. To transact any other business that properly comes before the Meeting
and any adjournment thereof.
Shareholders of record of each Fund at the close of business on October 6,
1997 (the "Record Date") are entitled to notice of and to vote at the Meeting
and any adjournment thereof. Shareholders of each Fund will vote separately on
the proposal. If you have a single account holding shares of multiple Columbia
Funds, you will receive a single proxy card for your account and only one Joint
Proxy Statement. If you have accounts under more than one name but with the same
address and social security number, you will receive a separate proxy card for
each of your accounts, but only one Joint Proxy Statement. Please date and sign
all of the proxy cards you receive and return them in
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the postage-prepaid envelope enclosed for that purpose. You may attend the
Meeting in person even if you send in your proxy cards; retention of the proxy
cards is not necessary for admission to or identification at the Meeting.
By order the Board of Directors
Jeff B. Curtis
Secretary
October ___, 1997
Portland, Oregon
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IMPORTANT
YOU CAN HELP AVOID THE NECESSITY OF SENDING FOLLOW-UP LETTERS TO ENSURE A QUORUM
BY PROMPTLY SIGNING AND RETURNING THE ENCLOSED PROXY CARD(S). IF YOU ARE UNABLE
TO BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE ENCLOSED PROXY
CARD(S) TO ENSURE THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING.
THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
THE BOARD OF DIRECTORS OF EACH FUND RECOMMENDS THAT YOU CAST YOUR VOTE:
- FOR approval of each new Investment Advisory Contract.
YOUR VOTE IS IMPORTANT
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COLUMBIA COMMON STOCK FUND, INC.
COLUMBIA GROWTH FUND, INC.
COLUMBIA INTERNATIONAL STOCK FUND, INC.
COLUMBIA SPECIAL FUND, INC.
COLUMBIA SMALL CAP FUND, INC.
COLUMBIA REAL ESTATE EQUITY FUND, INC.
COLUMBIA BALANCED FUND, INC.
COLUMBIA DAILY INCOME COMPANY
COLUMBIA U.S. GOVERNMENT SECURITIES FUND, INC.
COLUMBIA FIXED INCOME SECURITIES FUND, INC.
COLUMBIA MUNICIPAL BOND FUND, INC.
COLUMBIA HIGH YIELD FUND, INC.
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JOINT PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
December 4, 1997
This Joint Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Directors (each a "Board" and together the "Boards")
of each Columbia Fund listed above (each a "Fund" and collectively the "Funds")
for use at the Special Meeting of Shareholders of each Fund to be held jointly
on December 4, 1997 (the "Meeting") and at any adjournments thereof. The first
mailing of this Joint Proxy Statement and the related Notice of Special Meeting
is expected to be made on or about October ___, 1997.
If the enclosed proxy cards are properly executed and returned in time to
be voted at the Meeting, the proxies named in the proxy cards will vote the
shares represented by the proxy in accordance with the instructions given on the
proxy cards. Unmarked proxy cards will be voted for approval of a new investment
advisory contract between each of the Funds and Columbia Funds Management
Company (the "Advisor").
Any person giving a proxy in the form accompanying this Joint Proxy
Statement has the power to revoke it at any time before its exercise. The proxy
may be revoked by filing with the Fund, attention Jeff B. Curtis, Secretary, an
instrument of revocation or a duly executed proxy card bearing a later date. The
proxy may also be revoked by voting in person at the Meeting. A shareholder who
attends the Meeting, however, is not required to revoke the proxy and vote in
person. Each valid, unrevoked proxy will be voted at the Meeting in accordance
with the instructions given in the proxy.
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Shares Entitled to Vote and Quorum
The holders of shares of record ("Shareholders") of each Fund as of the
close of business on October 6, 1997, the record date for the determination of
Shareholders entitled to notice of and to vote at the Meeting (the "Record
Date"), are entitled to one vote for each share held and a fractional vote for a
fractional share. The table below sets forth the number of shares outstanding
for each Fund as of the Record Date.
Number of
Shares
Name of Fund Outstanding
------------ -----------
Columbia Common Stock Fund, Inc........................................
Columbia Growth Fund, Inc..............................................
Columbia International Stock Fund, Inc.................................
Columbia Special Fund, Inc.............................................
Columbia Small Cap Fund, Inc...........................................
Columbia Real Estate Equity Fund, Inc..................................
Columbia Balanced Fund, Inc............................................
Columbia Daily Income Company..........................................
Columbia U.S. Government Securities Fund, Inc..........................
Columbia Fixed Income Securities Fund, Inc.............................
Columbia Municipal Bond Fund, Inc......................................
Columbia High Yield Fund, Inc..........................................
A quorum for the conduct of business at the Meeting requires the presence,
in person or by proxy, of holders of a majority of the outstanding shares of
each Fund. If the necessary quorum to transact business or the vote required to
approve any proposal is not obtained at the Meeting with respect to one or more
Funds, the persons named as proxies may propose one or more adjournments of the
Meeting for a total of not more than 120 days in the aggregate to obtain a
quorum or to permit further solicitation of proxies. Any such adjournment may be
approved by the affirmative vote of the holders of a majority of the relevant
Fund's shares present in person or by proxy at the Meeting, even though less
than a quorum. The persons named as proxies will vote in favor of such
adjournment those proxies they are entitled to vote in favor of Proposal 1 and
will vote against any such adjournment those proxies to be voted against
Proposal 1.
Attached as Exhibit A is a list of all persons known by the Funds to be the
record or beneficial owners of 5% or more of the outstanding shares of any Fund
as of the Record Date. Exhibit A also shows the number of shares of each Fund
owned by each directors and by all directors and officers of the Funds as a
group as of the Record Date.
Solicitation of Proxies
All costs of soliciting proxies for the Meeting, including printing and
mailing expenses, will be borne 50% by the Advisor or
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its affiliates and 50% by Fleet Financial Group, Inc. or its affiliate. Fleet
National Bank. Proxies will be solicited by use of the mails, and officers and
employees of the Advisor and its affiliates may also solicit proxies by
telephone or personal contact. The Advisor has also hired Shareholder
Communications Corporation to assist in soliciting proxies. Copies of
solicitation materials will be furnished to fiduciaries, custodians, and
brokerage houses for forwarding to beneficial owners of the stock held in their
names.
PROPOSAL 1:
APPROVAL OR DISAPPROVAL OF NEW INVESTMENT
ADVISORY CONTRACT
Background
The Advisor serves as the investment advisor to each Fund pursuant to an
investment advisory contract between the Fund and the Advisor (each a "Current
Contract" and collectively the "Current Contracts"). The approval of a new
investment advisory contract between each Fund and the Advisor (each a "New
Contract" and collectively the "New Contracts") is being sought in connection
with the proposed acquisition (the "Acquisition") of the Advisor by Fleet
Financial Group, Inc. ("Fleet") through its wholly owned subsidiary, Fleet
National Bank ("FNB"). Pursuant to the Investment Company Act of 1940, as
amended (the "Investment Company Act"), the change in ownership of the Advisor
resulting from the Acquisition will result in the automatic termination of all
of the Current Contracts. The New Contracts, which are substantially identical
to the Current Contracts, are proposed to become effective upon the termination
of the Current Contracts at the completion of the Acquisition. Attached as
Exhibit B is the form of the New Contracts, which are described under "The New
Investment Advisory Contracts" below. The Advisor's address is 1300 SW Sixth
Avenue, PO Box 1350, Portland, Oregon 97201-1350.
The Acquisition
On August 14, 1997, the Advisor and three affiliated companies entered into
an agreement (the "Acquisition Agreement") to be acquired by FNB, a wholly owned
subsidiary of Fleet. The affiliated companies (together with the Advisor, the
"Columbia Companies") are Columbia Management Co. ("CMC"), Columbia Trust
Company (the "Trust Company") and Columbia Financial Center Incorporated
("CFCI"). J. Jerry Inskeep, Jr. and James F. Rippey and their families together
own over 50% of the outstanding capital stock of each of CMC, the Advisor, and
CFCI, and the Advisor owns 79% of the outstanding capital stock of the Trust
Company. Certain employees of the Columbia Companies, including the other
officers of the Funds, and their families own the remaining stock of the
Columbia Companies.
The Columbia Companies operate together to provide a range of investment
advisory and related services. The Advisor serves as the investment advisor to
the Funds. CMC acts as investment manager for various institutional clients,
including CMC Fund Trust, which
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offers three mutual fund portfolios to institutional investors. The Trust
Company acts as transfer agent and dividend crediting agent for the Funds and
CMC Fund Trust and provides a variety of investment advisory and trust services
to tax-qualified retirement plans through its common trust and collective trust
pools and to individuals, institutions, trusts and estates through private
management accounts which tailor individual investment objectives using the
Funds as investment vehicles.
CFCI, a registered securities broker and a member of the National
Association of Securities Dealers, Inc. ("NASD"), acts as the principal
underwriter for distribution of the Funds' shares, but it does not charge any
fees or commissions for these services. Following the Acquisition, CFCI will not
serve as the principal underwriter of the Funds because of restrictions under
federal banking laws. Instead, the principal underwriter will be an independent
distributor. This independent distributor will, for a fee (which will be paid by
the Advisor), be named as the principal underwriter in the Funds' Prospectus and
sales literature, will file all sales materials with the NASD and will contract
with other broker dealers and financial intermediaries, including CFCI, for
distribution of the shares. In all other respects, and to the extent permitted
by applicable law, CFCI will continue to handle all the marketing and
distribution activities of the Funds, including preparing advertising and sales
material, communicating with shareholders and marketing the Funds' shares.
CFCI's address is 1301 SW Fifth Avenue, PO Box 1350, Portland, Oregon 97207-
1350.
Under the terms of the Acquisition Agreement, each of the Columbia
Companies other than the Trust Company will become a wholly owned subsidiary of
FNB through a merger with a newly created subsidiary of FNB in which each of
those Columbia Companies will be the surviving corporation. It is anticipated
that FNB will acquire the Trust Company by purchasing the stock of the Trust
Company held by shareholders other than CFMC (whose shares of the Trust Company
FNB will acquire through merger). Following the acquisition, the name of the
Advisor will continue to be Columbia Funds Management Company. The purchase
price to be paid to the shareholders of the Columbia Companies has two
components, (i) a fixed cash price payable at closing of the Acquisition, after
adjustment to reflect the net book value of the Columbia Companies as of the
closing, and (ii) contingent cash payments based on the profitability of the
Columbia Companies in the years 2001 and 2002, subject to acceleration in
certain circumstances. The Acquisition is expected to close soon after the
Meeting, subject to the satisfaction of closing conditions, which include among
others (i) approval of the New Contract by the Shareholders of each Fund, (ii)
the continued effectiveness of employment or consulting agreements executed by
certain employees of the Columbia Companies, and (iii) certain regulatory
approvals.
Current management of the Advisor and Fleet have indicated their intent
that the Advisor continue to operate with the same investment personnel and that
the same persons who are now responsible for the administration and operations
of the Advisor and for the investment policies of the Funds continue to manage
the Advisor following the Acquisition. No substantive changes in the Advisor's
method of operation, or the location where it conducts its business, are
contemplated as a result of the Acquisition. The Acquisition Agreement provides
that the Columbia Companies will remain an autonomous business unit of Fleet to
be managed by John A. Kemp (currently Managing Director-Administration and
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Senior Vice President of the Advisor) as Chief Executive Officer and Thomas L.
Thomsen (currently Managing Director-Investments and Senior Vice President of
the Advisor) as Chief Investment Officer. Mr. Kemp and Mr. Thomsen have each
signed a five-year employment agreement with FNB effective upon the closing of
the Acquisition which include substantial retention and incentive bonuses
payable through 2003. Mr. Inskeep and Mr. Rippey have signed two-year employment
agreements. Substantially all other investment managers and analysts of the
Advisor, including the portfolio managers of each of the Funds, have signed
employment agreements, effective upon the closing of the Acquisition, generally
for three years, which also include substantial retention and incentive bonuses
payable through 2003.
Information Concerning Fleet
FNB is a wholly owned subsidiary of Fleet, a publicly owned multibank
holding company registered under the Bank Holding Company Act of 1956. Fleet,
FNB, and various of their directly and indirectly owned subsidiaries provide a
wide range of banking, financial, and investment products and services to
individuals and businesses. Their principal activities include consumer and
commercial banking, mortgage lending and servicing, trust administration,
investment management, retirement plan services, brokerage and clearing
services, securities underwriting, private and corporate financing and advisory
activities, and insurance services. Among Fleet's principal non-banking
subsidiaries are Fleet Investment Advisors Inc. ("FIA"), a registered investment
adviser; FIS Securities, Inc. and Fleet Enterprises, Inc., retail
broker-dealers; Fleet Brokerage Securities, Inc., a discount broker; and Fleet
Securities, Inc., a securities underwriting firm. FIA and its affiliates manage,
advise, or oversee the investment of over $50 billion in assets belonging to a
wide range of individual, trust, and institutional clients, including registered
investment companies with total assets of approximately $10 billion.
Section 15(f) of the Investment Company Act
The Acquisition is subject to Section 15(f) of the Investment Company Act.
Section 15(f) provides in substance that, when a sale of a controlling interest
in an investment advisor occurs, the investment advisor or any of its affiliated
persons, as defined in the Investment Company Act, may receive any amount or
benefit in connection with the sale as long as two conditions are satisfied.
First, an "unfair burden" must not be imposed on the investment company as a
result of the transaction relating to the sale of such interest, or any express
or implied terms, conditions or understandings applicable to the sale. The term
"unfair burden" (as defined in the Investment Company Act) includes any
arrangement during the two-year period after the transaction whereby the
investment advisor (or predecessor or successor advisor), or any "interested
person" (as defined in the Investment Company Act) of any such advisor, receives
or is entitled to receive any compensation, directly or indirectly, from the
investment company or its security holders (other than fees for bona fide
investment advisory or other services) or from any person in connection with the
purchase or sale of securities or other property to, from or on behalf of the
investment company. Each Fund's Board is aware of no circumstances arising from
the Acquisition that might result in an unfair burden being imposed on any Fund.
Moreover, FNB and the
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Advisor have agreed with each other that they will each use their reasonable
best efforts to ensure that no unfair burden will be imposed on any Fund as a
result of the Acquisition during the two-year period following the Acquisition.
The second condition of Section 15(f) is that, during the three-year period
following the completion of a transaction, at least 75% of an investment
company's directors must not be "interested persons" (as defined in the
Investment Company Act) of the investment adviser or predecessor adviser
("Independent Directors"). FNB has agreed with the Advisor that for at least the
first three years following completion of the Acquisition, FNB will ensure that
not more than 25% of any Fund's Board are "interested persons." There are now
six directors of each Fund, three of whom (James C. George, Thomas R. Mackenzie,
and Richard L. Woolworth) are Independent Directors and three of whom (J. Jerry
Inskeep, Jr., James F. Rippey and John A. Kemp) are "interested persons." To
satisfy the second condition of Section 15(f), each of the Independent Directors
will remain Directors of the Funds and Mr. Rippey and Mr. Kemp will resign as
directors of the Funds effective as of the closing of the Acquisition. Following
the Acquisition, each Fund will then have three Independent Directors and one
director who is an "interested person."
The New Investment Advisory Contracts
The form of each of the proposed New Contracts is attached to this Joint
Proxy Statement as Exhibit B. THE TERMS OF EACH NEW CONTRACT, INCLUDING THE FEES
PAYABLE BY EACH FUND, ARE IDENTICAL IN ALL MATERIAL RESPECTS TO THOSE OF THE
CORRESPONDING CURRENT CONTRACT, EXCEPT FOR THE DATES OF EFFECTIVENESS AND
TERMINATION. The terms of the Current Contracts are described under "The Current
Investment Advisory Contracts" below. If approved by Shareholders, each New
Contract will become effective on the closing date of the Acquisition and will
continue in effect for an initial term of two years. Each New Contract will then
continue in effect from year to year thereafter if that continuance is approved
by the Fund's Board or by a "majority of the outstanding voting securities" (as
defined below) of the Fund and, in either event, by the vote cast in person of a
majority of the Fund's Independent Directors. If the Acquisition is not
completed, the Current Contacts will remain in effect.
The Boards' Consideration
The Boards of the Funds, including all of the Independent Directors, met in
person on September 26, 1997 for the purpose of considering whether it would be
in the best interests of each Fund and its Shareholders for the Fund to enter
into a New Contract with the Advisor that would become effective upon the
completion of the Acquisition. At an earlier meeting on August 21, 1997, the
Independent Directors were briefed generally by representatives of the Advisor
on the terms of the Acquisition and the expected impact of the Acquisition on
the Funds. The Independent Directors requested, and prior to their meeting on
September 26, 1997 they received, materials regarding Fleet and its business,
personnel and financial condition, the terms of the proposed Acquisition, and
Fleet's plans for the Advisor following the Acquisition. Representatives of
Fleet were present to answer
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questions from the Boards. The Independent Directors were assisted in their
review and deliberations by independent legal counsel.
In determining whether to approve a New Contract, the Board of each Fund
assessed how the Acquisition would affect the Advisor and its ability to
continue to provide to the Fund services of the same scope and quality as the
Advisor now provides. In particular, the Board inquired about the impact of the
Acquisition on the Advisor's personnel, management, facilities and financial
capabilities. They noted favorably the commitments made by Fleet in the
Acquisition Agreement to maintain the Advisor and the other Columbia Companies
as an autonomous business unit of Fleet and the incentives established by Fleet
for the management and investment professionals of the Columbia Companies to
continue in their current roles. They also considered the possible benefits to
the Funds of the Advisor's affiliation with Fleet, including access to the
greater resources of Fleet to expand distribution of the Funds and to develop
additional services for Shareholders.
The Board of each of the Funds also considered that each New Contract is
identical, in all material respects, to the corresponding Current Contract
(other than the dates of effectiveness and termination), which was last approved
by the Boards in April 1997. In particular, they noted that there would be no
change in the advisory fees paid by the Funds under the New Contracts.
Based upon each Board's review and the evaluations of the materials it
received, and after consideration of all factors the directors deemed relevant,
the Board of each Fund, including all of the Independent Directors, unanimously
determined that the corresponding New Contract is in the best interests of the
Fund and its Shareholders. ACCORDINGLY, THE BOARD OF EACH FUND, INCLUDING ALL OF
THE INDEPENDENT DIRECTORS, APPROVED THE APPLICABLE NEW CONTRACT AND VOTED TO
RECOMMEND SHAREHOLDER APPROVAL OF THE NEW CONTRACT.
The Current Investment Advisory Contracts
Under the Current Contracts, the Advisor regularly provides each Fund with
research, advice, and supervision with respect to investment matters and
determines what securities to purchase or sell and what portion of the Fund's
assets to invest. The Advisor provides office space and pays all executive
salaries and expenses and ordinary office expenses of each Fund (other than the
expenses of clerical services relating to the administration of the Fund).
Certain employees of the Advisor are also officers of the Funds and, subject to
the authority of each Fund's Board of Directors, are responsible for the overall
management of the Funds' business affairs.
In return for the Advisor's services and the expenses the Advisor assumes
under each Current Contract, each Fund pays the Advisor an advisory fee, which
is accrued daily and payable monthly. The table below shows the fee schedule for
each Fund and the amount of advisory fees paid to the Advisor by each Fund for
1996.
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<PAGE>
<TABLE>
<CAPTION>
Annual Advisory Fee Rate Advisory Fee
Name of Fund (as a percentage of daily net assets) Paid For 1996
- ------------ ------------------------------------- -------------
<S> <C> <C>
Columbia Common Stock Fund, Inc.................... .60% on all assets $2,686,585
Columbia Growth Fund, Inc.......................... .75% on first $200 million $5,711,080
.625% on next $300 million
.50% on assets over $500 million
Columbia International Stock Fund, Inc............. 1.00% on all assets $1,157,227
Columbia Special Fund, Inc......................... 1.00% on first $500 million $12,880,541
.75% on assets over $500 million
Columbia Small Cap Fund, Inc....................... 1.00% on all assets $40,273(1)
Columbia Real Estate Equity Fund, Inc.............. .75% on all assets $232,413
Columbia Balanced Fund, Inc........................ .50% on all assets $2,935,512
Columbia Daily Income Company...................... .50% on first $500 million $4,009,904
.45% on next $500 million
.40% on assets over $1 billion
Columbia U.S. Government Securities Fund, Inc. .50% on all assets $206,591
Columbia Fixed Income Securities Fund, Inc......... .50% on all assets $1,668,004
Columbia Municipal Bond Fund, Inc.................. .50% on all assets $1,881,542
Columbia High Yield Fund, Inc...................... .60% on all assets $150,432
- --------------
(1) Fund began offering shares to the public on October 1, 1996.
</TABLE>
Each Fund assumes the following costs and expenses: costs relating to
corporate matters; cost of services to Shareholders; transfer and dividend
paying agent fees; custodian fees; legal, auditing, and accounting expenses;
disinterested directors' fees; taxes and governmental fees; interest; brokers'
commissions; transaction expenses; cost of stock certificates and any other
expenses (including clerical expenses) of issue, sale, repurchase, or redemption
of its shares; expenses of registering or qualifying its shares for sale;
transfer taxes; all expenses of preparing its registration statements,
prospectuses, and reports; and the cost of printing and delivering to
Shareholders its prospectuses and reports. Additionally, third party
administrators of tax qualified retirement plans and other financial
institutions may establish omnibus accounts with the Funds and provide
sub-transfer agency and record keeping or other services to participants and
beneficial owners in the omnibus accounts. In recognition that these
arrangements reduce or eliminate the need for a Fund's transfer agent to provide
such services, the Fund may pay the administrator a sub-transfer agent or record
keeping fee.
The following table sets forth the date of each Current Contract and the
date each Current Contract was last approved by the applicable Fund's
Shareholders.
8
<PAGE>
<TABLE>
<CAPTION>
Date Current
Contract Was Last
Approved By the
Date of Current Fund's
Name of Fund Contract Shareholders
- ------------ -------- ------------
<S> <C> <C>
Columbia Common Stock Fund, Inc. August 8, 1991 April 23, 1992
Columbia Growth Fund, Inc. April 20, 1993(1) March 16, 1983
Columbia International Stock Fund, Inc. August 12, 1992 April 15, 1993
Columbia Special Fund, Inc. May 1, 1993(1) March 20, 1986
Columbia Small Cap Fund, Inc. August 20, 1996 Sept. 16, 1996
Columbia Real Estate Equity Fund, Inc. February 24, 1994 June 23, 1994
Columbia Balanced Fund, Inc. August 8, 1991 April 23, 1992
Columbia Daily Income Company. April 20, 1993(1) March 11, 1981
Columbia U.S. Government Securities Fund, Inc. April 29, 1988 March 17, 1988
Columbia Fixed Income Securities Fund, Inc. April 29, 1988 March 17, 1988
Columbia Municipal Bond Fund, Inc. April 29, 1988 March 17, 1988
Columbia High Yield Fund, Inc. August 16, 1993 June 23, 1994
- --------------
(1) The Current Contract was restated on the date indicated to make
typographical corrections and, in the case of Columbia Special Fund, Inc.,
to reduce the investment advisory fee. These changes did not require
resubmission of the restated contracts to the Shareholders for approval.
</TABLE>
After an initial two-year term, each Current Contract provides that it may
be continued in effect from year to year thereafter, provided that each
continuance is approved by the vote of a "majority of the outstanding voting
securities" (as defined below) of each Fund or by the Fund's Board and, in
either event, by the vote cast in person by a majority of the Independent
Directors at a meeting called for the purpose of voting on such approval. Each
Current Contract has been continued in effect from year to year by action of the
Board, including the Independent Directors. The most recent annual approval of
the Current Contracts occurred at a meeting of the Boards held on April 24,
1997. At that meeting each Board approved a minor amendment to the applicable
Fund's Current Contract to clarify that the Current Contract does not include
any waiver by the Fund of any rights under federal securities laws.
Each Current Contract also provides that it may be terminated at any time
by vote of the Fund's Board of Directors, by vote of the Fund's Shareholders, or
by the Advisor, in each instance without the payment of any penalty, on 60 days
notice. Each Current Contract also provides that it will automatically terminate
if it is assigned, as defined in the Investment Advisers Act of 1940.
The Advisor has entered into an agreement with CMC pursuant to which CMC
provides the Advisor with statistical and other factual information, advice
regarding economic factors and trends, and advice as to occasional transactions
in specific securities. CMC, upon receipt of specific instructions from the
Advisor, also contacts brokerage firms to effect securities transactions for
each Fund. The Advisor pays CMC a fee for these
9
<PAGE>
services. No Fund's expenses are increased by this arrangement, and no amounts
are paid by any Fund to CMC pursuant to this agreement.
Other Fees Paid to the Columbia Companies
The Trust Company acts as transfer agent and dividend crediting agent for
each of the Funds pursuant to Transfer Agent Agreements. The Trust Company is
paid a fee of $1.50 per month by each Fund for each shareholder account existing
at any time during the month. In addition, each Fund pays the Trust Company for
extra administrative services performed in accordance with a schedule set forth
in the applicable Transfer Agent Agreement and reimburses the Trust Company for
certain out-of-pocket expenses incurred in carrying out its duties under the
applicable Transfer Agent Agreement. The following table shows the amount paid
to the Trust Company by each Fund for services performed under the applicable
Transfer Agent Agreement for 1996.
<TABLE>
<CAPTION>
Transfer Agent
Name of Fund Fees in 1996
------------ ------------
<S> <C>
Columbia Common Stock Fund, Inc............................. $218,624
Columbia Growth Fund, Inc................................... $510,664
Columbia International Stock Fund, Inc...................... $181,749
Columbia Special Fund, Inc.................................. $663,083
Columbia Small Cap Fund, Inc................................ $3,700(1)
Columbia Real Estate Equity Fund, Inc....................... $24,214
Columbia Balanced Fund, Inc................................. $301,673
Columbia Daily Income Company............................... $578,095
Columbia U.S. Government Securities Fund, Inc............... $33,282
Columbia Fixed Income Securities Fund, Inc.................. $172,277
Columbia Municipal Bond Fund, Inc........................... $79,716
Columbia High Yield Fund, Inc............................... $19,989
--------------
(1) Fund began offering shares to the public on October 1, 1996.
</TABLE>
Directors of the Advisor and Executive Officers of the Funds
The following is a list of all directors of the Advisor, four of whom also
serve as executive officers of each Fund, and the two other executive officers
of each Fund, both of whom are officers of the Advisor. Each executive officer
of the Funds is an "interested person" as defined in the Investment Company Act.
The business address of each person named below is 1300 SW Sixth Avenue, P.O.
Box 1350, Portland, OR 97207.
10
<PAGE>
<TABLE>
<CAPTION>
Name Age Principal Positions for past Five Years
---- --- ---------------------------------------
<S> <C> <C>
J. Jerry Inskeep, Jr. 66 Chairman, Director, and a principal
shareholder of the Advisor and CMC;
Chairman and Director of each of the
Funds; Chairman and Director of the
Trust Company; Director of CFCI;
Chairman and Trustee of CMC Fund Trust.
James F. Rippey 66 President, Director, and a principal
shareholder of the Advisor and CMC;
Director of each of the Funds; President
and Director of the Trust Company;
President and Trustee of CMC Fund Trust.
John A. Kemp 55 Managing Director-Administration (since
July 1997), Senior Vice President, and
Director of the Advisor, CMC, and the
Trust Company; Senior Vice President and
Director of CFCI; Director (since June
1994) and President of each of the
Funds; Vice President and Trustee of CMC
Fund Trust.
George L. Hanseth 53 Vice President, Assistant Secretary,
Treasurer, and Director of the Advisor,
CMC, and the Trust Company; Senior Vice
President and Treasurer of each of the
Funds; President and Director of CFCI;
Vice President, Assistant Secretary,
Treasurer, and Trustee of CMC Fund
Trust.
Lawrence S. Viehl 58 Vice President and Director (since April
1997) of the Advisor, CMC, and the Trust
Company; Vice President of CMC Fund
Trust and each of the Funds.
Terry L. Chambers 52 Vice President and Director of the
Advisor, CMC and the Trust Company.
Alan J. Folkman 55 Senior Vice President and Director of
the Advisor, CMC and the Trust Company.
Thomas L. Thomsen 53 Managing Director-Investments (since May
1997), Senior Vice President and
Director of the Advisor, CMC and the
Trust Company.
Robert A. Unger 50 Vice President and Director of the
Advisor and CMC (since January 1994);
Director of the Trust Company.
Albert D. Corrado 63 Vice President of the Advisor and the
Trust Company; Vice President of each
Fund.
11
<PAGE>
Name Age Principal Positions for past Five Years
---- --- ---------------------------------------
Jeff B. Curtis 44 General Counsel, Vice President, and
Secretary of the Advisor, CMC, the Trust
Company, and CFCI (since April 1993);
Secretary of each of the Funds and CMC
Fund Trust (since April 1994); Attorney
with Stoel Rives LLP (1986-1993), a law
firm in Portland, Oregon.
</TABLE>
Pursuant to federal banking regulations, each of Messrs. Kemp, Hanseth,
Viehl, Corrado, and Curtis will be ineligible to serve as officers of the Funds
following the Acquisition. Therefore, the Board of Directors of each Fund will,
in accordance with the Fund's Bylaws, appoint a successor to each ineligible
officer.
Required Vote
No New Contract can be implemented unless it is approved at the Meeting, or
any adjournment thereof, by a majority of the outstanding voting securities of
the applicable Fund. Under the Investment Company Act, approval of a "majority
of the outstanding voting securities" means receiving the affirmative vote of
the holders of (a) 67% or more of the Fund's shares present in person or by
proxy at the Meeting, provided that the holders of more than 50% of the
outstanding shares are present in person or by proxy at the Meeting, or (b) more
than 50% of the Fund's outstanding shares, whichever is less. Abstentions and
broker non-votes are counted as shares present at the Meeting for purposes of
determining if a quorum is present and have the effect of votes against approval
of the New Contracts.
If the Shareholders of a Fund do not approve a New Contract, Fleet could
refuse to complete the Acquisition. If Fleet, at its option, completes the
Acquisition, the Current Contract with that Fund will terminate effective as of
the closing of the Acquisition, and the Fund's Board will make such arrangements
for the management of the Fund's investments as it deems to be in the best
interests of the Fund and its Shareholders.
THE BOARD OF EACH FUND UNANIMOUSLY RECOMMENDS THAT EACH FUND'S SHAREHOLDERS
VOTE FOR APPROVAL OF THE NEW INVESTMENT ADVISORY CONTRACT.
SHAREHOLDER PROPOSALS
Each Fund's Bylaws provide that the Fund is not required to hold annual
shareholders meetings, except as required by the Investment Company Act or
Oregon law. It is unlikely, therefore, that any Fund will hold an annual meeting
in any year unless required by law. For those years in which a Fund holds an
annual shareholders meetings, a shareholder proposal must be received by the
Fund within a reasonable period of time before the proxy
12
<PAGE>
solicitation is made in order to be considered for inclusion in the proxy
materials relating to that annual meeting.
REPORTS TO SHAREHOLDERS
EACH FUND'S MOST RECENT ANNUAL REPORT TO SHAREHOLDERS AND SEMI-ANNUAL
REPORT TO SHAREHOLDERS HAVE BEEN SENT PREVIOUSLY TO SHAREHOLDERS AND CAN BE
OBTAINED WITHOUT CHARGE UPON REQUEST BY CONTACTING THE COLUMBIA FUNDS, P.O. BOX
1350, PORTLAND, OREGON, 97207-1350 (TELEPHONE 1-800-547-1707 (TOLL FREE
NATIONWIDE) OR 222-3606 IN PORTLAND).
DISCRETIONARY AUTHORITY
While the Notice of Special Meeting of Shareholders provides for
transaction of any other business that properly comes before the Meeting, the
Boards of each of the Funds has no knowledge of any matters to be presented at
the Meeting other than the matters described in this proxy statement. The
enclosed proxy, however, gives discretionary authority to the proxy holders to
vote in accordance with their judgment if any other matters are properly
presented.
By Order of the Boards of Directors
Jeff B. Curtis
Secretary
October __, 1997
Portland, Oregon
13
<PAGE>
EXHIBIT A
PRINCIPAL SHAREHOLDERS OF THE FUNDS
The following table shows, as of October 6, 1997, the names and addresses
of all persons known by the Funds to be the record or beneficial owners of 5% or
more of the outstanding shares of any Fund. Those Shareholders marked with an
asterisk are nominees holding shares for beneficial owners and the Funds have no
record concerning the actual beneficial owners. The table also shows the number
of shares of each Fund owned by each director and all directors and officers of
the Funds as a group as of October 6, 1997.
<TABLE>
<CAPTION>
Columbia Common Stock Fund, Inc.
Name Number of Shares Held Percentage of Outstanding Shares
- ---- --------------------- --------------------------------
<S> <C> <C>
Columbia Special Fund, Inc.
Name Number of Shares Held Percentage of Outstanding Shares
- ---- --------------------- --------------------------------
Columbia Balanced Fund, Inc.
Name Number of Shares Held Percentage of Outstanding Shares
- ---- --------------------- --------------------------------
Columbia Fixed Income Securities
Fund, Inc.
Name Number of Shares Held Percentage of Outstanding Shares
- ---- --------------------- --------------------------------
Columbia Growth Fund, Inc.
Name Number of Shares Held Percentage of Outstanding Shares
- ---- --------------------- --------------------------------
A-1
<PAGE>
Columbia Small Cap Fund, Inc.
Name Number of Shares Held Percentage of Outstanding Shares
- ---- --------------------- --------------------------------
Columbia Daily Income Company
Name Number of Shares Held Percentage of Outstanding Shares
- ---- --------------------- --------------------------------
Columbia Municipal Bond Fund, Inc.
Name Number of Shares Held Percentage of Outstanding Shares
- ---- --------------------- --------------------------------
Columbia International Stock Fund,
Inc.
Name Number of Shares Held Percentage of Outstanding Shares
- ---- --------------------- --------------------------------
Columbia Real Estate Equity Fund,
Inc.
Name Number of Shares Held Percentage of Outstanding Shares
- ---- --------------------- --------------------------------
A-2
<PAGE>
Columbia U.S. Government
Securities Fund, Inc.
Name Number of Shares Held Percentage of Outstanding Shares
- ---- --------------------- --------------------------------
Columbia High Yield Fund, Inc.
Name Number of Shares Held Percentage of Outstanding Shares
- ---- --------------------- --------------------------------
</TABLE>
A-3
<PAGE>
EXHIBIT B
FORM OF INVESTMENT ADVISORY CONTRACT
COLUMBIA ________________, INC.
INVESTMENT ADVISORY CONTRACT
This Agreement is made the ___ day of ________________, 1997 between
COLUMBIA __________________________, INC., an Oregon corporation, (the "Fund")
and COLUMBIA FUNDS MANAGEMENT COMPANY, an Oregon corporation having its
principal place of business in Portland, Oregon (the "Adviser"). The Fund is
registered as an open-end investment company pursuant to the Investment Company
Act of 1940 (the "Act"). The Adviser is registered as an investment adviser
pursuant to the Investment Advisers Act of 1940. This Agreement relates to
services to be performed by the Adviser with respect to the Fund.
The parties agree as follows:
1. Duties of Adviser. The Adviser shall regularly provide the Fund with
research, advice, and supervision with respect to investment matters and shall
furnish continuously an investment program, recommend what securities shall be
purchased or sold and what portion of the Fund's assets shall be held invested
or uninvested, subject always to the provisions of the Act and the Fund's
Articles of Incorporation and Bylaws, and amendments thereto, which amendments
shall be furnished to the Adviser by the Fund. The Adviser shall take any steps
necessary or appropriate to carry out its decisions in regard to the foregoing
matters and the general conduct of the business of the Fund. The Adviser may
take into consideration receipt of research and statistical information and
other services rendered to the Fund in the allocation of commissions from
portfolio brokerage business.
2. Allocation of Charges and Expenses.
(a) The Adviser shall pay or reimburse the Fund for payments made by
the Fund for all executive salaries and executive expenses, office rent of the
Fund, ordinary office expenses (other than the expense of clerical services
relating to the administration of the Fund), and for any other expenses that, if
otherwise borne by the Fund, would cause the Fund to "be deemed to be acting as
a distributor of securities of which it is the issuer, other than through an
underwriter," pursuant to Rule 12b-1 under the Act. The Adviser shall provide
investment advisory, statistical, and research facilities and all clerical
services relating to research, statistical, and investment work with respect to
the Fund.
(b) The Adviser shall not be required to pay any expenses of the Fund
other than those enumerated in this Agreement. The Fund will assume all other
costs,
B-1
<PAGE>
including the cost of its custodian, legal, auditing, and accounting expenses,
disinterested directors' fees, taxes, and governmental fees, interest, brokers'
commissions, transaction expenses, cost of stock certificates, and any other
expenses (including clerical expenses) of issue, sale, repurchase, or redemption
of shares, expenses of registering or qualifying shares for sale, transfer
taxes, and all expenses of preparing the Fund's registration statement and
prospectus, and the cost of printing and delivering to shareholders prospectuses
and reports.
3. Compensation of the Adviser. For the services to be rendered, the
facilities to be furnished, and the payments to be made by the Adviser, as
provided in Sections 1 and 2 hereof, for each calendar month the Fund shall pay
to the Adviser a fee computed at the annual rate of 1 percent of daily net
assets. If the asset value is not required to be determined on any particular
business day, then for the purposes of this Section 3, the asset value of a
share as last determined shall be deemed to be the asset value of a share as of
the close of business on that day. If there is no business day in any calendar
month, the fee shall be computed on the basis of the asset value of a share as
last determined, multiplied by the average number of shares outstanding on the
last day of the month.
4. Covenants of the Adviser. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Adviser nor any
officer, director, or employee of the Adviser shall act as a principal. The
Adviser covenants that it and its employees will comply with investment
restrictions of the Fund's Bylaws applicable to them. If the Adviser or any of
its affiliates give any advice to clients concerning the shares of the Fund, it
will act solely as investment counsel for the clients and not on behalf of the
Fund.
5. Limitation on Liability of Adviser. The Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this agreement relates, except a loss
resulting from willful malfeasance, bad faith, or gross negligence on the part
of the Adviser in the performance of its duties or from reckless disregard by
the Adviser of its obligations and duties under this Agreement. The federal
securities laws impose liabilities under certain circumstances on persons who
act in good faith, and therefore nothing herein shall in any way constitute a
waiver or limitation of any rights which the Fund may have under any federal
securities laws.
6. Duration and Termination of this Agreement.
(a) This Agreement shall remain in force for two years from the date
hereof, and it may be continued from year to year thereafter if approved
annually by a vote of a majority of the Fund's shareholders or by its Board of
Directors and in either case a vote of a majority of the Board of Directors who
are not parties to this Agreement or interested persons of any such party cast
in person at a meeting called for the purpose of voting on such approval.
(b) This Agreement may be terminated at any time without the payment
of any penalty by vote of the Board of Directors of the Fund, by vote of a
majority of the
B-2
<PAGE>
outstanding shares of the Fund, or by the Adviser, on 60 days written notice to
the other party.
(c) This Agreement shall automatically terminate if it is assigned.
The Adviser shall notify the Fund of any change in the officers or directors of
the Adviser within a reasonable time after the change. The terms "assignment,"
"vote of a majority of the outstanding voting securities," and "interested
persons" shall have the meanings specified in the Act.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed as
of the day and year first written above.
COLUMBIA __________________, INC.
By ______________________________________
Title:
COLUMBIA FUNDS MANAGEMENT COMPANY
By ______________________________________
Title:
B-3
<PAGE>
COLUMBIA BALANCED FUND, INC.
COLUMBIA COMMON STOCK FUND, INC.
COLUMBIA DAILY INCOME COMPANY
COLUMBIA FIXED INCOME SECURITIES FUND, INC.
COLUMBIA GROWTH FUND, INC.
COLUMBIA HIGH YIELD FUND, INC.
COLUMBIA INTERNATIONAL STOCK FUND, INC.
COLUMBIA MUNICIPAL BOND FUND, INC.
COLUMBIA REAL ESTATE EQUITY FUND, INC.
COLUMBIA SMALL CAP FUND, INC.
COLUMBIA SPECIAL FUND, INC.
COLUMBIA U.S. GOVERNMENT SECURITIES FUND, INC.
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
December 4, 1997
The undersigned hereby appoints J. Jerry Inskeep, Jr., James F. Rippey,
John A. Kemp and George L. Hanseth, and each of them separately, proxies, with
power of substitution to each, and hereby authorizes them to represent and to
vote, as designated below, at the Special Meeting of Shareholders of the above
Funds, on December 4, 1997, at _.m., Pacific Time, and at any adjournments
thereof, all the shares of the Funds identified below in the Proposal which the
undersigned would be entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR THE PROPOSAL.
This proxy is solicited on behalf of the Boards of Directors of the above
Funds. Each Fund's Board of Directors recommends a vote FOR the above Proposal.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK AS FOLLOWS: [ADP Include
Example]
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
PROPOSAL:
- --------
Approval of Investment Advisory Contract with Columbia Funds Management Company
NAME OF FUND FOR AGAINST ABSTAIN
- ------------ --- ------- -------
ADP will list funds [ ] [ ] [ ]
Please sign your name exactly as it appears on this card. If you are a
joint owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If the shareholders is a
partner, sign in the partnership name.
- ----------------------------------- -------------------
Signature [PLEASE SIGN WITHIN BOX] Date
- ----------------------------------- -------------------
Signature (Joint Owners) Date
