COLONIAL MUNICIPAL MONEY MARKET FUND
Proxy This Proxy is Solicited on Behalf of the Trustees
The undersigned shareholder hereby appoints Harold W. Cogger, Nancy L. Conlin,
Michael H. Koonce and Arthur O. Stern, and each of them, proxies of the
undersigned, with power of substitution, to vote at the Special Meeting of
Shareholders of Colonial Municipal Money Market Fund, to be held at Boston,
Massachusetts, on Tuesday, June 18, 1996, and at any adjournments, as follows:
1. ELECTION OF THE BOARD OF TRUSTEES OF THE SR&F BASE TRUST (Item 1 of the
Notice)
FOR the nominees listed below WITHHOLD AUTHORITY
(except as marked to the contrary below*) to vote for the nominees listed
below
Timothy K. Armour Kenneth L. Block William W. Boyd
Lindsay Cook Douglas A. Hacker Francis W. Morley
Charles R. Nelson Thomas C. Theobald Gordon R. Worley
*(INSTRUCTION: To withhold authority to vote for any individual nominee write
that nominee's name in the space provided below)
2.A PROPOSAL TO AMEND THE PORTFOLIO'S FUNDAMENTAL RESTRICTION ON BORROWING
(Proposal 2.A. of the Notice)
FOR AGAINST ABSTAIN
2.B PROPOSAL TO AMEND THE FUND'S FUNDAMENTAL RESTRICTION ON BORROWING
CONDITIONED UPON APPROVAL OF PROPOSAL 2.A (Proposal 2.B. of the Notice)
FOR AGAINST ABSTAIN
3.A PROPOSAL TO AMEND THE PORTFOLIO'S FUNDAMENTAL RESTRICTION ON LENDING
(Proposal 3.A. of the Notice)
FOR AGAINST ABSTAIN
3.B PROPOSAL TO AMEND THE FUND'S FUNDAMENTAL RESTRICTION ON LENDING
CONDITIONED UPON APPROVAL OF
PROPOSAL 3.A (Proposal 3.B. of the Notice)
FOR AGAINST ABSTAIN
4. IN THEIR DISCRETION, UPON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.
This proxy when properly executed will be voted in the manner directed above
and, absent direction, will be voted for Proposals 1 through 3 listed above.
Please sign exactly as name
appears hereon. When
signing as attorney,
executor, administrator,
trustee or guardian, please
give full title as such. If
a corporation, please sign
in full corporate name by
President or other
authorized officer. If a
partnership, please sign in
partnership name by
authorized person.
Dated:---------------,1996
---------------------------
Signature
---------------------------
Signature if held jointly
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE.
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
Dear Shareholder:
I am writing to let you know that a Special Meeting of Shareholders of Colonial
Municipal Money Market Fund (Fund) will be held on June 18, 1996, to vote on the
election of a Board of Trustees for the SR&F Base Trust (Base Trust), as well as
several proposals to modify the fundamental investment policies on borrowing and
lending of the Stein Roe Municipal Money Market Portfolio (Portfolio). The Fund
currently invests all of its assets in the Portfolio, which is a series of the
Base Trust.
The modifications have been carefully reviewed and approved by your Fund's
Trustees. Currently, the Portfolio's and the Fund's policies only allow
borrowing from banks. The changes are being proposed primarily to allow the
Portfolio to borrow money from other mutual funds advised by Stein Roe & Farnham
Incorporated, when there is a cost advantage in doing so. Each of the Stein Roe
Funds, including the Portfolio, would be able to borrow a limited amount of
money from and lend money to the other Stein Roe Funds. Such borrowings and
loans would be made primarily to allow the borrowing fund to meet shareholder
redemptions.
As a shareholder in the Colonial Municipal Money Market Fund, you have the
opportunity to voice your opinion on these proposals. Everything you need to
vote is enclosed. Simply complete your proxy card and return it to us on or
before June 18, 1996, in the enclosed postage-paid envelope. Your vote is very
important -- no matter how many shares you own.
Please take a few moments to review the details of the proposals and return the
proxy at your earliest convenience. If you have any questions about the proxy,
please feel free to call Colonial Investors Service Center, Inc. at
1-800-345-6611. Our hearing-impaired shareholders may call 1-800-528-6979 if you
have special TTD equipment.
Thank you in advance for your participation and prompt attention. We look
forward to continuing to offer the high quality investment management and
shareholder services you have come to expect from Colonial Mutual Funds.
Sincerely,
Harold W. Cogger, President
May 17, 1996
TM-85/114C-0496
<PAGE>
COLONIAL MUNICIPAL MONEY MARKET FUND
One Financial Center, Boston, Massachusetts 02111
(617) 426-3750
NOTICE OF MEETING OF SHAREHOLDERS
TO BE HELD JUNE 18, 1996
Dear Shareholder:
A Special Meeting of Shareholders (Meeting) of Colonial Municipal Money
Market Fund (Fund)will be held at the offices of Colonial Management Associates,
Inc. (Administrator), One Financial Center, Boston, Massachusetts, on Tuesday,
June 18, 1996, at 10:00 A.M., Eastern time, to:
1. Consider the election of a Board of Trustees of the SR&F Base Trust;
2.A. Consider a proposal to amend the SR&F Municipal Money Market
Portfolio's fundamental investment restriction on borrowing;
2.B. Consider a proposal to amend the Fund's fundamental investment
restriction on borrowing conditioned upon the approval of Proposal
2.A;
3.A. Consider a proposal to amend the SR&F Municipal Money Market
Portfolio's fundamental investment restriction on lending;
3.B. Consider a proposal to amend the Fund's fundamental investment
restriction on lending conditioned upon the approval of Proposal
3.A; and
4. Transact such other business as may properly come before the
Meeting or any adjournment thereof.
By order of the Trustees,
Arthur O. Stern, Secretary
May 17, 1996
NOTICE: YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. IF
A QUORUM IS NOT PRESENT AT THE MEETING, ADDITIONAL EXPENSES WILL BE INCURRED TO
SOLICIT ADDITIONAL PROXIES. TO AVOID THESE COSTS TO YOUR FUND, PLEASE VOTE,
SIGN AND RETURN YOUR PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE IMMEDIATELY.
<PAGE>
Proxy Statement
I. Introduction
The Trustees of Colonial Trust IV (Trust) hereby are soliciting proxies from the
shareholders of Colonial Municipal Money Market Fund (Fund) in connection with a
meeting of shareholders of the Fund (Meeting) scheduled for June 18, 1996. The
Meeting is being held so that shareholders of the Fund may vote on the following
proposals:
1. Elect the Board of Trustees of the SR&F Base Trust (Base Trust) (the Fund
currently invests all of its assets in the SR&F Municipal Money Market
Portfolio (Portfolio), which is a series of the Base Trust);
2.A. Modify the Portfolio's fundamental investment restriction on
borrowing to enable it to borrow money under an interfund lending program;
2.B. Make a conforming change to the Fund's fundamental investment
restriction on borrowing conditioned upon approval of Proposal 2.A;
3.A. Modify the Portfolio's fundamental investment restriction on lending to
enable it to lend money under the interfund lending program;
3.B. Make a conforming change to the Fund's fundamental investment
restriction on lending conditioned upon approval of Proposal 3.A; and
4. Transact such other business as may properly come before the Meeting
or any adjournment thereof.
II. General Information Concering the Fund's Two-Tier Structure.
Rather than investing in individual securities, the Fund currently invests all
of its assets in the Portfolio which, in turn, invests in individual securities.
As an investor in the Portfolio, the Fund is entitled to vote on certain matters
affecting the Portfolio and the Base Trust, including the election of the Board
of Trustees of the Base Trust and changes to the Portfolio's fundamental
investment restrictions. The Portfolio has submitted the matters referenced in
Proposals 1, 2.A. and 3.A. above to a vote of its investors.
The Fund's Prospectus states that all matters submitted by the Portfolio to the
Fund for a vote be passed along by the Fund to its shareholders, and that the
Fund vote its interest in the Portfolio for and against such matters in
proportion to the votes received from Fund shareholders. The Fund is hereby
requesting that Fund shareholders vote on the matters submitted by the Portfolio
for voting by the Fund. In addition, in the event the proposed changes to the
Portfolio's investment policies referred to in Items 2.A. and 3.A. are approved
by investors in the Portfolio and implemented, it would be necessary to make
conforming changes to the Fund's fundamental investment restrictions since it
invests exclusively in the Portfolio. Those changes are the subject of Proposals
2.B. and 3.B.
Currently one other fund, the Stein Roe Municipal Money Market Fund (Stein Roe
Money Fund), also invests in the Portfolio. The matters being submitted by the
Portfolio to the Fund for a vote are also being submitted to the Stein Roe Money
Fund. As described in Section VI below, approval of Proposals 2.A. and 3.A. will
require the affirmative vote of the holders of a "majority" (as defined in the
Investment Company Act of 1940, as amended (Investment Company Act of 1940)) of
the outstanding interests in the Portfolio voting as a single class. As of April
17, 1996 (the record date for determining shareholders entitled to vote), the
Fund held 15% and the Stein Roe Money Fund held 85% of the interests in the
Portfolio. As a result, the outcome of the votes on these Proposals may be
controlled by the Stein Roe Money Fund and its shareholders.
The change to each Fund investment policy will be implemented only if the change
to the corresponding Portfolio policy is approved and implemented. If either of
the changes to the Portfolio's policies are approved and implemented but the
corresponding Fund policy change is not approved, the Trustees of the Fund will
consider what action to take, including possibly withdrawing the Fund's
investment from the Portfolio and investing in another pooled investment entity
or retaining an investment adviser to manage the Fund's assets. Certain of these
actions would require approval of the Fund's shareholders. Withdrawal of the
Fund's assets from the Portfolio could result in a distribution to the Fund of
portfolio securities in kind (as opposed to a cash distribution) and the Fund
could incur brokerage fees or other transaction costs in converting such
securities to cash. Such a distribution in kind could also result in a less
diversified portfolio of investments for the Fund.
Further information concerning the Fund is contained in its most recent Annual
and Semi-Annual Reports to shareholders, which are obtainable free of charge by
writing the Administrator at One Financial Center, Boston, MA 02111-2621 or
calling 1-800-248-2828.
The Board of Trustees of the Base Trust have recommended that investors in the
Portfolio vote:
1. FOR the election of all nominees as trustees;
2.A. FOR the proposed modification to the Portfolio's fundamental investment
restriction on borrowing; and
3.A. FOR the proposed modification to the Portfolio's fundamental investment
restriction on lending.
III. Proposal 1 - Election of Base Trust Board of Trustees
Pursuant to the Base Trust's By-Laws, three of the current trustees of the Base
Trust are scheduled to retire from the Base Trust's Board by December 31, 1997.
In order to facilitate the transition of Board responsibilities, the trustees
have expanded the Board temporarily from seven to nine members. The Nominating
Committee of the Base Trust has proposed a slate including seven nominees who
are currently trustees and two nominees who are standing for election for the
first time.
Each of the nine candidates nominated for election has agreed to and will serve
as a trustee of the Base Trust until the next meeting of shareholders of the
Base Trust called for the purpose of electing trustees and until a successor is
elected and qualified or until his earlier death, retirement, resignation or
removal. The persons named in the enclosed proxy intend to vote at the Meeting
in favor of the election of the nominees named below as the trustees of the Base
Trust. All nominees, except Mr. Hacker and Mr. Theobald are currently trustees
of the Base Trust. Each of the current trustees also serves as trustees for
Stein Roe Income Trust, Stein Roe Municipal Trust and Stein Roe Investment
Trust, whose funds comprise the other funds within the Stein Roe complex of
funds. Messrs. Hacker and Theobald are being proposed to join the trustee boards
of the Stein Roe complex of funds.
A shareholder using the enclosed proxy may vote for all or any of the nominees
or withhold his or her vote from all or any of such nominees. If the proxy is
properly executed but unmarked, it will be voted in favor of all nominees. If,
for any reason, any nominee shall become unavailable for election, the proxy
holders may, but will not be bound to, vote for a substitute nominee.
The current and proposed trustees, along with their principal occupations and
backgrounds, are set forth below:
Timothy K. Armour. President, Mutual Funds division, and Director, Stein Roe &
Farnham Incorporated (Adviser), since June, 1992; Senior Vice President and
Director of Marketing, Citibank, Illinois, 1989 to 1992. Age 47. Member of the
Executive Comittee, Nominating Committee, and Pricing Committee of the Base
Trust.(1)
Kenneth L. Block. Chairman Emeritus, A. T. Kearney, Inc. (international
management consultants). Age 75. Member of the Audit Committee of the Base
Trust.
William W. Boyd. Chairman and Director, Sterling Plumbing Group, Inc.
(manufacturer of plumbing products) since 1992; President and Chief Executive
Officer prior thereto. Also a director of Cummins-Allison Corp. (manufacturer
of currency counting equipment), Kohler Company (manufacturer of plumbing
products),and Market Facts, Inc. (market research); and Chairman of the Board of
Trustees,Elmhurst College. Age 69. Member of the Audit Committee and
Nominating Committee
of the Base Trust.
Lindsay Cook. Senior Vice President, Liberty Financial Companies, Inc. (Liberty
Financial) (the indirect parent of the Adviser and of Colonial Management
Associates, Inc. (Administrator)). Also a Vice President of Liberty Securities
Corporation, an indirect subsidiary of Liberty Financial. Age 44.(1)
Douglas A. Hacker. Senior Vice President and Chief Financial Officer, United
Airlines, since July, 1994; Senior Vice President--Finance, United Airlines,
February, 1993 to July, 1994; Vice President--Corporate & Fleet Planning,
American Airlines, 1991 to February, 1993. Also a Director of the Steppenwolf
Theatre Company and a Trustee of Providence-St. Mel School. Age 40.
Francis W. Morley. Chairman, Employer Plan Administrators and Consultants Co.
(designer, administrator, and communicator of employee benefit plans). Age 75.
Member of the Audit Committee of the Base Trust.
Charles R. Nelson. Van Voorhis Professor of Political Economy, University of
Washington. Also serves as a consultant on economic and statistical matters.
Age 53. Member of the Audit Committee and Nominating Committee of the Base
Trust.
Thomas C. Theobald. Managing Partner, William Blair Capital Partners (private
equity fund) since 1994; Chief Executive Officer and Chairman of the Board of
Directors of Continental Bank Corporation, 1987-1994. Also a director of the
following public companies: Xerox Corporation, Anixter International
(distributes network support equipment), Enron Global Power & Pipelines (owns
electric plants and pipelines in developing countries), and Peregrine Asia
Growth Fund (mutual fund). Director or partner of the following private
companies: GFTA (software developer) and Kleinwort Benson Holdings (holding
company for several American subsidiaries of London-based Kleinwort Benson).
Also a Trustee of Mutual Life Insurance Company of New York and Northwestern
University. Age 58.
Gordon R. Worley. Private investor. Age 76. Member of the Audit Committee of
the Base Trust.
Messrs. Block, Morley, Nelson, and Worley have been trustees of the Base Trust
since 1993. Messrs. Armour, Boyd, and Cook have been trustees of the Base Trust
since October, 1994.
(1) Messrs. Armour and Cook are interested persons of the Base Trust and of the
Adviser, as defined in the Investment Company Act , by reason of their
relationships with the Adviser.
Committees and Meetings of Trustees. The Board of Trustees of the Base Trust
currently has four committees. The Executive Committee has authority, with some
exceptions, to exercise the powers of the Board of Trustees between Board
meetings. The Audit Committee makes recommendations regarding the selection of
auditors, reviews with the auditors the reports issued by the auditors and the
financial statements, confers with the auditors regarding the results of the
audit and the adequacy of the accounting procedures and controls, and considers
related matters. The Nominating Committee, which functions only in an advisory
capacity, reviews and recommends to the full Board of Trustees candidates for
election to the Board of Trustees. The Pricing Committee determines a fair value
of the portfolio securities in cases where the Adviser believes that a market
quotation or valuation obtained using an approved pricing methodology does not
represent a fair value.
During the fiscal year ended June 30, 1995, the following numbers of meetings of
the Board of Trustees of the Base Trust were held:
Board of Trustees 6
Executive Committee 0
Audit Committee 1
Nominating Committee 1
Pricing Committee 0
Each incumbent trustee attended at least 75% of the meetings of the Base Trust
Board of Trustees and its committees on which he served during the fiscal year
ended June 30, 1995.
Compensation of Trustees. As compensation for their services, trustees of the
Base Trust who are not "interested persons" of the Base Trust or the Adviser are
paid an attendance fee from the Portfolio for each meeting of the Board or
committee thereof attended at which business for the Portfolio is conducted.
Attendance fees (other than for a Nominating Committee meeting) are based on the
Portfolio's net assets as of the preceding December 31 as follows: with net
assets of less than $251 million, the fee is $200 per meeting; with $251 million
to $500 million, $350; with $501 million to $750 million, $500; with $750
million to $1 billion, $650; and with over $1 billion in net assets, $800. The
Portfolio's net assets as of December 31, 1995 were $154.6 million. Each
non-interested trustee also receives an aggregate of $500 for attending each
meeting of the Nominating Committee. Trustees who are "interested persons"
receive no compensation from the Base Trust.
The following table shows aggregate compensation received by each non-interested
trustee during the fiscal year ended June 30, 1995, from the Portfolio and from
the fund complex of which the Portfolio is a part. The Board of Trustees of the
Base Trust do not receive any pension or retirement benefits from the Base
Trust.
Total Compensation from
Stein Roe Fund
Name of Trustee Portfolio Complex(2)
- --------------- --------- ----------
Kenneth L. Block $1,700 $72,800
William W. Boyd(3) 800 52,550
Francis W. Morley 1,700 73,750
Charles R. Nelson 1,700 74,550
Gordon R. Worley 1,700 72,200
(2) The Stein Roe Fund complex includes six funds of Stein Roe Income Trust,
four funds of Stein Roe Municipal Trust, eight funds of Stein Roe
Investment Trust and the Portfolio.
(3) Mr. Boyd became a trustee of the Base Trust in October, 1994.
Share Ownership by Trustees of the Base Trust. To the Fund's knowledge, as of
March 29, 1996, neither the trustees of the Base Trust nor any nominees for
trustee had or shared, directly or indirectly, beneficial ownership of any
interests in the Portfolio or shares of the Fund. In addition, to the Fund's
knowledge as of March 29, 1996, the trustees, nominees for trustee and officers
of the Base Trust as a group beneficially owned less than 1% of the then
outstanding interests in the Portfolio or shares of the Fund. On March 29, 1996,
the trustees and officers of the Fund as a group beneficially owned less than 1%
of the then outstanding shares of the Fund.
The Board of Trustees of the Base Trust recommends that shareholders vote FOR
the election of each nominee as trustee of the Base Trust.
IV. Proposal 2 - Modification of the Portfolio's and the Fund's Fundamendal
Investment Policies on Borrowing
The Fund's and the Portfolio's current fundamental investment restrictions with
respect to borrowing are as follows:
"[The Fund/Portfolio may not] borrow, except that the Fund or the Portfolio may
each borrow up to 33 1/3% of its total assets, taken at current value at the
time of such borrowing, from banks as a temporary measure for extraordinary or
emergency purposes but not to increase portfolio income (the total of reverse
repurchase agreements and such borrowings will not exceed 33 1/3% of either the
Fund's or the Portfolio's respective total assets and will not purchase
additional securities at a time when borrowings, less proceeds receivable from
sales of portfolio securities, exceed 5% of its total assets.)"
As amended, the Fund's and the Portfolio's fundamental investment restrictions
on borrowing would be as follows: "[The Fund/Portfolio may not] borrow, except
that it may (a) borrow for non-leveraging, temporary or emergency purposes and
(b) engage in reverse repurchase agreements and make other borrowings, provided
that the combination of (a) and (b) shall not exceed 33 1/3% of the value of its
total assets (including the amount borrowed) less liabilities (other than
borrowings) or such other percentage permitted by law; [the Portfolio and the
Fund] may borrow from banks, other Stein Roe Funds, and other persons to the
extent permitted by applicable law."
The Portfolio's and the Fund's current restrictions only allow borrowing from
banks. The foregoing changes are being proposed primarily to allow the Portfolio
to borrow money from other mutual funds advised by Stein Roe & Farnham
Incorporated (collectively with the Portfolio, the "Stein Roe Funds") under an
interfund lending program (the "Lending Program"). Under the Lending Program,
each of the Stein Roe Funds, including the Portfolio, would be able to borrow
money from and lend money to the other Stein Roe Funds. Such borrowings and
loans would be made primarily to allow the borrowing fund to meet shareholder
redemptions.
The Portfolio would borrow cash from another Stein Roe Fund only if the terms
were at least as favorable as the terms on which it could borrow from a bank.
The modified policies would continue to limit borrowings to no more than 33 1/3%
of total assets or any other percentage permitted under applicable law. In
addition to banks and the other Stein Roe Funds, the modified restrictions would
allow the Portfolio to borrow from any other lenders from which it may borrow
under applicable law, although there are no current plans to borrow from any
other entity.
The Board of Trustees of the Base Trust believe that the Lending Program may
provide a cost effective alternative to borrowing from other services.
In determining to recommend the proposed amendment to shareholders for approval,
the trustees of the Base Trust considered the possible risks to the Portfolio
from borrowing under the Lending Program. There is a risk that the Portfolio
could have a loan recalled by the lending Stein Roe Fund on one day's notice. In
these circumstances, the Portfolio might have to borrow from a bank at a higher
interest cost if money to borrow were not available from another Stein Roe Fund.
The Board of Trustees of the Base Trust believe that the benefits to the
Portfolio from participation in the program outweigh any likely risks that may
result from such participation.
If both the change in the Portfolio's policy on borrowing described in this
Section and the change in its policy regarding lending described below are
adopted, the Portfolio, subject to its investment objectives and policies, would
be able to participate in the Lending Program either as a borrower or as a
lender. If only one of the two Proposals is adopted, then the Portfolio's
participation in the Lending Program would be confined to the approved activity
(lending or borrowing, as the case may be).
In addition to approving the change to the Portfolio's investment restriction,
shareholders of the Fund also are being asked to approve a conforming change to
the Fund's fundamental investment policy regarding borrowing. The change to the
Fund's investment policy will not be made unless the change to the Portfolio's
investment restriction is approved and implemented.
The Board of Trustees of the Base Trust recommends that shareholders vote FOR
Proposal 2.A.; the Board of Trustees of Colonial Trust IV recommends that
shareholders vote FOR Proposal 2.B.
V. Proposal 3 - Modification of the Portfolio's and the Fund's Fundamental
Investment Policies on Lending
The Fund's and the Portfolio's current investment restrictions on lending are as
follows:
"[The Fund/Portfolio may not] make loans to other persons, except that the Fund
or the Portfolio may invest up to 100% of its assets in debt obligations,
including money market instruments."
As amended, the restrictions would be as follows: "[The Fund/Portfolio may not]
make loans, although the Portfolio may (a) participate in an interfund lending
program with other Stein Roe Funds provided that no such loan may be made if, as
a result, the aggregate of such loans would exceed 33 1/3% of the value of the
Portfolio's total assets; (b) purchase money market instruments and enter into
repurchase agreements; and (c) acquire publicly-distributed or privately-placed
debt securities."
The foregoing changes are being proposed to allow the Portfolio to participate
as a lender in the Lending Program described above. The Portfolio would lend
available cash only when the "interfund rate" was higher than the rate the
Portfolio could earn on repurchase agreements or other comparable short-term
investments. Clauses (a) and (b) are being added to clarify the current policy;
no substantive change is intended.
The Board of Trustees of the Base Trust believe that the Lending Program may
provide the Portfolio with an opportunity to earn a higher return on its cash
holdings than it might otherwise earn. There is, however, no assurance that such
a higher return will result.
In determining to recommend the proposed amendment to shareholders for approval,
the trustees of the Base Trust considered the possible risks to the Portfolio
from lending funds in the Lending Program. There is a risk that a lending fund
could experience a delay in obtaining repayment of a loan and, unlike with a
repurchase agreement, the lending fund would not necessarily have received
collateral for its loan. A delay in obtaining prompt payment could cause a
lending fund to miss an investment opportunity or to incur costs to borrow money
to replace the loaned funds. The Board of Trustees of the Base Trust believe
that the benefits to the Portfolio from participation in the Lending Program
outweigh any likely risks that may result from such participation. In addition,
any interest earned by the Portfolio with respect to a loan would be taxable.
Accordingly, the Portfolio would loan cash only if a determination is made that
loaning available cash to another fund on a taxable basis would be more
beneficial to shareholders than investing the cash in an alternative short-term
instrument.
In addition to approving the change to the Portfolio's investment restriction,
shareholders of the Fund also are being asked to approve a conforming change to
the Fund's fundamental investment restriction regarding lending. The change to
the Fund's investment restrictions will not be made unless the change to the
Portfolio's investment policiy is approved and implemented.
The Board of Trustees of the Base Trust recommends that shareholders vote FOR
Proposal 3.A.; the Board of Trustees of Colonial Trust IV recommends that
shareholders vote FOR Proposal 3.B.
VI. Further Information About Voting and the Shareholder Meeting
Required Vote. Approval of each of the items in Proposals 2A. and 3A. require
the affirmative vote of the holders of a "majority"(as defined in the Investment
Company Act) of the outstanding interests of the Portfolio; approval of the
items in Proposals 2.B. and 3.B. require the affirmative vote of the holders of
a "majority" of the outstanding shares of the Fund.
For this purpose, "majority" means the lesser of (a) 67% or more of the
interests in the Portfolio or shares of the Fund present at the Meeting, in
person or by proxy, if the holders of more than 50% of the outstanding interests
are present at the Meeting, in person or by proxy, or (b) more than 50% of the
outstanding interests in the Portfolio or shares of the Fund. All shareholders
of the Fund vote as a single class on all matters. All interestholders of the
Portfolio vote as a single class on all matters being submitted to a vote of the
Portfolio's interestholders described in the Proxy Statement.
How to Vote. Fund shareholders may vote either by completing, signing and
returning the enclosed proxy card or by voting in person at the meeting. Proxies
may be revoked by voting in person at the meeting or by sending a later dated
proxy card or a written revocation to the Fund's Secretarty which must be
received prior to the meeting. Solicitations of proxies may be made by mail,
telephone, telegraph, telecopy or by personal interviews. Authorization to
execute proxies may be obtained by telephone or electronically transmitted
restrictions. The expenses of the meeting and solicitation will be borne by the
Fund.
Who may vote. Shareholders of record at the close of business on April 17, 1996
(record date) are entitled to notice of and to vote at the Meeting. Each whole
share held on the record date shall be entitled to one vote and each fractional
share shall be entitled to a proportionate fractional vote. On the record date
the Fund had 24,428,448.236 shares outstanding. On the record date the following
shareholders were known by the Fund to be the record or beneficial owners of
more than 5% of a class of the Fund's shares:
Class A
Gretchen Henstorf Agee 5.50%
1217 3rd Avenue West
Seattle, WA 98119
Norman Garn & Nancy Garn Jt Ten 5.32%
1721 Mission Hills Road Apt. 208
Northbrook, IL 60062
John A. McNeice, Jr. 5.98%
47 Green Street
Canton, MA 02021-1023
Class B
Julianne F. Cole 7.85%
P.O. Box 160
Arcadia, LA 71001
Joseph C. Gambino 11.74%
8211 Narrows Avenue
Brooklyn, NY 11209
L. A. Hrnicek 9.80%
P.O. Box 606
Bayard, NE 69334-0606
Henry G. Taliaferro 8.08%
1015 Trenton
West Monroe, LA 91291
Method of Tabulation and Quorum. Votes cast by proxy or in person will be
counted by persons appointed by the Fund to act as election tellers for the
Meeting. The tellers will count the total number of votes cast "for" approval of
the proposals for purposes of determining whether sufficient affirmative votes
have been cast. Where 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), the shares will be counted
as present and entitiled to vote on the matter for purposes of determining the
presence of a quorum. With respect to the proposals to be considered at the
Meeting, abstentions and broker non-votes will have the effect of a negative
vote.
Quorum. Although 30% of the shares of the Fund entitled to vote, present in
person or represented by proxy, constitutes a quorum for the transaction of
business by the Fund's shareholders at the Meeting, the affirmative vote of a
"majority" of the shares entitled to vote, as defined above, is necessary to
approve Proposals 2.B.
and 3.B.
Other business. The Board of Trustees do not know of any other business to be
brought before the Meeting. However, if any other matters properly come before
the Meeting, it is their intention that proxies that do not contain specific
restrictions to the contrary will be voted on such matters in accordance with
the judgment of the persons named as proxies in the enclosed form of proxy.
Solicitation of proxies. Persons holding shares as nominees will, upon request,
be reimbursed for their reasonable expenses in soliciting instructions from
their principals. The expenses of the Meeting or any adjournment thereof and of
any proxy solicitation will be borne by the Fund.
Date for receipt of shareholders' proposals for subsequent meetings of
shareholders. The Trust's Agreement and Declaration of Trust does not provide
for annual meetings of shareholders, and the Trust does not currently intend to
hold such a meeting in 1997. Shareholder proposals for inclusion in the proxy
statement for any subsequent meeting must be received by the Trust within a
reasonable period of time prior to any such meeting.
Adjournment. If sufficient votes in favor of a Proposal 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 the
Proposal. 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 such
adjournment those proxies that they are entitled to vote in favor of the
Proposal. They will vote against any such adjournment those proxies required to
be voted against the Proposal.
VII. Further information about the Fund and the Portfolio
Adviser. Stein Roe & Farnham Incorporated (Adviser) serves as investment adviser
to the Portfolio. The Adviser is a wholly-owned subsidiary of SteinRoe Services
Inc. (SSI), the Base Trust's transfer agent, which is a wholly-owned subsidiary
of Liberty Financial Companies, Inc. (Liberty Financial), which is a
majority-owned subsidiary of Liberty Mutual Equity Corporation (Liberty Equity),
which is a wholly-owned subsidiary of Liberty Mutual Insurance Company (Liberty
Mutual). Liberty Mutual is a mutual insurance company, principally in the
property/casualty insurance field. The address of the Adviser and of SSI is One
South Wacker Drive, Chicago, Illinois 60606; the address of Liberty Financial
and Liberty Equity is Federal Reserve Plaza, 600 Atlantic Avenue, Boston,
Massachusetts 02210; and the address of Liberty Mutual is 175 Berkeley Street,
Boston, Massachusetts 02117.
The directors of the Adviser are Kenneth R. Leibler, C. Allen Merritt, Jr.,
Timothy K. Armour, N. Bruce Callow and Hans P. Ziegler. Mr. Leibler is
president and chief executive officer of Liberty Financial; Mr. Merritt is
senior vice president and treasurer of Liberty Financial; Mr. Armour is
president of the Adviser's Mutual Funds division; Mr. Callow is president of the
Adviser's Investment Counsel division; and Mr. Ziegler is chief executive
officer of the Adviser.
The Adviser provides investment management services and receives from the
Portfolio a monthly fee at an annual rate of 0.25% of the Portfolio's average
daily net assets. For services performed under the agreement, the Adviser did
not receive fees for the period ended June 30, 1995; the two-tier structure was
effective on September 28, 1995. For the period ended December 31, 1995, the
Adviser received $101,835.
Shareholder services (Portfolio). SSI is the agent of to the Portfolio for the
transfer of shares, disbursement of dividends, maintenance of shareholder
accounting records and shareholder servicing for a monthly fee of $500.
Bookkeeping and accounting (Portfolio). The Adviser performs certain bookkeeping
and accounting services for the Portfolio pursuant to a separate agreement with
the Base Trust. For those services the Adviser receives an annual fee of $25,000
plus 0.0025 of 1% of average net assets of the Portfolio over $50 million. For
services performed under the agreement, the Adviser did not receive fees from
the Portfolio for the period ended June 30, 1995; the two-tier structure was
effective on September 28, 1995. For the period ended December 31, 1995, the
Adviser received $6,901.
Administrator. Colonial Management Associates, Inc. (Administrator), an
affiliate of the Adviser and an indirect subsidiary of Liberty Financial,
provides the Fund with certain administrative services and generally oversees
the operation of the Fund. The Fund pays the Administrator a monthly fee at the
annual rate of 0.25% of the Fund's average daily net assets for these services.
For services performed under the agreement, the Administrator did not receive
fees for the period ended June 30, 1995; the two-tier structure was effective on
September 28, 1995. For the period ended December 31, 1995, the Administrator
received $47,000.
The Administrator also provides pricing and bookkeeping services to the Fund for
a monthly fee at the annual rate of $18,000 plus 0.0233% annually of average
daily net assets over $50 million. For services performed under the agreement,
the Administrator received $16,000 and $11,000 for the periods ended June 30,
1995 and December 31, 1995, respectively.
Shareholder services (Fund). Colonial Investors Service Center, Inc. (Transfer
Agent), an indirect subsidiary of Liberty Financial, serves as the Fund's
shareholder services and transfer agent for a fee of 0.20% annually of the
Fund's average daily net assets plus certain out-of-pocket expenses. For
services performed under the agreement, the Transfer Agent received $43,000 and
$28,000 for the periods ended June 30, 1995 and December 31, 1995, respectively.
Distributor (Fund). Shares of the Fund are offered for sale through Colonial
Investment Services, Inc. (CISI), a subsidiary of the Administrator.
Independent public accountants (Portfolio). The Board of Trustees of the Base
Trust have selected Ernst & Young LLP as independent auditors for the current
fiscal year. No representative of the accounting firm is expected to be present
at the shareholder meeting.
Independent accountants (Fund). The Board of Trustees of the Trust have selected
Price Waterhouse LLP as independent auditors of the Fund for the current fiscal
year. No representative of the accounting firm is expected to be present at the
Meeting.
Officers of the Base Trust.
The following persons are officers of the Base Trust:
<TABLE>
<CAPTION>
Position(s) Held Position Held
Name Age with the Base Trust (4) with the Adviser
---- --- ----------------------- ----------------
<S> <C> <C> <C>
Gary A. Anetsberger 40 Senior Vice-President Vice President
Timothy K. Armour 47 President President, Mutual Funds
division
Jilaine Hummel Bauer 40 Executive Vice-President General Counsel, Senior
and Secretary Vice President and
Secretary
N. Bruce Callow 50 Executive Vice-President President, Investment
Counsel division
Philip D. Hausken 38 Vice-President Vice President;
Corporate Counsel
Stephen P. Lautz 39 Vice-President Vice President
Nicolette D. Parrish 46 Vice-President and Senior Compliance
Assistant Secretary Administrator
Sharon R. Robertson 34 Controller Accounting Manager
Janet B. Rysz 40 Assistant Secretary Senior Compliance
Administrator
Hans P. Ziegler 55 Executive Vice-President Chief Executive Officer
Margaret O. Zwick 29 Treasurer Compliance Manager
</TABLE>
(4) Each individual has held the office indicated or other offices in the same
company for the last five years.
SHAREHOLDERS ARE URGED TO VOTE, SIGN AND MAIL
THEIR PROXY IMMEDIATELY.
