SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SteinRoe Municipal Trust
(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 appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-
6(i)(2), or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
_______________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined).
______________________________________________________________
(4) Proposed maximum aggregate value of transaction:
______________________________________________________________
(5) Total fee paid:
_______________________________________________________________
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2 ) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
____________________________________________________
(2) Form, Schedule or Registration Statement No.
____________________________________________________
(3) Filing Party:
____________________________________________________
(4) Date Filed:
____________________________________________________
<PAGE>
May 5, 1995
Dear Shareholder:
Enclosed is a Notice of the Meeting of Shareholders and Proxy Statement
for a special meeting of shareholders of SteinRoe Municipal Money Market
Fund scheduled for June 27, 1995.
At SteinRoe Mutual Funds, we are pleased to count you among the
shareholders of our Municipal Money Market Fund. I'm writing to seek
your support, and your vote, for two new agreements relating to the
Fund. These new agreements essentially carry forward the services Stein
Roe & Farnham already provides to shareholders of the Municipal Money
Market Fund. The agreements have been approved by the Board of Trustees
(including the independent trustees), and the trustees are recommending
that you approve the new agreements:
.The first agreement enables Stein Roe & Farnham to continue providing
administrative services to the Fund.
.The second enables Stein Roe & Farnham to provide investment management
services for the Municipal Money Market Fund, as well as other funds
with identical investment objectives.
Under these agreements, you'll benefit from continuity of investment
management and approach with Stein Roe & Farnham remaining your
investment adviser. In addition, these new agreements involve no
expense increase to the SteinRoe Municipal Money Market Fund, and
actually would result in a decrease if the assets of the master fund
(SR&F Municipal Money Market Portfolio) exceed $500 million, with a
future decrease if assets exceed $1 billion.
In sum, these agreements provide you continuity of the Fund's investment
objective and management, with no additional expense to the Fund, and
the potential for a decrease as the master fund grows. With these
factors in mind, please support the new agreements.
We encourage you to vote promptly by signing and returning the enclosed
proxy in the business reply envelope provided. We appreciate your
support. In the meantime, if you have any questions regarding the
proposal, please call us at 1-800-338-2550.
Sincerely,
Timothy K. Armour
President
<PAGE>
STEINROE MUNICIPAL MONEY MARKET FUND
NOTICE OF MEETING OF SHAREHOLDERS--JUNE 27, 1995
. This tells you when and where the meeting will be held and what
matters will be voted on.
A meeting of the shareholders of SteinRoe Municipal Money Market
Fund will be held on June 27, 1995 at 10:00 a.m. Chicago time at
the office of the Fund, Suite 3300, One South Wacker Drive,
Chicago, Illinois 60606, to consider the following:
Approving an Administrative Agreement between the Fund and Stein
Roe & Farnham Incorporated (the "Adviser") and a Management
Agreement between SR&F Base Trust and the Adviser ("Proposed
Agreements"), which would replace the present Investment Advisory
Agreement between the Fund and the Adviser;
and to transact such other business as may properly come before the
meeting.
THE BOARD OF TRUSTEES STRONGLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE
PROPOSED AGREEMENTS IN ORDER TO PERMIT THE FUND TO BENEFIT FROM THE
POTENTIAL OPERATIONAL EFFICIENCIES AND ECONOMIES OF A MASTER FUND/FEEDER
FUND STRUCTURE DESCRIBED IN THE ATTACHED PROXY STATEMENT. PLEASE MARK,
DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED SO YOUR
VOTE MAY BE CAST AT THE MEETING.
BY THE ORDER OF THE BOARD OF TRUSTEES:
Jilaine Hummel Bauer
Secretary
May 5, 1995
<PAGE>
PROXY STATEMENT
.THIS DOCUMENT GIVES YOU INFORMATION YOU NEED IN ORDER TO VOTE ON THE
MATTER COMING BEFORE THE MEETING. IF YOU HAVE ANY QUESTIONS, PLEASE
CALL US AT OUR TOLL-FREE NUMBER, 1-800-338-2550.
.WHO IS ASKING FOR MY VOTE?
The enclosed proxy is solicited by the Trustees of SteinRoe Municipal
Trust (the "Trust") for use at the meeting of shareholders of SteinRoe
Municipal Money Market Fund (the "Fund") to be held on June 27 and, if
the meeting is adjourned, at any later meeting, for the purposes
stated in the Notice of Meeting.
.HOW DO THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE?
The Trustees recommend that you vote for approval of the proposed
Administrative Agreement and Management Agreement with Stein Roe &
Farnham Incorporated.
.WHO IS ELIGIBLE TO VOTE?
Shareholders of record at the close of business on April 28, 1995 are
entitled to vote at the meeting.
Each share is entitled to a number of votes on any matter that comes
before the meeting equal to the net asset value of the share as of the
record date for the meeting. Shares represented by a duly executed
proxy will be voted in accordance with the shareholder's instructions.
If you sign the proxy, but do not fill in a vote, your shares will be
voted in accordance with the Trustees' recommendation.
APPROVAL OF ADMINISTRATIVE AGREEMENT AND MANAGEMENT AGREEMENT
Currently the Trust, on behalf of the Fund, has an Investment Advisory
Agreement (the "Present Agreement") with Stein Roe & Farnham
Incorporated (the "Adviser"). Under the Present Agreement the Adviser
furnishes to the Fund both portfolio management services and
administrative services and related facilities required in connection
with the Fund's operations. The Present Agreement is
<PAGE>
dated November 1, 1994 and was approved by the Board of Trustees on
July 27, 1994 and by the shareholders on October 25, 1994.
.WHY ARE THE PROPOSED AGREEMENTS BEING RECOMMENDED?
On August 1, 1995 or as soon as practicable thereafter, the Trustees
intend to convert the Fund into a "feeder" fund in "master/feeder fund
structure," as permitted by certain changes in the Fund's investment
restrictions that were approved by the shareholders in 1994. By
converting to a master/feeder fund structure, instead of investing
directly in a portfolio of securities, the Fund will invest
substantially all of its assets in SR&F Municipal Money Market
Portfolio (the "Master Fund"), a portfolio of SR&F Base Trust (the
"Base Trust"). Although the Adviser will continue to manage the
Fund's investment portfolio, the portfolio management function will be
performed at the Master Fund level, where Fund assets are expected to
be pooled with assets of other "feeder" mutual funds having common
investment objectives and policies.
The purpose of a master/feeder fund structure is to achieve certain
operational efficiencies and economies, assuming that the assets of
the Master Fund are greater than the assets of any one feeder fund.
This structure permits the investment in the Master Fund by multiple
feeder funds, which may be offered by different means of distribution.
In connection with the conversion of the Fund to a feeder fund, it
will be necessary (a) for the Trust to terminate the Present
Agreement, (b) for the Trust to enter into a new Administrative
Agreement approved by shareholders of the Fund under which the Adviser
would continue to furnish to the Fund the administrative services and
related facilities currently being furnished under the Present
Agreement, and (c) for the Base Trust to enter into a Management
Agreement approved by shareholders of the Fund under which the Adviser
would furnish to the Master Fund portfolio management services and
certain administrative services required by the Master Fund.
On April 19, 1995, all of the Trustees, including all of the Trustees
who are not "interested persons" of the Trust or the Adviser, voted
unanimously to approve and to recommend approval by the shareholders
of the Fund of (a) an administrative agreement relating to the Fund
between the Trust and the Adviser (the "Administrative
<PAGE>
Agreement") and (b) a management agreement relating to the Master Fund
between the Base Trust and the Adviser. The Trustees directed that
the Administrative Agreement and the Management Agreement
(collectively the "Proposed Agreements") be submitted to shareholders
of the Fund for approval or disapproval with a recommendation that
they be approved. Copies of those agreements are attached to this
proxy statement as Exhibits A and B, respectively.
.HOW ARE THE PROPOSED AGREEMENTS DIFFERENT FROM THE PRESENT AGREEMENT?
The only material differences between the Present Agreement and the
combined Proposed Agreements are that the latter (a) provide for the
Adviser to furnish portfolio management services to the Master Fund in
which the Fund would invest substantially all of its assets, instead
of furnishing such services directly to the Fund, (b) provide for a
reduction in the rate of total compensation payable to the Adviser if
net assets of the Fund exceed $500 million and a further reduction if
net assets exceed $1 billion, and (c) provide for the Adviser to
furnish administrative services and facilities to the Fund under a
separate contract and not under the Present Agreement. In addition,
each Proposed Agreement reflects a new effective date and a new date
stated for termination in the absence of annual approval of
continuation after the initial term.
.DO THE NEW AGREEMENTS REFLECT ANY FEE INCREASE?
No. The total fees payable by the Fund to the Adviser under the
Proposed Agreements, directly or as an investor in the Master Fund,
will be no greater than the fees payable under the Present Agreement.
As a result of the introduction of breakpoints in the administrative
fee schedule at $500 million and $1 billion of net assets of the Fund,
the total fees payable under the Proposed Agreements may be less than
the fees payable by the Fund under the Present Agreement.
Under the Present Agreement the Fund pays the Adviser, and under the
Proposed Agreements the Fund and the Master Fund will pay the Adviser,
monthly fees at the following annual rates as a percentage of average
daily net assets:
<PAGE>
<TABLE>
<CAPTION>
Under Under Proposed Agreements
Present Administrative Management
Agreement Agreement Agreement Total
<S> <C> <S> <S> <S>
On first $500 million .50 of 1% 25 of 1% .25 of 1% .50 of 1%
On second $500 million .50 of 1% .20 of 1% .25 of 1% .45 of 1%
On assets above $1 billion .50 of 1% .15 of 1% .25 of 1% .40 of 1%
</TABLE>
For the fiscal year ended June 30, 1994, the Fund paid the Adviser
fees totaling $998,500 under the Present Agreement. At March 31,
1995, the net assets of the Fund amounted to $151,379,000.
The Fund also pays the Adviser for providing bookkeeping and
recordkeeping services and pays an affiliate of the Adviser for
transfer agency services and shareholder servicing as described below
under "Further Information about the Trust and the Adviser--
Shareholder services, and Bookkeeping and accounting."
.WHAT SERVICES DOES THE ADVISER PROVIDE?
Both the Present Agreement and the Management Agreement provide that
the Adviser shall manage the investment of the assets of the Fund or
of the Master Fund, respectively, subject to the overall control of
the Board of Trustees of the Trust or of the Base Trust. The Adviser
is responsible for furnishing executive and other personnel, office
space, and office facilities necessary in connection with the
performance of its duties and obligations under both agreements.
The Administrative Agreement provides that the Adviser shall furnish
to the Fund administrative services, personnel, and facilities
necessary for the operations of the Fund.
The Present Agreement provides that the Adviser shall reimburse the
Trust to the extent that the total Fund expenses (excluding taxes,
interest, all commissions and other normal charges incident to the
purchase and sale of portfolio securities, and extraordinary charges
such as litigation costs, but including fees paid to the Adviser) for
any fiscal year of the Fund exceed the applicable limits prescribed by
any state in which shares of the Fund are being offered for sale;
however, the reimbursement for any year shall not exceed the Adviser's
fees under the agreement for that year. The Administrative Agreement
(but not the Management Agreement) contains a similar provision. The
Trust believes that at the present time, the most restrictive state
limits are those imposed by California, which are 2 1/2% of the first
$30 million of average net assets, 2% of the next $70 million, and 1
1/2% thereafter. In addition, in the interest of further limiting the
expenses of the Fund, the Adviser has undertaken to reimburse the Fund
to the extent that its annualized expenses exceed .70 of 1% of average
net assets. The expense undertaking expires on October 31, 1995,
subject to earlier termination by the Adviser on 30 days' notice.
.HOW LONG DO THE AGREEMENTS LAST?
The initial term of the Present Agreement expires on June 30, 1996 and
the initial term of the Management Agreement will expire on June 30,
1997. The Administrative Agreement will continue until it is
terminated by either or both parties. Each of the Present Agreement
and the Management Agreement provides that it may be continued after
its initial term from year to year only so long as its continuance is
approved annually (a) by the vote of a majority of the non-interested
Trustees of the Trust (or of the Base Trust in the case of the
Management Agreement), cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Board of Trustees
of the Trust (or of the Base Trust) or by a vote of a "majority" of
the outstanding shares of the Fund (or of the Master Fund), as defined
below. In addition, each of those agreements would terminate in the
event of its assignment and may be terminated without penalty by the
Board of Trustees of the Trust (or of the Base Trust) or by a vote of
a majority of the outstanding shares of the Fund (or of the Master
Fund) on 60 days' written notice to the Adviser, or by the Adviser at
any time on 60 days' written notice to the Trust (or the Base Trust).
.WHAT FACTORS DID THE TRUSTEES CONSIDER?
In considering the Proposed Agreements, the Trustees recognized the
potential economic advantage to the Fund and its shareholders of
converting the Fund into one of two or more feeder funds that would
invest their respective assets in the SR&F Municipal Money Market
Portfolio of SR&F Base Trust. In order to accomplish that conversion
it will be necessary for the shareholders to approve the Proposed
Agreements, which will take the place of the Present Agreement and
allow the Adviser to provide portfolio management services to SR&F
Municipal Money Market Portfolio and to continue providing
administrative services to the Fund.
<PAGE>
In connection with their approval of the specific terms of the
Management Agreement and the Administrative Agreement, the Trustees
placed primary emphasis upon the nature and quality of the services to
be provided by the Adviser under each agreement and a comparison with
other funds of recent investment performance of the Fund and of
management fees and other expenses that would be paid by the Fund
directly or through SR&F Municipal Money Market Portfolio.
The Trustees also considered, among other things, information provided
by the Adviser regarding the profitability of its current and proposed
fee arrangements with the Fund (without regard to costs incurred by
the Adviser and its affiliates in connection with the marketing of
shares).
.WHAT PERCENTAGE OF SHAREHOLDERS' VOTES ARE NEEDED FOR APPROVAL?
Approval of the Proposed Agreements requires the affirmative vote of a
"majority" of the outstanding shares of the Fund as defined in the
Investment Company Act of 1940, which is the lesser of (a) 67% of the
shares of the Fund present at the meeting, in person or by proxy, if
the holders of more than 50% of the outstanding shares of the Fund are
present, or (b) more than 50% of the Fund's outstanding shares. The
Trustees have determined that the proposal to approve the Proposed
Agreements affects only the individual interests of the shareholders
of the Fund and not the interests of shareholders of other series of
the Trust and, therefore, that only shareholders of the Fund should
vote on the proposal.
If the shareholders do not approve the Proposed Agreements, the
Present Agreement will continue in effect, but the Fund would not be
able to benefit from the potential operational efficiencies and
economies of a Master Fund/Feeder Fund structure. If the Proposed
Agreements are approved, they will become effective on or about August
2, 1995.
The Trustees believe that the Proposed Agreements are fair and
reasonable and in the best interests of the shareholders of the Fund.
Accordingly, the Trustees recommend that shareholders vote for
approval of the Proposed Agreements.
<PAGE>
FURTHER INFORMATION ABOUT VOTING AND THE SHAREHOLDER MEETING
QUORUM AND METHOD OF TABULATION. Although 30% of the shares entitled
to vote, present in person or represented by proxy, constitutes a
quorum for the transaction of business at the meeting, the affirmative
vote of a "majority" of the shares entitled to vote, as defined above,
is necessary to approve the Proposed Agreements.
For purposes of determining the approval of the Proposed Agreements,
abstentions will have the same effect as voting against the Proposed
Agreements. "Broker non-votes" (shares held by brokers or nominees as
to which (i) instructions have not been received from the beneficial
owners or the persons entitled to vote and (ii) the broker or nominee
does not have the discretionary voting power on a particular matter)
will also have the same effect as voting against the Proposed
Agreements.
OTHER BUSINESS. The 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. In addition to soliciting proxies by mail,
Trustees of the Fund and employees of the Adviser may solicit proxies
in person or by telephone but will not be additionally compensated
therefor. The Fund may also arrange to have votes recorded by
telephone. The telephone voting procedure is designed to authenticate
shareholders' identities, to allow shareholders to authorize the
voting of their shares in accordance with their instructions and to
confirm that their instructions have been properly recorded. Persons
holding shares as nominees will upon request be reimbursed for their
reasonable expenses in soliciting instructions from their principals.
REVOCATION OF PROXIES. Proxies, including proxies given by telephone,
may be revoked at any time before they are voted by a written
revocation received by the Secretary of the Trust, by properly
executing a later-dated proxy or by attending the meeting and voting
in person.
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 Fund does not
currently intend to hold such a meeting in 1996. Shareholder
proposals for inclusion in the proxy statement for any subsequent
meeting must be received by the Fund within a reasonable period of
time prior to any such meeting.
ADJOURNMENT. If sufficient votes in favor of the proposal set forth
in the Notice of the Meeting 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 60 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. The Fund will pay the costs of any additional solicitation
and of any adjourned session.
FINANCIAL INFORMATION. Shareholders of the Fund may obtain copies of
the Fund's most recent annual and semiannual reports by writing to the
Fund at P.O. Box 804058, Chicago, IL 60680 or by calling 1-800-338-
2550.
FURTHER INFORMATION ABOUT THE TRUST AND THE ADVISER
THE ADVISER. Stein Roe & Farnham Incorporated (the "Adviser"), is a
wholly-owned subsidiary of SteinRoe Services Inc. ("SSI"), the Fund's
transfer agent, which in turn is a wholly-owned direct subsidiary of
Liberty Financial Companies, Inc. ("Liberty Financial"). Liberty
Financial is an indirect, majority-owned subsidiary of Liberty Mutual
Insurance Company ("Liberty Mutual"), through an intervening wholly-
owned subsidiary, Liberty Mutual Equity Corporation. Liberty Mutual
is a mutual insurance company, principally in the property/casualty
insurance field. The address of the Adviser and of SteinRoe Services,
Inc. is One South Wacker Drive, Chicago, Illinois 60606; the address
of Liberty Financial Companies and Liberty Mutual Equity Corporation
is Federal Reserve Plaza, Boston,
<PAGE>
Massachusetts 02210; and the address of Liberty Mutual Insurance
Company is 175 Berkeley Street, Boston, Massachusetts 02117.
The directors of the Adviser are Gary L. Countryman, Kenneth R.
Leibler, Timothy K. Armour, N. Bruce Callow and Hans P. Ziegler. Mr.
Countryman is chairman of Liberty Mutual Insurance Company; Mr.
Leibler is president and chief executive officer of Liberty Financial
Companies; 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.
SHAREHOLDER SERVICES. SSI is the agent of the Trust for the transfer
of shares, disbursement of dividends, maintenance of shareholder
accounting records and shareholder servicing. For performing those
services SSI receives from the Fund a monthly fee at an annual rate of
.15 of 1% of the Fund's average net assets. Prior to May 1, 1995, the
fee was calculated on the basis of the number of shareholder accounts
and the number of various types of transactions in shareholder
accounts. For services rendered during the fiscal year ended June 30,
1994, SSI received payments of $148,750 from the Fund. If the current
fee schedule had been in effect during that year, SSI would instead
have been entitled to receive $248,700, which is net of certain Fund
out-of-pocket expenses now being assumed by SSI, for those services.
BOOKKEEPING AND ACCOUNTING. Since November 1, 1994, the Adviser has
performed certain bookkeeping and accounting services for the Fund
pursuant to a separate agreement with the Trust. For those services
the Adviser receives an annual fee of $25,000 plus .0025 of 1% of
average net assets of the Fund over $50 million.
DISTRIBUTOR. Shares of the Fund are offered for sale through Liberty
Securities Corporation (the "Distributor"), without any sales
commissions or charges to the Fund or its shareholders. The
Distributor is a wholly-owned indirect subsidiary of Liberty Mutual
whose address is 600 Atlantic Avenue, Boston, Massachusetts 02210.
The Adviser bears all sales and promotional expenses, including
payments to the Distributor for the sales of Fund shares. The Adviser
also makes payments to other broker-dealers, banks and institutions
for the sales of Fund shares held through those institutions. The
Trust has agreed to pay all expenses in connection with registration
of its shares with the Securities and Exchange Commission and auditing
<PAGE>
and filing fees in connection with registration of its shares under
the various state blue sky laws and assumes the cost of preparation of
prospectuses and other expenses.
OFFICERS OF THE TRUST. The following persons are officers of the
Trust:
Position(s) Held Position Held
Name with the Trust with the Adviser
Gary A. Anetsberger Senior Vice-President; Vice President
Controller
Timothy K. Armour President; Trustee President of the Mutual
Funds division
Jilaine Hummel Bauer Executive Vice-President; Senior Vice President
Secretary and Assistant Secretary
Thomas W. Butch Vice-President Senior Vice President
N. Bruce Callow Executive Vice-President President of the
Investment Counsel
division
Joanne T. Costopoulos Vice-President Vice President
Philip D. Hausken Vice-President Legal Counsel
Kenneth A. Kalina Treasurer Associate
Stephen P. Lautz Vice-President Vice President
Lynn C. Maddox Vice-President Senior Vice President
Anne E. Marcel Vice-President Manager, Mutual Fund
Sales and Services
M. Jane McCart Vice-President Senior Vice President
Jill K. Netzel Vice-President Associate
Nicolette D. Parrish Vice-President; Associate
Assistant Secretary
Janet B. Rysz Assistant Secretary Assistant Secretary
Thomas P. Sorbo Vice-President Senior Vice President
Hans P. Ziegler Executive Vice-President Chief Executive Officer
SHAREHOLDINGS. As of March 31, 1995, no person was known by the Trust
to own beneficially 5% or more of the outstanding shares of the Fund,
as determined in accordance with Rule 13d-3 under the Securities
Exchange Act of 1934.
<PAGE>
EXHIBIT A
ADMINISTRATIVE AGREEMENT
BETWEEN
STEINROE MUNICIPAL TRUST
AND
STEIN ROE & FARNHAM INCORPORATED
STEINROE MUNICIPAL TRUST, a Massachusetts business trust registered
under the Securities Act of 1933 ("1933 Act") and the Investment Company
Act of 1940 ("1940 Act") (the "Trust"), hereby appoints STEIN ROE &
FARNHAM INCORPORATED, a Delaware corporation, of Chicago, Illinois
("Administrator"), to furnish certain administrative services with
respect to the Trust and the series of the Trust listed in Schedule A
hereto, as such schedule may be amended from time to time (each such
series hereinafter referred to as "Fund").
The Trust and Administrator hereby agree that:
1. Administrative Services. Subject to the terms of this
Agreement and the supervision and control of the Trust's Board of
Trustees ("Trustees"), Administrator shall provide the following
services with respect to the Trust:
(a) Preparation and maintenance of the Trust's registration statement
with the Securities and Exchange Commission ("SEC");
(b) Preparation and periodic updating of the prospectus and statement of
additional information for the Fund ("Prospectus");
(c) Preparation, filing with appropriate regulatory authorities, and
dissemination of various reports for the Fund, including but not
limited to semiannual reports to shareholders under Section 30(d) of
the 1940 Act, annual and semiannual reports on Form N-SAR, and
notices pursuant to Rule 24f-2;
(d) Arrangement for all meetings of shareholders, including the
collection of all information required for preparation of proxy
statements, the preparation and filing with appropriate regulatory
agencies of such proxy statements, the supervision of solicitation
of shareholders and shareholder nominees in connection therewith,
tabulation (or supervision of the tabulation) of votes, response to
all inquiries regarding such meetings from shareholders, the public
and the media, and preparation and retention of all minutes and all
other records required to be kept in connection with such meetings;
(e) Maintenance and retention of all Trust charter documents and the
filing of all documents required to maintain the Trust's status as a
Massachusetts business trust and as a registered open-end investment
company;
(f) Arrangement and preparation and dissemination of all materials for
meetings of the Board of Trustees and committees thereof and
preparation and retention of all minutes and other records thereof;
(g) Preparation and filing of the Trust's Federal, state, and local
income tax returns and calculation of any tax required to be paid in
connection therewith;
(h) Calculation of all Trust and Fund expenses and arrangement for the
payment thereof;
(i) Calculation of and arrangement for payment of all income, capital
gain, and other distributions to shareholders of each Fund;
(j) Determination, after consultation with the officers of the Trust, of
the jurisdictions in which shares of beneficial interest of each
Fund ("Shares") shall be registered or qualified for sale, or may be
sold pursuant to an exemption from such registration or
qualification, and preparation and maintenance of the registration
or qualification of the Shares for sale under the securities laws of
each such jurisdiction;
(k) Provision of the services of persons who may be appointed as
officers of the Trust by the Board of Trustees (it is agreed that
some person or persons may be officers of both the Trust and the
Administrator, and that the existence of any such dual interest
shall not affect the validity of this Agreement except as otherwise
provided by specific provision of applicable law);
(l) Preparation and, subject to approval of the Trust's Chief Financial
Officer, dissemination of the Trust's and each Fund's quarterly
financial information to the Board of Trustees and preparation of
such other reports relating to the business and affairs of the Trust
and each Fund as the officers and Board of Trustees may from time to
time reasonably request;
(m) Administration of the Trust's Code of Ethics and periodic reporting
to the Board of Trustees of Trustee and officer compliance
therewith;
(n) Provision of internal legal, accounting, compliance, audit, and risk
management services and periodic reporting to the Board of Trustees
with respect to such services;
(o) Negotiation, administration, and oversight of third party services
to the Trust including, but not limited to, custody, tax, transfer
agency, disaster recovery, audit, and legal services;
<PAGE>
(p) Negotiation and arrangement for insurance desired or required of the
Trust and administering all claims thereunder;
(q) Response to all inquiries by regulatory agencies, the press, and the
general public concerning the business and affairs of the Trust,
including the oversight of all periodic inspections of the
operations of the Trust and its agents by regulatory authorities and
responses to subpoenas and tax levies;
(r) Handling and resolution of any complaints registered with the Trust
by shareholders, regulatory authorities, and the general public;
(s) Monitoring legal, tax, regulatory, and industry developments related
to the business affairs of the Trust and communicating such
developments to the officers and Board of Trustees as they may
reasonably request or as the Administrator believes appropriate;
(t) Administration of operating policies of the Trust and recommendation
to the officers and the Board of Trustees of the Trust of
modifications to such policies to facilitate the protection of
shareholders or market competitiveness of the Trust and Fund and to
the extent necessary to comply with new legal or regulatory
requirements;
(u) Responding to surveys conducted by third parties and reporting of
Fund performance and other portfolio information; and
(v) Filing of claims, class actions involving portfolio securities, and
handling administrative matters in connection with the litigation or
settlement of such claims.
2. Use of Affiliated Companies and Subcontractors. In connection
with the services to be provided by Administrator under this Agreement,
Administrator may, to the extent it deems appropriate, and subject to
compliance with the requirements of applicable laws and regulations and
upon receipt of approval of the Trustees, make use of (i) its affiliated
companies and their directors, trustees, officers, and employees and
(ii) subcontractors selected by Administrator, provided that
Administrator shall supervise and remain fully responsible for the
services of all such third parties in accordance with and to the extent
provided by this Agreement. All costs and expenses associated with
services provided by any such third parties shall be borne by
Administrator or such parties.
3. Instructions, Opinions of Counsel, and Signatures. At any time
Administrator may apply to a duly authorized agent of Trust for
instructions regarding the Trust, and may consult counsel for the Trust
or its own counsel, in respect of any matter arising in connection with
this
<PAGE>
Agreement, and it shall not be liable for any action taken or omitted by
it in good faith in accordance with such instructions or with the advice
or opinion of such counsel. Administrator shall be protected in acting
upon any such instruction, advice, or opinion and upon any other paper
or document delivered by the Trust or such counsel believed by
Administrator to be genuine and to have been signed by the proper person
or persons and shall not be held to have notice of any change of
authority of any officer or agent of the Trust, until receipt of written
notice thereof from the Trust.
4. Expenses Borne by Trust. Except to the extent expressly
assumed by Administrator herein or under a separate agreement between
the Trust and Administrator and except to the extent required by law to
be paid by Administrator, the Trust shall pay all costs and expenses
incidental to its organization, operations and business. Without
limitation, such costs and expenses shall include but not be limited to:
(a) All charges of depositories, custodians and other agencies for the
safekeeping and servicing of its cash, securities, and other
property;
(b) All charges for equipment or services used for obtaining price
quotations or for communication between Administrator or the Trust
and the custodian, transfer agent or any other agent selected by the
Trust;
(c) All charges for investment advisory, portfolio management, and
accounting services provided to the Trust by the Administrator, or
any other provider of such services;
(d) All charges for services of the Trust's independent auditors and for
services to the Trust by legal counsel;
(e) All compensation of Trustees, other than those affiliated with
Administrator, all expenses incurred in connection with their
services to the Trust, and all expenses of meetings of the Trustees
or committees thereof;
(f) All expenses incidental to holding meetings of shareholders,
including printing and of supplying each record-date shareholder
with notice and proxy solicitation material, and all other proxy
solicitation expenses;
(g) All expenses of printing of annual or more frequent revisions of the
Trust's prospectus(es) and of supplying each then-existing
shareholder with a copy of a revised prospectus;
(h) All expenses related to preparing and transmitting certificates
representing the Trust's shares;
(i) All expenses of bond and insurance coverage required by law or
deemed advisable by the Board of Trustees;
(j) All brokers' commissions and other normal charges incident to the
purchase, sale, or lending of Fund securities;
(k) All taxes and governmental fees payable to Federal, state or other
governmental agencies, domestic or foreign, including all stamp or
other transfer taxes;
(l) All expenses of registering and maintaining the registration of the
Trust under the 1940 Act and, to the extent no exemption is
available, expenses of registering the Trust's shares under the 1933
Act, of qualifying and maintaining qualification of the Trust and of
the Trust's shares for sale under securities laws of various states
or other jurisdictions and of registration and qualification of the
Trust under all other laws applicable to the Trust or its business
activities;
(m) All interest on indebtedness, if any, incurred by the Trust or a
Fund; and
(n) All fees, dues and other expenses incurred by the Trust in
connection with membership of the Trust in any trade association or
other investment company organization.
5. Allocation of Expenses Borne by Trust. Any expenses borne by
the Trust that are attributable solely to the organization, operation or
business of a Fund shall be paid solely out of Fund assets. Any expense
borne by the Trust which is not solely attributable to a Fund, nor
solely to any other series of shares of the Trust, shall be apportioned
in such manner as Administrator determines is fair and appropriate, or
as otherwise specified by the Board of Trustees.
6. Expenses Borne by Administrator. Administrator at its own
expense shall furnish all executive and other personnel, office space,
and office facilities required to render the services set forth in this
Agreement. However, Administrator shall not be required to pay or
provide any credit for services provided by the Trust's custodian or
other agents without additional cost to the Trust.
In the event that Administrator pays or assumes any expenses of the
Trust or a Fund not required to be paid or assumed by Administrator
under this Agreement, Administrator shall not be obligated hereby to pay
or assume the same or similar expense in the future; provided that
nothing contained herein shall be deemed to relieve Administrator of
<PAGE>
any obligation to the Trust or a Fund under any separate agreement or
arrangement between the parties.
7. Administration Fee. For the services rendered, facilities
provided, and charges assumed and paid by Administrator hereunder, the
Trust shall pay to Administrator out of the assets of each Fund fees at
the annual rate for such Fund as set forth in Schedule B to this
Agreement. For each Fund, the administrative fee shall accrue on each
calendar day, and shall be payable monthly on the first business day of
the next succeeding calendar month. The daily fee accrual shall be
computed by multiplying the fraction of one divided by the number of
days in the calendar year by the applicable annual rate of fee, and
multiplying this product by the net assets of the Fund, determined in
the manner established by the Board of Trustees, as of the close of
business on the last preceding business day on which the Fund's net
asset value was determined.
8. State Expense Limitation. If for any fiscal year of a Fund,
its aggregate operating expenses ("Aggregate Operating Expenses") exceed
the applicable percentage expense limit imposed under the securities law
and regulations of any state in which Shares of the Fund are qualified
for sale (the "State Expense Limit"), the Administrator shall pay such
Fund the amount of such excess. For purposes of this State Expense
Limit, Aggregate Operating Expenses shall (a) include (i) any fees or
expense reimbursements payable to Administrator pursuant to this
Agreement and (ii) to the extent the Fund invests all or a portion of
its assets in another investment company registered under the 1940 Act,
the pro rata portion of that company's operating expenses allocated to
the Fund, and (iii) any compensation payable to Administrator pursuant
to any separate agreement relating to the Fund's investment operations
and portfolio management, but (b) exclude any interest, taxes, brokerage
commissions, and other normal charges incident to the purchase, sale or
loan of securities, commodity interests or other investments held by the
Fund, litigation and indemnification expense, and other extraordinary
expenses not incurred in the ordinary course of business. Except as
otherwise agreed to by the parties or unless otherwise required by the
law or regulation of any state, any reimbursement by Administrator to a
Fund under this section shall not exceed the administrative fee payable
to Administrator by the Fund under this Agreement.
Any payment to a Fund by Administrator hereunder shall be made
monthly, by annualizing the Aggregate Operating Expenses for
<PAGE>
each month as of the last day of the month. An adjustment for payments
made during any fiscal year of the Fund shall be made on or before the
last day of the first month following such fiscal year of the Fund if
the Annual Operating Expenses for such fiscal year (i) do not exceed the
State Expense Limitation or (ii) for such fiscal year there is no
applicable State Expense Limit.
9. Non-Exclusivity. The services of Administrator to the Trust
hereunder are not to be deemed exclusive and Administrator shall be free
to render similar services to others.
10. Standard of Care. Neither Administrator, nor any of its
directors, officers or stockholders, agents or employees shall be liable
to the Trust, any Fund, or its shareholders for any action taken or
thing done by it or its subcontractors or agents on behalf of the Trust
or the Fund in carrying out the terms and provisions of this Agreement
if done in good faith and without negligence or misconduct on the part
of Administrator, its subcontractors, or agents.
11. Indemnification. The Trust shall indemnify and hold
Administrator and its controlling persons, if any, harmless from any and
all claims, actions, suits, losses, costs, damages, and expenses,
including reasonable expenses for counsel, incurred by it in connection
with its acceptance of this Agreement, in connection with any action or
omission by it or its agents or subcontractors in the performance of its
duties hereunder to the Trust, or as a result of acting upon any
instruction believed by it to have been executed by a duly authorized
agent of the Trust or as a result of acting upon information provided by
the Trust in form and under policies agreed to by Administrator and the
Trust, provided that: (i) to the extent such claims, actions, suits,
losses, costs, damages, or expenses relate solely to a particular Fund
or group of Funds, such indemnification shall be only out of the assets
of that Fund or group of Funds; (ii) this indemnification shall not
apply to actions or omissions constituting negligence or misconduct of
Administrator or its agents or subcontractors, including but not limited
to willful misfeasance, bad faith, or gross negligence in the
performance of their duties, or reckless disregard of their obligations
and duties under this Agreement; and (iii) Administrator shall give the
Trust prompt notice and reasonable opportunity to defend against any
such claim or action in its own name or in the name of Administrator.
Administrator shall indemnify and hold harmless the Trust from and
against any and all claims, demands, expenses and liabilities which such
Trust may sustain or incur arising out of, or incurred because of, the
negligence or misconduct of Administrator or its agents or
subcontractors, provided that such Trust shall give Administrator prompt
notice and reasonable opportunity to defend against any such claim or
action in its own name or in the name of such Trust.
12. Effective Date, Amendment, and Termination. This Agreement
shall become effective as to any Fund as of the effective date for that
Fund specified in Schedule A hereto and, unless terminated as
hereinafter provided, shall remain in effect with respect to such Fund
thereafter from year to year so long as such continuance is specifically
approved with respect to that Fund at least annually by a majority of
the Trustees who are not interested persons of Trust or Administrator.
As to any Trust or Fund of that Trust, this Agreement may be
modified or amended from time to time by mutual agreement between the
Administrator and the Trust and may be terminated by Administrator or
Trust by at least sixty (60) days' written notice given by the
terminating party to the other party. Upon termination as to any Fund,
the Trust shall pay to Administrator such compensation as may be due
under this Agreement as of the date of such termination and shall
reimburse Administrator for its costs, expenses, and disbursements
payable under this Agreement to such date. In the event that, in
connection with a termination, a successor to any of the duties or
responsibilities of Administrator hereunder is designated by the Trust
by written notice to Administrator, upon such termination Administrator
shall promptly, and at the expense of the Trust or Fund with respect to
which this Agreement is terminated, transfer to such successor all
relevant books, records, and data established or maintained by
Administrator under this Agreement and shall cooperate in the transfer
of such duties and responsibilities, including provision, at the expense
of such Fund, for assistance from Administrator personnel in the
establishment of books, records, and other data by such successor.
13. Assignment. Any interest of Administrator under this
Agreement shall not be assigned either voluntarily or involuntarily, by
operation of law or otherwise, without the prior written consent of
Trust.
14. Books and Records. Administrator shall maintain, or oversee
the maintenance by such other persons as may from time to time be
approved by the Board of Trustees to maintain, the books, documents,
records, and data required to be kept by the Trust under the 1940 Act,
the laws of the Commonwealth of Massachusetts or such other authorities
<PAGE>
having jurisdiction over the Trust or the Fund or as may otherwise be
required for the proper operation of the business and affairs of the
Trust or the Fund (other than those required to be maintained by any
investment adviser retained by the Trust on behalf of a Fund in
accordance with Section 15 of the 1940 Act).
Administrator will periodically send to the Trust all books,
documents, records, and data of the Trust and each of its Funds listed
in Schedule A that are no longer needed for current purposes or required
to be retained as set forth herein. Administrator shall have no
liability for loss or destruction of said books, documents, records, or
data after they are returned to such Trust.
Administrator agrees that all such books, documents, records, and
data which it maintains shall be maintained in accordance with Rule 31a-
3 of the 1940 Act and that any such items maintained by it shall be the
property of the Trust. Administrator further agrees to surrender
promptly to the Trust any such items it maintains upon request, provided
that the Administrator shall be permitted to retain a copy of all such
items. Administrator agrees to preserve all such items maintained under
Rule 31a-1 for the period prescribed under Rule 31a-2 of the 1940 Act.
Trust shall furnish or otherwise make available to Administrator
such copies of the financial statements, proxy statements, reports, and
other information relating to the business and affairs of each Fund of
the Trust as Administrator may, at any time or from time to time,
reasonably require in order to discharge its obligations under this
Agreement.
15. Non-Liability of Trustees and Shareholders. Any obligation of
Trust hereunder shall be binding only upon the assets of Trust (or the
applicable Fund thereof) and shall not be binding upon any Trustee,
officer, employee, agent or shareholder of Trust. Neither the
authorization of any action by the Trustees or shareholders of Trust nor
the execution of this Agreement on behalf of Trust shall impose any
liability upon any Trustee or any shareholder.
16. Use of Administrator's Name. The Trust may use its name and
the names of its Funds listed in Schedule A or any other name derived
from the name "Stein Roe & Farnham" only for so long as this Agreement
or any extension, renewal, or amendment hereof remains in effect,
including any similar agreement with any organization which shall have
succeeded to the business of Administrator as it relates to the services
it
<PAGE>
has agreed to furnish under this Agreement. At such time as this
Agreement or any extension, renewal or amendment hereof, or such other
similar agreement shall no longer be in effect, Trust will cease to use
any name derived from the name "Stein Roe & Farnham" or otherwise
connected with Administrator, or with any organization which shall have
succeeded to Administrator's business herein described.
17. References and Headings. In this Agreement and in any such
amendment, references to this Agreement and all expressions such as
"herein," "hereof," and "hereunder" shall be deemed to refer to this
Agreement as amended or affected by any such amendments. Headings are
placed herein for convenience of reference only and shall not be taken
as a part hereof or control or affect the meaning, construction or
effect of this Agreement. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original.
Dated: _______________, 1995
STEINROE MUNICIPAL TRUST
Attest By:
Timothy K. Armour, President
Jilaine Hummel Bauer
Secretary
STEIN ROE & FARNHAM INCORPORATED
Attest: By:
Hans P. Ziegler
Chief Executive Officer
Keith J. Rudolf
Secretary
<PAGE>
ADMINISTRATIVE AGREEMENT
SCHEDULE A
The Funds of the Trust currently subject to this Agreement are as
follows:
Effective Date
SteinRoe Municipal Money Market Fund ________, 1995
Dated: ___________________
ADMINISTRATIVE AGREEMENT
SCHEDULE B
Compensation pursuant to Section 7 of the SteinRoe Funds Administrative
Agreement shall be calculated with respect to each Fund in accordance
with the following schedule applicable to average daily net assets of
the Fund:
Fund Administrative Fee Schedule B1
SteinRoe Municipal Money Market Fund 0.250% of first $500 million,
0.200% of next $500 million,
0.150% thereafter
Dated: ________________
<PAGE>
EXHIBIT B
MANAGEMENT AGREEMENT
BETWEEN
SR&F BASE TRUST AND
STEIN ROE & FARNHAM INCORPORATED
SR&F BASE TRUST, a Massachusetts common law trust registered under
the Investment Company Act of 1940 ("1940 Act") as an open-end
diversified management investment company ("Trust"), hereby appoints
STEIN ROE & FARNHAM INCORPORATED, a Delaware corporation registered
under the Investment Advisers Act of 1940 as an investment adviser, of
Chicago, Illinois ("Manager"), to furnish investment advisory and
portfolio management services with respect to the portion of its assets
represented by the shares of beneficial interest issued in each series
listed in Schedule A hereto, as such schedule may be amended from time
to time (each such series hereinafter referred to as "Portfolio").
Trust and Manager hereby agree that:
1. Investment Management Services. Manager shall manage the
investment operations of Trust and each Portfolio, subject to the terms
of this Agreement and to the supervision and control of Trust's Board of
Trustees ("Trustees"). Manager agrees to perform, or arrange for the
performance of, the following services with respect to each Portfolio:
(a) to obtain and evaluate such information relating to economies,
industries, businesses, securities and commodities markets, and
individual securities, commodities and indices as it may deem
necessary or useful in discharging its responsibilities hereunder;
(b) to formulate and maintain a continuing investment program in a
manner consistent with and subject to (i) Trust's agreement and
declaration of trust and by-laws; (ii) the Portfolio's investment
objectives, policies, and restrictions as set forth in written
documents furnished by the Trust to Manager; (iii) all securities,
commodities, and tax laws and regulations applicable to the
Portfolio and Trust; and (iv) any other written limits or directions
furnished by the Trustees to Manager;
(c) unless otherwise directed by the Trustees, to determine from time to
time securities, commodities, interests or other investments to be
purchased, sold, retained or lent by the Portfolio, and to implement
those decisions, including the selection of entities with or through
which such purchases, sales or loans are to be effected;
<PAGE>
(d) to use reasonable efforts to manage the Portfolio so that it will
qualify as a regulated investment company under subchapter M of the
Internal Revenue Code of 1986, as amended;
(e) to make recommendations as to the manner in which voting rights,
rights to consent to Trust or Portfolio action, and any other rights
pertaining to Trust or the Portfolio shall be exercised;
(f) to make available to Trust promptly upon request all of the
Portfolio's records and ledgers and any reports or information
reasonably requested by the Trust; and
(g) to the extent required by law, to furnish to regulatory authorities
any information or reports relating to the services provided
pursuant to this Agreement.
Except as otherwise instructed from time to time by the Trustees,
with respect to execution of transactions for Trust on behalf of a
Portfolio, Manager shall place, or arrange for the placement of, all
orders for purchases, sales, or loans with issuers, brokers, dealers or
other counterparties or agents selected by Manager. In connection with
the selection of all such parties for the placement of all such orders,
Manager shall attempt to obtain most favorable execution and price, but
may nevertheless in its sole discretion as a secondary factor, purchase
and sell Portfolio securities from and to brokers and dealers who
provide Manager with statistical, research and other information,
analysis, advice, and similar services. In recognition of such services
or brokerage services provided by a broker or dealer, Manager is hereby
authorized to pay such broker or dealer a commission or spread in excess
of that which might be charged by another broker or dealer for the same
transaction if the Manager determines in good faith that the commission
or spread is reasonable in relation to the value of the services so
provided.
Trust hereby authorizes any entity or person associated with
Manager that is a member of a national securities exchange to effect any
transaction on the exchange for the account of a Portfolio to the extent
permitted by and in accordance with Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder. Trust hereby
consents to the retention by such entity or person of compensation for
such transactions in accordance with Rule 11a-2-2(T)(a)(iv).
Manager may, where it deems to be advisable, aggregate orders for
its other customers together with any securities of the same type to be
sold or purchased for Trust or one or more Portfolios in order to obtain
best execution or lower brokerage commissions. In such event, Manager
shall allocate the shares so purchased or sold, as well as the expenses
incurred in the transaction, in a manner it considers to be equitable
and fair and consistent with its fiduciary obligations to Trust, the
Portfolios, and Manager's other customers.
Manager shall for all purposes be deemed to be an independent
contractor and not an agent of Trust and shall, unless otherwise
expressly provided or authorized, have no authority to act for or
represent Trust in any way.
2. Administrative Services. Manager shall supervise the business
and affairs of Trust and each Portfolio and shall provide such services
and facilities as may be required for effective administration of Trust
and Portfolios as are not provided by employees or other agents engaged
by Trust; provided that Manager shall not have any obligation to provide
under this Agreement any such services which are the subject of a
separate agreement or arrangement between Trust and Manager, any
affiliate of Manager, or any third party administrator ("Administrative
Agreements").
3. Use of Affiliated Companies and Subcontractors. In connection
with the services to be provided by Manager under this Agreement,
Manager may, to the extent it deems appropriate, and subject to
compliance with the requirements of applicable laws and regulations and
upon receipt of written approval of the Trustees, make use of (i) its
affiliated companies and their directors, trustees, officers, and
employees and (ii) subcontractors selected by Manager, provided that
Manager shall supervise and remain fully responsible for the services of
all such third parties in accordance with and to the extent provided by
this Agreement. All costs and expenses associated with services
provided by any such third parties shall be borne by Manager or such
parties.
4. Expenses Borne by Trust. Except to the extent expressly
assumed by Manager herein or under a separate agreement between Trust
and Manager and except to the extent required by law to be paid by
Manager, Manager shall not be obligated to pay any costs or expenses
incidental to the organization, operations or business of the Trust.
Without limitation, such costs and expenses shall include but not be
limited to:
(a) all charges of depositories, custodians and other agencies for the
safekeeping and servicing of its cash, securities, and other
property;
<PAGE>
(b) all charges for equipment or services used for obtaining price
quotations or for communication between Manager or Trust and the
custodian, transfer agent or any other agent selected by Trust;
(c) all charges for administrative and accounting services provided to
Trust by Manager, or any other provider of such services;
(d) all charges for services of Trust's independent auditors and for
services to Trust by legal counsel;
(e) all compensation of Trustees, other than those affiliated with
Manager, all expenses incurred in connection with their services to
Trust, and all expenses of meetings of the Trustees or committees
thereof;
(f) all expenses incidental to holding meetings of holders of units of
interest in the Trust ("Unitholders"), including printing and of
supplying each record-date Unitholder with notice and proxy
solicitation material, and all other proxy solicitation expense;
(g) all expenses of printing of annual or more frequent revisions of
Trust prospectus(es) and of supplying each then-existing Unitholder
with a copy of a revised prospectus;
(h) all expenses related to preparing and transmitting certificates
representing Trust shares;
(i) all expenses of bond and insurance coverage required by law or
deemed advisable by the Board of Trustees;
(j) all brokers' commissions and other normal charges incident to the
purchase, sale, or lending of portfolio securities;
(k) all taxes and governmental fees payable to Federal, state or other
governmental agencies, domestic or foreign, including all stamp or
other transfer taxes;
(l) all expenses of registering and maintaining the registration of
Trust under the 1940 Act and, to the extent no exemption is
available, expenses of registering Trust's shares under the 1933
Act, of qualifying and maintaining qualification of Trust and of
Trust's shares for sale under securities laws of various states or
other jurisdictions and of registration and qualification of Trust
under all other laws applicable to Trust or its business activities;
(m) all interest on indebtedness, if any, incurred by Trust or a
Portfolio; and
(n) all fees, dues and other expenses incurred by Trust in connection
with membership of Trust in any trade association or other
investment company organization.
5. Allocation of Expenses Borne by Trust. Any expenses borne by
Trust that are attributable solely to the organization, operation or
<PAGE>
business of a Portfolio shall be paid solely out of Portfolio assets.
Any expense borne by Trust which is not solely attributable to a
Portfolio, nor solely to any other series of shares of Trust, shall be
apportioned in such manner as Manager determines is fair and
appropriate, or as otherwise specified by the Board of Trustees.
6. Expenses Borne by Manager. Manager at its own expense shall
furnish all executive and other personnel, office space, and office
facilities required to render the investment management and
administrative services set forth in this Agreement. Manager shall pay
all expenses of establishing, maintaining, and servicing the accounts of
Unitholders in each Portfolio listed in Exhibit A. However, Manager
shall not be required to pay or provide any credit for services provided
by Trust's custodian or other agents without additional cost to Trust.
In the event that Manager pays or assumes any expenses of Trust or
a Portfolio not required to be paid or assumed by Manager under this
Agreement, Manager shall not be obligated hereby to pay or assume the
same or similar expense in the future; provided that nothing contained
herein shall be deemed to relieve Manager of any obligation to Trust or
a Portfolio under any separate agreement or arrangement between the
parties.
7. Management Fee. For the services rendered, facilities
provided, and charges assumed and paid by Manager hereunder, Trust shall
pay to Manager out of the assets of each Portfolio fees at the annual
rate for such Portfolio as set forth in Schedule B to this Agreement.
For each Portfolio, the management fee shall accrue on each calendar
day, and shall be payable monthly on the first business day of the next
succeeding calendar month. The daily fee accrual shall be computed by
multiplying the fraction of one divided by the number of days in the
calendar year by the applicable annual rate of fee, and multiplying this
product by the net assets of the Portfolio, determined in the manner
established by the Board of Trustees, as of the close of business on the
last preceding business day on which the Portfolio's net asset value was
determined.
8. Retention of Sub-Adviser. Subject to obtaining the initial and
periodic approvals required under Section 15 of the 1940 Act, Manager
may retain one or more sub-advisers at Manager's own cost and expense
for the purpose of furnishing one or more of the services described in
Section 1 hereof with respect to Trust or one or more Portfolios.
Retention of a sub-adviser shall in no way reduce the responsibilities
or obligations of Manager under this Agreement, and Manager shall be
responsible to Trust and its Portfolios for all acts or omissions of any
sub-adviser in connection with the performance of Manager's duties
hereunder.
9. Non-Exclusivity. The services of Manager to Trust hereunder
are not to be deemed exclusive and Manager shall be free to render
similar services to others.
10. Standard of Care. Neither Manager, nor any of its directors,
officers, stockholders, agents or employees shall be liable to Trust or
its Unitholders for any error of judgment, mistake of law, loss arising
out of any investment, or any other act or omission in the performance
by Manager of its duties under this Agreement, except for loss or
liability resulting from willful misfeasance, bad faith or gross
negligence on Manager's part or from reckless disregard by Manager of
its obligations and duties under this Agreement.
11. Amendment. This Agreement may not be amended as to Trust or
any Portfolio without the affirmative votes (a) of a majority of the
Board of Trustees, including a majority of those Trustees who are not
"interested persons" of Trust or of Manager, voting in person at a
meeting called for the purpose of voting on such approval, and (b) of a
"majority of the outstanding shares" of Trust or, with respect to an
amendment affecting an individual Portfolio, a "majority of the
outstanding shares" of that Portfolio. The terms "interested persons"
and "vote of a majority of the outstanding shares" shall be construed in
accordance with their respective definitions in the 1940 Act and, with
respect to the latter term, in accordance with Rule 18f-2 under the 1940
Act.
12. Effective Date and Termination. This Agreement shall become
effective as to any Portfolio as of the effective date for that
Portfolio specified in Schedule A hereto. This Agreement may be
terminated at any time, without payment of any penalty, as to any
Portfolio by the Board of Trustees of Trust, or by a vote of a majority
of the outstanding shares of that Portfolio, upon at least sixty (60)
days' written notice to Manager. This Agreement may be terminated by
Manager at any time upon at least sixty (60) days' written notice to
Trust. This Agreement shall terminate automatically in the event of its
"assignment" (as defined in the 1940 Act). Unless terminated as
hereinbefore provided, this Agreement shall continue in effect with
respect to any Portfolio until the end of the initial term applicable to
that Portfolio specified in Schedule A and thereafter from year to year
only so long as such continuance is specifically approved with respect
to that Portfolio at least annually (a) by a majority of those Trustees
who are not interested persons of Trust or of Manager,
<PAGE>
voting in person at a meeting called for the purpose of voting on such
approval, and (b) by either the Board of Trustees of Trust or by a "vote
of a majority of the outstanding shares" of the Portfolio.
13. Ownership of Records; Interparty Reporting. All records
required to be maintained and preserved by Trust pursuant to the
provisions of rules or regulations of the Securities and Exchange
Commission under Section 31(a) of the 1940 Act or other applicable laws
or regulations which are maintained and preserved by Manager on behalf
of Trust and any other records the parties mutually agree shall be
maintained by Manager on behalf of Trust are the property of Trust and
shall be surrendered by Manager promptly on request by Trust; provided
that Manager may at its own expense make and retain copies of any such
records.
Trust shall furnish or otherwise make available to Manager such
copies of the financial statements, proxy statements, reports, and other
information relating to the business and affairs of each Unitholder in a
Portfolio as Manager may, at any time or from time to time, reasonably
require in order to discharge its obligations under this Agreement.
Manager shall prepare and furnish to Trust as to each Portfolio
statistical data and other information in such form and at such
intervals as Trust may reasonably request.
14. Non-Liability of Trustees and Unitholders. Any obligation of
Trust hereunder shall be binding only upon the assets of Trust (or the
applicable Portfolio thereof) and shall not be binding upon any Trustee,
officer, employee, agent or Unitholder of Trust. Neither the
authorization of any action by the Trustees or Unitholders of Trust nor
the execution of this Agreement on behalf of Trust shall impose any
liability upon any Trustee or any Unitholder.
15. Use of Manager's Name. Trust may use the name "SR&F Base
Trust" and the Portfolio names listed in Schedule A or any other name
derived from the name "Stein Roe & Farnham" only for so long as this
Agreement or any extension, renewal, or amendment hereof remains in
effect, including any similar agreement with any organization which
shall have succeeded to the business of Manager as investment adviser.
At such time as this Agreement or any extension, renewal or amendment
hereof, or such other similar agreement shall no longer be in effect,
Trust will cease to use any name derived from the name "Stein Roe &
Farnham" or otherwise connected with Manager, or with any organization
which shall have succeeded to Manager's business as investment adviser.
<PAGE>
16. References and Headings. In this Agreement and in any such
amendment, references to this Agreement and all expressions such as
"herein," "hereof," and "hereunder" shall be deemed to refer to this
Agreement as amended or affected by any such amendments. Headings are
placed herein for convenience of reference only and shall not be taken
as a part hereof or control or affect the meaning, construction or
effect of this Agreement. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original.
Dated: _______________, 1995
SR&F BASE TRUST
Attest By:
Timothy K. Armour, President
Jilaine Hummel Bauer
Secretary
STEIN ROE & FARNHAM INCORPORATED
Attest: By:
Hans P. Ziegler
Chief Executive Officer
Keith J. Rudolf
Secretary
<PAGE>
<PAGE>
SR&F BASE TRUST
MANAGEMENT AGREEMENT
SCHEDULE A
The Series of SR&F Base Trust currently subject to this Agreement are as
follows:
Effective Date End of Initial Term
SteinRoe Municipal Money
Market Fund
Dated: _______________
SR&F BASE TRUST
MANAGEMENT AGREEMENT
SCHEDULE B
Compensation pursuant to Section 7 of the SR&F Base Trust Management
Agreement shall be calculated in accordance with the following
schedule(s):
Schedule B8
0.250% on first $500 million of average daily net assets
0.250% on next $500 million of average daily net assets
0.250% on average daily net assets in excess of $1 billion
Dated: _______________
<PAGE>
[FORM OF PROXY]
IN ORDER TO VOTE YOUR SHARES, PLEASE DETACH THE LOWER PORTION OF THIS
CARD, SIGN AND DATE THE CARD, AND RETURN IT IN THE ENVELOPE PROVIDED.
BY SIGNING THE LOWER PORTION OF THIS CARD, YOU AUTHORIZE THE PROXIES TO
VOTE ON THE PROPOSAL AS MARKED OR, IF NOT MARKED, SHARES WILL BE VOTED
AS RECOMMENDED BY THE BOARD.
STEINROE MUNICIPAL MONEY MARKET FUND
SPECIAL MEETING OF SHAREHOLDERS OF JUNE 27, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF
STEINROE MUNICIPAL TRUST
BY SIGNING AND DATING BELOW, YOU AUTHORIZE GARY A. ANETSBERGER, TIMOTHY
K. ARMOUR, AND JILAINE HUMMEL BAUER, OR ANY OF THEM, EACH WITH POWER OF
SUBSTITUTION, TO VOTE YOUR SHARES OF THE FUND AT THE SCHEDULED MEETING
OF SHAREHOLDERS OF THE FUND AND AT ANY ADJOURNMENT OF THE MEETING. THEY
SHALL VOTE AS RECOMMENDED BY THE BOARD UNLESS OTHERWISE INDICATED BELOW,
AND IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
THE BOARD OF TRUSTEES RECOMMENDS VOTING "FOR" THE PROPOSAL.
TO VOTE, MARK AN X IN BLUE OR BLACK INK IN THE APPROPRIATE BOX ON THE
PROXY CARD BELOW. KEEP THIS PORTION FOR YOUR RECORDS.
(DETACH HERE AND RETURN THIS PORTION ONLY)
STEINROE MUNICIPAL MONEY MARKET FUND
VOTE ON PROPOSAL
FOR AGAINST ABSTAIN To approve an Administrative Agreement between
the Fund and Stein Roe & Farnham Incorporated
and a Management Agreement between SR&F Base
Trust and Stein Roe & Farnham Incorporated.
SIGNATURE DATE SIGNATURE (JOINT OWNER) DATE
PLEASE SIGN NAME OR NAMES AS PRINTED ABOVE TO AUTHORIZE THE VOTING
OF YOUR SHARES AS INDICATED. WHERE SHARES ARE REGISTERED WITH
JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS
EXECUTOR, ADMINISTRATOR, TRUSTEE, OR OTHER REPRESENTATIVE SHOULD
GIVE FULL TITLE AS SUCH.
