Securities Act of 1933 File No. 333-_________
Investment Company Act of 1940 File No. 811-4537
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------------------------------
FORM N-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 |X|
PRE-EFFECTIVE AMENDMENT NO. |_|
POST-EFFECTIVE AMENDMENT NO. |_|
and/or
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 |X|
AMENDMENT NO. 11 |X|
---------------------------------------------------------
LIBERTY ALL-STAR GROWTH FUND, INC.
(Exact Name of Registrant as Specified in Articles of Incorporation)
- -------------------------------------------------------------------
Federal Reserve Plaza, Boston, Massachusetts 02210
----------------------------------------------------------
(Address of Principal Executive Offices)
617-722-6000
------------
(Registrant's Telephone Number, Including Area Code)
John L. Davenport, Esq.
Vice President and Associate General Counsel
Liberty Financial Companies, Inc.
Federal Reserve Plaza
Boston, MA 02210
----------------------------------------------------------
(Name and Address of Agent for Service)
----------------------------------------------------------
With copy to:
Jeremiah J. Bresnahan, Esq.
Bingham, Dana & Gould
150 Federal Street, 24th Floor
Boston, MA 02110
Approximate Date of Proposed Offering:
As soon as practicable after the effective date of this Registration
Statement.
If any securities being registered on this form will be offered on a delayed or
continuous basis in reliance on Rule 415 under the Securities Act of 1933, other
than securities offered in connection with a dividend reinvestment plan, check
for the following box. |X|
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT
OF 1933
- -----------------------------------------------------------
<PAGE>
==============================================================================
Title of Proposed Proposed Maximum Maximum
Securities Amount Offering Aggregate Amount of
Being Being Price Per Offering Registration
Registered Registered Unit(1) Price (1) Fee
==============================================================================
Shares of
Common Stock, 1,334,476 Shares $13.1875 $17,598,402 $5,192
Par Value
$.10
per share
==============================================================================
(1) Calculated pursuant to Rule 457(c) under the Securities Act of 1933, based
on the average of the high and low sale prices reported on the consolidated
reporting system on April 29, 1998.
Registrant hereby amends this Registration Statement under the Securities Act of
1933 on such date or dates as may be necessary to delay its effective date until
Registrant shall file a further amendment which specifically states that such
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until such Registration Statement
shall become effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
================================================================================
LIBERTY ALL-STAR GROWTH FUND, INC.
REGISTRATION STATEMENT ON FORM N-2
CROSS REFERENCE SHEET
Item Number and Heading
- -----------------------
Part A Caption in Prospectus
- ------- ---------------------
1. Outside Front Cover Cover Page
2. Inside Front and Outside Back Cover Page
Cover Page
3. Fee Table and Synopsis Expenses; Prospectus Summary
4. Financial Highlights Financial Highlights
5. Plan of Distribution The Offer
6. Selling Shareholders *
7. Use of Proceeds Use of Proceeds
8. General Description of Registrant General; Cover Page; The Multi-Manager
Concept; Investment
Objective and Policies;
Description of Shares -
Share Price Data
9. Management Management of All-Star;
Appendix A
10. Capital Stock, Long-Term Debt, Description of Shares; Distributions;
and Other Securities Automatic Reinvestment and
Cash Purchase Plan; Tax Status
11. Defaults and Arrears on Senior
Securities *
12. Legal Proceedings *
13. Table of Contents of the Statement of Additional Information
Statement of Additional
Information
Part B Caption in Statement of Additional
- ------ Information
--------------------------------------
14. Cover Page Cover Page
15. Table of Contents Table of Contents
16. General Information and History (See "History" in the Prospectus)
17. Investment Objective and Policies Investment Objective and Policies;
Investment Restrictions
18. Management Directors and Officers of
All-Star
19. Control Persons and Principal Principal Shareholders
Holders of Securities
Caption in Statement
Part B of Additional Information
- ----- ------------------------------
20. Investment Advisory and Other Services Investment Advisory and Other
Services
21. Brokerage Allocation and Other Portfolio Security Transactions
Practices
22. Tax Status (See "Tax Status" in
Prospectus)
23. Financial Statements Financial Statements
- ----------------
* Not applicable
PROSPECTUS
[Logo]
1,334,476 Shares of Common Stock, par value $.10 per share
Issuable Upon Exercise of Rights
to Subscribe for such Shares
LIBERTY ALL-STAR GROWTH FUND, INC.
Liberty All-Star Growth Fund, Inc. ("All-Star") is offering to its
shareholders of record as of the close of business on June __, 1998 rights
("Rights") entitling the holders thereof to subscribe for an aggregate of
1,334,476 shares of Common Stock, par value $.10 per share, of All-Star (the
"Shares") at the rate of one Share for each ten Rights held (the "Offer"), and
entitling such shareholders to subscribe, subject to certain limitations and
subject to allotment, for any Shares not acquired by exercise of primary
subscription Rights. The Rights are not transferable and will not be admitted
for trading on the New York Stock Exchange. See "The Offer". THE SUBSCRIPTION
PRICE PER SHARE WILL BE 95% OF THE LOWER OF (i) THE LAST REPORTED SALE PRICE ON
THE NEW YORK STOCK EXCHANGE ON JULY , 1998 OF A SHARE OF ALL-STAR, OR (ii) THE
NET ASSET VALUE OF A SHARE OF ALL-STAR ON THAT DATE.
THE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK TIME, ON JULY __, 1998 (the
"Expiration Date"). SINCE THE CLOSE OF THE OFFERING ON THE EXPIRATION DATE IS
PRIOR TO THE PRICING DATE, SHAREHOLDERS WHO CHOOSE TO EXERCISE THEIR RIGHTS WILL
NOT KNOW THE SUBSCRIPTION PRICE PER SHARE AT THE TIME THEY EXERCISE SUCH RIGHTS.
For additional information, please call Corporate Investor Communications,
Inc. (the "Information Agent") toll free at (888) 501-9721.
All-Star is a multi-managed diversified closed-end management investment
company that allocates its portfolio assets on an approximately equal basis
among several independent investment organizations (currently three in number)
having different investment styles recommended and monitored by Liberty Asset
Management Company, All-Star's fund manager. All-Star's investment objective is
to seek long term capital appreciation. It seeks its investment objective
through investment primarily in a diversified portfolio of equity securities.
The address of All-Star is Federal Reserve Plaza, Boston, Massachusetts
02210 and its telephone number is 1-800-542-3863. All-Star's shares are listed
on the New York Stock Exchange under the symbol "ASG".
All-Star announced the terms of the Offer before the opening of trading on
the New York Stock Exchange on April 24, 1998. The net asset value per share of
common stock of All-Star at the close of business on April 23, 1998 and May __,
1998 was $______ and $_______, respectively, and the last reported sale price of
a share on such Exchange on those dates was $__________ and $_________,
respectively.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
==============================================================================
Subscription Proceeds to
Price (1) Sales Load All-Star(2)
- ------------------------------------------------------------------------------
Per Share...$_______ NONE $________
- ------------------------------------------------------------------------------
Total.......$_______ NONE $________
==============================================================================
(1) Estimated based on an assumed Subscription Price of 95% of the last
reported sale price on the New York Stock Exchange on May , 1998.
(2) Before deduction of expenses payable by All-Star,
estimated at $____________.
---------------------------
As a result of the terms of the Offer, shareholders who do not exercise
their Rights will, upon completion of the Offer, own a smaller proportional
interest in All-Star. In addition, because the Subscription Price per share will
be less than the then current net asset value per share, the Offer will result
in some dilution of the aggregate net asset value of the shares owned by
shareholders who do not fully exercise their Rights.
-----------------------------------
This Prospectus sets forth concisely the information
that a shareholder ought
to know before exercising his
or her Rights and should be retained for future
reference. A Statement of Additional Information dated
May __, 1998 has been filed with the Securities and
Exchange Commission and is incorporated herein by reference.
The table of contents of the Statement of Additional Information
appears on page ___ of this Prospectus, and a copy is available
at no charge by calling the Information Agent
at (888) 501-9721.
-------------------------------
The date of this Prospectus
is May __, 1998
[End of Cover]
EXPENSES
Shareholder Transaction Expenses
- --------------------------------
These are the expenses that an investor incurs when buying shares of
All-Star, whether in this Offer, in the open-market or through All-Star's
Automatic Dividend Reinvestment and Cash Purchase Plan.
Sales load None(1)
Dividend Reinvestment
and Cash Purchase Plan Fees $1.25 per
voluntary cash
investment
- ----------------
(1) No sales load or commission will be payable in connection with this Offer.
Purchases of shares through brokers in secondary market transactions are subject
to brokers' commissions and charges.
Annual Expenses (as a percentage of net assets attributable to Common Stock)
Management and administrative fees ____%
Other Expenses ____%
Total Annual Expenses ____%
Example: You would pay the following expenses on an
investment (at net asset value) of $1,000, assuming a 5%
annual return.
1 Year 3 Years 5 Years 10 Years
- ------ ------- ------- --------
$---- $---- $---- $----
These figures are intended to illustrate the effect of All-Star's expenses,
but are not meant to predict its future returns and expenses, which may be
higher or lower than those shown.
The purpose of the above tables is to assist investors in understanding the
various costs and expenses that an investor in All-Star will bear directly or
indirectly. The numbers shown under the Annual Expenses table are projections
based on All-Star's actual expenses for the year ended December 31, 1997, and on
its projected net assets assuming the offer is fully subscribed for at an
assumed Subscription Price of $______ per share, and have been adjusted to
assume that the increased management and administrative fees to be effective
August 1, 1998 (see "Management of All-Star") were in effect for the full year
ended December 31, 1997. See "Financial Highlights" for All-Star's actual ratio
of expenses to average net assets for the year ended December 31, 1997.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the more
detailed information included elsewhere in this Prospectus.
Purpose of the Offer
The Board of Directors of Liberty All-Star Growth Fund, Inc. ("All-Star" or the
"Fund") has determined that it would be in the best interest of All-Star and its
shareholders to increase the assets of All-Star available for investment. The
Offer seeks to reward investors in All-Star by giving existing shareholders the
opportunity to purchase additional Shares at a price below market value and
without brokerage commissions. See "The Offer-Purpose of the Offer."
Terms of the Offer
All-Star is issuing to its shareholders of record as of the close of
business on June , 1998 (the "Record Date") rights ("Rights") to subscribe for
an aggregate of 1,334,476 shares (sometimes referred to herein as the "Shares")
of Common Stock, par value $.10 per share, of All-Star. Each such shareholder is
being issued one Right for each full share of Common Stock owned on the Record
Date. The Rights entitle the holder to acquire, at the Subscription Price (as
hereinafter defined), one Share for each ten Rights held. Rights may be
exercised at any time during the period (the "Subscription Period") which
commences on June , and ends at 5:00 p.m., New York time, on July __, 1998 (the
"Expiration Date"). The right to acquire during the Subscription Period at the
Subscription Price one additional Share for each ten Rights held is hereinafter
referred to as the "Primary Subscription."
In addition, any shareholder who fully exercises all Rights issued to him
or her (other than those Rights which cannot be exercised because they represent
the right to acquire less than one Share) is entitled to subscribe for Shares
which were not otherwise subscribed for by others on Primary Subscription (the
"Over-Subscription Privilege"). For purposes of determining the maximum number
of Shares a shareholder may acquire pursuant to the Offer, broker-dealers whose
shares are held of record by Cede & Co., Inc. ("Cede"), nominee for Depository
Trust Company, or by any other depository or nominee will be deemed to be the
holders of the Rights that are issued to Cede or such other depository or
nominee. Shares acquired pursuant to the Over-Subscription Privilege are subject
to allotment, which is more fully discussed under "The Offer--Over-Subscription
Privilege."
The subscription price per Share (the "Subscription Price") will be 95% of
the lower of (i) the last reported sale price on the New York Stock Exchange on
July __, 1998 (the "Pricing Date") of a share of Common Stock of All-Star, or
(ii) the net asset value of a share of All-Star on the Pricing Date. Since the
Expiration Date is prior to the Pricing Date, shareholders who choose to
exercise their Rights will not know at the time they exercise such Rights what
the purchase price for Shares acquired pursuant to such exercise will be.
Shareholders will have no right to rescind their subscription after receipt of
their payment for Shares by the Subscription Agent. Subscription payments will
be held by the Subscription Agent pending completion of the processing of the
subscription. No interest thereon will be paid to subscribers.
The Rights are not transferable. Therefore, only the underlying Shares, and
not the Rights, will be admitted for trading on the New York Stock Exchange.
Since fractional shares will not be issued on exercise of Rights, shareholders
who receive, or are left with, fewer than ten Rights will be unable to exercise
such Rights and will not be entitled to receive any cash in lieu of fractional
shares.
Shareholders' inquiries about the Offer should be directed to their broker, bank
or trust company, or to:
Corporate Investor Communications, Inc.
1-888-501-9721
Important Dates to Remember
Event Date
- ----- ----
Record Date. . . . . . . . . . . . . . . June , 1998
Subscription
Period . . . . . . . . . . . . . . . . June , 1998
through July , 1998
Expiration Date (Deadline
for delivery of Subscription
Certificate together with payment of
estimated Subscription Price or for
delivery of Notice of Guaranteed
Delivery). . . . . . . . . . . . . . . July , 1998
Pricing Date . . . . . . . . . . . . . July , 1998
Deadline for payment of final
Subscription Price pursuant to Notice
Of Guaranteed Delivery. . . . . . . . . . July , 1998
Confirmation
to Registered Shareholders. . . . . . . July , 1998
For Registered Shareholders'
Subscriptions - deadline for
payment of unpaid balance if final
Subscription Price is higher than
Estimated Subscription Price. . . . . . . July , 1998
Information about All-Star
All-Star is a multi-managed diversified closed-end management investment
company that allocates its assets on an approximately equal basis among a number
of independent investment management organizations (currently three in number)
each having a different investment style. See "The Multi-Manager Concept."
All-Star's investment objective is to seek long-term capital appreciation. It
seeks its objective through investment primarily (at least 65% of total assets
under normal conditions) in a diversified portfolio of equity securities. The
portion of All-Star's portfolio not invested in equity securities (not more than
35% of total assets under normal conditions) is invested in U.S. Government
Securities, repurchase agreements with respect thereto, and certain money market
mutual funds. See "Investment Objective and Policies."
All-Star commenced investment operations in March 1986 under the name
"Growth Stock Outlook Trust, Inc." (see "History of the Fund" below). Its
outstanding shares of Common Stock are listed and traded on the New York Stock
Exchange (Symbol "ASG"). The average weekly trading volume of the shares on the
New York Exchange during the year ended December 31, 1997 was _________ shares.
As at May , 1998 All-Star's net assets were $___________________ and 13,344,760
shares of All-Star were issued and outstanding.
Information about Liberty Asset Management Company
Liberty Asset Management Company ("LAMCO") provides Portfolio Manager
selection, evaluation and monitoring services to All-Star, and is responsible
for the provision of administrative services to the Fund, some of which are
delegated to LAMCO's affiliate, Colonial Management Associates, Inc.
("Colonial"). See "Management of All-Star" for the fees paid by the Fund to
LAMCO and by LAMCO to the Portfolio Managers. Since the fees of LAMCO and the
Portfolio Managers are based on the average weekly net assets of All-Star, LAMCO
and the Portfolio Managers will benefit from the Offer.
LAMCO, organized in 1985, is an indirect wholly-owned subsidiary of Liberty
Financial Companies, Inc. As of May , 1998, approximately __% of the combined
voting power of the issued and outstanding voting stock of Liberty Financial
Companies, Inc. was held, indirectly, by Liberty Mutual Insurance Company, and
substantially all of the remaining shares are listed on the New York Stock
Exchange.
Special Considerations and Risk Factors
The following summarizes certain matters that should be considered, among
others, in connection with the Offer.
Dilution............. As a result of the terms of the
Offer, shareholders who do not
fully exercise their Rights should
expect that they will, at the
completion of the Offer, own a
smaller proportional interest in
All-Star than if they fully
exercise their Rights. In
addition, some dilution of the
aggregate net asset value of the
shares owned by shareholders who do
not fully exercise their Rights
will be experienced as a result of
the Offer because the Subscription
Price will be less than the net
asset value per share and therefore
the number of shares outstanding
after the Offer will increase by a
greater percentage than the
increase in All-Star's assets.
Although it is not possible to
state precisely the amount of such
dilution because it is not known at
this time how many shares will be
subscribed for or what the net
asset value or market price per
share will be on the Pricing Date,
All-Star estimates that such
dilution should not be
substantial. For example, if
All-Star's Shares are trading at a
discount from their net asset value
of .__% (the average discount for
the three month period ended
_______________, 1998), and
assuming all Rights are exercised,
the Subscription Price would be
_____% below All-Star's net asset
value per share, resulting in a
reduction of such net asset value
of approximately $.__ per share, or
less than 0.___%.
Anti-takeover
Provisions........... All-Star's Articles of
Incorporation and By-laws have
provisions (commonly referred to as
"anti-takeover provisions") which
are intended to have the effect of
limiting the ability of other
entities or persons to acquire
control of All-Star, to cause it to
engage in certain transactions, or
to modify its structure. For
instance, the affirmative vote or
consent of 66 2/3 percent of the
shares of the Fund is required to
authorize All-Star's conversion
from a closed-end to an open-end
investment company, regardless of
whether such conversion is approved
or recommended by the Board of
Directors. A similar shareholder
vote or consent is required to
authorize a merger, sale of a
substantial part of the assets,
issuance of securities for cash, or
similar transaction with a person
beneficially owning five percent or
more of All-Star's shares, unless
approved by All-Star's Board of
Directors under certain
conditions. These provisions
cannot be amended without a similar
super-majority vote. In addition,
All-Star's Board of Directors is
divided into three classes, each of
which has a term of three years and
only one of which is elected at
each annual meeting of
shareholders. See "Description of
Shares--Certain Provisions of the
Articles of Incorporation and
By-laws."
Distributions..........All-Star currently has a policy of paying distributions
on its common stock totalling approximately 10% of its
net asset value per year, payable in four quarterly
distributions of 2.5% of All-Star's net asset value at
the close of the New York Stock Exchange on the Friday
prior to each quarterly declaration date. These fixed
distributions are not related to All-Star's net
investment income or net realized capital gains or
losses. If, for any calendar year, the total
distributions made under the 10% pay-out policy exceed
All-Star's net investment income and net realized capital
gains, the excess will generally be treated as a tax-free
return of capital to shareholders (up to the amount of
the shareholder's basis in his or her shares), and
thereafter as gain from the sale of shares. The amount
treated as a tax-free return of capital will reduce the
shareholder's adjusted basis in his or her shares,
thereby increasing his or her potential gain or reducing
his or her potential loss on the sale of his or her
shares. Such excess, however, will be treated first as
ordinary dividend income up to the amount of All-Star's
current and accumulated earnings and profits, and then as
return of capital and capital gain as set forth above.
All-Star may, in the discretion of the Board of
Directors, retain for reinvestment net long-term capital
gains in excess of net short-term capital losses for any
year to the extent that its net investment income, net
short-term realized gains, and net long-term realized
gains exceed the minimum amount required to be
distributed for such year under the 10% pay-out policy.
Such retained capital gains will be taxed to both
All-Star and the shareholders as long-term capital gains;
however shareholders will be able to claim their
proportionate share of the federal income taxes paid by
All-Star as a credit against their own federal income tax
liabilities, and will be entitled to increase the
adjusted tax basis of their All-Star shares by the
difference between their pro rata share of the
undistributed capital gains and their tax credit. See
"Distributions; Automatic Dividend Reinvestment and Cash
Purchase Plan."
Closed-end fund
discounts............ Shares of closed-end investment companies such as
All-Star are not redeemable and frequently trade at a
discount from their net asset value. This risk
is separate and distinct from the risk that All-Star's
net asset value may decline. See "Share Price Data."
FINANCIAL HIGHLIGHTS
--------------------
The following information as to per share operating performance, total
investment return and ratios for each of the ten years ended December 31, 1997
has been audited by KPMG Peat Marwick LLP, Boston, Massachusetts, independent
auditors. The report of KPMG Peat Marwick LLP, together with the financial
statements of All-Star, are included in the Statement of Additional Information
(see cover page). The information for the three months ended March 31, 1998 is
unaudited.
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------
Three
months
ended
March
31,
1998 1997 1996 1995 1994 1993 1992 1991 1990 1989 1988
--------------------------------------------------------------------
PER SHARE
OPERATING
PERFORMANCE:
Net asset
value
at
beginning
of
period $11.27 $10.55 $9.95 $10.54 $10.28 $10.40 $9.90 $10.10 $9.59 $9.18
Income from Investment
Operations:
Net
investment
income
(loss) (0.02) 0.01 0.31 0.23 0.18 0.29 0.44 0.54 0.57 0.41
Net
realized
and
unrealized
gain
(loss)
on
investments 2.88 1.86 1.05 (0.24) 0.56 0.03 0.71 (0.12) 0.58 0.41
---- ---- ---- ----- ---- ----- ----- ---- ---- ----
Total
from
Investment
Operations 2.86 1.87 1.36 (0.01) 0.74 0.32 1.15 0.42 0.15 (0.82)
---- ---- ---- ----- --- ---- ----- ---- ---- ----
Less Distributions:
Dividends
from
net
investment
income - (0.01) (0.31) (0.23) (0.18) (0.30) (0.44) (0.54) (0.57) (0.41)
Distributions
from
realized
capital
gains (1.24)(1.01)(0.45) (0.35)(0.30)(0.14) (0.21)(0.08)(0.07) -
---- ---- ---- ------ ---- ---- ----- ----- ----- ----
Total Distributions(1.24)(1.02)(0.76) (0.58)(0.48)(0.44)(0.65)(0.62)(0.64)(0.41)
Impact of
shares issued
in dividend
reinvestment (a)- (0.13) - - - - - - - -
----- ----- ---- ---- ------ ---- --- ---- ---- ----
Total
Distributions
and
Reinvestments (1.24)(1.15)(0.76)(0.58)(0.48)(0.44)(0.64) (0.62)(0.64)(0.41)
Net asset
value
at end
of
period $12.89 $11.27 $10.55 $9.95 $10.54 $10.28 $10.40 $9.90 $10.10 $9.59
Per share
market
value at
end of
period $11.938 $9.250 $9.375 $8.500 $10.250 $10.00 $10.00 $10.25 $10.00 $9.38
TOTAL INVESTMENT RETURN FOR SHAREHOLDERS:(b)
Based on
net
asset
value 27.3% 18.3% 13.8% (1.1%) 7.2%
Based on
market
price 43.6% 9.3% 19.3% (11.6%) 7.2% 4.43% 3.91% 8.85% 13.48%
RATIOS AND SUPPLEMENTAL DATA:
Net assets
at end
of
period
(millions) $167 $137 $120 $113 $125 $123 $125 $121 $124 $128
Ratio of
expenses
to
average
net
assets 1.20% 1.35% 1.42% 1.51% 1.35% 1.33% 1.31% 1.48% 1.43% 1.46%
Ratio of
net
investment
income
to
average
net
assets (0.18%) 0.06% 2.87% 2.12% 1.71% 2.80% 4.17% 5.30% 5.58% 4.24%
Portfolio
turnover
rate 57% 51% 82% 50% 47% 19% 25% 41% 25% 24%
Average
commission
rate(d) $0.0502 $0.0555 - - - - - - - -
- ----------------
(a) Effect on dividend reinvestment shares at a price below net asset value in
accordance with the 1996 Automatic Dividend Reinvestment and Cash Purchase
Plan.
(b) Calculated assuming all distributions reinvested.
(c) For fiscal years beginning on or after September
1, 1995, a fund is required to disclose its average commission rate per
share for trades on which commissions are charged.
See "History of the Fund" below for changes in the investment management of
All-Star effective May 27, 1994 and November 6, 1995.
SHARE PRICE DATA
Trading in All-Star's shares on the New York Stock Exchange commenced on
March , 1986. For the two years ended December 31, 1997 and the quarter ended
March 31, 1998 the high and low sales prices for All-Star's shares, as reported
in the consolidated transaction reporting system, and the highest discount from
or premium to net asset value per share and the net asset value on the day or
days when the shares traded at such high and low sales prices, were as follows:
===============================================================
(Dis- (Dis-
count count
from) from)
or or
Premium Premium
High Net to Net Low Net to Net
Sales Asset Asset Sales Asset Asset
Price Value Value Price Value Value
===============================================================
1996
- ---------------------------------------------------------------
1st
Quarter
- ---------------------------------------------------------------
2nd
Quarter
- ---------------------------------------------------------------
3rd
Quarter
- ---------------------------------------------------------------
4th
Quarter
===============================================================
1997
- ---------------------------------------------------------------
1st
Quarter
- ---------------------------------------------------------------
2nd
Quarter
- ---------------------------------------------------------------
3rd
Quarter
- ---------------------------------------------------------------
1998
=============================================================
=============================================================
1st
Quarter
=============================================================
All-Star's shares have historically traded at a discount from their net
asset value. Certain features of and steps taken by All-Star may have tended to
reduce the discount from net asset value at which its shares might otherwise
have traded, although All-Star is not able to determine what effect, if any,
these various features and steps may have had. All-Star's current 10%
distribution policy (see "Distributions; Automatic Dividend Reinvestment and
Cash Purchase Plan-10% Distribution Policy" below), begun in February, 1987, may
have contributed to this effect. This trend may also have resulted in whole or
in part from other factors, such as the Fund's investment performance and
increased attention directed to All-Star by securities analysts and market
letters.
The net asset value of a share of All-Star on May __, 1998 was $______. The
last reported sale price of an All-Star share on that day was $________,
representing a discount from net asset value of _____%.
INVESTMENT PERFORMANCE
The table below shows two measures of All-Star's return to investors for
periods beginning April 1, 1996 and ending March 31, 1998, the calendar quarter
beginning April 1, 1996 being the first full calendar quarter during all of
which the Fund was fully invested in accordance with LAMCO's multi-management
methodology (see "History of the Fund" below). No. 1 ("All-Star NAV") shows
All-Star's investment performance based on a valuation of its shares at net
asset value ("NAV"). No. 2 ("All-Star Price") shows All-Star's investment
performance based on the market price of All-Star's shares. Both measures assume
reinvestment of all of the Fund's dividends and distributions in additional
shares pursuant to All-Star's Automatic Dividend Reinvestment and Cash Purchase
Plan (see "Distributions; Automatic Dividend Reinvestment and Cash Purchase
Plan" below).
The Lipper Growth Fund Average has been included so that the Fund's results
may be compared with an unweighted average of the total return of open-end
mutual funds classified as growth funds (i.e. mutual funds having investment
objectives and policies comparable to All-Star) published by Lipper Analytical
Services, Inc. The record of the S&P 500 Index has also been included so that
All-Star's results may be compared with those of an unmanaged group of
securities widely regarded by investors as representative of the stock market in
general. The S&P 500 Index information reflects the total return (change in the
market price) of the securities included in the index, and the Lipper Growth
Fund Average information reflects the total return (change in net asset value)
of the mutual funds included in the average, in each case assuming reinvestment
of dividends and distributions.
- ---------------------------------------------------------------
No. 1 No. 2 Lipper
All-Star All-Star Growth S&P 500
NAV Price Fund Index
Average
- ---------------------------------------------------------------
- ---------------------------------------------------------------
1 Year Since
4/1/97
- ----------------------------------------------------------------
- ----------------------------------------------------------------
2 Years
Since 4/1/96
- ---------------------------------------------------------------
- ---------------------------------------------------------------
- -------------------
The return shown is the average annual return for the period indicated to March
31, 1998.
The above results represent All-Star's past performance and are not
intended as a prediction of its future performance. The investment return, net
asset value and market value of All-Star's shares will fluctuate, so that such
shares when sold may be worth more or less than their original cost.
THE OFFER
Terms of the Offer
All-Star is issuing to the holders of its shares of Common Stock of record
on the Record Date non-transferable Rights to subscribe for the Shares. Each
such shareholder is being issued one Right for each share of Common Stock owned
on the Record Date. The Rights entitle the holder to acquire on Primary
Subscription at the Subscription Price one Share for each ten Rights held. No
Rights will be issued for fractional shares. Rights may be exercised at any time
during the Subscription Period, which commences on June , 1998 and ends at 5:00
p.m., New York time, on July , 1998 (the "Expiration Date").
In addition, any shareholder who fully exercises all Rights initially
issued to him or her in the Primary Subscription (other than those Rights which
cannot be exercised because they represent the right to acquire less than one
Share) is entitled to subscribe for Shares which were not otherwise subscribed
for by others on Primary Subscription. For purposes of determining the number of
Shares a shareholder may acquire pursuant to the Offer, broker-dealers whose
shares are held of record on the Record Date by Cede or by any other depository
or nominee will be deemed to be the holders of the Rights that are issued to
Cede or such other depository or nominee on their behalf. Shares acquired
pursuant to the Over-Subscription Privilege are subject to allotment, which is
more fully discussed below under "Over-Subscription Privilege."
The Rights are not transferable. Therefore, only the underlying Shares, and
not the Rights, will be admitted for trading on the New York Stock Exchange.
Since fractional shares will not be issued, shareholders who receive, or who are
left with, fewer than ten Rights will be unable to exercise such Rights and will
not be entitled to receive any cash in lieu of such fractional shares.
The Rights will be evidenced by Subscription Certificates which will be
mailed to Record Date shareholders. Rights may be exercised by completing a
Subscription Certificate and delivering it, together with payment by means of
(i) a check or money order, or (ii) a Notice of Guaranteed Delivery, to the
Subscription Agent during the Subscription Period. The method by which Rights
may be exercised and the Shares paid for is set forth below under "Method of
Exercise of Rights" and "Payment for Shares."
Purpose of the Offer
The Board of Directors of All-Star has determined that it would be in the
best interests of All-Star and its shareholders to increase the assets of
All-Star available for investment, and that the potential benefits of the Offer
to All-Star and its shareholders will outweigh the dilution to shareholders who
do not fully exercise their rights. The proceeds of the Offer will enable
All-Star's Portfolio Managers to take advantage of perceived investment
opportunities without having to sell existing portfolio holdings which they
otherwise would retain. The Offer seeks to reward investors by giving existing
shareholders the opportunity to purchase additional Shares at a price below
market value and without brokerage commissions. Increasing the size of All-Star
should result in lowering its total expenses as a percentage of average net
assets. In addition, the Offer will enhance the likelihood that All-Star will
continue to have sufficient assets remaining after the distributions called for
by its current 10% distribution policy to permit the Fund to maintain the
current ratio of its fixed expenses to its net assets.
All-Star's Fund Manager and Portfolio Managers will benefit from the Offer
because their fees are based on the average weekly net assets of All-Star. See
"Management of All-Star." It is not possible to state precisely the amount of
additional compensation they will receive as a result of the Offer because it is
not known how many Shares will be subscribed for and because the net proceeds of
the Offer will be invested in additional portfolio securities that will
fluctuate in value. One of All-Star's Directors who voted to authorize the Offer
is an "interested person," within the meaning of the 1940 Act, of LAMCO, and
therefore could benefit indirectly from the Offer. The other four Directors are
not "interested persons" of All-Star or LAMCO.
All-Star may, in the future and at its discretion, choose to make
additional rights offerings from time to time for a number of shares and on
terms which may or may not be similar to the Offer. Any such future rights
offering will be made in accordance with the 1940 Act.
Over-Subscription Privilege
If some shareholders do not exercise all of their Rights initially issued
to them in the Primary Subscription, the remaining unsubscribed Shares ("Excess
Shares") will be offered, by means of the Over-Subscription Privilege, to
holders of Rights who have exercised all the Rights initially issued to them and
who wish to acquire more than the number of Shares to which their Rights entitle
them. Holders of Rights who exercise all their Rights initially issued to them
(other than those Rights which cannot be exercised because they represent the
right to acquire less than one Share) will have the opportunity to indicate on
their Subscription Certificate how many Shares they are willing to acquire
pursuant to this Over-Subscription Privilege. If there are sufficient Excess
Shares, all over-subscriptions will be honored in full. If the Excess Shares are
insufficient to honor all over-subscriptions, the available Excess Shares will
be allocated (subject to the elimination of fractional Shares) among those
holders of Rights exercising the Over-Subscription Privilege, in proportion, not
to the number of Shares requested pursuant to the Over-Subscription Privilege,
but to the number of shares held by them on the Record Date; provided, however,
that if such pro rata allocation results in any holder being allocated a greater
number of Excess Shares than such holder subscribed for pursuant to the exercise
of such holder's Over-Subscription Privilege, then such holder will be allocated
only such number of Excess Shares as such holder subscribed for and the
remaining Excess Shares will be allocated among all other holders exercising
Over-Subscription Privileges. The formula to be used in allocating the Excess
Shares is as follows:
Holder's Record Date Position
------------------------------
Total Record Date Position x Excess Shares
of all Oversubscribers Remaining
The allocation process may involve a series of allocations in order to
assure that the total number of shares available for Over-Subscription is
distributed on a pro rata basis. The Fund will not offer or sell any Shares
which are not subscribed for under the Primary Subscription or the
Over-Subscription Privilege.
The Subscription Price
The Subscription Price for the Shares to be issued pursuant to the Rights
will be 95% of the lower of (i) the last reported sale price of a share of
Common Stock of All-Star on the New York Stock Exchange on July , 1998 (the
"Pricing Date"), or (ii) the net asset value of a share of All-Star on the
Pricing Date.
All-Star announced the terms of the Offer before the opening of trading on
the New York Stock Exchange on April 24, 1998. The net asset value per share of
All-Star at the close of business on April 24, 1998 and on May , 1998 was $_____
and $_____, respectively, and the last reported sale price of a share on such
Exchange on those dates was $_______ and $_________, respectively.
Expiration of the Offer
The Offer will expire at 5:00 p.m., New York time, on July , 1998 (the
"Expiration Date"). Rights will expire on the Expiration Date and thereafter may
not be exercised, unless the Offer is extended. Since the Expiration Date is
prior to the Pricing Date, shareholders who decide to acquire Shares on Primary
Subscription or pursuant to the Over-Subscription Privilege will not know, when
they make such decision, what the purchase price for such Shares will be.
Any extension, termination, or amendment of the Offer will be followed as
promptly as practical by announcement thereof, such announcement in the case of
an extension to be issued no later than 9:00 a.m., New York City time, on the
next business day following the previously scheduled Expiration Date. The Fund
will not, unless otherwise required by law, have any obligation to publish,
advertise, or otherwise communicate any such announcement other than by making a
release to the Dow Jones New Service or such other means of announcement as the
Fund deems appropriate.
Subscription Agent
The Subscription Agent is State Street Bank and Trust Company, P.O. Box
8200, Boston, Massachusetts 02266-8200. State Street Bank and Trust Company is
also the Fund's dividend paying agent, transfer agent and registrar. The
Subscription Agent will receive from All-Star a fee estimated to be $______ and
reimbursement for its out-of-pocket expenses related to the Offer.
Information Agent
Any questions or requests for assistance regarding the Offer may be
directed to the Information Agent at its telephone number and address listed
below:
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt, NJ 07072-2586
Call Toll Free (888) 501-9721
The Information Agent will receive a fee estimated at approximately $_________.
Method of Exercise of Rights
Rights may be exercised by filling in and signing the Subscription
Certificate and mailing it in the envelope provided, or otherwise delivering the
completed and signed Subscription Certificate to the Subscription Agent,
together with payment for the Shares as described below under "Payment for
Shares." Rights may also be exercised through a Rights holder's broker, who may
charge such Rights holder a servicing fee in connection with such exercise.
Fractional Shares will not be issued, and Rights holders who receive, or who are
left with, fewer than ten Rights will not be able to exercise such Rights.
Completed Subscription Certificates and related payments must be received
by the Subscription Agent prior to 5:00 p.m., New York time, on the Expiration
Date (unless payment is effected by means of a notice of guaranteed delivery as
described below under "Payment for Shares")at the offices of the Subscription
Agent at one of the addresses set forth below.
The Subscription Certificate and payment should be sent to STATE STREET
BANK AND TRUST COMPANY by one of the following methods:
Subscription Certificate
Delivery Method Address/Number
- ----------------------- --------------
By First Class Mail State Street Bank and
Trust Company
Corporate Reorganization
P.O. Box 9061
Boston, MA 02205-8686
By Hand State Street Bank and Trust Company
Securities Transfer and Reporting Services
One Exchange Place
55 Broadway, 3rd Floor
New York, New York 10006
By Overnight Courier State Street Bank and Trust Company
or Express Mail Corporate Reorganization Department
70 Campanelli Drive
Braintree, MA 02184
By Broker-Dealer or Shareholders whose Shares are held in
other Nominee a brokerage, bank or trust account
(Notice of Guaranteed may contact their broker or other
Delivery) nominee and instruct them to submit
a Notice of Guaranteed Delivery and
payment on their behalf.
Delivery by any method or to any address not listed above will not
constitute good delivery.
All questions as to the validity, form, eligibility (including times of
receipt and matters pertaining to beneficial ownership) and the acceptance of
subscription forms and the Subscription Price will be determined by All-Star,
which determinations will be final and binding. No alternative, conditional or
contingent subscriptions will be accepted. All-Star reserves the absolute right
to reject any or all subscriptions not properly submitted or the acceptance of
which would, in the opinion of the Fund's counsel, be unlawful. All-Star also
reserves the right to waive any irregularities or conditions, and the Fund's
interpretations of the terms and conditions of the Offer shall be final and
binding. Any irregularities in connection with subscriptions must be cured
within such time, if any, as the Fund shall determine unless waived. Neither
All-Star nor the Subscription Agent shall be under any duty to give notification
of defects in such subscriptions or incur any liability for failure to give such
notification. Subscriptions will not be deemed to have been made until such
irregularities have been cured or waived.
Payment for Shares
Holders of Rights who subscribe for Shares on Primary Subscription or
pursuant to the Over-Subscription Privilege may choose between the following
methods of payment:
(1) If, prior to 5:00 p.m., New York time, on the Expiration Date, the
Subscription Agent shall have received a notice of guaranteed delivery by
facsimile or otherwise, from a bank or trust company or a New York Stock
Exchange or National Association of Securities Dealers member firm,
guaranteeing delivery of (a) payment of the full Subscription Price for the
Shares subscribed for on Primary Subscription and any additional Shares
subscribed for pursuant to the Over-Subscription Privilege and (b) a
properly completed and executed Subscription Certificate, the subscription
will be accepted by the Subscription Agent. The Subscription Agent will not
honor a notice of guaranteed delivery if a properly completed and executed
Subscription Certificate and full payment for the Shares is not received by
the Subscription Agent by July __, 1998.
(2) Alternatively, a holder of rights can, together with the
Subscription Certificate, send payment for the Shares acquired on Primary
Subscription and any additional shares subscribed for pursuant to the
Over-Subscription Privilege to the Subscription Agent based on an estimated
purchase price of $________ per Share. To be accepted, such payment,
together with the Subscription Certificate, must be received by the
Subscription Agent prior to 5:00 p.m., New York time, on the Expiration
Date.
A PAYMENT BY CHECK OR MONEY ORDER, PURSUANT TO THE SECOND METHOD DESCRIBED
ABOVE, MUST ACCOMPANY ANY SUBSCRIPTION CERTIFICATE FOR SUCH EXERCISE TO BE
ACCEPTED. The check or money order must be drawn on a bank located in the United
States and must be made payable to Liberty All-Star Growth Fund, Inc..
On July __, 1998 (the "Confirmation Date"), a confirmation will be sent by
the Subscription Agent to each shareholder exercising his or her Rights (or, if
the All-Star shares on the Record Date are held by Cede or any other depository
or nominee, to Cede or such other depository or nominee), showing (i) the number
of Shares acquired pursuant to the Primary Subscription; (ii) the number of
Shares, if any, acquired pursuant to the Over-Subscription Privilege; (iii) the
per Share and total purchase price for the Shares; and (iv) any additional
amount payable by such shareholder to All-Star or any excess to be refunded by
All-Star to such shareholder, in each case based on the Subscription Price as
determined on the Pricing Date. Any additional payment required from a
shareholder must be received by the Subscription Agent prior to 5:00 p.m., New
York time, on July __, 1998, and any excess payment to be refunded by All-Star
to such shareholder will be mailed by the Subscription Agent with the
confirmation. All payments by a shareholder must be in United States dollars by
money order or check drawn on a bank located in the United States of America and
be payable to Liberty All-Star Growth Fund, Inc.. Such payments will be held by
the Subscription Agent pending completion of the processing of the subscription,
and will then be paid to All-Star. Any interest earned on such amounts will
accrue to All-Star and none will be paid to the subscriber.
Whichever of the above two methods of payment is used, issuance and
delivery of the Shares subscribed for are subject to collection of checks and
actual payment pursuant to any notice of guaranteed delivery.
Rights holders will have no right to rescind their subscription after
receipt of their payment for Shares by the Subscription Agent.
If a holder of Rights who acquires Shares pursuant to the Primary
Subscription or the Over-Subscription Privilege does not make payment of any
amounts due, All-Star reserves the right to take any or all of the following
actions: (i) find other purchasers for such subscribed and unpaid for Shares;
(ii) apply any payment actually received by it toward the purchase of the
greatest number of whole Shares which could be acquired by such holder upon
exercise of the Primary Subscription or the Over-Subscription Privilege; (iii)
sell in the open market all or a portion of the Shares purchased by the holder,
and apply the proceeds to the amounts owed; and (iv) exercise any and all other
rights or remedies to which it may be entitled, including, without limitation,
the right to set off against payments actually received by it with respect to
such subscribed Shares to enforce the relevant guaranty of payment or monetary
damages.
All-Star shareholders whose shares are held by a broker-dealer, bank, trust
company or other nominee should contact the nominee to exercise their Rights and
request the nominee to exercise their Rights in accordance with their
instructions.
Brokers, banks, trust companies, depositories and other nominees who hold
All-Star shares for the account of others should notify the respective
beneficial owners of such shares as soon as possible to ascertain such
beneficial owners' intentions and to obtain instructions with respect to
exercising the Rights. If the beneficial owner so instructs, the record holder
of such Right should complete Subscription Certificates and submit them to the
Subscription Agent with the proper payment.
The instructions contained on the Subscription Certificate should be read
carefully and followed in detail. DO NOT SEND SUBSCRIPTION CERTIFICATES TO
ALL-STAR. (They should be sent to State Street Bank and Trust Company as
indicated above).
Delivery of Share Certificates
Participants in All-Star's Automatic Dividend Reinvestment and Cash
Purchase Plan (the "Plan") who exercise the Rights issued on the shares held in
their accounts in the Plan will have their Shares acquired on Primary
Subscription and pursuant to the Over-Subscription Privilege credited to their
shareholder distribution reinvestment accounts in the Plan. Shareholders whose
shares are held of record by Cede or by any other depository or nominee on their
behalf or their broker-dealers' behalf will have their Shares acquired on
Primary Subscription and pursuant to the Over-Subscription Privilege credited to
the account of Cede or such other depository or nominee. With respect to all
other shareholders, share certificates for all Shares acquired on Primary
Subscription and pursuant to the Over-Subscription Privilege will be mailed on
or about July __, 1998, provided that any additional amount owed by such
shareholders has been paid and payment for the Shares subscribed for has
cleared, which clearance may take up to five days from the date of receipt of
the payment. If such payment does not clear within five days from the date of
receipt, All-Star may exercise its rights in the event of non-payment under
"Payment for Shares" above.
Federal Income Tax Consequences
For federal income tax purposes, neither the receipt nor the exercise of
the Rights will result in taxable income to holders of shares, and no loss will
be realized if the Rights expire without being exercised. All-Star will realize
no gain or loss on the issuance, exercise or expiration of the Rights.
The holding period for a Share acquired upon exercise of a Right begins
with the date of exercise. In the absence of a special election by the
shareholder, the shareholder's basis for determining gain or loss upon the sale
of that Share will be the per share Subscription Price. The gain or loss
recognized upon such sale will be capital gain or loss if the Share was held as
a capital asset at the time of sale taxable, in the case of noncorporate
shareholders, at a maximum rate of 20% if the shareholder's holding period for
the Share is more than eighteen months, or 28% if the shareholder's holding
period for the Share is more than twelve months but less than or equal to
eighteen months.
The foregoing does not cover the state or local tax consequences of
receiving or exercising a Right or address tax aspects of the Offer that may be
relevant to shareholders subject to special treatment under the Internal Revenue
Code (such as insurance companies, financial institutions, tax-exempt entities,
employee benefit plans, dealers in securities, foreign corporations, and persons
who are not citizens or residents of the U.S.). The foregoing is intended solely
as general information, based on the Internal Revenue Code, applicable
regulations and judicial precedent as of the date hereof, and each shareholder
is advised to consult his or her own tax adviser regarding tax consequences.
Special Considerations and Risk Factors
As a result of the terms of the Offer, shareholders who do not exercise
their Rights will, at the completion of the Offer, own a smaller proportional
interest in All-Star. In addition, because the Subscription Price will be less
than the then current net asset value per Share, the Offer will result in a
dilution of net asset value, which will disproportionately affect shareholders
who do not exercise their Rights.
Possible Suspension of the Offer
All-Star has, as required by the Securities and Exchange Commission's
registration form, undertaken to suspend the Offer until it amends this
Prospectus if subsequent to May __, 1998,- the effective date of the Fund's
Registration Statement,- All-Star's net asset value declines more than 10% from
its net asset value as of May __, 1998. Accordingly, All-Star will notify
shareholders of any such decline and thereby permit them to cancel their
exercise of Rights.
USE OF PROCEEDS
The net proceeds of the Offer, assuming that all Shares offered hereby are
sold at an assumed Subscription Price of $________ per share, are estimated to
be approximately $_____________, after deducting expenses payable by All-Star
estimated at $__________. Such net proceeds will be invested by All-Star's
Portfolio Managers in portfolio securities in accordance with All-Star's
investment objective and policies. It is anticipated that investment of such net
proceeds under normal market conditions will take place during a period of
approximately 30 days from their receipt by All-Star, and would in any event be
completed within three months. Pending such investment the net proceeds will be
invested in Short-Term Money Market Instruments (as defined under "Investment
Objective and Policies" below).
HISTORY OF THE FUND
The Fund commenced investment operations on March 14, 1986 under the name
"Growth Stock Outlook Trust, Inc." and under the management of Growth Stock
Outlook, Inc. ("GSO"), a corporation owned by Mr. Charles Allmon and his wife.
In May, 1990 the Fund's original investment objective of long-term capital
appreciation (with income being a consideration in the selection of investments
but not an investment objective) was changed to long-term capital appreciation
as a primary objective and current income as a secondary objective, in each case
with an emphasis on the preservation of capital, and in May, 1991 the Fund's
name was changed to "The Charles Allmon Trust, Inc." During GSO's management of
the Fund, a substantial portion of the Fund's portfolio was invested in U.S.
Government Securities and other short-term cash equivalents.
Pursuant to an Asset Acquisition and Fund Transition Agreement among LAMCO,
GSO and Mr. Allmon, on May 27, 1994 the Fund entered into a Fund Management
Agreement with LAMCO pursuant to which LAMCO provided its multi-manager services
described under "The Multi-Manager Concept" below with respect to an initial
amount equal to 20% of the Fund's total assets, with GSO continuing to manage
the remaining 80%. LAMCO also assumed administrative responsibility for the
Fund. On November 6, 1995 LAMCO assumed investment management responsibility for
100% of the Fund's assets, the Fund's name was changed to "Liberty All-Star
Growth Fund, Inc.", the Fund's investment objective was returned to the original
objective of long-term capital appreciation, eliminating the secondary objective
of current income and the emphasis on preservation of capital, and the Fund's
Board of Directors was reconstituted. The approximately 79% of the Fund's assets
then being managed by GSO, over 80% of which had been invested in U.S. Treasury
bills and other short-term cash equivalents, was assigned in substantially equal
portions to the Fund's then three Portfolio Managers under LAMCO's supervision
and within three months was substantially fully invested in equity securities in
accordance with their respective investment styles.
THE MULTI-MANAGER CONCEPT
All-Star allocates its portfolio assets on an approximately equal basis
among a number of independent investment management firms ("Portfolio
Managers"),currently three in number,- recommended by LAMCO, each of which
employs a different investment style, and from time to time rebalances the
portfolio among the Portfolio Managers so as to maintain an approximately equal
allocation of the portfolio among them throughout all market cycles.
In the opinion of LAMCO, the multi-manager concept provides advantages over
the use of a single manager because of the following primary factors:
(i) most equity investment management firms consistently employ a
distinct investment style which causes them to emphasize stocks with
particular characteristics;
(ii) because of changing investor preferences, any given investment
style will move into and out of market favor and will result in better
investment performance under certain market conditions but less successful
performance under other conditions;
(iii) consequently, by allocating All-Star's portfolio on an
approximately equal basis among Portfolio Managers employing different
styles, the impact of any one such style on investment performance will be
diluted, and the investment performance of the total portfolio will be more
consistent and less volatile over the long-term than if a single style were
employed throughout the entire period;
(iv) consistent performance at a given annual rate of return over time
produces a higher rate of return for the long-term than more volatile
performance having the same average annual rate of return.
LAMCO, based on the foregoing principles and on its analysis and evaluation
of information regarding the personnel and investment styles and performance of
a universe of several hundred professional investment management firms, has
selected for appointment by All-Star a group of Portfolio Managers representing
a blending of different investment styles which, in its opinion, is appropriate
to All-Star's investment objective.
LAMCO continuously monitors the performance and investment styles of
All-Star's Portfolio Managers and from time to time recommends changes of
Portfolio Managers based on factors such as changes in a Portfolio Manager's
investment style or a departure by a Portfolio Manager from the investment style
for which it had been selected, a deterioration in a Portfolio Manager's
performance relative to that of other investment management firms practicing a
similar style, or adverse changes in its ownership or personnel. Portfolio
Manager changes may also be made to change the mix of investment styles employed
by All-Star's Portfolio Managers. Since inception All-Star has had ______
Portfolio Manager changes.
All-Star Portfolio Manager changes, as well as the periodic rebalancings of
its portfolio among the Portfolio Managers and the need to raise cash for
All-Star's quarterly distributions, may result in some portfolio turnover in
excess of what would otherwise be the case (see "Financial Highlights" above).
Increased portfolio turnover would cause increased brokerage commission costs to
the Fund, and may result in realization of capital gains, which are taxable to
shareholders.
Under the terms of an exemptive order issued to All-Star and LAMCO by the
Securities and Exchange Commission, a portfolio management agreement with a new
or additional Portfolio Manager may be entered into in advance of shareholder
approval, provided that the new agreement is at a fee no higher than that
provided in, and is on other terms and conditions substantially similar to,
All-Star's agreements with its other Portfolio Managers, and that its
continuance is subject to approval by shareholders at All-Star's regularly
scheduled annual shareholder meeting (normally held in April) next following the
date of the new or additional portfolio management agreement. Information about
Portfolio Manager changes or additions made in advance of shareholder approval
will be announced to the press following Board of Director action and will be
included in the next report to shareholders.
All-Star's current Portfolio Managers are:
Oppenheimer Capital
William Blair & Company, L.L.C.
Mississippi Valley Advisers, Inc.
See Appendix A for information about these Portfolio Managers, including
the employees primarily responsible for the day-to-day management of the portion
of All-Star's portfolio allocated to each.
INVESTMENT OBJECTIVE AND POLICIES
All-Star's investment objective is to seek long-term capital appreciation.
It seeks its investment objective through investment primarily in a diversified
portfolio of equity securities. See "History of the Fund" above for its prior
investment objectives.
All-Star invests primarily (at least 65% under normal market conditions) in
equity securities, including securities convertible into or exchangeable for
equity securities.
Although under normal market conditions All-Star will remain substantially
fully invested in equity securities, up to 35% of the value of All-Star's total
assets may be invested in obligations of the U.S. Government and its agencies
and instrumentalities ("U.S. Government Securities"), repurchase agreements with
respect to U.S. Government Securities, and, to an extent not greater than 10% of
the market value of the Fund's total assets, money market mutual funds that
invest primarily in U.S. Government Securities. All-Star may temporarily invest
without limit in U.S. Government Securities, repurchase agreements and money
market mutual funds for defensive purposes when LAMCO or the Portfolio Managers
deem that market conditions are such that a more conservative approach to
investment is desirable.
All-Star's investment objective of long-term capital appreciation, as well
as certain of its investment restrictions referred to under Reducing Risk below
and in the Statement of Additional Information, are fundamental and may not be
changed without a majority vote of All-Star's outstanding shares. Under the 1940
Act, a "majority vote" means the vote of the lesser of (a) 67% of the shares of
All-Star represented at a meeting at which the holders of more than 50% of the
outstanding shares of All-Star are present or represented, or (b) more than 50%
of the outstanding shares of All-Star. Non-fundamental policies may be changed
by vote of the Board of Directors.
Repurchase Agreements
All-Star may enter into repurchase agreements with banks or broker-dealer
firms whereby such institutions sell U.S. Government Securities to All-Star and
agree at the time of sale to repurchase them at a mutually agreed upon time and
price. The resale price is greater than the purchase price, reflecting an
agreed-upon interest rate which is effective during the time between the
purchase and resale and is not related to the stated interest rate on the
purchased securities. All-Star requires the seller of the securities to maintain
on deposit with All-Star's custodian bank securities in an amount at all times
equal to or in excess of the value of the repurchase agreement. In the event
that the seller of the securities defaults on its repurchase obligation or
becomes bankrupt, All-Star could receive less than the repurchase price on the
sale of the securities to another party or could be subjected to delays in
selling the securities. Under normal market conditions, not more than 35% of
All-Star's total assets will be invested in Short-Term Money Market Instruments,
including repurchase agreements, and not more than 10% of All-Star's net assets
will be invested in repurchase agreements maturing in more than seven days.
Foreign Securities
Although to date it has not done so, All-Star may invest up to 25% percent
of its net assets in foreign securities, provided that it will not purchase the
securities of a foreign issuer if as a result more than 50% of the Fund's
investments in equity securities would consist of securities of foreign issuers.
Investment in foreign securities involves considerations and risks not typically
associated with investing in securities of domestic companies. See "Investment
Objectives and Policies - Foreign Securities" in the Statement of Additional
Information.
Risks
As an investment company that holds common stocks, All-Star's portfolio is
subject to the possibility that common stock prices will decline over short or
even extended periods. All-Star may remain substantially fully invested during
periods when stock prices generally rise and also during periods when they
generally decline. Risks are inherent in investment in equities, and Fund
shareholders should be able to tolerate significant fluctuations in the value of
their investment in All-Star. All-Star is intended to be a long-term investment
vehicle and is not designed to provide investors with a means of speculating on
short-term stock market movements. Investors should not consider the Fund a
complete investment program.
In addition to the foregoing investment risks, shares of closed-end
investment companies such as All-Star are not redeemable and frequently trade at
a discount from their net asset value. This risk is separate and distinct from
the risk that All-Star's net asset value may decline. See "Share Price Data" for
information about the market price and net asset value of All-Star's shares
since January 1, 1996.
Reducing Investment Risk
As a matter of fundamental policy, All-Star will not (i), as to 75% of its
total assets, purchase the securities (other than U.S. Government Securities) of
any one issuer if after such purchase more than 5% of its assets would be
invested in the securities of that issuer, (ii) purchase more than 10% of the
outstanding voting securities of such issuer, (iii) invest 25% more of its total
assets in the securities of issuers in the same industry, or (iv) invest more
than 10% of its total assets in securities that at the time of purchase have
legal or contractual restrictions on resale (including unregistered securities
that are eligible for resale to qualified institutional buyers pursuant to Rule
144A under the Securities Act of 1933). See "Investment Restrictions" in the
Statement of Additional Information.
MANAGEMENT OF ALL-STAR
The management of All-Star's business and affairs is the responsibility of
its Board of Directors.
All-Star has a Fund Management Agreement with Liberty Asset Management
Company (the "Fund Manager") pursuant to which LAMCO provides the Portfolio
Manager selection, evaluation, monitoring and rebalancing services ("investment
management services") described above under "The Multi-Manager Concept." No
single individual at LAMCO is responsible for LAMCO's decisions with respect to
the retention or replacement of the Portfolio Managers.
LAMCO is also responsible for the provision of administrative services to
All-Star, including the provision of office space, shareholder and broker-dealer
communications, compensation of all officers of All-Star who are officers or
employees of LAMCO or its affiliates, and the supervision of transfer agency,
dividend disbursing, custodial and other services provided to others. Certain of
LAMCO's administrative responsibilities have been delegated to Colonial.
LAMCO has its offices at 600 Atlantic Avenue, 23rd Floor, Boston,
Massachusetts 02210. LAMCO was organized in 1985 and is an indirect wholly-owned
subsidiary of Liberty Financial Companies, Inc., which in turn is an indirect
majority-owned subsidiary of Liberty Mutual Insurance Company, an international
multi-line insurance carrier.
Under All-Star's Portfolio Management Agreements with each of its Portfolio
Managers and LAMCO, each Portfolio Manager has discretionary authority
(including for the selection of brokers and dealers for the execution of
All-Star's portfolio transactions) with respect to the portion of All-Star's
assets allocated to it by LAMCO from time to time, subject to All-Star's
investment objective and policies, to the supervision and control of the
Directors, and to instructions from LAMCO. As described under "The Multi-Manager
Concept", LAMCO from time to time reallocates All-Star's portfolio assets in
order to maintain an approximately equal allocation of them among the Portfolio
Managers and to preserve an approximately equal weighting among the different
investment styles practiced by the Portfolio Managers. Although the Portfolio
Managers' activities are subject to general oversight by LAMCO and the Directors
and officers of All-Star, neither LAMCO nor such Directors and officers evaluate
the investment merits of the Portfolio Managers' selections of individual
securities.
Although All-Star does not permit a Portfolio Manager to act or have a
broker-dealer affiliate act as broker for Fund portfolio transactions initiated
by it, All-Star's Portfolio Managers are permitted to place portfolio
transactions initiated by them with another Portfolio Manager or its
broker-dealer affiliate for execution on an agency basis, provided the
commission does not exceed the usual and customary broker's commission being
paid to other brokers for comparable transactions and is otherwise in accordance
with All-Star's procedures adopted under Rule 17e-1 under the 1940 Act.
Under All-Star's Fund Management Agreement with LAMCO and its Portfolio
Management Agreements with the Portfolio Managers, All-Star pays LAMCO a fund
management fee and an administrative fee, and LAMCO in turn pays the fees of the
Portfolio Managers from the fund management fees paid to it. The shareholders of
the Fund at their 1998 annual meeting approved a new Fund Management Agreement
with LAMCO and new Portfolio Management Agreements with the Portfolio Managers
increasing, effective August 1, 1998, the fees payable to LAMCO and the
Portfolio Managers on net assets in excess of $125 million. The annual fees that
are paid under the current agreements and that will be paid under the new
agreements effective August 1, 1998 are shown below (fees are payable quarterly
based on the indicated percentage of the Fund's average weekly net assets during
the prior quarter).
Fund Management
Fee Paid to LAMCO
and Portfolio Manage-
Average weekly ment Fee Paid to Port- Administrative
Net Asset Value folio Managers Fee Paid to LAMCO Total Fees
- ----------------- ------------------- ----------------- ------------
Fee schedule under
current Agreements
First $125 million 0.75% (0.40% to 0.25% 1.00%
Portfolio Managers)
Next $125 million 0.5625% (0.30% to 0.1875% 0.75%
Portfolio Managers)
Over $250 million 0.375% (0.20% to 0.125% 0.50%
Portfolio Managers)
Fee schedule under
new Agreements
effective August 1, 1998
First $300 million 0.80% (0.40% to 0.20% 1.00%
Portfolio Managers)
Over $300 million 0.72% (0.36% to 0.18% 0.90%
Portfolio Managers)
Colonial provides pricing and bookkeeping services to All-Star for an
annual fee of $21,000 plus an annual asset-based fee of 0.0233% of net assets in
excess of $50 million, with breakpoint reductions at $500 million and $1
billion.
Custodian and Transfer Agent
The Chase Manhattan Bank, 4 Chase MetroTech Center, Brooklyn, New York
11245, is All-Star's custodian. State Street Bank and Trust Company, 225
Franklin Street, Boston, Massachusetts 02110, is the transfer and dividend
disbursing agent and registrar for All-Star.
Expenses of the Fund
LAMCO provides the Portfolio Manager selection, evaluation, monitoring and
rebalancing services and assumes responsibility for the administrative services
described above, pays the compensation of and furnishes office space for the
officers of All-Star who are affiliated with LAMCO, and pays the management fees
of the Portfolio Managers. All-Star pays all its expenses, other than those
expressly assumed by LAMCO. The expenses payable by All-Star include: management
and administrative fees payable to LAMCO; pricing and bookkeeping fees payable
to Colonial; fees and expenses of independent auditors; fees for transfer agent
and registrar, dividend disbursing, custodian and portfolio recordkeeping
services; expenses in connection with the Automatic Dividend Reinvestment and
Cash Purchase Plan; expenses in connection with obtaining quotations for
calculating the value of All-Star's net assets; taxes (if any) and the
preparation of All-Star's tax returns; brokerage fees and commissions; interest;
costs of director and shareholder meetings (including expenses of printing and
mailing proxy material therefor); expenses of printing and mailing reports to
shareholders; fees for filing reports with regulatory bodies and the maintenance
of All-Star's existence; membership dues for investment company industry trade
associations; legal fees; stock exchange listing fees and expenses; fees to
federal and state authorities for the registration of shares; fees and expenses
of Directors who are not directors, officers, employees or stockholders of LAMCO
or its affiliates; insurance and fidelity bond premiums; and any extraordinary
expenses of a non-recurring nature.
Year 2000
Many existing computer programs and systems, including some used by LAMCO,
by All-Star's custodian bank, transfer and dividend dispersing agent, and by
Colonial in connection with its pricing and bookkeeping services to the Fund,
have been written in such a way that, without modification, they will not
properly process and calculate date-related information and data from and after
January 1, 2000. All-Star has been advised that LAMCO, Colonial, and the Fund's
custodian bank and transfer agent (neither of which are affiliated with LAMCO)
are in the process of making any required modifications of their programs and
systems and that they believe that they will complete such modifications on a
timely basis and will be able properly to process such information and data for
All-Star after that date. The cost of these modifications will not affect
All-Star. However, failure by LAMCO or any of All-Star's other service providers
to successfully complete the required modifications in a timely manner could
have a materially adverse impact on All-Star.
DESCRIPTION OF SHARES
General
All-Star's capitalization consists of 20,000,000 shares of Common Stock,
par value $.10 per share, of which 13,344,760 shares were outstanding on the
date of this Prospectus. The currently outstanding shares are, and the Shares
offered hereby when issued and paid for pursuant to the terms of the Offer will
be, fully paid and non-assessable. Shareholders would be entitled to share pro
rata in the net assets of All-Star available for distribution to shareholders
upon liquidation of All-Star.
Shareholders are entitled to one vote for each share held. All-Star's
shares do not have cumulative voting rights, which means that the holders of
more than 50% of the shares of All-Star voting for the election of Directors can
elect all the Directors standing for election, and, in such event, the holders
of the remaining shares will not be able to elect any of such Directors.
Repurchase of Shares
All-Star is a closed-end investment company and as such its shareholders do
not have the right to cause All-Star to redeem their All-Star shares. All-Star,
however, is authorized to repurchase its shares on the open market when its
shares are trading at a discount from their net asset value. All-Star has no
current plans to repurchase its shares.
Anti-takeover Provisions of the
Articles of Incorporation
and By-Laws; Super-majority Vote
Requirement to Conversion to
Open-End Status
All-Star's Articles of Incorporation and By-laws contain provisions
(commonly referred to as "anti-takeover" provisions) which are intended to have
the effect of limiting the ability of other entities or persons to acquire
control of All-Star, to cause it to engage in certain transactions, or to modify
its structure. The Board of Directors is divided into three classes, each having
a term of three years. On the date of the annual meeting of shareholders in each
year the term of one class expires. This provision could delay for up to three
years the replacement of a majority of the Board of Directors. In addition, the
affirmative vote or consent of the holders of 66 2/3% of the shares of the Fund
will be required generally to authorize any of the following transactions:
(i) All-Star's merger or consolidation with or into any other corporation;
(ii) the issuance of any securities of All-Star to any person or entity
for cash;
(iii) the sale, lease or exchange of all or any substantial part of
All-Star's assets to any entity or person (except assets having an aggregate
fair market value of less than $1,000,000); or
(iv) the sale, lease or exchange to All-Star, in exchange for securities
of All-Star, of any assets of any entity or person (except assets having an
aggregate fair market value of less than $1,000,000);
if such corporation, person or entity is directly, or indirectly through
affiliates, the beneficial owner of five percent or more of the outstanding
shares of All-Star. Such 66 2/3% vote or consent will not be required with
respect to the transactions listed in (i) through (iv) above where the Board of
Directors under certain conditions approves the transaction. However, depending
upon the transaction, a different shareholder vote may nevertheless be required
under Maryland law.
The affirmative vote or consent of the holders of 66 2/3rds percent of the
outstanding shares of Common Stock will be required to authorize All-Star's
conversion from a closed-end to an open-end investment company, regardless of
whether approved or recommended by the Fund's Board of Directors. As part of the
settlement of litigation relating to the Fund's 1995 annual meeting, LAMCO
agreed to recommend to All-Star's Board of Directors that the Fund's proxy
statement for the annual meeting of shareholders to be held in the year 2000
include a proposal to change the Fund from a closed-end investment company to an
open-end mutual fund. Neither LAMCO nor the Fund's Directors are obligated,
however, to recommend that proposal to shareholders. The super-majority vote
referred to above would be required for such conversion regardless of whether or
not recommended by the Board of Directors.
The foregoing super-majority vote requirements may not be amended except
with a similar super-majority vote of the shareholders.
These provisions will make more difficult a change in All-Star's structure
or management or consummation of the foregoing transactions without the
Directors' approval. The anti-takeover provisions could have the effect of
depriving shareholders of an opportunity to sell their shares at a premium over
prevailing market prices by discouraging a third party from seeking to obtain
control of All-Star in a tender offer or similar transaction. However, the Board
of Directors continues to believe that the anti-takeover provisions are in the
best interests of All-Star and its shareholders because they provide the
advantage of potentially requiring persons seeking control of All-Star to
negotiate with its management regarding the price to be paid and facilitating
the continuity of All-Star's management and its continuing application of the
multi-manager concept.
The Board also believes that the super majority vote requirement for
conversion to an open-end investment company is in the best interest of All-Star
and its shareholders because it will allow All-Star to continue to benefit from
the advantages of its closed-end structure until such time that, based on
relevant factors including the then current relationship of the market price of
All-Star's shares to their net asset value, the Board determines to recommend to
shareholders All-Star's conversion to an open-end investment company.
DISTRIBUTIONS; AUTOMATIC DIVIDEND
REINVESTMENT AND CASH PURCHASE PLAN
10% Distribution Policy
All-Star's current distribution policy, announced in February, 1997, is to
pay distributions on its Common Stock totaling approximately 10% of its net
asset value per year, payable in four quarterly distributions of 2.5% of
All-Star's net asset value at the close of the New York Stock Exchange on the
Friday prior to each quarterly declaration date. These fixed distributions are
not related to the Fund's net investment income or net realized capital gains or
losses. If, for any calendar year, the total distributions required by the 10%
pay-out policy exceed All-Star's net investment income and net realized capital
gains, the excess will generally be treated as a tax-free return of capital to
the extent of the shareholder's basis in his or her shares, and thereafter, to
the extent of any excess over such basis, as capital gain. The amount treated as
a tax-free return of capital will reduce the shareholder's adjusted basis in his
or her shares, thereby increasing his or her potential gain or reducing his or
her potential loss on the sale of his or her shares.
To the extent All-Star's 10% payout policy results in distributions in
excess of its net investment income and net realized capital gains, such
distributions will decrease All-Star's total assets and increase its expense
ratio to a greater extent than would have been the case without the 10% payout
policy. In addition, in order to make distributions under the 10% payout policy,
All-Star may have to sell portfolio securities at times when the particular
investment styles of its Portfolio Managers would dictate not doing so.
All-Star may, in the discretion of the Board of Directors, retain for
reinvestment, and not distribute, net long-term capital gains in excess of net
short-term capital losses for any year to the extent that its net investment
income, net short-term realized gains and net long-term realized gains exceed
the minimum amount required to be distributed for such year under the 10%
pay-out policy, although All-Star reserves the right to distribute such excess.
Any such retained capital gains would be taxed to shareholders as long-term
capital gains and shareholders would be able to claim their proportionate share
of the federal income taxes paid by All-Star with respect to such retained gains
as a credit against their own federal income tax liabilities, and would be
entitled to increase the adjusted tax basis of their All-Star shares by the
difference between their pro rata share of the undistributed capital gains and
their tax credit.
All-Star intends to pay all or a substantial portion of its distributions
in each year to shareholders in the form of newly issued shares (plus cash in
lieu of any fractional shares that would otherwise be issuable), to all
shareholders except those non-participants in All-Star's Automatic Dividend
Reinvestment and Cash Purchase Plan who specifically elect to receive their
distribution in cash by completing and signing an option card, a copy of which
will be enclosed with the notice of each such distribution payable in shares,
and returning it on a timely basis to State Street Bank and Trust Company,
All-Star's transfer agent and dividend paying agent.
The number of shares to be issued in payment of distributions declared
payable in shares will be determined by dividing the total dollar amount of the
distribution payable to the shareholder by the lower of the market value or the
net asset value per share on the valuation date for the distribution (but not at
a discount of more than 5% from the market value). Market value per share for
this purpose will be the last sales price on the New York Stock Exchange on the
valuation date or, if there are no sales on that day, the mean between the
closing bid and closing asked quotations for that date.
Automatic Dividend Reinvestment and Cash Purchase Plan
Each shareholder of the Fund will automatically be a participant in
All-Star's Automatic Dividend Reinvestment and Cash Purchase Plan, as amended
(the "Plan"),unless the shareholder specifically elects otherwise by writing or
calling the Plan Agent, State Street Bank & Trust Company, P.O. Box 8200,
Boston, Massachusetts 02266-8200 (1-800-542-3863). Shareholders whose shares are
held in the name of a brokerage firm, bank or other nominee must notify their
brokerage firm, bank or nominee if they do not want to participate in the Plan.
Shareholders who want to receive their distributions in cash should elect not to
participate in the Plan and, as noted above, will be required to elect to
receive in cash each distribution declared payable in shares or cash.
Under the Plan, distributions declared payable in shares or cash at the
option of shareholders are paid to participants in the Plan entirely in newly
issued full and fractional shares valued at the lower of market value or net
asset value per share on the valuation date for the distribution (but not a
discount of more than 5% from market price). Distributions declared payable in
cash will be reinvested for the accounts of participants in the Plan in
additional shares purchased by the Plan Agent on the open market, on the New
York Stock Exchange or elsewhere at prevailing market prices (if the Fund's
shares are trading at a discount to their net asset value), or in newly issued
shares (if the Fund's shares are trading at or above their net asset value).
Dividends and distributions are subject to taxation, whether received in cash or
in shares (see "Tax Status" below).
Participants in the Plan have the option of making additional cash payments
in any amount from $100 to $3000 on a monthly basis for investment in All-Star
shares purchased on the open market. These voluntary cash payments will be
invested on or about the 15th day of each calendar month, and voluntary payments
should be sent so as to be received by the Plan Agent no later than ten business
days before the next investment date. Barring suspension of trading, voluntary
cash payments will be invested within 45 days of receipt. A participant may
withdraw a voluntary cash payment by written notice received by the Plan Agent
at least 48 hours before such payment is to be invested.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in the account, including information
needed by shareholders for tax records. Shares in the account of each Plan
participant will be held by the Plan Agent in non-certificated form in the name
of the participant, and each shareholder's proxy will include those shares
purchased or received pursuant to the Plan.
In the case of shareholders such as banks, brokers or nominees which hold
shares for others who are the beneficial owners, the Plan Agent will administer
the Plan on the basis of the number of shares certified from time to time by the
record shareholder as representing the total amount registered in the record
shareholder's name and held for the account of beneficial owners who participant
in the Plan.
There is no charge to participants for reinvesting distributions payable in
either shares or cash. The Plan Agent's fees for handling the reinvestment of
such distributions are paid by All-Star. There are no brokerage charges with
respect to shares issued directly by All-Star as a result of distributions
payable in shares or in cash. However, each participant bears a pro rata share
of brokerage commissions incurred with respect to the Plan Agent's open market
purchases in connection with the reinvestment of distributions declared payable
in cash.
With respect to purchases from voluntary cash payments, the Plan Agent will
charge $1.25 for each such purchase for a participant, plus a pro rata share of
the brokerage commissions. Brokerage charges for purchasing small amounts of
shares for individual accounts through the Plan are expected to be less than the
usual brokerage charges for such transactions, as the Plan Agent will be
purchasing shares for all participants in blocks and prorating the lower
commission thus attainable.
The automatic reinvestment of dividends and distributions will not relieve
plan participants of any income tax which may be payable on such dividends or
distributions. See "Tax Status" below.
A participant may elect to withdraw from the Plan at any time by notifying
the Plan Agent in writing. There will be no penalty for withdrawal from the Plan
and shareholders who have previously withdrawn from the Plan may rejoin it at
any time. A withdrawal will only be effective for subsequent distributions with
a record date at least ten days after the notice of withdrawal is received by
the Plan Agent.
Experience under the Plan may indicate that changes are desirable.
Accordingly, All-Star reserves the right to amend or terminate the Plan.
TAX STATUS
The following discussion summarizes the general rules applicable to
taxation of All-Star and its shareholders. Shareholders are urged to consult
with their own tax advisors concerning the tax consequences of their continued
investment in All-Star and of their receipt and exercise of the Rights.
All-Star intends to elect and to qualify each year for federal income tax
treatment as a regulated investment company under the Internal Revenue Code of
1986, as amended (the "Code"), and to make distributions to the shareholders in
accordance with the timing requirements set out in the Code. As a result, it is
expected that All-Star will be relieved of federal income taxes on its net
investment income and net realized capital gains to the extent distributed to
shareholders. (See "Distributions; Automatic Dividend Reinvestment and Cash
Purchase Plan--10% Distribution Policy" regarding the authority of All-Star to
retain and pay taxes on, and not distribute, net realized capital gains). If
All-Star should fail to qualify as a regulated investment company in any year,
it would incur a federal corporate income tax upon its taxable income and its
distributions would generally be taxable as ordinary dividend income to the
shareholders.
Dividends and distributions by All-Star from net investment income and net
realized capital gains are subject to taxation whether received by shareholders
in cash or in shares of All-Star. Shareholders receiving a dividend or
distribution in the form of newly issued shares will be treated for federal
income tax purposes as receiving a distribution in an amount equal to the fair
market value, determined as of the distribution date, of the shares received.
Such shareholders will have a cost basis in each newly issued share equal to the
fair market value of a share of All-Star on the distribution date. Distributions
are generally taken into account for tax purposes when paid, except that
distributions paid in January but declared in the last quarter of the preceding
calendar year must be taken into account as if paid on December 31 of such
preceding calendar year. A portion of All-Star's net investment income paid to
corporate shareholders which is attributable to dividends from domestic
corporations may be eligible for the 70% dividends received deduction available
to corporations. Availability of the deduction for particular corporate
shareholders is subject to certain limitations, and deducted amounts may be
subject to the alternative minimum tax or result in certain basis adjustments.
Distributions from net realized capital gains are taxable as long-term capital
gains, regardless of how long the shareholder has held the shares, and are not
eligible for the dividends received deduction for corporations. Net long-term
capital gains are taxable, in the case of noncorporate shareholders, at a
maximum rate of 20% if attributable to the disposition of assets the holding
period for which was more than eighteen months or 28% if attributable to the
disposition of assets the holding period for which was more than twelve months
but less than or equal to eighteen months.
If a shareholder holds shares of All-Star for six months or less, any loss
on the sale of the shares will be treated as a long-term capital loss to the
extent of any amount reportable by the shareholder as long-term capital gain
with respect to such shares. Any loss realized upon a disposition of shares may
also be disallowed under rules relating to wash sales.
At the time of an investor's purchase of All-Star shares, All-Star's net
asset value may reflect undistributed net investment income or capital gains or
net unrealized appreciation of securities held by All-Star. As of May __, 1998,
All-Star had net unrealized appreciation of its investments of $_______ million.
A subsequent distribution to the investor of such amounts, although it may in
effect constitute a return of his or her investment, would be taxable to the
shareholder as ordinary income or capital gain as described above. For federal
income tax purposes, All-Star is permitted to carry forward its net realized
capital losses, if any, and may realize net capital gains up to the amount of
such losses without being required to pay taxes on or distribute such gains. As
of December 31, 1997, All-Star had no capital loss carryovers.
Under the Interest and Dividend Tax Compliance Act of 1983, certain
non-corporate All-Star shareholders may be subject to 31% withholding on
reportable dividends and capital gains distributions ("back-up withholding").
Generally, shareholders subject to back-up withholding will be those for whom a
taxpayer identification number and certain required certificates are not on file
with All-Star or who, to All-Star's knowledge, have furnished an incorrect
number. In addition, All-Star is required to withhold from distributions to any
shareholder who does not certify to All-Star that such shareholder is not
subject to back-up withholding due to notification by the Internal Revenue
Service that such taxholder has under-reported interest or dividend income.
Distributions from net investment income paid to shareholders who are
non-resident aliens or entities may be subject to 30% United States withholding
tax (but not, in such event, subject to backup withholding) under the existing
provisions of the Code applicable to foreign individuals and entities unless a
reduced rate of withholding or a withholding exemption is provided under an
applicable treaty. Non-U.S. shareholders are urged to consult their own tax
advisors concerning the applicability of the United States withholding tax.
Information concerning the federal income tax status of All-Star dividends
and distributions is mailed to shareholders annually.
Distributions and the transactions referred to in the preceding paragraphs
may be subject to state and local income taxes, and the treatment thereof may
differ from the federal income tax consequences discussed herein. Shareholders
are advised to consult with their tax advisors concerning the application of
state and local taxes.
See "The Offer-Federal Income Tax Consequences" for a discussion of the
federal income tax consequences of the receipt and exercise of Rights.
GENERAL
All-Star was incorporated as a Maryland corporation on December 16, 1985
and commenced investment operations on March 14, 1986.
LAMCO is an indirect wholly-owned subsidiary of Liberty Financial
Companies, Inc., itself an indirect majority-owned subsidiary of Liberty Mutual
Insurance
Company.
Under the Fund Management Agreement between All-Star and LAMCO, All-Star
may use the name "Liberty All-Star" only so long as the Fund Management
Agreement remains in effect. If the Fund Management Agreement is no longer in
effect, All-Star is obligated (to the extent it lawfully can) to cease using
such name or any other name indicating that it is advised by or otherwise
connected with LAMCO. In addition, LAMCO may grant the non-exclusive right to
use the name "Liberty All-Star" to any other entity, including any other
investment company of which LAMCO or any of its affiliates is the investment
adviser or distributor.
STATEMENT OF ADDITIONAL INFORMATION
Additional information about the Fund is contained in the Statement of
Additional Information, a copy of which is available at no charge by calling the
Information Agent at the telephone number indicated on the cover of the
Prospectus. Set forth below is the Table of Contents of the Statement of
Additional Information.
Table of Contents
Page
Investment Objective and Policies
Investment Restrictions
Investment Advisory and Other Services
Directors and Officers of All-Star
Portfolio Security Transactions
Principal Shareholders
Financial Statements
APPENDIX A
INFORMATION ABOUT THE PORTFOLIO MANAGERS
WILLIAM BLAIR & COMPANY, L.L.C.
222 West Adams Street
Chicago, IL 60606
William Blair & Company, L.L.C. ("Blair") was appointed as All-Star
Portfolio Manager effective March 1, 1997. Blair is a registered investment
adviser and a securities broker-dealer. It is the successor to a general
partnership over 140 former general partners of which are members or principal
no one of whom owns more than 25% interest.
As of December 31, 1997, Blair had approximately $9 billion in assets under
management. John Jostrand, Principal of Blair, has managed the portion of
All-Star's portfolio allocated to Blair since its appointment as an All-Star
Portfolio Manager. Mr. Jostrand has been associated with Blair since 1993.
MISSISSIPPI VALLEY ADVISORS INC.
One Mercantile Center
Seventh & Washington Streets
St. Louis, Missouri 63101
Mississippi Valley Advisors Inc. ("MVA") was appointed an All-Star Portfolio
Manager effective January 2, 1996. MVA is a wholly-owned subsidiary of
Mercantile Bank, N.A., which in turn is a wholly-owned subsidiary of Mercantile
Bancorporation Inc., a New York Stock Exchange listed bank holding company.
As of December 31, 1997, MVA had approximately $9.4 billion in assets under
management. Robert J. Anthony, Senior Associate of MVA, has managed the portion
of All-Star's portfolio assigned to MVA since its appointment as an All-Star
Portfolio Manager. Mr. Anthony has been associated with MVA since 1987.
OPPENHEIMER CAPITAL
Oppenheimer Tower
World Financial Center
New York, NY 10281
Oppenheimer Capital ("Opp Cap") has been a Portfolio Manager of All-Star
since June 1, 1994. Opp Cap is a Delaware general partnership formed on July 1,
1987 as the successor to a corporation formed in 1975. Opp Cap is owned and
controlled by PIMCO Advisors L.P. ("PIMCO"), an investment adviser with
approximately $199 billion in assets under management. One of PIMCO's general
partners is PIMCO Partners, G.P., a general partnership of which the managing
general partner is a limited liability company whose members are the Managing
Directors of Pacific Investment Management Company, and the other general
partner of which is a subsidiary of Pacific Mutual Life Insurance Company.
Approximately 42% of the limited partnership interests in PIMCO are owned by
PIMCO Advisors Holdings, L.P., units of which are publicly traded.
Mr.John Lindenthal, Managing Director of Opp Cap., has managed the portion
of All-Star's portfolio allocated to Opp Cap since its appointment as an
All-Star Portfolio Manager. Mr. Lindenthal has been associated with Opp Cap for
over 18 years.
[Back Cover]
No person has been authorized to give any information or to make any
representation not contained in this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized.
This Prospectus does not constitute an offering of any securities other than the
registered securities to which it relates or an offer to any person in any State
or jurisdiction of the United States or any country where such offer would be
unlawful.
[Logo] LIBERTY
All-Star
GROWTH FUND, INC.
TABLE OF CONTENTS
Expenses........................
Prospectus Summary..............
Financial Highlights............
Share Price Data................
Investment Performance..........
The Offer.......................
Use of Proceeds.................
History of the Fund.............
The Multi-Manager Concept....... A Multi-Managed Investment
Investment Objective Company
and Policies..................
Management of All-Star.......... 1,334,476 Shares of Common Stock
Description of Shares........... Issuable upon Exercise of
Distributions; Automatic Rights to Subscribe
Dividend Reinvestment and for such Shares
Cash Purchase Plan............
Tax Status General.............. PROSPECTUS
Statement of Additional May , 1998
Information...................
Appendix A--Information about
the Portfolio Managers..........
LIBERTY ALL-STAR GROWTH FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
May __, 1998
This Statement of Additional Information is not a prospectus, and should be
read in conjunction with the Prospectus of Liberty All-Star Growth Fund, Inc.
("All-Star") dated May __, 1998. A copy of the Prospectus may be obtained by
calling or writing Liberty Asset Management Company at 600 Atlantic Avenue,
Boston, Massachusetts 02110 (1-800-542-3863).
TABLE OF CONTENTS PAGE
- ----------------- ----
Investment Objectives and Policies...........
Investment Restrictions......................
Investment Advisory and Other Services.......
Directors and Officers of All-Star............
Portfolio Security Transactions..............
Principal Shareholders.......................
Financial Statements.........................
INVESTMENT OBJECTIVES AND POLICIES
A description of the investment objective of Liberty Al-Star Growth Fund,
Inc. ("All-Star" or the "Fund") and the types of securities in which it may
invest is contained in the Prospectus under "Investment Objectives and
Policies."
Foreign Securities
- ------------------
All-Star may invest up to 25 percent of its net assets in securities of
foreign issuers, provided that the Fund will not purchase the securities of a
foreign issuer, if, as a result of the purchase, more than 50% of its equity
investment would consist of securities of foreign issuers. All-Star's investment
in foreign securities involves considerations not typically associated with
investing in securities of domestic companies. Investing in securities of
foreign issuers and the attendant holding of foreign currencies, for example,
could cause the Fund to be affected favorably or unfavorably by changes in
currency rates and exchange control regulations. In addition, less information
may be available about foreign companies that about domestic companies and
foreign companies may not be subject to reporting or accounting standards and
requirements comparable to those applicable to domestic companies. Foreign
securities and their markets may not be as liquid as domestic securities and
their markets. Securities of some foreign companies may involve greater market
risk than securities of domestic companies and foreign brokerage commissions and
custody fees are generally higher than those in the United States. Investment in
foreign securities may also be subject to local economic or political risks,
including instability of some foreign governments, the possibility of currency
blockage or the imposition of withholding taxes on dividend or interest payments
and the potential for expropriation of the assets of the companies issuing the
securities.
Short sales against the box
- ---------------------------
All-Star may, to an extent not greater than 5% of its net assets, effect
short sales of securities "against the box" (i.e., short sales of securities
where the Fund holds or has the right to obtain at no additional cost securities
identical to those sold short.)
INVESTMENT RESTRICTIONS
The following investment restrictions have been adopted for All-Star as
fundamental policies and may be changed only by a majority vote (as defined
under "Investment Objective and Policies" in the Prospectus) of All-Star's
outstanding shares. Non-fundamental policies may be changed by the Board of
Directors without shareholder approval.
All-Star may not:
(1) With respect to 75 percent of its total assets, invest in securities of
any one issuer if immediately after and as a result of such investment more than
five percent of the total assets of the Fund, taken at market value, would be
invested in the securities of such issuer. This restriction does not apply to
investments in U.S. Government Securities.
(2) Purchase more than 10 percent of the outstanding voting securities, or
any class of securities, of any one issuer.
(3) Invested 25 percent or more of its total assets, taken at market value
at the time of each investment, in the securities of issuers in any particular
industry. This restriction does not apply to investments in U.S.
Government Securities.
(4) Purchase securities of other investment companies, except in connection
with a merger, consolidation, acquisition or reorganization, if more than 10
percent of the market value of the Fund's total assets would be invested in
securities of other investment companies, more than five percent of the market
value of the Fund's total assets would be invested in the securities of any one
investment company or the Fund would own more than three percent of any other
investment company's securities.
(5) Purchase or sell commodities or real estate; provided that All-Star may
invest in securities secured by real estate or interests therein or issued by
companies which invest in real estate or interests therein.
(6) Purchase any securities on margin or make short sales of securities,
except that All-Star may obtain such short-term credit as may be necessary for
the clearance of purchases and sales of portfolio securities.
(7) Make loans of money, except by the purchase of debt obligations in
which the Trust may invest consistent with its investment objective and
policies. Although there is no present intention of doing so in the foreseeable
future, All-Star reserves the authority to make loans of its portfolio
securities in an aggregate amount not exceeding 20 percent of its total assets.
Any such loans will only be made upon approval of, and subject to any conditions
imposed by, All-Star's Board of Directors.
(8) Borrow money, except that All-Star may borrow from banks and other
financial institutions on an unsecured basis to finance the repurchase of its
shares. All-Star also may borrow money on a secured basis from banks as a
temporary measure for extraordinary or emergency purposes. Such temporary
borrowings may not exceed five percent of the value of the Fund's total assets
at the time the loan is made. All-Star may pledge up to 10 percent of the lesser
of the cost or value of its total assets to secure temporary borrowings.
All-Star will not borrow for investment purposes. Immediately after any
borrowing, All-Star will maintain asset coverage of not less than 300 percent
with respect to all borrowings. While the Fund's borrowings exceed five percent
of its total assets, All-Star will make no further purchases of securities,
although this limitation will not apply to share repurchase transactions.
(9) Issue senior securities, as defined in the Investment Company Act of
1940 (the "Act"), or mortgage, pledge, hypothecate or in any manner transfer, as
security for indebtedness, any securities owned or held by All-Star except as
may be necessary in connection with borrowings mentioned in (8) above, and then
such mortgaging, pledging or hypothecating may not exceed 10 percent of the
Fund's total assets, taken at the lesser of cost or market value.
(10) Underwrite securities of other issuers except insofar as All-Star may
be deemed an underwriter under the Securities Act of 1933, as amended, in
selling portfolio securities.
(11) Invest more than 10 percent of All-Star's total assets in securities
that at the time of purchase have legal or contractual restrictions on resale
(including unregistered securities that are eligible for resale pursuant to Rule
144A under the Securities Act of 1933).
Except for the 300% limitation referred to in Investment Restriction No. 8
above, if a percentage restriction on investment or utilization of assets as set
forth above is adhered to at the time an investment is made, a later change in
percentage resulting from a change in the market values of All-Star's assets
will not be considered a violation of the restriction.
INVESTMENT ADVISORY AND OTHER SERVICES
As stated under "Management of All-Star" in the Prospectus, Liberty Asset
Management Company ("LAMCO") performs the investment management services and is
responsible for the administrative services described therein. LAMCO, through
Liberty Financial Companies, Inc. ("Liberty Financial"), is an indirect majority
owned subsidiary of Liberty Mutual Insurance Company, Boston, Massachusetts. As
indicated under "Directors and Officers of All-Star" below, one of All-Star's
Directors and all of its officers are officers of LAMCO, Colonial Management
Associates, Inc., Liberty Financial or other affiliates of liberty Financial.
Reference is made to Appendix A of the Prospectus for the names of the
controlling persons of All-Star's current Portfolio Managers and the names of
the individuals at each Portfolio Manager primarily responsible for the
management of the portion of All-Star's portfolio assigned to it. None of such
Portfolio Managers has any affiliation with LAMCO or (except as Portfolio
Manager) with All-Star.
As described under "Management of All-Star" in the Prospectus, All-Star
pays LAMCO a fund management fee for its investment management services (from
which LAMCO pays the Portfolio Managers' fee), and an administrative fee for its
administrative services. As shown under "Management of All-Star", effective
August 1, 1998 these fees will increase on net assets in excess of $125 million.
For the years ended December 31, 1996 and 1997 the total fund management
and administrative fees paid to LAMCO were $__________ and $__________,
respectively, of which an aggregate of $______________ and $____________,
respectively, was paid to the Portfolio Managers. For the year ended December
31, 1995 the Fund Manager received an administrative fee of $_________, and a
fund management fee of $_________________ representing its fee for its
investment management of the approximately 20% of the net assets of All-Star
under its supervision from January 1, 1995 through December 5, 1995 and 100% of
such assets under its supervision for the balance of 1995. The Fund Manager paid
$________ of such investment management fees to the Fund's then Portfolio
Managers. All-Star's original investment manager, Growth Stock Outlook, Inc.,
received investment management fees of $_________ for its investment management
of approximately 80% of All-Star's net assets from January 1 through December 5,
1995. See "History of the Fund" in the Prospectus.
All-Star's current Fund Management Agreement and Portfolio Management
Agreements will continue in effect until July 31, 1998, whereupon the new
agreements at the increased fees will take effect. The new agreements will
continue in effect until July 31, 1999 and will continue in effect thereafter so
long as such continuance is specifically approved annually by (a) the Board of
Directors or (b) the majority vote of All-Star's outstanding shares (as defined
under "Investment Objective and Policies" in the Prospectus), provided that, in
either event, the continuance is also approved by a majority of the Directors
who are not "interested persons" (as defined in the 1940 Act) of All-Star, LAMCO
or the Portfolio Managers by a vote cast in person at a meeting called for the
purpose of voting on such approval. The Fund Management Agreement may be
terminated on 60 days written notice by either party, and the Portfolio
Management Agreements may be terminated on 30 days' notice by any party, and any
such agreements will terminate automatically if assigned.
Custodian and Pricing and Bookkeeping Agent
The Chase Manhattan Bank (the "Bank"), 4 Chase MetroTech Center, Brooklyn,
NY 11245, is the custodian of the portfolio securities and cash of All-Star. As
such, the Bank holds All-Star's portfolio securities and cash in separate
accounts on All-Star's behalf and receives and delivers portfolio securities and
cash in connection with portfolio transactions initiated by All-Star's Portfolio
Managers, collects income due on its portfolio securities and disburses funds in
connection with the payment of distributions and expenses.
Colonial Management Associates, Inc. ("Colonial"), an
affiliate of LAMCO, performs pricing and bookkeeping
services for All-Star (see "Management of All-Star" in
the Prospectus). For the years ended December 31, 1996
and 1997, All-Star paid pricing and bookkeeping fees to
Colonial Management Associates, Inc. of $___________ and
$_____________, respectively.
Independent Auditors
KPMG Peat Marwick LLP, 99 High Street, Boston, Massachusetts 02110, are the
independent auditors of All-Star. KPMG Peat Marwick LLP audits and reports on
All-Star's annual financial statements, reviews certain of its regulatory
reports and its Federal income tax returns, and performs such other accounting,
tax and advisory services as All-Star may engage it to do.
DIRECTORS AND OFFICERS OF ALL-STAR
The following is a list of All-Star's Directors and officers, together with
information about their present positions with All-Star and their principal
occupations during the past five years. The Director who is an "interested
person" of All-Star, as defined by the 1940 Act, is indicated with an asterisk.
Position
with Principal Occupation During
Name and Address All-Star Past Five Years
- ---------------- --------- ------------------------------
Robert J. Birnbaum Director Retired (since January,
313 Bedford Road 1994); Special Counsel,
Ridgewood, NJ Dechert, Price & Rhoads
07450 (September, 1988 to
December, 1993); President
and Chief Operating Officer,
New York Stock Exchange,
Inc. (May, 1985 to June,
1988).
James E. Grinnell Director Private investor (since
22 Harbor Avenue November, 1988); President
Marblehead, MA and Chief Executive Officer,
01945 Distribution Management
Systems, Inc. (1983 to May
1986); Senior Vice
President-Operations, The
Rockport Company, importer
and distributor of shoes
(May, 1986 to November,
1988).
Harold W. Cogger* Director Executive Vice President and
Liberty Financial and Director, Liberty Financial
Companies, Inc. Chairman Companies, Inc. (since
600 Atlantic March, 1995); Director
Avenue (since October, 1981) and
Boston, MA 02210 Chairman of the Board (since
March, 1996), The Colonial Group, Inc.; Executive
Vice President (October, 1989 to July, 1993),
Colonial Management Associates, Inc.; President
(since March 1996), Stein Roe & Farnham
Incorporated.
Richard W. Lowry Director Private investor (since
10701 Charleston August, 1987); Chairman and
Drive Chief Executive Officer,
Vero Beach, FL U.S. Plywood Corporation,
32963 manufacturer and distributor
of wood products (August,
1985 to August, 1987).
John J. Neuhauser Director Dean, Boston College School
140 Commonwealth of Management (since
Ave September 1977). Director
Chestnut Hill, of Hyde Athletic Industries,
MA 02167 Inc. (athletic footwear), a
public company.
Richard R. President President of LAMCO (since
Christensen and Chief January, 1995); President of
Liberty Asset Executive Liberty Investment Services,
Management Officer Inc. (April, 1987 to March,
Company 1995).
600 Atlantic
Avenue
Boston, MA 02210
William R. Vice Senior Vice President and
Parmentier President Chief Investment Officer of
Liberty Asset - Chief LAMCO (since May, 1995);
Management Investment Consultant (October, 1994 to
Company Officer May, 1995); President, GQ
600 Atlantic Asset Management, Inc.
Avenue (July, 1993 to October,
Boston, MA 02210 1994); Assistant Treasurer,
Grumman Corporation
(December, 1974 to July,
1993).
Christopher S. Vice Vice President-Investments
Carabell President of LAMCO (since March,
Liberty Asset 1996); Associate Director,
Management U.S. Equity Research of
Company Rogers Casey & Associates,
600 Atlantic investment consultants
Avenue (January, 1995 to February,
Boston, MA 02210 1996); Director of
Investments, Boy Scouts of
America (June, 1990 to
January, 1995).
Timothy J. Jacoby Treasurer Senior Vice President, Fund
Colonial Administration, Colonial
Management Management Associates, Inc.
Associates, (since September, 1996);
Inc. Senior Vice President,
One Financial Fidelity Accounting and
Center Custody Services (September,
Boston, MA 02111 1993 to September, 1996);
Assistant Treasurer,
Fidelity Group of Funds
(August, 1990 to September,
1993).
J. Kevin Controller Vice President, Fund
Connaughton Administration Treasury
Colonial Group of Colonial Management
Management Associates, Inc. (since
Associates, February, 1998); Senior Tax
Inc. Manager, Coopers & Lybrand
One Financial (April, 1996 to February,
Center 1998); Vice President of
Boston, MA 02111 Financial Administration
(April, 1995 to April, 1996), Director of
Compliance (March, 1994 to April, 1995), First
Data Investor Services Group; Vice President of
Tax (January, 1994 to March, 1994), Assistant
Vice President of Tax (March, 1992 to January,
1994), The Boston Company.
John L. Davenport Secretary Vice President and Associate
Liberty Financial General Counsel of Liberty
Companies, Financial Companies, Inc.
Inc. and predecessor (since
600 Atlantic January, 1984).
Avenue
Boston, MA 02210
- ------
* Interested Director
Messrs. Birnbaum, Grinnell, Neuhauser and Lowry comprise the Audit
Committee of the Board of Directors.
All-Star's Board of Directors is divided into three classes, each of which
has a term of three years expiring with the annual meeting of shareholders in
the third year of the term. All-Star holds annual meetings of shareholders to
vote on, among other things, the election or re-election of the Directors whose
terms are expiring with that meeting. The term or office of Mr. Birnbaum will
expire upon the final adjournment of the 1999 annual meeting; the term of office
of Messrs. Neuhauser and Grinnell will expire upon final adjournment of the
annual meeting for the year 2000; and the term of office of Messrs. Cogger and
Lowry will expire upon final adjournment of the annual meeting for the year
2001. Messrs. Birnbaum, Grinnell, Neuhauser and Lowry are also Directors of
Colonial Trusts I through VII, the umbrella trusts for an aggregate of 39
open-end funds managed by Colonial, an affiliate of LAMCO, five closed-end funds
managed by Colonial, and LFC Utilities Trust, an open-end investment company
managed by Stein Roe & Farnham Incorporated, another affiliate of LAMCO. Messrs.
Birnbaum, Cogger, Grinnell, Neuhauser and Lowry are also directors of Liberty
All-Star Equity Fund, another closed-end multi-managed fund managed by LAMCO.
LAMCO or its affiliates pay the compensation of all the officers of
All-Star, including the Director who is affiliated with LAMCO. All-Star
currently pays the independent Directors an annual retainer of $5,000, plus
$1,200 per meeting attended, with a minimum of $11,000 per annum if less than
five meetings are held and all meetings are attended, plus out-of-pocket
expenses relating to attendance at meetings. For 1997, All-Star paid the
independent Directors an aggregate of $33,000 in fees and $1,952 in expenses.
PORTFOLIO SECURITY TRANSACTIONS
Each of All-Star's Portfolio Managers has discretion to select brokers and
dealers to execute portfolio transactions initiated by the Portfolio Manager for
the portion of All-Star's portfolio assets allocated to it, and to select the
markets in which such transactions are to be executed. The Portfolio Management
Agreements with All-Star provide, in substance, that, except as provided in the
following paragraph, in executing portfolio transactions and selecting brokers
or dealers, the primary responsibility of the Portfolio Manager is to seek to
obtain best net price and execution for All-Star. It is expected that securities
will ordinarily be purchased in the primary markets, and that, in assessing the
best net price and execution available to All-Star, the Portfolio Manager will
consider all factors it deems relevant, including the breadth of the market in
the security, the price of the security, the financial condition and execution
capability of the broker or dealer and the reasonableness of the commission, if
any, for the specific transaction and on a continuing basis. Recognizing these
factors, All-Star may pay a brokerage commission in excess of that which another
broker or dealer may have charged for effecting the same transaction.
The Portfolio Management Agreements also provide that LAMCO has the right
to request that transactions giving rise to brokerage commissions, in amounts to
be agreed upon from time to time between LAMCO and the Portfolio Manager, be
executed by brokers and dealers (to be agreed upon from time to time between
LAMCO and the Portfolio Manager) which provide, directly or through third
parties, research products and services to LAMCO or to All-Star. The commissions
paid on such transactions may exceed the amount of commissions another broker
would have charged for effecting that transaction. Research products and
services made available to LAMCO through brokers and dealers executing
transactions for All-Star involving brokerage commissions include performance,
portfolio characteristics, investment style and other qualitative and
quantitative data relating to investment managers in general and the Portfolio
Managers in particular; data relating to the historic performance of categories
of securities associated with particular investment styles; mutual fund
portfolio, performance and fee and expense data; data relating to portfolio
manager changes by pension plan fiduciaries; quotation equipment; and related
computer hardware and software, all of which are used by LAMCO in connection
with its selection and monitoring of portfolio managers (including the Portfolio
Managers) for All-Star and other multi-managed clients of LAMCO, the assembly of
a mix of investment styles appropriate to the investment objectives of All-Star
or such other clients, and the determination of overall portfolio strategies.
LAMCO from time to time reaches understandings with each of the Portfolio
Managers as to the amount of the All-Star portfolio transactions initiated by
such Portfolio Manager that are to be directed to brokers and dealers which
provide or make available research products and services to LAMCO and the
commissions to be charged to All-Star in connection therewith. These amounts may
differ among the Portfolio Managers based on the nature of the markets for the
types of securities managed by them and other factors.
These research products and services are used by LAMCO in connection with
its management of All-Star, Liberty All-Star Equity Fund, Liberty All-Star
Equity Fund, Variable Series, and other multi-managed clients of LAMCO,
regardless of the source of the brokerage commissions. In instances where LAMCO
receives from broker-dealers products or services which are used both for
research purposes and for administrative or other non-research purposes, LAMCO
makes a good faith effort to determine the relative proportions of such products
or services which may be considered as investment research, based primarily on
anticipated usage, and pays for the costs attributable to the non-research usage
in cash.
The Portfolio Managers are authorized to cause All-Star to pay a commission
to a broker or dealer who provides research products and services to the
Portfolio Manager for executing a portfolio transaction which is in excess of
the amount of commission another broker or dealer would have charged for
effecting that transaction. The Portfolio Managers must determine in good faith,
however, that such commission was reasonable in relation to the value of the
research products and services provided to them, viewed in terms of that
particular transaction or in terms of all the client accounts (including
All-Star) over which the Portfolio Manager exercises investment discretion. It
is possible that certain of the services received by a Portfolio Manager
attributable to a particular transaction will primarily benefit one or more
other accounts for which investment discretion is exercised by the Portfolio
Manager.
During 1995, 1996 and 1997, All-Star paid total brokerage commissions of
$__________ and $__________, and $_______ respectively. Approximately $________
$__________ and $___________, respectively, of those commissions on transactions
aggregating $___________, $________________ and $____________, respectively,
were paid to brokerage firms which provided or made available to All-Star's
Portfolio Managers or to LAMCO research products and services as described
above.
Although All-Star does not permit a Portfolio Manager to act or have an
affiliate act as broker for Fund portfolio transactions initiated by it, the
Portfolio Managers are permitted to place Fund portfolio transactions initiated
by them with another Portfolio Manager or its broker-dealer affiliate for
execution on an agency basis, provided the commission does not exceed the usual
and customary broker's commission being paid to other brokers for comparable
transactions and is otherwise in compliance with Rule 17e-1 under the Investment
Company Act of 1940. During 1996 aggregate commissions of $600, representing
less than one percent of the total commissions paid by All-Star, were paid to
Oppenheimer & Co., Inc., then a broker-dealer affiliate of Oppenheimer Capital,
a Portfolio Manager of the Fund, in connection with the execution of portfolio
transactions for the Fund initiated by another Portfolio Manager. During 1997 no
Fund portfolio transactions were placed with any Portfolio Manager or its
broker-dealer affiliate.
PRINCIPAL SHAREHOLDERS
To the knowledge at All-Star, no shareholder on May , 1998 owned
beneficially 5% or more of the outstanding shares of All-Star.
As of May , 1998, all officers and Directors of All-Star as a group owned
less than 1% of All-Star's outstanding shares.
FINANCIAL STATEMENTS
LIBERTY ALL*STAR GROWTH FUND
................................................................................
Schedule of Investments
December 31, 1997
<TABLE>
<CAPTION>
COMMON STOCKS (98.9%) SHARES MARKET VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
AEROSPACE (2.0%)
Boeing Co. 39,000 $ 1,908,563
Lockheed Martin Corp. 15,000 1,477,500
-----------
3,386,063
-----------
AUTO, TIRES & ACCESSORIES (1.1%)
Discount Auto Parts, Inc. (a) 18,000 344,250
LucasVarity PLC ADR (a) 45,000 1,569,375
-----------
1,913,625
===========
BANKS (6.3%)
Associated Banc-Corp 13,961 769,600
Bank United Corp., Class A 15,600 763,425
CCB Financial Corp. 6,300 677,250
Charter One Financial, Inc. 10,750 678,594
Citicorp 20,000 2,528,750
Crestar Financial Corp. 14,000 798,000
State Street Corp. 31,500 1,832,906
TCF Financial Corp. 24,000 814,500
Wells Fargo & Co. 5,000 1,697,188
10,560,213
BUSINESS SERVICES (12.5%)
Acxiom Corp. (a) 58,200 $1,120,350
American Management Systems (a) 36,100 699,438
Automatic Data Processing, Inc. (a) 46,400 2,847,800
Cintas Corp. 16,700 651,300
Cognizant Corp. (a) 27,100 1,207,644
Cognos, Inc. (a) 47,600 1,094,800
Concord EFS, Inc. (a) 27,700 689,038
Cotelligent Group, Inc. (a) 30,000 573,750
First Data Corp. 55,070 1,610,797
Gartner Group, Inc., Class A (a) 39,600 1,475,100
Intelliquest Information Group (a) 34,500 439,875
National Data Corp. 32,900 1,188,512
Network Associates, Inc. (a) 21,837 1,150,536
Rental Service Corp. (a) 18,000 445,500
Reuters Holdings PLCADR 17,200 1,139,500
Robert Half International, Inc. 18,450 738,000
</TABLE>
See Notes to Schedule of Investments.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
...............................................................................
Schedule of Investments
<TABLE>
<CAPTION>
COMMON STOCKS (CONT.) SHARES MARKET VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
BUSINESS SERVICES (CONT.)
Shared Medical Systems, Inc. 23,500 $ 1,551,000
SPSS, Inc. (a) 28,500 548,625
Sungard Data Systems, Inc. (a) 45,200 1,401,200
SystemSoft Corp. (a) 49,903 324,369
-----------
20,897,134
-----------
CHEMICALS (5.1%)
Cytec Industries, Inc. (a) 15,000 704,063
Hanna (M.A.) Co. 44,693 1,128,498
Hercules, Inc. 25,000 1,254,688
International Specialty Products, Inc. (a) 30,000 448,125
Minerals Technologies, Inc. 54,790 2,489,521
Monsanto Co. 30,000 1,260,000
OM Group, Inc. 14,400 529,200
RPM, Inc. 42,500 653,438
-----------
8,467,533
-----------
COMPUTER & BUSINESS EQUIPMENT (4.9%)
Black Box Corp. (a) 18,800 665,050
CFM Technologies (a) 27,546 423,520
Computer Associates International, Inc. 15,000 793,125
DT Industries, Inc. 14,000 479,500
Intel Corp. 37,000 2,599,250
Komag, Inc. (a) 34,332 510,689
Microsoft Corp. (a) 12,000 1,551,000
Zebra Technologies Corp., Class A (a) 37,803 1,124,639
-----------
8,146,773
-----------
CONSUMER PRODUCTS (1.6%)
Blyth Industries, Inc. (a) 26,200 784,363
Cole National Corp., Class A (a) 21,600 646,650
Furniture Brands International, Inc. (a) 23,000 480,125
Samsonite Corp. (a) 24,400 771,650
-----------
2,682,788
-----------
COSMETICS & TOILETRIES (0.4%)
Revlon, Inc. (a) 17,200 607,375
-----------
</TABLE>
See Notes to Schedule of Investments.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
................................................................................
Schedule of Investments
<TABLE>
<CAPTION>
COMMON STOCKS (CONT.) SHARES MARKET VALUE
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
DIVERSIFIED (1.3%)
Ball Corp. 7,000 $ 247,188
General Electric Co. 20,000 1,467,500
Lydall, Inc. (a) 23,000 451,375
-----------
2,166,063
-----------
DRUGS & HEALTH CARE (11.5%)
Allergan, Inc. 26,700 897,787
Amgen, Inc. 9,300 503,362
Apria Healthcare Group, Inc. (a) 45,800 621,162
Bard (C.R.), Inc. 20,000 626,250
Beverly Enterprises, Inc. (a) 47,000 611,000
Biomet, Inc. 45,000 1,147,500
Boston Scientific Corp. (a) 13,000 596,375
Cardinal Health, Inc. 14,300 1,074,287
Covance, Inc. (a) 56,500 1,122,937
DENTSPLY International, Inc. 30,000 915,000
Elan Corp. ADR(a) 21,100 1,080,056
Hanger Orthopedic Group, Inc. (a) 28,000 360,500
HEALTHSOUTH Corp. (a) 63,800 1,770,450
Integrated Health Services, Inc. 24,500 764,093
Medtronic, Inc. 27,500 1,440,312
Millipore Corp. 16,500 559,968
Pfizer, Inc. 24,800 1,849,150
Pharmerica, Inc. (a) 43,189 448,085
R.P. Scherer Corp. (a) 13,600 829,600
Sun Healthcare Group, Inc. (a) 57,600 1,116,000
Omnicare,Inc. 27,500 852,500
-----------
19,186,374
-----------
ELECTRONICS & ELECTRICAL EQUIPMENT (5.1%)
Adaptec, Inc. (a) 30,000 1,113,750
Analog Devices, Inc. (a) 15,333 424,532
Arrow Electronics, Inc. (a) 60,000 1,946,250
Hubbell, Inc., Class B 19,000 941,687
Linear Technology Corp. 16,400 943,000
Molex, Inc. 62,218 1,788,767
SBS Technologies (a) 22,000 596,750
Xilinix, Inc. (a) 21,800 764,362
-----------
8,519,098
-----------
</TABLE>
See Notes to Schedule of Investments.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
...............................................................................
Schedule of Investments
<TABLE>
<CAPTION>
COMMON STOCKS (CONT.) SHARES MARKET VALUE
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
FINANCIAL SERVICES (13.1%)
Aames Financial Corp. 29,000 $ 377,000
Cendant Corp. (a) 41,700 1,433,438
CMACInvestment Corp. 15,000 905,625
Countrywide Credit Industries, Inc. 55,000 2,358,125
Credit Acceptance Corp. (a) 49,700 385,175
Federal Home Loan Mortgage Corp. 93,000 3,900,188
Finova Group, Inc. 17,400 864,562
Household International, Inc. 15,900 2,028,244
Interim Services, Inc. (a) 28,600 732,875
MBNA Corp. 65,200 1,780,775
Money Store, Inc. (The) 30,000 630,000
Morgan Stanley, Dean Witter, Discover & Co. 41,250 2,438,906
Paychex, Inc. 15,000 759,375
Southern Pacific Funding Corp. (a) 37,500 492,187
Travelers Group, Inc. 50,000 2,693,750
-----------
21,780,225
-----------
FOOD, BEVERAGE &RESTAURANTS (3.4%)
Brinker International, Inc. (a) 35,000 560,000
Canandaigua Brands, Inc. Class A (a) 18,716 1,036,399
Diageo PLC ADR 30,000 1,136,250
Dole Food Co. 30,000 1,372,500
Hormel Foods Corp. 26,000 851,500
Performance Food Group Co. (a) 32,378 768,978
-----------
5,725,627
-----------
HOTEL & LEISURE (0.6%)
Carnival Corp., Class A 19,400 1,074,275
-----------
INDUSTRIAL EQUIPMENT (3.3%)
Albany International 29,500 678,500
Barnett, Inc. (a) 19,000 418,000
Caterpillar, Inc. 36,000 1,748,250
Illinois Tool Works, Inc. 25,100 1,509,138
Kulicke & Soffa Industries, Inc. (a) 32,000 596,000
MSC Industrial Direct Co., Inc. (a) 14,000 588,000
-----------
5,537,888
-----------
</TABLE>
See Notes to Schedule of Investments.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
................................................................................
Schedule of Investments
<TABLE>
<CAPTION>
COMMON STOCKS (CONT.) SHARES MARKET VALUE
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
INSURANCE (8.5%)
ACE Limited 25,000 $ 2,404,688
AFLAC, Inc. 35,000 1,789,375
American International Group, Inc. 15,000 1,631,250
EXEL Ltd. 40,000 2,535,000
HCC Insurance Holdings, Inc. 35,500 754,375
PMI Group, Inc. 10,000 723,125
Progressive Corp. 20,000 2,397,500
Transamerica Corp. 18,000 1,917,000
-----------
14,152,313
-----------
METALS & MINING (0.4%)
Freeport-McMoRan Copper & Gold, Inc., Class A 40,000 630,000
-----------
OIL & GAS (2.6%)
Global Industries Ltd. (a) 36,500 620,500
Ocean Energy, Inc. (a) 11,500 567,094
Swift Energy Co. (a) 29,446 620,204
Tidewater, Inc. 9,000 496,125
Triton Energy Corp. (a) 27,000 788,063
Union Texas Petroleum Holdings, Inc. 30,000 624,375
United Meridian Corp. (a) 19,900 559,688
-----------
4,276,049
-----------
PAPER & PLASTIC (1.6%)
Aptar Group, Inc. 9,567 530,969
Caraustar Industries, Inc. 13,000 445,250
Champion International Corp. 25,000 1,131,250
Consolidated Papers, Inc. 9,000 480,375
-----------
2,587,844
PUBLISHING (0.8%)
R.R. Donnelley & Sons Co. 35,000 1,303,750
-----------
RETAIL TRADE (5.8%)
CVS Corp. 20,200 1,294,063
Fastenal Co. (a) 13,100 501,075
Home Depot, Inc. 27,900 1,642,613
Lowe's Companies, Inc. 17,900 853,606
Marks Brothers Jewelers,Inc. (a) 31,000 511,500
May Department Stores Co. 25,000 1,317,188
</TABLE>
See Notes to Schedule of Investments.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
...............................................................................
Schedule of Investments
<TABLE>
<CAPTION>
COMMON STOCKS (CONT.) SHARES MARKET VALUE
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
RETAIL TRADE (CONT.)
Staples, Inc. (a) 51,000 $ 1,421,625
Viking Office Products, Inc. (a) 101,700 2,218,331
-----------
9,760,001
TELECOMMUNICATIONS (4.5%)
Airtouch Communications, Inc. (a) 33,000 1,371,563
Arch Communications Group, Inc. (a) 48,482 248,470
IXCCommunications, Inc. (a) 33,000 1,035,375
Mobile Telecommunication Technologies Corp. (a) 49,946 1,098,812
Nokia Corp. ADR 25,000 1,750,000
Sprint Corp. 35,000 2,045,313
-----------
7,549,533
TRANSPORTATION (2.5%)
AMR Corp. (a) 16,000 2,058,000
Hub Group, Inc., Class A(a) 18,500 550,375
U.S. Freightways Corp. 45,300 1,472,250
-----------
4,080,625
-----------
TOTAL COMMON STOCKS (Cost $122,777,125) 164,991,169
-----------
</TABLE>
See Notes to Schedule of Investments.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
................................................................................
Schedule of Investments
<TABLE>
<CAPTION>
REPURCHASE AGREEMENT (1.7%) PAR VALUE MARKET VALUE
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
ABN AMRO Chicago Corp., dated 12/31/97, 6.60%, to
be repurchased at $2,779,019 on 01/2/98, collaterized
by U.S. Treasury Notes with various maturities to
2016, with a current market value of $2,842,078. $ 2,778,000 $ 2,778,000
------------
TOTAL INVESTMENTS (100.6%) (Cost $125,555,125)(b) 167,769,169
OTHER ASSETS AND LIABILITIES, NET (-0.6%) (1,032,050)
------------
NET ASSETS (100.0%) $166,737,119
============
NET ASSET VALUE PER SHARE (12,937,680 SHARES OUTSTANDING) $ 12.89
============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income producing security.
(b) The cost of investments for federal income tax purposes is $125,751,189.
Gross unrealized appreciation and depreciation of investments at
December 31, 1997, is as follows:
Gross unrealized appreciation $ 47,930,605
Gross unrealized depreciation (5,912,625)
------------
Net unrealized appreciation $ 42,017,980
============
Acronym Name
------- ---------------------------
ADR American Depository Receipt
See Notes to Financial Statements.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
...............................................................................
Statement of Assets and Liabilities
December 31, 1997
ASSETS:
Investments at market value (identified cost $125,555,125) $167,769,169
Cash 710
Receivable for investments sold 1,037,457
Dividends and interest receivable 103,010
------------
TOTAL ASSETS 168,910,346
------------
LIABILITIES:
Payable for investments purchased 78,865
Distributions payable to shareholders 1,590,287
Management fees payable 290,160
Administrative and bookkeeping fees payable 110,716
Accrued other expenses 103,199
------------
TOTAL LIABILITIES 2,173,227
------------
NET ASSETS $166,737,119
============
NET ASSETS REPRESENTED BY:
Paid-in capital (authorized 20,000,000 shares
at $0.10 Par; 12,937,680 shares outstanding) $122,876,305
Accumulated net realized gains on investments
less distributions 1,646,770
Net unrealized appreciation on investments 42,214,044
------------
TOTAL NET ASSETS APPLICABLE
TO OUTSTANDING SHARES
OF BENEFICIAL INTEREST
($12.89 PER SHARE) $166,737,119
============
See Notes to Financial Statements.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
................................................................................
Statement of Operations
Year ended December 31, 1997
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends $ 1,265,415
Interest 293,433
------------
TOTAL INVESTMENT INCOME (NET OF
FOREIGN TAXES WITHHELD AT SOURCE
WHICH AMOUNTED TO $13,348) 1,558,848
EXPENSES:
Management fees $ 1,093,343
Administrative fee 361,802
Bookkeeping fee 53,795
Custodian and transer agent fees 91,567
Proxy and shareholder communication expense 38,756
Printing expense 73,572
Legal and audit fees 53,547
Directors' fees and expense 34,955
Miscellaneous expense 30,208
------------
TOTAL EXPENSE 1,831,545
------------
NET INVESTMENT LOSS (272,697)
REALIZED AND UNREALIZED GAINS ON INVESTMENTS:
Net realized gains on investment transactions:
Proceeds from sales 86,998,115
Cost of investments sold 70,458,759
------------
Net realized gains on investment transactions 16,539,356
Net unrealized appreciation on investments:
Beginning of year 22,346,578
End of year 42,214,044
------------
Change in unrealized appreciation -- net 19,867,466
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 36,134,125
============
</TABLE>
See Notes to Financial Statements.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
...............................................................................
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1997 1996
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income (loss) $ (272,697) 77,663
Net realized gain on investment transactions 16,539,356 7,600,155
Change in unrealized appreciation-net 19,867,466 13,538,818
------------- -------------
Net increase in net assets resulting from operations 36,134,125 21,216,636
------------- -------------
DISTRIBUTIONS DECLARED FROM:
Net investment income (35,334) (42,330)
Net realized gains on investments (15,385,610) (11,523,548)
------------- -------------
Total distributions (15,420,944) (11,565,878)
------------- -------------
CAPITAL TRANSACTIONS:
Increase in net assets from capital share transactions 9,386,884 7,411,472
------------- -------------
Total increase in net assets 30,100,065 17,062,230
NET ASSETS:
Beginning of year 136,637,054 119,574,824
------------- -------------
End of year (including undistributed net investment
income of $0 and $35,334, respectively) $ 166,737,119 $ 136,637,054
============= =============
</TABLE>
See Notes to Financial Statements.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
................................................................................
Financial Highlights
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of year $11.27 $10.55 $9.95 $10.54 $10.28
------- ------ ------ ------ -------
Income from Investment Operations:
Net investment income (loss) (0.02) 0.01 0.31 0.23 0.18
Net realized and unrealized gain (loss)
on investments 2.88 1.86 1.05 (0.24) 0.56
------- ------ ------ ------ -------
Total from Investment Operations 2.86 1.87 1.36 (0.01) 0.74
------- ------ ------ ------ -------
Less Distributions:
Dividends from net investment income -- (0.01) (0.31) (0.23) (0.18)
Distributions from realized capital gains (1.24) (1.01) (0.45) (0.35) (0.30)
------- ------ ------ ------ -------
Total Distributions (1.24) (1.02) (0.76) (0.58) (0.48)
Impact of shares issued in dividend reinvestment (a) -- (0.13) -- -- --
------- ------ ------ ------ -------
Total Distributions and Reinvestments (1.24) (1.15) (0.76) (0.58) (0.48)
------- ------ ------ ------ -------
Net asset value at end of year $12.89 $11.27 $10.55 $9.95 $10.54
======= ====== ====== ====== =======
Per share market value at end of year $11.938 $9.250 $9.375 $8.500 $10.250
======= ====== ====== ====== =======
TOTAL INVESTMENT RETURN FOR SHAREHOLDERS: (b)
Based on net asset value 27.3% 18.3% 13.8% (1.1%) 7.2%
Based on market price 43.6% 9.3% 19.3% (11.6%) 7.2%
RATIOS AND SUPPLEMENTAL DATA:
Net assets at end of year (millions) $167 $137 $120 $113 $125
Ratio of expenses to average net assets 1.20% 1.35% 1.42% 1.51% 1.35%
Ratio of net investment income to average net assets (0.18%) 0.06% 2.87% 2.12% 1.71%
Portfolio turnover rate 57% 51% 82% 50% 47%
Average commission rate (c) $0.0502 $0.0555 -- -- --
</TABLE>
(a) Effect of dividend reinvestment shares at a price below net asset value in
accordance with the 1996 Automatic Dividend Reinvestment and Cash Purchase
Plan.
(b) Calculated assuming all distributions reinvested.
(c) For fiscal years beginning on or after September 1, 1995, a fund is required
to disclose its average commission rate per share for trades on which
commissions are charged.
See Notes to Financial Statements.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
...............................................................................
Notes to Financial Statements
December 31, 1997
NOTE 1. ORGANIZATION AND ACCOUNTING POLICIES
Liberty All-Star Growth Fund, Inc. (the Fund), is registered under the
Investment Company Act of 1940, as amended, as a closed-end, diversified
management investment company and commenced operations on March 14, 1986. The
Fund's investment objective is to seek long-term capital appreciation. The Fund
is managed by Liberty Asset Management Company (the "Manager"). The Manager is a
subsidiary of Liberty Financial Companies, Inc., a publicly traded company of
which Liberty Mutual Insurance Company is the majority shareholder.
The following is a summary of significant accounting policies followed
by the Fund in the preparation of its financial statements. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results, if different,
are expected to be immaterial to the net assets of the Fund.
VALUATION OF INVESTMENTS -- Portfolio securities listed on an exchange
and over-the-counter securities quoted on the NASDAQ system are valued on the
basis of the last sale on the date as of which the valuation is made, or,
lacking any sales, at the mean of the closing bid and asked quotations on that
date. Over-the-counter securities not quoted on the NASDAQ system are valued at
the most recent bid prices on that date. Securities for which reliable
quotations are not readily available are valued at fair value, as determined in
good faith and pursuant to procedures established by the Board of Directors.
Short-term instruments maturing in more than 60 days for which market quotations
are readily available are valued at current market value. Short-term instruments
with remaining maturities of 60 days or less are valued at amortized cost,
unless the Board of Directors determine that this does not represent fair value.
PROVISION FOR FEDERAL INCOME TAX -- The Fund qualifies as a "regulated
investment company." As a result, a federal income tax provision is not required
for amounts distributed to shareholders.
OTHER -- Security transactions are accounted for on the trade date.
Interest income and expenses are recorded on the accrual basis. Dividend income
is recorded on the ex-dividend date.
NOTE 2. FEES PAID TO AFFILIATES
Under the Fund's Management and Portfolio Management Agreements, the
Fund pays the Manager a management fee for its investment management services at
an annual rate of 0.75% of the Fund's average weekly net assets. The Manager
pays each Portfolio Manager a portfolio management fee at an annual rate of
0.40% of the average weekly net assets of the portion of the investment
portfolio managed by it. The Fund also pays the Manager a fee for its
administrative services at an annual rate of 0.25% of the Fund's average weekly
net assets. The annual fund management and administrative fees are reduced to
0.5625% and 0.1875%, respectively, on average weekly net assets in excess of
$125 million up to $250 million and to 0.375% and 0.125%, respectively, on
average weekly net assets in excess of $250 million. The aggregate annual fees
payable by the Manager to the Portfolio Managers are reduced to 0.30% of the
Fund's average weekly net assets in excess of $125 million up to $250 million
and to 0.20% on average weekly net assets in excess of $250 million. Colonial
Management Associates, Inc. (an affiliate of the Manager) provides bookkeeping
and pricing services for $30,000 per year plus 0.0233% of the Fund's average
weekly net assets over $50 million.
NOTE 3. CAPITAL TRANSACTIONS
During the year ended December 31, 1997 and December 31, 1996,
distributions in the amount of $9,386,884 and $7,411,472, respectively, were
paid in newly issued shares valued at market value or net asset value, but not
less than 95% of market value, resulting in the issuance of 818,429 and 780,155
shares, respectively.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
................................................................................
Notes to Financial Statements
NOTE 4. SECURITIES TRANSACTIONS
Realized gains and losses are recorded on the identified cost basis for
both financial reporting and federal income tax purposes. The cost of
investments purchased and the proceeds from investments sold, excluding
short-term debt obligations for the year ended December 31, 1997, were
$84,561,657 and $86,998,115, respectively.
The Fund may enter into repurchase agreements and require the seller of
the instrument to maintain on deposit with the Fund's custodian bank or in the
Federal Reserve Book-Entry System securities in the amount at all times equal to
or in excess of the value of the repurchase agreement, plus accrued interest.
The Fund may experience costs and delays in liquidating the collateral if the
issuer defaults or enters bankruptcy.
NOTE 5. DISTRIBUTIONS TO SHAREHOLDERS
The Fund currently has a policy of paying distributions on its common
shares totaling approximately 10% of its net asset value per year, payable in
four quarterly distributions of 2.5% of the Fund's net asset value at the close
of the New York Stock Exchange on the Friday prior to each quarterly declaration
date.
Distributions to shareholders are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from generally accepted accounting
principles. Reclassifications are made to the Fund's capital accounts to reflect
income and gains available for distribution (or available capital loss
carryovers) under income tax regulations.
<PAGE>
LIBERTY ALL*STAR GROWTH FUND
...............................................................................
Independent Auditors' Report
[LOGO] KPMG Peat Marwick LLP
The Board of Directors and Shareholders
Liberty All-Star Growth Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of Liberty
All-Star Growth Fund, Inc. (the Fund), including the schedule of investments, as
of December 31, 1997, and the related statement of operations for the year then
ended, the statement s of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the years
in the five-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Investment securities held in custody are
confirmed to us by the custodian. As to securities purchased and sold, but not
received or delivered, we request confirmations from brokers and, where replies
are not received, we carry out other appropriate procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Liberty All-Star Growth Fund, Inc. as of December 31, 1997, the results of its
operations for the year then ended, changes in its net assets for each of the
years in the two-year period then ended, and financial highlights for each of
the years in the five-year period then ended, in conformity with generally
accepted accounting principles.
/s/ KPMG Peat Marwick LLP
Boston, Massachusetts
February 13, 1998
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(1) Financial Statements
Included in Part A
------------------
Financial highlights for ten years ended December 31, 1997 (audited)
Financial highlights for three months ended March 31, 1998*
Included in Part B
------------------
Audited
-------
Schedule of Investments, December 31, 1997
Statement of Assets and Liabilities, December 31, 1997
Statement of Operations for the year ended December 31, 1997
Statements of Changes in Net Assets for the years ended December 31,1997
and December 31, 1996
Financial Highlights for five years ended December 31, 1997
Notes to Financial Statements
Independent Auditors' Report
Unaudited*
---------
Schedule of Investments, March 31, 1998 Statement of Assets and
Liabilities, March 31, 1998 Statement of Operations for the three
months ended March 31, 1998
Statements of Changes in Net Assets for the three month periods ended
March 31, 1998 and March 31, 1997
Financial Highlights for three months ended March 31, 1998
Notes to Financial Statements
(2) Exhibits
--------
(a) Articles of Incorporation dated December 16,
1985
(a)(1) Articles of Amendment dated April 27, 1989 (a)(2) Articles
of Amendment dated May 31, 1991 (a)(3) Articles of Amendment
dated November 6, 1995
(b) Restated By-laws, as amended through
April 18, 1996
(c) Not applicable
(d)(1) Specimen certificate for shares of common stock
(d)(2) Form of subscription certificate
(e) Automatic Dividend Reinvestment and Cash
Purchase Plan Brochure, as amended effective
June 30, 1996
(f) Inapplicable
(g)(1) Fund Management Agreement dated November 6,
1995 between Registrant and Liberty Asset
Management Company*
(g)(2) Form of Portfolio Management Agreement among
Registrant, Liberty Asset Management Company
and Portfolio Managers
(h) Inapplicable
(i) Inapplicable
(j)(1) Form of Custody Agreement with The Chase
Manhattan Bank, NA1
(j)(2) Supplement to Custody Agreement
(k)(1) Registrar, Transfer Agency and Service
Agreement with State Street Bank and Trust Company
(2) Pricing and Bookkeeping
Agreement dated January 1, 1996 between
Registrant and Colonial Management
Associates, Inc.
(3) Form of Subscription Rights
Agency Agreement between Registrant and State
Street Bank & Trust Company*
(l) Opinion of counsel*
(m) Inapplicable
(n) Consent of independent auditors*
Item 25. Marketing Arrangements
Not applicable.
Item 26. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses expected to be
incurred in connection with the offering described in this Registration
Statement:
Registration fee..................... $
New York Stock Exchange Listing fee
Printing of Prospectus...............
Mailing..............................
Subscription Agent fees..............
Accounting fees and expense..........
Legal fees and expenses..............
Miscellaneous........................
Total
Item 27. Persons Controlled by or Under Common Control of Registrant
Not applicable
Item 28. Number of Holders of Securities
Title of Class No. of Record Holders
-------------- ---------------------
(as of April 28, 1998)
Shares of Common Stock,
par value $.10 per share 3,823
Item 29. Indemnification
Reference is made to Article X of Registrant's Articles of Incorporation
(Item 24, Exhibit (a)(1)) and to Article V of Registrant's Restated By-laws
(Item 24, Exhibit (b)) for provisions relating to indemnification
and exculpation.
The Registrant, Liberty Asset Management Company and their respective
trustees, directors and officers are insured by a directors and officers/errors
and omissions liability policy.
Item 30. Business and Other Connections of Investment Adviser
Liberty Asset Management Company, Registrant's Fund Manager, was organized
in August 1985 and is primarily engaged in the corporate administration of and
the provision of its multi-management services (see "The Multi-Manager Concept"
in the Prospectus) for Registrant and Liberty All-Star Equity Fund, another
multi-managed closed-end investment company. It also provides its
multi-management services to Liberty All-Star Equity Fund, Variable Series, a
multi-managed open-end investment company which serves as an investment vehicle
for variable annuity contracts issued by affiliated insurance companies.
Kenneth R. Leibler, Chairman of the Board, Lindsay Cook, Senior Vice
President and a Director, C. Allen Merritt, Jr., Vice President, Treasurer and a
Director, John A. Benning, Vice President and Secretary, and Michael E.
Santilli, Controller, of Liberty Asset Management Company, are each officers
(and in the case of Mr. Leibler, a Director) of and devote substantially all
their time to the business of Liberty Asset Management Company's parent, Liberty
Financial Companies, Inc. The remaining officers and directors of Liberty Asset
Management Company devote all or substantially all of their time to its affairs.
The business and other connections of the officers and directors of the
Portfolio Managers of Registrant are listed in Schedules A and D of their
respective ADV Forms as currently on file with the Commission, which information
is hereby incorporated herein by reference. The file numbers of such ADV Forms
are as follows:
Oppenheimer Capital 801-10708
William Blair & Co LLC 801-00688
Mississippi Valley Advisors Inc. 801-28897
Item 31. Location of Accounts and Records
The records of Registrant specified in items (1) through (3) and (5)
through (8) of Rule 31a-1(b) under the Investment Company Act of 1940 are
maintained by Registrant's pricing and bookkeeping agent, Colonial Management
Associates, Inc., One Financial Center, Boston, MA 02111.
The records of Registrant specified in items (4) and (11) of Rule 31a-1(b)
are maintained by Registrant's Fund Manager, Liberty Asset Management Company,
Federal Reserve Plaza, Boston, MA 02210.
The records of Registrant specified in items (9) and (10) of Rule 31a-1(b)
with respect to portfolio transactions initiated by a Portfolio Manager of
Registrant are maintained by that Portfolio Manager (see Appendix A to Part I).
Item 32. Management Services
Inapplicable
Item 33 Undertakings
(1) Registrant undertakes to suspend the offering of the shares covered
hereby until it amends its prospectus contained herein if (1) subsequent to the
effective date of this Registration Statement, its net asset value per share
declines more than 10 percent from its net asset value per share as of the
effective date of this Registration Statement, or (2) its net asset value
increases to an amount greater than its net proceeds as stated in the prospectus
contained herein.
(2) Not applicable
(3) Not applicable
(4) The Registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement;
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in this Registration Statement or any
material change to such information in the Registration Statement;"
(b) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(5) The Registrant hereby undertakes that:
a. for the purpose of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant under Rule 497(h)
under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective; and
b. for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of the securities at that
time shall be deemed to be the initial bona fide offering thereof.
(6) The Registrant hereby undertakes to send by first class mail or other
means designed to ensure equally prompt delivery, within two business days of
receipt of a written or oral request, any Statement of Additional Information.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement on Form N-2 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boston and the Commonwealth of Massachusetts on
April 29, 1998.
LIBERTY ALL-STAR GROWTH FUND, INC.
By:\s\ Richard R. Christensen
------------------------------------
Richard R. Christensen, President
Pursuant to the requirements of the Securities Act 1993, this Registration
Statement on Form N-2 has been signed below by the following persons in the
capacities and on the dates indicated. By so signing, each of the undersigned in
his capacity as a Director, or Officer, or both, as the case may be, of the
Registrant, does also hereby appoint John A. Benning, Richard R. Christensen,
John L. Davenport, and Jeremiah J. Bresnahan, Jr. and each of them, severally,
or if more than one acts, a majority of them, his true and lawful attorney and
agent to execute in his name, place and stead (in such capacity) any and all
amendments to this Registration Statement and any post-effective amendments
thereto and all instruments necessary or desirable in connection therewith, to
attest to the seal of the Registrant thereon and to file the same with the
Securities and Exchange Commission. Each of said attorneys and agents shall have
power to act with or without the others and have full power and authority to do
and perform in the name and on behalf of each of the undersigned, in any and all
capacities, every act whatsoever necessary or advisable to be done in the
premises as fully and to all intents and purposes as each of the undersigned
might or could in person, hereby ratifying and approving the act of said
attorneys and agents and each of them.
(Signature) (Title and Capacity) (Date)
- ---------- ------------------ ----
/s/ Richard R. Christensen President (Chief Executive
- -------------------------- Officer) April 29, 1998
Richard R. Christensen
/s/ Timothy J. Jacoby Treasurer (Principal Financial April 29, 1998
- ------------------------- Officer)
Timothy J. Jacoby
/s/ J. Kevin Connaughton Controller (Principal Accounting April 29, 1998
- -------------------------- Officer)
J. Kevin Connaughton
/s/ Robert J. Birnbaum Director April 29, 1998
- --------------------------
Robert J. Birnbaum
/s/ Harold W. Cogger Director April 29, 1998
- -------------------------
Harold W. Cogger
/s/ James E. Grinnell Director April 29, 1998
- ------------------------
James E. Grinnell
/s/ Richard W. Lowry Director April 29, 1998
- ------------------------
Richard W. Lowry
/s/ John J. Neuhauser Director April 29, 1998
- ------------------------
John J. Neuhauser
ARTICLES OF INCORPORATION
OF
GROWTH STOCK OUTLOOK TRUST, INC.
- -----------------------------------------------------------
ARTICLE I
THE UNDERSIGNED, John W. Scheflen, whose post office address is 1800
Mercantile Bank & Trust Building, 2 Hopkins Plaza, Baltimore, Maryland 21201,
being at least eighteen years of age does hereby act as an incorporator and form
a corporation under and by virtue of the Maryland General Corporation Law.
ARTICLE II
NAME
----
The name of the Corporation is GROWTH STOCK OUTLOOK TRUST, INC.
ARTICLE III
PURPOSES AND POWERS
-------------------
The Corporation is formed for the following purposes:
(1) To conduct and carry on the business of an investment company.
(2) To hold, invest and reinvest its assets in securities and other
investments or to hold part or all of its assets in cash.
(3) To issue and sell shares of its capital stock in such amounts and on
such terms and conditions and for such purposes and for such amount or kind of
consideration as may now or hereafter be permitted by law.
(4) To do any and all additional acts and to exercise any and all
additional powers or rights as may be necessary, incidental, appropriate or
desirable for the accomplishment of all or any of the foregoing purposes.
The Corporation shall be authorized to exercise and enjoy all of the
powers, rights and privileges granted to, or conferred upon, corporations by the
Maryland General Corporation Law now or hereafter in force, and the enumeration
of the foregoing shall not be deemed to exclude any powers, rights or privileges
so granted or conferred.
ARTICLE IV
PRINCIPAL OFFICE AND RESIDENT AGENT
-----------------------------------
The post office address of the principal office of the Corporation in the
State of Maryland is 4405 East-West Highway, Bethesda, Maryland 20814. The name
of the resident agent of the Corporation in the State of Maryland is Charles
Allmon, a citizen and resident of the State of Maryland. The post office address
of the resident agent is 4405 East-West Highway, Bethesda, Maryland 20814.
ARTICLE V
0
CAPITAL STOCK
(1) The total number of shares of capital stock that the Corporation shall
have authority to issue is twenty million (20,000,000) shares, of the par value
of ten cents ($.10) per share and of the aggregate par value of two million
dollars ($2,000,000), all of which twenty million (20,000,000) shares are
designated Common Stock.
(2) The Corporation may issue fractional shares. Any fractional share shall
carry proportionately the rights of a whole share including, without limitation,
the right to vote and the right to receive dividends. A fractional shares shall
not, however, have the right to receive a certificate evidencing it.
(3) All persons who shall acquire stock in the Corporation shall acquire
the same subject to the provisions of these Articles of Incorporation and the
By-Laws of the Corporation.
(4) No holder of stock of the Corporation by virtue of being such a holder
shall have any right to purchase or subscribe for any shares of the
Corporation's capital stock or any other security that the Corporation may issue
or sell (whether out of the number of shares authorized by these Articles of
Incorporation or out of any shares of the Corporation's capital stock that the
Corporation may acquire) other than a right that the Board of Directors in its
discretion may determine to grant.
(5) The Board of Directors shall have authority by resolution to classify
and reclassify any authorized but unissued shares of capital stock from time to
time by setting or changing in any one or more respects the preferences,
conversion or other rights, voting powers, restrictions, limitations as to
dividends, qualifications or terms or conditions or redemption of the capital
stock.
(6) Notwithstanding any provision of law requiring any action to be taken
or authorized by the affirmative vote of the holders of a designated proportion
of the votes of all classes or of any class of stock of the Corporation, such
action shall be effective and valid if taken or authorized by the affirmative
vote of a majority of the total number of votes entitled to be cast thereon,
except as otherwise provided in these Articles of Incorporation.
ARTICLE VI
BOARD OF DIRECTORS
(1) The number of directors constituting the Board of Directors shall be no
less than three (3) nor more than nine (9). This number may be changed pursuant
to the By-Laws of the Corporation, but shall at no time be less than the minimum
number required under the Maryland General Corporation Law. The names of the
directors who shall act until the first annual meeting of shareholders or until
their successors are duly chosen and qualified are:
Charles Allmon;
Thomas McIntyre; and
Ingrid Hendershot.
(2) In furtherance, and not in limitation, of the powers conferred by the
laws of the State of Maryland, the Board of Directors is expressly authorized:
(i) To make, alter or repeal the By-Laws of the Corporation, except
where such power is reserved by the By-Laws to the stockholders, and except as
otherwise required by the Investment Company Act of 1940.
(ii) From time to time to determine whether and to what extent and at
what times and places and under what conditions and regulations the books and
accounts of the Corporation, or any of them other than the stock ledger, shall
be open to the inspection of the stockholders. No stockholder shall have any
right to inspect any account or book or document of the Corporation, except as
conferred by law or authorized by resolution of the Board of Directors or of the
stockholders.
(iii) Without the assent or vote of the stockholders, to authorize the
issuance from time to time of shares of the stock of any class of the
Corporation, whether now or hereafter authorized, and securities convertible
into shares of stock of the Corporation of any class or classes, whether now or
hereafter authorized, for such consideration as the Board of Directors may deem
advisable.
(iv) Without the assent or vote of the stockholders, to authorize and
issue obligations of the Corporation, secured and unsecured, as the Board of
Directors may determine, and to authorize and cause to be executed mortgages and
liens upon the real or personal property of the Corporation.
(v) Notwithstanding anything in these Articles of Incorporation to the
contrary, to establish in its absolute discretion the basis or method for
determining the value of the assets belonging to any class, the value of the
liabilities belonging to any class and the net asset value of each share of any
class of the Corporation's stock.
(vi) To determine in accordance with generally accepted accounting
principles and practices what constitutes net profits, earnings, surplus or net
assets in excess of capital, and to determine what accounting periods shall be
used by the Corporation for any purpose; to set apart out of any funds of the
Corporation reserves for such purposes as it shall determine and to abolish the
same; to declare and pay any dividends and distributions in cash, securities or
other property from surplus or any funds legally available therefor, at such
intervals as it shall determine; to declare dividends or distributions by means
of a formula or other method of determination, at meetings held less frequently
than the frequency of the effectiveness of such declarations; to establish
payment dates for dividends or any other distributions on any basis, including
dates occurring less frequently than the effectiveness of declarations thereof;
and to provide for the payment of declared dividends on a date earlier or later
than the specified payment date in the case of stockholders of the Corporation
redeeming their entire ownership of shares of any class of the Corporation.
(vii) In addition to the powers and authorities granted herein and by
statute expressly conferred upon it, the Board of Directors is authorized to
exercise all powers and do all acts that may be exercised or done by the
Corporation pursuant to the provisions of the laws of the State of Maryland,
these Articles of Incorporation and the By-Laws of the Corporation.
(3) Any determination made in good faith, and in accordance with accepted
accounting practices, if applicable, by or pursuant to the direction of the
Board of Directors, with respect to the amount of assets, obligations or
liabilities of the Corporation, as to the amount of net income of the
Corporation from dividends and interest for any period or amounts at any time
legally available for the payment of dividends, as to the amount of any reserves
or charges set up and the propriety thereof, as to the time of or purpose for
creating reserves or as to the use, alteration or cancellation of any reserves
or charges (whether or not any obligation or liability for which the reserves or
charges have been created has been paid or discharged or is then or thereafter
required to be paid or discharged), as to the value of any security owned by the
Corporation, the determination of the net asset value of shares of any class of
the Corporation's capital stock, or as to any other matters relating to the
issuance, sale, redemption or other acquisition or disposition of securities or
shares of capital stock of the Corporation, and any reasonable determination
made in good faith by the Board of Directors whether any transaction constitutes
a purchase of securities on "margin," a sale of securities "short," or an
underwriting of the sale of, or a participation in any underwriting or selling
group in connection with the public distribution of, any securities, shall be
final and conclusive, and shall be binding upon the Corporation and all holders
of its capital stock, past, present and future, and shares of the capital stock
of the Corporation are issued and sold on the condition and understanding,
evidenced by the purchase of shares of capital stock or acceptance of share
certificates, that any and all such determinations shall be binding as
aforesaid. No provision of these Articles of Incorporation of the Corporation
shall be effective to (i) require a waiver of compliance with any provision of
the Securities Act of 1933, as amended, or the Investment Company Act of 1940,
or of any valid rule, regulation or order of the Securities and Exchange
Commission under those Acts or (ii) protect or purport to protect any director
or officer of the Corporation against any liability to the Corporation or its
security holders to which he would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
ARTICLE VII
CHANGE OF STRUCTURE
Notwithstanding any other provision of these Articles of Incorporation, the
conversion of the Corporation from a "closed-end company" to an "open-end
company," as those terms are defined in Sections 5(a)(2) and 5(a)(1),
respectively, of the Investment Company Act of 1940 as in effect on December 1,
1985, shall require the affirmative vote or consent of the holders of sixty-six
and two-thirds percent (66 2/3%) of the outstanding shares of each class of
stock of the Corporation normally entitled to vote in elections of directors
voting for the purposes of this Article as separate classes. Such affirmative
vote or consent shall be in addition to the vote or consent of the holders of
the stock of the Corporation otherwise required by law or by the terms of any
class or series of preferred stock, whether now or hereafter authorized, or any
agreement between the Corporation and any national securities exchange.
ARTICLE VIII
CERTAIN TRANSACTIONS
(1) Notwithstanding any other provision of these Articles of
Incorporation, and subject to the exceptions provided in Paragraph (4) of this
Article, the types of transactions described in Paragraph (3) of this Article
shall require the affirmative vote or consent of the holders of sixty-six and
two-thirds percent (66 2/3%) of the outstanding shares of each class of stock of
the Corporation normally entitled to vote in elections of directors voting for
the purposes of this Article as separate classes, when a Principal Shareholder
(as defined in Paragraph (2) of this Article) is a party to the transaction.
Such affirmative vote or consent shall be in addition to the vote or consent of
the holders of the stock of the Corporation otherwise required by law or by the
terms of any class or series of preferred stock, whether now or hereafter
authorized, or any agreement between the Corporation and any national securities
exchange.
(2) The term "Principal Shareholder" shall mean any corporation, person
or other entity which is the beneficial owner, directly or indirectly, of more
than five percent (5%) of the outstanding shares of any class of stock of the
Corporation and shall include any affiliate or associate, as such terms are
defined in clause (i) below, of a Principal Shareholder. For the purposes of
this Article, in addition to the shares of stock which a corporation, person or
other entity beneficially owns directly, (a) any corporation, person or other
entity shall be deemed to be the beneficial owner of any shares of stock of the
Corporation (i) which it has the right to acquire pursuant to any agreement or
upon exercise of conversion rights or warrants, or otherwise (but excluding
stock options granted by the Corporation) or (ii) which are beneficially owned,
directly or indirectly (including shares deemed owned through application of
clause (i) above), by any other corporation, person or entity with which it or
its "affiliate" or "associate" (as defined below) has any agreement ,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of stock of the Corporation, or which is its "affiliate", or
"associate" as those terms are defined in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934 as in effect on December
1, 1985, and (b) the outstanding shares of any class of stock of the Corporation
shall include shares deemed owned through application of clauses (i) and (ii)
above but shall not include any other shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights or warrants, or otherwise.
(3) This Article shall apply to the following transactions:
(i) The merger or consolidation of the Corporation or any subsidiary
of the Corporation with or into any Principal Shareholder.
(ii) The issuance of any securities of the Corporation to any
Principal Shareholder for cash.
(iii)The sale, lease or exchange of all or any substantial part of the
assets of the Corporation to any Principal Shareholder (except
assets having an aggregate fair market value of less than
$1,000,000, aggregating for the purpose of such computation all
assets sold, leased or exchanged in any series of similar
transactions within a twelve-month period).
(iv) The sale, lease or exchange to the Corporation or any subsidiary
thereof, in exchange for securities of the Corporation, of any
assets of any Principal Shareholder (except assets having an
aggregate fair market value of less than $1,000,000, aggregating
for the purposes of such computation all assets sold, leased or
exchanged in any series of similar transactions within a
twelve-month period).
(4) The provisions of this Article shall not be applicable to (i) any
of the transactions described in Paragraph (3) of this Article if the Board of
Directors of the Corporation shall by resolution have approved a memorandum of
understanding with such Principal Shareholder with respect to and substantially
consistent with such transaction, or (ii) any such transaction with any
corporation of which a majority of the outstanding shares of all classes of
stock normally entitled to vote in elections of directors is owned of record or
beneficially by the Corporation and its subsidiaries.
(5) The Board of Directors shall have the power and duty to determine
for the purposes of this Article on the basis of information known to the
Corporation, whether (i) a corporation, person or entity beneficially owns more
than five percent (5%) of the outstanding shares of any class of stock of the
Corporation, (ii) a corporation, person, or entity beneficially owns more than
five percent (5%) of the outstanding shares of any class of stock of the
Corporation, (ii) a corporation, person or entity is an "affiliate" or
"associate" (as defined above) of another, (iii) the assets being acquired or
leased to or by the Corporation, or any subsidiary thereof, constitute a
substantial part of the assets of the Corporation and have an aggregate fair
market value of less than $1,000,000, and (iv) the memorandum of understanding
referred to in Paragraph (4) hereof is substantially consistent with the
transaction covered thereby. Any such determination shall be conclusive and
binding for all purposes of this Article.
ARTICLE IX
AMENDMENTS
(1) The Corporation reserves the right from time to time to make any
amendment to its Articles of Incorporation, now or hereafter authorized by law,
including any amendment that alters the contract rights, as expressly set forth
in its Articles of Incorporation, of any outstanding stock.
(2) Notwithstanding Paragraph (1) of this Article or any other
provision of these Articles of Incorporation, no amendment to these Articles of
Incorporation of the Corporation shall amend, alter, change or repeal any of the
provisions of Articles VII, VIII, and IX unless the amendment effecting such
amendment, alteration, change or repeal shall receive the affirmative vote or
consent of sixty-six and two-thirds percent (66 2/3%) of the outstanding shares
of each class of stock of the Corporation normally entitled to vote in elections
of directors, voting for the purposes of this Article as separate classes. Such
affirmative vote or consent shall be in addition to the vote or consent of the
holders of the stock of the Corporation otherwise required by law or by the
terms of any class or series of preferred stock, whether now or hereafter
authorized, or any agreement between the Corporation and any national securities
exchange.
IN WITNESS WHEREOF, I have adopted and signed these Articles of
Incorporation and do hereby acknowledge that the adoption and signed are my act.
Dated the 16th day of December, 1985.
\s\ John W. Scheflen
--------------------------------------
John W. Scheflen Incorporator
CONSENT TO USE OF NAME
GROWTH STOCK OUTLOOK, INC., a corporation organized under the laws of the
State of Maryland, hereby consents to the organization of Growth Stock Outlook
Trust, Inc.
in the State of Maryland.
IN WITNESS WHEREOF, said GROWTH STOCK OUTLOOK, INC.
has caused this consent to be executed by its President
and attested under its corporate seal by its Secretary,
this 13th day of December 1985.
GROWTH STOCK OUTLOOK, INC.
By:
Charles Allmon
President
Attest:
Secretary
(SEAL)
GROWTH STOCK OUTLOOK TRUST, INC.
ARTICLES OF AMENDMENT
GROWTH STOCK OUTLOOK TRUST, INC., a Maryland corporation (the
"Corporation"), its principal office in the State of Maryland being 4405
East-West Highway, Bethesda, Maryland 20814, hereby certifies to the State
Department of Assessments and Taxation of Maryland that:
FIRST: The charter of the Corporation is hereby
amended by adding a new Article X to the Articles of Incorporation which shall
be as follows:
ARTICLE X
To the fullest extent permitted by the Maryland General Corporation Law, as
amended from time to time, no director or officer of the Corporation shall be
personally liable to the Corporation or its stockholders for money damages,
except to the extent such exemption from liability or limitation thereof is not
permitted to the Investment Company Act of 1940, as amended from time to time.
No amendment to these Articles of Incorporation or repeal of any of its
provisions shall limit or eliminate the benefits provided to directors and
officers under this provision with respect to any act or omission which occurred
prior to such amendment or repeal.
SECOND: The foregoing amendment has been advised by the Board of Directors
of the Corporation and approved by the stockholders of the Corporation.
IN WITNESS WHEREOF, Growth Stock Outlook Trust, Inc. has caused these
presents to be signed in its name and on its behalf by its President and
Chairman and its corporate seal to be hereunder affixed and attested by its
Secretary on April 27, 1989.
GROWTH STOCK OUTLOOK TRUST, INC.
By:_______________________________
Charles Allmon
Chairman and President
Attest:
Janet R. Hudson
Secretary
THE UNDERSIGNED, President of Growth Stock Outlook Trust, Inc., who
executed on behalf of the Corporation the foregoing Articles of Amendment, of
which this certificate is made a part, hereby acknowledges, in the name and on
behalf of the Corporation, the foregoing Articles of Amendment to be the
corporate act of the Corporation and further certifies that, to the best of his
knowledge, information and belief, the matters and facts set forth therein with
respect to the approval thereof are true in all material respects, under
penalties of perjury.
____________________________________
Charles Allmon
President
GROWTH STOCK OUTLOOK TRUST, INC.
ARTICLES OF AMENDMENT
Growth Stock Outlook Trust, Inc., a Maryland corporation having its
principal office in Montgomery County, Maryland (hereinafter called
"Corporation"), hereby certifies:
FIRST: The charter of the Corporation is amended by
striking out Article II of the Articles of Incorporation
and inserting in lieu thereof the following:
"Name: The name of the Corporation (hereinafter
called the Corporation) is The Charles Allmon Trust, Inc."
SECOND: The amendment of the charter of the
Corporation as hereinabove set forth has been duly
advised by the Board of Directors and approved by the
stockholders of the Corporation.
IN WITNESS WHEREOF, Growth Stock Outlook Trust, Inc. has caused this
instrument to be signed in its name and on its behalf by its President, Charles
Allmon, and attested by its Secretary, Janet R. Hudson, on the 31st day of May,
1991.
The undersigned acknowledges these Articles of Amendment to be the
corporate act of the Corporation and states that to the best of his or her
knowledge, information and belief the matters and facts set forth herein with
respect to the authorization and approval hereof are true in all material
respects and that this statement is made under the penalties of perjury.
GROWTH STOCK OUTLOOK TRUST, INC.
By: \s\ Charles Allmon
------------------------------
Charles Allmon, President
ATTEST
By: \s\ Janet R. Hudson
---------------------
Janet R. Hudson
Secretary
THE CHARLES ALLMON TRUST, INC.
ARTICLES OF AMENDMENT
THE CHARLES ALLMON TRUST, INC., a Maryland corporation having its principal
office in Montgomery County, Maryland (hereinafter called the "Corporation"),
hereby certifies to the State Department of Assessments and Taxation of
Maryland, that:
FIRST: The charter of the Corporation is hereby
amended by striking out Article II of the
Articles of Incorporation, as amended, and
inserting in lieu thereof the following:
"Name: The name of the Corporation
(hereinafter called the "Corporation")
is "Liberty ALL-STAR Growth Fund, Inc."
SECOND: The amendment of the charter of the
Corporation as hereinabove set forth has been
duly advised by the Board of Directors and
approved by the stockholders of the
Corporation.
IN WITNESS WHEREOF, The Charles Allmon Trust, Inc.
has caused this instrument to be signed in its name and
on its behalf by its President, William R. Parmentier,
and attested by its Secretary, John L. Davenport, on the
6th day of November, 1995.
THE CHARLES ALLMON TRUST, INC.
By:_____________________________
William R. Parmentier
President
ATTEST:
By:_______________________________
John L. Davenport, Secretary
THE UNDERSIGNED, President of The Charles Allmon Trust, Inc., who executed
on behalf of said corporation the foregoing Articles of Amendment, of which this
certificate is made a part, hereby acknowledges, in the name and on behalf of
said corporation, the foregoing Articles of Amendment to be the corporate act of
said corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect to
the approval thereof are true in all materials respects, under the penalties of
perjury.
\s\ William R. Parmentier
------------------------------
William R. Parmentier
Restated
BY-LAWS
OF
LIBERTY ALL-STAR GROWTH FUND, INC.
A Maryland Corporation
As amended through April 18, 1996
ARTICLE I
STOCKHOLDERS
SECTION 1. Annual Meetings. The annual meeting of the stockholders of
Liberty All-Star Growth Fund, Inc. (formerly "The Charles Allmon Trust, Inc.")
(the "Corporation") shall be held on a date fixed from time to time by the Board
of Directors within the thirty-one (31) day period ending four (4) months after
the end of the Corporation's fiscal year. An annual meeting may be held at any
place in or out of the State of Maryland as may be determined by the Board of
Directors as shall be designated in the notice of the meeting and at the time
specified by the Board of Directors. Any business of the Corporation may be
transacted at an annual meeting without being specifically designated in the
notice unless otherwise provided by statute, the Corporation's Charter or these
By-Laws.
SECTION 2. Special Meetings. Special meetings of the stockholders of any
purpose or purposes, unless otherwise prescribed by statute or by the
Corporation's Charter, may be held at any place within the United States, and
may be called at any time by the Board of Directors, by the Chairman of the
Board or by the President, and shall be called by the Chairman of the Board or
President or Secretary at the request in writing of a majority of the Board of
Directors or at the request in writing of stockholders entitled to cast at least
twenty-five (25) percent of the votes entitled to be cast at the meeting upon
payment by such stockholders to the Corporation of the reasonably estimated cost
of preparing and mailing a notice of a meeting (which estimated cost shall be
provided to such stockholders by the Secretary of the Corporation).
Notwithstanding the foregoing, unless requested by stockholders entitled to cast
a majority of the votes entitled to be cast at the meeting, a special meeting of
the stockholders need not be called at the request of stockholders to consider
any matter that is substantially the same as a matter voted on at any special
meeting of the stockholders held during the preceding twelve (12) months. A
written request shall state the purpose or purposes of the proposed meeting.
SECTION 3. Notice of Meetings. Written or printed notice of the purpose or
purposes and of the time and place of every meeting of the stockholders shall be
given by the Secretary of the Corporation to each stockholder of record entitled
to vote at the meeting, by placing the notice in the mail at least ten (10)
days, but not more than ninety (90) days, prior to the date designated for the
meeting addressed to each stockholder at the address appearing on the books of
the Corporation or supplied by the stockholder to the Corporation for the
purpose of notice. The notice of any meeting of stockholders may be accompanied
by a form of proxy approved by the Board of Directors in favor of the actions or
persons as the Board of Directors may select. Notice of any meeting of
stockholders shall be deemed waived by any stockholder who attends the meeting
in person or by proxy, who before or after the meeting submits a signed waiver
of notice that is filed with the records of the meeting.
SECTION 4. Quorum. Except as otherwise provided by statute or by the
Corporation's Charter, the presence in person or by proxy of stockholders of the
Corporation entitled to cast at least a majority of the votes entitled to be
cast shall constitute a quorum at each meeting of the stockholders and all
questions shall be decided by majority vote of the shares so represented in
person or by proxy at the meeting and entitled to vote. In the absence of a
quorum, the stockholders present in person or by proxy at the meeting, by
majority vote and without notice other than by announcement at the meeting, may
adjourn the meeting from time to time as provided in Section 5 of this Article I
until a quorum shall attend. The stockholders present at any duly organized
meeting may continue to do business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum. The absence from
any meeting in person or by proxy of holders of the number of shares of stock of
the Corporation in excess of a majority that may be required by the laws of the
State of Maryland, the Investment Company Act of 1940, or other applicable
statute, the Corporation's Articles of Incorporation or these By-Laws, for
action upon any given matter shall not prevent action at the meeting on any
other matter or matters that may properly come before the meeting, so long as
there are present, in person or by proxy, holders of the number of shares of
stock of the Corporation required for action upon the other matter or matters.
SECTION 5. Adjournment. Any meeting of the stockholders may be adjourned
from time to time, without notice other than by announcement at the meeting at
which the adjournment is taken. At any adjourned meeting at which a quorum shall
be present any action may be taken that could have been taken at the meeting
originally called. A meeting of the stockholders may not be adjourned to a date
more than one-hundred-twenty (120) days after the original record date.
SECTION 6. Organization. At every meeting of the stockholders, the
Chairman of the Board, or in his absence or inability to act, the President, or
in his absence or inability to act, a Vice President, or in the absence or
inability to act of the Chairman of the Board, the President and all the Vice
Presidents, a chairman chosen by the stockholders, shall act as chairman of the
meeting. The Secretary, or in the absence or inability to act, a person
appointed by the chairman of the meeting, shall act as secretary of the meeting
and keep the minutes of the meeting.
SECTION 7. Order of Business. The order of business at all meetings
of the stockholders shall be as determined by the chairman of the meeting.
SECTION 8. Voting. Except as otherwise provided by statute or the
Corporation's Charter, each holder of record of shares of stock of the
Corporation having voting power shall be entitled at each meeting of the
stockholders to one (1) vote for every share of stock standing in his name on
the records of the Corporation as of the record date determined pursuant to
Section 9 of this Article I.
Each stockholder entitled to vote at any meeting of stockholders may
authorize another person or persons to act from him by a proxy signed by the
stockholder or his attorney-in-fact. The placing of a shareholder's name on a
proxy pursuant to telephonic or electronically transmitted instructions obtained
pursuant to procedures reasonably designed to verify that such instructions have
been authorized by such shareholder shall constitute execution or signature of
such proxy by or on behalf of such shareholder. No proxy shall be valid after
the expiration of eleven (11) months from the date thereof, unless otherwise
provided in the proxy. Every proxy shall be revocable at the pleasure of the
stockholder executing it, except in those cases in which the proxy states that
it is irrevocable and in which an irrevocable proxy is permitted by law.
SECTION 9. Fixing of Record Date for Determining Stockholders Entitled to
Vote at Meeting. The Board of Directors may set a record date for the purpose of
determining stockholders entitled to vote at any meeting of the stockholders.
The record date for a particular meeting shall be not more than ninety (90) for
fewer than ten (10) days before the date of the meeting. All persons who were
holders of record of shares as of the record date of a meeting, and no others,
shall be entitled to vote at such meeting and any adjournment thereof.
SECTION 10. Inspectors. The Board of Directors may, in advance of any
meeting of stockholders, appoint one (1) or more inspectors to act at the
meeting or at any adjournment of the meeting. If the inspectors shall not be so
appointed or if any of them shall fail to appear or act, the chairman of the
meeting may appoint inspectors. Each inspector, before entering upon the
discharge of his duties, shall, if required by the chairman of the meeting, take
and sign an oath to execute faithfully the duties of inspector at the meeting
with strict impartiality and according to the best of his ability. The
inspectors shall determine the number of shares outstanding and the voting power
of each share, the number of shares represented at the meeting, the existence of
a quorum and the validity and effect of proxies, and shall receive votes,
ballots or consents, hear and determine all challenges and questions arising in
connection with the right to vote, count and tabulate all votes, ballots or
consents, determine the result, and do those acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the chairman
of the meeting or any stockholder entitled to vote at the meeting, the
inspectors shall make a report in writing of any challenge, request or matter
determined by them and shall execute a certificate of any fact found by them. No
director or candidate for the office of director shall act as inspector of an
election of directors. Inspectors need not be stockholders of the Corporation.
SECTION 11. Consent of Stockholders in Lieu of Meeting. Except as
otherwise provided by statute or the Corporation's Charter, any action required
to be taken at any annual or special meeting of stockholders, or any action that
may be taken at any annual or special meeting of the stockholders, may be taken
without a meeting, without prior notice and without a vote, if the following are
filed with the records of stockholders' meetings: (a) an unanimous written
consent that sets for the action and is signed by each stockholder entitled to
vote on the matter and (b) a written waiver of any right to dissent signed by
each stockholder entitled to notice of the meeting but not entitled to vote at
the meeting.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. General Powers. Except as otherwise provided in the
Corporation's Charter, the business and affairs of the Corporation shall be
managed under the direction of the Board of Directors. All powers of the
Corporation may be exercised by or under authority of the Board of Directors
except as conferred on or reserved to the stockholders by law, by the
Corporation's Charter or by these By-Laws.
SECTION 2. Number, Election and Term of Directors. The number of directors
shall be fixed from time to time by resolution of the Board of Directors adopted
by a majority of the directors then in office; provided, however, that the
number of directors shall in no event be fewer than three (3) nor more then nine
(9). The Board of Directors shall be divided into three classes. Within the
limits above specified, the number of directors in each class shall be
determined by resolution of the Board of Directors or by the stockholders at the
annual meeting thereof. The term of office of the first class shall expire on
the date of the first annual meeting of stockholders. The term of office of the
second class shall expire one year thereafter. The term of office of the third
class shall expire two years thereafter. Upon expiration of the term of office
in each class as set forth above, the number of directors in such class, as
determined by the Board of Directors, shall be elected for a term of three years
to succeed the directors whose terms of office expire. The directors shall be
elected at the annual meeting of the stockholders, except as provided in Section
5 of this Article, and each director elected shall hold office until his
successor shall have been elected and shall have qualified, or until his death,
or until he shall have resigned or have been removed as provided in these
By-Laws, or as otherwise provided by statute or the Corporation's Charter. Any
vacancy created by an increase in directors may be filled in accordance with
Section 5 of this Article II. No reduction in the number of directors shall have
the effect of removing any director from office prior to the expiration of his
term unless the director is specifically removed pursuant to Section 4 of this
Article II at the time of the decrease. A director need not be a stockholder of
the Corporation, a citizen of the United States or a resident of the State of
Maryland.
SECTION 3. Resignation. A director of the Corporation may resign at any
time by giving written notice of his resignation to the Board of Directors or
the Chairman of the Board or to the President or the Secretary of the
Corporation. Any resignation shall take effect at the time specified in it or,
should the time when it is to become effective not be specified in it,
immediately upon its receipt. Acceptance of a resignation shall not be necessary
to make it effective unless the resignation states otherwise.
SECTION 4. Removal of Directors. Any director of the Corporation may be
removed by the stockholders with or without cause by a vote of a majority of the
votes entitled to be cast for the election of directors.
SECTION 5. Vacancies. Subject to the provisions of the Investment Company
Act of 1940, any vacancies in the Board of Directors, whether arising from
death, resignation, removal or any other cause except an increase in the number
of directors, shall be filled by a vote of the majority of the Board of
Directors then in office even though that majority is less than a quorum,
provided that no vacancy or vacancies shall be filled by action of the remaining
directors if, after the filling of the vacancy or vacancies, fewer than
two-thirds of the directors then holding office shall have been elected by the
stockholders of the Corporation. A majority of the entire Board may fill a
vacancy that results from an increase in the number of directors. In the event
that at any time a vacancy exists in any office of a director that may not be
filled by the remaining directors, a special meeting of the stockholders shall
be held as promptly as possible and in any event within sixty (60) days, for the
purpose of filling the vacancy or vacancies. Any director appointed by the Board
of Directors to fill a vacancy shall hold office only until the next annual
meeting of stockholders of the Corporation and until a successor has been
elected and qualifies or until his earlier resignation or removal. Any director
elected by the stockholders to fill a vacancy shall hold office for the balance
of the term of the director whose death, resignation or removal occasioned the
vacancy and until a successor has been elected and qualified or until his
earlier resignation or removal.
SECTION 6. Place of Meetings. Meetings of the Board may be held at any
place that the Board of Directors may from time to time determine or that is
specified in the notice of the meeting.
SECTION 7. Regular Meetings. Regular meetings of
the Board of Directors may be held without notice at the time and
place determined by the Board of Directors.
SECTION 8. Special Meetings. Special meetings of
the Board of Directors may be called by two (2) or more directors of
the Corporation or by the Chairman of the Board or the President.
SECTION 9. Annual Meeting. The annual meeting of the newly elected and
other directors shall be held as soon as practicable after the meeting of
stockholders at which the newly elected directors were elected. No notice of
such annual meeting shall be necessary if held immediately after the
adjournment, and at the site, of the meeting of stockholders. If not so held,
notice shall be given as hereinafter provided for special meetings of the Board
of Directors.
SECTION 10. Notice of Special Meetings. Notice of each special meeting of
the Board of Directors shall be given by the Secretary as hereinafter provided.
Each notice shall state the time and place of the meeting and shall be delivered
to each director, either personally or by telephone or other standard form of
telecommunication, at least twenty-four (24) hours before the time at which the
meeting is to be held, or by first-class mail, postage prepaid, addressed to the
director at his residence or usual place of business, and mailed at least three
(3) days before the day on which the meeting is to be held.
SECTION 11. Waiver of Notice of Meetings. Notice of any special meeting
need not be given to any director who shall, either before or after the meeting,
sign a written waiver of notice that is filed with the records of the meeting or
who shall attend the meeting.
SECTION 12. Quorum and Voting. One-third (1/3), but not fewer than two (2)
of the members of the entire Board of Directors shall be present in person at
any meeting of the Board so as to constitute a quorum for the transaction of
business at the meeting, and except as otherwise expressly required by statute,
the Corporation's Charter, these By-Laws, the Investment Company Act of 1940, or
any other applicable statute, the act of a majority of the directors present at
any meeting at which a quorum is present shall be the act of the Board. In the
absence of a quorum at any meeting of the Board, a majority of the directors
present may adjourn the meeting to another time and place until a quorum shall
be present. Notice of the time and place of any adjourned meeting shall be given
to the directors who were not present at the time of the adjournment and, unless
the time and place were announced at the meeting at which the adjournment was
taken, to the other directors. At any adjourned meeting at which a quorum is
present, any business may be transacted that might have been transacted at the
meeting as originally called.
SECTION 13. Organization. The Board of Directors may designate a Chairman
of the Board, who shall preside at each meeting of the Board. In the absence or
inability of the Chairman of the Board to act, the President, or, in his absence
or inability to act, another director chosen by a majority of the directors
present, shall act as chairman of the meeting and preside at the meeting. The
Secretary (or, in his absence or inability to act, any person appointed by the
chairman) shall act as secretary of the meeting and keep the minutes of the
meeting.
SECTION 14. Committees. The Board of Directors may designate one (1) or
more committees of the Board of Directors, each consisting of two (2) or more
directors. To the extent provided in the resolution, and permitted by law, the
committee or committees shall have and may exercise the powers of the Board of
Directors in the management of the business affairs of the Corporation. Any
committee or committees shall have the name or names determined from time to
time by resolution adopted by the Board of Directors. Each committee shall keep
regular minutes of its meetings and provide those minutes to the Board of
Directors when required. The members of a committee present at any meeting,
whether or not they constitute a quorum, may appoint a director to act in the
place of an absent member.
SECTION 15. Written Consent of Directors in Lieu of a Meeting. Subject to
the provisions of the Investment Company Act of 1940, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee of the Board may be taken without a meeting if all members of the
Board or committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of the proceedings of the Board
or committee.
SECTION 16. Telephone Conference. Members of the Board of Directors of any
committee of the Board may participate in any Board or committee meeting by
means of a conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other at the same
time. Participation by such means shall constitute presence in person at the
meeting.
SECTION 17. Compensation. Each director shall be entitled to receive
compensation, if any, as may from time to time be fixed by the Board of
Directors, including a fee for each meeting of the Board or any committee
thereof, regular or special, he attends. Directors may also be reimbursed by the
Corporation for all reasonable expenses incurred in traveling to and from the
place of a Board or committee meeting.
ARTICLE III
OFFICERS, AGENTS AND EMPLOYEES
SECTION 1. Number and Qualifications. The officers of the Corporation
shall be a Chairman of the Board, a President, a Treasurer, a Controller and a
Secretary, each of whom shall be elected by the Board of Directors. The Board of
Directors may also appoint any other officers, agents and employees it deems
necessary or proper. Any two (2) or more officers may be held by the same
person, except the office of President, but no officer shall execute,
acknowledge or verify in more than one (1) capacity any instrument required by
law to be executed, acknowledged or verified in more than one capacity. The
Chairman of the Board, the President, the Treasurer, the Controller and the
Secretary shall be elected by the Board of Directors each year at its first
meeting held after the annual meeting of stockholders, each to hold office until
the meeting of the Board following the next annual meeting of the stockholders
and until his or her successor shall have been duly elected and shall have
qualified, or until his or her death, or until he or she shall have resigned or
have been removed, as provided in these By-Laws. The Board of Directors may from
time to time elect such additional officers (including one or more Vice
Presidents, one or more Assistant Vice Presidents, one or more Assistant
Treasurers, one or more Assistant Controllers and one or more Assistant
Secretaries) and may appoint, or delegate to the President the power to appoint,
such agents as may be necessary or desirable for the business of the
Corporation. Such other officers and agents shall have such duties and shall
hold their offices for such terms as may be prescribed by the Board or by the
appointing authority. Any officer other than the Chairman of the Board may be
but none need be, a Director, and any officer may be, but none need be a
stockholder of the Corporation.
SECTION 2. Resignations. Any officer of the Corporation may resign at any
time by giving written notice of his or her resignation to the Board of
Directors, the Chairman of the Board, the President or the Secretary. Any
resignation shall take effect at the time specified therein or, if the time when
it shall become effective is not specified therein, immediately upon its
receipt. The acceptance of a resignation shall not be necessary to make it
effective unless otherwise stated in the resignation.
SECTION 3. Removal of Officer, Agent or Employee. Any officer, agent or
employee of the Corporation may be removed by the Board of Directors with or
without cause at any time, and the Board may delegate the power of removal as to
agents and employees not elected or appointed by the Board of Directors.
SECTION 4. Vacancies. A vacancy in any office, whether arising from death,
resignation, removal or any other cause, may be filled for the unexpired portion
of the term of the office that shall be vacant, in the manner prescribed in
these By-Laws for the regular election or appointment to that office.
SECTION 5. Compensation. The compensation, if any, of the officers of the
Corporation shall be fixed by the Board of Directors, but this power may be
delegated to any officer with respect to other officers under his control.
SECTION 6. Bonds or Other Security. If required by the Board, any officer,
agent or employee of the Corporation shall give a bond or other security for the
faithful performance of his or her duties, in an amount and with any surety or
sureties as the Board may require.
SECTION 7. Chairman of the Board. The Chairman of the Board shall be a
Director of the Corporation and, unless the Board shall specify otherwise, shall
preside at meetings of the Board and of the Stockholders of the Corporation.
SECTION 8. President. The President shall be the Chief Executive Officer
of the Corporation and shall have, subject to the control of the Board of
Directors, general charge of the business and affairs of the Corporation, and
may employ and discharge employees and agents of the Corporation, except those
elected or appointed by the Board, and he or she may delegate these powers.
SECTION 9. Vice President. Each Vice President shall have the powers and
perform the duties that the President or the Board of Directors may from time to
time prescribe. In the absence or disability of the President, the Vice
President or, if there be more than one Vice President, any Vice President
designated by the Directors, shall perform all the duties and may exercise any
of the powers of the President, subject to the control of the Board of
Directors.
SECTION 10. Treasurer. The Treasurer shall be the principal financial and
accounting officer of the Corporation. He or she shall deliver all funds of the
Corporation which may come into his or her hands to any custodian appointed by
or pursuant to authority granted by the Board of Directors. He or she shall
render a statement of condition of the finances of the Corporation to the
Directors as often as they shall require the same, and he or she shall in
general perform all the duties incident to the office of Treasurer and such
other duties as from time to time may be assigned to him or her by the Board of
Directors.
SECTION 11. Assistant Treasurers. In the absence or disability of the
Treasurer, the Assistant Treasurer, or, if there be more than one, any Assistant
Treasurer designated by the Board of Directors, shall perform all the duties,
and may exercise all the powers, of the Treasurer. The Assistant Treasurers, if
any, shall perform such other duties as from time to time may be assigned to
them by the Treasurer or the Board of Directors.
SECTION 12. Controller. The Controller shall be the chief accounting
officer of the Corporation and shall have control of all its books of account.
He or she shall see that correct and complete books and records of account are
kept as required by law, showing fully, in such form as he or she shall
prescribe, all transactions of the Corporation, and he or she shall require,
keep and preserve all vouchers relating thereto for such period as may be
necessary. The Controller shall render periodically such financial statements
and such other reports relating to the Corporation's business as may be required
by the President or the Board. He or she shall generally perform all duties
appertaining to the office of controller of a corporation.
SECTION 13. Assistant Controllers. In the absence or disability of the
Controller, the Assistant Controller, or, if there be more than one, any
Assistant Controller designated by the Board of Directors, shall perform all of
the duties, and may exercise all of the powers, of the Controller. The Assistant
Controllers, if any, shall perform such other duties as from time to time may be
assigned to them by the Controller or the Board of Directors.
SECTION 14. Secretary. The Secretary shall keep the minutes of all
meetings of the Directors and of all meetings of the Stockholders of the
Corporation in proper books provided for that purpose; he or she shall have
custody of the seal of the Corporation; he or she shall have charge of the share
transfer books, lists and records unless the same are in the charge of the
Corporation's transfer agent. He or she shall attend to the giving and serving
of all notices by the Corporation in accordance with the provisions of these
By-Laws and as required by law; and subject to these By-Laws, he or she shall in
general perform all duties incident to the office of Secretary and such other
duties as from time to time may be assigned to him or her by the Directors.
SECTION 15. Assistant Secretaries. In the absence or disability of the
Secretary, the Assistant Secretary, or, if there be more than one, any Assistant
Secretary designated by the Board of Directors, shall perform all of the duties,
and may exercise all of the powers, of the Secretary. The Assistant Secretaries,
if any, shall perform such other duties as from time to time may be assigned to
them by the Secretary or the Board of Directors.
SECTION 16. Delegation of Duties. In case of the absence or disability of
any officer of the Corporation, or for any other reason that the Board of
Directors may deem sufficient, the Board may confer for the time being the
powers or duties, or any of them, of such officer upon any other officer or upon
any Director.
ARTICLE IV
STOCK
SECTION 1. Stock Certificates. Unless otherwise provided by the Board of
Directors and permitted by law, each holder of stock of the Corporation shall be
entitled upon specific written request to such person as may be designated by
the Corporation to have a certificate or certificates, in a form approved by the
Board, representing the number of shares of stock of the Corporation owned by
him; provided, however, that certificates for fractional shares will not be
delivered in any case. The certificates representing shares of stock shall be
signed by or in the name of the Corporation by the Chairman of the Board, the
President or a Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer and sealed with the seal of the
Corporation. Any or all of the signatures or the seal on the certificate may be
facsimiles. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before the certificate is
issued, it may be issued by the Corporation with the same effect as if the
officer, transfer agent or registrar was still in office at the date of issue.
SECTION 2. Stock Ledger. There shall be maintained a stock ledger
containing the name and address of each stockholder and the number of shares of
stock of each class the shareholder holds. The stock ledger may be in written
form or any other form which can be converted within a reasonable time into
written form for visual inspection. The original or a duplicate of the stock
ledger shall be kept at the principal office of the Corporation or at any other
office or agency specified by the Board of Directors.
SECTION 3. Transfers of Shares. Transfers of shares of stock of the
Corporation shall be made on the stock records of the Corporation only by the
registered holder of the shares, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary or with a transfer
agent or transfer clerk, and on surrender of the certificate or certificates, if
issued, for the shares properly endorsed or accompanied by a duly executed stock
transfer power and the payment of all taxes thereon. Except as otherwise
provided by law, the Corporation shall be entitled to recognize the exclusive
right of a person in whose name any share or shares stand on the record of
stockholders as the owner of the share or shares for all purposes, including,
without limitation, the rights to receive dividends or other distributions and
to vote as the owner, and the Corporation shall not be bound to recognize any
equitable or legal claim to or interest in any such share or shares on the part
of any other person.
SECTION 4. Regulations. The Board of Directors may authorize the issuance
of uncertificated securities if permitted by law. If stock certificates are
issued, the Board of Directors may make any additional rules and regulations,
not inconsistent with these By-Laws, as it may deem expedient concerning the
issue, transfer and registration of certificates for shares of stock of the
Corporation. The Board may appoint, or authorize any officer or officers to
appoint, one or more transfer agents or one or more transfer clerks and one or
more registrars and may require all certificates for shares of stock to bear the
signature or signatures of any of them.
SECTION 5. Lost, Destroyed or Mutilated Certificates. The holder of any
certificate representing shares of stock of the Corporation shall immediately
notify the Corporation of its loss, destruction or mutilation and the
Corporation may issue a new certificate of stock in the place of any certificate
issued by it that has been alleged to have been lost or destroyed or that shall
have been mutilated. The Board may, in its discretion, require the owner (or his
legal representative) of a lost, destroyed or mutilated certificate: to give the
Corporation a bond in a sum, limited or unlimited, and in a form and with any
surety or sureties, as the Board in its absolute discretion shall determine, to
indemnify the Corporation against any claim that may be made against it on
account of the alleged loss or destruction of any such certificate, or issuance
of a new certificate. Anything herein to the contrary notwithstanding, the Board
of Directors, in its absolute discretion, may refuse to issue any such new
certificate, except pursuant to legal proceedings under the laws of the State of
Maryland.
SECTION 6. Fixing of Record Date for Dividends, Distributions, etc. The
Board may fix, in advance, a date not more than ninety (90) days preceding the
date fixed for the payment of any dividend or the making of any distribution or
the allotment of rights to subscribe for securities of the Corporation, or for
the delivery of evidences of rights or evidences of interests arising out of any
change, conversion or exchange of common stock or other securities, as the
record date for the determination of the stockholders entitled to receive any
such dividend, distribution, allotment, rights or interest, and in such case
only the stockholders of record at the time so fixed shall be entitled to
receive such dividend, distribution, allotment, rights or interests.
SECTION 7. Information to Stockholders and Others. Any stockholder of the
Corporation or his agent may inspect and copy during the Corporation's usual
business hours the Corporation's By-Laws, minutes of the proceedings of its
stockholders, annual statements of its affairs and voting trust agreements on
file at its principal office.
ARTICLE V
INDEMNIFICATION
SECTION 1. Indemnification of Directors and Officers. The Corporation
shall indemnify its directors to the fullest extent that indemnification of
directors is permitted by the Maryland General Corporation Law. The Corporation
shall indemnify its officers to the same extent as its directors and to such
further extent as is consistent with law. The Corporation shall indemnify its
directors and officers who while serving as directors or officers also serve at
the request of the Corporation as a director, officer, partner, trustee,
employee, agent or fiduciary of another corporation, partnership, joint venture,
trust, other enterprise or employee benefit plan to the fullest extent
consistent with law. The indemnification and other rights provided by this
Article shall continue as to a person who has ceased to be a director or officer
and shall inure to the benefit of the heirs, executors and administrators of
such a person. This Article shall not protect any such a person against any
liability to the Corporation or any stockholder thereof to which such person
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office ("disabling conduct").
SECTION 2. Advances. Any current or former director or officer of the
Corporation claiming indemnification within the scope of this Article V shall be
entitled to advances from the Corporation for payment of the reasonable expenses
incurred by him in connection with proceedings to which he is a party in the
manner and to the fullest extent permissible under the Maryland General
Corporation Law. The person seeking indemnification shall provide to the
Corporation a written affirmation of his good faith belief that the standard of
conduct necessary for indemnification by the Corporation has been met and a
written undertaking to repay any such advance, if it should ultimately be
determined that the standard of conduct has not been met. In addition, at lease
one of the following additional conditions shall be met: (a) the person seeking
indemnification shall provide a security in form and amount acceptable to the
Corporation for his undertaking; (b) the Corporation is insured against losses
arising by reason of the advance; or (c) a majority of a quorum of directors of
the Corporation who are neither "interested persons" as defined in Section
2(a)(19) of the Investment Company Act of 1940 nor parties to the proceeding
("disinterested non-party directors"), or independent legal counsel, in a
written opinion, shall have determined, based in a review of facts readily
available to the Corporation at the time the advance is proposed to be made,
that there is reason to believe that the person seeking indemnification will
ultimately be found to be entitled to indemnification.
SECTION 3. Procedure. At the request of any person claiming
indemnification under this Article, the Board of Directors shall determine, or
cause to be determined, in a manner consistent with the Maryland General
Corporation Law, whether the standards required by this Article have been met.
Indemnification shall be made only following: (a) a final decision on the merits
by a court or other body before whom the proceeding was brought that the person
to be indemnified was not liable by reason of disabling conduct or (b) in the
absence of such a decision, a reasonable determination, based upon a review of
the facts, that the person to be indemnified was not liable by reason of
disabling conduct, by (i) the vote of a majority of a quorum of disinterested
non-party directors or (ii) an independent legal counsel in a written opinion.
SECTION 4. Indemnification of Employees and Agents. Employees and agents
who are not officers or directors of the Corporation may be indemnified, and
reasonable expenses may be advanced to such employees or agents, as may be
provided by action of the Board of Directors or by contract subject to any
limitations imposed by the Investment Company Act of 1940.
SECTION 5. Other Rights. The Board of Directors may make further provision
consistent with law for indemnification and advance of expenses to directors,
officers, employees and agents by resolution, agreement or otherwise. The
indemnification provided by this Article shall not be deemed exclusive of any
other right, with respect to indemnification or otherwise, to which those
seeking indemnification may be entitled under any insurance or other agreement
or resolution of stockholders or disinterested directors or otherwise.
SECTION 6. Amendments. References in this Article are to the Maryland
General Corporation Law and to the Investment Company Act of 1940 as from time
to time amended. No amendment of these By-Laws shall affect any right of any
person under this Article based on any event, omission or proceeding prior to
the amendment.
ARTICLE VI
SEAL
The seal of the Corporation shall be circular in form and shall bear the
name of the Corporation, the year of its incorporation, the words "Corporate
Seal" and "Maryland" and any emblem or device approved by the Board of
Directors. The seal may be used by causing it or a facsimile to be impressed or
affixed or in any other manner reproduced, or by placing the word ("seal")
adjacent to the signature of the authorized officer of the Corporation.
ARTICLE VII
FISCAL YEAR
SECTION 1. Fiscal Year. The Corporation's fiscal
year shall be fixed by the Board of Directors.
SECTION 2. Accountant.
(a) The Corporation shall employ an independent public accountant or a
firm of independent public accountants of national reputation as its Accountant
to examine the accounts of the Corporation and to sign and certify financial
statements filed by the Corporation. The Accountant's certificates and reports
shall be addressed both to the Board of Directors and to the stockholders. The
employment of the Accountant shall be conditioned upon the right of the
Corporation to terminate the employment forthwith without any penalty by vote of
a majority of the outstanding voting securities at any stockholders' meeting
called for that purpose.
(b) A majority of the members of the Board of Directors who are not
"interested persons" (as such term is defined in the Investment Company Act of
1940) of the Corporation shall select the Accountant at any meeting held within
thirty (30) days before or after the beginning of the fiscal year of the
Corporation or before the annual stockholders' meeting in that year. Such
selection shall be submitted for ratification or rejection at the next
succeeding annual stockholders' meeting. If such meeting shall reject such
selection, the Accountant shall be selected by majority vote of the
Corporation's outstanding voting securities, either at the meeting at which the
rejection occurred or at a subsequent meeting of stockholders called for that
purpose.
(c) Any vacancy occurring between annual meetings, due to the resignation
of the Accountant, may be filled by the vote of a majority of the members of the
Board of Directors who are not "interested persons" of the Corporation, as that
term is defined in the Investment Company Act of 1940, at a meeting called for
the purpose of voting on such action.
ARTICLE VIII
CUSTODY OF SECURITIES
SECTION 1. Employment of a Custodian. The Corporation shall place and at
all times maintain in the custody of a Custodian (including any sub-custodian
for the Custodian) all funds, securities and similar investments owned by the
Corporation. The Custodian (and any sub-custodian) shall be an institution
conforming to the requirements of Section 17(f) of the Investment Company Act of
1940 and the rules of the Securities and Exchange Commission thereunder. The
Custodian shall be appointed from time to time by the Board of Directors, which
shall fix its renumeration.
SECTION 2. Termination of Custodian Agreement. Upon termination of the
Custodian Agreement or inability of the Custodian to continue to serve, the
Board of Directors shall promptly appoint a successor custodian, but in the
event that no successor Custodian can be found who has the required
qualifications and is willing to serve, the Board of Directors shall call as
promptly as possible a special meeting of the stockholders to determine whether
the Corporation shall function without a Custodian or shall be liquidated. If so
directed by vote of the holders of a majority of the outstanding shares of stock
entitled to vote of the Corporation, the Custodian shall deliver and pay over
all property of the Corporation held by it as specified in such vote.
ARTICLE IX
AMENDMENTS
These By-Laws may be amended or repealed by the affirmative vote of a
majority of the Board of Directors at any regular or special meeting of the
Board of Directors, subject to the requirements of the Investment Company Act of
1940.
LIBERTY ALL-STAR
GROWTH FUND, INC.
COMMON COMMON STOCK
STOCK Par Value
$.10 Per Share
THIS CERTIFICATE IS TRANSFERABLE IN
BOSTON, MASSACHUSETTS OR
NEW YORK, NEW YORK
INCORPORATED UNDER THE LAWS OF
THE STATE OF MARYLAND
LIBERTY ALL-STAR GROWTH FUND, INC.
- -------------------------------------------------------------
THIS CERTIFIES THAT
IS THE OWNER OF
- -------------------------------------------------------------
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK
OF
Liberty All-Star Growth Fund, Inc. transferable on the books of the Corporation
by the holder hereof in person or by daily authorized Attorney upon surrender of
this Certificate properly endorsed. This Certificate and the shares represented
hereby are issued and shall be subject to all of the provisions of the Articles
of Incorporation of the Corporation, and the Bylaws of the Corporation, and all
amendments thereof, copies of which are on file at the principal office of the
Corporation and with the Transfer Agent. This Certificate is not valid unless
countersigned and registered by the Transfer Agent and Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
COUNTERSIGNED AND REGISTERED:
STATE STREET BANK AND TRUST COMPANY
TRANSFER AGENT
BY AND REGISTRAR.
\s\ John Davenport
\s\Richard R. Christensen
Secretary
President
AUTHORIZED SIGNATURE
Rights Issued__________ Shares of Common Stock available on Primary
Subscription _________
VOID IF NOT RECEIVED BY THE SUBSCRIPTION AGENT BEFORE 5:00 P.M.
EASTERN TIME ON JULY __, 1998 UNLESS PRECEDED
BY A NOTICE OF GUARANTEED DELIVERY
LIBERTY ALL-STAR GROWTH FUND, INC.
SUBSCRIPTION CERTIFICATE FORM FOR RIGHTS TO SUBSCRIBE
FOR SHARES OF COMMON STOCK
IN ORDER TO EXERCISE YOUR RIGHTS, YOU MUST EITHER (i) COMPLETE AND SIGN THIS
SUBSCRIPTION CERTIFICATE ON THE BACK AND RETURN IT TOGETHER WITH PAYMENT OF THE
ESTIMATED SUBSCRIPTION PRICE REFERRED TO BELOW, OR (ii) PRESENT A PROPERLY
COMPLETED NOTICE OF GURARANTEED DELIVERY, IN EITHER CASE TO THE SUBSCRIPTION
AGENT BEFORE 5:00 P.M. EASTERN TIME ON JULY , 1998.
As the record holder of rights (the "Rights") to acquire shares of Common Stock
("Shares") of Liberty All-Star Growth Fund, Inc. (the "Fund"), you are entitled
to subscribe for the number of Shares of the Fund shown above, pursuant to the
Primary Subscription, upon the terms and conditions and at the Subscription
Price for each Share determined in accordance with the formula specified in the
Prospectus relating thereto. The Rights issued to you also entitle you to
participate in the Over-Subscription Privilege, as described in the Prospectus.
Pursuant to the Over-Subscription Privilege, you may purchase any number of
additional Shares if such Shares are available and you have fully exercised your
rights on Primary Subscription (other than those Rights which cannot be
exercised because they represent the right to acquire less than one full Share).
NOTE: The Subscription Price of $ referred to on the back is an estimated price
only. The final Subscription Price, to be determined on July , 1998, could be
higher or lower. Additional payment may be required for any new Shares acquired
in the Primary Subscription (and any new Shares acquired through the
Over-Subscription Privilege) when the actual Subscription Price is determined.
Please reference the Control Number appearing on the form below on your check,
money order, or notice of guaranteed delivery.
--------------------------------------------------------
The number of shares you are entitled to subscribe for
on Primary Subscription is computed as follows:
No. of Common Shares owned _______ /10 = ____________ new Shares
(fractions ignored)
-------------------------------------------------------
THIS SUBSCRIPTION RIGHT IS NON-TRANSFERABLE
Full payment of the estimated Subscription Price for Shares subscribed for both
on Primary Subscription and pursuant to the Over-Subscription Privilege must
accompany this Subscription Certificate and must be made payable in United
States dollars by money order or check drawn on a bank located in the United
States payable to Liberty All-Star Growth Fund, Inc. Alternatively, a Notice of
Guaranteed Delivery must be received by the Subscription Agent before 5:00 p.m.
Eastern time on July , 1998.
Account No:
Control No:
Number of
Rights:
(continued
on back)
PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY
- ------------------------------------------------------------------------------
SECTION 1: DETAILS OF SUBSCRIPTION
IF YOU WISH TO SUBSCRIBE FOR YOUR FULL ENTITLEMENT:
A. I subscribe for my full entitlement of new Shares
__________________ X $_________________= $_____________
(No. of new Shares) (amount enclosed)
B. I apply for the Over-Subscription Privilege*
_________________ X $_________________ = $______________
(No. of additional Shares) (amount enclosed)
* You can exercise your Over-Subscription Privilege
only if you have fully exercised your Rights on Primary Subscription,
other than those Rights that would entitle you to subscribe for
less than one full Share.
IF YOU DO NOT WISH TO SUBSCRIBE FOR YOUR FULL ENTITLEMENT:
C. I apply for __________X $________ = _____________
(No. of new Shares) (amount enclosed)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECTION 2: TO SUBSCRIBE: I acknowledge that I have received the Prospectus for
this Offer, and I hereby irrevocably subscribe for the number of new Shares
indicated above on the terms and conditions set out in the Prospectus. I
understand and agree that I will be obligated to pay an additional amount to the
Fund if the Subscription Price, as determined on the Expiration Date, is in
excess of the estimated Subscription Price of $ .
I hereby agree that if I fail to pay in full for the Shares for which I
have subscribed, the Fund may exercise any of the remedies provided for in the
Prospectus.
Signature of Subscriber(s)____________________________________________________
__________________________________________________
Your telephone number ( )____________________________________________________
If you wish to have the certificates for your Shares and refund check (if any)
delivered to an address other than that listed on this card, you must have your
signature guaranteed by a member firm of the New York Stock Exchange or a bank
or trust company. Please provide the delivery address below and note if it is a
permanent change.
Name ____________________________________________________
Address ____________________________________________________
____________________________________________________
Zip ____________________________________________________
_
Check if permanent change |_|
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
YOUR SUBSCRIPTION CERTIFICATE AND PAYMENT
(OR NOTICE OR GUARANTEED DELIVERY)
SHOULD BE SENT AS FOLLOWS:
BY FIRST CLASS MAIL: BY HAND: BY OVERNIGHT
State Street Bank State Street Bank COURIER OR EXPRESS
and Trust Company and Trust Company MAIL:
Corporate Securities State Street Bank
Reorganization Transfer and and Trust Company
P.O. Box 9061 Reporting Corporate
Boston, MA Services Reorganization
02205-8686 One Exchange Place Department
55 Broadway, 3rd 70 Campanelli Drive
Floor Braintree, MA
New York, New 02184
York 10006
DELIVERY TO AN ADDRESS OTHER THAN ONE OF THE ADDRESSES
LISTED ABOVE
WILL NOT CONSTITUTE GOOD DELIVERY
- -------------------------------------------------------------------------------
LIBERTY ALL-STAR
GROWTH FUND, INC.
Automatic
Dividend
Reinvestment
and Cash Purchase
Plan
(as amended effective June 30, 1996)
Dear Shareholder:
We have prepared this brochure in response to your questions concerning our
Automatic Dividend Reinvestment and Cash Purchase plan (the "Plan"). Before
delving into the "fine print" you will find several pages of Questions and
Answers designed to convey the basic operational features of the Plan.
The Plan is available to all shareholders of the Liberty All-Star Growth Fund,
Inc. (the "Fund"). State Street Bank and Trust Company ("State Street") serves
as the administrator for the Plan. Feel free to call State Street for additional
information (see "Whom Should I Contact for Additional Information?").
We hope this proves helpful in your understanding of the Plan.
Sincerely,
Richard R. Christensen
President and Chief Executive Officer
What is the Automatic Dividend
Reinvestment and Cash Purchase Plan?
The Automatic Dividend Reinvestment and Cash Purchase Plan offers shareholders
in Liberty ALL-STAR Growth Fund, Inc. a prompt and simple way to reinvest their
dividends and distributions in additional shares of the Fund.
The Plan also gives shareholders the option of making cash investments in Fund
shares through the Plan Agent.
State Street Bank and Trust Company acts as Plan Agent for shareholders in
administering the Plan. The complete Terms and Conditions of the Plan appear
later in this brochure.
How Do I Enroll in the Plan?
No enrollment is necessary. Each registered shareholder is considered a
participant in the Plan (unless the shareholder elects otherwise). All dividends
and distributions will be automatically reinvested by State Street, as the Plan
agent, in whole and/or fractional shares of the Fund, as the case may be.
What If My Shares Are Held by a Broker, Bank or Nominee?
When brokers, banks or nominees hold shares for others who are beneficial
owners, State Street will administer the Plan based on the information provided
to State Street by the registered shareholder (the broker, bank or nominee). To
the extent that you wish to participate, or not participate, in the Plan, you
should contact the institution holding your shares to ensure that your account
is properly represented.
What Does the Plan Offer?
The Plan has two components: reinvestment of dividends
and distributions, and
an optional cash purchase feature.
o Reinvestment of Dividends and Distributions
Unless you elect not to participate in the Plan, your dividends and
distributions will be promptly invested for you, automatically increasing your
holdings in the Fund.
If the Fund declares a dividend or distribution payable at the option of the
shareholder either in cash or in shares of the Fund, the Fund will issue new
shares to you valued at the lower of (i) the market price of the shares on the
valuation date for the dividend or distribution, or (ii) the net asset value of
the shares on such date, provided that the Fund will not issue new shares at a
discount of more than 5% from the then current market price.
If the dividend or distribution is declared payable only in cash, then, unless
you elect not to participate in the Plan, you will receive shares purchased with
the dividend or distribution on the New York Stock Exchange or otherwise on the
open market. If the market price exceeds net asset value before the Plan Agent
has completed its purchases, the Fund may direct the Plan Agent to cease
purchasing shares, with the Fund issuing the remaining shares at net asset value
(but not at a discount of more than 5% from the then current market price).
All reinvestments are in full and fractional shares, carried to three decimal
places.
o Voluntary Cash Purchases
Plan participants have the option of making additional investments in Fund
shares through the Plan Agent. You may invest any amount from $100 to $3,000 on
a monthly basis. The Plan Agent will purchase shares for you on the New York
Stock Exchange or in the open market on or about the 15th day of each calendar
month, and in any event no more than 45 days after such date except where
curtailment or suspension of purchases is necessary for compliance with law. If
you hold shares in your own name, you should deal directly with the Plan Agent,
State Street Bank and Trust Company. We suggest you send your check to the
following address to be received on or about the fifth day of the calendar month
to allow time for processing: State Street Bank and Trust Company P.O. Box 8200
Boston, MA 02266-8200
A shareholder whose shares are held by an institution must send the voluntary
cash payment to the institution (bank, broker or nominee), which (as the
registered shareholder) will forward the payment to State Street.
You should not send your check prior to the 15th day of the month prior to the
month in which you want the check invested. You will not receive interest on
uninvested cash payments. You may withdraw a voluntary cash payment by written
notice, if the notice is received by State Street Bank not less than 48 hours
before the investment date.
Is There a Cost to Participate?
There is no direct charge to participants for reinvesting dividends and
distributions, since the Plan Agent's fees are paid by the Fund. There are no
brokerage charges for shares issued directly by the Fund. Whenever shares are
purchased on the New York Stock Exchange or otherwise on the open market, each
participant will pay a pro rata portion of brokerage commissions.
Brokerage charges for purchasing shares through the Plan, whether with
reinvested dividends and distributions or voluntary cash purchases, are expected
to be less than the usual brokerage charges for individual transactions, because
the Plan Agent will purchase shares for all participants in blocks, resulting in
lower commissions for each individual participant.
Voluntary cash purchases will be subject to a $1.25 service fee for each
investment, in addition to a pro rata share of brokerage commissions.
Brokerage commissions and service fees, if any, will be reflected in the prices
paid for shares.
What are the Tax Implications for Participants?
You will receive tax information annually for your personal records and to help
you prepare your federal income tax return. The automatic reinvestment of
dividends and distributions does not relieve you of any income tax which may be
payable on dividends or distributions.
How do I Terminate my Dividend Reinvestment and Cash
Purchase Plan Account?
Please use the attached card to terminate your Dividend Reinvestment and Cash
Purchase Plan account. Your withdrawal will be effective as specified in
Paragraph 13 of the Terms and Conditions.
If you withdraw, you will receive, without charge, a stock certificate issued in
your name for all full shares; or, if you wish, State Street Bank will sell your
shares and send you the proceeds, less a service fee of $2.50 and less brokerage
commissions. You must choose one of these two options by checking the
appropriate box on the attached card. (State Street will sell your shares only
if they are noncertificated and held on State Street's books. Shares in
certificate form must be sold through a broker.) State Street Bank will convert
any fractional shares you hold at the time of your withdrawal to cash at the
current market price and send you a check for the proceeds.
How do Participating Shareholders Benefit?
o You will build holdings in the Fund easily and
automatically, at no brokerage
cost or at reduced costs.
o You will receive a detailed account statement from State Street Bank and Trust
Company, your Plan Agent, showing total dividends and distributions or optional
cash investments, date of investment, shares acquired and price per share, and
total shares of record held by you and by the Plan Agent. Your proxy will
include shares held for you by the Plan Agent pursuant to the Plan.
o As long as you participate in the Plan, State Street Bank, as your Plan Agent,
will hold the shares it is holding for you in safekeeping, in non-certificated
form. This convenience provides added protection against loss, theft, or
inadvertent destruction of certificates.
Will I be Issued Stock Certificates for Transactions in the Plan?
If a stock certificate is desired, it must be
requested in writing for each
transaction. The attached card may be used for this
purpose. Certificates will
be issued only for whole shares.
Whom Should I Contact for Additional Information?
If you hold shares in your own name, please address all
notices, correspondence,
questions, or other communications regarding the Plan to:
State Street Bank and Trust Company
P.O. Box 8200, Boston, MA 02266-8200
800-542-3863
If your shares are not held in your name, you should contact your brokerage
firm, bank or other nominee for more information.
Either Liberty ALL-STAR Growth Fund, Inc. or State Street Bank may amend or
terminate the Plan. Participants will receive written notice at least 90 days
before the effective date of any amendment. In the case of termination,
participants will receive written notice of termination at least 90 days before
the record date of any dividend or distribution by the Fund.
Terms and Conditions of Automatic
Dividend Reinvestment and
Cash Purchase Plan
(as amended effective
June 30, 1996)
1.Each common shareholder of record holding shares of common stock, par value
$.10 per share ("Shares"), of Liberty ALL-STAR Growth Fund, Inc. (the "Fund")
will automatically be a participant in the Automatic Dividend Reinvestment and
Cash Purchase Plan (the "Plan") unless the shareholder specifically elects
otherwise. All dividends and other distributions of the Fund will be
automatically reinvested by State Street Bank and Trust Company ("State Street")
as Plan agent, in whole and/or fractional Shares, as the case may be, for the
accounts of Plan participants, as hereinafter provided.
2.Whenever the Fund declares a distribution or an income dividend payable in
Shares or cash at the option of the shareholders, each participant in the Plan
hereby elects to take such distribution or dividend entirely in Shares, and
State Street shall automatically receive such shares, including fractions, for
his or her account. The number of additional Shares to be credited to the
account of each participant in the Plan shall be determined by dividing the
dollar amount of the distribution or income dividend payable on his or her
Shares by the lower of (i) the market price per Share on the valuation date, or
(ii) the net asset value per Share on the valuation date. Shares issued by the
Fund will not be issued at a discount of more than 5% from the then current
market value of the Shares. The valuation date will be the payable date for such
distribution or such prior date as may be determined by the Board of Directors
of the Fund.
3.In the event that the Fund declares a distribution or an income dividend
payable only in cash, State Street shall apply the amount of such distribution
or dividend payable on the Shares of each participant in the Plan (less his or
her pro rata share of brokerage commissions incurred with respect to State
Street's open-market purchases in connection with the reinvestment of such
dividend or distribution) to the purchase on the open market of Shares for his
or her account. Such purchases will be made on or shortly after the payment date
for such distribution or dividend, and in no event more than 30 days after such
date except where temporary curtailment or suspension of purchases is necessary
to comply with applicable provisions of federal securities law.
In the event that, prior to State Street's completion of all such purchases
necessary in connection with such distribution or dividend, the market price of
a Share equals or exceeds its net asset value, then State Street may cease
purchasing Shares and the Fund will issue the remaining Shares necessary for the
payment of such distribution or dividend at their net asset value per share, but
not at a discount of more than 5% from the then current market value of the
Shares.
In a case where, in accordance with the preceding paragraph, State Street has
terminated open-market purchases and the Fund has issued the remaining Shares,
the number of Shares received by the participants in respect of such
distribution or dividend will be based on the weighted average of prices paid
for Shares purchased in the open market and the price at which the Fund issued
the remaining Shares.
4.For purposes of the Plan (a) the market price of Shares on a particular date
shall be the last sale price on the New York Stock Exchange (the "Exchange") at
the close of the trading day on that date or, if there is no sale on the
Exchange on that date, then the mean between the closing bid and asked
quotations for Shares on the Exchange on such date, and (b) the net asset value
per Share on a particular date shall be as determined by or on behalf of the
Fund in the manner described in the Fund's Registration Statement on Form N- 2.
5.The open-market purchases provided for above may be made on any securities
exchange where the Shares are traded, in the over-the-counter market or in
negotiated transactions, and may be on such terms as to price, delivery and
otherwise as State Street shall determine.
6.The entire amount of a participant's dividend or other distribution will be
reinvested by State Street in Shares as provided above. For any balance that is
insufficient to purchase a whole Share, State Street will credit a participant's
account with a fractional Share interest computed to three decimal places. The
fractional Share interest is included in all subsequent distributions, and a
participant has voting rights on full and fractional Shares acquired under the
Plan. However, if a participant's Shares are held by a broker, bank or nominee,
any amount not sufficient to purchase a whole share may be credited to a
participant's account in lieu of the fractional Share interest.
7.State Street will maintain all shareholder accounts in the Plan and furnish
written confirmations of all transactions in the accounts, including information
needed by shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by State Street in noncertificated form in
the name of the participant and each shareholder's proxy will include those
Shares purchased pursuant to the Plan.
8.In the case of shareholders such as banks, brokers or nominees that hold
Shares for others who are beneficial owners, State Street will administer the
Plan on the basis of the number of Shares certified from time to time by the
shareholder as representing the total amount registered in the shareholder's
name and held for the account of beneficial owners who are to participate in the
Plan.
9.A participant will be issued a stock certificate for
transactions in the Plan
only upon written request by the participant for each
transaction. Certificates
will be issued only for whole Shares.
10.Participants in the Plan have the option of making additional cash payments
on a monthly basis for investment in Shares. These payments can be made in any
amount from $100 to $3,000. State Street will use all funds received to purchase
Shares in the open market on or about the 15th day of each calendar month, and
in no event no more than 45 days after such date except where temporary
curtailment or suspension of purchases is necessary to comply with applicable
provisions of Federal securities laws.
11.Registered shareholders should send voluntary cash payments to State Street
in a manner than ensures that State Street will receive these payments
approximately 10 days before the next investment date. For shareholders whose
Share are held by an institution, the shareholder must send the voluntary cash
payment to the institution (bank, broker or nominee), which (as the registered
shareholder) will forward the payment to State Street. A participant may
withdraw a voluntary cash payment by written notice if the notice is received by
State Street at least 48 hours before the payment is to be invested.
12.State Street's fee for handling the reinvestment of dividends and
distributions will be paid by the Fund. State Street will charge a $1.25 service
fee for each voluntary cash investment. There will be no brokerage charge to
shareholders for Shares issued directly by the Fund as a result of dividends or
distributions payable either in stock or cash. Each participant, however, will
pay a pro rata share of brokerage commissions incurred with respect to State
Street's open-market purchases in connection with the reinvestment of dividends
or distributions as well as from voluntary cash payments.
13.A shareholder may terminate her or his account under the Plan by notifying
State Street in writing. Such termination will be effective immediately if
notice is received by State Street not less than 10 days prior to any dividend
or distribution record date; otherwise such termination will be effective, with
respect to any subsequent dividend or distributions, on the first trading day
after the dividend paid for such record date has been credited to the
shareholder's account. The Plan may be terminated by State Street or the Fund
upon notice in writing mailed to the shareholder at least 90 days prior to any
record date for the payment of any dividend or distribution by the Fund. Upon
any termination State Street will cause a certificate for the number of full
Shares held in the shareholder's Plan account and a check in payment for any
fractional Share interest to be delivered to her or him. The payment for the
fractional share interest will be valued at the closing price of Shares on the
date the discontinuance is effective.
If a shareholder elects by notice to State Street in writing in advance of a
termination of the shareholder's account under the Plan to have State Street
sell her or his noncertificated Shares credited to the shareholder's account and
remit the proceeds to her or him, State Street is authorized to deduct from the
proceeds $2.50 per transaction plus the brokerage commissions incurred in
connection with such sale.
Terminations in which the shareholder has requested that State Street sell her
or his noncertificated Shares will occur on the first trading day of the week
immediately following receipt of written notification by State Street. A
shareholder may withdraw her or his request to so terminate her or his account
by written notice if the notice is received by State Street at least 48 hours
before the account is to be terminated.
14.These terms and conditions may be amended or supplemented by State Street or
the Fund at any time or times but, except when necessary or appropriate to
comply with applicable law or the rules or policies of the Securities and
Exchange Commission or any other regulatory authority, only by mailing to the
shareholder appropriate written notice at least 90 days prior to the effective
date thereof. The amendment or supplement shall be deemed to be accepted by the
shareholder unless, prior to the effective date thereof, State Street receives
written notice of the termination of the shareholder account under the Plan.
Subject to approval of the Fund's Board of Directors, any such amendment may
include an appointment of a successor agent under these terms and conditions,
with full power and authority to perform all or any of the acts to be performed
by State Street under these terms and conditions.
LIBERTY ALL-STAR GROWTH FUND, INC.
PLEASE TERMINATE MY REINVESTMENT ACCOUNT AND . . . (CHECK
ONE)
[ ] Issue a certificate for all full shares and sell
any fractional shares
remaining in my reinvestment account. [ ] Sell all
shares currently being held
in my reinvestment account and remit a check for the net
proceeds.
PLEASE CONTINUE TO REINVEST MY DIVIDENDS AND
DISTRIBUTIONS AND . . .
[ ] Issue a certificate for shares.
(Please Print)
NAME(S)
DATE
ACCOUNT NUMBER
SIGNATURE(S)
LIBERTY ALL-STAR
GROWTH FUND, INC.
.
.
STATE STREET BANK AND TRUST COMPANY
P.O. BOX 8200
BOSTON, MASSACHUSETTS 02266-8200
PLACE
STAMP
HERE.
FORM PORTFOLIO MANAGEMENT AGREEMENT
______________, 199_
[Name and address of
Portfolio Manager]
Re: Portfolio Management Agreement
------------------------------
Ladies and Gentlemen:
Liberty All-Star Growth Fund, Inc. (the "Fund") is a diversified closed-end
investment company registered under the Investment Company Act of 1940 (the
"Act"), and is subject to the rules and regulations promulgated thereunder.
Liberty Asset Management Company (the "Fund Manager") evaluates and
recommends portfolio managers for the assets of the Fund, and is responsible for
the day-to-day administration of the Fund.
1. Employment as a Portfolio Manager. The Fund being duly authorized hereby
employs _____________________ (the "Portfolio Manager") as a discretionary
portfolio manager, on the terms and conditions set forth herein, of that portion
of the Fund's assets which the Fund Manager determines to assign to the
Portfolio Manager (those assets being referred to as the "Portfolio Manager
Account"). The Fund Manager may, from time to time, allocate and reallocate the
Fund's assets among the Portfolio Manager and the other portfolio managers of
the Fund's assets.
2. Acceptance of Employment; Standard of Performance. The Portfolio Manager
accepts its employment as a discretionary portfolio manager and agrees to use
its best professional judgment to make timely investment decisions for the
Portfolio Manager Account in accordance with the provisions of this Agreement.
3. Portfolio Management Services of Portfolio Manager. In providing
portfolio management services to the Portfolio Manager Account, the Portfolio
Manager shall be subject to the investment objectives, policies and restrictions
of the Fund as set forth in its current Registration Statement under the Act, as
the same may be modified from time to time (the "Registration Statement"), and
the investment restrictions set forth in the Act and the Rules thereunder (as
and to the extent set forth in the Registration Statement or in other
documentation furnished to the Portfolio Manager by the Fund or the Fund
Manager), to the supervision and control of the Board of Directors of the Fund,
and to instructions from the Fund Manager. The Portfolio Manager shall not,
without the prior approval of the Fund or the Fund Manager, effect any
transactions which would cause the Portfolio Manager Account, treated as a
separate fund, to be out of compliance with any of such restrictions or
policies.
4. Transaction Procedures. All portfolio transactions for the Portfolio
Manager Account will be consummated by payment to or delivery by the custodian
of the Fund (the "Custodian"), or such depositories or agents as may be
designated by the Custodian in writing, as custodian for the Fund, of all cash
and/or securities due to or from the Portfolio Manager Account, and the
Portfolio Manager shall not have possession or custody thereof or any
responsibility or liability with respect to such custody. The Portfolio Manager
shall advise and confirm to the Custodian all investment orders for the
Portfolio Manager Account placed by it with brokers and dealers at the time and
in the manner set forth in Schedule A hereto (as amended from time to time by
the Fund Manager). The Fund shall issue to the Custodian such instructions as
may be appropriate in connection with the settlement of any transaction
initiated by the Portfolio manager. The Fund shall be responsible for all
custodial arrangements and the payment of all custodial charges and fees, and,
upon giving proper instructions to the Custodian, the Portfolio Manager shall
have no responsibility or liability with respect to custodial arrangements or
the acts, omissions or other conduct of the Custodian.
5. Allocation of Brokerage. The Portfolio Manager shall have authority and
discretion to select brokers and dealers to execute portfolio transactions
initiated by the Portfolio Manager for the Portfolio Manager Account, and to
select the markets on or in which the transaction will be executed.
A. In doing so, the Portfolio Manager's primary responsibility shall be
to seek to obtain best net price and execution for the Fund. However, this
responsibility shall not obligate the Portfolio Manager to solicit
competitive bids for each transaction or to seek the lowest available
commission cost to the Fund, so long as the Portfolio Manager reasonably
believes that the broker or dealer selected by it can be expected to obtain
a "best execution" market price on the particular transaction and
determines in good faith that the commission cost is reasonable in relation
to the value of the brokerage and research services (as defined in Section
28(e)(3) of the Securities Exchange Act of 1934) provided by such broker or
dealer to the Portfolio Manager viewed in terms of either that particular
transaction or of the Portfolio Manager's overall responsibilities with
respect to its clients, including the Fund, as to which the Portfolio
Manager exercises investment discretion, notwithstanding that the Fund may
not be the direct or exclusive beneficiary of any such services or that
another broker may be willing to charge the Fund a lower commission on the
particular transaction.
B. Subject to the requirements of paragraph A above, the Fund Manager
shall have the right to request that transactions giving rise to brokerage
commissions, in an amount to be agreed upon by the Fund Manager and the
Portfolio Manager, shall be executed by brokers and dealers that provide
brokerage or research services to the Fund Manager, or as to which an
on-going relationship will be of value to the Fund in the management of its
assets, which services and relationship may, but need not, be of direct
benefit to the Portfolio Manager Account.
C. The Portfolio Manager shall not execute any portfolio transactions
for the Portfolio Manager Account with a broker or dealer which is an
"affiliated person" (as defined in the Act) of the Fund, the Portfolio
Manager or any other Portfolio Manager of the Fund without the prior
written approval of the Fund. The Fund Manager will provide the Portfolio
Manager with a list of brokers and dealers which are "affiliated persons"
of the Fund or its Portfolio Managers.
6. Proxies. The Fund will vote or direct the voting of all proxies
solicited by or with respect to the issuers of securities in which assets of the
Portfolio Manager Account may be invested from time to time. At the request of
the Fund, the Portfolio Manager shall provide the Fund with its recommendations
as to the voting of such proxies.
7. Fees for Services. The compensation of the Portfolio Manager for its
services under this Agreement shall be calculated and paid by the Fund Manager
in accordance with the attached Schedule C. Pursuant to the Fund Management
Agreement between the Fund and the Fund Manager, the Fund Manager is solely
responsible for the payment of fees to the Portfolio Manager from the fund
management fees paid to it by the Fund, and the Portfolio Manager agrees to seek
payment of its fees solely from the Fund Manager.
8. Other Investment Activities of Portfolio Manager. The Fund acknowledges
that the Portfolio Manager or one or more of its affiliates has investment
responsibilities, renders investment advice to and performs other investment
advisory services for other individuals or entities ("Client Accounts"), and
that the Portfolio Manager, its affiliates or any of its or their directors,
members, officers, agents or employees may buy, sell or trade in any securities
for its or their respective accounts ("Affiliated Accounts"). Subject to the
provisions of paragraph 2 hereof, the Fund agrees that the Portfolio Manager or
its affiliates may give advice or exercise investment responsibility and take
such other action with respect to other Client Accounts and Affiliated Accounts
which may differ from the advice given or the timing or nature of action taken
with respect to the Portfolio Manager Account, provided that the Portfolio
Manager acts in good faith, and provided further, that it is the Portfolio
Manager's policy to allocate, within its reasonable discretion, investment
opportunities to the Portfolio Manager Account over a period of time on a fair
and equitable basis relative to the Client Accounts and the Affiliated Accounts,
taking into account the cash position and the investment objectives and policies
of the Fund and any specific investment restrictions applicable thereto. The
Fund acknowledges that one or more Client Accounts and Affiliated Accounts may
at any time hold, acquire, increase, decrease, dispose of or otherwise deal with
positions in investments in which the Portfolio Manager Account may have an
interest from time to time, whether in transactions which involve the Portfolio
Manager Account or otherwise. The Portfolio Manager shall have no obligation to
acquire for the Portfolio Manager Account a position in any investment which any
Client Account or Affiliated Account may acquire, and the Fund shall have no
first refusal, coinvestment or other rights in respect of any such investment,
either for the Portfolio Manager Account or otherwise.
9. Limitation of Liability. The Portfolio Manager shall not be liable for
any action taken, omitted or suffered to be taken by it in its reasonable
judgment, in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement, or in
accordance with (or in the absence of) specific directions or instructions from
the Fund, provided, however, that such acts or omissions shall not have resulted
from the Portfolio Manager's willful misfeasance, bad faith or gross negligence,
a violation of the standard of care established by and applicable to the
Portfolio Manager in its actions under this Agreement or breach of its duty or
of its obligations hereunder (provided, however, that the foregoing shall not be
construed to protect the Portfolio Manager from liability in violation of
Section 17(i) of the Act).
10. Confidentiality. Subject to the duty of the Portfolio Manager and the
Fund to comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Portfolio Manager Account and the
actions of the Portfolio Manager and the Fund in respect thereof.
11. Assignment. This Agreement shall terminate automatically in the event
of its assignment, as that term is defined in Section 2(a)(4) of the Act. The
Portfolio Manager shall notify the Fund in writing sufficiently in advance of
any proposed change of control, as defined in Section 2(a)(9) of the Act, as
will enable the Fund to consider whether an assignment as defined in Section
2(a)(4) of the Act will occur, and whether to take the steps necessary to enter
into a new contract with the Portfolio Manager.
12. Representations, Warranties and Agreements of
the Fund. The Fund represents, warrants and agrees that:
A. The Portfolio Manager has been duly appointed
to provide investment services to the Portfolio
Manager Account as contemplated hereby.
B. The Fund has delivered to the Portfolio Manager such instructions
governing the investment of the Portfolio Manager Account as are necessary
for the Portfolio Manager to carry out its obligations under this
Agreement.
13. Representations, Warranties and Agreements of
the Portfolio Manager. The Portfolio Manager represents,
warrants and agrees that:
A. It is registered as an "Investment Adviser"
under the Investment Advisers Act of 1940 ("Advisers
Act").
B. It will maintain, keep current and preserve on behalf of the Fund,
in the manner required or permitted by the Act and the Rules thereunder,
the records identified in Schedule B (as Schedule B may be amended from
time to time by the Fund Manager). The Portfolio Manager agrees that such
records are the property of the Fund, and will be surrendered to the Fund
promptly upon request.
C. It will adopt a written code of ethics complying with the
requirements of Rule l7j-l under the Act and will provide the Fund with a
copy of the code of ethics and evidence of its adoption. Within 45 days of
the end of each year while this Agreement is in effect, an officer or
general partner of the Portfolio Manager shall certify to the Fund that the
Portfolio Manager has complied with the requirements of Rule l7j-l during
the previous year and that there has been no violation of its code of
ethics or, if such a violation has occurred, that appropriate action was
taken in response to such violation. Upon the written request of the Fund,
the Portfolio Manager shall permit the Fund to examine the reports required
to be made by the Portfolio Manager under Rule l7j-l(c)(l).
D. Upon request, the Portfolio Manager will promptly supply the Fund
with any information concerning the Portfolio Manager and its stockholders,
employees and affiliates which the Fund may reasonably require in
connection with the preparation of its Registration Statement or amendments
thereto, proxy material, reports and other documents required to be filed
under the Act, the Securities Act of 1933, or other applicable securities
laws.
14. Amendment. This Agreement may be amended at any time, but (except for
Schedules A and B which may be amended by the Fund Manager acting alone) only by
written agreement among the Portfolio Manager, the Fund Manager and the Fund,
which amendment, other than amendments to Schedules A and B, is subject to the
approval of the Board of Directors and the Shareholders of the Fund as and to
the extent required by the Act.
15. Effective Date; Term. This Agreement shall
continue in effect until July 31, 1998 and shall continue
in effect thereafter provided such continuance is
specifically approved at least annually by (i) the Fund's
Board of Directors or (ii) a vote of a "majority" (as
defined in the Act) of the Fund's outstanding voting
securities, provided that in either event such
continuance is also approved by a majority of the Board
of Directors who are not "interested persons" (as
defined in the Act) of any party to this Agreement, by
vote cast in person at a meeting called for the purpose
of voting on such approval [, and provided further that,
in accordance with the conditions of the application of
the Fund and the Fund Manager for an exemption from
Section 15(a) of the Act (Rel. Nos. IC 20772 and 20824,
as amended, Rel. Nos. IC. 22498 and 22542), the
continuance of the Agreement following the regularly
scheduled annual meeting of the shareholders of the Fund
next following the date of this Agreement shall be
subject to approval at such meeting by such "majority"
vote of the Fund's outstanding voting securities.]* The
aforesaid requirement that continuance of this Agreement
be "specifically approved at least annually" shall be
construed in a manner consistent with the Act and the
Rules and Regulations thereunder.
16. Termination. This Agreement may be terminated by any party, without
penalty, immediately upon written notice to the other parties in the event of a
breach of any provision thereof by a party so notified, or otherwise upon not
less than thirty (30) days' written notice to the Portfolio Manager in the case
of termination by the Fund or the Fund Manager, or ninety (90) days' written
notice to the Fund and the Fund Manager in the case of termination by the
Portfolio Manager, but any such termination shall not affect the status,
obligations or liabilities of any party hereto to the other parties.
17. Applicable Law. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be administered,
construed and enforced according to the laws of the Commonwealth of
Massachusetts.
18. Severability. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the remainder
of this Agreement, and such term or condition except to such extent or in such
application, shall not be affected thereby, and each and every term and
condition of this Agreement shall be valid and enforced to the fullest extent
and in the broadest application permitted by law.
[19. Prior Agreement Superceded. This Agreement
supercedes and replaces the Portfolio Management
Agreement dated among the Fund, the Fund Manager
and the Portfolio Manager.]
LIBERTY ALL-STAR GROWTH FUND, INC.
By:____________________________________
Title:_________________________________
LIBERTY ASSET MANAGEMENT COMPANY
By:____________________________________
Title:_________________________________
ACCEPTED:
[Name of Portfolio Manager]
By:________________________________
Title:_____________________________
SCHEDULES: A. Operational Procedures For Portfolio Transactions
B. Record Keeping Requirements
C. Fee Schedule
SCHEDULE C
PORTFOLIO MANAGER FEE
For services provided to the Portfolio Manager Account, the Fund Manager
will pay to the Portfolio Manager, on or before the fifth business day of each
calendar quarter, a fee for the previous calendar quarter at the rate of:
.10% (.40% annually) of the Portfolio Manager's Percentage (as defined
below) of the average weekly net assets of the Fund up to and including
$125 million;
.075% (.30% annually) of the Portfolio Manager's Percentage of the average
weekly net assets of the Fund exceeding $125 million and up to and
including $250 million; and
.05% (.20% annually) of the Portfolio Manager's Percentage of the average
weekly net assets of the Fund exceeding $250 million.
Each quarterly payment set forth above shall be based on the average weekly
net assets during such previous calendar quarter. The fee for the period from
the date this Agreement becomes effective to the end of the calendar quarter in
which such effective date occurs will be prorated according to the proportion
that such period bears to the full quarterly period. Upon any termination of
this Agreement before the end of a calendar quarter, the fee for the part of
that calendar quarter during which this Agreement was in effect shall be
prorated according to the proportion that such period bears to the full
quarterly period and will be payable upon the date of termination of this
Agreement. For the purpose of determining fees payable to the Portfolio Manager,
the value of the Fund's net assets will be computed at the times and in the
manner specified in the Registration Statement as from time to time in effect.
"Portfolio Manager's Percentage" means the percentage obtained by dividing
the average weekly net assets in the Portfolio Manager Account by the Fund's
average weekly net assets.
AGREEMENT
This AGREEMENT is made as of _________________, 1998 between The Chase Manhattan
Bank (the "Bank") and each of the trusts on behalf of each of the funds set
forth in Schedule A hereto (each, a "Customer").
WHEREAS, the Bank, the Customers and certain other investment companies have
entered into a Global Custody Agreement dated as of August 17, 1997 (the
"Custody Agreement") pursuant to which the Bank has agreed to serve as custodian
of the Customers' assets and, in connection therewith, to establish and maintain
a Custody Account and Deposit Account on behalf of the Customers; and
WHEREAS, the Custody Agreement provides that additional Accounts may be
established and separately accounted for upon written agreement between the Bank
and the Customers.
NOW, THEREFORE, the Bank and the Customers hereby agree as follows:
1. Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Custody Agreement.
2. The Bank shall establish and maintain a separate
Account ("Portfolio Manager Account") for each
portfolio management firm ("Portfolio Manager")
appointed, including Portfolio Managers appointed
subsequent to the date of this Agreement, by the
applicable Customer to manage such Customer's Assets,
each Portfolio Manager Account to contain the Assets
allocated to that Portfolio Manager by the Customer's
investment manager, Liberty Asset Management Company
(the "Fund Manager"), as specified from time to time
in Instructions to the Bank. All Assets received and
delivered and all payments made and received for a
Customer's Custody Account or Deposit Account
resulting from investment decisions made by a
Portfolio Manager pursuant to Instructions to the
Bank shall be credited to or debited from the
applicable Portfolio Manager Account, together with
all investment earnings on the Assets in such Account
and all other amounts paid on or with respect to, and
all Assets received in exchange for, such Assets.
Such crediting and debiting shall occur at the same
time and in the same manner as with respect to the
applicable Custody Account or Deposit Account. All
other receipts and expenditures by a Customer shall
be allocated among the Portfolio Manager Accounts in
accordance with Instructions.
3. A Portfolio Manager Account shall be deemed an
"Account" for purposes of the Custody Agreement.
4. All notices, statements, Corporate Actions and proxies delivered by the
Bank to the Customers pursuant to the Custody Agreement shall also be
delivered simultaneously by the Bank to the appropriate Portfolio Manager.
5. In the event that the Fund Manager establishes
additional investment companies, or additional series
to existing investment companies, which are
multi-managed in a similar manner as the Customers
(the "New Customers"), and the New Customers become
party to the Custody Agreement, then the New
Customers shall also become party to this Agreement
and their Portfolio Manager Accounts shall be deemed
"Accounts" for purposes of the Custody Agreement by a
written instrument signed by the New Customer and the
Bank.
6. A copy of the Agreement and Declaration of Trust of
each Customer is on file with the Secretary of State
of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on
behalf of the Trustees of each Customer as Trustees
and not individually and that the obligations of this
instrument are not binding upon any of the Trustees,
officers or shareholders of any Customer individually
but are binding only upon the assets and property of
a Customer.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Each of the Investment Companies
listed on Schedule A
By______________________________
Name:
Title:
THE CHASE MANHATTAN BANK
By______________________________
Name:
Title:
Schedule A
List of Investment Companies party to the Agreement
Liberty All-Star Growth Fund, Inc.
Liberty All-Star Equity Fund
Liberty Variable Investment Trust, on behalf of
Liberty All-Star Equity Fund, Variable Series
REGISTRAR, TRANSFER AGENCY AND SERVICE AGREEMENT
between
THE CHARLES ALLMON TRUST, INC.
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
Page
1. Terms of Appointment; Duties of theBank............1
2. Fees and Expenses..................................3
3. Representations and Warranties of the Bank.........4
4. Representations and Warranties of the Fund.........5
5. Data Access and Proprietary Information............6
6. Indemnification....................................8
7. Standard of Care..................................11
8. Covenants of the Fund and the Bank................11
9. Termination of Agreement..........................13
10. Assignment........................................13
11. Amendment.........................................14
12. Massachusetts Law to Apply........................14
13. Force Majeure.....................................14
14. Consequential Damages.............................14
15. Merger of Agreement...............................15
16. Counterparts......................................15
REGISTRAR,TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the day of , 1994, by and between THE CHARLES ALLMON TRUST,
INC., a Maryland corporation, having its principal office and place of business
at 4405 East-West Highway, Bethesda, Maryland, 20814, (the "Fund"), and STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust company having its
principal office and place of business at 225 Franklin Street, Boston,
Massachusetts 02110 (the "Bank"). WHEREAS, the Fund desires to appoint the Bank
as its registrar, transfer agent, dividend disbursing agent, custodian of
certain retirement plans and agent in connection with certain other activities,
and the Bank desires to accept such appointment; NOW, THEREFORE, in
consideration of the mutual covenants herein contained, the parties hereto agree
as follows:
l. Terms of Appointment; Duties of the Bank
1.1 Subject to the terms and conditions set forth in
this Agreement, the Fund
hereby employs and appoints the Bank to act as, and
the Bank agrees to act
as registrar, transfer agent for the Fund's
authorized and issued shares
of its common stock, ("Shares"), dividend
disbursing agent, custodian of
certain retirement plans and agent in
connection with any dividend
reinvestment plan in effect as of the date of this
Agreement.
1.2 The Bank agrees that it will perform the following
services:
(a) In accordance with procedures established
from time to
time by agreement between the Fund and the
Bank, the Bank shall:
(i) Issue and record the appropriate number
of Shares as
authorized and hold such Shares in the
appropriate
Shareholder account;
(ii) Effect transfers of Shares by the
registered owners
thereof upon receipt of appropriate
documentation;
(iii) Prepare and transmit payments for
dividends and
distributions declared by the Fund;
(iv) Act as agent for Shareholders
pursuant to the dividend
reinvestment and cash purchase plan as
amended from time to time
and mutually agreed upon by the
Fund and the Bank in
substantially the form attached as
Exhibit A hereto; and
(vi) Issue replacement certificates
for those
certificates alleged to have been
lost, stolen or
destroyed upon receipt by
the Bank of
indemnification satisfactory to
the Bank and
protecting the Bank and the Fund, and
the Bank at
its option, may issue replacement
certificates in
place of mutilated stock
certificates upon
presentation thereof and without such
indemnity;
(b) In addition to and neither in lieu nor in contravention of the services set
forth in the above paragraph (a), the Bank shall: (i) perform all the customary
services of a registrar, transfer agent, dividend disbursing agent, custodian of
certain retirement plans and agent of the dividend reinvestment and cash
purchase plan as described in Section 1 consistent with those requirements in
effect as at the date of this Agreement. The detailed definition, frequency,
limitations and associated costs (if any) set out in the attached fee schedule,
include but not limited to: maintaining all Shareholder accounts, preparing
Shareholder meeting lists, mailing proxies and proxy material to current
shareholders and receiving and tabulating proxies, mailing Shareholder reports
to current Shareholders, withholding and paying on a timely basis taxes on U.S.
resident and non-resident alien accounts where applicable, preparing and filing
U.S. Treasury Department Forms 1099 and other appropriate forms required with
respect to dividends and distributions by federal or state authorities for all
registered Shareholders, preparing and mailing confirmations and statements of
account to shareholders for all confirmable transactions in shareholder
accounts, and providing shareholder information. (c) The Bank shall provide
additional services on behalf of the Fund (i.e., escheatment services) which may
be agreed upon in writing between the Fund and the Bank.
2. Fees and Expenses
2.1 For the performance by the Bank pursuant to this Agreement, the Fund agrees
to pay the Bank an annual maintenance fee as set out in the initial fee schedule
attached hereto. Such fees and out-of-pocket expenses and advances identified
under Section 2.2 below may be changed from time to time subject to mutual
written agreement between the Fund and the Bank. 2.2 In addition to the fee paid
under Section 2.1 above, the Fund agrees to reimburse the Bank for out-of-pocket
expenses, including but not limited to confirmation production, postage, forms,
telephone, microfilm, microfiche, tabulating proxies, records storage, or
advances incurred by the Bank for the items set out in the fee schedule attached
hereto. In addition, any other expenses incurred by the Bank at the request or
with the consent of the Fund, will be reimbursed by the Fund. 2.3 The Fund
agrees to pay all fees and reimbursable expenses within five days following the
receipt of the respective billing notice. Postage for mailing of dividends,
proxies, Fund reports and other mailings to all Shareholder accounts shall be
advanced to the Bank by the Fund at least seven (7) days prior to the mailing
date of such materials.
3. Representations and Warranties of the Bank
The Bank represents and warrants to the Fund that:
3.1 It is a trust company duly organized and
existing and in good standing
under the laws of the Commonwealth of Massachusetts.
3.2 It is duly qualified to carry on its
business in the
Commonwealth of Massachusetts.
3.3 It is empowered under applicable laws and by its
Charter and By-Laws to
enter into and perform this Agreement.
3.4 All requisite corporate proceedings have been
taken to authorize it to
enter into and perform this Agreement.
3.5 It has and will continue to have access to the
necessary facilities,
equipment and personnel to perform its duties and
obligations under this
Agreement.
4. Representations and Warranties of the Fund
The Fund represents and warrants to the Bank that:
4.1 It is a corporation duly organized and existing and
in good standing under
the laws of Maryland.
4.2 It is empowered under applicable laws and by its
Articles of Incorporation
and By-Laws to enter into and perform this
Agreement.
4.3 All corporate proceedings required by said
Articles of Incorporation and
By-Laws have been taken to authorize it to enter
into and perform this
Agreement.
4.4 It is a closed-end, diversified investment
company registered under the
Investment Company Act of 1940, as amended.
4.5 To the extent required by federal securities laws a
registration statement
under the Securities Act of 1933, as amended, is
currently effective, and
appropriate state securities law filings have
been made with respect to
all Shares of the Fund being offered for sale;
information to the contrary
will result in immediate notification to the Bank.
4.6 It shall make all required filings under
federal and state securities
laws.
5. Data Access and Proprietary Information 5.1 The Fund acknowledges that the
data bases, computer programs, screen formats, report formats, interactive
design techniques, and documentation manuals furnished to the Fund by the Bank
as part of the Fund's ability to access certain Fund-related data ("Customer
Data") maintained by the Bank on data bases under the control and ownership of
the Bank or other third party ("Data Access Services") constitute copyrighted,
trade secret, or other proprietary information (collectively, "Proprietary
Information") of substantial value to the Bank or other third party. In no event
shall Proprietary Information be deemed Customer Data. The Fund agrees to treat
all Proprietary Information as proprietary to the Bank and further agrees that
it shall not divulge any Proprietary Information to any person or organization
except as may be provided hereunder. Without limiting the foregoing, the Fund
agrees for itself and its employees and agents: (a) to access Customer Data
solely from locations as may be designated in writing by the Bank and solely in
accordance with the Bank's applicable user documentation; (b) to refrain from
copying or duplicating in any way the Proprietary Information; (c) to refrain
from obtaining unauthorized access to any portion of the Proprietary
Information, and if such access is inadvertently obtained, to inform the Bank in
a timely manner of such fact and dispose of such information in accordance with
the Bank's instructions; (d) to refrain from causing or allowing third-party
data acquired hereunder from being retransmitted to any other computer facility
or other location, except with the prior written consent of the Bank; (e) that
the Fund shall have access only to those authorized transactions agreed upon by
the parties; and (f) to honor all reasonable written requests made by the Bank
to protect at the Bank's expense the rights of the Bank in Proprietary
Information at common law, under federal copyright law and under other federal
or state law. Each party shall take reasonable efforts to advise its employees
of their obligations pursuant to this Section 5. The obligations of this Section
shall survive any earlier termination of this Agreement. 5.2 If the Fund
notifies the Bank that any of the Data Access Services do not operate in
material compliance with the most recently issued user documentation for such
services, the Bank shall endeavor in a timely manner to correct such failure.
Organizations from which the Bank may obtain certain data included in the Data
Access Services are solely responsible for the contents of such data and the
Fund agrees to make no claim against the Bank arising out of the contents of
such third-party data, including, but not limited to, the accuracy thereof. DATA
ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN
CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS. THE BANK
EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE EXPRESSLY STATED HEREIN
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. 5.3 If the transactions available to the Fund
include the ability to originate electronic instructions to the Bank in order to
(i) effect the transfer or movement of cash or Shares or (ii) transmit
Shareholder information or other information, (such transactions constituting a
"COEFI"), then in such event the Bank shall be entitled to rely on the validity
and authenticity of such instruction without undertaking any further inquiry as
long as such instruction is undertaken in conformity with security procedures
established by the Bank from time to time.
6. Indemnification 6.1 The Bank shall not be responsible for, and the Fund shall
indemnify and hold the Bank harmless from and against, any and all losses,
damages, costs, charges, counsel fees, payments, expenses and liability arising
out of or attributable to: (a) All actions of the Bank or its agent or
subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or willful
misconduct. (b) The Fund's lack of good faith, negligence or willful misconduct
which arise out of the breach of any representation or warranty of the Fund
hereunder. (c) The reliance on or use by the Bank or its agents or
subcontractors of information, records, documents or services which (i) are
received by the Bank or its agents or subcontractors, and (ii) have been
prepared, maintained or performed by the Fund or any other person or firm on
behalf of the Fund including but not limited to any previous transfer agent or
registrar. (d) The reliance on, or the carrying out by the Bank or its agents or
subcontractors of, any instructions or requests of the Fund. (e) The offer or
sale of Shares in violation of any requirement under the federal securities laws
or regulations or the securities laws or regulations of any state that such
Shares be registered in such state or in violation of any stop order or other
determination or ruling by any federal agency or any state with respect to the
offer or sale of such Shares in such state. 6.2 The Bank shall indemnify and
hold the Fund harmless from and against any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liability arising out of or
attributable to any action or failure or omission to act by the Bank as a result
of the Bank's lack of good faith, negligence or willful misconduct. 6.3 At any
time, the Bank may apply to any officer of the Fund for instructions, and may
consult with legal counsel with respect to any matter arising in connection with
the services to be performed by the Bank under this Agreement, and the Bank and
its agents or subcontractors shall not be liable and shall be indemnified by the
Fund for any action taken or omitted by it in reliance upon such instructions or
upon the opinion of such counsel. The Bank, its agents and subcontractors shall
be protected and indemnified in acting upon any paper or document furnished by
or on behalf of the Fund, reasonably believed to be genuine and to have been
signed by the proper person or persons, or upon any instruction, information,
data, records or documents provided the Bank or its agents or subcontractors by
machine readable input, telex, CRT data entry or other similar means authorized
by the Fund, and shall not be held to have notice of any change of authority of
any person, until receipt of written notice thereof from the Fund. The Bank, its
agents and subcontractors shall also be protected and indemnified in recognizing
stock certificates which are reasonably believed to bear the proper manual or
facsimile signatures of the officers of the Fund, and the proper
countersignature of any former transfer agent or former registrar, or of a
co-transfer agent or co-registrar. 6.4 In order that the indemnification
provisions contained in this Section 6 shall apply, upon the assertion of a
claim for which either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the other party of such assertion,
and shall keep the other party advised with respect to all developments
concerning such claim. The party who may be required to indemnify shall have the
option to participate with the party seeking indemnification in the defense of
such claim. The party seeking indemnification shall in no case confess any claim
or make any compromise in any case in which the other party may be required to
indemnify it except with the other party's prior written consent.
7. Standard of Care The Bank shall at all times act in good faith and agrees to
use its best efforts within reasonable limits to insure the accuracy of all
services performed under this Agreement, but assumes no responsibility and shall
not be liable for loss or damage due to errors unless said errors are caused by
its negligence, bad faith, or willful misconduct or that of its employees.
8. Covenants of the Fund and the Bank
8.1 The Fund shall promptly furnish to the Bank the
following:
(a) A certified copy of the resolution of
the Board of
Directors of the Fund authorizing the
appointment of the Bank and the
execution and delivery of this Agreement.
(b) A copy of the Articles of Incorporation
and By-Laws of
the Fund and all amendments thereto.
8.2 The Bank hereby agrees to establish and maintain facilities and procedures
reasonably acceptable to the Fund for safekeeping of stock certificates, check
forms and facsimile signature imprinting devices, if any; and for the
preparation or use, and for keeping account of, such certificates, forms and
devices.
8.3 The Bank shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, the Bank agrees that all such records prepared or
maintained by the Bank relating to the services to be performed by the Bank
hereunder are the property of the Fund and will be preserved, maintained and
made available in accordance with such Section and Rules, and will be
surrendered promptly to the Fund on and in accordance with its request.
8.4 The Bank and the Fund agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other person, except
as may be required by law.
8.5 In case of any requests or demands for the
inspection of the Shareholder records of the Fund, the Bank will endeavor to
notify the Fund and to secure instructions from an authorized officer of the
Fund as to such inspection. The Bank reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be held liable for the failure to exhibit the Shareholder records to such
person.
9. Termination of Agreement
9.1 This Agreement may be terminated by either party
upon one hundred twenty
(120) days written notice to the other.
9.2 Should the Fund exercise its right to
terminate, all out-of-pocket
expenses associated with the movement of records
and material will be
borne by the Fund. Additionally, the Bank reserves
the right to charge for
any other reasonable expenses associated with
such termination and/or a
charge equivalent to the average of three (3)
months' fees.
10. Assignment
10.1 Except as provided in Section 10.3 below, neither
this Agreement nor any
rights or obligations hereunder may be assigned
by either party without
the written consent of the other party.
10.2 This Agreement shall inure to the benefit of
and be binding upon the
parties and their respective permitted successors
and assigns.
10.3 The Bank may, without further consent on the part
of the Fund, subcontract
for the performance hereof with (i) Boston
Financial Data Services, Inc.,
a Massachusetts corporation ("BFDS") which is
duly registered as a
transfer agent pursuant to Section 17A(c)(1) of
the Securities Exchange
Act of 1934, as amended ("Section 17A(c)(1)"); (ii)
a BFDS subsidiary duly
registered as a transfer agent pursuant to Section
17A(c)(1); or (iii) a
BFDS affiliate; provided, however, that the
Bank shall be as fully
responsible to the Fund for the acts and omissions
of any subcontractor as
it is for its own acts and omissions.
11. Amendment This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the Board
of Directors of the Fund.
12. Massachusetts Law to Apply This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of the
Commonwealth of Massachusetts.
13. Force Majeure In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
14. Consequential Damages Neither party to this Agreement shall be liable to the
other party for consequential damages under any provision of this Agreement or
for any consequential damages arising out of any act or failure to act
hereunder.
15. Merger of Agreement This Agreement constitutes the entire agreement between
the parties hereto and supersedes any prior agreement with respect to the
subject matter hereof whether oral or written.
16. Counterparts This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
THE CHARLES ALLMON TRUST, INC.
BY:
ATTEST:
STATE STREET BANK AND TRUST COMPANY
BY:__________________________________
Executive Vice President
ATTEST:
PRICING AND BOOKKEEPING AGREEMENT AGREEMENT dated as of January 1, 1996, between
Liberty All-Star Growth Fund, Inc. (Fund) and Colonial Management Associates,
Inc.(Colonial), a Massachusetts corporation.
The Fund and Colonial agree as follows:
1.Appointment. The Fund appoints Colonial as agent to perform the services
described below, such appointment to take effect January 1, 1996.
2.Services. Colonial shall (i) determine and timely communicate to persons
designated by the Fund the Fund's net asset value per share in accordance with
the applicable provisions of the Fund's Registration Statement on Form N-2; and
(ii) maintain and preserve in a secure manner the accounting records of the
Fund, including all such accounting records as the Fund is obligated to maintain
and preserve under the Investment Company Act of 1940 and the rules thereunder,
applicable federal and state tax laws and any other applicable laws, rules or
regulations. In addition to the accounting records of the Fund as a whole,
Colonial will maintain and preserve in a secure manner separate portfolio
accounts ("Portfolio Manager Accounts") for the assets of the Fund allocated by
Liberty Asset Management Company to each of the Fund's Portfolio Managers. All
records shall be the property of the Fund. Colonial will provide disaster
planning to minimize possible service interruption.
3.Audit, Use and Inspection. Colonial shall make available on its premises
during regular business hours all records of a Fund for reasonable audit, use
and inspection by the Fund, its agents and any regulatory agency having
authority over the Fund.
4.Compensation. The Fund will pay Colonial a monthly fee of $1,750 plus $250
for each Portfolio Manager Account, plus a percentage fee for each month at the
following annual rates: 0.0233% of the average weekly net assets of the Fund for
such month in excess of $50 million up to $500 million; 0.0167% of the average
weekly net assets of the Fund for such month in excess of $500 million up to $1
billion; 0.015% of the average weekly net assets of the Fund for such month in
excess of $1 billion up to $3 billion; and 0.001% of the average weekly net
assets of the Fund for such month in excess of $3 billion.
5.Compliance. Colonial shall comply with applicable provisions in the Fund's
Registration Statement on Form N-2 relating to pricing and bookkeeping.
6.Limitation of Liability. In the absence of willful misfeasance, bad faith
or gross negligence on the part of Colonial, or reckless disregard of its
obligations and duties hereunder, Colonial shall not be subject to any liability
to the Fund, to any shareholder of the Fund or to any other person, firm or
organization, for any act or omission in the course of, or connected with,
rendering services hereunder.
7.Amendments. The Fund shall submit to Colonial a reasonable time in advance
of filing with the Securities and Exchange Commission copies of any changes in
its Registration Statements. If a change in documents or procedures materially
increases the cost to Colonial of performing its obligations, Colonial shall be
entitled to receive reasonable additional compensation.
8. Duration and Termination, etc. This Agreement may be changed only by
writing executed by each party. This Agreement: (a) shall continue in effect
from year to year so long as approved annually by vote of a majority of the
Directors who are not affiliated with Colonial; (b) may be terminated at any
time without penalty by sixty days' written notice to either party; and (c) may
be terminated at any time for cause by either party if such cause remains
unremedied for a reasonable period not to exceed ninety days after receipt of
written specification of such cause. Paragraph 6 of this Agreement shall survive
termination. If the Fund designates a successor to any of Colonial's
obligations, Colonial shall, at the expense and direction of the Fund, transfer
to the successor all Fund records maintained by Colonial.
9. Miscellaneous. This Agreement shall be governed by the laws of
The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above.
LIBERTY ALL-STAR GROWTH FUND, INC.
By: Peter L. Lydecker, Controller
COLONIAL MANAGEMENT ASSOCIATES, INC.
By: Arthur O. Stern, Executive Vice President
