<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
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14a-6(e)(2))
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[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
SteinRoe Investment Trust
(Name of Registrant as Specified In Its Charter)
______________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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or Item 22(a)(2) of Schedule 14A.
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14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined).
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<PAGE> 1
STEINROE INVESTMENT TRUST
SteinRoe Prime Equities
SteinRoe Young Investor Fund
SteinRoe Total Return Fund
SteinRoe Growth Stock Fund
SteinRoe Capital Opportunities Fund
SteinRoe Special Fund
NOTICE OF MEETING OF SHAREHOLDERS--AUGUST 15, 1995
- - This tells you when and where the meeting will be held and what
matters will be voted on.
A meeting of the shareholders of each Fund named above will be
held on August 15, 1995, at 10:00 a.m. Chicago time at the
office of the Funds, Suite 3300, One South Wacker Drive,
Chicago, Illinois 60606. The meeting has been called to
consider and to vote upon new agreements relating to management
and administrative services provided to the Fund by Stein Roe &
Farnham Incorporated (the "Adviser"), as well as the
compensation the Adviser receives for those services. When the
investment advisory services to a mutual fund and/or the fees
for such services change, as they may from time to time, a new
agreement (or agreements) is created and must be approved by the
fund's independent trustees and its shareholders.
The new agreements you are being asked to vote upon are
described in the following document, and your vote, along with
that of your fellow shareholders, will determine whether the
agreements are approved or rejected.
PLEASE NOTE THAT THE TRUSTEES--WHOSE JOB IT IS TO PROTECT YOUR
INTERESTS AS A SHAREHOLDER AND TO ENSURE THAT THE FUNDS ARE
MANAGED PROFESSIONALLY AND COST EFFECTIVELY--HAVE UNANIMOUSLY
APPROVED THE NEW AGREEMENTS AND RECOMMEND THAT YOU VOTE TO
APPROVE THE AGREEMENTS.
The specific matters that will be submitted to shareholders of
each Fund for approval or disapproval are:
1. The following agreements relating to the Fund between
SteinRoe Investment Trust and the Adviser that would replace
the Fund's present Investment Advisory Agreement (as the
names
<PAGE> 2
suggest, these agreements relate to the services furnished by
the Adviser to the Fund):
A. Administrative Agreement,
B. Management Agreement;
2. A Management Agreement between SR&F Base Trust and the
Adviser that would replace the proposed Management Agreement
between Investment Trust and the Adviser if and when the Fund
converted to a master/feeder fund structure (this structure
would permit the Fund to pool its assets with other funds
that have the same investment objective, with the combined
assets being managed by the Adviser); and
Any other business as may properly come before the meeting.
THE BOARD OF TRUSTEES STRONGLY RECOMMENDS THAT YOU VOTE IN FAVOR OF
THE PROPOSED AGREEMENTS. PLEASE MARK, DATE, SIGN AND MAIL THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED SO YOUR VOTE MAY BE CAST AT
THE MEETING.
BY THE TRUSTEES: Timothy K. Armour Francis W. Morley
Kenneth L. Block Charles R. Nelson
William W. Boyd Gordon R. Worley
Lindsay Cook
June 26, 1995
<PAGE> 3
PROXY STATEMENT
- - THIS DOCUMENT GIVES YOU INFORMATION YOU NEED IN ORDER TO VOTE ON
THE MATTERS COMING BEFORE THE MEETING. IF YOU HAVE ANY
QUESTIONS, PLEASE CALL US AT OUR TOLL-FREE NUMBER, 1-800-338-
2550. IF YOU WOULD LIKE A COPY OF THE FUNDS' MOST RECENT ANNUAL
AND SEMIANNUAL REPORTS, PLEASE CALL US AT THE SAME TOLL-FREE
NUMBER OR WRITE TO INVESTMENT TRUST, P.O. BOX 804058, CHICAGO,
ILLINOIS 60680.
- - WHO IS ASKING FOR MY VOTE AND WHAT AM I VOTING ON?
The Trustees of SteinRoe Investment Trust ("Investment Trust"),
who are responsible for overseeing each of the Funds, have asked
that you vote on three new agreements (the "Proposed
Agreements") relating to the services that Stein Roe & Farnham
Incorporated, as investment adviser (the "Adviser"), provides to
the Funds. The Proposed Agreements describe the services that
the Adviser provides to the Funds and the compensation it
receives for doing so. The vote will be formally taken at an
August 15 meeting of shareholders. You may vote in person at
that meeting or--as most shareholders do--return the attached
proxy card, indicating your vote, in advance of the meeting.
Your completed and signed proxy will be voted in accordance with
your instructions. If you sign the proxy, but do not fill in a
vote, your shares will be voted in accordance with the Trustees'
recommendation.
- - HOW DO THE TRUSTEES RECOMMEND THAT I VOTE?
The Trustees believe that the new agreements are fair and
reasonable and in the best interests of each Fund and its
shareholders. Accordingly, the Trustees have unanimously
approved the agreements and recommend that you vote for the new
agreements.
- - WHO IS ELIGIBLE TO VOTE?
Shareholders of record of each Fund at the close of business on
June 16, 1995, are entitled to vote at the meeting. Each share
of a Fund is entitled to a number of votes on any matter
relating to that Fund that comes before the meeting equal to the
dollar net asset value of the share as of the record date for
the meeting. Each Fund's outstanding shares and its net asset
value per share on the record date were:
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No. of Shares
Fund Outstanding Net Asset Value
- -------------------------------- ------------- ---------------
SteinRoe Prime Equities 8,417,421 $15.39
SteinRoe Young Investor Fund 1,703,754 12.08
SteinRoe Total Return Fund 8,541,207 26.57
SteinRoe Growth Stock Fund 14,137,040 23.36
SteinRoe Capital Opportunities Fund 5,399,081 37.18
SteinRoe Special Fund 51,209,982 23.54
If you return a duly executed proxy, we will cast your vote in
accordance with your instructions. If you return a signed
proxy, but do not fill in a vote, your vote will be cast in
accordance with the Trustees' recommendation.
APPROVAL OF PROPOSED AGREEMENTS
- - WHAT ARE THE TERMS OF THE PRESENT AGREEMENTS?
Currently Investment Trust, on behalf of each Fund, has an
Investment Advisory Agreement (the "Fund's Present Agreement")
with Stein Roe & Farnham Incorporated (the "Adviser"). Under
the Present Agreement the Adviser furnishes to the Fund both
portfolio management services and administrative services and
related facilities required in connection with the Fund's
operations. The Present Agreement for each Fund except Young
Investor Fund is dated February 1, 1995 and was approved by the
Board of Trustees on October 26, 1994 and by the shareholders on
January 17, 1995. The Present Agreement for Young Investor
Fund, dated April 22, 1994, was approved by the Board of
Trustees on April 20, 1994 and by the shareholders on April 29,
1994; its continuance was approved by the Board of Trustees on
April 19, 1995.
- - WHY ARE THE PROPOSED AGREEMENTS BEING RECOMMENDED?
The Proposed Agreements for each Fund, which provide for
substantially the same services as furnished under the Present
Agreements, are being recommended for two reasons:
(1) To facilitate the conversion of the Fund at some future time
into a "feeder" fund in a "master/feeder fund" structure, as
explained below; and
(2) To provide for an increase in the aggregate fees payable to
the Adviser under the Proposed Agreements.
<PAGE> 5
The forms of the Proposed Agreements for each Fund are attached
to this proxy statement as Appendices B, C, and D. Further
information about Investment Trust and services provided to the
Funds by the Adviser and its affiliates may be found under
"Further Information about Investment Trust and the Adviser" on
page 11.
MASTER/FEEDER FUND STRUCTURE
- - WHAT IS A MASTER/FEEDER FUND STRUCTURE?
Under a master/feeder fund structure, the assets of mutual funds
with common investment objectives and substantially the same
investment policies are pooled together and, rather than being
managed separately, are "fed" into a combined pool for portfolio
management purposes. The individual funds are known as "feeder"
funds and the pool is known as a "master" fund.
- - WHY IS THIS ADVANTAGEOUS?
Generally, it is believed that the larger the pool of assets
being managed, the more efficiently and cost-effectively it can
be run. Because a master fund pools the assets of multiple
feeder funds, it provides an effective means of creating large
asset pools.
- - DOES THIS MEAN MY FUND WILL CONVERT IMMEDIATELY TO A FEEDER FUND?
By asking you to approve the Proposed Agreements, the Trustees
are asking that you grant them the ability to convert your Fund
to a "master/feeder fund" structure when and if, in their view,
it makes sense to do so at some point in the future. Obviously,
the timing of any such conversion would depend upon uncovering
opportunities to pool assets with those of other feeder funds.
So, while the Trustees believe converting to a master/feeder
fund structure would be desirable given the right opportunity,
there are no formal plans to effect such a conversion of any
Fund. Approval of the Proposed Agreements would provide the
Trustees the ability to move opportunistically when the right
opportunity comes about. You would receive at least 30 days'
advance notice if your Fund were to be converted.
- - IF MY FUND DOES CONVERT TO A FEEDER FUND, IS THERE ANY INCREASED
COST TO THE FUND OR TO ME?
The primary motivation for considering a master/feeder fund
structure is to seek to achieve the operating and expense
efficiencies that
<PAGE> 6
can be gained by managing larger pools of assets. The Trustees'
decision to convert your Fund would be based upon their belief
that it would be in the best interests of both the Fund and its
shareholders.
- - WHAT OTHER CHANGES WOULD RESULT FROM IMPLEMENTING A MASTER/FEEDER
FUND STRUCTURE?
The other changes are mostly technical and legal in nature. To
put it as simply as possible, moving to a master/feeder fund
structure would require termination of the Management Agreement
in place at that time between the Investment Trust and the
Adviser relating to your Fund, and replacing it with a new
Management Agreement relating to the master fund in which your
Fund would invest. This new Management Agreement would be
between the Adviser and the SR&F Base Trust("Base Trust"), a new
trust created to offer mutual funds serving as the master funds
in a master/feeder fund structure. As a result, you are being
asked to approve three new agreements:
- - an Administrative Agreement between Investment Trust and the
Adviser;
- - a Management Agreement between the Investment Trust and the
Adviser; and
- - a Management Agreement between Base Trust and the Adviser.
The Administrative Agreement would become effective September l,
l995, and would remain in place whether or not your Fund
converts to the master/feeder fund structure. The Management
Agreement between Investment Trust and the Adviser would become
effective on September l, l995, and would remain in place for
your Fund unless and until your Fund were converted into a
master/feeder fund structure. If your Fund were converted into
a master/feeder fund structure, the Management Agreement between
Investment Trust and the Adviser relating to your Fund would be
terminated and replaced by a Management Agreement between Base
Trust and the Adviser relating to the master fund in which your
Fund would then invest.
- - WOULD MY FUND BE MANAGED ANY DIFFERENTLY UNDER A MASTER/FEEDER
FUND STRUCTURE?
No. The master fund in which the assets of your Fund would be
invested would have the identical investment objective and
substantially the same investment policies as your Fund. This
means that the assets of the master fund would be invested in
the same types of securities in which your Fund is currently
authorized to invest.
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IF YOU HAVE ANY QUESTIONS ABOUT THE MASTER/FEEDER FUND
STRUCTURE, PLEASE CALL US AT OUR TOLL-FREE NUMBER, L-800-338-
2550,
- - HOW ARE THE FEES OF THE ADVISER BEING CHANGED?
The Proposed Agreements for each Fund will replace the Fund's
Present Agreement. The following table shows the annual rate of
fees payable under the Present Agreements and the Proposed
Agreements as a percentage of average net assets of the
respective Funds, the date of the last management fee change
(inception date for Young Investor Fund), and the net assets of
each Fund as of May 31, 1995:
<TABLE>
<CAPTION>
Current Fee Schedule Proposed Fee Schedule
(dollar amounts in millions) (dollar amounts in millions) Net Assets
Fund -------------------------- -------------------------------------------------- at
(last fee Management and Management Administrative Total 5/31/95
change) Administrative Fee Fee Fee Fees (in millions)
- ----------------- ------------------ -------------- -------------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Prime Equities .60% up to $100, .60% up to $500, .15% up to $500, .75% up to $500, $127.6
(3/9/87) .55% next $100, 55% next $500, .125% next $500, .675% next $500,
. 50% thereafter .50% thereafter .10% thereafter .60% thereafter
Young Investor Fund .75% up to $250, .60% up to $500, .20% up to $500, .80% up to $500, 19.3
(4/29/94) .70% next $250, .55% next $500 .15% next $500, .70% next $500,
.60% thereafter .50% thereafter .125% thereafter .625% thereafter
Total Return Fund .625% up to $100, .50% next $500, .15% up to $500, .70% up to $500, 223.4
(6/30/80) .50% thereafter .55% up to $500, .125% next $500, .625% next $500,
.45% thereafter .10% thereafter .55% thereafter
Growth Stock Fund .75% up to $250, .60% up to $500, .15% up to $500, .75% up to $500, 326.4
(7/1/91) .70% next $250, .55% next $500, .125% next $500, .675% next $500,
.60% thereafter .50% thereafter .10% thereafter .60% thereafter
Capital Oppor- .75% .75% up to $500, .15% up to $500, .90% up to $500, 188.6
tunities Fund .70% next $500, .125% next $500, .825% next $500,
(6/30/80) .65% next $500, .10% next $500, .75% next $500,
.60% thereafter .075% thereafter .675% thereafter
Special Fund .75% .75% up to $500, .15% up to $500, .90% up to $500, 1,197.4
(6/30/79) .70% next $500, .125% next $500, .825% next $500,
.65% next $500, .10% next $500, .75% next $500,
.60% thereafter .075% thereafter .675% thereafter
</TABLE>
The following table shows (in thousands of dollars) for each
Fund (a) the aggregate fees paid by the Fund to the Adviser
under the Present Agreement during the fiscal year ended
September 30, 1994, (b) the pro forma aggregate fees under the
Proposed Agreements that would have been paid during that year
to the Adviser by the Fund,
<PAGE> 8
directly or indirectly through the Fund's master fund (assuming
the master fund's assets would have consisted solely of all of
the Fund's assets), (c) the difference between the actual and pro
forma aggregate fees stated as a percentage of the actual aggregate
fee, and (d) the increase in the Fund's annual operating expenses
due to the fee increase per $1,000 of net asset value. Column (e)
shows the number of years since the Fund's management fee was last
changed. The fee increase has no impact on the operating expenses
of Young Investor Fund because the Adviser has undertaken to
reimburse the Fund's expenses in excess of 0.99 of 1% of average
net assets through January 31, 1996.
(d)
Management Fee Increase in (e)
-------------------------- Operating Years
(c) Expense Since
(a) (b) Fee (per $1,000 Last
Fund Actual Pro Forma Increase NAV) Change
- ---------------------- ------ --------- -------- ---------- ------
Prime Equities 688 $ 870 26% $1.60 8
Young Investor Fund 17 18 6 None N/A
Total Return Fund 1,262 1,592 26 1.50 15
Growth Stock Fund 2,545 2,592 2 0.10 4
Capital Opportunities
Fund 1,241 1,489 20 1.50 15
Special Fund 8,805 9,930 13 1.00 16
- - WHAT DO MANAGEMENT AND ADMINISTRATIVE FEES PAY FOR?
The fees paid to the Adviser compensate it for the services that
the Adviser provides in conducting the day-to-day operations of
a Fund (or of a Fund's master fund). These services include:
providing personnel, equipment and office facilities necessary
for managing the investment portfolio and related research;
compliance services; preparing reports to shareholders;
complying with state and federal tax and legal requirements
relating to maintaining the Investment Trust as a Massachusetts
business trust and as a registered open-end investment company;
making arrangements and preparation of materials for meetings of
the Board of Trustees and of shareholders; calculating and
paying Fund expenses and income and capital gain distributions
to shareholders; overseeing third party service providers to the
Trust; and handling other related business affairs of the Fund.
The Present Agreement for each Fund provides that the Adviser
shall reimburse Investment Trust to the extent that the total
expenses
<PAGE> 9
of the Fund (excluding taxes, interest, all commissions
and other normal charges incident to the purchase and sale of
portfolio securities, and extraordinary charges such as
litigation costs, but including fees paid to the Adviser) for
any fiscal year of the Fund exceed the applicable limits
prescribed by any state in which shares of the Fund are being
offered for sale; however, the reimbursement for any year shall
not exceed the Adviser's fees under the agreement for that year.
The Fund's Proposed Administrative Agreement (but not the
Proposed Management Agreement) contains a similar provision.
Investment Trust believes that at the present time, the most
restrictive state limits are those imposed by California, which
are 2 1/2% of the first $30 million of average net assets, 2% of
the next $70 million, and 1-1/2% thereafter. In addition, in
the interest of further limiting the expenses of Young Investor
Fund, the Adviser has undertaken to reimburse the Fund to the
extent that its annualized expenses exceed 0.99 of 1% of average
net assets. The expense undertaking expires on January 31,
1996, subject to earlier termination by the Adviser on 30 days'
notice.
- - WHY DID THE ADVISER RECOMMEND FEE INCREASES?
Recently the Adviser undertook a comprehensive review of the
services it provides to each Fund and the fees it receives under
the Present Agreements. As a result of its analysis, the
Adviser developed a proposed fee model designed to reflect
differences in the costs and complexities of managing portfolio
securities of different types and differences in investment
styles and research methods employed in the management of the
portfolios of the various Funds. The fee schedules in the
Proposed Agreements reflect this fee model, as well as provide
for fee breakpoints with respect to certain Funds for which they
do not currently exist.
The Adviser believes the fee increases--the first proposed with
respect to most of the Funds in many years--are reasonable in
terms of its costs of providing those services and will ensure
its ability to continue providing high-quality investment
management services to the Funds. The investment management
process has, in recent years, grown increasingly complex,
technology associated with investing has become more
sophisticated, and the competition for talented investment
personnel has intensified.
- - WHEN DID YOU LAST RAISE THE MANAGEMENT FEE FOR MY FUND?
<PAGE> 10
It has been many years since the management fees for most of the
Funds were raised. The management fee for Special Fund has not
been changed in 16 years and the fees for Capital Opportunities
Fund and Total Return Fund have not changed in 15 years. The
fee for Prime Equities has not changed since the Fund's 1987
inception. Growth Stock Fund's fee has not been changed since
1991. Young Investor Fund was launched just over a year ago and
its fee was set at that time.
- - WHAT EFFECT DOES THE PROPOSED FEE INCREASE HAVE ON FUND OPERATING
EXPENSES?
Both the Adviser and the Trustees believe the Funds' operating
expenses will remain competitive with those of most other funds
of similar objective and size. The effect of the proposed fee
increase on Fund operating expenses is shown in Appendix A. In
the case of Young Investor Fund, the proposed increase would
have no immediate effect because the Adviser has agreed to limit
the Fund's operating expenses to 0.99 of 1% of average net
assets through January 31, 1996.
- - WHAT FACTORS DID THE TRUSTEES CONSIDER IN APPROVING THE PROPOSED
AGREEMENTS AND NEW FEE SCHEDULE?
In considering the Proposed Agreements, the Trustees recognized
the potential economic advantage to each Fund and its
shareholders of being able to readily convert the Fund to a
master/feeder fund structure by having separate Administrative
and Management Agreements.
In connection with approval of the specific terms of the
Proposed Agreements, the Trustees placed primary emphasis upon
the nature and quality of the services to be provided by the
Adviser under each agreement, including the relative complexity
of managing each Fund, and a comparison of recent investment
performance, fees and other expenses payable by each Fund under
the Proposed Agreements and actual (and pro forma) expense
ratios, with those of similar funds managed by other investment
advisers. The mutual fund comparative study was prepared at the
request of the Trustees by Lipper Analytical Services, an
independent analytical service that specializes in the mutual
fund industry.
The Trustees also considered, among other things, information
provided by the Adviser regarding the profitability to the
Adviser under both the Present and the Proposed Agreements and
under separate
<PAGE> 11
agreements relating to bookkeeping and accounting
and transfer agency services furnished to each Fund by the
Adviser or one of its affiliates. In addition, the Trustees
considered benefits to the Adviser and its affiliates resulting
from their relationship with each Fund. Those considerations
were made without regard to the costs incurred by the Adviser
and its affiliates in connection with the distribution of Fund
shares.
On April 19, 1995, after lengthy consideration and discussion at
a series of meetings, the Trustees, including the five Trustees
who are not "interested persons" of the Adviser, unanimously
approved the Proposed Agreements and recommended that the
shareholders approve the agreements.
- - WHAT PERCENTAGE OF SHAREHOLDERS' VOTES ARE NEEDED TO APPROVE THE
PROPOSED AGREEMENTS?
Approval of each of the Proposed Agreements for a Fund requires
a "yes" vote of a "majority" of the outstanding shares of the
Fund as defined in the Investment Company Act of 1940. For this
purpose, this means the lesser of (a) 67% of the shares of the
Fund present at the meeting, in person or by proxy, if the
holders of more than 50% of the outstanding shares of the Fund
are present, or (b) more than 50% of the Fund's outstanding
shares.
The Trustees have determined that the proposal to approve each
Fund's Proposed Agreements affects only the individual interests
of the shareholders of that Fund and not the interests of
shareholders of other Funds that are series of Investment Trust.
Therefore, only shareholders of a particular Fund are voting on
the proposal relating to that Fund, and not all shareholders of
the Investment Trust in the aggregate.
The Trustees believe it is in the best interests of each Fund
and its shareholders for the Proposed Agreements to be approved.
However, if a Fund's shareholders do not approve both the
Administrative Agreement and the Management Agreement between
Investment Trust and the Adviser, neither agreement will take
effect and the Fund's Present Agreement will continue in effect.
If the shareholders of a Fund approve the Proposed Agreements
relating to the Fund between Investment Trust and the Adviser
but do not approve the Management Agreement between the Base
Trust and the Adviser relating to that Fund's master fund, the
Fund would not be able to readily convert into a master/feeder
fund structure.
<PAGE> 12
FURTHER INFORMATION ABOUT VOTING AND THE SHAREHOLDER MEETING
QUORUM AND METHOD OF TABULATION. Although 30% of the shares of
a Fund entitled to vote, present in person or represented by
proxy, constitutes a quorum for the transaction of business by
that Fund's shareholders at the meeting, the affirmative vote of
a "majority" of the shares entitled to vote, as defined above,
is necessary to approve the Fund's Proposed Agreements.
For purposes of determining the approval of the Proposed
Agreements, abstentions will have the same effect as voting
against the Proposed Agreements. "Broker non-votes" (shares
held by brokers or nominees as to which (i) instructions have
not been received from the beneficial owners or the persons
entitled to vote and (ii) the broker or nominee does not have
the discretionary voting power on a particular matter) will also
have the same effect as voting against the Proposed Agreements.
OTHER BUSINESS. The Trustees do not know of any other business
to be brought before the meeting. However, if any other matters
properly come before the meeting, it is their intention that
proxies that do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the
judgment of the persons named as proxies in the enclosed form of
proxy.
SOLICITATION OF PROXIES. In addition to soliciting proxies by
mail, the Trustees and employees of the Adviser may solicit
proxies in person or by telephone but will not be additionally
compensated therefor. Investment Trust may also arrange to have
votes recorded by telephone. The telephone voting procedure is
designed to authenticate shareholders' identities, to allow
shareholders to authorize the voting of their shares in
accordance with their instructions and to confirm that their
instructions have been properly recorded. Persons holding
shares as nominees will upon request be reimbursed for their
reasonable expenses in soliciting instructions from their
principals. Investment Trust may engage D.F. King & Co., Inc.
to render proxy solicitation services at a fee estimated at
$85,000. The expenses of the meeting or any adjournment thereof
and of any proxy solicitation will be borne by the Funds.
REVOCATION OF PROXIES. Proxies, including proxies given by
telephone, may be revoked at any time before they are voted by a
written revocation received by the Secretary of Investment
Trust, by
<PAGE> 13
properly executing a later-dated proxy or by attending
the meeting and voting in person.
DATE FOR RECEIPT OF SHAREHOLDERS' PROPOSALS FOR SUBSEQUENT
MEETINGS OF SHAREHOLDERS. Investment Trust's Agreement and
Declaration of Trust does not provide for annual meetings of
shareholders, and the Trust does not currently intend to hold
such a meeting in 1996. Shareholder proposals for inclusion in
the proxy statement for any subsequent meeting must be received
by Investment Trust within a reasonable period of time prior to
any such meeting.
ADJOURNMENT. If sufficient votes in favor of the proposal for
any Fund set forth in the Notice of the Meeting are not received
by the time scheduled for the meeting, the persons named as
proxies may propose adjournments of the meeting for a period or
periods of not more than 60 days in the aggregate to permit
further solicitation of proxies with respect to the proposal.
Any adjournment will require the affirmative vote of a majority
of the votes cast on the question in person or by proxy at the
session of the meeting to be adjourned. The persons named as
proxies will vote in favor of such adjournment those proxies
that they are entitled to vote in favor of the proposal. They
will vote against any such adjournment those proxies required to
be voted against the proposal.
FURTHER INFORMATION ABOUT INVESTMENT TRUST AND THE ADVISER
THE ADVISER. Stein Roe & Farnham Incorporated (the "Adviser"),
is a wholly-owned subsidiary of SteinRoe Services Inc. ("SSI"),
Investment Trust's transfer agent, which is a wholly-owned
subsidiary of Liberty Financial Companies, Inc. ("Liberty
Financial"), which is a majority-owned subsidiary of Liberty
Mutual Equity Corporation ("Liberty Equity"), which is a wholly-
owned subsidiary of Liberty Mutual Insurance Company ("Liberty
Mutual"). Liberty Mutual is a mutual insurance company,
principally in the property/casualty insurance field. The
address of the Adviser and of SSI is One South Wacker Drive,
Chicago, Illinois 60606; the address of Liberty Financial and
Liberty Equity is Federal Reserve Plaza, Boston, Massachusetts
02210; and the address of Liberty Mutual is 175 Berkeley Street,
Boston, Massachusetts 02117.
The directors of the Adviser are Gary L. Countryman, Kenneth R.
Leibler, Timothy K. Armour, N. Bruce Callow and Hans P. Ziegler.
Mr. Countryman is chairman and chief executive officer of
Liberty
<PAGE> 14
Mutual; Mr. Leibler is president and chief executive
officer of Liberty Financial; Mr. Armour is president of the
Adviser's Mutual Funds division; Mr. Callow is president of the
Adviser's Investment Counsel division; and Mr. Ziegler is chief
executive officer of the Adviser.
ADDITIONAL INFORMATION ABOUT THE MASTER/FEEDER FUND STRUCTURE.
Under a master/feeder fund structure, instead of investing
directly in a portfolio of securities, a Fund would invest
substantially all of its assets in a portfolio (the Fund's
"master fund") of SR&F Base Trust (the "Base Trust") having the
same investment objective and substantially the same investment
policies as the Fund. The Adviser would continue to manage the
investment portfolio at the master fund level, where Fund assets
would be pooled with assets of other institutional investors
having common investment objectives and policies. Investment
Trust and Base Trust have the same Trustees.
A Fund may withdraw its investment in a master fund at any time
if its Board of Trustees determines that it is in the best
interests of the shareholders of the Fund to do so or if the
investment policies or restrictions of the master fund were
changed so that they were inconsistent with the policies and
restrictions of the Fund. Upon any such withdrawal, the Board
of Trustees of Investment Trust would consider what action might
be taken, including the investment of all of the assets of the
Fund in another pooled investment entity having substantially
the same investment objectives and policies as the Fund or the
investment of the Fund's assets directly in accordance with its
investment objective and policies. If another pooled investment
vehicle with substantially the same investment objectives and
policies could not be found, the shareholders of the Fund would
not be able to derive the benefits of the master/feeder fund
structure.
ADDITIONAL INFORMATION ON THE PRESENT AND PROPOSED AGREEMENTS.
Other than changes in fee structure, the only material
differences between each Fund's Present Agreement and the Fund's
Proposed Agreements considered together are that (a) the
Administrative Agreement provides for the Adviser to furnish
administrative services and facilities to the Fund under a
separate contract and not under the Fund's Present Agreement and
(b) the Management Agreement relating to Base Trust provides for
the Adviser to furnish portfolio management services to the
Fund's master fund (in which the Fund would invest substantially
all of its assets), instead of furnishing such services directly
to the Fund. In addition, each Proposed Agreement reflects a
new effective date and a new date stated for
<PAGE> 15
termination in the absence of annual approval of continuation
after the initial term.
The current term of each Fund's Present Agreement expires on
June 30, 1996. The initial term of each Management Agreement
will not be longer than two years. Each Administrative
Agreement will continue until it is terminated by either or both
parties. Each Present Agreement and each Management Agreement
provides that it may be continued after its initial term from
year to year only so long as its continuance is approved
annually (a) by the vote of a majority of the non-interested
Trustees of Investment Trust, cast in person at a meeting called
for the purpose of voting on such approval, and (b) by the Board
of Trustees of Investment Trust or by a vote of a "majority" of
the outstanding shares of the Fund, as defined below. In
addition, each of those agreements would terminate in the event
of its assignment and may be terminated without penalty by the
Board of Trustees of Investment Trust, or by a vote of a
majority of the outstanding shares of the Fund on 60 days'
written notice to the Adviser, or by the Adviser at any time on
60 days' written notice to Investment Trust. /1/
SHAREHOLDER SERVICES. SSI is the agent of Investment Trust for
the transfer of shares, disbursement of dividends, maintenance
of shareholder accounting records and shareholder servicing.
Prior to May 1, 1995, the fee SSI received from each Fund for
performing these services was calculated on the basis of the
number of shareholder accounts and the number of various types
of transactions in shareholder accounts. Effective May 1, 1995,
the Trustees approved an amendment to the Trust's agreement with
SSI to (a) explicitly provide for certain administrative and
shareholder services furnished by SSI, (b) transfer
responsibility to SSI for payment of certain out-of-pocket
expenses previously paid for by the Funds (aggregating
approximately $1 million in the 1994 calendar year), and (c)
replace a fee schedule based on transaction activity and number
of shareholder accounts with a schedule under which each Fund is
charged a monthly fee at an annual rate of 0.22 of 1% of average
net assets.
The new billing arrangement recognizes that transfer agency
costs are increasingly being influenced by investments in
information
- -----------------
/1/ In the case of a Fund that has been converted into a feeder
fund, continuation or termination of the Management Agreement
for that Fund's Master Fund would instead require approval of
the Trustees of Base Trust or the shareholders of the Fund's
Master Fund. The Adviser could terminate that Agreement by 60
days' written notice to Base Trust.
<PAGE> 16
technology, including imaging systems, optical character recognition
capabilities, intelligent work-stations, on-line computer
capabilities, and other advanced telephone systems. If the new
fee schedule had been in place for the Funds' most recent fiscal
year, it would have resulted in an increase in transfer agency
expense of not more than $1 per $1,000 of assets for any Fund.
For each Fund (a) payments made to SSI for services rendered
during the fiscal year ended September 30, 1994 and (b) pro forma
payments that would have been made (net of certain Fund out-of-
pocket expenses now being assumed by SSI) if the current fee
schedule had been in effect throughout that year are as follows:
Prime Equities, $84,000 and $202,000; Total Return Fund, $170,000
and $421,000; Growth Stock Fund, $228,000 and $670,000; Capital
Opportunities Fund, $118,000 and $300,000; and Special Fund,
$837,000 and $2,138,000. For Young Investor Fund, payments
for the fiscal year were $18,000, but no payment would have
been made under the current fee schedule because the Adviser
has undertaken to reimburse the Fund's expenses in excess of
0.99% of average net assets through January 31, 1996.
BOOKKEEPING AND ACCOUNTING. Beginning August 1, 1994 for the
Young Investor Fund and February 1, 1995 for the other Funds,
the Adviser has performed certain bookkeeping and accounting
services for each Fund pursuant to a separate agreement with
Investment Trust. For those services the Adviser receives an
annual fee of $25,000 plus .0025 of 1% of average net assets of
the Fund over $50 million.
DISTRIBUTOR. Shares of each Fund are offered for sale through
Liberty Securities Corporation (the "Distributor"), without any
sales commissions or charges to the Fund or its shareholders.
The Distributor is a wholly-owned indirect subsidiary of Liberty
Mutual whose address is 600 Atlantic Avenue, Boston,
Massachusetts 02210. The Adviser bears all sales and
promotional expenses, including payments to the Distributor for
the sales of Fund shares. The Adviser also makes payments to
other broker-dealers, banks and institutions for the sales of
Fund shares held through those institutions. Investment Trust
pays all expenses in connection with registration of its shares
with the Securities and Exchange Commission and auditing and
filing fees in connection with registration of its shares under
the various state blue sky laws and assumes the cost of
preparation of prospectuses and other expenses.
PORTFOLIO TRANSACTIONS. The Adviser places the orders for the
purchase and sale of each Fund's portfolio securities and
options and futures contracts. The Adviser's overriding
objective in effecting
<PAGE> 17
portfolio transactions is to seek to
obtain the best combination of price and execution. The best
net price, giving effect to brokerage commissions, if any, and
other transaction costs, normally is an important factor in this
decision, but a number of other judgmental factors may also
enter into the decision. These include: the Adviser's knowledge
of negotiated commission rates currently available and other
current transaction costs; the nature of the security being
traded; the size of the transaction; the desired timing of the
trade; the activity existing and expected in the market for the
particular security; confidentiality; the execution, clearance
and settlement capabilities of the broker or dealer selected and
others which are considered; the Adviser's knowledge of the
financial stability of the broker or dealer selected and such
other brokers or dealers; and the Adviser's knowledge of actual
or apparent operational problems of any broker or dealer.
Recognizing the value of these factors, a Fund may pay a
brokerage commission in excess of that which another broker or
dealer may have charged for effecting the same transaction.
Evaluations of the reasonableness of brokerage commissions,
based on the foregoing factors, are made on an ongoing basis by
the Adviser's staff while effecting portfolio transactions. The
general level of brokerage commissions paid is reviewed by the
Adviser, and reports are made annually to the Board of Trustees.
With respect to issues of securities involving brokerage
commissions, when more than one broker or dealer is believed to
be capable of providing the best combination of price and
execution with respect to a particular portfolio transaction for
a Fund, the Adviser often selects a broker or dealer that has
furnished it with research products or services such as research
reports, subscriptions to financial publications and research
compilations, compilations of securities prices, earnings,
dividends, and similar data, and computer data bases, quotation
equipment and services, research-oriented computer software and
services, and services of economic and other consultants.
Selection of brokers or dealers is not made pursuant to an
agreement or understanding with any of the brokers or dealers;
however, the Adviser uses an internal allocation procedure to
identify those brokers or dealers who provide it with research
products or services and the amount of research products or
services they provide, and endeavors to direct sufficient
commissions generated by its clients' accounts in the aggregate,
including the Funds, to such brokers or dealers to ensure the
continued receipt of research products or services the Adviser
feels are useful. In certain instances, the Adviser receives
from brokers and dealers products or services that are used both
as investment research and for administrative, marketing, or
other non-research purposes. In such instances, the Adviser
makes a good faith
<PAGE> 18
effort to determine the relative proportions
of such products or services which may be considered as investment
research. The portion of the costs of such products or services
attributable to research usage may be defrayed by the Adviser (without
prior agreement or understanding, as noted above) through brokerage
commissions generated by transactions by clients (including the Funds),
while the portions of the costs attributable to non-research usage of
such products or services is paid by the Adviser in cash. No person
acting on behalf of a Fund is authorized, in recognition of the value
of research products or services, to pay a commission in excess of that
which another broker or dealer might have charged for effecting the same
transaction. Research products or services furnished by brokers and
dealers may be used in servicing any or all of the clients of the Adviser
and not all such research products or services are used in connection
with the management of the Funds.
With respect to a Fund's purchases and sales of portfolio
securities transacted with a broker or dealer on a net basis,
the Adviser may also consider the part, if any, played by the
broker or dealer in bringing the security involved to the
Adviser's attention, including investment research related to
the security and provided to the Fund.
OFFICERS OF INVESTMENT TRUST. The following persons are officers of
Investment Trust:
Positions(s) Held Position Held
Name with the Trust with the Adviser
- ------------------- ------------------- -----------------
Gary A. Anetsberger Senior Vice-President; Vice President
Controller
Timothy K. Armour President; Trustee President of the Mutual
Funds division
Jilaine Hummel Bauer Executive Vice- Senior Vice President
President; Secretary and Assistant Secretary
David P. Brady Vice-President Portfolio Manager
Thomas W. Butch Vice-President Senior Vice President
N. Bruce Callow Executive Vice- President of the
President Investment Counsel
division
Daniel K. Cantor Vice-President Senior Vice President
Robert A. Christensen Vice-President Senior Vice President
E. Bruce Dunn Vice-President Senior Vice President
<PAGE> 19
Positions(s) Held Position Held
Name with the Trust with the Adviser
- ------------------- ------------------- -----------------
Erik P. Gustafson Vice-President Vice President
Philip D. Hausken Vice-President Corporate Counsel
Harvey B. Hirschhorn Vice-President Executive Vice President
Kenneth A. Kalina Treasurer Associate
Stephen P. Lautz Vice-President Vice President
Eric S. Maddix Vice-President Portfolio Manager
Lynn C. Maddox Vice-President Senior Vice President
Anne E. Marcel Vice-President Manager, Mutual Fund Sales
and Services
Nicolette D. Parrish Vice-President; Associate
Assistant Secretary
Richard B. Peterson Vice-President Senior Vice President
Janet B. Rysz Assistant Secretary Assistant Secretary
Gloria J. Santella Vice-President Vice President
Thomas P. Sorbo Vice-President Senior Vice President
Hans P. Ziegler Executive Vice- Chief Executive Officer
President
SHAREHOLDINGS. As of May 31, 1995, the following person was known by
Investment Trust to own beneficially 5% or more of the outstanding
shares of Young Investor Fund, as determined in accordance with Rule
13d-3 under the Securities Exchange Act of 1934:
Approximate Percentage of
Name and Address Outstanding Shares Held
- ----------------------- -------------------------
Keyport Life Insurance Co. 24.4%
Federal Reserve Plaza
600 Atlantic Avenue
Boston, MA 0221
<PAGE> 20
APPENDIX A
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
The following table shows for each Fund for its fiscal year ended
September 30, 1994 (a) the Fund's operating expenses (adjusted to
reflect current transfer agency, bookkeeping, and accounting fee rates)
as a percentage of the Fund's average net assets and (b) the pro forma
operating expenses assuming the Proposed Agreements had been in effect
throughout the year. The Adviser has undertaken to reimburse Young
Investor Fund for expenses in excess of 0.99% of average net assets
through January 31, 1996, subject to earlier termination by the Adviser
on 30 days' notice. Absent such expense undertaking, Other Expenses and
Total Fund Operating Expenses for Young Investor Fund would have been
2.97% and 3.72%, respectively, under current expenses and 2.97% and
3.77%, respectively, under pro forma expenses.
Current Pro Forma
Expenses Expenses
-------- ---------
Prime Equities
Management and Administrative Fees........... 0.59% 0.75%
12b-1 Fees ...................................None None
Other Expenses .............................. 0.39% 0.39%
Total Fund Operating Expenses................ 0.98% 1.14%
Young Investor Fund
Management and Administrative Fees ...........0.75% 0.80%
12b-1 Fees ...................................None None
Other Expenses(after expense reimbursement).. 0.24% 0.19%
Total Fund Operating Expenses
(after expense reimbursement)............. 0.99% 0.99%
Total Return Fund
Management and Administrative Fees .......... 0.55% 0.70%
12b-1 Fees....................................None None
Other Expenses ...............................0.37% 0.37%
Total Fund Operating Expenses ................0.92% 1.07%
Growth Stock Fund
Management and Administrative Fees ...........0.74% 0.75%
12b-1 Fees ...................................None None
Other Expenses ...............................0.32% 0.32%
Total Fund Operating Expenses ................1.06% 1.07%
<PAGE> 21
Current Pro Forma
Expenses Expenses
-------- ---------
Capital Opportunities Fund
Management and Administrative Fees .......... 0.75% 0.90%
12b-1 Fees....................................None None
Other Expenses ...............................0.31% 0.31%
Total Fund Operating Expenses.................1.06% 1.21%
Special Fund
Management and Administrative Fees............0.75% 0.85%
12b-1 Fees....................................None None
Other Expenses ...............................0.31% 0.31%
Total Fund Operating Expenses.................1.06% 1.16%
Examples.
The following examples illustrate the expenses on a $1,000 investment
under the existing and proposed fee schedules and the expenses stated
above, assuming (1) a 5% annual return and (2) redemption at the end of
each time period:
1 year 3 years 5 years 10 years
------ ------- ------- --------
Prime Equities
Existing Fees ........... $10 $31 $54 $120
Proposed Fees ............ 12 36 63 139
Young Investor Fund
Existing Fees .............10 32 N/A N/A
Proposed Fees .............10 32 N/A N/A
Total Return Fund
Existing Fees ..............9 29 51 113
Proposed Fees ............ 11 34 59 131
Growth Stock Fund
Existing Fees ............ 11 34 58 129
Proposed Fees ............ 11 34 59 131
Capital Opportunities Fund
Existing Fees .............11 34 58 129
Proposed Fees ............ 12 38 67 147
Special Fund
Existing Fees .............11 34 58 129
Proposed Fees ............ 12 37 64 141
The purpose of the above examples is to assist you in understanding the
various costs and expenses that you will bear directly or indirectly as
an investor in a Fund. The examples above should not be considered a
representation of past or future expenses of any Fund. Actual expenses
may vary from year to year and may be higher or lower than those shown
above.
<PAGE> 22
APPENDIX B
ADMINISTRATIVE AGREEMENT
BETWEEN
STEINROE INVESTMENT TRUST
AND
STEIN ROE & FARNHAM INCORPORATED
STEINROE INVESTMENT TRUST, a Massachusetts business trust
registered under the Securities Act of 1933 ("1933 Act") and the
Investment Company Act of 1940 ("1940 Act") (the "Trust"), hereby
appoints STEIN ROE & FARNHAM INCORPORATED, a Delaware corporation, of
Chicago, Illinois ("Administrator"), to furnish certain administrative
services with respect to the Trust and the series of the Trust listed in
Schedule A hereto, as such schedule may be amended from time to time
(each such series hereinafter referred to as "Fund").
The Trust and Administrator hereby agree that:
1. ADMINISTRATIVE SERVICES. Subject to the terms of this Agreement and
the supervision and control of the Trust's Board of Trustees
("Trustees"), Administrator shall provide the following services with
respect to the Trust:
(a) Preparation and maintenance of the Trust's registration statement
with the Securities and Exchange Commission ("SEC");
(b) Preparation and periodic updating of the prospectus and statement of
additional information for the Fund ("Prospectus");
(c) Preparation, filing with appropriate regulatory authorities, and
dissemination of various reports for the Fund, including but not
limited to semiannual reports to shareholders under Section 30(d) of
the 1940 Act, annual and semiannual reports on Form N-SAR, and
notices pursuant to Rule 24f-2;
(d) Arrangement for all meetings of shareholders, including the
collection of all information required for preparation of proxy
statements, the preparation and filing with appropriate regulatory
agencies of such proxy statements, the supervision of solicitation
of shareholders and shareholder nominees in connection therewith,
tabulation (or supervision of the tabulation) of votes, response to
all inquiries regarding such meetings from shareholders, the public
and the media, and preparation and retention of all minutes and all
other records required to be kept in connection with such meetings;
(e) Maintenance and retention of all Trust charter documents and the
filing of all documents required to maintain the Trust's status as a
<PAGE> 23
Massachusetts business trust and as a registered open-end investment
company;
(f) Arrangement and preparation and dissemination of all materials for
meetings of the Board of Trustees and committees thereof and
preparation and retention of all minutes and other records thereof;
(g) Preparation and filing of the Trust's Federal, state, and local
income tax returns and calculation of any tax required to be paid in
connection therewith;
(h) Calculation of all Trust and Fund expenses and arrangement for the
payment thereof;
(i) Calculation of and arrangement for payment of all income, capital
gain, and other distributions to shareholders of each Fund;
(j) Determination, after consultation with the officers of the Trust, of
the jurisdictions in which shares of beneficial interest of each
Fund ("Shares") shall be registered or qualified for sale, or may be
sold pursuant to an exemption from such registration or
qualification, and preparation and maintenance of the registration
or qualification of the Shares for sale under the securities laws of
each such jurisdiction;
(k) Provision of the services of persons who may be appointed as
officers of the Trust by the Board of Trustees (it is agreed that
some person or persons may be officers of both the Trust and the
Administrator, and that the existence of any such dual interest
shall not affect the validity of this Agreement except as otherwise
provided by specific provision of applicable law);
(l) Preparation and, subject to approval of the Trust's Chief Financial
Officer, dissemination of the Trust's and each Fund's quarterly
financial information to the Board of Trustees and preparation of
such other reports relating to the business and affairs of the Trust
and each Fund as the officers and Board of Trustees may from time to
time reasonably request;
(m) Administration of the Trust's Code of Ethics and periodic reporting
to the Board of Trustees of Trustee and officer compliance
therewith;
(n) Provision of internal legal, accounting, compliance, audit, and risk
management services and periodic reporting to the Board of Trustees
with respect to such services;
(o) Negotiation, administration, and oversight of third party services
to the Trust including, but not limited to, custody, tax, transfer
agency, disaster recovery, audit, and legal services;
(p) Negotiation and arrangement for insurance desired or required of the
Trust and administering all claims thereunder;
(q) Response to all inquiries by regulatory agencies, the press, and the
general public concerning the business and affairs of the Trust,
<PAGE> 24
including the oversight of all periodic inspections of the
operations of the Trust and its agents by regulatory authorities and
responses to subpoenas and tax levies;
(r) Handling and resolution of any complaints registered with the Trust
by shareholders, regulatory authorities, and the general public;
(s) Monitoring legal, tax, regulatory, and industry developments related
to the business affairs of the Trust and communicating such
developments to the officers and Board of Trustees as they may
reasonably request or as the Administrator believes appropriate;
(t) Administration of operating policies of the Trust and recommendation
to the officers and the Board of Trustees of the Trust of
modifications to such policies to facilitate the protection of
shareholders or market competitiveness of the Trust and Fund and to
the extent necessary to comply with new legal or regulatory
requirements;
(u) Responding to surveys conducted by third parties and reporting of
Fund performance and other portfolio information; and
(v) Filing of claims, class actions involving portfolio securities, and
handling administrative matters in connection with the litigation or
settlement of such claims.
2. USE OF AFFILIATED COMPANIES AND SUBCONTRACTORS. In connection
with the services to be provided by Administrator under this Agreement,
Administrator may, to the extent it deems appropriate, and subject to
compliance with the requirements of applicable laws and regulations and
upon receipt of approval of the Trustees, make use of (i) its affiliated
companies and their directors, trustees, officers, and employees and
(ii) subcontractors selected by Administrator, provided that
Administrator shall supervise and remain fully responsible for the
services of all such third parties in accordance with and to the extent
provided by this Agreement. All costs and expenses associated with
services provided by any such third parties shall be borne by
Administrator or such parties.
3. INSTRUCTIONS, OPINIONS OF COUNSEL, AND SIGNATURES. At any time
Administrator may apply to a duly authorized agent of Trust for
instructions regarding the Trust, and may consult counsel for the Trust
or its own counsel, in respect of any matter arising in connection with
this Agreement, and it shall not be liable for any action taken or
omitted by it in good faith in accordance with such instructions or with
the advice or opinion of such counsel. Administrator shall be protected
in acting upon any such instruction, advice, or opinion and upon any
other paper or document delivered by the Trust or such counsel believed
by
<PAGE> 25
Administrator to be genuine and to have been signed by the proper
person or persons and shall not be held to have notice of any change of
authority of any officer or agent of the Trust, until receipt of written
notice thereof from the Trust.
4. EXPENSES BORNE BY TRUST. Except to the extent expressly
assumed by Administrator herein or under a separate agreement between
the Trust and Administrator and except to the extent required by law to
be paid by Administrator, the Trust shall pay all costs and expenses
incidental to its organization, operations and business. Without
limitation, such costs and expenses shall include but not be limited to:
(a) All charges of depositories, custodians and other agencies for the
safekeeping and servicing of its cash, securities, and other
property;
(b) All charges for equipment or services used for obtaining price
quotations or for communication between Administrator or the Trust
and the custodian, transfer agent or any other agent selected by the
Trust;
(c) All charges for investment advisory, portfolio management, and
accounting services provided to the Trust by the Administrator, or
any other provider of such services;
(d) All charges for services of the Trust's independent auditors and for
services to the Trust by legal counsel;
(e) All compensation of Trustees, other than those affiliated with
Administrator, all expenses incurred in connection with their
services to the Trust, and all expenses of meetings of the Trustees
or committees thereof;
(f) All expenses incidental to holding meetings of shareholders,
including printing and of supplying each record-date shareholder
with notice and proxy solicitation material, and all other proxy
solicitation expenses;
(g) All expenses of printing of annual or more frequent revisions of the
Trust's prospectus(es) and of supplying each then-existing
shareholder with a copy of a revised prospectus;
(h) All expenses related to preparing and transmitting certificates
representing the Trust's shares;
(i) All expenses of bond and insurance coverage required by law or
deemed advisable by the Board of Trustees;
(j) All brokers' commissions and other normal charges incident to the
purchase, sale, or lending of Fund securities;
(k) All taxes and governmental fees payable to Federal, state or other
governmental agencies, domestic or foreign, including all stamp or
other transfer taxes;
<PAGE> 26
(l) All expenses of registering and maintaining the registration of the
Trust under the 1940 Act and, to the extent no exemption is
available, expenses of registering the Trust's shares under the 1933
Act, of qualifying and maintaining qualification of the Trust and of
the Trust's shares for sale under securities laws of various states
or other jurisdictions and of registration and qualification of the
Trust under all other laws applicable to the Trust or its business
activities;
(m) All interest on indebtedness, if any, incurred by the Trust or a
Fund; and
(n) All fees, dues and other expenses incurred by the Trust in
connection with membership of the Trust in any trade association or
other investment company organization.
5. ALLOCATION OF EXPENSES BORNE BY TRUST. Any expenses borne by
the Trust that are attributable solely to the organization, operation or
business of a Fund shall be paid solely out of Fund assets. Any expense
borne by the Trust which is not solely attributable to a Fund, nor
solely to any other series of shares of the Trust, shall be apportioned
in such manner as Administrator determines is fair and appropriate, or
as otherwise specified by the Board of Trustees.
6. EXPENSES BORNE BY ADMINISTRATOR. Administrator at its own
expense shall furnish all executive and other personnel, office space,
and office facilities required to render the services set forth in this
Agreement. However, Administrator shall not be required to pay or
provide any credit for services provided by the Trust's custodian or
other agents without additional cost to the Trust.
In the event that Administrator pays or assumes any expenses of the
Trust or a Fund not required to be paid or assumed by Administrator
under this Agreement, Administrator shall not be obligated hereby to pay
or assume the same or similar expense in the future; provided that
nothing contained herein shall be deemed to relieve Administrator of any
obligation to the Trust or a Fund under any separate agreement or
arrangement between the parties.
7. ADMINISTRATION FEE. For the services rendered, facilities
provided, and charges assumed and paid by Administrator hereunder, the
Trust shall pay to Administrator out of the assets of each Fund fees at
the annual rate for such Fund as set forth in Schedule B to this
Agreement. For each Fund, the administrative fee shall accrue on each
calendar day, and shall be payable monthly on the first business day of
the next succeeding calendar month. The daily fee accrual shall be
computed by multiplying the fraction of one divided by the number of
<PAGE> 27
days in the calendar year by the applicable annual rate of fee, and
multiplying this product by the net assets of the Fund, determined in
the manner established by the Board of Trustees, as of the close of
business on the last preceding business day on which the Fund's net
asset value was determined.
8. STATE EXPENSE LIMITATION. If for any fiscal year of a Fund,
its aggregate operating expenses ("Aggregate Operating Expenses") exceed
the applicable percentage expense limit imposed under the securities law
and regulations of any state in which Shares of the Fund are qualified
for sale (the "State Expense Limit"), the Administrator shall pay such
Fund the amount of such excess. For purposes of this State Expense
Limit, Aggregate Operating Expenses shall (a) include (i) any fees or
expense reimbursements payable to Administrator pursuant to this
Agreement and (ii) to the extent the Fund invests all or a portion of
its assets in another investment company registered under the 1940 Act,
the pro rata portion of that company's operating expenses allocated to
the Fund, and (iii) any compensation payable to Administrator pursuant
to any separate agreement relating to the Fund's investment operations
and portfolio management, but (b) exclude any interest, taxes, brokerage
commissions, and other normal charges incident to the purchase, sale or
loan of securities, commodity interests or other investments held by the
Fund, litigation and indemnification expense, and other extraordinary
expenses not incurred in the ordinary course of business. Except as
otherwise agreed to by the parties or unless otherwise required by the
law or regulation of any state, any reimbursement by Administrator to a
Fund under this section shall not exceed the administrative fee payable
to Administrator by the Fund under this Agreement.
Any payment to a Fund by Administrator hereunder shall be made
monthly, by annualizing the Aggregate Operating Expenses for each month
as of the last day of the month. An adjustment for payments made during
any fiscal year of the Fund shall be made on or before the last day of
the first month following such fiscal year of the Fund if the Annual
Operating Expenses for such fiscal year (i) do not exceed the State
Expense Limitation or (ii) for such fiscal year there is no applicable
State Expense Limit.
9. NON-EXCLUSIVITY. The services of Administrator to the Trust
hereunder are not to be deemed exclusive and Administrator shall be free
to render similar services to others.
10. STANDARD OF CARE. Neither Administrator, nor any of its
directors, officers or stockholders, agents or employees shall be liable
to the Trust, any Fund, or its shareholders for any action taken or
thing done
<PAGE> 28
by it or its subcontractors or agents on behalf of the Trust
or the Fund in carrying out the terms and provisions of this Agreement
if done in good faith and without negligence or misconduct on the part
of Administrator, its subcontractors, or agents.
11. INDEMNIFICATION. The Trust shall indemnify and hold
Administrator and its controlling persons, if any, harmless from any and
all claims, actions, suits, losses, costs, damages, and expenses,
including reasonable expenses for counsel, incurred by it in connection with
its acceptance of this Agreement, in connection
with any action or omission by it or its agents or subcontractors in the
performance of its duties hereunder to the Trust, or as a result of
acting upon any instruction believed by it to have been executed by a
duly authorized agent of the Trust or as a result of acting upon
information provided by the Trust in form and under policies agreed to
by Administrator and the Trust, provided that: (i) to the extent such
claims, actions, suits, losses, costs, damages, or expenses relate
solely to a particular Fund or group of Funds, such indemnification
shall be only out of the assets of that Fund or group of Funds; (ii)
this indemnification shall not apply to actions or omissions
constituting negligence or misconduct of Administrator or its agents or
subcontractors, including but not limited to willful misfeasance, bad
faith, or gross negligence in the performance of their duties, or
reckless disregard of their obligations and duties under this Agreement;
and (iii) Administrator shall give the Trust prompt notice and
reasonable opportunity to defend against any such claim or action in its
own name or in the name of Administrator.
Administrator shall indemnify and hold harmless the Trust from and
against any and all claims, demands, expenses and liabilities which such
Trust may sustain or incur arising out of, or incurred because of, the
negligence or misconduct of Administrator or its agents or
subcontractors, provided that such Trust shall give Administrator prompt
notice and reasonable opportunity to defend against any such claim or
action in its own name or in the name of such Trust.
12. EFFECTIVE DATE, AMENDMENT, AND TERMINATION. This Agreement
shall become effective as to any Fund as of the effective date for that
Fund specified in Schedule A hereto and, unless terminated as
hereinafter provided, shall remain in effect with respect to such Fund
thereafter from year to year so long as such continuance is specifically
approved with respect to that Fund at least annually by a majority of
the Trustees who are not interested persons of Trust or Administrator.
As to any Trust or Fund of that Trust, this Agreement may be
modified or amended from time to time by mutual agreement between the
<PAGE> 29
Administrator and the Trust and may be terminated by Administrator or
Trust by at least sixty (60) days' written notice given by the
terminating party to the other party. Upon termination as to any Fund,
the Trust shall pay to Administrator such compensation as may be due
under this Agreement as of the date of such termination and shall
reimburse Administrator for its costs, expenses, and disbursements
payable under this Agreement to such date. In the event that, in
connection with a termination, a successor to any of the duties or
responsibilities of Administrator hereunder is designated by the Trust
by written notice to Administrator, upon such termination Administrator
shall promptly, and at the expense of the Trust or Fund with respect to
which this Agreement is terminated, transfer to such successor all
relevant books, records, and data established or maintained by
Administrator under this Agreement and shall cooperate in the transfer
of such duties and responsibilities, including provision, at the expense
of such Fund, for assistance from Administrator personnel in the
establishment of books, records, and other data by such successor.
13. ASSIGNMENT. Any interest of Administrator under this
Agreement shall not be assigned either voluntarily or involuntarily, by
operation of law or otherwise, without the prior written consent of
Trust.
14. BOOKS AND RECORDS. Administrator shall maintain, or oversee
the maintenance by such other persons as may from time to time be
approved by the Board of Trustees to maintain, the books, documents,
records, and data required to be kept by the Trust under the 1940 Act,
the laws of the Commonwealth of Massachusetts or such other authorities
having jurisdiction over the Trust or the Fund or as may otherwise be
required for the proper operation of the business and affairs of the
Trust or the Fund (other than those required to be maintained by any
investment adviser retained by the Trust on behalf of a Fund in
accordance with Section 15 of the 1940 Act).
Administrator will periodically send to the Trust all books,
documents, records, and data of the Trust and each of its Funds listed
in Schedule A that are no longer needed for current purposes or required
to be retained as set forth herein. Administrator shall have no
liability for loss or destruction of said books, documents, records, or
data after they are returned to such Trust.
Administrator agrees that all such books, documents, records, and
data which it maintains shall be maintained in accordance with Rule 31a-
3 of the 1940 Act and that any such items maintained by it shall be the
property of the Trust. Administrator further agrees to surrender
promptly to the Trust any such items it maintains upon request,
<PAGE> 30
provided that the Administrator shall be permitted to retain a copy of
all such items. Administrator agrees to preserve all such items
maintained under Rule 31a-1 for the period prescribed under Rule 31a-2
of the 1940 Act.
Trust shall furnish or otherwise make available to Administrator
such copies of the financial statements, proxy statements, reports, and
other information relating to the business and affairs of each Fund of
the Trust as Administrator may, at any time or from time to time,
reasonably require in order to discharge its obligations under this
Agreement.
15. NON-LIABILITY OF TRUSTEES AND SHAREHOLDERS. Any obligation of
Trust hereunder shall be binding only upon the assets of Trust (or the
applicable Fund thereof) and shall not be binding upon any Trustee,
officer, employee, agent or shareholder of Trust. Neither the
authorization of any action by the Trustees or shareholders of Trust nor
the execution of this Agreement on behalf of Trust shall impose any
liability upon any Trustee or any shareholder.
16. USE OF ADMINISTRATOR'S NAME. The Trust may use its name and
the names of its Funds listed in Schedule A or any other name derived
from the name "Stein Roe & Farnham" only for so long as this Agreement
or any extension, renewal, or amendment hereof remains in effect,
including any similar agreement with any organization which shall have
succeeded to the business of Administrator as it relates to the services
it has agreed to furnish under this Agreement. At such time as this
Agreement or any extension, renewal or amendment hereof, or such other
similar agreement shall no longer be in effect, Trust will cease to use
any name derived from the name "Stein Roe & Farnham" or otherwise
connected with Administrator, or with any organization which shall have
succeeded to Administrator's business herein described.
17. REFERENCES AND HEADINGS. In this Agreement and in any such
amendment, references to this Agreement and all expressions such as
"herein," "hereof," and "hereunder" shall be deemed to refer to this
Agreement as amended or affected by any such amendments. Headings are
placed herein for convenience of reference only and shall not be taken
as a part hereof or control or affect the meaning, construction or
effect of this Agreement. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original.
<PAGE> 31
Dated: _______________, 1995
STEINROE INVESTMENT TRUST
BY__________________________
ATTEST:
___________________________
STEIN ROE & FARNHAM INCORPORATED
BY _______________________________
ATTEST:
___________________________
STEINROE INVESTMENT TRUST
ADMINISTRATIVE AGREEMENT
SCHEDULE A
The Funds of the Trust currently subject to this Agreement are as
follows:
Effective Date
--------------
SteinRoe Prime Equities
SteinRoe Young Investor Fund
SteinRoe Total Return Fund
SteinRoe Growth Stock Fund
SteinRoe Capital Opportunities Fund
SteinRoe Special Fund
Dated: ________________
<PAGE> 32
<PAGE> 33
STEINROE INVESTMENT TRUST
ADMINISTRATIVE AGREEMENT
SCHEDULE B
Compensation pursuant to Section 7 of this Agreement shall be calculated
with respect to each Fund in accordance with the following schedule
applicable to average daily net assets of the Fund:
Fund Administrative Fee Schedule B1
SteinRoe Young Investor Fund 0.200% of first $500 million,
0.150% of next $500 million,
0.125% thereafter
Fund Administrative Fee Schedule B2
SteinRoe Growth Stock Fund 0.150% of first $500 million,
SteinRoe Prime Equities 0.125 of next $500 million,
SteinRoe Total Return Fund 0.100% thereafter
Fund Administrative Fee Schedule B3
SteinRoe Special Fund 0.150% of first $500 million,
SteinRoe Capital Opportunities Fund 0.125% of next $500 million,
0.100% of next $500 million,
0.075% thereafter
Dated: ________________
<PAGE> 34
APPENDIX C
MANAGEMENT AGREEMENT
BETWEEN
STEINROE INVESTMENT TRUST
AND
STEIN ROE & FARNHAM INCORPORATED
STEINROE INVESTMENT TRUST, a Massachusetts business trust
registered under the Investment Company Act of 1940 ("1940 Act") as an
open-end diversified management investment company ("Trust"), hereby
appoints STEIN ROE & FARNHAM INCORPORATED, a Delaware corporation
registered under the Investment Advisers Act of 1940 as an investment
adviser, of Chicago, Illinois ("Manager"), to furnish investment
advisory and portfolio management services with respect to the portion
of its assets represented by the shares of beneficial interest issued in
each series listed in Schedule A hereto, as such schedule may be amended
from time to time (each such series hereinafter referred to as "Fund").
Trust and Manager hereby agree that:
1. INVESTMENT MANAGEMENT SERVICES. Manager shall manage the
investment operations of Trust and each Fund, subject to the terms of
this Agreement and to the supervision and control of Trust's Board of
Trustees ("Trustees"). Manager agrees to perform, or arrange for the
performance of, the following services with respect to each Fund:
(a) to obtain and evaluate such information relating to economies,
industries, businesses, securities and commodities markets, and
individual securities, commodities and indices as it may deem
necessary or useful in discharging its responsibilities hereunder;
(b) to formulate and maintain a continuing investment program in a
manner consistent with and subject to (i) Trust's agreement and
declaration of trust and by-laws; (ii) the Fund's investment
objectives, policies, and restrictions as set forth in written
documents furnished by the Trust to Manager; (iii) all securities,
commodities, and tax laws and regulations applicable to the Fund and
Trust; and (iv) any other written limits or directions furnished by
the Trustees to Manager;
(c) unless otherwise directed by the Trustees, to determine from time to
time securities, commodities, interests or other investments to be
purchased, sold, retained or lent by the Fund, and to implement
those decisions, including the selection of entities with or through
which such purchases, sales or loans are to be effected;
(d) to use reasonable efforts to manage the Fund so that it will qualify
as a regulated investment company under subchapter M of the Internal
Revenue Code of 1986, as amended;
<PAGE> 35
(e) to make recommendations as to the manner in which voting rights,
rights to consent to Trust or Fund action, and any other rights
pertaining to Trust or the Fund shall be exercised;
(f) to make available to Trust promptly upon request all of the Fund's
records and ledgers and any reports or information reasonably
requested by the Trust; and
(g) to the extent required by law, to furnish to regulatory authorities
any information or reports relating to the services provided
pursuant to this Agreement.
Except as otherwise instructed from time to time by the Trustees,
with respect to execution of transactions for Trust on behalf of a Fund,
Manager shall place, or arrange for the placement of, all orders for
purchases, sales, or loans with issuers, brokers, dealers or other
counterparties or agents selected by Manager. In connection with the
selection of all such parties for the placement of all such orders,
Manager shall attempt to obtain most favorable execution and price, but
may nevertheless in its sole discretion as a secondary factor, purchase
and sell portfolio securities from and to brokers and dealers who
provide Manager with statistical, research and other information,
analysis, advice, and similar services. In recognition of such services
or brokerage services provided by a broker or dealer, Manager is hereby
authorized to pay such broker or dealer a commission or spread in excess
of that which might be charged by another broker or dealer for the same
transaction if the Manager determines in good faith that the commission
or spread is reasonable in relation to the value of the services so
provided.
Trust hereby authorizes any entity or person associated with
Manager that is a member of a national securities exchange to effect any
transaction on the exchange for the account of a Fund to the extent
permitted by and in accordance with Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder. Trust hereby
consents to the retention by such entity or person of compensation for
such transactions in accordance with Rule 11a-2-2(T)(a)(iv).
Manager may, where it deems to be advisable, aggregate orders for
its other customers together with any securities of the same type to be
sold or purchased for Trust or one or more Funds in order to obtain best
execution or lower brokerage commissions. In such event, Manager shall
allocate the shares so purchased or sold, as well as the expenses
incurred in the transaction, in a manner it considers to be equitable
and fair and consistent with its fiduciary obligations to Trust, the
Funds, and Manager's other customers.
<PAGE> 36
Manager shall for all purposes be deemed to be an independent
contractor and not an agent of Trust and shall, unless otherwise
expressly provided or authorized, have no authority to act for or
represent Trust in any way.
2. ADMINISTRATIVE SERVICES. Manager shall supervise the business
and affairs of Trust and each Fund and shall provide such services and
facilities as may be required for effective administration of Trust and
Funds as are not provided by employees or other agents engaged by Trust;
provided that Manager shall not have any obligation to provide under
this Agreement any such services which are the subject of a separate
agreement or arrangement between Trust and Manager, any affiliate of
Manager, or any third party administrator ("Administrative Agreements").
3. USE OF AFFILIATED COMPANIES AND SUBCONTRACTORS. In connection
with the services to be provided by Manager under this Agreement,
Manager may, to the extent it deems appropriate, and subject to
compliance with the requirements of applicable laws and regulations and
upon receipt of written approval of the Trustees, make use of (i) its
affiliated companies and their directors, trustees, officers, and
employees and (ii) subcontractors selected by Manager, provided that
Manager shall supervise and remain fully responsible for the services of
all such third parties in accordance with and to the extent provided by
this Agreement. All costs and expenses associated with services
provided by any such third parties shall be borne by Manager or such
parties.
4. EXPENSES BORNE BY TRUST. Except to the extent expressly
assumed by Manager herein or under a separate agreement between Trust
and Manager and except to the extent required by law to be paid by
Manager, Manager shall not be obligated to pay any costs or expenses
incidental to the organization, operations or business of the Trust.
Without limitation, such costs and expenses shall include but not be
limited to:
(a) all charges of depositories, custodians and other agencies for the
safekeeping and servicing of its cash, securities, and other
property;
(b) all charges for equipment or services used for obtaining price
quotations or for communication between Manager or Trust and the
custodian, transfer agent or any other agent selected by Trust;
(c) all charges for administrative and accounting services provided to
Trust by Manager, or any other provider of such services;
(d) all charges for services of Trust's independent auditors and for
services to Trust by legal counsel;
<PAGE> 37
(e) all compensation of Trustees, other than those affiliated with
Manager, all expenses incurred in connection with their services to
Trust, and all expenses of meetings of the Trustees or committees
thereof;
(f) all expenses incidental to holding meetings of holders of units of
interest in the Trust ("Unitholders"), including printing and of
supplying each record-date Unitholder with notice and proxy
solicitation material, and all other proxy solicitation expense;
(g) all expenses of printing of annual or more frequent revisions of
Trust prospectus(es) and of supplying each then-existing Unitholder
with a copy of a revised prospectus;
(h) all expenses related to preparing and transmitting certificates
representing Trust shares;
(i) all expenses of bond and insurance coverage required by law or
deemed advisable by the Board of Trustees;
(j) all brokers' commissions and other normal charges incident to the
purchase, sale, or lending of portfolio securities;
(k) all taxes and governmental fees payable to Federal, state or other
governmental agencies, domestic or foreign, including all stamp or
other transfer taxes;
(l) all expenses of registering and maintaining the registration of
Trust under the 1940 Act and, to the extent no exemption is
available, expenses of registering Trust's shares under the 1933
Act, of qualifying and maintaining qualification of Trust and of
Trust's shares for sale under securities laws of various states or
other jurisdictions and of registration and qualification of Trust
under all other laws applicable to Trust or its business activities;
(m) all interest on indebtedness, if any, incurred by Trust or a Fund;
and
(n) all fees, dues and other expenses incurred by Trust in connection
with membership of Trust in any trade association or other
investment company organization.
5. ALLOCATION OF EXPENSES BORNE BY TRUST. Any expenses borne by
Trust that are attributable solely to the organization, operation or
business of a Fund shall be paid solely out of Fund assets. Any expense
borne by Trust which is not solely attributable to a Fund, nor solely to
any other series of shares of Trust, shall be apportioned in such manner
as Manager determines is fair and appropriate, or as otherwise specified
by the Board of Trustees.
6. EXPENSES BORNE BY MANAGER. Manager at its own expense shall
furnish all executive and other personnel, office space, and office
facilities required to render the investment management and
administrative
<PAGE> 38
services set forth in this Agreement. Manager shall pay
all expenses of establishing, maintaining, and servicing the accounts of
Unitholders in each Fund listed in Exhibit A. However, Manager shall
not be required to pay or provide any credit for services provided by
Trust's custodian or other agents without additional cost to Trust.
In the event that Manager pays or assumes any expenses of Trust or
a Fund not required to be paid or assumed by Manager under this
Agreement, Manager shall not be obligated hereby to pay or assume the
same or similar expense in the future; provided that nothing contained
herein shall be deemed to relieve Manager of any obligation to Trust or
a Fund under any separate agreement or arrangement between the parties.
7. MANAGEMENT FEE. For the services rendered, facilities
provided, and charges assumed and paid by Manager hereunder, Trust shall
pay to Manager out of the assets of each Fund fees at the annual rate
for such Fund as set forth in Schedule B to this Agreement. For each
Fund, the management fee shall accrue on each calendar day, and shall be
payable monthly on the first business day of the next succeeding
calendar month. The daily fee accrual shall be computed by multiplying
the fraction of one divided by the number of days in the calendar year
by the applicable annual rate of fee, and multiplying this product by
the net assets of the Fund, determined in the manner established by the
Board of Trustees, as of the close of business on the last preceding
business day on which the Fund's net asset value was determined.
8. RETENTION OF SUB-ADVISER. Subject to obtaining the initial and
periodic approvals required under Section 15 of the 1940 Act, Manager
may retain one or more sub-advisers at Manager's own cost and expense
for the purpose of furnishing one or more of the services described in
Section 1 hereof with respect to Trust or one or more Funds. Retention
of a sub-adviser shall in no way reduce the responsibilities or
obligations of Manager under this Agreement, and Manager shall be
responsible to Trust and its Funds for all acts or omissions of any sub-
adviser in connection with the performance of Manager's duties
hereunder.
9. NON-EXCLUSIVITY. The services of Manager to Trust hereunder
are not to be deemed exclusive and Manager shall be free to render
similar services to others.
10. STANDARD OF CARE. Neither Manager, nor any of its directors,
officers, stockholders, agents or employees shall be liable to Trust or
its Unitholders for any error of judgment, mistake of law, loss arising
out of any investment, or any other act or omission in the performance
by Manager of its duties under this Agreement, except for loss or
liability
<PAGE> 39
resulting from willful misfeasance, bad faith or gross negligence on
Manager's part or from reckless disregard by Manager of its obligations
and duties under this Agreement.
11. AMENDMENT. This Agreement may not be amended as to Trust or
any Fund without the affirmative votes (a) of a majority of the Board of
Trustees, including a majority of those Trustees who are not "interested
persons" of Trust or of Manager, voting in person at a meeting called
for the purpose of voting on such approval, and (b) of a "majority of
the outstanding shares" of Trust or, with respect to an amendment
affecting an individual Fund, a "majority of the outstanding shares" of
that Fund. The terms "interested persons" and "vote of a majority of
the outstanding shares" shall be construed in accordance with their
respective definitions in the 1940 Act and, with respect to the latter
term, in accordance with Rule 18f-2 under the 1940 Act.
12. EFFECTIVE DATE AND TERMINATION. This Agreement shall become
effective as to any Fund as of the effective date for that Fund
specified in Schedule A hereto. This Agreement may be terminated at any
time, without payment of any penalty, as to any Fund by the Board of
Trustees of Trust, or by a vote of a majority of the outstanding shares
of that Fund, upon at least sixty (60) days' written notice to Manager.
This Agreement may be terminated by Manager at any time upon at least
sixty (60) days' written notice to Trust. This Agreement shall
terminate automatically in the event of its "assignment" (as defined in
the 1940 Act). Unless terminated as hereinbefore provided, this
Agreement shall continue in effect with respect to any Fund until the
end of the initial term applicable to that Fund specified in Schedule A
and thereafter from year to year only so long as such continuance is
specifically approved with respect to that Fund at least annually (a) by
a majority of those Trustees who are not interested persons of Trust or
of Manager, voting in person at a meeting called for the purpose of
voting on such approval, and (b) by either the Board of Trustees of
Trust or by a "vote of a majority of the outstanding shares" of the
Fund.
13. OWNERSHIP OF RECORDS; INTERPARTY REPORTING. All records
required to be maintained and preserved by Trust pursuant to the
provisions of rules or regulations of the Securities and Exchange
Commission under Section 31(a) of the 1940 Act or other applicable laws
or regulations which are maintained and preserved by Manager on behalf
of Trust and any other records the parties mutually agree shall be
maintained by Manager on behalf of Trust are the property of Trust and
shall be surrendered by Manager promptly on request by Trust; provided
that Manager may at its own expense make and retain copies of any such
records.
<PAGE> 40
Trust shall furnish or otherwise make available to Manager such
copies of the financial statements, proxy statements, reports, and other
information relating to the business and affairs of each Unitholder in a
Fund as Manager may, at any time or from time to time, reasonably
require in order to discharge its obligations under this Agreement.
Manager shall prepare and furnish to Trust as to each Fund
statistical data and other information in such form and at such
intervals as Trust may reasonably request.
14. NON-LIABILITY OF TRUSTEES AND UNITHOLDERS. Any obligation of
Trust hereunder shall be binding only upon the assets of Trust (or the
applicable Fund thereof) and shall not be binding upon any Trustee,
officer, employee, agent or Unitholder of Trust. Neither the
authorization of any action by the Trustees or Unitholders of Trust nor
the execution of this Agreement on behalf of Trust shall impose any
liability upon any Trustee or any Unitholder.
15. USE OF MANAGER'S NAME. Trust may use the name "SteinRoe
Investment Trust" and the Fund names listed in Schedule A or any other
name derived from the name "Stein Roe & Farnham" only for so long as
this Agreement or any extension, renewal, or amendment hereof remains in
effect, including any similar agreement with any organization which
shall have succeeded to the business of Manager as investment adviser.
At such time as this Agreement or any extension, renewal or amendment
hereof, or such other similar agreement shall no longer be in effect,
Trust will cease to use any name derived from the name "Stein Roe &
Farnham" or otherwise connected with Manager, or with any organization
which shall have succeeded to Manager's business as investment adviser.
16. REFERENCES AND HEADINGS. In this Agreement and in any such
amendment, references to this Agreement and all expressions such as
"herein," "hereof," and "hereunder" shall be deemed to refer to this
Agreement as amended or affected by any such amendments. Headings are
placed herein for convenience of reference only and shall not be taken
as a part hereof or control or affect the meaning, construction or
effect of this Agreement. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original.
<PAGE> 41
Dated: _______________, 1995
STEINROE INVESTMENT TRUST
BY__________________________
ATTEST:
___________________________
STEIN ROE & FARNHAM INCORPORATED
BY _______________________________
ATTEST:
___________________________
STEINROE INVESTMENT TRUST
MANAGEMENT AGREEMENT
SCHEDULE A
The Funds of the Trust currently subject to this Agreement are as
follows:
End of Initial
Effective Date Term
-------------- --------------
SteinRoe Special Fund
SteinRoe Capital Opportunities Fund
SteinRoe Young Investor Fund
SteinRoe Growth Stock Fund
SteinRoe Prime Equities
SteinRoe Total Return Fund
Dated: __________
<PAGE> 42
STEINROE INVESTMENT TRUST
MANAGEMENT AGREEMENT
SCHEDULE B
Compensation pursuant to Section 7 of this Agreement shall be calculated
in accordance with the following schedules applicable to average daily
net assets of the Funds:
Schedule B1 (SteinRoe Capital Opportunities Fund, SteinRoe Special Fund)
- ----------------------------
0.750% on first $500 million
0.700% on next $500 million
0.650% on next $500 million
0.600% thereafter
Schedule B2 (SteinRoe Growth Stock Fund, SteinRoe Young Investor Fund,
SteinRoe Prime Equities)
- --------------------------------
0.600% on first $500 million
0.550% on next $500 million
0.500% thereafter
Schedule B3 (SteinRoe Total Return Fund)
- ----------------------------------------
0.550% on first $500 million of average daily net assets
0.500% on next $500 million of average daily net assets
0.450% on average daily net assets in excess of $1 billion
Dated ___________________________
<PAGE> 43
APPENDIX D
MANAGEMENT AGREEMENT
BETWEEN
SR&F BASE TRUST
AND
STEIN ROE & FARNHAM INCORPORATED
SR&F BASE TRUST, a Massachusetts common law trust registered under
the Investment Company Act of 1940 ("1940 Act") as an open-end
diversified management investment company ("Trust"), hereby appoints
STEIN ROE & FARNHAM INCORPORATED, a Delaware corporation registered
under the Investment Advisers Act of 1940 as an investment adviser, of
Chicago, Illinois ("Manager"), to furnish investment advisory and
portfolio management services with respect to the portion of its assets
represented by the shares of beneficial interest issued in each series
listed in Schedule A hereto, as such schedule may be amended from time
to time (each such series hereinafter referred to as "Portfolio").
Trust and Manager hereby agree that:
1. INVESTMENT MANAGEMENT SERVICES. Manager shall manage the
investment operations of Trust and each Portfolio, subject to the terms
of this Agreement and to the supervision and control of Trust's Board of
Trustees ("Trustees"). Manager agrees to perform, or arrange for the
performance of, the following services with respect to each Portfolio:
(a) to obtain and evaluate such information relating to economies,
industries, businesses, securities and commodities markets, and
individual securities, commodities and indices as it may deem
necessary or useful in discharging its responsibilities hereunder;
(b) to formulate and maintain a continuing investment program in a
manner consistent with and subject to (i) Trust's agreement and
declaration of trust and by-laws; (ii) the Portfolio's investment
objectives, policies, and restrictions as set forth in written
documents furnished by the Trust to Manager; (iii) all securities,
commodities, and tax laws and regulations applicable to the
Portfolio and Trust; and (iv) any other written limits or directions
furnished by the Trustees to Manager;
(c) unless otherwise directed by the Trustees, to determine from time to
time securities, commodities, interests or other investments to be
purchased, sold, retained or lent by the Portfolio, and to implement
those decisions, including the selection of entities with or through
which such purchases, sales or loans are to be effected;
(d) to use reasonable efforts to manage the Portfolio so that it will
qualify as a regulated investment company under subchapter M of the
Internal Revenue Code of 1986, as amended;
<PAGE> 44
(e) to make recommendations as to the manner in which voting rights,
rights to consent to Trust or Portfolio action, and any other rights
pertaining to Trust or the Portfolio shall be exercised;
(f) to make available to Trust promptly upon request all of the
Portfolio's records and ledgers and any reports or information
reasonably requested by the Trust; and
(g) to the extent required by law, to furnish to regulatory authorities
any information or reports relating to the services provided
pursuant to this Agreement.
Except as otherwise instructed from time to time by the Trustees,
with respect to execution of transactions for Trust on behalf of a
Portfolio, Manager shall place, or arrange for the placement of, all
orders for purchases, sales, or loans with issuers, brokers, dealers or
other counterparties or agents selected by Manager. In connection with
the selection of all such parties for the placement of all such orders,
Manager shall attempt to obtain most favorable execution and price, but
may nevertheless in its sole discretion as a secondary factor, purchase
and sell Portfolio securities from and to brokers and dealers who
provide Manager with statistical, research and other information,
analysis, advice, and similar services. In recognition of such services
or brokerage services provided by a broker or dealer, Manager is hereby
authorized to pay such broker or dealer a commission or spread in excess
of that which might be charged by another broker or dealer for the same
transaction if the Manager determines in good faith that the commission
or spread is reasonable in relation to the value of the services so
provided.
Trust hereby authorizes any entity or person associated with
Manager that is a member of a national securities exchange to effect any
transaction on the exchange for the account of a Portfolio to the extent
permitted by and in accordance with Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder. Trust hereby
consents to the retention by such entity or person of compensation for
such transactions in accordance with Rule 11a-2-2(T)(a)(iv).
Manager may, where it deems to be advisable, aggregate orders for
its other customers together with any securities of the same type to be
sold or purchased for Trust or one or more Portfolios in order to obtain
best execution or lower brokerage commissions. In such event, Manager
shall allocate the shares so purchased or sold, as well as the expenses
incurred in the transaction, in a manner it considers to be equitable
and fair and consistent with its fiduciary obligations to Trust, the
Portfolios, and Manager's other customers.
<PAGE> 45
Manager shall for all purposes be deemed to be an independent
contractor and not an agent of Trust and shall, unless otherwise
expressly provided or authorized, have no authority to act for or
represent Trust in any way.
2. ADMINISTRATIVE SERVICES. Manager shall supervise the business
and affairs of Trust and each Portfolio and shall provide such services
and facilities as may be required for effective administration of Trust
and Portfolios as are not provided by employees or other agents engaged
by Trust; provided that Manager shall not have any obligation to provide
under this Agreement any such services which are the subject of a
separate agreement or arrangement between Trust and Manager, any
affiliate of Manager, or any third party administrator ("Administrative
Agreements").
3. USE OF AFFILIATED COMPANIES AND SUBCONTRACTORS. In connection
with the services to be provided by Manager under this Agreement,
Manager may, to the extent it deems appropriate, and subject to
compliance with the requirements of applicable laws and regulations and
upon receipt of written approval of the Trustees, make use of (i) its
affiliated companies and their directors, trustees, officers, and
employees and (ii) subcontractors selected by Manager, provided that
Manager shall supervise and remain fully responsible for the services of
all such third parties in accordance with and to the extent provided by
this Agreement. All costs and expenses associated with services
provided by any such third parties shall be borne by Manager or such
parties.
4. EXPENSES BORNE BY TRUST. Except to the extent expressly
assumed by Manager herein or under a separate agreement between Trust
and Manager and except to the extent required by law to be paid by
Manager, Manager shall not be obligated to pay any costs or expenses
incidental to the organization, operations or business of the Trust.
Without limitation, such costs and expenses shall include but not be
limited to:
(a) all charges of depositories, custodians and other agencies for the
safekeeping and servicing of its cash, securities, and other
property;
(b) all charges for equipment or services used for obtaining price
quotations or for communication between Manager or Trust and the
custodian, transfer agent or any other agent selected by Trust;
(c) all charges for administrative and accounting services provided to
Trust by Manager, or any other provider of such services;
(d) all charges for services of Trust's independent auditors and for
services to Trust by legal counsel;
<PAGE> 46
(e) all compensation of Trustees, other than those affiliated with
Manager, all expenses incurred in connection with their services to
Trust, and all expenses of meetings of the Trustees or committees
thereof;
(f) all expenses incidental to holding meetings of holders of units of
interest in the Trust ("Unitholders"), including printing and of
supplying each record-date Unitholder with notice and proxy
solicitation material, and all other proxy solicitation expense;
(g) all expenses of printing of annual or more frequent revisions of
Trust prospectus(es) and of supplying each then-existing Unitholder
with a copy of a revised prospectus;
(h) all expenses related to preparing and transmitting certificates
representing Trust shares;
(i) all expenses of bond and insurance coverage required by law or
deemed advisable by the Board of Trustees;
(j) all brokers' commissions and other normal charges incident to the
purchase, sale, or lending of portfolio securities;
(k) all taxes and governmental fees payable to Federal, state or other
governmental agencies, domestic or foreign, including all stamp or
other transfer taxes;
(l) all expenses of registering and maintaining the registration of
Trust under the 1940 Act and, to the extent no exemption is
available, expenses of registering Trust's shares under the 1933
Act, of qualifying and maintaining qualification of Trust and of
Trust's shares for sale under securities laws of various states or
other jurisdictions and of registration and qualification of Trust
under all other laws applicable to Trust or its business activities;
(m) all interest on indebtedness, if any, incurred by Trust or a
Portfolio; and
(n) all fees, dues and other expenses incurred by Trust in connection
with membership of Trust in any trade association or other
investment company organization.
5. ALLOCATION OF EXPENSES BORNE BY TRUST. Any expenses borne by
Trust that are attributable solely to the organization, operation or
business of a Portfolio shall be paid solely out of Portfolio assets.
Any expense borne by Trust which is not solely attributable to a
Portfolio, nor solely to any other series of shares of Trust, shall be
apportioned in such manner as Manager determines is fair and
appropriate, or as otherwise specified by the Board of Trustees.
6. EXPENSES BORNE BY MANAGER. Manager at its own expense shall
furnish all executive and other personnel, office space, and office
facilities required to render the investment management and
administrative
<PAGE> 47
services set forth in this Agreement. Manager shall pay
all expenses of establishing, maintaining, and servicing the accounts of
Unitholders in each Portfolio listed in Exhibit A. However, Manager
shall not be required to pay or provide any credit for services provided
by Trust's custodian or other agents without additional cost to Trust.
In the event that Manager pays or assumes any expenses of Trust or
a Portfolio not required to be paid or assumed by Manager under this
Agreement, Manager shall not be obligated hereby to pay or assume the
same or similar expense in the future; provided that nothing contained
herein shall be deemed to relieve Manager of any obligation to Trust or
a Portfolio under any separate agreement or arrangement between the
parties.
7. MANAGEMENT FEE. For the services rendered, facilities
provided, and charges assumed and paid by Manager hereunder, Trust shall
pay to Manager out of the assets of each Portfolio fees at the annual
rate for such Portfolio as set forth in Schedule B to this Agreement.
For each Portfolio, the management fee shall accrue on each calendar
day, and shall be payable monthly on the first business day of the next
succeeding calendar month. The daily fee accrual shall be computed by
multiplying the fraction of one divided by the number of days in the
calendar year by the applicable annual rate of fee, and multiplying this
product by the net assets of the Portfolio, determined in the manner
established by the Board of Trustees, as of the close of business on the
last preceding business day on which the Portfolio's net asset value was
determined.
8. RETENTION OF SUB-ADVISER. Subject to obtaining the initial and
periodic approvals required under Section 15 of the 1940 Act, Manager
may retain one or more sub-advisers at Manager's own cost and expense
for the purpose of furnishing one or more of the services described in
Section 1 hereof with respect to Trust or one or more Portfolios.
Retention of a sub-adviser shall in no way reduce the responsibilities
or obligations of Manager under this Agreement, and Manager shall be
responsible to Trust and its Portfolios for all acts or omissions of any
sub-adviser in connection with the performance of Manager's duties
hereunder.
9. NON-EXCLUSIVITY. The services of Manager to Trust hereunder
are not to be deemed exclusive and Manager shall be free to render
similar services to others.
10. STANDARD OF CARE. Neither Manager, nor any of its directors,
officers, stockholders, agents or employees shall be liable to Trust or
its Unitholders for any error of judgment, mistake of law, loss arising
out of
<PAGE> 48
any investment, or any other act or omission in the performance
by Manager of its duties under this Agreement, except for loss or
liability resulting from willful misfeasance, bad faith or gross
negligence on Manager's part or from reckless disregard by Manager of
its obligations and duties under this Agreement.
11. AMENDMENT. This Agreement may not be amended as to Trust or
any Portfolio without the affirmative votes (a) of a majority of the
Board of Trustees, including a majority of those Trustees who are not
"interested persons" of Trust or of Manager, voting in person at a
meeting called for the purpose of voting on such approval, and (b) of a
"majority of the outstanding shares" of Trust or, with respect to an
amendment affecting an individual Portfolio, a "majority of the
outstanding shares" of that Portfolio. The terms "interested persons"
and "vote of a majority of the outstanding shares" shall be construed in
accordance with their respective definitions in the 1940 Act and, with
respect to the latter term, in accordance with Rule 18f-2 under the 1940
Act.
12. EFFECTIVE DATE AND TERMINATION. This Agreement shall become
effective as to any Portfolio as of the effective date for that
Portfolio specified in Schedule A hereto. This Agreement may be
terminated at any time, without payment of any penalty, as to any
Portfolio by the Board of Trustees of Trust, or by a vote of a majority
of the outstanding shares of that Portfolio, upon at least sixty (60)
days' written notice to Manager. This Agreement may be terminated by
Manager at any time upon at least sixty (60) days' written notice to
Trust. This Agreement shall terminate automatically in the event of its
"assignment" (as defined in the 1940 Act). Unless terminated as
hereinbefore provided, this Agreement shall continue in effect with
respect to any Portfolio until the end of the initial term applicable to
that Portfolio specified in Schedule A and thereafter from year to year
only so long as such continuance is specifically approved with respect
to that Portfolio at least annually (a) by a majority of those Trustees
who are not interested persons of Trust or of Manager, voting in person
at a meeting called for the purpose of voting on such approval, and (b)
by either the Board of Trustees of Trust or by a "vote of a majority of
the outstanding shares" of the Portfolio.
13. OWNERSHIP OF RECORDS; INTERPARTY REPORTING. All records
required to be maintained and preserved by Trust pursuant to the
provisions of rules or regulations of the Securities and Exchange
Commission under Section 31(a) of the 1940 Act or other applicable laws
or regulations which are maintained and preserved by Manager on behalf
of Trust and any other records the parties mutually agree shall be
maintained by Manager on behalf of Trust are the property of Trust and
shall be surrendered by Manager promptly on request by Trust; provided
<PAGE> 49
that Manager may at its own expense make and retain copies of any such
records.
Trust shall furnish or otherwise make available to Manager such
copies of the financial statements, proxy statements, reports, and other
information relating to the business and affairs of each Unitholder in a
Portfolio as Manager may, at any time or from time to time, reasonably
require in order to discharge its obligations under this Agreement.
Manager shall prepare and furnish to Trust as to each Portfolio
statistical data and other information in such form and at such
intervals as Trust may reasonably request.
14. NON-LIABILITY OF TRUSTEES AND UNITHOLDERS. Any obligation of
Trust hereunder shall be binding only upon the assets of Trust (or the
applicable Portfolio thereof) and shall not be binding upon any Trustee,
officer, employee, agent or Unitholder of Trust. Neither the
authorization of any action by the Trustees or Unitholders of Trust nor
the execution of this Agreement on behalf of Trust shall impose any
liability upon any Trustee or any Unitholder.
15. USE OF MANAGER'S NAME. Trust may use the name "SR&F Base
Trust" and the Portfolio names listed in Schedule A or any other name
derived from the name "Stein Roe & Farnham" only for so long as this
Agreement or any extension, renewal, or amendment hereof remains in
effect, including any similar agreement with any organization which
shall have succeeded to the business of Manager as investment adviser.
At such time as this Agreement or any extension, renewal or amendment
hereof, or such other similar agreement shall no longer be in effect,
Trust will cease to use any name derived from the name "Stein Roe &
Farnham" or otherwise connected with Manager, or with any organization
which shall have succeeded to Manager's business as investment adviser.
16. REFERENCES AND HEADINGS. In this Agreement and in any such
amendment, references to this Agreement and all expressions such as
"herein," "hereof," and "hereunder" shall be deemed to refer to this
Agreement as amended or affected by any such amendments. Headings are
placed herein for convenience of reference only and shall not be taken
as a part hereof or control or affect the meaning, construction or
effect of this Agreement. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original.
<PAGE> 50
Dated: _______________, 19__.
SR&F BASE TRUST
BY__________________________
ATTEST:
___________________________
STEIN ROE & FARNHAM INCORPORATED
BY _______________________________
ATTEST:
___________________________
SR&F BASE TRUST
MANAGEMENT AGREEMENT
SCHEDULE A
The Series of SR&F Base Trust currently subject to this Agreement are as
follows:
End of
Equity Portfolios Effective Date Initial Term
- ------------------------------------ -------------- ------------
Capital Appreciation Portfolio I
(Special)
Capital Appreciation Portfolio II
(Capital Opportunities)
Growth Portfolio I (Young Investor)
Growth Portfolio II (Growth Stock)
Growth Portfolio III (Prime Equities)
Equity Income Portfolio (Total Return)
Dated ___________________________
<PAGE> 51
SR&F BASE TRUST
MANAGEMENT AGREEMENT
SCHEDULE B
Compensation pursuant to Section 7 of this Agreement shall be calculated
in accordance with the following schedules applicable to average daily
net assets of the Portfolio:
Schedule B1 (Capital Appreciation Portfolios I and II)
- -----------------------------------------------------------
0.750% on first $500 million
0.700% on next $500 million
0.650% on next $500 million
0.600% thereafter
Schedule B2 (Growth Portfolios I and II)
- ---------------------------------------------
0.600% on first $500 million
0.550% on next $500 million
0.500% thereafter
Schedule B3 (Equity Income Portfolio)
- -------------------------------------
0.550% on first $500 million of average daily net assets
0.500% on next $500 million of average daily net assets
0.450% on average daily net assets in excess of $1 billion
Dated ___________________________
<PAGE>
APPENDIX - PROXY CARDS
STEINROE PRIME EQUITIES
SPECIAL MEETING OF SHAREHOLDERS OF AUGUST 15, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF
STEINROE INVESTMENT TRUST
BY SIGNING AND DATING BELOW, YOU AUTHORIZE GARY A. ANETSBERGER, TIMOTHY
K. ARMOUR, AND JILAINE HUMMEL BAUER, OR ANY OF THEM, EACH WITH POWER OF
SUBSTITUTION, TO VOTE YOUR SHARES OF THE FUND AT THE SCHEDULED MEETING
OF SHAREHOLDERS AND AT ANY ADJOURNMENT OF THE MEETING. THEY SHALL VOTE
AS RECOMMENDED BY THE BOARD UNLESS OTHERWISE INDICATED BELOW,
AND IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
PLEASE VOTE, SIGN, DATE, AND DETACH THE LOWER PORTION OF THIS CARD, AND
RETURN IT IN THE ENVELOPE PROVIDED. YOUR SHARES WILL BE VOTED AS
INDICATED BY YOUR MARK. IF YOU MAKE NO MARK, YOUR SHARES WILL BE VOTED
AS RECOMMENDED BY THE BOARD. THE BOARD OF TRUSTEES RECOMMENDS VOTING
"FOR" PROPOSALS 1 AND 2.
TO VOTE, MARK AN X IN BLUE OR BLACK INK IN THE APPROPRIATE BOX ON THE
PROXY CARD BELOW. KEEP THIS PORTION FOR YOUR RECORDS.
(DETACH HERE AND RETURN THIS PORTION ONLY)
STEINROE PRIME EQUITIES
VOTE ON PROPOSAL
FOR AGAINST ABSTAIN
1. To approve each of the following agreements
between the Investment Trust and Stein Roe &
Farnham Incorporated ("Adviser") relating to
the Fund:
____ ____ ____ A. Administrative Agreement
____ ____ ____ B. Management Agreement
____ ____ ____ 2. To approve a Management Agreement between
the SR&F Base Trust and the Adviser relating
to the Fund if and when the Fund converts to
a master fund/feeder fund structure.
_________________________ _________________________________
SIGNATURE DATE SIGNATURE (JOINT OWNER) DATE
PLEASE SIGN NAME(S) AS PRINTED ABOVE. WHERE SHARES ARE REGISTERED WITH
JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS
EXECUTOR, ADMINISTRATOR, TRUSTEE, OR OTHER REPRESENTATIVE SHOULD GIVE
FULL TITLE AS SUCH.
<PAGE>
STEINROE YOUNG INVESTOR FUND
SPECIAL MEETING OF SHAREHOLDERS OF AUGUST 15, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF
STEINROE INVESTMENT TRUST
BY SIGNING AND DATING BELOW, YOU AUTHORIZE GARY A. ANETSBERGER, TIMOTHY
K. ARMOUR, AND JILAINE HUMMEL BAUER, OR ANY OF THEM, EACH WITH POWER OF
SUBSTITUTION, TO VOTE YOUR SHARES OF THE FUND AT THE SCHEDULED MEETING
OF SHAREHOLDERS AND AT ANY ADJOURNMENT OF THE MEETING. THEY SHALL VOTE
AS RECOMMENDED BY THE BOARD UNLESS OTHERWISE INDICATED BELOW,
AND IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
PLEASE VOTE, SIGN, DATE, AND DETACH THE LOWER PORTION OF THIS CARD, AND
RETURN IT IN THE ENVELOPE PROVIDED. YOUR SHARES WILL BE VOTED AS
INDICATED BY YOUR MARK. IF YOU MAKE NO MARK, YOUR SHARES WILL BE VOTED
AS RECOMMENDED BY THE BOARD. THE BOARD OF TRUSTEES RECOMMENDS VOTING
"FOR" PROPOSALS 1 AND 2.
TO VOTE, MARK AN X IN BLUE OR BLACK INK IN THE APPROPRIATE BOX ON THE
PROXY CARD BELOW. KEEP THIS PORTION FOR YOUR RECORDS.
(DETACH HERE AND RETURN THIS PORTION ONLY)
STEINROE YOUNG INVESTOR FUND
VOTE ON PROPOSAL
FOR AGAINST ABSTAIN
1. To approve each of the following agreements
between the Investment Trust and Stein Roe &
Farnham Incorporated ("Adviser") relating to
the Fund:
____ ____ ____ A. Administrative Agreement
____ ____ ____ B. Management Agreement
____ ____ ____ 2. To approve a Management Agreement between
the SR&F Base Trust and the Adviser relating
to the Fund if and when the Fund converts to
a master fund/feeder fund structure.
_________________________ _________________________________
SIGNATURE DATE SIGNATURE (JOINT OWNER) DATE
PLEASE SIGN NAME(S) AS PRINTED ABOVE. WHERE SHARES ARE REGISTERED WITH
JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS
EXECUTOR, ADMINISTRATOR, TRUSTEE, OR OTHER REPRESENTATIVE SHOULD GIVE
FULL TITLE AS SUCH.
<PAGE>
STEINROE TOTAL RETURN FUND
SPECIAL MEETING OF SHAREHOLDERS OF AUGUST 15, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF
STEINROE INVESTMENT TRUST
BY SIGNING AND DATING BELOW, YOU AUTHORIZE GARY A. ANETSBERGER, TIMOTHY
K. ARMOUR, AND JILAINE HUMMEL BAUER, OR ANY OF THEM, EACH WITH POWER OF
SUBSTITUTION, TO VOTE YOUR SHARES OF THE FUND AT THE SCHEDULED MEETING
OF SHAREHOLDERS AND AT ANY ADJOURNMENT OF THE MEETING. THEY SHALL VOTE
AS RECOMMENDED BY THE BOARD UNLESS OTHERWISE INDICATED BELOW,
AND IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
PLEASE VOTE, SIGN, DATE, AND DETACH THE LOWER PORTION OF THIS CARD, AND
RETURN IT IN THE ENVELOPE PROVIDED. YOUR SHARES WILL BE VOTED AS
INDICATED BY YOUR MARK. IF YOU MAKE NO MARK, YOUR SHARES WILL BE VOTED
AS RECOMMENDED BY THE BOARD. THE BOARD OF TRUSTEES RECOMMENDS VOTING
"FOR" PROPOSALS 1 AND 2.
TO VOTE, MARK AN X IN BLUE OR BLACK INK IN THE APPROPRIATE BOX ON THE
PROXY CARD BELOW. KEEP THIS PORTION FOR YOUR RECORDS.
(DETACH HERE AND RETURN THIS PORTION ONLY)
STEINROE TOTAL RETURN FUND
VOTE ON PROPOSAL
FOR AGAINST ABSTAIN
1. To approve each of the following agreements
between the Investment Trust and Stein Roe &
Farnham Incorporated ("Adviser") relating to
the Fund:
____ ____ ____ A. Administrative Agreement
____ ____ ____ B. Management Agreement
____ ____ ____ 2. To approve a Management Agreement between
the SR&F Base Trust and the Adviser relating
to the Fund if and when the Fund converts to
a master fund/feeder fund structure.
_________________________ _________________________________
SIGNATURE DATE SIGNATURE (JOINT OWNER) DATE
PLEASE SIGN NAME(S) AS PRINTED ABOVE. WHERE SHARES ARE REGISTERED WITH
JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS
EXECUTOR, ADMINISTRATOR, TRUSTEE, OR OTHER REPRESENTATIVE SHOULD GIVE
FULL TITLE AS SUCH.
<PAGE>
STEINROE GROWTH STOCK FUND
SPECIAL MEETING OF SHAREHOLDERS OF AUGUST 15, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF
STEINROE INVESTMENT TRUST
BY SIGNING AND DATING BELOW, YOU AUTHORIZE GARY A. ANETSBERGER, TIMOTHY
K. ARMOUR, AND JILAINE HUMMEL BAUER, OR ANY OF THEM, EACH WITH POWER OF
SUBSTITUTION, TO VOTE YOUR SHARES OF THE FUND AT THE SCHEDULED MEETING
OF SHAREHOLDERS AND AT ANY ADJOURNMENT OF THE MEETING. THEY SHALL VOTE
AS RECOMMENDED BY THE BOARD UNLESS OTHERWISE INDICATED BELOW,
AND IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
PLEASE VOTE, SIGN, DATE, AND DETACH THE LOWER PORTION OF THIS CARD, AND
RETURN IT IN THE ENVELOPE PROVIDED. YOUR SHARES WILL BE VOTED AS
INDICATED BY YOUR MARK. IF YOU MAKE NO MARK, YOUR SHARES WILL BE VOTED
AS RECOMMENDED BY THE BOARD. THE BOARD OF TRUSTEES RECOMMENDS VOTING
"FOR" PROPOSALS 1 AND 2.
TO VOTE, MARK AN X IN BLUE OR BLACK INK IN THE APPROPRIATE BOX ON THE
PROXY CARD BELOW. KEEP THIS PORTION FOR YOUR RECORDS.
(DETACH HERE AND RETURN THIS PORTION ONLY)
STEINROE GROWTH STOCK FUND
VOTE ON PROPOSAL
FOR AGAINST ABSTAIN
1. To approve each of the following agreements
between the Investment Trust and Stein Roe &
Farnham Incorporated ("Adviser") relating to
the Fund:
____ ____ ____ A. Administrative Agreement
____ ____ ____ B. Management Agreement
____ ____ ____ 2. To approve a Management Agreement between
the SR&F Base Trust and the Adviser relating
to the Fund if and when the Fund converts to
a master fund/feeder fund structure.
_________________________ _________________________________
SIGNATURE DATE SIGNATURE (JOINT OWNER) DATE
PLEASE SIGN NAME(S) AS PRINTED ABOVE. WHERE SHARES ARE REGISTERED WITH
JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS
EXECUTOR, ADMINISTRATOR, TRUSTEE, OR OTHER REPRESENTATIVE SHOULD GIVE
FULL TITLE AS SUCH.
<PAGE>
STEINROE CAPITAL OPPORTUNITIES FUND
SPECIAL MEETING OF SHAREHOLDERS OF AUGUST 15, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF
STEINROE INVESTMENT TRUST
BY SIGNING AND DATING BELOW, YOU AUTHORIZE GARY A. ANETSBERGER, TIMOTHY
K. ARMOUR, AND JILAINE HUMMEL BAUER, OR ANY OF THEM, EACH WITH POWER OF
SUBSTITUTION, TO VOTE YOUR SHARES OF THE FUND AT THE SCHEDULED MEETING
OF SHAREHOLDERS AND AT ANY ADJOURNMENT OF THE MEETING. THEY SHALL VOTE
AS RECOMMENDED BY THE BOARD UNLESS OTHERWISE INDICATED BELOW,
AND IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
PLEASE VOTE, SIGN, DATE, AND DETACH THE LOWER PORTION OF THIS CARD, AND
RETURN IT IN THE ENVELOPE PROVIDED. YOUR SHARES WILL BE VOTED AS
INDICATED BY YOUR MARK. IF YOU MAKE NO MARK, YOUR SHARES WILL BE VOTED
AS RECOMMENDED BY THE BOARD. THE BOARD OF TRUSTEES RECOMMENDS VOTING
"FOR" PROPOSALS 1 AND 2.
TO VOTE, MARK AN X IN BLUE OR BLACK INK IN THE APPROPRIATE BOX ON THE
PROXY CARD BELOW. KEEP THIS PORTION FOR YOUR RECORDS.
(DETACH HERE AND RETURN THIS PORTION ONLY)
STEINROE CAPITAL OPPORTUNITIES FUND
VOTE ON PROPOSAL
FOR AGAINST ABSTAIN
1. To approve each of the following agreements
between the Investment Trust and Stein Roe &
Farnham Incorporated ("Adviser") relating to
the Fund:
____ ____ ____ A. Administrative Agreement
____ ____ ____ B. Management Agreement
____ ____ ____ 2. To approve a Management Agreement between
the SR&F Base Trust and the Adviser relating
to the Fund if and when the Fund converts to
a master fund/feeder fund structure.
_________________________ _________________________________
SIGNATURE DATE SIGNATURE (JOINT OWNER) DATE
PLEASE SIGN NAME(S) AS PRINTED ABOVE. WHERE SHARES ARE REGISTERED WITH
JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS
EXECUTOR, ADMINISTRATOR, TRUSTEE, OR OTHER REPRESENTATIVE SHOULD GIVE
FULL TITLE AS SUCH.
<PAGE>
STEINROE SPECIAL FUND
SPECIAL MEETING OF SHAREHOLDERS OF AUGUST 15, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF
STEINROE INVESTMENT TRUST
BY SIGNING AND DATING BELOW, YOU AUTHORIZE GARY A. ANETSBERGER, TIMOTHY
K. ARMOUR, AND JILAINE HUMMEL BAUER, OR ANY OF THEM, EACH WITH POWER OF
SUBSTITUTION, TO VOTE YOUR SHARES OF THE FUND AT THE SCHEDULED MEETING
OF SHAREHOLDERS AND AT ANY ADJOURNMENT OF THE MEETING. THEY SHALL VOTE
AS RECOMMENDED BY THE BOARD UNLESS OTHERWISE INDICATED BELOW,
AND IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.
PLEASE VOTE, SIGN, DATE, AND DETACH THE LOWER PORTION OF THIS CARD, AND
RETURN IT IN THE ENVELOPE PROVIDED. YOUR SHARES WILL BE VOTED AS
INDICATED BY YOUR MARK. IF YOU MAKE NO MARK, YOUR SHARES WILL BE VOTED
AS RECOMMENDED BY THE BOARD. THE BOARD OF TRUSTEES RECOMMENDS VOTING
"FOR" PROPOSALS 1 AND 2.
TO VOTE, MARK AN X IN BLUE OR BLACK INK IN THE APPROPRIATE BOX ON THE
PROXY CARD BELOW. KEEP THIS PORTION FOR YOUR RECORDS.
(DETACH HERE AND RETURN THIS PORTION ONLY)
STEINROE SPECIAL FUND
VOTE ON PROPOSAL
FOR AGAINST ABSTAIN
1. To approve each of the following agreements
between the Investment Trust and Stein Roe &
Farnham Incorporated ("Adviser") relating to
the Fund:
____ ____ ____ A. Administrative Agreement
____ ____ ____ B. Management Agreement
____ ____ ____ 2. To approve a Management Agreement between
the SR&F Base Trust and the Adviser relating
to the Fund if and when the Fund converts to
a master fund/feeder fund structure.
_________________________ _________________________________
SIGNATURE DATE SIGNATURE (JOINT OWNER) DATE
PLEASE SIGN NAME(S) AS PRINTED ABOVE. WHERE SHARES ARE REGISTERED WITH
JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS
EXECUTOR, ADMINISTRATOR, TRUSTEE, OR OTHER REPRESENTATIVE SHOULD GIVE
FULL TITLE AS SUCH.
<PAGE> 1
[Appendix -- Proxy Solicitation Material]
June 26, 1995
Dear SteinRoe shareholder:
Enclosed in this envelope is a notice of a meeting of
shareholders for one or more SteinRoe equity mutual funds in
which you have invested, as well as a proxy statement and a
proxy card. The proxy statement provides you with information
you need in order to vote on matters to be considered at the
meeting; the proxy card for each fund in which you are a
shareholder is, in essence, a ballot that enables you to cast
your vote by mail.
We've sent you these materials -- and I am writing to you
today -- to seek your vote of approval for three agreements
relating to the investment advisory services provided by
Stein Roe & Farnham Incorporated.
The trustees of your fund (including the independent
trustees) -- whose job it is to protect your interests as a
shareholder and to ensure that your fund is managed
professionally and cost-effectively -- have unanimously
recommended that you approve the proposed agreements.
The agreements relate to the investment advisory services
Stein Roe & Farnham provides to your fund, as well as its
compensation for doing so. The agreements are:
- - An Administrative Agreement and a Management Agreement
that would replace the current Investment Advisory
Agreement relating to your fund. These new agreements
essentially carry forward, under two separate agreements,
the investment advisory services Stein Roe & Farnham
already provides to your fund. As you would imagine, the
proposed Administrative Agreement covers Stein Roe &
Farnham's provision of certain administrative services;
while the proposed Management Agreement covers portfolio
management services. These agreements provide for an
increase in the fee paid to Stein Roe & Farnham for the
services it provides.
- - A second proposed Management Agreement, which would
replace the management agreement mentioned above and
would, as appropriate at a future date, allow your fund's
assets to be pooled with assets of other funds that have
identical investment objectives. The resulting larger pool
of assets would be managed by Stein Roe & Farnham.
<PAGE> 2
A word about the fee increase. No such action is ever taken
lightly. Stein Roe & Farnham recommended the increase -- and
the trustees approved the recommendation -- only after both
had conducted an exhaustive study of Stein Roe's
competitiveness in meeting the needs of mutual fund investors
currently, and what will be required for continued success in
the future. Investing today is a complex business, and
identifying wealth-building opportunities in the market is
becoming more and more intricate. Moreover, a strong
proprietary research capability -- long a Stein Roe hallmark
- -- has become even more critical in the investment process.
At the same time, the cost of maintaining such a capability
has continued to escalate. Mutual fund companies must invest
in both top-notch talent and technology to an even greater
degree than was required seven to ten years ago, when we last
raised fees on many of our equity funds.
Having considered these factors, the trustees believe, as we
do, that, by voting to approve the proposed agreements, you
will help ensure our ability to continue to provide you
high-quality investment management service.
We believe the management fee increase recommended for each
fund is reasonable and competitive -- the largest amounting
to less than $2 a year per each $1,000 invested. And, even at
the new fees, each of the funds' expenses would be in line
with or below the median expense for its fund peer group. As
always, SteinRoe funds remain pure no-load funds, with no
sales commissions or redemption charges, and no 12b-1 fees.
Please mark, date, sign and mail the enclosed proxy in the
envelope provided so your vote may be cast at the meeting.
By their nature, proxy statements are technical and complex
documents. While we've worked hard to make this proxy
statement as simple as possible, you may have additional
questions. If so, please call us at 1 800 228-2550.
On behalf of your trustees, I ask for your approval of these
important agreements, and, as always, thank you for investing
with us.
Sincerely,
Timothy K. Armour
President
