SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. __)
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CMC Fund Trust
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(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: Set forth the amount on which
the filing fee is calculated and state how it was determined.
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[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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<PAGE>
[LOGO]
COLUMBIA MANAGEMENT COMPANY
November __, 1997
[Name of Client]
[Address]
Dear ________:
As you are aware from previous communications we have had with you,
Columbia Management Co. ("CMC") has entered into an agreement to be acquired by
Fleet Financial Group, Inc. ("Fleet"). Previously, we sent you a letter
explaining the effect of the transaction on our investment advisory
relationship. We continue to make progress towards completion of the
transaction, but a few outstanding issues remain.
A portion of the assets that we manage on your behalf are invested in one
or more of the three portfolios of CMC Fund Trust: CMC Small Cap Fund, CMC
International Stock Fund and CMC High Yield Fund. The assets of each of these
Funds are managed by us pursuant to an investment advisory contract between the
Fund and Columbia Management Co. Under the Investment Company Act of 1940,
shareholders must approve a new investment advisory contract whenever there is a
change in control of a fund's investment advisor. Therefore, we are asking the
shareholders of each of these Funds to approve a new investment advisory
contract on behalf of each Fund. The new contract is identical to the existing
contract in all material respects, including the fees paid by the Funds.
In addition, as more fully described in the enclosed proxy materials,
shareholders of the Funds are being requested to elect a new slate of trustees
that oversee the affairs of the Trust. The purpose of the election of trustees
is to add two new independent trustees to the Board of Trustees.
The Board of Trustees of CMC Fund Trust, including the independent trustee
that is not affiliated with CMC or Fleet, met on October 23rd to consider the
approval of the new investment advisory contracts. After careful consideration
of the shareholders' interests, the Board approved the new investment advisory
contracts and recommended that they be submitted to the shareholders for
approval. With this letter you are receiving a proxy statement together with
proxy cards for each Fund in which you are a shareholder. Please read the proxy
statement, which contains a description of the transaction and additional
information about Fleet. The Board of Trustees encourages you to cast your
ballot FOR the adoption of new investment advisory contracts for each Fund and
FOR the election of the slate of trustees presented by the Board. Additionally,
as required by law, we have enclosed a supplement to your CMC Fund Trust
prospectus which describes the Fleet transaction.
If you have any questions about this proxy, the transaction with Fleet, or
voting your shares, or the supplement to the prospectus, please do not hesitate
to give any of us a call.
Sincerely,
JAMES F. RIPPEY
James F. Rippey
President
1300 SW Sixth Avenue, Portland, OR 97201-3459 (503) 222-3600 1-800-547-1037
<PAGE>
[Logo]
Columbia
CMC SMALL CAP FUND
CMC INTERNATIONAL STOCK FUND
CMC HIGH YIELD FUND
OF
CMC FUND TRUST
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 4, 1997
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of CMC Small Cap Fund, CMC International Stock Fund, and CMC High
Yield Fund (each a "Fund" and collectively the "Funds"), the three series of CMC
Fund Trust (the "Trust") will be held in the third floor conference room at the
principal offices of the Trust at 1300 S.W. Sixth Avenue, Portland, Oregon, on
December 4, 1997, at 11:00 a.m., Pacific Time, for the following purposes:
1. For the shareholders of each Fund to approve or disapprove a new
investment advisory contract between the Trust and Columbia Management
Co. (the "Advisor") (Proposal 1);
2. For the shareholders of all of the Funds to elect a new Board of
Trustees of the Trust ("Trustees") consisting of four Trustees who
will serve from the time of their election until their successors are
elected (Proposal 2); and
3. To transact any other business that properly comes before the Meeting
and any adjournment thereof.
Both Proposal 1 and Proposal 2 described above are contingent upon the
completion of a proposed acquisition of the Advisor, together with three other
companies affiliated with the Advisor, by Fleet Financial Group, Inc. through
its wholly owned subsidiary, Fleet National Bank (the "Acquisition"). The
Acquisition is described in the attached Proxy Statement. If the Acquisition is
not completed, neither Proposal 1 nor Proposal 2 will become effective, even if
they have received the necessary shareholder approvals.
<PAGE>
Shareholders of record of each Fund at the close of business on October 24,
1997 (the "Record Date") are entitled to notice of and to vote at the Meeting
and any adjournment thereof. Shareholders of each Fund will vote separately on
approval or disapproval of a new investment advisory contract between the Trust
and the Advisor with respect to investment advisory services for that Fund
(Proposal 1), but all of the shareholders of the Funds will vote together on the
election of Trustees (Proposal 2). If you hold shares in more than one Fund you
will receive a separate proxy card for each Fund, but only one Proxy Statement.
Please date and sign the enclosed proxy card(s) and return it (them) in the
enclosed postage-prepaid envelope. You may attend the Meeting in person even if
you send in your proxy card(s); retention of the proxy card(s) is not necessary
for admission to or identification at the Meeting.
By order the Board of Trustees
Jeff B. Curtis
Secretary
November 5, 1997
Portland, Oregon
IMPORTANT
YOU CAN HELP AVOID THE NECESSITY OF SENDING FOLLOW-UP LETTERS TO ENSURE A QUORUM
BY PROMPTLY SIGNING AND RETURNING THE ENCLOSED PROXY CARD(S). IF YOU ARE UNABLE
TO BE PRESENT IN PERSON, PLEASE FILL IN, SIGN AND RETURN THE ENCLOSED PROXY
CARD(S) TO ENSURE THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING.
THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS THAT YOU CAST YOUR VOTE:
- FOR APPROVAL of each new investment advisory contract; and
- FOR the election of all of the Trustees nominated for election.
YOUR VOTE IS IMPORTANT
<PAGE>
[Logo]
Columbia
CMC SMALL CAP FUND
CMC INTERNATIONAL STOCK FUND
CMC HIGH YIELD FUND
OF
CMC FUND TRUST
----------------
PROXY STATEMENT
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SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 4, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees (sometimes referred to in this Proxy Statement
as the "Board" or the "Trustees") of CMC Fund Trust (the "Trust") for use at a
Special Meeting of Shareholders of CMC Small Cap Fund, CMC International Stock
Fund, and CMC High Yield Fund (each a "Fund" and collectively the "Funds"), the
three series of the Trust, to be held on December 4, 1997 (the "Meeting") and at
any adjournments thereof. The first mailing of this Proxy Statement and the
related Notice of Special Meeting is expected to be made on or about November 5,
1997.
If the enclosed proxy card(s) is (are) properly executed and returned in
time to be voted at the Meeting, the proxies named in the proxy card(s) will
vote the shares represented by the proxy in accordance with the instructions
given on the proxy card(s). Unmarked proxy cards will be voted FOR approval of a
new investment advisory contract between Columbia Management Co. (the "Advisor")
and the Trust with respect to investment advisory services for the applicable
Fund and FOR election of each of the nominees for Trustee of the Trust.
Both the proposal to approve a new investment advisory contract with the
Advisor (Proposal 1) and the proposal to elect Trustees (Proposal 2) are
contingent upon the completion of a proposed acquisition of the Advisor,
together with three other companies affiliated with the Advisor, by Fleet
Financial Group, Inc. ("Fleet") through its wholly owned subsidiary, Fleet
National Bank ("FNB"). The proposed acquisition is described below under
"Proposal 1: Approval or Disapproval of New Investment Advisory Contract--The
Acquisition." If the proposed acquisition is not completed, neither Proposal 1
nor Proposal 2 will become effective, even if they have received the necessary
shareholder approvals.
<PAGE>
Any person giving a proxy in the form accompanying this Proxy Statement has
the power to revoke it at any time before its exercise. The proxy may be revoked
by filing with the Trust, attention Jeff B. Curtis, Secretary, an instrument of
revocation or a duly executed proxy card bearing a later date. The proxy may
also be revoked by voting in person at the Meeting. A shareholder who attends
the Meeting, however, is not required to revoke the proxy and vote in person.
Each valid, unrevoked proxy will be voted at the Meeting in accordance with the
instructions given in the proxy.
Shares Entitled to Vote and Quorum
The holders of shares of record ("Shareholders") of each Fund as of the
close of business on October 24, 1997, the record date for the determination of
Shareholders entitled to notice of and to vote at the Meeting (the "Record
Date"), are entitled to one vote for each share held and a fractional vote for a
fractional share. The table below sets forth the number of shares of each Fund
outstanding as of the Record Date.
Number of
Shares
Name of Fund Outstanding
------------ -----------
CMC Small Cap Fund........................................... 7,975,274
CMC International Stock Fund................................. 1,878,639
CMC High Yield Fund.......................................... 3,184,087
A quorum for the conduct of business at the Meeting requires the presence,
in person or by proxy, of 30% of the outstanding shares of the Trust as a whole,
and, with respect to voting on approval or disapproval of the new investment
advisory contract for each Fund, 30% of the outstanding shares of each Fund
separately. Approval of each new investment advisory contract, however, requires
the affirmative vote of a "majority of the outstanding voting securities" (as
defined below) of the applicable Fund. This means that, with respect to each
Fund's approval or disapproval of a new investment advisory contract, at least
50% of the outstanding shares of a given Fund must be present by proxy or in
person at the Meeting. See "Proposal 1: Approval or Disapproval of New
Investment Advisory Contract--Required Vote." If the necessary quorum to
transact business or the vote required to approve any proposal is not obtained
at the Meeting, the persons named as proxies may propose one or more
adjournments of the Meeting for a total of not more than 120 days in the
aggregate to obtain a quorum or to permit further solicitation of proxies. Any
such adjournment may be approved by the affirmative vote of the holders of a
majority of the shares of the Trust present in person or by proxy at the
Meeting, even though less than a quorum. The persons named as proxies will vote
in favor of such adjournment those proxies they are entitled to vote for
approval of the applicable Fund's new investment advisory contract under
Proposal 1 and will vote against any such adjournment those proxies to be voted
for disapproval of the applicable new investment advisory contract.
Attached as Exhibit A is a list of all persons known by the Funds to be the
record or beneficial owners of 5% or more of the outstanding shares of any Fund
as of the Record Date. As of the Record Date, no Trustee or nominee for Trustee
beneficially owned shares of any of the Funds, which are made available for
investment by institutional clients of the Advisor.
2
<PAGE>
Solicitation of Proxies
All costs of soliciting proxies for the Meeting, including printing and
mailing expenses, will be borne 50% by the Advisor and 50% by Fleet or its
affiliate, FNB. Proxies will be solicited by use of the mails, and officers and
employees of the Advisor and its affiliates may also solicit proxies by
telephone or personal contact.
PROPOSAL 1:
APPROVAL OR DISAPPROVAL OF NEW INVESTMENT
ADVISORY CONTRACT
Background
The Advisor serves as the investment advisor to each Fund pursuant to an
investment advisory contract between the Trust and the Advisor. There is a
separate investment advisory contract between the Trust and the Advisor for each
Fund. (Each of the current investment advisory contracts is referred to in this
Proxy Statement as a "Current Contract" and all of the current investment
advisory contracts are referred to collectively as the "Current Contracts.") The
Advisor has acted as an investment advisor since 1969 and acts as investment
manager for approximately $14 billion of assets. The address of the Advisor is
1300 SW Sixth Avenue, Portland, Oregon.
The approval of a new investment advisory contract between the Trust and
the Advisor for each Fund (each a "New Contract" and collectively the "New
Contracts") is being sought in connection with the proposed acquisition (the
"Acquisition") of the Advisor by Fleet through its wholly owned subsidiary, FNB.
Under the Investment Company Act of 1940 (the "Investment Company Act"), the
change in ownership of the Advisor resulting from the Acquisition will result in
the automatic termination of all of the Current Contracts. The New Contracts,
which are substantially identical to the Current Contracts, are proposed to
become effective upon the termination of the Current Contracts at the completion
of the Acquisition. Attached as Exhibit B is the form of the New Contracts,
which are described under "The New Investment Advisory Contracts" below.
The Acquisition
On August 14, 1997, the Advisor and three affiliated companies entered into
an agreement (the "Acquisition Agreement") pursuant to which the Advisor will be
acquired by FNB, a wholly owned subsidiary of Fleet. The affiliated companies
(together with the Advisor, the "Columbia Companies") are Columbia Funds
Management Company ("CFMC"), Columbia Trust Company (the "Trust Company"), and
Columbia Financial Center Incorporated ("CFCI"). J. Jerry Inskeep, Jr. and James
F. Rippey and their families together own over 50% of the outstanding capital
stock of each of the Advisor, CFMC, and CFCI, and CFMC owns 79% of the
outstanding capital stock of the Trust Company. Certain employees of the
Columbia Companies, including the officers of the Trust, and their families own
the remaining stock of the Columbia Companies.
3
<PAGE>
The Columbia Companies operate together to provide a range of investment
advisory and related services. The Advisor principally acts as investment
manager for various institutional clients and serves as the investment advisor
to the Trust with respect to each of the Funds. CFMC acts as investment advisor
to 12 open-end investment management companies (the "Columbia Funds"). The Trust
Company acts as transfer agent and dividend crediting agent for the Trust and
the Columbia Funds and provides a variety of investment advisory and trust
services to tax-qualified retirement plans through its common trust and
collective trust pools and to individuals, institutions, trusts and estates
through private management accounts using the Columbia Funds as investment
vehicles.
Under the terms of the Acquisition Agreement, each of the Columbia
Companies other than the Trust Company will become a wholly owned subsidiary of
FNB through mergers with newly-created subsidiaries of FNB in which the Columbia
Companies will be the surviving corporations. FNB will acquire the Trust Company
by purchasing the stock of the Trust Company held by shareholders other than
CFMC (whose shares of the Trust Company FNB will acquire through merger).
Following the Acquisition, the name of the Advisor will continue to be Columbia
Management Co. The purchase price to be paid to the shareholders of the Columbia
Companies has two components, (i) a fixed cash price payable at closing of the
Acquisition, after adjustment to reflect the net book value of the Columbia
Companies as of the closing, and (ii) contingent cash payments based on the
profitability of the Columbia Companies in the years 2001 and 2002, subject to
acceleration in certain circumstances. The Acquisition is expected to close soon
after the Meeting, subject to the satisfaction of closing conditions, which
include among others (i) approval of each New Contract by the Shareholders of
the applicable Fund, (ii) the continued effectiveness of employment or
consulting agreements executed by certain employees of the Columbia Companies,
and (iii) certain regulatory approvals.
Current management of the Advisor and Fleet have indicated their intent
that the Advisor continue to operate with the same investment personnel and that
the same persons who are now responsible for the administration and operations
of the Advisor and for the investment policies of each of the Funds continue to
manage the Advisor following the Acquisition. No substantive changes in the
Advisor's method of operation or the location where it conducts its business are
contemplated as a result of the Acquisition. The Acquisition Agreement provides
that the Columbia Companies will operate as autonomous business units of Fleet
to be managed by John A. Kemp (currently Managing Director-Administration,
Senior Vice President, and Director of the Advisor) as Chief Executive Officer
and Thomas L. Thomsen (currently Managing Director-Investments, Senior Vice
President, and Director of the Advisor) as Chief Investment Officer. Messrs.
Kemp and Thomsen have each signed a five-year employment agreement with FNB,
effective upon the closing of the Acquisition, that includes substantial
retention and incentive bonuses payable through 2003. Messrs. Inskeep and Rippey
have signed two-year employment agreements. Substantially all other investment
managers and analysts of the Advisor, including all of the portfolio managers of
each of the Funds, have signed employment agreements, effective upon the closing
of the Acquisition, generally for three years, which also include substantial
retention and incentive bonuses payable through 2003.
4
<PAGE>
Information Concerning Fleet and FNB
FNB is a wholly owned subsidiary of Fleet, a publicly owned multibank
holding company registered under the Bank Holding Company Act of 1956. Fleet,
FNB, and various of their directly and indirectly owned subsidiaries provide a
wide range of banking, financial, and investment products and services to
individuals and businesses. Their principal activities include consumer and
commercial banking, mortgage lending and servicing, trust administration,
investment management, retirement plan services, brokerage and clearing
services, securities underwriting, private and corporate financing and advisory
activities, and insurance services. Among Fleet's principal non-banking
subsidiaries are Fleet Investment Advisors Inc. ("FIA"), a registered investment
advisor; FIS Securities, Inc. and Fleet Enterprises, Inc., retail
broker-dealers; Fleet Brokerage Securities, Inc., a discount broker; and Fleet
Securities, Inc., a securities underwriting firm. FIA and its affiliates manage,
advise, or oversee the investment of over $50 billion in assets belonging to a
wide range of individual, trust, and institutional clients, including registered
investment companies with total assets of approximately $10 billion.
Section 15(f) of the Investment Company Act
The Acquisition is subject to Section 15(f) of the Investment Company Act.
Section 15(f) provides in substance that, when a sale of a controlling interest
in an investment advisor occurs, the investment advisor or any of its affiliated
persons, as defined in the Investment Company Act, may receive any amount or
benefit in connection with the sale as long as two conditions are satisfied.
First, an "unfair burden" must not be imposed on the investment company as a
result of the transaction relating to the sale of such interest, or any express
or implied terms, conditions, or understandings applicable to the sale. The term
"unfair burden" (as defined in the Investment Company Act) includes any
arrangement during the two-year period after the transaction whereby the
investment advisor (or predecessor or successor advisor), or any "interested
person" (as defined in the Investment Company Act) of any such advisor, receives
or is entitled to receive any compensation, directly or indirectly, from the
investment company or its security holders (other than fees for bona fide
investment advisory or other services) or from any person in connection with the
purchase or sale of securities or other property to, from, or on behalf of the
investment company. The Trust's Board of Trustees is aware of no circumstances
arising from the Acquisition that might result in an unfair burden being imposed
on the Trust or any of the Funds. Moreover, FNB and the Advisor have agreed with
each other that they will each use their reasonable best efforts to ensure that
no unfair burden will be imposed on the Trust or any of the Funds as a result of
the Acquisition during the two-year period following the Acquisition.
The second condition of Section 15(f) is that, during the three-year period
following the completion of a transaction, at least 75% of an investment
company's board of directors must not be "interested persons" of the investment
advisor or predecessor advisor. FNB has agreed with the Advisor that for at
least the first three years following completion of the Acquisition, FNB will
ensure that not more than 25% of the Trustees of the Trust are "interested
persons." If the nominees for Trustee named in Proposal 2 are elected as the
Trustees, no more than 25% of the Trustees will be "interested persons."
5
<PAGE>
The New Investment Advisory Contracts
The form of each of the proposed New Contracts is attached to this Proxy
Statement as Exhibit B. The terms of each New Contract, including the fees
payable by the Trust with respect to each Fund, are identical in all material
respects to those of the corresponding Current Contract, except for the dates of
effectiveness and termination. The terms of the Current Contracts are described
under "The Current Investment Advisory Contracts" below. If approved by
Shareholders, each New Contract will become effective on the closing date of the
Acquisition and will continue in effect for an initial term of two years. Each
New Contract will then continue in effect from year to year thereafter if that
continuance is approved by the Trustees or by a "majority of the outstanding
voting securities" (as defined below) of the Fund and, in either event, by the
vote cast in person of a majority of the Trustees who are not "interested
persons" as defined in the Investment Company Act (the "Independent Trustees").
If the Acquisition is not completed, the Current Contacts will remain in effect.
The Board's Consideration
The Board of Trustees, including the sole Independent Trustee, met in
person on October 23, 1997 for the purpose of considering whether it would be in
the best interests of the Trust and each Fund's Shareholders for the Trust to
enter into a New Contract with the Advisor with respect to each Fund that would
become effective upon the completion of the Acquisition. On August 21, 1997, the
Independent Trustee was briefed generally by representatives of the Advisor on
the terms of the Acquisition and the expected impact of the Acquisition on the
Trust and each of the Funds. The Independent Trustee requested, and before the
meeting of the Trustees on October 23, 1997 he received, materials regarding
Fleet and its business, personnel and financial condition, the terms of the
proposed Acquisition, and Fleet's plans for the Advisor following the
Acquisition. The Independent Trustee was assisted in his review and
deliberations by independent legal counsel.
In determining whether to approve each New Contract, the Trustees assessed
how the Acquisition would affect the Advisor and its ability to continue to
provide to the Trust services of the same scope and quality as the Advisor now
provides with respect to the Fund. In particular, the Trustees inquired about
the impact of the Acquisition on the Advisor's personnel, management,
facilities, and financial capabilities. They noted favorably the commitments
made by FNB in the Acquisition Agreement to maintain the Advisor and the other
Columbia Companies as autonomous business units of Fleet and the incentives
established by Fleet for the management and investment professionals of the
Columbia Companies to continue in their current roles. They also considered the
possible benefits to the Funds of the Advisor's affiliation with Fleet,
including access to the greater resources of Fleet to expand distribution of the
Funds' shares and to develop additional services for Shareholders.
6
<PAGE>
The Trustees also considered that each New Contract is identical, in all
material respects, to the corresponding Current Contract (other than the dates
of effectiveness and termination), which was last approved by the Board of
Trustees on April 24, 1997. In particular, they noted that there would be no
change in the advisory fees paid by the Trust under the New Contracts.
Based upon the Board's review and the evaluations of the materials it
received, and after consideration of all factors the Trustees deemed relevant,
the Board of Trustees, including the sole Independent Trustee, determined that
each New Contract is in the best interests of the Trust and the applicable
Fund's Shareholders. ACCORDINGLY, THE BOARD OF TRUSTEES, INCLUDING THE SOLE
INDEPENDENT TRUSTEE, APPROVED EACH NEW CONTRACT AND VOTED TO RECOMMEND
SHAREHOLDER APPROVAL OF EACH NEW CONTRACT.
The Current Investment Advisory Contracts
Under the Current Contracts, the Advisor regularly provides the Trust with
research, advice, and supervision with respect to investment matters affecting
each Fund and determines what securities to purchase or sell and what portion of
each Fund's assets to invest. The Advisor provides office space and pays all
executive salaries and expenses and ordinary office expenses of the Trust with
respect to each Fund (other than the expenses of clerical services relating to
the administration of the Trust). Certain employees of the Advisor are also
officers of the Trust and, subject to the authority of the Board of Trustees,
are responsible for the overall management of the Trust's business affairs.
In return for the Advisor's services and the expenses the Advisor assumes
under each Current Contract, each Fund pays the Advisor an advisory fee, which
is accrued daily and payable monthly. The table below shows the fee schedule for
each Fund and the amount of advisory fees paid to the Advisor by the Trustee
with respect to each Fund for the fiscal year ended October 31, 1997.
<TABLE>
<CAPTION>
Annual Advisory Fee Rate
Name of Fund (as a percentage of daily net assets) Advisory Fee
- ------------ ------------------------------------- ------------
<S> <C> <C>
CMC Small Cap Fund........................ .75% on all assets $3,462,393
CMC International Stock Fund.............. .75% on all assets $686,166
CMC High Yield Fund....................... .40% on all assets $354,620
</TABLE>
With respect to each Fund, the Trust assumes the following costs and
expenses: costs relating to trust matters; cost of services to shareholders;
transfer and dividend paying agent fees; custodian fees; legal, auditing, and
accounting expenses; disinterested Trustees' fees; taxes and governmental fees;
interest; brokers' commissions; transaction expenses; cost of stock certificates
and any other expenses (including clerical expenses) of issue, sale, repurchase,
or redemption of its shares; expenses of registering or qualifying its shares
for sale; transfer taxes; all expenses of preparing its registration statements,
prospectuses, and reports; and the cost of printing and delivering to
shareholders its prospectuses and reports.
7
<PAGE>
The following table sets forth the date of each Current Contract and the
date the Current Contract for CMC Small Cap Fund was last approved by that
Fund's shareholders. The Current Contracts for CMC International Stock Fund and
CMC High Yield Fund have not been submitted to shareholders of those Funds for
approval because neither Fund has held a shareholder meeting since it commenced
operations.
<TABLE>
<CAPTION>
Date Current
Contract Was
Date of Current Last Approved By the
Name of Fund Contract Fund's Shareholders
- ------------ --------------- -------------------
<S> <C> <C>
CMC Small Cap Fund.................................. August 8, 1989 August 7, 1989
CMC International Stock Fund........................ October 26, 1993 N/A
CMC High Yield Fund................................. April 29, 1994 N/A
</TABLE>
After an initial two-year term, each Current Contract provides that it may
be continued in effect from year to year thereafter, provided that each
continuance is approved by the vote of a "majority of the outstanding voting
securities" (as defined below) of each Fund or by the Board of Trustees and, in
either event, by the vote cast in person by a majority of the Independent
Trustees at a meeting called for the purpose of voting on such approval. Each
Current Contract has been continued in effect from year to year by action of the
Board, including the sole Independent Trustee. The most recent annual approval
of the Current Contracts occurred at a meeting of the Board held on April 24,
1997. At that meeting the Board approved a minor amendment to each Current
Contract to clarify that the Current Contracts do not include any waiver by the
Trust of any rights under federal securities laws.
Each Current Contract also provides that it may be terminated at any time
by vote of the Fund's Board of Trustees, by vote of the Fund's Shareholders, or
by the Advisor, in each instance without the payment of any penalty, on 60 days
notice. Each Current Contract also provides that it will automatically terminate
if it is assigned, as defined in the Investment Company Act.
Other Fees Paid to the Columbia Companies
The Trust Company acts as transfer agent and dividend crediting agent for
the Trust with respect to each of the Funds pursuant to Transfer Agent
Agreements. The Trust Company is paid a fee of $1.00 per month per Fund for each
shareholder account existing at any time during the month, subject to a minimum
monthly payment of $1,500 per month for each Fund. In addition, the Trust pays
the Trust Company for extra administrative services performed in accordance with
a schedule set forth in the applicable Transfer Agent Agreement and reimburses
the Trust Company for certain out-of-pocket expenses incurred in carrying out
its duties under the applicable Transfer Agent Agreement. The following table
shows the amount paid by the Trust to the Trust Company with respect to each
Fund for services performed under the applicable Transfer Agent Agreement for
the fiscal year ended October 31, 1997.
8
<PAGE>
Name of Fund Transfer Agent Fees
------------ -------------------
CMC Small Cap Fund.................................... $18,000
CMC International Stock Fund.......................... $18,000
CMC High Yield Fund................................... $18,000
Directors of the Advisor and Executive Officers of the Trust
The following is a list of all directors of the Advisor, four of whom also
serve as executive officers of the Trust, and all of the other executive
officers of the Trust. Each executive officer of the Trust serves at the
discretion of the Board of Trustees. Each executive officer of the Trust is an
"interested person" as defined in the Investment Company Act. The "Columbia
Funds" consist of the following: Columbia Common Stock Fund, Inc.; Columbia
Growth Fund, Inc.; Columbia International Stock Fund, Inc.; Columbia Special
Fund, Inc.; Columbia Small Cap Fund, Inc.; Columbia Real Estate Equity Fund,
Inc.; Columbia Balanced Fund, Inc.; Columbia Daily Income Company; Columbia U.S.
Government Securities Fund, Inc.; Columbia Fixed Income Securities Fund, Inc.;
Columbia Municipal Bond Fund, Inc.; and Columbia High Yield Fund, Inc. The
business address of each person named below is 1300 SW Sixth Avenue, Portland,
OR 97207.
<TABLE>
<CAPTION>
Officer of the
Name Age Principal Positions for Past Five Years Trust Since
---- --- --------------------------------------- -----------
<S> <C> <C> <C>
J. Jerry Inskeep, Jr. 66 Chairman and Director of the Advisor, CFMC, the 1989
Trust Company and each of the Columbia Funds;
Director of CFCI; Chairman and Trustee of the
Trust.
James F. Rippey 66 President and Director of the Advisor, CFMC, and 1989
the Trust Company; Director of each of the
Columbia Funds; President and Trustee of the
Trust.
John A. Kemp 55 Senior Vice President and Director of the Advisor, 1989
CFMC, CFCI, and the Trust Company; Managing
Director-Administration (since July 1997) of the
Advisor, CFMC, and the Trust Company; Director
(since June 1994) and President of each of the
Columbia Funds; Vice President and Trustee of the
Trust.
9
<PAGE>
Officer of the
Name Age Principal Positions for Past Five Years Trust Since
---- --- --------------------------------------- -----------
<S> <C> <C> <C>
George L. Hanseth 53 Vice President, Assistant Secretary, Treasurer, 1989
and Director of the Advisor, CFMC, and the Trust
Company; Senior Vice President and Treasurer of
each of the Columbia Funds; President and Director
of CFCI; Vice President, Assistant Secretary,
Treasurer, and Trustee of the Trust.
Lawrence S. Viehl 58 Vice President and Director (since April 1997) of 1989
the Advisor, CFMC, and the Trust Company; Vice
President of the Trust and each of
the Columbia Funds.
Terry L. Chambers 52 Vice President and Director of the Advisor and N/A
CFMC; Vice President of the Trust Company.
Alan J. Folkman 55 Senior Vice President and Director of the Advisor, N/A
CFMC, and the Trust Company.
Thomas L. Thomsen 53 Managing Director-Investments (since July 1997), N/A
Senior Vice President, and Director of the
Advisor, CFMC, and the Trust Company.
Robert A. Unger 50 Vice President and Director (since January 1994) N/A
of the Advisor and CFMC; Director of the Trust
Company.
Jeff B. Curtis 44 Vice President, General Counsel, and Secretary of 1994
the Advisor, CFMC, the Trust Company, and CFCI
(since April 1993); Secretary of each of the
Columbia Funds and the Trust (since April 1994);
Attorney with Stoel Rives LLP (1986-1993), a
law firm in Portland, Oregon.
</TABLE>
Pursuant to federal banking regulations, each of Messrs. Rippey, Kemp,
Hanseth, Viehl, and Curtis will be ineligible to serve as officers of the Trust
following the Acquisition. Therefore, the Board of Trustees will, in accordance
with the Trust's Bylaws, appoint a successor to each ineligible officer.
10
<PAGE>
Required Vote
No New Contract can be implemented unless it is approved at the Meeting, or
any adjournment thereof, by a majority of the outstanding voting securities of
the applicable Fund. Under the Investment Company Act, approval of a "majority
of the outstanding voting securities" means receiving the affirmative vote of
the holders of (a) 67% or more of the Fund's shares present in person or by
proxy at the Meeting, provided that the holders of more than 50% of the
outstanding shares are present in person or by proxy at the Meeting, or (b) more
than 50% of the Fund's outstanding shares, whichever is less. Abstentions and
broker non-votes are counted as shares present at the Meeting for purposes of
determining if a quorum is present and have the effect of votes against approval
of the New Contracts.
If the Shareholders of a Fund do not approve a New Contract, Fleet could
refuse to complete the Acquisition. If Fleet, at its option, completes the
Acquisition, the Current Contract with that Fund will terminate effective as of
the closing of the Acquisition, and the Board of Trustees will make such
arrangements for the management of the Fund's investments as it deems to be in
the best interests of the Trust, the applicable Fund, and the applicable Fund's
Shareholders.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF EACH FUND VOTE
FOR APPROVAL OF THE FUND'S NEW INVESTMENT ADVISORY CONTRACT.
PROPOSAL 2:
ELECTION OF TRUSTEES
There are now eight Trustees, one of whom (Richard L. Woolworth) is an
Independent Trustee and seven of whom (J. Jerry Inskeep, Jr., James F. Rippey,
John A. Kemp, George L. Hanseth, Alexander S. MacMillan III, Peter C. Olson, and
Peter T. Shand) are "interested persons" (as that term is defined under the
Investment Company Act). One of the conditions of Section 15(f) of the
Investment Company Act is that for three years following the closing of the
Acquisition at least 75% of the Trustees of the Trust must be Independent
Trustees. See "Proposal 1: Approval or Disapproval of New Investment Advisory
Contract--Section 15(f) of the Investment Company Act." In addition, federal
banking regulations prohibit any employee of a bank from serving as an officer,
director, or trustee of an investment company for which the bank or any of the
bank's affiliates serves as an investment advisor. Because Mr. Inskeep will be
employed by Fleet (which is a bank holding company) rather than FNB following
the Acquisition, however, federal banking regulations will not prevent Mr.
Inskeep from continuing to serve as a Trustee or officer of the Trust if the
Acquisition is completed. To satisfy the requirements of Section 15(f) of the
Investment Company Act, the size of the Board of Trustees will be reduced from
eight Trustees to four Trustees, three of whom will qualify as Independent
Trustees. Specifically, each of the current Trustees who are "interested
persons," other than J. Jerry Inskeep, Jr., will resign effective as of the
closing of the Acquisition. Messrs. Woolworth and Inskeep have both agreed to
stand for re-election. They will be joined by James C. George and Thomas R.
Mackenzie, each of whom will qualify as an Independent Trustee, who have been
nominated for election as Trustees for the first time. The new nominees for
election as Independent Trustees have been selected and proposed for election by
Mr. Woolworth, the Trust's current Independent Trustee.
11
<PAGE>
The election of Trustees under this Proposal 2 is contingent upon the
completion of the Acquisition described earlier in this Proxy Statement. (See
"Proposal 1: Approval or Disapproval of New Investment Advisory Contract--The
Acquisition.") If the Acquisition is not completed, the election of Trustees
contemplated by this Proposal 2 will not become effective, even if the nominees
for Trustee listed below have otherwise received the necessary votes to be
elected. Instead, the current Trustees will continue to serve as Trustees in
accordance with the Trust's Declaration of Trust and Bylaws.
If the Acquisition is completed and the nominees for Trustee listed below
are elected, each Trustee will take office effective as of the closing of the
Acquisition. Each Trustee will hold office during the existence of the Trust
until he dies, resigns, or is removed by Shareholders, or, if sooner, until the
next meeting of Shareholders held to elect Trustees. The Trust is not required,
and does not intend, to hold regular annual meetings of its Shareholders. If any
nominee becomes unavailable for election for any reason, the proxy holders will
have discretionary authority to vote pursuant to the proxy for a substitute or
substitutes.
The Board of Trustees (including the sole Independent Trustee) recommends
election of the nominees listed below. Trustees are elected by a plurality of
the votes cast by the shares entitled to vote if a quorum is present at the
Meeting. Abstentions and broker non-votes are counted to determine whether a
quorum exists at the Meeting but are not counted and have no effect on the
determination of whether a plurality has voted for any nominee.
None of the nominees for Trustee listed below own any shares in any of the
Funds, which generally are made available only for investment by institutional
clients of the Advisor. The nominees for the Trust's Board of Trustees to be
elected at the Meeting are:
<TABLE>
<CAPTION>
Name and Address Age Principal Occupations for Past Five Years
---------------- --- -----------------------------------------
<S> <C> <C>
J. Jerry Inskeep, Jr.(1) 66 Chairman, Director, and shareholder of the
1300 SW Sixth Ave. Advisor; Chairman and Director of CMC, each
P.O. Box 1350 of the Columbia Funds, and the Trust Company;
Portland, OR 97207 Director of CFCI; Chairman and Trustee of the
Trust since 1989.
James C. George 65 Investment consultant; Director of each of
1001 S.W. Fifth Ave. the Columbia Funds (since June 1994); former
Portland, OR 97204 Investment Manager of the Oregon State
Treasury (1962-1992).
12
<PAGE>
Name and Address Age Principal Occupations for Past Five Years
---------------- --- -----------------------------------------
<S> <C> <C>
Thomas R. Mackenzie 70 Chairman of the Board of Directors of Group
0690 S.W. Bancroft St. Mackenzie (architecture, planning and
Portland, Oregon 97201 interior design engineering); Director of
each of the Columbia Funds.
Richard L. Woolworth 56 Chairman, President, and Chief Executive
100 S.W. Market Street Officer of Blue Cross and Blue Shield of
Portland, Oregon 97201 Oregon and Chairman and Chief Executive
Officer of the Regence Group, health
insurers; Director of each of the Columbia
Funds (since January 1992); Trustee of the
Trust since 1993.
- --------------
(1) Mr. Inskeep is an "interested person" as defined in the Investment Company
Act because he is a shareholder, director, and officer of the Advisor.
</TABLE>
The Trust does not have an executive, audit, nominating, or compensation
committee. During the fiscal year ended October 31, 1997 the Trust held four
Board meetings. Both of the nominees who are now Trustees attended at least 75%
of these meetings.
No officer or employee of the Advisor receives any compensation from the
Trust for serving as a Trustee or officer of the Trust. Each Independent Trustee
is paid an annual fee for services performed for the Trust. The fee paid by the
Trust is allocated among the Funds based on the daily net assets of the Funds.
The following table shows compensation paid to Mr. Woolworth by the Trust for
the fiscal year ended October 31, 1997, as well as total compensation paid to
Mr. Woolworth by the Trust and the Columbia Funds (for each of which Mr.
Woolworth serves as an independent director) during the same period.
<TABLE>
<CAPTION>
Total Compensation
Aggregate Compensation from the From the Trust and
Trust with Respect to Each Fund the Columbia Funds
- ------------------------------------------------------------- ------------------
Name of Fund Aggregate Compensation
- ------------ ----------------------
<S> <C> <C>
CMC Small Cap Fund $5,777 $29,000
CMC International Stock Fund $1,114
CMC High Yield Fund $1,109
</TABLE>
SHAREHOLDER PROPOSALS
Under the Trust's Declaration of Trust and Bylaws, the Trust is not
required to hold annual shareholders' meetings, although a shareholder meeting
must be called when required by the Investment Company Act and in certain other
cases. It is unlikely, therefore, that the Trust will hold a meeting in any year
unless required by law. For those years in which the Trust holds a shareholders
meeting, the Trust must receive a shareholder proposal within a reasonable
period of time before the proxy solicitation for that meeting is made to
consider it for inclusion in the proxy materials relating to that meeting.
13
<PAGE>
REPORTS TO SHAREHOLDERS
THE TRUST'S MOST RECENT ANNUAL REPORT TO SHAREHOLDERS AND SEMI-ANNUAL
REPORT TO SHAREHOLDERS HAVE BEEN SENT PREVIOUSLY TO SHAREHOLDERS AND CAN BE
OBTAINED WITHOUT CHARGE UPON REQUEST BY CONTACTING CMC FUND TRUST, P.O. BOX
1350, PORTLAND, OREGON, 97207-1350 (TELEPHONE 1-800-547-1707 (TOLL FREE
NATIONWIDE) OR 222-3606 IN PORTLAND).
DISCRETIONARY AUTHORITY
While the Notice of Special Meeting of Shareholders provides for
transaction of any other business that properly comes before the Meeting, the
Board of Trustees does not know of any matters to be presented at the Meeting
other than the matters described in this Proxy Statement. The enclosed proxy,
however, gives discretionary authority to the proxy holders to vote in
accordance with their judgment if any other matters are properly presented.
By Order of the Board of Trustees
Jeff B. Curtis
Secretary
November 5, 1997
Portland, Oregon
14
<PAGE>
EXHIBIT A
PRINCIPAL SHAREHOLDERS OF THE FUNDS
The following table shows, as of October 24, 1997, the names and addresses
all persons known by the Trust to be the record or beneficial owners of 5% or
more of the outstanding shares of any Fund. None of the Trustees, nominees for
Trustee, or officers of the Trust beneficially owned shares of any of the Funds
as of October 24, 1997.
<TABLE>
<CAPTION>
CMC SMALL CAP FUND
Name and Address Number of Shares Held Percentage of Outstanding Shares
- ------------------ --------------------- --------------------------------
<S> <C> <C>
Hanford Operations and Engineering 1,120,012 14.04%
Pension Plan
2425 Stevens Center Circle
P.O. Box 1970, H3-08
Richland, WA 99352
State of Oregon Stock Growth Fund 1,113,464 13.96%
Department of the Treasury
350 Winter Street N.E., Suite 100
Salem, OR 97310
CMC INTERNATIONAL STOCK FUND
Name and Address Number of Shares Held Percentage of Outstanding Shares
- ------------------ --------------------- --------------------------------
<S> <C> <C>
State of Oregon Stock Growth Fund 1,336,566 67.55%
Department of the Treasury
350 Winter Street N.E., Suite 100
Salem, OR 97310
Lumber Industry Pension Fund 151,557 7.66%
2929 N.W. 31st Avenue
Portland, OR 97210
CMC HIGH YIELD FUND
Name and Address Number of Shares Held Percentage of Outstanding Shares
- ------------------ --------------------- --------------------------------
<S> <C> <C>
Legacy Health System Employees
Retirement Plan - Fixed 444,656 13.96%
Legacy Health Care Systems
1919 N.W. Lovejoy
Portland, OR 97209
Lumber Industry Pension Fund 253,885 7.97%
2929 N.W. 31st Avenue
Portland, OR 97210
A-1
<PAGE>
CMC HIGH YIELD FUND
Name and Address Number of Shares Held Percentage of Outstanding Shares
- ------------------ --------------------- --------------------------------
<S> <C> <C>
Locals 302 & 612 Operating Engineers 242,617 7.62%
Employers Retirement Fund
P.O. Box 34203
Seattle, WA 98124
Tektronix Master Retirement Trust 201,509 6.33%
Tektronix Inc., Corporate Headquarters
M/S 63-844
P.O. Box 1000
Wilsonville, OR 97070
Willamette Industries, Inc., and Associate 166,284 5.22%
Companies Salaried Employees Retirement Plan
First Interstate Bank Tower
1300 S.W. 5th Avenue - 38th Floor
Portland, OR 97201
</TABLE>
A-2
<PAGE>
EXHIBIT B - FORM OF INVESTMENT ADVISORY CONTRACT
CMC FUND TRUST
CMC ____________________ FUND
INVESTMENT ADVISORY CONTRACT
This Agreement is made the __th day of ______, 1997 between CMC FUND TRUST,
an Oregon business trust, (the "Fund") and COLUMBIA MANAGEMENT CO., an Oregon
corporation having its principal place of business in Portland, Oregon (the
"Adviser"). The Fund is registered as an open-end investment company pursuant to
the Investment Company Act of 1940 (the "Act"). The Adviser is registered as an
investment adviser pursuant to the Investment Advisers Act of 1940. The Fund has
established a _________ series of shares, referred to as "CMC
___________________ Fund" (the "Series"), and this Agreement relates to services
to be performed by the Adviser with respect to that Series.
The parties agree as follows:
1. Duties of Adviser. With respect to the Series, the Adviser shall
regularly provide the Fund with research, advice, and supervision with respect
to investment matters and shall furnish continuously an investment program,
recommend what securities shall be purchased or sold and what portion of the
Fund's assets shall be held invested or uninvested, subject always to the
provisions of the Act and the Fund's Declaration of Trust and Bylaws, and
amendments thereto, which amendments shall be furnished to the Adviser by the
Fund. The Adviser shall take any steps necessary or appropriate to carry out its
decisions in regard to the foregoing matters and the general conduct of the
business of the Fund. The Adviser may take into consideration receipt of
research and statistical information and other services rendered to the Fund in
the allocation of commissions from portfolio brokerage business.
2. Allocation of Charges and Expenses.
(a) With respect to the Series, the Adviser shall pay or reimburse the Fund
for payments made by the Fund for all executive salaries and executive expenses,
office rent of the Fund, ordinary office expenses (other than the expense of
clerical services relating to the administration of the Fund), and for any other
expenses that, if otherwise borne by the Fund, would cause the Fund to "be
deemed to be acting as a distributor of securities of which it is the issuer,
other than through an underwriter," pursuant to Rule 12b-1 under the Act. The
Adviser shall provide investment advisory, statistical, and research facilities
and all clerical services relating to research, statistical, and investment work
with respect to the Series.
B-1
<PAGE>
(b) The Adviser shall not be required to pay any expenses of the Fund other
than those enumerated in this Agreement. The Fund will assume all other costs,
including the cost of its custodian, legal, auditing, and accounting expenses,
disinterested directors' fees, taxes, and governmental fees, interest, brokers'
commissions, transaction expenses, cost of stock certificates, and any other
expenses (including clerical expenses) of issue, sale, repurchase, or redemption
of shares, expenses of registering or qualifying shares for sale, transfer
taxes, and all expenses of preparing the Fund's registration statement and
prospectus, and the cost of printing and delivering to shareholders prospectuses
and reports.
3. Compensation of the Adviser. For the services to be rendered, the
facilities to be furnished, and the payments to be made by the Adviser, as
provided in Sections 1 and 2 hereof, for each calendar month the Fund shall pay
to the Adviser a fee computed at the annual rate of ____ of 1 percent of daily
net assets of the Series. If the asset value is not required to be determined on
any particular business day, then for the purposes of this Section 3, the asset
value of a share as last determined shall be deemed to be the asset value of a
share as of the close of business on that day. If there is no business day in
any calendar month, the fee shall be computed on the basis of the asset value of
a share as last determined, multiplied by the average number of shares
outstanding on the last day of the month.
4. Covenants of the Adviser. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Adviser nor any
officer, director, or employee of the Adviser shall act as a principal. The
Adviser covenants that it and its employees will comply with investment
restrictions of the Fund's Bylaws applicable to them. If the Adviser or any of
its affiliates give any advice to clients concerning the shares of the Fund, it
will act solely as investment counsel for the clients and not on behalf of the
Fund.
5. Limitation on Liability of Adviser. The Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this agreement relates, except a loss
resulting from willful malfeasance, bad faith, or gross negligence on the part
of the Adviser in the performance of its duties or from reckless disregard by
the Adviser of its obligations and duties under this Agreement. The federal
securities laws impose liabilities under certain circumstances on persons who
act in good faith, and therefore nothing herein shall in any way constitute a
waiver or limitation of any rights which the Fund may have under any federal
securities laws.
6. Duration and Termination of this Agreement.
(a) This Agreement shall remain in force for two years from the date
hereof, and it may be continued from year to year thereafter if approved
annually by a vote of a majority of the Fund's shareholders or by its trustees
and in either case a vote of a majority of the trustees who are not parties to
this Agreement or interested persons of any such party cast in person at a
meeting called for the purpose of voting on such approval.
B-2
<PAGE>
(b) This Agreement may be terminated at any time without the payment of any
penalty by vote of the trustees of the Fund, by vote of a majority of the
outstanding shares of the Fund, or by the Adviser, on 60 days written notice to
the other party.
(c) This Agreement shall automatically terminate if it is assigned. The
Adviser shall notify the Fund of any change in the officers or directors of the
Adviser within a reasonable time after the change. The terms "assignment," "vote
of a majority of the outstanding voting securities," and "interested persons"
shall have the meanings specified in the Act.
7. Applicable to Specific Series. The Adviser agrees that, with respect to
any obligation of the Fund under this Agreement, the Adviser shall look only to
the assets of the Series to which this Agreement relates.
IN WITNESS WHEREOF the parties have caused this Agreement to be executed as
of the day and year first written above.
CMC FUND TRUST
By
--------------------------------------
Title:
----------------------------------
COLUMBIA MANAGEMENT CO.
By
--------------------------------------
Title:
----------------------------------
B-3
<PAGE>
[LOGO]
COLUMBIA MANAGEMENT COMPANY
November 5, 1997
IMPORTANT PROXY INFORMATION
Dear CMC Fund Trust Shareholder:
As described in your attached proxy statement, this is your proxy ballot. To
vote your fund shares, please complete this form, sign it and return it to CMC
Fund Trust in the enclosed postage-paid envelope. This ballot is valid only when
signed and dated.
This proxy is solicited on behalf of the Board of Trustees of CMC Fund Trust.
The Board of Trustees recommends a vote FOR Proposal No. 1 and FOR the election
of Trustees.
The undersigned hereby appoints J. Jerry Inskeep, Jr., James F. Rippey, John A.
Kemp, George L. Hanseth, and each of them proxies, with power of substitution of
each, to vote all shares on behalf of the shareholder listed above at the
Special Meeting of Shareholders to be held on December 4, 1997, and at any
adjournment hereof, as specified herein, and in accordance with their best
judgement on any other business that my properly come before this meeting.
PROPOSALS
---------
FOR AGAINST ABSTAIN
1. APPROVAL OF INVESTMENT ADVISORY
CONTRACT WITH COLUMBIA MANAGEMENT CO. [ ] [ ] [ ]
2. ELECTION OF TRUSTEES:
[ ] FOR ALL NOMINEES LISTED BELOW (EXCEPT AS MARKED TO THE CONTRARY)
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW
NOMINEES: James C. George, J. Jerry Inskeep, Thomas R. Mackenzie,
Richard L. Woolworth
To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list above.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is made, this proxy will be
voted FOR Proposal No. 1 and FOR the election of Trustees.
Please sign below and indicate your capacity or title in which you are signing
for the registered owner.
- ------------------------------------- -------------------------------------
Owner Signature Date Signature Date
(if more than one is required)
1300 SW Sixth Avenue, Portland, OR 97201-3459 (503) 222-3600 1-800-547-1037
