As filed with the Securities and Exchange Commission on October 5, 2000
Registration No. 33-
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
---------------------------
__Pre-Effective Amendment No. ____ __Post-Effective Amendment No. ____
(Check appropriate box or boxes)
---------------------------
LIBERTY FUNDS TRUST VI *
(Exact Name of Registrant as Specified in Charter)
617-426-3750
(Area Code and Telephone Number)
ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111
(Address of Principal Executive Offices)
WILLIAM J. BALLOU
Liberty Funds Group LLC
One Financial Center
Boston, Massachusetts 02111
(Name and Address of Agent for Service)
---------------------------
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
It is proposed that this filing will become effective on November 4, 2000
pursuant to Rule 488.
No filing fee is required because an indefinite number of shares have previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended. Pursuant to Rule 429 under the Securities Act of 1933, this
Registration Statement relates to shares previously registered on the aforesaid
Registration Statement.
*On behalf of its Liberty Growth & Income Fund and Liberty Newport Asia Pacific
Fund series.
<PAGE>
LIBERTY MUTUAL FUNDS
STEIN ROE MUTUAL FUNDS
ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111
Dear Shareholder:
Your Fund will hold a special meeting on December 19, 2000 at 10:00 a.m. Eastern
Time, at the offices of Colonial Management Associates, Inc. You will be asked
to vote on the acquisition of your Fund and, except if you are a Liberty
All-Star Growth & Income Fund shareholder, on the election of eleven Trustees. A
formal Notice of Special Meeting of Shareholders appears on the next few pages,
followed by the combined prospectus/proxy statement which explains in more
detail the proposals to be considered. We hope that you can attend the Meeting
in person; however, we urge you in any event to vote your shares at your
earliest convenience.
Your Fund is part of one of several proposed acquisitions and liquidations of
funds in the Liberty and Stein Roe Fund groups proposed by Liberty Financial
Companies, Inc., the indirect parent of each of the investment advisors to the
Liberty and Stein Roe Funds. The overall purposes of these acquisitions and
liquidations include streamlining and rationalizing the product offerings of the
Liberty and Stein Roe Funds, reducing fund expense ratios by creating larger,
more efficient funds and permitting the Liberty organization to focus its
portfolio management resources on a more focused group of portfolios. Please
review the enclosed prospectus/proxy statement for a more detailed description
of the proposed acquisition of your Fund and the specific reasons it is being
proposed.
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. YOU CAN VOTE
EASILY AND QUICKLY AT OUR WEB SITE, BY MAIL, BY FAX (NOT AVAILABLE FOR ALL
SHAREHOLDERS; REFER TO ENCLOSED PROXY INSERT), BY PHONE OR IN PERSON. TO VOTE
THROUGH OUR WEB SITE, JUST FOLLOW THE SIMPLE INSTRUCTIONS THAT APPEAR ON THE
ENCLOSED PROXY INSERT. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE HAS BEEN ENCLOSED
FOR YOUR CONVENIENCE. PLEASE HELP YOUR FUND AVOID THE EXPENSE OF A FOLLOW-UP
MAILING BY VOTING TODAY!
Your Fund is using Shareholder Communications Corporation ("SCC"), a
professional proxy solicitation firm, to assist shareholders in the voting
process. As the date of the special meeting approaches, if we have not yet
received your vote, you may receive a telephone call from SCC reminding you to
exercise your right to vote.
Please take a few moments to review the details of each proposal. If you have
any questions regarding the combined prospectus/proxy statement, please feel
free to call the contact number listed in the enclosed prospectus/proxy
statement.
We appreciate your participation and prompt response in these matters and thank
you for your continued support.
Sincerely,
/s/Stephen E. Gibson, President
----------------------------
November 8, 2000
[Job Code]
<PAGE>
NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS TO BE HELD
DECEMBER 19, 2000
LIBERTY-STEIN ROE FUNDS INVESTMENT TRUST
LIBERTY VALUE OPPORTUNITIES FUND CLASSES A, B, C AND Z
STEIN ROE GROWTH & INCOME FUND CLASS S
LIBERTY FUNDS TRUST VI
LIBERTY VALUE FUND
LIBERTY FUNDS TRUST IX
LIBERTY ALL-STAR GROWTH & INCOME FUND
NOTICE IS HEREBY GIVEN that Special Meetings of the shareholders of the
Liberty Value Opportunities Fund, the Liberty Value Fund and the Liberty
All-Star Growth & Income Fund (together, the "Acquired Funds") will be held at
10:00 a.m. on Tuesday, December 19, 2000 at the offices of Colonial Management
Associates, Inc., One Financial Center, Boston, Massachusetts 02111 for these
purposes:
1. SHAREHOLDERS OF THE LIBERTY VALUE OPPORTUNITIES FUND VOTE: To
approve an Agreement and Plan of Reorganization providing for
the sale of all of the assets of the Liberty Value
Opportunities Fund to, and the assumption of all of the
liabilities of the Liberty Value Opportunities Fund by, the
Liberty Growth & Income Fund in exchange for shares of the
Liberty Growth & Income Fund and the distribution of such
shares to the shareholders of the Liberty Value Opportunities
Fund in complete liquidation of the Liberty Value
Opportunities Fund.
2. SHAREHOLDERS OF THE LIBERTY VALUE FUND VOTE: To approve an
Agreement and Plan of Reorganization providing for the sale of
all of the assets of the Liberty Value Fund to the Liberty
Growth & Income Fund in exchange for shares of the Liberty
Growth & Income Fund and the assumption of all of the
liabilities of the Liberty Value Fund and the distribution of
such shares to the shareholders of the Liberty Value Fund in
complete liquidation of the Liberty Value Fund.
3. SHAREHOLDERS OF THE LIBERTY ALL-STAR GROWTH & INCOME FUND
VOTE: To approve an Agreement and Plan of Reorganization
providing for the sale of all of the assets of the Liberty
All-Star Growth & Income Fund to the Liberty Growth & Income
Fund in exchange for shares of the Liberty Growth & Income
Fund and the assumption of all of the liabilities of the
Liberty All-Star Growth & Income Fund and the distribution of
such shares to the shareholders of the Liberty All-Star Growth
& Income Fund in complete liquidation of the Liberty All-Star
Growth & Income Fund.
<PAGE>
4. SHAREHOLDERS OF THE LIBERTY VALUE OPPORTUNITIES FUND VOTE: To
elect eleven Trustees.
5. SHAREHOLDERS OF THE LIBERTY VALUE FUND VOTE: To elect eleven
Trustees.
6. To consider and act upon any other matters that properly come
before the meeting and any adjourned session of the meeting.
Shareholders of record at the close of business on September 29, 2000,
are entitled to notice of and to vote at the meeting and any adjourned session.
By order of the Board of Trustees,
William J. Ballou, Assistant Secretary
November 8, 2000
NOTICE: YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU
OWN. YOU CAN VOTE EASILY AND QUICKLY AT OUR WEB SITE, BY
PHONE, BY MAIL, BY FAX (NOT AVAILABLE FOR ALL SHAREHOLDERS;
REFER TO ENCLOSED PROXY INSERT) OR IN PERSON. TO VOTE THROUGH
OUR WEB SITE, JUST FOLLOW THE SIMPLE INSTRUCTIONS THAT APPEAR
ON THE ENCLOSED PROXY INSERT. PLEASE HELP YOUR FUND AVOID THE
EXPENSE OF A FOLLOW-UP MAILING BY VOTING TODAY!
-2-
<PAGE>
COMBINED PROSPECTUS AND PROXY STATEMENT
NOVEMBER 8, 2000
ACQUISITION OF THE ASSETS AND LIABILITIES OF EACH OF
LIBERTY VALUE OPPORTUNITIES FUND CLASSES A, B, C AND Z AND
STEIN ROE GROWTH & INCOME FUND CLASS S
c/o Liberty-Stein Roe Funds Investment Trust
One Financial Center
Boston, Massachusetts 02111
1-800-338-2550
AND
LIBERTY VALUE FUND
c/o Liberty Funds Trust VI
One Financial Center
Boston, Massachusetts 02111
1-800-426-3750
AND
LIBERTY ALL-STAR GROWTH & INCOME FUND
c/o Liberty Funds Trust IX
One Financial Center
Boston, Massachusetts 02111
1-800-426-3750
BY AND IN EXCHANGE FOR SHARES OF
LIBERTY GROWTH & INCOME FUND
c/o Liberty Funds Trust VI
One Financial Center
Boston, Massachusetts 02111
1-800-426-3750
TABLE OF CONTENTS
<TABLE>
<S> <C>
Synopsis.........................................................................................
Proposal 1 - Acquisition of the Liberty Value Opportunities Fund Classes A, B, C and
Z and the Stein Roe Growth & Income Fund Class S by the Liberty
Growth & Income Fund.............................................................
Principal Investment Risks..................................................................
Information about the Acquisition...........................................................
Proposal 2 - Acquisition of the Liberty Value Fund by
the Liberty Growth & Income Fund.................................................
Principal Investment Risks..................................................................
Information about the Acquisition...........................................................
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Proposal 3 - Acquisition of the Liberty All-Star Growth & Income Fund by
the Liberty Growth & Income Fund.................................................
Principal Investment Risks..................................................................
Information about the Acquisition...........................................................
Information Applicable to Proposals 1, 2 and 3...................................................
Proposal 4 - Election of Trustees by Liberty Value Opportunities Fund
Shareholders....................................................................
Proposal 5 - Election of Trustees by Liberty Value Fund Shareholders.............................
General..........................................................................................
Voting Information..........................................................................
Appendix A - Form of Agreement and Plan of Reorganization........................................
Appendix B - Fund Information....................................................................
Appendix C - Capitalization .....................................................................
Appendix D - Management's Discussion of Fund Performance for the Liberty
Growth & Income Fund................................................................
</TABLE>
This combined Prospectus/Proxy Statement contains information you
should know before voting on the proposed acquisition of the Liberty Value
Opportunities Fund Class A, B, C and Z shares and the Stein Roe Growth & Income
Fund Class S shares (collectively, the "Opportunities Fund"), the Liberty Value
Fund (the "Value Fund") and the Liberty All-Star Growth and Income Fund (the
"All-Star Fund") (together, the "Acquired Funds") by the Liberty Growth & Income
Fund (the "Growth & Income Fund") (each, an "Acquisition," and together, the
"Acquisitions") or voting on the other proposals to be considered at a Special
Meeting of Shareholders of each Acquired Fund (the "Meetings"), which will be
held at 10:00 a.m. Eastern Time on December 19, 2000 at the offices of Colonial
Management Associates, Inc. ("Colonial"), One Financial Center, Boston,
Massachusetts. Please read this Prospectus/Proxy Statement and keep it for
future reference.
Proposal 1 in this Prospectus/Proxy Statement relates to the proposed
acquisition of the Opportunities Fund by the Growth & Income Fund. Proposal 2 in
this Prospectus/Proxy Statement relates to the proposed acquisition of the Value
Fund by the Growth & Income Fund. Proposal 3 in this Prospectus/Proxy Statement
relates to the proposed acquisition of the All-Star Fund by the Growth & Income
Fund. If the Acquisition of your Fund occurs, you will become a shareholder of
the Growth & Income Fund. The Growth & Income Fund seeks long-term growth and
income. If the Agreement and Plan of Reorganization for your Fund is approved by
the shareholders of your Fund and the Acquisition occurs, your Fund will
transfer all of the assets and liabilities attributable to each class of its
shares to the Growth & Income Fund in exchange for shares of the same class with
the same aggregate net asset value as the assets and liabilities transferred.
After that exchange, shares of each class received by each Acquired Fund will be
distributed pro rata to its shareholders of the same class.
Proposal 4 in this Prospectus/Proxy Statement relates to the election
of Trustees of Liberty-Stein Roe Funds Investment Trust (the "Stein Roe Trust"),
of which the Opportunities Fund is a series. Proposal 5 in this Prospectus/Proxy
Statement relates to the election of Trustees of Liberty Funds Trust VI ("Trust
VI"), of which the Value
-2-
<PAGE>
Fund is a series.
If you are a shareholder of the Opportunities Fund, you are being asked
to vote on Proposals 1 and 4 in this Prospectus/Proxy Statement. Please review
these Proposals carefully, as well as the section "Information Applicable to
Proposals 1, 2 and 3." If you are a shareholder of the Value Fund, you are being
asked to vote on Proposals 2 and 5 in this Prospectus/Proxy Statement. Please
review these Proposals carefully, as well as the section "Information Applicable
to Proposals 1, 2 and 3." If you are a shareholder of the All-Star Fund, you are
being asked to vote on Proposal 3 in this Prospectus/Proxy Statement. Please
review these Proposals carefully, as well as the section "Information Applicable
to Proposals 1, 2 and 3."
Please review the enclosed Prospectuses and Annual Report of the Growth
& Income Fund. Each of these documents is incorporated in this Prospectus/Proxy
Statement by reference. The following documents have also been filed with the
Securities and Exchange Commission (the "SEC") and are incorporated in this
Prospectus/Proxy Statement by reference:
- The Prospectuses of the Opportunities Fund dated November 22,
1999, as supplemented on February 1, 2000, August 2, 2000,
August 15, 2000 and August 21, 2000, with respect to Class A,
B, C and Z shares; and dated February 1, 2000, as supplemented
on February 11, 2000, April 20, 2000, June 5, 2000, June 23,
2000, July 14, 2000, August 2, 2000, August 11, 2000, August
28, 2000 and September 1, 2000, with respect to Class S
shares.
- The Prospectuses of the Value Fund dated November 1, 1999, as
supplemented on December 28, 1999, July 28, 2000, August 1,
2000 and August 15, 2000.
- The Prospectuses of the All-Star Fund dated March 17, 2000, as
supplemented on August 1, 2000 and August 15, 2000.
- The Statement of Additional Information of the Opportunities
Fund dated November 22, 1999, as supplemented on June 23,
2000, with respect to Class A, B, C and Z shares; and dated
February 1, 2000, as supplemented on June 23, 2000, with
respect to Class S shares.
- The Statement of Additional Information of the Value Fund
dated November 1, 1999, as supplemented on June 23, 2000 and
August 21, 2000.
- The Statement of Additional Information of the All-Star Fund
dated March 17, 2000, as supplemented on June 27, 2000 and
August 21, 2000.
-3-
<PAGE>
- The Statement of Additional Information of the Growth & Income
Fund dated November 1, 1999, as supplemented on June 23, 2000
and August 21, 2000.
- The Report of Independent Accountants and financial statements
included in the Annual Report to Shareholders of the
Opportunities Fund dated September 30, 1999.
- The financial statements included in the Opportunities Fund's
Semi-Annual Report to Shareholders dated March 31, 2000.
- The Report of Independent Accountants and financial statements
included in the Annual Report to Shareholders of the Value
Fund dated June 30, 2000.
- The Report of Independent Accountants and financial statements
included in the Annual Report to Shareholders of the All-Star
Fund dated December 31, 1999.
- The financial statements included in the All-Star Fund's
Semi-Annual Report to Shareholders dated June 30, 2000.
- The Statement of Additional Information of the Growth & Income
Fund dated November 8, 2000 relating to the Acquisitions.
Each Acquired Fund has previously sent its Annual and Semi-Annual
Reports to its shareholders. For a free copy of these Reports or any of the
documents listed above, Value Fund, All-Star Fund and Growth & Income Fund
shareholders may call 1-800-426-3750 and Opportunities Fund shareholders may
call 1-800-338-2550 or you may write to your Fund at the address listed on the
cover of this Prospectus/Proxy Statement. You may also obtain many of these
documents by accessing the web site of your Fund at www.libertyfunds.com or
www.steinroe.com. Hearing impaired shareholders of the Value Fund, the All-Star
Fund or the Growth & Income Fund may call Liberty Funds Services, Inc. at
1-800-528-6979 if you have special TTD equipment. Text-only versions of all the
Opportunities Fund, Value Fund, All-Star Fund and Growth & Income Fund documents
can be viewed online or downloaded from the Edgar database on the SEC's internet
site at www.sec.gov. You can review and copy information about the Funds by
visiting the following location, and you can obtain copies, upon payment of a
duplicating fee, by writing the Public Reference Room, U.S. Securities and
Exchange Commission, Washington, DC 20549-0102. Information on the operation of
the Public Reference Room may be obtained by calling 202-942-8090.
THE SEC HAS NOT APPROVED OR DISAPPROVED THE SHARES OF THE GROWTH &
INCOME FUND OR DETERMINED WHETHER THIS PROSPECTUS/PROXY STATEMENT IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-4-
<PAGE>
SYNOPSIS
THE FOLLOWING QUESTIONS AND RESPONSES PROVIDE AN OVERVIEW OF KEY
FEATURES OF THE ACQUISITIONS AND OF THE OTHER MATTERS TO BE CONSIDERED
AT THE MEETINGS AND OF THE INFORMATION CONTAINED IN THIS COMBINED
PROSPECTUS/PROXY STATEMENT. PLEASE REVIEW THE FULL PROSPECTUS/PROXY
STATEMENT PRIOR TO CASTING YOUR VOTE, AS THIS SECTION IS ONLY A
SYNOPSIS OF THE COMPLETE DOCUMENT.
1. WHAT IS BEING PROPOSED?
First, the Trustees of the respective Funds are recommending in
Proposal 1 that the Growth & Income Fund acquire the Opportunities
Fund, in Proposal 2 that the Growth & Income Fund acquire the Value
Fund, and in Proposal 3 that the Growth & Income Fund acquire the
All-Star Fund. This means that the Growth & Income Fund would acquire
all of the assets and liabilities of each of the Acquired Funds in
exchange for shares of the Growth & Income Fund representing the
aggregate net asset value of each Acquired Fund's assets and
liabilities. If Proposals 1, 2 and 3 are approved, you will receive
shares of the Growth & Income Fund with an aggregate net asset value
equal to the aggregate net asset value of your Acquired Fund shares as
of the day before the closing of the Acquisitions. The Acquisitions are
currently scheduled to take place on or around January 29, 2001. Note
that the closing of each Acquisition is not conditioned on the closing
of the other Acquisition proposed in this Prospectus/Proxy Statement.
Accordingly, in the event that the shareholders of one of the
Acquired Funds approve their Fund's Acquisition, it is expected that
the approved Acquisition will, subject to the terms of the Agreement
and Plan of Reorganization, take place as described in this
Prospectus/Proxy, even if the shareholders of another Acquired
Fund have not approved their Fund's Acquisition.
In addition, the Trustees of the Opportunities Fund and the Trustees of
the Value Fund are recommending in Proposal 4 and Proposal 5,
respectively, that you vote in favor of eleven nominees for Trustees.
2. WHY ARE THE ACQUISITIONS BEING PROPOSED?
The Trustees of each of the Opportunities Fund, the Value Fund and the
All-Star Fund recommend approval of the Acquisitions because they offer
shareholders of each Acquired Fund an investment in a fund with similar
investment goals and the economies of scale of a larger fund. In
reviewing the Acquisitions, the Trustees also considered:
- the expected reduction in the fees and expenses payable by the
All-Star Fund as a result of the Acquisitions;
- the expected reduction in the fees and expenses payable by the
Value Fund as a result of the Acquisitions, assuming the Value
Fund's investment
-5-
<PAGE>
advisor declined to continue the current voluntary fee waiver
or expense reimbursement in effect with respect to the Fund;
- that it is unlikely the Value and All-Star Funds will achieve
scale through sales growth;
- the ability of the Funds' investment advisors to create a more
focused value-style investment management team (applicable to
Value Fund and Opportunities Fund); and
- the tax-free nature of the Acquisitions as opposed to other
alternatives for the Funds and for shareholders and other tax
considerations.
Please review "Reasons for the Acquisition" in Proposals 1, 2 and 3 of
this Prospectus/Proxy Statement for a full description of the factors
considered by the Trustees.
3. WHAT CLASS OF SHARES WILL YOU RECEIVE IN THE GROWTH & INCOME FUND IF
THE ACQUISITIONS OCCUR?
You will receive the same class of shares that you currently own in
your Acquired Fund. The shares will have the same exchange rights and
will bear the same contingent deferred sales charges ("CDSCs"), if
applicable, as your current shares.
4. HOW DO THE INVESTMENT GOALS, STRATEGIES AND POLICIES OF YOUR ACQUIRED
FUND AND THE GROWTH & INCOME FUND COMPARE?
This table shows the investment goals and primary investment strategies
of each Fund:
<TABLE>
<CAPTION>
--------------------------------------------- ---------------------------------------------
OPPORTUNITIES FUND VALUE FUND
--------------------------------------------- ---------------------------------------------
<S> <C>
INVESTMENT GOALS: The Opportunities Fund INVESTMENT GOALS: The Value Fund seeks
seeks to provide both growth of capital and long-term growth and current income.
current income.
--------------------------------------------- ---------------------------------------------
PRIMARY INVESTMENT STRATEGIES: PRIMARY INVESTMENT STRATEGIES:
The Opportunities Fund seeks to achieve its The Value Fund seeks to achieve its goals
goals as follows: as follows:
- The Fund invests primarily in - The Fund invests primarily in
common stocks of well-established income-producing equity securities.
companies having large market - The Fund invests at least 65% of its
capitalizations (as defined by total assets in equity securities.
Morningstar). - The Fund uses a "value" investment
- The Fund may also invest in companies approach when purchasing stocks.
having midsized market capitalizations
(as defined by Morningstar)
</TABLE>
-6-
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------- ---------------------------------------------
OPPORTUNITIES FUND VALUE FUND
--------------------------------------------- ---------------------------------------------
<S> <C>
and up to 25% of its assets in
foreign stocks.
- The Fund uses a bottom-up,
fundamental analysis to find well-
managed businesses selling at very
attractive valuations.
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------- ---------------------------------------------
ALL-STAR FUND GROWTH & INCOME FUND
--------------------------------------------- ---------------------------------------------
<S> <C>
INVESTMENT GOAL: The All-Star Fund seeks INVESTMENT GOAL: The Growth & Income Fund
total return, comprised of long-term seeks long-term growth and income.
capital appreciation and current income
through investment primarily in a
diversified portfolio of equity securities.
--------------------------------------------- ---------------------------------------------
PRIMARY INVESTMENT STRATEGIES: PRIMARY INVESTMENT STRATEGIES:
The All-Star Fund seeks to achieve The Growth & Income Fund seeks to
its goal as follows: achieve its goal as follows:
- The Fund invests primarily in - The Fund invests at least 65% of
equity and equity-related securities, its total assets in common stocks of
which include common stocks, bonds U.S. companies with equity market
convertible into stocks, warrants and capitalizations at the time of
other rights to purchase stocks. purchase in excess of $3 billion.
- The Fund uses a multi-manager - Up to 35% of the Fund's total
concept by allocating the Fund's assets may be invested in common
portfolio assets on an approximately stocks of U.S. companies with equity
equal basis among a number of market capitalizations at the time of
independent investment management purchase between $1 billion and $3
organizations (Portfolio Managers). billion.
There are currently five Portfolio - Up to 10% of the Fund's total
Managers, each of which employs a assets may be invested in a
different investment style. combination of (i) convertible bonds,
(ii) corporate bonds that are rated
investment grade, and (iii) U.S.
government securities.
- The Fund may use a "value"
investment approach when purchasing
stocks.
--------------------------------------------- ---------------------------------------------
</TABLE>
The investment policies of each of the Acquired Funds, on the one hand,
and the Growth & Income Fund, on the other hand, are similar, except as
follows:
-7-
<PAGE>
- The Growth & Income Fund may not invest more than 10% of its
assets in ADRs.
- The Opportunities Fund, unlike the Growth & Income Fund, may
not invest more than 5% of its total assets in restricted
securities, other than so-called "Rule 144A securities."
- All of the Growth & Income Fund's debt (up to 10% of its
assets) must be investment grade, whereas the Value Fund may
invest up to 20% of its assets in lower-rated debt.
- In addition to the foregoing significant considerations, the
Opportunities Fund has a number of investment restrictions
that the Growth & Income Fund is not subject to. Many of these
restrictions were imposed by regulations of state securities
laws which are no longer applicable to mutual funds.
In addition, the Opportunities Fund currently pursues its investment
program by investing all of its assets in another investment company,
the Stein Roe & Farnham Growth & Income Portfolio (the "Master Fund"),
although a small interest in the Master Fund is also owned by Liberty
Financial Companies, Inc. ("Liberty Financial"). The Master Fund is
advised by Stein Roe and has the same investment objectives and
policies as the Opportunities Fund. This arrangement is known as a
"master-feeder" structure. The Opportunities Fund currently owns
substantially all of the shares of the Master Fund. If Proposal 1 is
approved, prior to the Acquisition, the Master Fund is expected to
liquidate the interests of Liberty Financial in the Master Fund and
distribute all of its remaining assets to the Opportunities Fund in
exchange for all of the shares of the Master Fund owned by the
Opportunities Fund in complete liquidation of the Master Fund. As a
result, the Opportunities Fund will cease, immediately before the
Acquisition, to operate under a "master-feeder" structure.
For a complete list of the Funds' investment restrictions, see the
Statement of Additional Information of each Fund, each of which is
incorporated by reference into this Prospectus/Proxy Statement.
5. HOW DO THE MANAGEMENT FEES AND EXPENSES OF THE FUNDS COMPARE AND WHAT
ARE THEY ESTIMATED TO BE FOLLOWING THE ACQUISITIONS?
The following tables allow you to compare the sales charges, if
applicable, and management fees and expenses of each Acquired Fund and
the Growth & Income Fund and to analyze the estimated expenses that
Colonial expects the combined fund to bear in the first year following
the Acquisitions. Sales charges are paid directly by shareholders to
Liberty Funds Distributor, Inc., each Fund's distributor. Annual Fund
Operating Expenses are deducted from the Fund. They include management
and administration fees, 12b-1 fees (if applicable) and administrative
costs, including pricing and custody services. The Annual Fund
Operating Expenses shown in the table below represent expenses incurred
by the Opportunities Fund for its last fiscal year ended September 30,
1999, by the Value Fund for its last fiscal year ended June 30, 2000,
by the All-Star Fund for its last fiscal year ended December 31, 1999,
and by the Growth & Income Fund for its last fiscal year ended June 30,
2000.
Detailed pro forma combined expense information presented in the Annual
Fund Operating Expenses table below for the combined fund is provided
based on the assumption that the Growth & Income Fund acquires both
Acquired Funds. In addition, following the presentation of that
detailed information, the total Annual Fund Operating Expenses are
presented on a pro forma combined basis for each possible scenario in
which the Growth & Income Fund acquires one, but not the other,
Acquired Fund.
SHAREHOLDER FEES
(paid directly from your investment)
-8-
<PAGE>
<TABLE>
<CAPTION>
OPPORTUNITIES FUND VALUE FUND(1)
------------------ -------------
CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS
A B C Z S A B C Z
----------------------------- -------- -------- ------- -------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum sales charge (load)
on purchases (%) (as a
percentage of the offering
price) 5.75 0.00 0.00 0.00 0.00 5.75 0.00 0.00 0.00
----------------------------- -------- -------- ------- -------- -------- --------- --------- --------- ---------
Maximum deferred sales
charge (load) on
redemptions (%) (as a
percentage of the lesser of
purchase price or
redemption price) 1.00(2) 5.00 1.00 0.00 0.00 1.00(3) 5.00 1.00 0.00
----------------------------- -------- -------- ------- -------- -------- --------- --------- --------- ---------
Redemption fee (%) (as a
percentage of amount
redeemed, if applicable) (4) (4) (4) (4) (5) (4) (4) (4) (4)
</TABLE>
-9-
<PAGE>
<TABLE>
<CAPTION>
ALL-STAR FUND(1) GROWTH & INCOME FUND(1)
---------------- -----------------------
CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS
A B C Z A B C S Z
---------------------------------- -------- --------- --------- --------- --------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum sales charge (load) on
purchases (%) (as a percentage
of the offering price) 5.75 0.00 0.00 0.00 5.75 0.00 0.00 0.00 0.00
---------------------------------- -------- --------- --------- --------- --------- --------- -------- --------- ---------
Maximum deferred sales charge
(load) on redemptions (%) (as a
percentage of the lesser of
purchase price or redemption
price) 1.00(3) 5.00 1.00 0.00 1.00(3) 5.00 1.00 0.00 0.00
---------------------------------- -------- --------- --------- --------- --------- --------- -------- --------- ---------
Redemption fee (%) (as a
percentage of amount redeemed,
if applicable) (4) (4) (4) (4) (4) (4) (4) (5) (4)
</TABLE>
---------
(1) A $10 annual fee is deducted from accounts of less than $1,000 and paid to
the transfer agent.
(2) This charge applies only to purchases of $1 million to $5 million if shares
obtained through these purchases are redeemed within 18 months of purchase.
(3) This charge applies only to certain Class A shares bought without an
initial sales charge that are sold within 18 months of purchase.
(4) There is a $7.50 charge for wiring sale proceeds to your bank.
(5) There is a $7.00 charge for wiring sale proceeds to your bank. A fee of $5
per quarter may be charged to accounts that fall below the required minimum
balance.
ANNUAL FUND OPERATING EXPENSES
(deducted directly from Fund assets)
<TABLE>
<CAPTION>
OPPORTUNITIES FUND(6) VALUE FUND
--------------------- ----------
CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS
A B C Z S A B C Z
------------------------- -------- --------- --------- -------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fee(7) (8)
(%) 0.75 0.75 0.75 0.75 0.75 0.80 0.80 0.80 0.80
------------------------- -------- --------- --------- -------- --------- --------- --------- --------- ---------
Distribution and
service (12b-1) fees (%) 0.35 1.00 1.00 0.00 0.00 0.25 1.00 1.00 0.00
------------------------- -------- --------- --------- -------- --------- --------- --------- --------- ---------
Other expenses(7) (%) 0.29 0.29 0.29 0.33 0.31 0.58 0.58 0.58 0.58
------------------------- -------- --------- --------- -------- --------- --------- --------- --------- ---------
Total annual fund
operating expenses (7)
(%) 1.39 2.04 2.04 1.08 1.06 1.63 2.38 2.38 1.38
</TABLE>
<TABLE>
<CAPTION>
ALL-STAR FUND GROWTH & INCOME FUND
------------- -------------------------
CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS CLASS
A B C Z A B C S Z
---------------------------------- -------- --------- --------- --------- --------- --------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fee(7) (%) 0.80 0.80 0.80 0.80 0.78 0.78 0.78 0.78 0.78
---------------------------------- -------- --------- --------- --------- --------- --------- ------- ------- --------
Distribution and service (12b-1)
fees (%) 0.25 1.00 1.00 0.00 0.25 1.00 1.00 0.00 0.00
---------------------------------- -------- --------- --------- --------- --------- --------- ------- ------- --------
Other expenses(7) (%) 2.12 2.12 2.12 2.12 0.35 0.35 0.35 0.35 0.35
---------------------------------- -------- --------- --------- --------- --------- --------- ------- ------- --------
Total annual fund operating
expenses (7) (%) 3.17 3.92 3.92 2.92 1.38 2.13 2.13 1.13 1.13
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
GROWTH & INCOME FUND
--------------------
(PRO FORMA COMBINED)
CLASS CLASS CLASS CLASS CLASS
A B C S Z
---------------------------------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Management fee (%) 0.72 0.72 0.72 0.72 0.72
---------------------------------- -------- --------- --------- --------- ---------
Distribution and service (12b-1) 0.25 1.00 1.00 0.00 0.00
fees (%)
---------------------------------- -------- --------- --------- --------- ---------
Other expenses (%) 0.30 0.30 0.30 0.30 0.30
---------------------------------- -------- --------- --------- --------- ---------
Total annual fund operating 1.27 2.02 2.02 1.02 1.02
expenses (%)(9)
</TABLE>
--------
(6) Each Fund's expenses include management fees and administrative costs such
as furnishing each Fund with offices and providing tax and compliance
services. With respect to the Opportunities Fund, annual fund operating
expenses consist of the Opportunities Fund's expenses plus the Fund's share
of the expenses of the Portfolio.
(7) The Value Fund's advisor has voluntarily agreed to waive management fees
and reimburse the Fund for certain expenses so that the total annual fund
operating expenses (exclusive of distribution and service fees, brokerage
commissions, interest, taxes and extraordinary expenses, if any) will not
exceed 0.75%. As a result, the actual management fee for each share class
would be 0.17%, other expenses for each share class would be 0.58% and
total annual fund operating expenses for Class A, B, C and Z shares would
be 1.00%, 1.75%, 1.75% and 0.75%, respectively. This arrangement may be
modified or terminated by the advisor at any time.
The All-Star Fund's advisor and administrator have voluntarily agreed to
waive management and administration fees and reimburse the Fund for certain
expenses so that the total annual fund operating expenses (exclusive of
distribution and service fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) will not exceed 1.25%. As a result, the
actual management and administration fees for each share class would be
0.00%, other expenses for each share class would be 1.25% and total annual
fund operating expenses for Class A, B, C and Z shares would be 1.50%,
2.25%, 2.25% and 1.25%, respectively. This arrangement may be modified or
terminated by the advisor at any time.
(8) With respect to the Opportunities Fund, management fee includes both the
management fee and the administration fee charged to the Fund.
(9) The total annual fund operating expenses detailed above assume that each
Acquired Fund approves the Acquisition. If only Value Fund shareholders
and All-Star Fund shareholders were to approve the Acquisition, the total
annual fund operating expenses would be as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS S CLASS Z
<S> <C> <C> <C> <C> <C>
Management fee (&) 0.75 0.75 0.75 N/A 0.75
Distribution & Service (12b-1) fees (%) 0.25 1.00 1.00 N/A 0.00
Other Expenses (%) 0.31 0.31 0.31 N/A 0.31
------------------------------------------------------------
Total annual fund operating
expenses (%) 1.31 2.06 2.06 N/A 1.06
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $701 $966 $1,251 $2,061
Class B: did not sell your shares $209 $645 $1,107 $2,195
sold all your shares at end of period $709 $945 $1,307 $2,195
Class C: did not sell your shares $209 $645 $1,107 $2,387
sold all your shares at end of period $309 $645 $1,107 $2,387
Class S N/A N/A N/A N/A
Class Z $108 $337 $ 584 $1,292
</TABLE>
If only Value Fund shareholders and Opportunities Fund shareholders were to
approve the Acquisition, the total annual fund operating expenses would be as
follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS S CLASS Z
<S> <C> <C> <C> <C> <C> <C>
Management fee (&) 0.72 0.72 0.72 0.72 0.72
Distribution & Service (12b-1) fees (%) 0.25 1.00 1.00 0.00 0.00
Other Expenses (%) 0.30 0.30 0.30 0.30 0.30
------------------------------------------------------------
Total annual fund operating
expenses (%) 1.27 2.02 2.02 1.02 1.02
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $697 $954 $1,231 $2,018
Class B: did not sell your shares $205 $633 $1,087 $2,153
sold all your shares at end of period $705 $933 $1,287 $2,153
Class C: did not sell your shares $205 $633 $1,087 $2,346
sold all your shares at end of period $305 $633 $1,087 $2,346
Class S $104 $324 $ 562 $1,245
Class Z $104 $324 $ 562 $1,245
</TABLE>
If only Opportunities Fund shareholders and All-Star Fund shareholders were to
approve the Acquisition, the total annual fund operating expenses would be as
follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS S CLASS Z
<S> <C> <C> <C> <C> <C>
Management fee (&) 0.72 0.72 0.72 0.72 0.72
Distribution & Service (12b-1) fees (%) 0.25 1.00 1.00 0.00 0.00
Other Expenses (%) 0.30 0.30 0.30 0.30 0.30
------------------------------------------------------------
Total annual fund operating
expenses (%) 1.27 2.02 2.02 1.02 1.02
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $697 $954 $1,231 $2,018
Class B: did not sell your shares $205 $633 $1,087 $2,153
sold all your shares at end of period $705 $933 $1,287 $2,153
Class C: did not sell your shares $205 $633 $1,087 $2,346
sold all your shares at end of period $305 $633 $1,087 $2,346
Class S $104 $324 $ 562 $1,245
Class Z $104 $324 $ 562 $1,245
</TABLE>
If only Opportunities Fund shareholders were to approve the Acquisition, the
total annual fund operating expenses would be as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS S CLASS Z
<S> <C> <C> <C> <C> <C>
Management fee (&) 0.72 0.72 0.72 0.72 0.72
Distribution & Service (12b-1) fees (%) 0.25 1.00 1.00 0.00 0.00
Other Expenses (%) 0.30 0.30 0.30 0.30 0.30
-----------------------------------------------------------------
Total annual fund operating
expenses (%) 1.27 2.02 2.02 1.02 1.02
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $697 $954 $1,231 $2,018
Class B: did not sell your shares $205 $633 $1,087 $2,153
sold all your shares at end of period $705 $933 $1,287 $2,153
Class C: did not sell your shares $205 $633 $1,087 $2,346
sold all your shares at end of period $305 $633 $1,087 $2,346
Class S $104 $324 $ 562 $1,245
Class Z $104 $324 $ 562 $1,245
</TABLE>
If only Value Fund shareholders were to approve the Acquisition, the total
annual fund operating expenses would be as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS S CLASS Z
<S> <C> <C> <C> <C>
Management fee (&) 0.76 0.76 0.76 N/A 0.76
Distribution & Service (12b-1) fees (%) 0.25 1.00 1.00 N/A 0.00
Other Expenses (%) 0.30 0.30 0.30 N/A 0.30
-------------------------------------------------------------
Total annual fund operating
expenses (%) 1.31 2.06 2.06 N/A 1.06
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $701 $966 $1,252 $2,063
Class B: did not sell your shares $209 $646 $1,108 $2,197
sold all your shares at end of period $709 $946 $1,308 $2,197
Class C: did not sell your shares $209 $646 $1,108 $2,390
sold all your shares at end of period $309 $646 $1,108 $2,390
Class S N/A N/A N/A N/A
Class Z $108 $337 $ 585 $1,294
</TABLE>
If only All-Star Fund shareholders were to approve the Acquisition, the total
annual fund operating expenses would be as follows:
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C CLASS S CLASS Z
<S> <C> <C> <C> <C> <C>
Management fee (&) 0.76 0.76 0.76 N/A N./A
Distribution & Service (12b-1) fees (%) 0.25 1.00 1.00 N/A 0.00
Other Expenses (%) 0.30 0.30 0.30 N/A 0.30
------------------------------------------------------------
Total annual fund operating
expenses (%) 1.31 2.06 2.06 N/A 0.30
</TABLE>
<TABLE>
<CAPTION>
PRO FORMA COMBINED 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A $701 $966 $1,252 $2,063
Class B: did not sell your shares $209 $646 $1,108 $2,197
sold all your shares at end of period $709 $946 $1,308 $2,197
Class C: did not sell your shares $209 $646 $1,108 $2,390
sold all your shares at end of period $309 $646 $1,108 $2,390
Class S N/A N/A N/A N/A
Class Z $108 $337 $ 585 $ 1294
</TABLE>
-11-
<PAGE>
EXAMPLE EXPENSES
Example Expenses help you compare the cost of investing in your Acquired Fund
and the Growth & Income Fund currently with the cost of investing in the
combined fund on a pro forma basis and also allows you to compare this with the
cost of investing in other mutual funds. The table does not take into account
any expense reduction arrangements discussed in the footnotes to the Annual Fund
Operating Expenses table. It uses the following hypothetical conditions:
- $10,000 initial investment
- 5% total return for each year
- Each Fund's operating expenses remain the same
- Assumes reinvestment of all dividends and distributions
- Assumes Class B shares convert to Class A shares after eight
years
EXAMPLE EXPENSES
(your actual costs may be higher or lower)
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
OPPORTUNITIES FUND
Class A $712 $1,000 $1,310 $2,185
Class B: did not sell your shares $211 $651 $1,117 $2,240
sold all your shares
at end of period $711 $951 $1,317 $2,240
Class C: did not sell your shares $211 $651 $1,117 $2,406
</TABLE>
-12-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
sold all your shares
at end of period $311 $ 651 $1,117 $2,406
Class Z $110 $ 342 $ 593 $1,313
Class S $108 $ 337 $ 585 $1,294
VALUE FUND
Class A $731 $1,060 $1,411 $2,397
Class B: did not sell your shares $241 $ 742 $1,270 $2,530
sold all your shares
at end of period $741 $1,042 $1,470 $2,530
Class C: did not sell your shares $241 $ 742 $1,270 $2,716
sold all your shares
at end of period $341 $ 742 $1,270 $2,716
Class Z $140 $ 437 $ 755 $1,657
ALL-STAR FUND
Class A $876 $1,496 $2,138 $3,850
Class B: did not sell your shares $394 $1,195 $2,013 $3,978
sold all your shares
at end of period $894 $1,495 $2,213 $3,978
Class C: did not sell your shares $394 $1,195 $2,013 $4,137
sold all your shares
at end of period $494 $1,195 $2,013 $4,137
Class Z $295 $ 903 $1,537 $3,242
GROWTH & INCOME FUND
Class A $707 $ 987 $1,287 $2,137
Class B: did not sell your shares $216 $ 667 $1,144 $2,271
sold all your shares
at end of period $716 $ 967 $1,344 $2,271
Class C: did not sell your shares $216 $ 667 $1,144 $2,462
sold all your shares
at end of period $316 $ 667 $1,144 $2,462
Class S $115 $ 359 $ 622 $1,375
Class Z $115 $ 359 $ 622 $1,375
</TABLE>
-13-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
GROWTH & INCOME FUND
(pro forma combined)
Class A $697 $954 $1,231 $2,019
Class B: did not sell your shares $205 $633 $1,087 $2,154
sold all your shares
at end of period $705 $933 $1,287 $2,154
Class C: did not sell your shares $205 $633 $1,087 $2,347
sold all your shares
at end of period $305 $633 $1,087 $2,347
Class S $104 $324 $562 $1,246
Class Z $104 $324 $562 $1,246
</TABLE>
Significant assumptions underlying the pro forma Annual Fund Operating Expenses
and Example Expenses are as follows: (1) the current contractual agreements will
remain in place; (2) the elimination of certain duplicate costs involved in
operating the Acquired Funds; and (3) expenses ratios are based on pro forma
combined average net assets for the year ended June 30, 2000.
6. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF THE ACQUISITIONS?
Each Acquisition is expected to be tax free to you for federal income
tax purposes. This means that no gain or loss will be recognized by the
Opportunities Fund, the Value Fund or the All-Star Fund, or any such
Fund's shareholders as a result of the Acquisitions.
The cost basis and holding period of your Opportunities Fund, Value
Fund or All-Star Fund shares are expected to carry over to your new
shares in the Growth & Income Fund.
-14-
<PAGE>
PROPOSAL 1 - ACQUISITION OF THE LIBERTY VALUE OPPORTUNITIES FUND CLASSES A,
B, C AND Z AND THE STEIN ROE GROWTH & INCOME FUND CLASS S BY
THE LIBERTY GROWTH & INCOME FUND
THE PROPOSAL
You are being asked to approve the Agreement and Plan of Reorganization
dated October 26, 2000. A form of Agreement and Plan of Reorganization is
attached as Appendix A to the Prospectus/Proxy Statement. By approving the
Agreement and Plan of Reorganization, you are also approving the Acquisition of
the Opportunities Fund by the Growth & Income Fund under the Agreement and Plan
of Reorganization.
PRINCIPAL INVESTMENT RISKS
WHAT ARE THE PRINCIPAL INVESTMENT RISKS OF THE GROWTH & INCOME FUND, AND HOW DO
THEY COMPARE WITH THE OPPORTUNITIES FUND?
Because the Funds have similar goals and strategies, the potential
risks associated with each Fund are similar. The actual risks of investing in
each Fund depend on the securities held in each Fund's portfolio and on market
conditions, both of which change over time. Please see the enclosed Prospectuses
of the Growth & Income Fund for a description of the principal investment risks
of the Fund.
INFORMATION ABOUT THE ACQUISITION
Please see the section "Information Applicable to Proposals 1, 2 and 3"
of this combined Prospectus/Proxy Statement.
SHARES YOU WILL RECEIVE
If the Acquisition occurs, you will receive shares in the Growth &
Income Fund of the same class as the shares that you currently own in the
Opportunities Fund. In comparison to the shares you currently own, the shares
you receive will have the following characteristics:
- The shares you receive will have an aggregate net asset value
equal to the aggregate net asset value of your current shares
as of the business day before the closing of the Acquisition.
- If applicable, your Growth & Income Fund shares will bear the
same sales charges, redemption fees and CDSCs as your current
shares, but for purposes of determining the CDSC applicable to
any redemption, the new shares will continue to age from the
date you purchased your Opportunities Fund shares.
- The procedures for purchasing and redeeming your shares will
not change as a result of the Acquisition.
-15-
<PAGE>
- You will have the same exchange options as you currently have.
- You will have the same voting rights as you currently have,
but as a shareholder of the Growth & Income Fund and of Trust
VI.
REASONS FOR THE ACQUISITION
The Trustees of each Trust, including all Trustees who are not
"interested persons" of the Trust, have determined that the Acquisition would be
in the best interests of each Fund's shareholders. The Trustees have unanimously
approved the Acquisition and recommend that you vote in favor of the Acquisition
by approving the form of Agreement and Plan of Reorganization attached as
Appendix A to this Prospectus/Proxy Statement.
The Acquisition is one of several proposed acquisitions and
liquidations of funds in the Liberty and Stein Roe Fund groups proposed by
Liberty Financial, the indirect parent of each of the investment advisors to the
Liberty and Stein Roe Funds. The overall purposes of these acquisitions and
liquidations include streamlining and rationalizing the product offerings of the
Liberty and Stein Roe Funds, reducing fund expense ratios by creating larger,
more efficient funds and permitting the Liberty Financial organization to focus
its portfolio management resources on a more focused group of portfolios.
In proposing the Acquisition, Liberty Financial presented to the
Trustees the following reasons for the Opportunities Fund to enter into the
Acquisition:
- The Acquisition is expected to create a larger fund with
similar investment goals and strategies to the Opportunities
Fund, without significantly impacting the Fund's operating
expenses.
- The Acquisition will also permit a more focused value-style
investment management team to concentrate its efforts on a
single value equity approach
-16-
<PAGE>
rather than manage multiple portfolios with somewhat different
investment approaches.
- The Acquisition is intended to permit the Opportunities Fund's
shareholders to exchange their investment for an investment in
the Growth & Income Fund without recognizing gain or loss for
federal income tax purposes. By contrast, if an Opportunities
Fund shareholder redeemed his or her shares to invest in
another fund, like the Growth & Income Fund, the transaction
would likely be a taxable event for such shareholder.
Similarly, if the Opportunities Fund were liquidated or
reorganized in a taxable transaction, the transaction would
likely be a taxable event for the Fund's shareholders. After
the Acquisition, shareholders may redeem any or all of their
Growth & Income Fund shares at net asset value (subject to any
applicable CDSC) at any time, at which point they would
recognize a taxable gain or loss.
The projected post-Acquisition expense reductions presented above are
based upon numerous material assumptions, including: (1) the current contractual
agreements will remain in place; that (2) certain duplicate costs involved in
operating the Acquired Funds are eliminated; and (3) the Growth & Income Fund
acquires all three of the Acquired Funds. See the table "Annual Fund Operating
Expenses" under Question 5 in the Synopsis above for the expenses that would be
applicable if one of the Acquisitions did not take place. Although these
projections represent good faith estimates, there can be no assurance that any
particular level of expenses or expense savings will be achieved, because
expenses depend on a variety of factors, including the future level of fund
assets, many of which factors are beyond the control of the Growth & Income Fund
or Liberty Financial.
In addition, the Trustees considered the relative Fund performance
results which are based on the factors and assumptions set forth below under
Performance Information. No assurance can be given that the Growth & Income Fund
will achieve any particular level of performance after the Acquisition.
Although the Funds' Trustees are proposing that the Growth & Income
Fund acquire all three of the Acquired Funds, the acquisition of the
Opportunities Fund is not conditioned upon the acquisition of the other Acquired
Funds. Accordingly, if the Opportunities Fund's shareholders approve the
acquisition of the Opportunities Fund, but the other Acquired Funds'
shareholders do not approve the acquisition of the one or both of the other
Acquired Funds, it is expected that, subject to the terms of the Agreement and
Plan of Reorganization, the Acquisition proposed in this Proposal 1 will take
place as described in this Prospectus/Proxy Statement.
-17-
<PAGE>
PERFORMANCE INFORMATION
The charts below show the percentage gain or loss in each calendar year
for the 10-year period ending December 31, 1999 or, if shorter, since inception,
for the Class A shares of the Growth & Income Fund and the Class A shares of the
Opportunities Fund. They should give you a general idea of how each Fund's
return has varied from year-to-year. The graphs include the effects of Fund
expenses, but not sales charges (if applicable to the Fund's shares). Returns
would be lower if any applicable sales charges were included. The calculations
of total return assume the reinvestment of all dividends and capital gain
distributions on the reinvestment date. Past performance is not an indication of
future results. Performance results include the effect of expense reduction
arrangements, if any. If these arrangements were not in place, then the
performance results would have been lower. Any expense reduction arrangements
may be discontinued at any time.
Additional discussion of the manner of calculation of total return is
contained in each Fund's respective Prospectus and Statement of Additional
Information, which are incorporated by reference in this Prospectus/Proxy
Statement.
OPPORTUNITIES FUND
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
----------- --------- --------- --------- --------- -------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
45%
40%
35%
32.42% 30.15%
30%
25.71%
25%
21.81%
20%
19.54%
15%
10.01% 12.86% 11.13%
10%
5%
0%
-1.72% -0.14%
-5%
----------- --------- --------- --------- --------- -------- --------- --------- --------- --------- --------
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
The Fund's year-to-date total return through For period shown in bar chart:
September 30, 2000 was 0.07%. Best quarter: Fourth quarter 1998, +17.91%
Worst quarter: Third quarter 1990, -12.06%
</TABLE>
GROWTH & INCOME FUND
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
----------- --------- --------- --------- --------- -------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40%
35.18%
</TABLE>
-18-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35%
30%
29.49%
25%
20.05%
20%
19.69%
15%
14.19% 11.4%
10%
5%
0%
-0.34%
-5%
----------- --------- --------- --------- --------- -------- --------- --------- --------- --------- --------
</TABLE>
The Fund's year-to-date total return through
September 30, 2000 was 8.34%.
For period shown in bar chart:
Best quarter: Fourth quarter 1998, +21.59%
Worst quarter: Third quarter 1998, -14.04%
The next table lists each Fund's average annual total return for each
class of its shares for the one-year, five-year and ten-year periods ending
December 31, 1999, or for the life of the Fund through December 31, 1999, if
shorter, as the case may be, including the applicable sales charge for Class A,
B, C and Z shares of the Opportunities Fund and Growth & Income Fund. This table
is intended to provide you with some indication of the risks of investing in the
Funds. At the bottom of each table, you can compare the Funds' performance with
one or more indices or averages.
OPPORTUNITIES FUND*
<TABLE>
<CAPTION>
INCEPTION
DATE 1 YEAR 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A (%) 11/2/99 4.76 20.07 14.95(1)
Class B (%) 11/2/99 6.10 21.31 15.62(1)
Class C (%) 11/2/99 10.10 21.49 15.62(1)
Class Z (%) 11/2/99 11.18 21.51 15.63(1)
Class S (%) 11.13 21.50 15.63
S&P 500 Index (%) 21.03 28.54 18.19
</TABLE>
GROWTH & INCOME FUND+
<TABLE>
<CAPTION>
INCEPTION
DATE 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND
<S> <C> <C> <C> <C> <C>
Class A (%) 7/1/92 5.00 21.44 N/A 17.22
Class B (%) 7/1/92 5.53 21.79 N/A 17.24
Class C (%) 7/1/94 9.58 21.98 N/A 17.25(2)
Class Z (%) 1/11/99 11.76 22.96(2) N/A 18.20(2)
S&P 500 Index (%) N/A 21.03 28.54 N/A 21.24(3)
Lipper Average (%) N/A 13.92 21.45 N/A 16.73(3)
</TABLE>
* The Opportunities Fund's return is compared to the Standard & Poor's 500
Index ("S&P 500 Index"), an unmanaged index that tracks the performance of
U.S. stock market securities. Unlike the Opportunities Fund, indices are
not investments, do not incur fees or expenses and are not professionally
managed. It is not possible to invest directly in indices.
+ The Growth & Income Fund's return is compared to the S&P 500 Index. Unlike
the Growth & Income Fund, indices are not investments, do not incur fees or
expenses and are not professionally managed. It is not possible to invest
directly in indices. The Growth & Income Fund's return is also compared to
the average return of the funds included in the Lipper Growth and Income
Funds category ("Lipper Average"). This Lipper Average, which is calculated
by Lipper, Inc., is composed of funds with similar investment objectives to
the Fund. Sales charges are not reflected in the Lipper Average.
(1) Class A, Class B, Class C and Class Z are the newer classes of shares.
Their performance information includes returns of the Opportunities Fund's
Class S shares (the oldest existing fund class) for periods prior to the
inception of the newer classes of shares. The Class S share returns are not
restated to reflect any differences in expenses (such as Rule 12b-1 fees)
between Class S shares and the newer classes of shares.
-19-
<PAGE>
(2) Class C and Class Z are the newer classes of shares. Their performance
information includes returns of the Growth & Income Fund's Class A shares
(the oldest existing fund class) for periods prior to the inception of the
newer classes of shares. The Class A share returns are not restated to
reflect any differences in expenses (such as Rule 12b-1 fees) between Class
A shares and the newer classes of shares.
(3) Performance information is from June 30, 1992 through December 31, 1999.
THE TRUSTEES OF THE OPPORTUNITIES FUND UNANIMOUSLY RECOMMEND APPROVAL OF THE
AGREEMENT AND PLAN OF REORGANIZATION.
REQUIRED VOTE FOR PROPOSAL 1
Approval of the form of Agreement and Plan of Reorganization dated
October 26, 2000 between the Stein Roe Trust on behalf of the Opportunities Fund
and Trust VI on behalf of the Growth & Income Fund will require the affirmative
vote of a majority of the shares of the Opportunities Fund outstanding at the
record date for the Meetings.
PROPOSAL 2 - ACQUISITION OF THE LIBERTY VALUE FUND BY THE LIBERTY GROWTH &
INCOME FUND
THE PROPOSAL
You are being asked to approve the Agreement and Plan of Reorganization
dated October 26, 2000. A form of Agreement and Plan of Reorganization is
attached as Appendix A to the Prospectus/Proxy Statement. By approving the
Agreement and Plan of Reorganization, you are also approving the Acquisition of
the Value Fund by the Growth & Income Fund under the Agreement and Plan of
Reorganization.
PRINCIPAL INVESTMENT RISKS
WHAT ARE THE PRINCIPAL INVESTMENT RISKS OF THE GROWTH & INCOME FUND, AND HOW DO
THEY COMPARE WITH THE VALUE FUND?
Because the Funds have similar goals and strategies, the potential
risks associated with each Fund are similar. The actual risks of investing in
each Fund depend on the securities held in each Fund's portfolio and on market
conditions, both of which change over time. Please see the enclosed Prospectuses
of the Growth & Income Fund for a description of the principal investment risks
of the Fund.
INFORMATION ABOUT THE ACQUISITION
-20-
<PAGE>
Please see the section "Information Applicable to Proposals 1, 2 and 3"
of this combined Prospectus/Proxy Statement.
SHARES YOU WILL RECEIVE
If the Acquisition occurs, you will receive shares in the Growth &
Income Fund of the same class as the shares that you currently own in the Value
Fund. In comparison to the shares you currently own, the shares you receive will
have the following characteristics:
- The shares you receive will have an aggregate net asset value
equal to the aggregate net asset value of your current shares
as of the business day before the closing of the Acquisition.
- If applicable, your Growth & Income Fund shares will bear the
same sales charges, redemption fees and CDSCs as your current
shares, but for purposes of determining the CDSC applicable to
any redemption, the new shares will continue to age from the
date you purchased your Value Fund shares.
- The procedures for purchasing and redeeming your shares will
not change as a result of the Acquisition.
- You will have the same exchange options as you currently have.
- You will have the same voting rights as you currently have,
but as a shareholder of the Growth & Income Fund and of Trust
VI.
Unlike Trust IX, which has only one series of shares, Trust VI has multiple
series of shares, and all shareholders of Trust VI vote together on matters not
specific to any series or class of shares, including on the election of
Trustees. Several of the current Trustees of Trust IX are also Trustees of Trust
VI. The shareholders of Trust VI and of various other open-end trusts are being
asked to elect a Board of Trustees that includes three Trustees who serve as
Trustees of Trust IX at a meeting to be held on December 19, 2000.
REASONS FOR THE ACQUISITION
The Trustees of each Trust, including all Trustees who are not
"interested persons" of the Trust, have determined that the Acquisition would be
in the best interests of each Fund's shareholders. The Trustees have
unanimously approved the Acquisition and recommend that you vote in favor of the
Acquisition by approving the form of Agreement and Plan of Reorganization
attached as Appendix A to this Prospectus/Proxy Statement.
The Acquisition is one of several proposed acquisitions and
liquidations of funds in the Liberty and Stein Roe Fund groups proposed by
Liberty Financial, the indirect parent of each of the investment advisors to the
Liberty and Stein Roe Funds. The overall purposes of these acquisitions and
liquidations include streamlining and rationalizing the product offerings of the
Liberty and Stein Roe Funds, reducing fund expense ratios by creating larger,
more efficient funds and permitting the Liberty Financial organization to focus
its portfolio management resources on a more focused group of portfolios.
-21-
<PAGE>
In proposing the Acquisition, Liberty Financial presented to the
Trustees the following reasons for the Value Fund to enter into the Acquisition:
- The Acquisition is expected to create a larger fund with
similar investment goals and strategies to the Value Fund.
- The Value Fund is not likely to achieve the scale necessary to
reduce Fund expenses through sales growth. In this connection,
Liberty Financial indicated to the Trustees that it was not
willing to continue subsidizing the Fund's operations (through
fee waiver or expense assumptions) over the long term. Thus,
even though the Growth & Income Fund has a higher expense
ratio than the subsidized expense ratio of Value Fund, the
Growth & Income Fund's expense ratio after the Acquisition is
expected to be materially lower than the Value Fund's expense
ratio would be if the advisor discontinued its subsidy.
Although, as explained below, it is not possible to predict
future expense ratios with certainty, information provided to
the Trustees by Liberty Financial indicated that, based on the
assets of the Value and Growth & Income Funds on July 31, 2000
and the Funds' current expense structures, the Growth & Income
Fund's annualized expense ratio (exclusive of 12b-1 fees)
immediately after the Acquisitions would be about 0.31% lower
than the Value Fund's current expense ratio would be if the
current voluntary expense limitation were discontinued (for
example, for Class A shares, a 1.07% expense ratio for the
Growth & Income Fund, as compared to 1.38% for the Value Fund
if the limitation were discontinued and 0.75% if it
continued). Note that the 12b-1 fees on Classes A, B and C on
each fund are 0.25%, 1.00%, and 1.00%, respectively. There are
no 12b-1 fees on Class Z shares.
- The Acquisition will also permit a more focused value-style
investment management team to concentrate its efforts on a
single value equity approach rather than manage multiple
portfolios with somewhat different investment approaches.
- The Acquisition is intended to permit the Value Fund's
shareholders to exchange their investment for an investment in
the Growth & Income Fund without recognizing gain or loss for
federal income tax purposes. By contrast, if a Value Fund
shareholder redeemed his or her shares to invest in another
fund, like the Growth & Income Fund, or if the Value Fund were
liquidated or reorganized in a taxable transaction, the
transaction would likely be a taxable event for its
shareholders. After the Acquisition, shareholders may redeem
any or all of their Growth & Income Fund shares at net asset
value (subject to any applicable CDSC) at any time, at which
point they would recognize a taxable gain or loss.
In reviewing the Acquisition, the Trustees also considered the fact
that the unrealized gain exposure in the Value Fund's portfolio will likely
increase as a result of the Acquisition, thus increasing and accelerating a
Value Fund shareholder's potential exposure to federal income taxes.
-22-
<PAGE>
The projected post-Acquisition expense reductions presented above are
based upon numerous material assumptions, including: (1) the current contractual
agreements will remain in place; that (2) certain fixed costs involved in
operating the Acquired Funds are eliminated; and (3) the Growth & Income Fund
acquires both of the Acquired Funds. See the table "Annual Fund Operating
Expenses" under Question 5 in the Synopsis above for the expenses that would be
applicable if one of the Acquisitions did not take place. Although these
projections represent good faith estimates, there can be no assurance that any
particular level of expenses or expense savings will be achieved, because
expenses depend on a variety of factors, including the future level of fund
assets, many of which factors are beyond the control of the Fund or Liberty
Financial.
In addition, the Trustees considered the relative Fund performance
results which are based on the factors and assumptions set forth below under
Performance Information. No assurance can be given that the Growth & Income Fund
will achieve any particular level of performance after the Acquisition.
Although the Funds' Trustees are proposing that the Growth & Income
Fund acquire all three of the Acquired Funds, the acquisition of the Value Fund
is not conditioned upon the acquisition of the other Acquired Funds.
Accordingly, if the Value Fund's shareholders approve the acquisition of the
Value Fund, but the other Acquired Funds' shareholders do not approve the
acquisition of the one or both of the other Acquired Funds, it is expected that,
subject to the terms of the Agreement and Plan of Reorganization, the
Acquisition proposed in this Proposal 1 will take place as described in this
Prospectus/Proxy Statement.
If the Acquisition does not occur, Liberty Financial has indicated that
it may recommend to the Trustees that the Value Fund be liquidated.
PERFORMANCE INFORMATION
The charts below show the percentage gain or loss in each calendar year
for the 10-year period ending December 31, 1999 or, if shorter, since inception,
for the Class A shares of the Growth & Income and the Class A shares of the
Value Fund. They should give you a general idea of how each Fund's return has
varied from year-to-year. The graphs include the effects of Fund expenses, but
not sales charges (if applicable to the Fund's shares). Returns would be lower
if any applicable sales charges were included. The calculations of total return
assume the reinvestment of all dividends and capital gain distributions on the
reinvestment date. Past performance is not an indication of future results.
Performance results include the effect of expense reduction arrangements, if
any. If these arrangements were not in place, then the performance results would
have been lower. Any expense reduction arrangements may be discontinued at any
time.
Additional discussion of the manner of calculation of total return is
contained in each Fund's respective Prospectus and Statement of Additional
Information, which are incorporated by reference in this Prospectus/Proxy
Statement.
VALUE FUND
-23-
<PAGE>
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
----------- --------- --------- --------- --------- -------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35%
30%
29.64%
25%
20%
15%
10%
8.13%
5%
2.11%
0%
----------- --------- --------- --------- --------- -------- --------- --------- --------- --------- --------
</TABLE>
The Fund's year-to-date total return through
September 30, 2000 was 5.49%.
For period shown in bar chart:
Best quarter: Second quarter 1997, +13.61%
Worst quarter: Third quarter 1998, -13.29%
GROWTH & INCOME FUND
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
----------- --------- --------- --------- --------- -------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40%
35.18%
35%
30%
29.49%
25%
20.05%
20%
19.69%
15%
14.19% 11.4%
10%
5%
0%
-0.34%
-5%
----------- --------- --------- --------- --------- -------- --------- --------- --------- --------- --------
</TABLE>
The Fund's year-to-date total return through
September 30, 2000 was 8.34%.
For period shown in bar chart:
Best quarter: Fourth quarter 1998, +21.59%
Worst quarter: Third quarter 1998, -14.04%
The next table lists each Fund's average year-by-year return for each
class of its shares for the one-year, five-year and ten-year periods ending
December 31, 1999, and from each Fund's inception through December 31, 1999,
including the applicable sales charge for Class A, B and C shares of the Value
Fund and Growth & Income Fund. This table is intended to provide you with some
indication of the risks of investing in the Funds. At the bottom of each table,
you can compare the Funds' performance with one or more indices or averages.
VALUE FUND+
-24-
<PAGE>
<TABLE>
<CAPTION>
INCEPTION
DATE 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND
<S> <C> <C> <C> <C> <C>
Class A (%) 3/25/96 (3.76) N/A N/A 11.69
Class B (%) 3/25/96 (3.61) N/A N/A 12.05
Class C (%) 3/25/96 0.37 N/A N/A 12.62
Class Z (%) 12/1/98 2.29 N/A N/A 13.52
S&P 500 Index (%) N/A 21.03 N/A N/A 26.60(1)
Barra Value Index N/A 12.72 N/A N/A 19.11(1)
Lipper Average (%) N/A 13.92 N/A N/A 18.57(1)
</TABLE>
GROWTH & INCOME FUND*
<TABLE>
<CAPTION>
INCEPTION
DATE 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND
<S> <C> <C> <C> <C> <C>
Class A (%) 7/1/92 5.00 21.44 N/A 17.22
Class B (%) 7/1/92 5.53 21.79 N/A 17.24
Class C (%) 7/1/94 9.58 21.98 N/A 17.25(2)
Class Z (%) 1/11/99 11.76 22.96(2) N/A 18.20(2)
S&P 500 Index (%) N/A 21.03 28.54 N/A 21.24(3)
Lipper Average (%) N/A 13.92 21.45 N/A 16.73(3)
</TABLE>
+ The Value Fund's return is compared to the S&P 500 Index, an unmanaged
index that tracks the performance of 500 widely held, large capitalization
U. S. stocks. The Value Fund's return is also compared to the Barra Value
Index, an unmanaged index that tracks the performance of value stocks, as
determined by low price-to-book ratios, included in the S&P 500 Index.
Unlike the fund, indices are not investments, do not incur fees or expenses
and are not professionally managed. It is not possible to invest directly
in indices.
* The Growth & Income Fund's return is compared to the S&P 500 Index. Unlike
the fund, indices are not investments, do not incur fees or expenses and
are not professionally managed. It is not possible to invest directly in
indices. The Growth & Income Fund's return is also compared to the average
return of the funds included in the Lipper Growth and Income Funds category
("Lipper Average"). This Lipper Average, which is calculated by Lipper,
Inc., is composed of funds with similar investment objectives to the Fund.
Sales charges are not reflected in the Lipper Average.
(1) Performance information is from March 31, 1996 through December 31, 1999.
(2) Class C and Class Z are the newer classes of shares. Their performance
information includes returns of the Growth & Income Fund's Class A shares
(the oldest existing fund class) for periods prior to the inception of the
newer classes of shares. The Class A share returns are not restated to
reflect any differences in expenses (such as Rule 12b-1 fees) between Class
A shares and the newer classes of shares.
(3) Performance information is from June 30, 1992 through December 31, 1999.
THE TRUSTEES OF THE VALUE FUND UNANIMOUSLY RECOMMEND APPROVAL OF THE AGREEMENT
AND PLAN OF REORGANIZATION.
The Declaration of Trust (the "Declaration") establishing Trust VI
provides that any series of Trust VI (such as the Value Fund) may be terminated
by a two-thirds vote of the series' shares or by notice from the Trustees to the
shareholders. The Trust believes that, under this provision, no shareholder vote
is required to approve the Acquisition, although the provision could also be
interpreted to require a two-thirds vote, if the Acquisition is submitted for
shareholder approval. The Declaration also
-25-
<PAGE>
provides that it may be amended by the Trustees, upon majority vote of the
shareholders of the affected series. To eliminate any uncertainty about whether
any shareholder vote is required to approve the Acquisition, the Trustees will
consider any vote in favor of the Acquisition to be a vote in favor of amending
the Declaration to provide that the Value Fund may be terminated by majority
vote of the Value Fund's shares entitled to vote (or by Trustee notice to
shareholders), and will so amend the Declaration if a majority of the Value
Fund's shareholders entitled to vote on the proposal vote in favor of such
proposal.
REQUIRED VOTE FOR PROPOSAL 2
Approval of the form of Agreement and Plan of Reorganization dated
October 26, 2000 between Trust VI on behalf of the Value Fund and Trust VI on
behalf of the Growth & Income Fund will require the affirmative vote of a
majority of the shares of the Value Fund outstanding at the record date for the
Meetings.
PROPOSAL 3 - ACQUISITION OF THE LIBERTY ALL-STAR GROWTH & INCOME FUND BY THE
LIBERTY GROWTH & INCOME FUND
THE PROPOSAL
You are being asked to approve the Agreement and Plan of Reorganization
dated October 26, 2000. A form of Agreement and Plan of Reorganization is
attached as Appendix A to the Prospectus/Proxy Statement. By approving the
Agreement and Plan of Reorganization, you are also approving the Acquisition of
the All-Star Fund by the Growth & Income Fund under the Agreement and Plan of
Reorganization.
PRINCIPAL INVESTMENT RISKS
WHAT ARE THE PRINCIPAL INVESTMENT RISKS OF THE GROWTH & INCOME FUND, AND HOW DO
THEY COMPARE WITH THE ALL-STAR FUND?
Because the Funds have similar goals and strategies, the potential
risks associated with each Fund are similar. The actual risks of investing in
each Fund depend on the securities held in each Fund's portfolio and on market
conditions, both of which change over time. Please see the enclosed Prospectuses
of the Growth & Income Fund for a description of the principal investment risks
of the Fund.
INFORMATION ABOUT THE ACQUISITION
Please see the section "Information Applicable to Proposals 1, 2 and 3"
of this combined Prospectus/Proxy Statement.
SHARES YOU WILL RECEIVE
If the Acquisition occurs, you will receive shares in the Growth &
Income Fund of the same class as the shares that you currently own in the
All-Star Fund. In
-26-
<PAGE>
comparison to the shares you currently own, the shares you receive will have the
following characteristics:
- The shares you receive will have an aggregate net asset value
equal to the aggregate net asset value of your current shares
as of the business day before the closing of the Acquisition.
- If applicable, your Growth & Income Fund shares will bear the
same sales charges, redemption fees and CDSCs as your current
shares, but for purposes of determining the CDSC applicable to
any redemption, the new shares will continue to age from the
date you purchased your All-Star Fund shares.
- The procedures for purchasing and redeeming your shares will
not change as a result of the Acquisition.
- You will have the same exchange options as you currently have.
- You will have the same voting rights as you currently have,
but as a shareholder of the Growth & Income Fund and of Trust
VI.
REASONS FOR THE ACQUISITION
The Trustees of each Trust, including all Trustees who are not
"interested persons" of the Trust, have determined that the Acquisition would be
in the best interests of each Fund's shareholders. The Trustees have unanimously
approved the Acquisition and recommend that you vote in favor of the Acquisition
by approving the form of Agreement and Plan of Reorganization attached as
Appendix A to this Prospectus/Proxy Statement.
The Acquisition is one of several proposed acquisitions and
liquidations of funds in the Liberty and Stein Roe Fund groups proposed by
Liberty Financial, the indirect parent of each of the investment advisors to the
Liberty and Stein Roe Funds. The overall purposes of these acquisitions and
liquidations include streamlining and rationalizing the product offerings of the
Liberty and Stein Roe Funds, reducing fund expense ratios by creating larger,
more efficient funds and permitting the Liberty Financial organization to focus
its portfolio management resources on a more focused group of portfolios.
In proposing the Acquisition, Liberty Financial presented to the
Trustees the following reasons for the All-Star Fund to enter into the
Acquisition:
- The Acquisition is expected to create a larger fund with
similar investment goals and strategies to the All-Star Fund,
but with lower operating expenses as a percentage of fund
assets. This expense ratio reduction would benefit All-Star
Fund shareholders, since operating expenses are paid by the
fund and reduce the
-27-
<PAGE>
investment return to fund shareholders. Although, as explained
below, it is not possible to predict future expense ratios
with certainty, information provided to the Trustees by
Liberty Financial indicated that, based on the assets of the
All-Star and Growth & Income Funds on July 31, 2000 and the
Funds' current expense structures, the Growth & Income Fund's
annualized expense ratio (exclusive of 12b-1 fees) immediately
after the Acquisitions would be about 0.57% lower than the
All-Star Fund's current expense ratio if the current voluntary
expense limitation were discontinued (for example, for Class A
shares, a 1.07% expense ratio for the Growth & Income Fund, as
compared to 1.64% for the All-Star Fund if the limitation were
discontinued and 1.25% it it continued). Note that the 12b-1
fees on Classes A, B and C on each fund are 0.25%, 1.00%, and
1.00%, respectively. There are no 12b-1 fees on Class Z
shares.
- The All-Star Fund is not likely to achieve the scale necessary
to reduce Fund expenses through sales growth. In this
connection, Liberty Financial indicated to the Trustees that
it was not willing to continue subsidizing the Fund's
operations (through fee waiver or expense assumptions) over
the long term.
- The Acquisition is intended to permit the All-Star Fund's
shareholders to exchange their investment for an investment in
the Growth & Income Fund without recognizing gain or loss for
federal income tax purposes. By contrast, if an All-Star Fund
shareholder redeemed his or her shares to invest in another
fund, like the Growth & Income Fund, or if the All-Star Fund
were liquidated or reorganized in a taxable transaction, the
transaction would likely be a taxable event for its
shareholders. After the Acquisition, shareholders may redeem
any or all of their Growth & Income Fund shares at net asset
value (subject to any applicable CDSC) at any time, at which
point they would recognize a taxable gain or loss.
In reviewing the Acquisition, the Trustees also considered the loss of
the multi-manager approach of the All-Star Fund and the fact that the unrealized
gain exposure in the All-Star Fund's portfolio will increase as a result of the
Acquisition, thus increasing and accelerating an All-Star Fund shareholder's
potential exposure to federal income taxes.
The projected post-Acquisition expense reductions presented above are
based upon numerous material assumptions, including: (1) the current contractual
agreements will remain in place; that (2) certain fixed costs involved in
operating the Acquired Funds are eliminated; and (3) the Growth & Income Fund
acquires all three of the Acquired Funds. See the table "Annual Fund Operating
Expenses" under Question 5 in the Synopsis above for the expenses that would be
applicable if one of the Acquisitions did not take place. Although these
projections represent good faith estimates, there can be
-28-
<PAGE>
no assurance that any particular level of expenses or expense savings will be
achieved, because expenses depend on a variety of factors, including the future
level of fund assets, many of which factors are beyond the control of the Fund
or Liberty Financial.
In addition, the Trustees considered the relative performance results
which are based on the factors and assumptions set forth below under Performance
Information. No assurance can be given that the Growth & Income Fund will
achieve any particular level of performance after the Acquisition.
Although the Funds' Trustees are proposing that the Growth & Income
Fund acquire all three of the Acquired Funds, the acquisition of the All-Star
Fund is not conditioned upon the acquisition of the other Acquired Funds.
Accordingly, if the All-Star Fund's shareholders approve the acquisition of the
All-Star Fund, but the other Acquired Fund's shareholders do not approve the
acquisition of one or both of the other Acquired Funds, it is expected that,
subject to the terms of the Agreement and Plan of Reorganization, the
Acquisition proposed in this Proposal will take place as described in this
Prospectus/Proxy Statement.
If the Acquisition does not occur, Liberty Financial has indicated that
it may recommend to the Trustees that the All-Star Fund be liquidated.
PERFORMANCE INFORMATION
The chart below shows the percentage gain or loss in each calendar year
for the 10-year period ending December 31, 1999 for the Class A shares of the
Growth & Income Fund. The chart should give you a general idea of how the Growth
& Income Fund's return has varied from year-to-year. The graph includes the
effects of Fund expenses, but not sales charges (if applicable to the Fund's
shares). Returns would be lower if any applicable sales charges were included.
The calculations of total return assume the reinvestment of all dividends and
capital gain distributions on the reinvestment date. Past performance is not an
indication of future results. Performance results include the effect of expense
reduction arrangements, if any. If these arrangements were not in place, then
the performance results would have been lower. Any expense reduction
arrangements may be discontinued at any time.
Additional discussion of the manner of calculation of total return is
contained in each Fund's respective Prospectus and Statement of Additional
Information, which are incorporated by reference in this Prospectus/Proxy
Statement.
Because the All-Star Fund commenced investment operations on March 1,
1999, and has not completed one full calendar year, information related to the
All-Star Fund's performance has not been included in this Prospectus/Proxy
Statement.
GROWTH & INCOME FUND
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
----------- --------- --------- --------- --------- -------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
40%
35.18%
</TABLE>
-29-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
35%
30%
29.49%
25%
20.05%
20%
19.69%
15%
14.19% 11.4%
10%
5%
0%
-0.34%
-5%
----------- --------- --------- --------- --------- -------- --------- --------- --------- --------- --------
</TABLE>
The Fund's year-to-date total return through
September 30, 2000 was 8.34%.
For period shown in bar chart:
Best quarter: Fourth quarter 1998, +21.59%
Worst quarter: Third quarter 1998, -14.04%
The next table lists the Growth & Income Fund's average year-by-year
return for each class of its shares for the one-year, five-year and ten-year
periods ending December 31, 1999, and from each Fund's inception through
December 31, 1999, including the applicable sales charge for Class A , B and C
shares. This table is intended to provide you with some indication of the risks
of investing in the Fund. At the bottom of the table, you can compare the Fund's
performance with one or more indices or averages.
Because the All-Star Fund commenced investment operations on March 1,
1999, and has not completed one full calendar year, information related to the
All-Star Fund's performance has not been included in this Prospectus/Proxy
Statement.
GROWTH & INCOME FUND*
<TABLE>
<CAPTION>
INCEPTION
DATE 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND
<S> <C> <C> <C> <C> <C>
Class A (%) 7/1/92 5.00 21.44 N/A 17.22
Class B (%) 7/1/92 5.53 21.79 N/A 17.24
Class C (%) 7/1/94 9.58 21.98 N/A 17.25(1)
Class Z (%) 1/11/99 11.76 22.96(1) N/A 18.20(1)
S&P 500 Index (%) N/A 21.03 28.54 N/A 21.24(2)
Lipper Average (%) N/A 13.92 21.45 N/A 16.73(2)
</TABLE>
* The Growth & Income Fund's return is compared to the S&P 500 Index. Unlike
the fund, indices are not investments, do not incur fees or expenses and
are not professionally managed. It is not possible to invest directly in
indices. The Growth & Income Fund's return is also compared to the average
return of the funds included in the Lipper Growth and Income Funds category
("Lipper Average"). This Lipper Average, which is calculated by Lipper,
Inc., is composed of funds with similar investment objectives to the Fund.
Sales charges are not reflected in the Lipper Average.
(1) Class C and Class Z are the newer classes of shares. Their performance
information includes returns of the Growth & Income Fund's Class A shares
(the oldest existing fund class) for periods prior to the inception of the
newer classes of shares. The Class A share returns are not restated to
reflect any differences in expenses (such as Rule 12b-1 fees) between Class
A shares and the newer classes of shares.
(2) Performance information is from June 30, 1992 through December 31, 1999.
-30-
<PAGE>
THE TRUSTEES OF THE ALL-STAR FUND UNANIMOUSLY RECOMMEND APPROVAL OF THE
AGREEMENT AND PLAN OF REORGANIZATION.
The Declaration establishing Trust IX provides that any series of Trust
IX (such as the All-Star Fund) may be terminated by a two-thirds vote of the
series' shares or by notice from the Trustees to the shareholders. The Trust
believes that, under this provision, no shareholder vote is required to approve
the Acquisition, although the provision could also be interpreted to require a
two-thirds vote, if the Acquisition is submitted for shareholder approval. The
Declaration also provides that it may be amended by the Trustees, upon majority
vote of the shareholders of the affected series. To eliminate any uncertainty
about whether any shareholder vote is required to approve the Acquisition, the
Trustees will consider any vote in favor of the Acquisition to be a vote in
favor of amending the Declaration to provide that the All-Star Fund may be
terminated by majority vote of the All-Star Fund's shares entitled to vote (or
by Trustee notice to shareholders), and will so amend the Declaration if a
majority of the All-Star Fund's shareholders entitled to vote in favor of the
proposal vote in favor of such proposal.
REQUIRED VOTE FOR PROPOSAL 3
Approval of the form of Agreement and Plan of Reorganization dated
October 26, 2000 between Trust IX on behalf of the All-Star Fund and Trust VI on
behalf of the Growth & Income Fund will require the affirmative vote of a
majority of the shares of the All-Star Fund outstanding at the record date for
the Meetings.
INFORMATION APPLICABLE TO PROPOSALS 1, 2 AND 3
TERMS OF THE AGREEMENT AND PLAN OF REORGANIZATION
If approved by the shareholders of each Acquired Fund, the Acquisitions
are expected to occur on or around January 29, 2001, under the Agreement and
Plan of Reorganization, a form of which is attached as Appendix A to this
combined Prospectus/Proxy Statement. Please review Appendix A. The following is
a brief summary of the principal terms of the Agreement and Plan of
Reorganization:
- Each Acquired Fund will transfer all of the assets and
liabilities attributable to each class of its shares to the
Growth & Income Fund in exchange for shares of the same class
of the Growth & Income Fund with an aggregate net asset value
equal to the net value of the transferred assets and
liabilities.
- The Acquisitions will occur on the next business day after the
time (currently scheduled to be 4:00 p.m. Eastern Time on
January 26, 2001 or such other date and time as the parties
may determine) when the assets of each Fund are valued for
purposes of the Acquisitions.
-31-
<PAGE>
- The shares of each class of the Growth & Income Fund received
by each Acquired Fund will be distributed to the respective
Acquired Fund's shareholders of the same class pro rata in
accordance with their percentage ownership of each class of
such Acquired Fund in full liquidation of such Acquired Fund.
- After the Acquisitions, each Acquired Fund will be terminated,
and its affairs will be wound up in an orderly fashion.
- Each Acquisition requires approval by the Acquired Fund's
shareholders and satisfaction of a number of other conditions;
the Acquisitions may be terminated at any time with the
approval of the Trustees of all the Funds.
Although the Funds' Trustees are proposing that the Growth & Income
Fund acquire each of the Acquired Funds, the Acquisition proposed in each
Proposal is not conditioned upon the approval of the Acquisition proposed in the
other Proposal. Accordingly, in the event that the shareholders of the
respective Acquired Funds approve one but not the other Acquisition, it is
expected that the approved Acquisition will, subject to the terms of the
Agreement and Plan of Reorganization, take place as described above.
Shareholders who object to the Acquisitions will not be entitled under
Massachusetts law or the Declaration to demand payment for, or an appraisal of,
their shares. However, shareholders should be aware that the Acquisitions as
proposed are not expected to result in recognition of gain or loss to
shareholders for federal income tax purposes and that, if the Acquisitions are
consummated, shareholders will be free to redeem the shares which they receive
in the transaction at their then-current net asset value. In addition, shares
may be redeemed at any time prior to the consummation of the Acquisitions.
The form of Agreement and Plan of Reorganization attached as Appendix A
to this combined Prospectus/Proxy Statement is a general form which will be used
for each of the Acquisitions. There will be a separate Agreement and Plan of
Reorganization with respect to each Acquisition, between the relevant Acquired
Fund and the Growth & Income Fund. The form of Agreement and Plan of
Reorganization for each Acquisition has been filed with the SEC as part of the
Registration Statement of which this Prospectus/Proxy Statement forms a part.
Please see page 4 of this Prospectus/Proxy Statement for information on how to
obtain a copy of the Registration Statement or the form of Agreement and Plan of
Reorganization for your Fund's Acquisition.
FEDERAL INCOME TAX CONSEQUENCES
Each Acquisition is intended to be a tax-free reorganization. The
closing of each Acquisition will be conditioned on receipt of opinions from
Ropes & Gray and Bell Boyd & Lloyd LLC to the effect that, on the basis of
existing law under specified sections of the Internal Revenue Code of 1986, as
amended (the "Code"), for federal income tax purposes:
- under Section 361 or Section 354 of the Code, respectively, no
gain or loss will be recognized by the Acquired Funds or the
shareholders of the Acquired Funds as a result of each
Acquisition;
- under Section 358 of the Code, the tax basis of the Growth &
Income Fund shares you receive will be the same, in the
aggregate, as the
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<PAGE>
aggregate tax basis of your Opportunities Fund, Value Fund or
All-Star Fund shares;
- under Section 1223(1) of the Code, your holding period for the
Growth & Income Fund shares you receive will include the
holding period for your Opportunities Fund, Value Fund or
All-Star Fund shares if you hold your shares as a capital
asset;
- under Section 1032 of the Code, no gain or loss will be
recognized by the Growth & Income Fund as a result of each
Acquisition;
- under Section 362(b) of the Code, the Growth & Income Fund's
tax basis in the assets that the Growth & Income Fund receives
from each Acquired Fund will be the same as such Acquired
Fund's basis in such assets; and
- under Section 1223(2) of the Code, the Growth & Income Fund's
holding period in such assets will include the relevant
Acquired Fund's holding period in such assets.
The opinions will be based on certain factual certifications made by
officers of each Fund's Trust. The opinions are not a guarantee that the tax
consequences of the Acquisitions will be as described above. Prior to the
closing of the Acquisitions, each Acquired Fund and the Growth & Income Fund
will each distribute to their shareholders all of their respective investment
company taxable income and net realized capital gains, which have not previously
been distributed to shareholders. Such distributions will be taxable to each
Acquired Fund's shareholders.
This description of the federal income tax consequences of the
Acquisitions does not take into account your particular facts and circumstances.
Consult your own tax advisor about the effect of state, local, foreign, and
other tax laws.
PROPOSAL 4 - ELECTION OF TRUSTEES BY LIBERTY VALUE OPPORTUNITIES FUND
SHAREHOLDERS
THE PROPOSAL
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<PAGE>
The purpose of this proposal is to elect six new members as well as
five of the currently serving members of the Board of Trustees of the Stein Roe
Trust, of which the Opportunities Fund is a series. All of the nominees listed
below, except for the proposed six new members (Ms. Verville and Messrs. Lowry,
Macera, Mayer, Neuhauser and Stitzel), are currently members of the Board of
Trustees of the Stein Roe Trust, as well as two Stein Roe closed-end funds and
six other Stein Roe open-end trusts (collectively, the "Stein Roe Mutual
Funds"), and have served in that capacity continuously since originally elected
or appointed. All of the currently serving members who are nominees, other than
Mr. Palombo and Ms. Kelly, have been previously elected by the shareholders of
the Stein Roe Trust. The proposed six new members currently serve on the Boards
of Trustees of nine Liberty closed-end funds and a number of Liberty open-end
trusts, and were recommended for election as Trustees of the Stein Roe Trust by
the Board of Trustees of the Stein Roe Trust at a special meeting held on
October 17, 2000. Each of the nominees elected will serve as a Trustee of the
Stein Roe Trust until the next meeting of shareholders of the Stein Roe Trust
called for the purpose of electing a Board of Trustees, and until a successor is
elected and qualified or until death, retirement, resignation or removal.
Currently, two different boards of trustees are responsible for
overseeing substantially all of the Liberty and Stein Roe Funds. Liberty
Financial and the Stein Roe Trust's Trustees have agreed that shareholder
interests can more effectively be represented by a single board with
responsibility for overseeing substantially all of the Liberty and Stein Roe
Funds. Creation of a single, consolidated board should also provide certain
administrative efficiencies and potential future cost savings for both the
Liberty and Stein Roe Funds and Liberty Financial. The nominees listed below
will be the members of the single, consolidated Board of Trustees. The persons
named in the enclosed proxy card intend to vote at the Meetings in favor of the
election of the nominees named below as Trustees of the Stein Roe Trust (if so
instructed). If any nominee listed below becomes unavailable for election, the
enclosed proxy card may be voted for a substitute nominee in the discretion of
the proxy holder(s).
INFORMATION ABOUT THE NOMINEES
Set forth below is information concerning each of the nominees.
<TABLE>
<CAPTION>
NOMINEE NAME & AGE PRINCIPAL OCCUPATION(1) AND DIRECTORSHIPS TRUSTEE SINCE
------------------ ----------------------------------------- -------------
<S> <C> <C>
Douglas A. Hacker Executive Vice President and Chief 1996
(43) Financial Officer of UAL, Inc. (airline)
since July 1999; Senior Vice President
and Chief Financial Officer of UAL, Inc.
prior thereto.
</TABLE>
-34-
<PAGE>
<TABLE>
<S> <C> <C>
Janet Langford Kelly Executive Vice President--Corporate 1996
(41) Development, General Counsel, and
Secretary of Kellogg Company since
September 1999; Senior Vice President,
Secretary and General Counsel of Sara
Lee Corporation (branded, packaged,
consumer-products manufacturer) from
1995 to August 1999; partner at Sidley &
Austin (law firm) prior thereto.
Richard W. Lowry Private Investor. (Formerly Chairman and New nominee
(64) Chief Executive Officer of U.S. Plywood
Corporation from August 1985 to August 1987.)
Salvatore Macera Private Investor. (Formerly Executive New nominee
(69) Vice President and Director of Itek
Corporation (electronics) from 1975 to 1981.)
William E. Mayer(2) Partner, Park Avenue Equity Partners New nominee
(60) (venture capital); Director, Johns
Manville; Director, Lee Enterprises;
Director, WR Hambrecht & Co. (Formerly
Dean, College of Business and Management,
University of Maryland, from October 1992
to November 1996.)
John J. Neuhauser Academic Vice President and Dean of New nominee
(57) Faculties, Boston College, since August
1999. (Formerly Dean, Boston College
School of Management, from September
1977 to September 1999.)
Charles Nelson Van Voorhis Professor of Political 1987
(57) Economy of the University of Washington.
Joseph R. Palombo(3) Vice President of the Stein Roe Mutual 2000
(47) Funds since April 1999; Executive Vice
President and Director of Colonial
Management Associates, Inc. and Stein Roe
& Farnham Incorporated since April 1999;
Executive Vice President and Chief
Administrative Officer of Liberty Funds
Group LLC since April 1999. (Formerly
Chief Operating Officer, Putnam Mutual
Funds, from 1994 to 1998.)
Thomas E. Stitzel Business Consultant; Chartered Financial New nominee
(64) Analyst. (Formerly Professor of Finance,
from 1975 to 1999, and Dean, from 1977 to
1991, College of Business, Boise State
University.)
</TABLE>
-35-
<PAGE>
<TABLE>
<S> <C> <C>
Thomas C. Theobald Managing Director, William Blair Capital 1996
(62) Partners (private equity investing)
since 1994; Chief Executive Officer and
Chairman of the Board of Directors of
Continental Bank Corporation from 1987
to 1994.
Anne-Lee Verville Consultant. (Formerly General Manager, New nominee
(54) Global Education Industry, from 1994 to
1997, and President, Applications Solutions
Division, IBM Corporation (global
education and global applications), from
1991 to 1994.)
</TABLE>
---------------------------
(1) Except as otherwise noted, each individual has held the office indicated or
other offices in the same company for the last five years.
(2) Mr. Mayer is an "interested person," as defined in the Investment Company
Act of 1940, as amended (the "1940 Act"), because of his affiliation with
WR Hambrecht & Co. (a registered broker-dealer).
(3) Mr. Palombo is an "interested person," as defined in the 1940 Act, because
of his affiliation with Liberty Financial.
TRUSTEES' COMPENSATION
The members of the Board of Trustees will serve as Trustees of the
Liberty and Stein Roe Funds, for which service each Trustee, except for Mr.
Palombo, will receive an annual retainer of $45,000, and attendance fees of
$8,000 for each regular joint meeting and $1,000 for each special joint meeting.
Committee chairs will receive an additional annual retainer of $5,000, and
receive $1,000 for each special meeting attended on a day other than a regular
joint meeting day. Committee members will receive an additional annual retainer
of $1,000, and receive $1,000 for each special meeting attended on a day other
than a regular joint meeting day. Two-thirds of the Trustees' fees are allocated
among the Liberty and Stein Roe Funds based on each Fund's relative net assets,
and one-third of the fees is divided equally among the Liberty and Stein Roe
Funds.
The Stein Roe Funds do not currently provide pension or retirement plan
benefits to the Trustees. However, William J. Boyd, Jr. and John A. Bacon, two
of the Trustees currently serving on the Board of Trustees of the Stein Roe
Trust who are not continuing on the combined Board of Trustees of the Liberty
and Stein Roe Funds, will receive certain payments after completing their
service on the Board. Mr. Boyd will receive a payment of $50,000 upon his
departure. Mr. Bacon will receive payments at an annual rate equal to the 1999
compensation of the Trustees of the Liberty Funds until he would otherwise have
retired at age 74. The payments to Messrs. Boyd and Bacon will be made
quarterly, beginning in 2001. Liberty Financial and the Stein Roe Mutual Funds
will each bear one-half of the cost of the payments to Mr. Bacon; the Stein Roe
Mutual Funds' portion of the payments will be allocated among the Stein Roe
Mutual Funds based on each fund's share of the Trustee fees for 2000.
Further information concerning the Trustees' compensation is included
in Appendix B.
MEETINGS AND CERTAIN COMMITTEES
Composition. The current Board of Trustees of the Stein Roe Mutual
Funds consists of six non-interested Trustees and one interested Trustee.
Audit Committee. The Audit Committee of the Stein Roe Mutual Funds,
consisting of Messrs. Hacker (Chairman), Bacon, Boyd, Nelson and Theobald and
Ms. Kelly, all of whom are non-interested Trustees, recommends to the Board of
Trustees the independent accountants to serve as auditors, reviews with the
independent accountants the results of the auditing engagement and internal
accounting procedures
-36-
<PAGE>
and considers the independence of the independent accountants, the range of
their audit services and their fees.
Compensation Committee. The Compensation Committee of the Stein Roe
Mutual Funds, consisting of Messrs. Boyd and Nelson, both of whom are
non-interested Trustees, reviews compensation of the Board of Trustees.
Nominating Committee. The Nominating Committee of the Stein Roe Mutual
Funds, consisting of Messrs. Boyd and Nelson, both of whom are non-interested
Trustees, recommends to the Board of Trustees, among other things, nominees for
trustee and for appointments to various committees. The Committee will consider
candidates for trustee recommended by shareholders. Written recommendations with
supporting information should be directed to the Committee in care of your Fund.
Executive Committee. The Executive Committee of the Stein Roe Mutual
Funds, consisting of Mr. Boyd, a non-interested Trustee, and Mr. Cook, an
interested Trustee, is authorized to take certain actions delegated to it by the
full Board of Trustees and to exercise the full powers of the Board of Trustees,
with some exceptions, between Board meetings.
Record of Board and Committee Meetings. During the fiscal year ended
September 30, 2000, the Board of Trustees of the Stein Roe Trust held five
meetings, the Audit Committee held four meetings, the Compensation Committee
held no meetings, the Nominating Committee held no meetings, and the Executive
Committee held one meeting.
During the most recently completed fiscal year, each of the current
Trustees attended more than 75% of the meetings of the Board of Trustees and the
committees of which such Trustee is a member.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF THE STEIN ROE TRUST
VOTE FOR PROPOSAL 4.
REQUIRED VOTE FOR PROPOSAL 4
A plurality of the votes cast at the Meetings, if a quorum is
represented, is required for the election of each Trustee to the Board of
Trustees of the Stein Roe Trust. Since the number of Trustees has been fixed at
eleven, this means that the eleven persons receiving the highest number of votes
will be elected.
PROPOSAL 5 - ELECTION OF TRUSTEES BY LIBERTY VALUE FUND SHAREHOLDERS
THE PROPOSAL
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<PAGE>
You are being asked to approve the election of four new members as well
as seven of the currently serving members of the Board of Trustees of the
Liberty Trusts, of which the Value and All-Star Funds are series. All of the
nominees listed below, except for the proposed four new members (Ms. Kelly and
Messrs. Hacker, Nelson and Theobald), are currently members of the Board of
Trustees of the Liberty Trusts, as well as nine Liberty closed-end funds and
seven (or, in the case of Messrs. Lowry, Mayer and Neuhauser, eight) other
Liberty open-end trusts (collectively, the "Liberty Mutual Funds"), and have
served in that capacity continuously since originally elected or appointed. All
of the currently serving members, other than Mr. Palombo, have been previously
elected by the shareholders of the Liberty Trusts. The proposed four new members
currently serve on the Board of Trustees of two Stein Roe closed-end funds and
seven Stein Roe open-end trusts, and were recommended for election as Trustees
of the Liberty Mutual Funds by the Board of Trustees at a meeting held on
October 25, 2000. Each of the nominees elected will serve as a Trustee of the
Liberty Trusts until the next meetings of shareholders of the Liberty Trusts
called for the purpose of electing a Board of Trustees, and until a successor is
elected and qualified or until death, retirement, resignation or removal.
Currently, two different boards of trustees are responsible for
overseeing substantially all of the Liberty and Stein Roe Funds. Liberty
Financial and the Trustees of the Liberty Trusts have agreed that shareholder
interests can more effectively be represented by a single board with
responsibility for overseeing substantially all of the Liberty and Stein Roe
Funds. Creation of a single, consolidated board should also provide certain
administrative efficiencies and potential future cost savings for both the
Liberty and Stein Roe Funds and Liberty Financial. The nominees listed below
will be the members of the single, consolidated Board of Trustees. The persons
named in the enclosed proxy card intend to vote at the Meetings in favor of the
election of the nominees named below as Trustees of the Liberty Trusts (if so
instructed). If any nominee listed below becomes unavailable for election, the
enclosed proxy card may be voted for a substitute nominee in the discretion of
the proxy holder(s).
INFORMATION ABOUT THE NOMINEES
Set forth below is information concerning each of the nominees.
<TABLE>
<CAPTION>
NOMINEE NAME & AGE PRINCIPAL OCCUPATION(1) AND DIRECTORSHIPS TRUSTEE SINCE
------------------ ----------------------------------------- -------------
<S> <C> <C>
Douglas A. Hacker Executive Vice President and Chief New nominee
(43) Financial Officer of UAL, Inc. (airline)
since July 1999; Senior Vice President and
Chief Financial Officer of UAL, Inc. prior
thereto.
</TABLE>
-38-
<PAGE>
<TABLE>
<S> <C> <C>
Janet Langford Kelly Executive Vice President--Corporate New nominee
(41) Development, General Counsel, and
Secretary of Kellogg Company since
September 1999; Senior Vice President,
Secretary and General Counsel of Sara Lee
Corporation (branded, packaged,
consumer-products manufacturer) from 1995
to August 1999; partner at Sidley &
Austin (law firm) prior thereto.
Richard W. Lowry Private Investor since August 1987. 1995
(64) (Formerly Chairman and Chief Executive
Officer of U.S. Plywood Corporation from
August 1985 to August 1987.)
Salvatore Macera Private Investor. (Formerly Executive Vice 1998
(69) President and Director of Itek Corporation
(electronics) from 1975 to 1981.)
William E. Mayer(2) Partner, Park Avenue Equity Partners 1994
(60) (venture capital); Director, Johns
Manville; Director, Lee Enterprises;
Director, WR Hambrecht & Co. (Formerly
Dean, College of Business and Management,
University of Maryland, from October 1992
to November 1996.)
John J. Neuhauser Academic Vice President and Dean of 1985
(57) Faculties, Boston College, since August
1999. (Formerly Dean, Boston College
School of Management, from September 1977
to September 1999.)
Charles Nelson Van Voorhis Professor of Political Economy New nominee
(57) of the University of Washington.
Joseph R. Palombo(3) Vice President of the Stein Roe Mutual 2000
(47) Funds since April 1999; Executive Vice
President and Director of Colonial
Management Associates, Inc. and Stein Roe
& Farnham Incorporated since April 1999;
Executive Vice President and Chief
Administrative Officer of Liberty Funds
Group LLC since April 1999. (Formerly
Chief Operating Officer, Putnam Mutual
Funds, from 1994 to 1998.)
Thomas E. Stitzel Business Consultant; Chartered Financial 1998
(64) Analyst. (Formerly Professor of Finance,
from 1975 to 1999, and Dean, from 1977 to
1991, College of Business, Boise State
University.)
</TABLE>
-39-
<PAGE>
<TABLE>
<S> <C> <C>
Thomas C. Theobald Managing Director, William Blair Capital New nominee
(62) Partners (private equity investing) since
1994; Chief Executive Officer and
Chairman of the Board of Directors of
Continental Bank Corporation from 1987 to
1994.
Anne-Lee Verville Consultant. (Formerly General Manager, 1998
(54) Global Education Industry, from 1994 to
1997, and President, Applications
Solutions Division, IBM Corporation
(global education and global
applications), from 1991 to 1994.)
</TABLE>
---------------------------
(1) Except as otherwise noted, each individual has held the office indicated or
other offices in the same company for the last five years.
(2) Mr. Mayer is not affiliated with Liberty Financial, but is an "interested
person," as defined in the Investment Company Act of 1940, as amended (the
"1940 Act"), because of his affiliation with WR Hambrecht & Co. (a
registered broker-dealer).
(3) Mr. Palombo is an "interested person," as defined in the 1940 Act, because
of his affiliation with Liberty Financial.
TRUSTEES' COMPENSATION
The members of the Board of Trustees will serve as Trustees of the
Liberty and Stein Roe Funds, for which service each Trustee, except for Mr.
Palombo, will receive an annual retainer of $45,000, and attendance fees of
$8,000 for each regular joint meeting and $1,000 for each special joint meeting.
The Board of Trustees is expected to hold six regular joint meetings each year.
Committee chairs will receive an additional annual retainer of $5,000, and
receive $1,000 for each special meeting attended on a day other than a regular
joint meeting day. Committee members will receive an additional annual retainer
of $1,000, and receive $1,000 for each special meeting attended on a day other
than a regular joint meeting day. Two-thirds of the Trustees' fees are allocated
among the Liberty and Stein Roe Funds based on each Fund's relative net assets,
and one-third of the fees is divided equally among the Liberty and Stein Roe
Funds.
The Liberty Mutual Funds do not currently provide pension or retirement
plan benefits to the Trustees. However, certain Trustees currently serving on
the Board of Trustees of the Liberty Trusts who are not continuing on the
combined Board of Trustees of the Liberty and Stein Roe Funds will receive
payments at an annual rate equal to their 1999 Trustee compensation for the
lesser of two years or until the date they would otherwise have retired at age
72. These payments will be made quarterly, beginning in 2001. Liberty Financial
and the Liberty Mutual Funds will each bear one-half of the cost of the
payments; the Liberty Mutual Funds' portion of the payments will be allocated
among the Liberty Mutual Funds based on each fund's share of the Trustee fees
for 2000.
Further information concerning the Trustees' compensation is included
in Appendix B.
-40-
<PAGE>
MEETINGS AND CERTAIN COMMITTEES
Composition. The current Board of Trustees of the Liberty Mutual Funds
consists of two interested and nine non-interested Trustees. Mr. Mayer is not
affiliated with Liberty Financial or any of its affiliates, but is considered
interested as a result of his affiliation with a broker-dealer.
Audit Committee. The Audit Committee of Trust VI, consisting of Ms.
Verville (Chairperson) and Messrs. Bleasdale, Grinnell, Lowry, Macera and Moody,
all of whom are non-interested Trustees, recommends to the Board of Trustees the
independent accountants to serve as auditors, reviews with the independent
accountants the results of the auditing engagement and internal accounting
procedures and considers the independence of the independent accountants, the
range of their audit services and their fees.
Compensation Committee. The Compensation Committee of Trust VI,
consisting of Messrs. Neuhauser (Chairman), Grinnell, Stitzel and Ms. Collins,
all of whom are non-interested Trustees, reviews compensation of the Board of
Trustees.
Governance Committee. The Governance Committee of Trust VI, consisting
of Messrs. Bleasdale (Chairman), Lowry, Mayer, Moody and Ms. Verville, all of
whom are non-interested Trustees, except for Mr. Mayer (Mr. Mayer is interested
as a result of his affiliation with a broker-dealer, but is not affiliated with
Liberty Financial or any of its affiliates), recommends to the Board of
Trustees, among other things, nominees for trustee and for appointments to
various committees. The Committee will consider candidates for trustee
recommended by shareholders. Written recommendations with supporting information
should be directed to the Committee in care of your Fund.
Record of Board and Committee Meetings. During the fiscal year ended
June 30, 2000, the Board of Trustees of Trust VI held six meetings, the Audit
Committee held four meetings, the Compensation Committee held one meeting, and
the Governance Committee held four meetings.
During the most recently completed fiscal years, each of the current
Trustees attended more than 75% of the meetings of the Board of Trustees and the
committees of which such Trustee is a member.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF THE LIBERTY TRUSTS
VOTE FOR PROPOSAL 5.
REQUIRED VOTE FOR PROPOSAL 5
A plurality of the votes cast at the Meetings, if a quorum is
represented, is required for the election of each Trustee to the Board of
Trustees of the Liberty Trusts. Since the number of Trustees has been fixed at
eleven, this means that the eleven persons receiving the highest number of
votes will be elected.
-41-
<PAGE>
GENERAL
VOTING INFORMATION
The Trustees of the Stein Roe Trust, Trust VI and Trust IX are soliciting
proxies from the shareholders of each such Fund in connection with the Meetings,
which have been called to be held at 10:00 a.m. Eastern Time on December 19,
2000 at Colonial's offices, One Financial Center, Boston, Massachusetts. The
meeting notice, this combined Prospectus/Proxy Statement and proxy cards are
being mailed to shareholders beginning on or about November 8, 2000.
INFORMATION ABOUT PROXIES AND THE CONDUCT OF THE MEETINGS
Solicitation of Proxies. Proxies will be solicited primarily by mailing
this combined Prospectus/Proxy Statement and its enclosures, but proxies may
also be solicited through further mailings, telephone calls, personal interviews
or e-mail by officers of the Opportunities Fund, the Value Fund or the All-Star
Fund, or by employees or agents of Liberty Asset Management Company ("LAMCO"),
Stein Roe & Farnham Incorporated or Colonial and their affiliated companies. In
addition, SCC has been engaged to assist in the solicitation of proxies, at an
estimated cost of $700,000 total for all of the proposed acquisitions of funds
in the Liberty and Stein Roe Fund groups scheduled to take place in January
2001.
VOTING PROCESS
You can vote in any one of the following five ways:
a. By mail, by filling out and returning the enclosed proxy card;
b. By phone, by calling 1-800-732-3683 and following the
instructions;
c. By internet, by visiting our Web site at www.libertyfunds.com
and clicking on "Proxy Voting;"
d. By fax (not available for all shareholders; refer to enclosed
proxy insert); or
e. In person at the Meetings.
Shareholders who owned shares on the record date, September 29, 2000,
are entitled to vote at the Meetings. Shareholders of the Value Fund and the
All-Star Fund are entitled to cast one vote for each share owned on the record
date. Shareholders of the Opportunities Fund are entitled to cast a number of
votes equal to the dollar net asset value of the shares as of the record date.
The net asset value of a Class S share of the Opportunities Fund on the record
date was $27.43. We encourage you to vote by internet, using the 12-digit or
14-digit "control" number that appears on the enclosed proxy card. Voting by
internet will reduce expenses by saving postage costs. If you choose to vote by
mail or by fax, and you are an individual account owner, please sign exactly as
your name appears on the proxy card. Either owner of a joint account may sign
the proxy card, but the signer's name must exactly match the name that appears
on the card.
Costs of Solicitation. The costs of the Meetings, including the costs
of soliciting proxies, and the costs of the Acquisitions will be borne by the
following parties in the following percentages: the Opportunities Fund ___%, the
Value Fund ___%, the All-Star Fund ___%, the Growth & Income Fund ___%, Liberty
Financial ___%.
-42-
<PAGE>
Voting and Tabulation of Proxies. Shares represented by duly executed
proxies will be voted as instructed on the proxy. If no instructions are given,
the proxy will be voted in favor of each Proposal. You can revoke your proxy by
sending a signed, written letter of revocation to the Assistant Secretary of
your Fund, by properly executing and submitting a later-dated proxy or by
attending the Meetings and voting in person.
Votes cast in person or by proxy at the Meetings will be counted by
persons appointed by each Acquired Fund as tellers for the Meetings (the
"Tellers"). Thirty percent (30%) of the shares of the Opportunities Fund and
thirty percent (30%) of the shares of each of the Value Fund and the All-Star
Fund outstanding on the record date, present in person or represented by proxy,
constitute a quorum for the transaction of business by the shareholders of the
respective Funds at the Meetings. Shareholders of the Opportunities Fund vote
together with the shareholders of the other series of the Stein Roe Trust for
the election of Trustees; thirty percent (30%) of the outstanding shares of the
Stein Roe Trust constitutes a quorum for voting on the election of Trustees.
Shareholders of the Value Fund vote together with the shareholders of the other
series of Trust VI for the election of Trustees; thirty percent (30%) of the
outstanding shares of Trust VI constitutes a quorum for voting on the election
of Trustees. Shareholders of the All-Star Fund vote together with the
shareholders of the other series of Trust IX for the election of Trustees;
thirty percent (30%) of the outstanding shares of Trust IX constitutes a quorum
for voting on the election of Trustees. In determining whether a quorum is
present, the Tellers will count shares represented by proxies that reflect
abstentions and "broker non-votes" as shares that are present and entitled to
vote. Since these shares will be counted as present, but not as voting in favor
of any proposal, these shares will have the same effect as if they cast votes
against Proposals 1, 2 and 3 and will have no effect on the outcome of Proposals
4 and 5. "Broker non-votes" are shares held by brokers or nominees as to which
(i) the broker or nominee does not have discretionary voting power and (ii) the
broker or nominee has not received instructions from the beneficial owner or
other person who is entitled to instruct how the shares will be voted.
Advisor's, Distributor's and Administrator's Addresses. The address of
Colonial Management Associates, Inc., the investment advisor of the Value Fund
and the Growth & Income Fund and the administrator of the Opportunities Fund and
the All-Star Fund, is One Financial Center, Boston, Massachusetts 02111. The
address of each Fund's principal underwriter, Liberty Funds Distributor, Inc.,
is One Financial Center, Boston, Massachusetts 02111. The address of the
Opportunities Fund's investment advisor, Stein Roe & Farnham Incorporated, is
One South Wacker Drive, Chicago, Illinois 60606. The address of the All-Star
Fund's investment advisor, Liberty Asset Management Company, is Federal Reserve
Plaza, 600 Atlantic Avenue, Boston, Massachusetts 02110.
Outstanding Shares and Significant Shareholders. Appendix B to this
Prospectus/Proxy Statement lists for the Opportunities Fund and the Stein Roe
Trust, the Value Fund and Growth & Income Fund and Trust VI, and the All-Star
Fund the total number of shares outstanding as of September 29, 2000 for each
class of the shares of each such Fund and Trust entitled to vote at the
Meetings. It also lists
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for the Growth & Income Fund the total number of shares outstanding as of
September 29, 2000 for each class of the Fund's shares. It also identifies
holders of more than 5% or 25% of any class of shares of each Fund, and contains
information about the executive officers and Trustees of the Funds and their
shareholdings in the Funds.
Adjournments; Other Business. If either Acquired Fund or the Trust of
which it is a series has not received enough votes by the time of the Meetings
to approve any Proposal the persons named as proxies may propose that such
Meetings be adjourned one or more times to permit further solicitation of
proxies. Any adjournment requires the affirmative vote of a majority of the
total number of shares of such Acquired Fund or Trust that are present in person
or by proxy on the question when the adjournment is being voted on. The persons
named as proxies will vote in favor of any such adjournment all proxies that
they are entitled to vote in favor of the relevant Proposal (or in favor of any
nominee, in the case of Proposals 4 and 5). They will vote against any such
adjournment any proxy that directs them to vote against the Proposal (or against
all nominees, in the case of Proposals 4 and 5). They will not vote any proxy
that directs them to abstain from voting on the Proposal in question.
The Meetings have been called to transact any business that properly
comes before them. The only business that management of each Acquired Fund
intends to present or knows that others will present is Proposals 1 through 5.
If any other matters properly come before the Meetings, and on all matters
incidental to the conduct of the Meetings, the persons named as proxies intend
to vote the proxies in accordance with their judgment, unless the Assistant
Secretary of the relevant Acquired Fund has previously received written contrary
instructions from the shareholder entitled to vote the shares.
Shareholder Proposals at Future Meetings. The Stein Roe Trust and the
Liberty Trusts do not hold annual or other regular meetings of shareholders.
Shareholder proposals to be presented at any future meeting of shareholders of
the Funds or the Trusts must be received by the relevant Fund or Trust in
writing a reasonable amount of time before the Trust solicits proxies for that
meeting, in order to be considered for inclusion in the proxy materials for that
meeting.
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APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION dated as of October 26, 2000
by and among [Name of Acquired Fund Trust] (the "Trust"), a Massachusetts
business trust established under a Declaration of Trust dated _______________,
as amended, on behalf of [Name of Acquired Fund] (the "Acquired Fund"), a series
of the Trust, Liberty Funds Trust VI (the "Acquiring Trust"), a Massachusetts
business trust established under a Declaration of Trust dated January 3, 1992,
as amended, on behalf of Liberty Growth & Income Fund (the "Acquiring Fund"), a
series of the Acquiring Trust, and Liberty Financial Companies, Inc.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code"), and any
successor provision. The reorganization will consist of the transfer of all of
the assets of the Acquired Fund in exchange solely for [Class A, B, C, Z and S]
shares of beneficial interest of the Acquiring Fund ("Acquiring Shares") and the
assumption by Acquiring Fund of the liabilities of the Acquired Fund (other than
certain expenses of the reorganization contemplated hereby) and the distribution
of such Acquiring Shares to the shareholders of the Acquired Fund in liquidation
of the Acquired Fund, all upon the terms and conditions set forth in this
Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF ACQUIRED FUND IN EXCHANGE FOR ASSUMPTION
OF LIABILITIES AND ACQUIRING SHARES AND LIQUIDATION OF
ACQUIRED FUND.
1.1 Subject to the terms and conditions herein set forth and on
the basis of the representations and warranties contained
herein,
(a) The Trust, on behalf of the Acquired Fund, will
transfer and deliver to the Acquiring Fund, and the
Acquiring Fund will acquire, all the assets of the
Acquired Fund as set forth in paragraph 1.2.
(b) The Acquiring Fund will assume all of the Acquired
Fund's liabilities and obligations of any kind
whatsoever, whether absolute, accrued, contingent or
otherwise in existence on the Closing Date (as
defined in paragraph 1.2 hereof) (the "Obligations"),
except that expenses of reorganization contemplated
hereby to be paid by the Acquired Fund pursuant to
paragraphs 1.5 and 9.2 shall not be assumed or paid
by the Acquiring Fund, and
(c) The Acquiring Fund will issue and deliver to the
Acquired Fund in exchange for such assets the number
of Acquiring Shares (including fractional shares, if
any) determined by dividing the net asset value of
the Acquired Fund, computed in the manner and as of
the time and date set forth in paragraph 2.1, by the
net asset value of one Acquiring Share, computed in
the manner and as of the time and date set forth in
paragraph 2.2. Such transactions shall take place at
the closing provided for in paragraph 3.1 (the
"Closing").
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1.2 The assets of the Acquired Fund to be acquired by the
Acquiring Fund shall consist of all cash, securities,
dividends and interest receivable, receivables for shares sold
and all other assets which are owned by the Acquired Fund on
the closing date provided in paragraph 3.1 (the "Closing
Date") and any deferred expenses, other than unamortized
organizational expenses, shown as an asset on the books of the
Acquired Fund on the Closing Date.
1.3 As provided in paragraph 3.4, as soon after the Closing Date
as is conveniently practicable (the "Liquidation Date"), the
Acquired Fund will liquidate and distribute pro rata to its
shareholders of record ("Acquired Fund Shareholders"),
determined as of the close of business on the Valuation Date
(as defined in paragraph 2.1), the Acquiring Shares received
by the Acquired Fund pursuant to paragraph 1.1. Such
liquidation and distribution will be accomplished by the
transfer of the Acquiring Shares then credited to the account
of the Acquired Fund on the books of the Acquiring Fund to
open accounts on the share records of Acquiring Fund in the
names of the Acquired Fund Shareholders and representing the
respective pro rata number of Acquiring Shares due such
shareholders. The Acquiring Fund shall not be obligated to
issue certificates representing Acquiring Shares in connection
with such exchange.
1.4 With respect to Acquiring Shares distributable pursuant to
paragraph 1.3 to an Acquired Fund Shareholder holding a
certificate or certificates for shares of the Acquired Fund,
if any, on the Valuation Date, the Acquiring Trust will not
permit such shareholder to receive Acquiring Share
certificates therefor, exchange such Acquiring Shares for
shares of other investment companies, effect an account
transfer of such Acquiring Shares, or pledge or redeem such
Acquiring Shares until the Acquiring Trust has been notified
by the Acquired Fund or its agent that such Shareholder has
surrendered all his or her outstanding certificates for
Acquired Fund shares or, in the event of lost certificates,
posted adequate bond.
1.5 [RESERVED]
1.6 As promptly as possible after the Closing Date, the Acquired
Fund shall be terminated pursuant to the provisions of the
laws of the Commonwealth of Massachusetts, and, after the
Closing Date, the Acquired Fund shall not conduct any business
except in connection with its liquidation.
2. VALUATION.
2.1 For the purpose of paragraph 1, the value of the Acquired
Fund's assets to be acquired by the Acquiring Fund hereunder
shall be the net asset value computed as of the close of
regular trading on the New York Stock Exchange on the business
day next preceding the Closing (such time and date being
herein called the "Valuation Date") using the valuation
procedures set forth in the Declaration of Trust of the
Acquiring Trust and the then current prospectus or statement
of additional information of the Acquiring Fund, after
deduction for the expenses of the reorganization contemplated
hereby to be paid by the Acquired Fund pursuant to paragraphs
1.5, and shall be certified by the Acquired Fund.
2.2 For the purpose of paragraph 2.1, the net asset value of an
Acquiring Share shall be the net asset value per share
computed as of the close of regular trading on the New York
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Stock Exchange on the Valuation Date, using the valuation
procedures set forth in the Declaration of Trust of the
Acquiring Trust and the then current prospectus or
prospectuses and the statement of additional information or
statements of additional information of the Acquiring Fund
(collectively, as from time to time amended and supplemented,
the "Acquiring Fund Prospectus").
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be on January 29, 2001, or on such
other date as the parties may agree in writing. The Closing
shall be held at 9:00 a.m. at the offices of Colonial
Management Associates, Inc., One Financial Center, Boston,
Massachusetts 02111, or at such other time and/or place as the
parties may agree.
3.2 The portfolio securities of the Acquired Fund shall be made
available by the Acquired Fund to The Chase Manhattan Bank, as
custodian for the Acquiring Fund (the "Custodian"), for
examination no later than five business days preceding the
Valuation Date. On the Closing Date, such portfolio securities
and all the Acquired Fund's cash shall be delivered by the
Acquired Fund to the Custodian for the account of the
Acquiring Fund, such portfolio securities to be duly endorsed
in proper form for transfer in such manner and condition as to
constitute good delivery thereof in accordance with the custom
of brokers or, in the case of portfolio securities held in the
U.S. Treasury Department's book-entry system or by the
Depository Trust Company, Participants Trust Company or other
third party depositories, by transfer to the account of the
Custodian in accordance with Rule 17f-4 or Rule 17f-5, as the
case may be, under the Investment Company Act of 1940 (the
"1940 Act") and accompanied by all necessary federal and state
stock transfer stamps or a check for the appropriate purchase
price thereof. The cash delivered shall be in the form of
currency or certified or official bank checks, payable to the
order of "The Chase Manhattan Bank, custodian for Acquiring
Fund."
3.3 In the event that on the Valuation Date (a) the New York Stock
Exchange shall be closed to trading or trading thereon shall
be restricted, or (b) trading or the reporting of trading on
said Exchange or elsewhere shall be disrupted so that accurate
appraisal of the value of the net assets of the Acquired Fund
or the Acquiring Fund is impracticable, the Closing Date shall
be postponed until the first business day after the day when
trading shall have been fully resumed and reporting shall have
been restored; provided that if trading shall not be fully
resumed and reporting restored within three business days of
the Valuation Date, this Agreement may be terminated by either
of the Trust or the Acquiring Trust upon the giving of written
notice to the other party.
3.4 At the Closing, the Acquired Fund or its transfer agent shall
deliver to the Acquiring Fund or its designated agent a list
of the names and addresses of the Acquired Fund Shareholders
and the number of outstanding shares of beneficial interest of
the Acquired Fund owned by each Acquired Fund Shareholder, all
as of the close of business on the Valuation Date, certified
by the Secretary or Assistant Secretary of the Trust. The
Acquiring Trust will provide to the Acquired Fund evidence
satisfactory to the Acquired Fund that the Acquiring Shares
issuable pursuant to paragraph 1.1 have been credited to the
Acquired Fund's account on the books of the Acquiring Fund. On
the Liquidation Date, the Acquiring Trust will provide to the
Acquired Fund evidence satisfactory to the Acquired Fund that
such Acquiring Shares have been credited pro rata to open
accounts in the names of the Acquired Fund shareholders as
provided in paragraph 1.3.
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3.5 At the Closing each party shall deliver to the other such
bills of sale, instruments of assumption of liabilities,
checks, assignments, stock certificates, receipts or other
documents as such other party or its counsel may reasonably
request in connection with the transfer of assets, assumption
of liabilities and liquidation contemplated by paragraph 1.
4. REPRESENTATIONS AND WARRANTIES.
4.1 The Trust, on behalf of the Acquired Fund, represents and
warrants the following to the Acquiring Trust and to the
Acquiring Fund as of the date hereof and agrees to confirm the
continuing accuracy and completeness in all material respects
of the following on the Closing Date:
(a) The Trust is a business trust duly organized, validly
existing and in good standing under the laws of the
Commonwealth of Massachusetts;
(b) The Trust is a duly registered investment company
classified as a management company of the open-end
type and its registration with the Securities and
Exchange Commission as an investment company under
the 1940 Act is in full force and effect, and the
Acquired Fund is a separate series thereof duly
designated in accordance with the applicable
provisions of the Declaration of Trust of the Trust
and the 1940 Act;
(c) The Trust is not in violation in any material respect
of any provision of its Declaration of Trust or
By-laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the
Trust is a party or by which the Acquired Fund is
bound, and the execution, delivery and performance of
this Agreement will not result in any such violation;
(d) The Trust has no material contracts or other
commitments (other than this Agreement and such other
contracts as may be entered into in the ordinary
course of its business) which if terminated may
result in material liability to the Acquired Fund or
under which (whether or not terminated) any material
payments for periods subsequent to the Closing Date
will be due from the Acquired Fund;
(e) No litigation or administrative proceeding or
investigation of or before any court or governmental
body is presently pending or threatened against the
Acquired Fund, any of its properties or assets, or
any person whom the Acquired Fund may be obligated to
indemnify in connection with such litigation,
proceeding or investigation. The Acquired Fund knows
of no facts which might form the basis for the
institution of such proceedings, and is not a party
to or subject to the provisions of any order, decree
or judgment of any court or governmental body which
materially and adversely affects its business or its
ability to consummate the transactions contemplated
hereby;
(f) The statement of assets and liabilities, the
statement of operations, the statement of changes in
net assets, and the schedule of investments as at and
for the two years ended [___________________, ____]
of the Acquired Fund, audited by
PricewaterhouseCoopers LLP [and the statement of
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<PAGE>
assets, the statement of changes in net assets and
the schedule of investments for the six months ended
___________________, 2000,], copies of which have
been furnished to the Acquiring Fund, fairly reflect
the financial condition and results of operations of
the Acquired Fund as of such dates and for the
periods then ended in accordance with generally
accepted accounting principles consistently applied,
and the Acquired Fund has no known liabilities of a
material amount, contingent or otherwise, other than
those shown on the statements of assets referred to
above or those incurred in the ordinary course of its
business since __________________, 2000;
(g) Since __________________, 2000, there has not been
any material adverse change in the Acquired Fund's
financial condition, assets, liabilities or business
(other than changes occurring in the ordinary course
of business), or any incurrence by the Acquired Fund
of indebtedness, except as disclosed in writing to
the Acquiring Fund. For the purposes of this
subparagraph (g), distributions of net investment
income and net realized capital gains, changes in
portfolio securities, changes in the market value of
portfolio securities or net redemptions shall be
deemed to be in the ordinary course of business;
(h) By the Closing Date, all federal and other tax
returns and reports of the Acquired Fund required by
law to have been filed by such date (giving effect to
extensions) shall have been filed, and all federal
and other taxes shown to be due on said returns and
reports shall have been paid so far as due, or
provision shall have been made for the payment
thereof, and to the best of the Acquired Fund's
knowledge no such return is currently under audit and
no assessment has been asserted with respect to such
returns;
(i) For all taxable years and all applicable quarters of
such years from the date of its inception, the
Acquired Fund has met the requirements of subchapter
M of the Code, for treatment as a "regulated
investment company" within the meaning of Section 851
of the Code. Neither the Trust nor the Acquired Fund
has at any time since its inception been liable for
nor is now liable for any material excise tax
pursuant to Section 852 or 4982 of the Code. The
Acquired Fund has duly filed all federal, state,
local and foreign tax returns which are required to
have been filed, and all taxes of the Acquired Fund
which are due and payable have been paid except for
amounts that alone or in the aggregate would not
reasonably be expected to have a material adverse
effect. The Acquired Fund is in compliance in all
material respects with applicable regulations of the
Internal Revenue Service pertaining to the reporting
of dividends and other distributions on and
redemptions of its capital stock and to withholding
in respect of dividends and other distributions to
shareholders, and is not liable for any material
penalties which could be imposed thereunder;
(j) The authorized capital of the Trust consists of an
unlimited number of shares of beneficial interest
with no par value, of multiple series and classes.
All issued and outstanding shares of the Acquired
Fund are, and at the Closing Date will be, duly and
validly issued and outstanding, fully paid and
(except as set forth in the Acquired Fund's then
current prospectus or prospectuses and statement of
additional information or statements of additional
information (collectively, as amended or supplemented
from time to time, the "Acquired Fund
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<PAGE>
Prospectus")),non-assessable by the Acquired Fund and
will have been issued in compliance with all
applicable registration or qualification requirements
of federal and state securities laws. No options,
warrants or other rights to subscribe for or
purchase, or securities convertible into, any shares
of beneficial interest of the Acquired Fund are
outstanding and none will be outstanding on the
Closing Date (except that Class B shares of the
Acquired Fund convert automatically into Class A
shares, as set forth in the Acquired Fund
Prospectus);
(k) The Acquired Fund's investment operations from
inception to the date hereof have been in compliance
in all material respects with the investment policies
and investment restrictions set forth in its
prospectus and statement of additional information as
in effect from time to time, except as previously
disclosed in writing to the Acquiring Fund;
(l) The execution, delivery and performance of this
Agreement has been duly authorized by the Trustees of
the Trust, and, upon approval thereof by the required
majority of the shareholders of the Acquired Fund,
this Agreement will constitute the valid and binding
obligation of the Acquired Fund enforceable in
accordance with its terms except as the same may be
limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of
creditors' rights generally and other equitable
principles;
(m) The Acquiring Shares to be issued to the Acquired
Fund pursuant to paragraph 1 will not be acquired for
the purpose of making any distribution thereof other
than to the Acquired Fund Shareholders as provided in
paragraph 1.3; and
(n) The information provided by the Acquired Fund for use
in the Registration Statement and Proxy Statement
referred to in paragraph 5.3 shall be accurate and
complete in all material respects and shall comply
with federal securities and other laws and
regulations applicable thereto.
(o) No consent, approval, authorization or order of any
court or governmental authority is required for the
consummation by the Acquired Fund of the transactions
contemplated by this Agreement, except such as may be
required under the Securities Act of 1933, as amended
(the "1933 Act"), the Securities Exchange Act of
1934, as amended (the "1934 Act"), the 1940 Act and
state insurance, securities or blue sky laws (which
term as used herein shall include the laws of the
District of Columbia and of Puerto Rico).
(p) At the Closing Date, the Trust, on behalf of the
Acquired Fund will have good and marketable title to
its assets to be transferred to the Acquiring Fund
pursuant to paragraph 1.1 and will have full right,
power and authority to sell, assign, transfer and
deliver the Investments (as defined below) and any
other assets and liabilities of the Acquired Fund to
be transferred to the Acquiring Fund pursuant to this
Agreement. At the Closing Date, subject only to the
delivery of the Investments and any such other assets
and liabilities and payment therefor as contemplated
by this Agreement, the Acquiring Fund will acquire
good and marketable title thereto and will acquire
the Investments and any such other assets and
liabilities subject to no encumbrances, liens or
security interests whatsoever and without any
restrictions upon the transfer thereof, except as
previously disclosed to the
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Acquiring Fund. As used in this Agreement, the term
"Investments" shall mean the Acquired Fund's
investments shown on the schedule of its investments
as of _______, 2000 referred to in Section 4.1(f)
hereof, as supplemented with such changes in the
portfolio as the Acquired Fund shall make, and
changes resulting from stock dividends, stock
split-ups, mergers and similar corporate actions
through the Closing Date.
(q) At the Closing Date, the Acquired Fund will have sold
such of its assets, if any, as are necessary to
assure that, after giving effect to the acquisition
of the assets of the Acquired Fund pursuant to this
Agreement, the Acquiring Fund will remain a
"diversified company" within the meaning of Section
5(b)(1) of the 1940 Act and in compliance with such
other mandatory investment restrictions as are set
forth in the Acquiring Fund Prospectus, as amended
through the Closing Date.
(r) No registration of any of the Investments would be
required if they were, as of the time of such
transfer, the subject of a public distribution by
either of the Acquiring Fund or the Acquired Fund,
except as previously disclosed by the Acquired Fund
to the Acquiring Fund.
4.2 The Acquiring Trust, on behalf of the Acquiring Fund,
represents and warrants the following to the Trust and to the
Acquired Fund as of the date hereof and agrees to confirm the
continuing accuracy and completeness in all material respects
of the following on the Closing Date:
(a) The Acquiring Trust is a business trust duly
organized, validly existing and in good standing
under the laws of The Commonwealth of Massachusetts;
(b) The Acquiring Trust is a duly registered investment
company classified as a management company of the
open-end type and its registration with the
Securities and Exchange Commission as an investment
company under the 1940 Act is in full force and
effect, and the Acquiring Fund is a separate series
thereof duly designated in accordance with the
applicable provisions of the Declaration of Trust of
the Acquiring Trust and the 1940 Act;
(c) The Acquiring Fund Prospectus conforms in all
material respects to the applicable requirements of
the 1933 Act and the rules and regulations of the
Securities and Exchange Commission thereunder and
does not include any untrue statement of a material
fact or omit to state any material fact required to
be stated therein or necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading, and there are no
material contracts to which the Acquiring Fund is a
party that are not referred to in such Prospectus or
in the registration statement of which it is a part;
(d) At the Closing Date, the Acquiring Fund will have
good and marketable title to its assets;
(e) The Acquiring Trust is not in violation in any
material respect of any provisions of its Declaration
of Trust or By-laws or of any agreement, indenture,
instrument, contract, lease or other undertaking to
which the Acquiring Trust is a party or by
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which the Acquiring Fund is bound, and the execution,
delivery and performance of this Agreement will not
result in any such violation;
(f) No litigation or administrative proceeding or
investigation of or before any court or governmental
body is presently pending or threatened against the
Acquiring Fund or any of its properties or assets.
The Acquiring Fund knows of no facts which might form
the basis for the institution of such proceedings,
and is not a party to or subject to the provisions of
any order, decree or judgment of any court or
governmental body which materially and adversely
affects its business or its ability to consummate the
transactions contemplated hereby;
(g) The statement of assets, the statement of operations,
the statement of changes in assets and the schedule
of investments as at and for the two years ended June
30, 2000 of the Acquiring Fund, audited by
PricewaterhouseCoopers LLP, copies of which have been
furnished to the Acquired Fund, fairly reflect the
financial condition and results of operations of the
Acquiring Fund as of such dates and the results of
its operations for the periods then ended in
accordance with generally accepted accounting
principles consistently applied, and the Acquiring
Fund has no known liabilities of a material amount,
contingent or otherwise, other than those shown on
the statements of assets referred to above or those
incurred in the ordinary course of its business since
January 30, 2000;
(h) Since January 30, 2000, there has not been any
material adverse change in the Acquiring Fund's
financial condition, assets, liabilities or business
(other than changes occurring in the ordinary course
of business), or any incurrence by the Acquiring Fund
of indebtedness. For the purposes of this
subparagraph (h), changes in portfolio securities,
changes in the market value of portfolio securities
or net redemptions shall be deemed to be in the
ordinary course of business;
(i) By the Closing Date, all federal and other tax
returns and reports of the Acquiring Fund required by
law to have been filed by such date (giving effect to
extensions) shall have been filed, and all federal
and other taxes shown to be due on said returns and
reports shall have been paid so far as due, or
provision shall have been made for the payment
thereof, and to the best of the Acquiring Fund's
knowledge no such return is currently under audit and
no assessment has been asserted with respect to such
returns;
(j) For each fiscal year of its operation, the Acquiring
Fund has met the requirements of Subchapter M of the
Code for qualification as a regulated investment
company;
(k) The authorized capital of the Acquiring Trust
consists of an unlimited number of shares of
beneficial interest, no par value, of such number of
different series as the Board of Trustees may
authorize from time to time. The outstanding shares
of beneficial interest in the Acquiring Fund are, and
at the Closing Date will be, divided into Class A
shares, Class B shares, Class C shares, Class Z
shares and Class S shares each having the
characteristics described in the Acquiring Fund
Prospectus. All issued and outstanding shares of the
Acquiring Fund are, and at the Closing Date will be,
duly and validly issued and outstanding, fully paid
and non-assessable (except as set forth in the
Acquiring Fund Prospectus) by the Acquiring Trust,
and will have been issued in compliance with all
applicable
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registration or qualification requirements of federal
and state securities laws. Except for Class B shares
which convert to Class A shares after the expiration
of a period of time, no options, warrants or other
rights to subscribe for or purchase, or securities
convertible into, any shares of beneficial interest
in the Acquiring Fund of any class are outstanding
and none will be outstanding on the Closing Date;
(l) The Acquiring Fund's investment operations from
inception to the date hereof have been in compliance
in all material respects with the investment policies
and investment restrictions set forth in its
prospectus and statement of additional information as
in effect from time to time;
(m) The execution, delivery and performance of this
Agreement have been duly authorized by all necessary
action on the part of the Acquiring Trust, and this
Agreement constitutes the valid and binding
obligation of the Acquiring Trust and the Acquiring
Fund enforceable in accordance with its terms, except
as the same may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally and other
equitable principles;
(n) The Acquiring Shares to be issued and delivered to
the Acquired Fund pursuant to the terms of this
Agreement will at the Closing Date have been duly
authorized and, when so issued and delivered, will be
duly and validly issued [Class A shares, Class B
shares, Class C shares, Class Z shares and Class S
shares] of beneficial interest in the Acquiring Fund,
and will be fully paid and non-assessable (except as
set forth in the Acquiring Fund Prospectus) by the
Acquiring Trust, and no shareholder of the Acquiring
Trust will have any preemptive right of subscription
or purchase in respect thereof; and
(o) The information to be furnished by the Acquiring Fund
for use in the Registration Statement and Proxy
Statement referred to in paragraph 5.3 shall be
accurate and complete in all material respects and
shall comply with federal securities and other laws
and regulations applicable thereto.
(p) No consent, approval, authorization or order of any
court or governmental authority is required for the
consummation by the Acquiring Fund of the
transactions contemplated by this Agreement, except
such as may be required under 1933 Act, the 1934 Act,
the 1940 Act and state insurance, securities or blue
sky laws (which term as used herein shall include the
laws of the District of Columbia and of Puerto Rico).
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5. COVENANTS OF THE ACQUIRED FUND AND THE ACQUIRING FUND.
The Acquiring Trust, on behalf of the Acquiring Fund, and the Trust, on
behalf of the Acquired Fund, each hereby covenants and agrees with the other as
follows:
5.1 The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and
the Closing Date, it being understood that such ordinary
course of business will include regular and customary periodic
dividends and distributions.
5.2 The Acquired Fund will call a meeting of its shareholders to
be held prior to the Closing Date to consider and act upon
this Agreement and take all other reasonable action necessary
to obtain the required shareholder approval of the
transactions contemplated hereby.
5.3 In connection with the Acquired Fund shareholders' meeting
referred to in paragraph 5.2, the Acquired Fund will prepare a
Proxy Statement for such meeting, to be included in a
Registration Statement on Form N-14 (the "Registration
Statement") which the Acquiring Trust will prepare and file
for the registration under the 1933 Act of the Acquiring
Shares to be distributed to the Acquired Fund shareholders
pursuant hereto, all in compliance with the applicable
requirements of the 1933 Act, the 1934 Act, and the 1940 Act.
5.4 The information to be furnished by the Acquired Fund for use
in the Registration Statement and the information to be
furnished by the Acquiring Fund for use in the Proxy
Statement, each as referred to in paragraph 5.3, shall be
accurate and complete in all material respects and shall
comply with federal securities and other laws and regulations
thereunder applicable thereto.
5.5 The Acquiring Fund will advise the Acquired Fund promptly if
at any time prior to the Closing Date the assets of the
Acquired Fund include any securities which the Acquiring Fund
is not permitted to acquire.
5.6 Subject to the provisions of this Agreement, the Acquired Fund
and the Acquiring Fund will each take, or cause to be taken,
all action, and do or cause to be done, all things reasonably
necessary, proper or advisable to cause the conditions to the
other party's obligations to consummate the transactions
contemplated hereby to be met or fulfilled and otherwise to
consummate and make effective such transactions.
5.7 The Acquiring Fund will use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the
1940 Act and such of the state securities or "Blue Sky" laws
as it may deem appropriate in order to continue its operations
after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the
transactions provided for herein shall be subject, at its
election, to the performance by the Acquiring Trust and the
A-10
<PAGE>
Acquiring Fund of all the obligations to be performed by them
hereunder on or before the Closing Date and, in addition
thereto, to the following further conditions:
6.1 The Acquiring Trust, on behalf of the Acquiring Fund, shall
have delivered to the Trust a certificate executed in its name
by its President or Vice President and its Treasurer or
Assistant Treasurer, in form satisfactory to the Trust and
dated as of the Closing Date, to the effect that the
representations and warranties of the Acquiring Trust on
behalf of the Acquiring Fund made in this Agreement are true
and correct at and as of the Closing Date, except as they may
be affected by the transactions contemplated by this
Agreement, and that the Acquiring Trust and the Acquiring Fund
have complied with all the covenants and agreements and
satisfied all of the conditions on their parts to be performed
or satisfied under this Agreement at or prior to the Closing
Date.
6.2 The Trust shall have received a favorable opinion from Ropes &
Gray, counsel to the Acquiring Trust for the transactions
contemplated hereby, dated the Closing Date and, in a form
satisfactory to the Trust, to the following effect:
(a) The Acquiring Trust is a business trust duly
organized and validly existing under the laws of The
Commonwealth of Massachusetts and has power to own
all of its properties and assets and to carry on its
business as presently conducted, and the Acquiring
Fund is a separate series thereof duly constituted in
accordance with the applicable provisions of the 1940
Act and the Declaration of Trust and By-laws of the
Acquiring Trust; (b) this Agreement has been duly
authorized, executed and delivered on behalf of the
Acquiring Fund and, assuming the Prospectus and
Registration Statement referred to in paragraph 5.3
complies with applicable federal securities laws and
assuming the due authorization, execution and
delivery of this Agreement by the Trust on behalf of
the Acquired Fund, is the valid and binding
obligation of the Acquiring Fund enforceable against
the Acquiring Fund in accordance with its terms,
except as the same may be limited by bankruptcy,
insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights
generally and other equitable principles; (c) the
Acquiring Fund has the power to assume the
liabilities to be assumed by it hereunder and upon
consummation of the transactions contemplated hereby
the Acquiring Fund will have duly assumed such
liabilities; (d) the Acquiring Shares to be issued
for transfer to the shareholders of the Acquired Fund
as provided by this Agreement are duly authorized and
upon such transfer and delivery will be validly
issued and outstanding and fully paid and
nonassessable [Class A shares, Class B shares, Class
C shares, Class Z shares and Class S shares] of
beneficial interest in the Acquiring Fund, and no
shareholder of the Acquiring Fund has any preemptive
right of subscription or purchase in respect thereof;
(e) the execution and delivery of this Agreement did
not, and the performance by the Acquiring Trust and
the Acquiring Fund of their respective obligations
hereunder will not, violate the Acquiring Trust's
Declaration of Trust or By-laws, or any provision of
any agreement known to such counsel to which the
Acquiring Trust or the Acquiring Fund is a party or
by which either of them is bound or, to the knowledge
of such counsel, result in the acceleration of any
obligation or the imposition of any penalty under any
agreement, judgment, or decree to which the Acquiring
Trust or the Acquiring Fund is a party or by which
either of them is bound; (f) to the knowledge of such
counsel, no consent, approval, authorization or order
of any court or governmental authority is required
for the consummation by the Acquiring
A-11
<PAGE>
Trust or the Acquiring Fund of the transactions
contemplated by this Agreement except such as may be
required under state securities or "Blue Sky" laws or
such as have been obtained; (g) except as previously
disclosed, pursuant to section 4.2(f) above, such
counsel does not know of any legal or governmental
proceedings relating to the Acquiring Trust or the
Acquiring Fund existing on or before the date of
mailing of the Prospectus referred to in paragraph
5.3 or the Closing Date required to be described in
the Registration Statement referred to in paragraph
5.3 which are not described as required; (h) the
Acquiring Trust is registered with the Securities and
Exchange Commission as an investment company under
the 1940 Act; and (i) to the best knowledge of such
counsel, no litigation or administrative proceeding
or investigation of or before any court or
governmental body is presently pending or threatened
as to the Acquiring Trust or the Acquiring Fund or
any of their properties or assets and neither the
Acquiring Trust nor the Acquiring Fund is a party to
or subject to the provisions of any order, decree or
judgment of any court or governmental body, which
materially and adversely affects its business.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the
transactions provided for herein shall be subject, at its
election, to the performance by the Acquired Fund of all the
obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, to the following
further conditions:
7.1 The Trust, on behalf of the Acquired Fund, shall have
delivered to the Acquiring Trust a certificate executed in its
name by its President or Vice President and its Treasurer or
Assistant Treasurer, in form and substance satisfactory to the
Acquiring Trust and dated the Closing Date, to the effect that
the representations and warranties of the Acquired Fund made
in this Agreement are true and correct at and as of the
Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and that the
Trust and the Acquired Fund have complied with all the
covenants and agreements and satisfied all of the conditions
on its part to be performed or satisfied under this Agreement
at or prior to the Closing Date;
7.2 The Acquiring Trust shall have received a favorable opinion
from [Ropes & Gray/ Bell, Boyd & Lloyd LLC/Bingham Dana LLP],
counsel to the Trust, dated the Closing Date and in a form
satisfactory to the Acquiring Trust, to the following effect:
(a) The Trust is a business trust duly organized and
validly existing under the laws of the Commonwealth
of Massachusetts and has corporate power to own all
of its properties and assets and to carry on its
business as presently conducted, and the Acquired
Fund is a separate series thereof duly constituted in
accordance with the applicable provisions of the 1940
Act and the Declaration of Trust of the Trust; (b)
this Agreement has been duly authorized, executed and
delivered on behalf of the Acquired Fund and,
assuming the Proxy Statement referred to in paragraph
5.3 complies with applicable federal securities laws
and assuming the due authorization, execution and
delivery of this Agreement by the Acquiring Trust on
behalf of the Acquiring Fund, is the valid and
binding obligation of the Acquired Fund enforceable
against the Acquired Fund in accordance with its
terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other
A-12
<PAGE>
similar laws affecting the enforcement of creditors'
rights generally and other equitable principles; (c)
the Acquired Fund has the power to sell, assign,
transfer and deliver the assets to be transferred by
it hereunder, and, upon consummation of the
transactions contemplated hereby, the Acquired Fund
will have duly transferred such assets to the
Acquiring Fund; (d) the execution and delivery of
this Agreement did not, and the performance by the
Trust and the Acquired Fund of their respective
obligations hereunder will not, violate the Trust's
Declaration of Trust or By-laws, or any provision of
any agreement known to such counsel to which the
Trust or the Acquired Fund is a party or by which
either of them is bound or, to the knowledge of such
counsel, result in the acceleration of any obligation
or the imposition of any penalty under any agreement,
judgment, or decree to which the Trust or the
Acquired Fund is a party or by which either of them
is bound; (e) to the knowledge of such counsel, no
consent, approval, authorization or order of any
court or governmental authority is required for the
consummation by the Trust or the Acquired Fund of the
transactions contemplated by this Agreement, except
such as may be required under state securities or
"Blue Sky" laws or such as have been obtained; (f)
such counsel does not know of any legal or
governmental proceedings relating to the Trust or the
Acquired Fund existing on or before the date of
mailing of the Prospectus referred to in paragraph
5.3 or the Closing Date required to be described in
the Registration Statement referred to in paragraph
5.3 which are not described as required; (g) the
Trust is registered with the Securities and Exchange
Commission as an investment company under the 1940
Act; and (h) to the best knowledge of such counsel,
no litigation or administrative proceeding or
investigation of or before any court or governmental
body is presently pending or threatened as to the
Trust or the Acquired Fund or any of its properties
or assets and neither the Trust nor the Acquired Fund
is a party to or subject to the provisions of any
order, decree or judgment of any court or
governmental body, which materially and adversely
affects its business.
7.3 The Acquired Fund shall have furnished to the Acquiring Fund
tax returns, signed by a partner of PricewaterhouseCoopers LLP
for the fiscal year ended _______________, 2000 and signed pro
forma tax returns for the period from _______ 1, 2000 to the
Closing Date (which pro forma tax returns shall be furnished
promptly after the Closing Date).
7.4 Prior to the Closing Date, the Acquired Fund shall have
declared a dividend or dividends which, together with all
previous dividends, shall have the effect of distributing all
of the Acquired Fund's investment company taxable income for
its taxable years ending on or after ________, 2000 and on or
prior to the Closing Date (computed without regard to any
deduction for dividends paid), and all of its net capital
gains realized in each of its taxable years ending on or after
_________, 2000 and on or prior to the Closing Date.
7.5 The Acquired Fund shall have furnished to the Acquiring Fund a
certificate, signed by the President (or any Vice President)
and the Treasurer of the Trust, as to the adjusted tax basis
in the hands of the Acquired Fund of the securities delivered
to the Acquiring Fund pursuant to this Agreement.
A-13
<PAGE>
7.6 The custodian of the Acquired Fund shall have delivered to the
Acquiring Fund a certificate identifying all of the assets of
the Acquired Fund held by such custodian as of the Valuation
Date.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE ACQUIRING
FUND AND THE ACQUIRED FUND.
The respective obligations of the Trust and the Acquiring Trust
hereunder are each subject to the further conditions that on or before the
Closing Date:
8.1 This Agreement and the transactions contemplated herein shall
have been approved by the vote of the required majority of the
holders of the outstanding shares of the Acquired Fund of
record on the record date for the meeting of its shareholders
referred to in paragraph 5.2;
8.2 On the Closing Date no action, suit or other preceding shall
be pending before any court or governmental agency in which it
is sought to restrain or prohibit, or obtain damages or other
relief in connection with, this Agreement or the transactions
contemplated hereby;
8.3 All consents of other parties and all other consents, orders
and permits of federal, state and local regulatory authorities
(including those of the Securities and Exchange Commission and
of state Blue Sky and securities authorities) deemed necessary
by the Trust or the Acquiring Trust to permit consummation, in
all material respects, of the transactions contemplated hereby
shall have been obtained, except where failure to obtain any
such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of the
Acquiring Fund or the Acquired Fund.
8.4 The Registration Statement referred to in paragraph 5.3 shall
have become effective under the 1933 Act and no stop order
suspending the effectiveness thereof shall have been issued
and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the
1933 Act;
8.5 The Trust shall have received a favorable opinion of Ropes &
Gray satisfactory to the Trust and the Acquiring Trust shall
have received a favorable opinion of [Ropes & Gray/Bell, Boyd
& Lloyd LLC] satisfactory to the Acquiring Trust, each
substantially to the effect that, for federal income tax
purposes:
(a) The acquisition by the Acquiring Fund of the assets
of the Acquired Fund in exchange for the Acquiring
Fund's assumption of the Obligations of the Acquired
Fund and issuance of the Acquiring Shares, followed
by the distribution by the Acquired Fund of such the
Acquiring Shares to the shareholders of the Acquired
Fund in exchange for their shares of the Acquired
Fund, all as provided in paragraph 1 hereof, will
constitute a reorganization within the meaning of
Section 368(a) of the Code, and the Acquired Fund and
the Acquiring Fund will each be "a party to a
reorganization" within the meaning of Section 368(b)
of the Code;
(b) No gain or loss will be recognized to the Acquired
Fund (i) upon the transfer of its assets to the
Acquiring Fund in exchange for the Acquiring Shares
or (ii) upon the
A-14
<PAGE>
distribution of the Acquiring Shares to the
shareholders of the Acquired Fund as contemplated in
paragraph 1 hereof;
(c) No gain or loss will be recognized to the Acquiring
Fund upon the receipt of the assets of the Acquired
Fund in exchange for the assumption of the
Obligations and issuance of the Acquiring Shares as
contemplated in paragraph 1 hereof;
(d) The tax basis of the assets of the Acquired Fund
acquired by the Acquiring Fund will be the same as
the basis of those assets in the hands of the
Acquired Fund immediately prior to the transfer, and
the holding period of the assets of the Acquired Fund
in the hands of the Acquiring Fund will include the
period during which those assets were held by the
Acquired Fund;
(e) The shareholders of the Acquired Fund will recognize
no gain or loss upon the exchange of their shares of
the Acquired Fund for the Acquiring Shares;
(f) The tax basis of the Acquiring Shares to be received
by each shareholder of the Acquired Fund will be the
same in the aggregate as the aggregate tax basis of
the shares of the Acquired Fund surrendered in
exchange therefor;
(g) The holding period of the Acquiring Shares to be
received by each shareholder of the Acquired Fund
will include the period during which the shares of
the Acquired Fund surrendered in exchange therefor
were held by such shareholder, provided such shares
of the Acquired Fund were held as a capital asset on
the date of the exchange.
(h) Acquiring Fund will succeed to and take into account
the items of Acquired Fund described in Section
381(c) of the Code, subject to the conditions and
limitations specified in Sections 381, 382, 383 and
384 of the Code and the regulations thereunder.
8.6 At any time prior to the Closing, any of the foregoing
conditions of this Agreement may be waived jointly by the
Board of Trustees of the Trust and the Board of Trustees of
the Acquiring Trust if, in their judgment, such waiver will
not have a material adverse effect on the interests of the
shareholders of the Acquired Fund and the Acquiring Fund.
9. BROKERAGE FEES AND EXPENSES.
9.1 The Trust, on behalf of the Acquired Fund, and the Acquiring
Trust, on behalf of the Acquiring Fund, each represents and
warrants to the other that there are no brokers or finders
entitled to receive any payments in connection with the
transactions provided for herein.
9.2 The Acquiring Trust, on behalf of the Acquiring Fund, shall
pay all fees paid to governmental authorities for the
registration or qualification of the Acquiring Shares. The
other expenses of the transactions contemplated by this
Agreement shall be borne by the following parties in the
percentages indicated: (a) the Trust, on behalf of the
Acquired Fund, __%, (b) the Acquiring Trust, on behalf of the
Acquiring Fund, __%, and (c) Liberty Financial Companies, Inc.
__%.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES.
A-15
<PAGE>
10.1 The Trust on behalf of the Acquired Fund and the Acquiring
Trust on behalf of the Acquiring Fund agree that neither party
has made any representation, warranty or covenant not set
forth herein and that this Agreement constitutes the entire
agreement between the parties.
10.2 The representations, warranties and covenants contained in
this Agreement or in any document delivered pursuant hereto or
in connection herewith shall not survive the consummation of
the transactions contemplated hereunder except paragraphs 1.1,
1.3, 1.5, 1.6, 5.4, 9, 10, 13 and 14.
11. TERMINATION.
11.1 This Agreement may be terminated by the mutual agreement of
the Acquiring Trust and the Trust. In addition, either the
Acquiring Trust or the Trust may at its option terminate this
Agreement at or prior to the Closing Date because:
(a) Of a material breach by the other of any
representation, warranty, covenant or agreement
contained herein to be performed by the other party
at or prior to the Closing Date; or
(b) A condition herein expressed to be precedent to the
obligations of the terminating party has not been met
and it reasonably appears that it will not or cannot
be met.
(c) If the transactions contemplated by this Agreement
have not been substantially completed by May 31, 2001
this Agreement shall automatically terminate on that
date unless a later date is agreed to by both the
Trust and the Acquiring Trust.
11.2 If for any reason the transactions contemplated by this
Agreement are not consummated, no party shall be liable to any
other party for any damages resulting therefrom, including
without limitation consequential damages.
12. AMENDMENTS.
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Trust on behalf of the Acquired Fund and the Acquiring Trust on behalf of the
Acquiring Fund; provided, however, that following the shareholders' meeting
called by the Acquired Fund pursuant to paragraph 5.2 no such amendment may have
the effect of changing the provisions for determining the number of the
Acquiring Shares to be issued to shareholders of the Acquired Fund under this
Agreement to the detriment of such shareholders without their further approval.
13. NOTICES.
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to: Liberty Funds Trust VI, One
Financial Center, Boston, MA 02111 attention Secretary or to [Name and Address
of Trust] attention Secretary.
A-16
<PAGE>
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
NON-RECOURSE.
14.1 The article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in
accordance with the domestic substantive laws of The
Commonwealth of Massachusetts, without giving effect to any
choice or conflicts of law rule or provision that would result
in the application of the domestic substantive laws of any
other jurisdiction.
14.4 This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns,
but no assignment or transfer hereof or of any rights or
obligations hereunder shall be made by any party without the
written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties
hereto and their respective successors and assigns, any rights
or remedies under or by reason of this Agreement.
14.5 A copy of the Declaration of Trust of the Trust and the
Declaration of Trust of the Acquiring Trust are each on file
with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that no trustee,
officer, agent or employee of either the Trust or the
Acquiring Trust shall have any personal liability under this
Agreement, and that this Agreement is binding only upon the
assets and properties of the Acquired Fund and the Acquiring
Fund.
A-17
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as a sealed instrument by its President or Vice
President and its corporate seal to be affixed thereto and attested by its
Secretary or Assistant Secretary.
[ACQUIRED FUND TRUST],
on behalf of __________________ Fund
By:
--------------------------------------
Name:
------------------------------------
Title:
------------------------------------
ATTEST:
Name:
--------------------------------
Title:
--------------------------------
LIBERTY FUNDS TRUST VI,
on behalf of Liberty Growth & Income Fund
By:
--------------------------------------
Name:
------------------------------------
Title:
------------------------------------
ATTEST:
Name:
--------------------------------
Title:
--------------------------------
Solely for purposes of Section 9.2
of the Agreement:
LIBERTY FINANCIAL COMPANIES, INC.
By:
------------------------------------
Name:
---------------------------------
Title:
--------------------------------
ATTEST:
Name:
------------------------------
Title:
-----------------------------
A-18
<PAGE>
APPENDIX B
FUND INFORMATION
SHARES OUTSTANDING AND ENTITLED TO VOTE OF THE OPPORTUNITIES FUND AND THE STEIN
ROE TRUST, THE VALUE FUND AND TRUST VI, AND THE ALL-STAR FUND, AND SHARES
OUTSTANDING OF THE GROWTH & INCOME FUND
For each class of each Acquired Fund's shares and each Trust's shares
entitled to vote at the Meetings, and for each class of the Growth & Income
Fund's shares, the number of shares outstanding as of September 29, 2000 was as
follows:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
FUND OR TRUST CLASS NUMBER OF SHARES OUTSTANDING AND
ENTITLED TO VOTE
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Opportunities Fund A 14,114
------------------------------------------------------------------------------------------------------------
B 64,928
------------------------------------------------------------------------------------------------------------
C 3,876
------------------------------------------------------------------------------------------------------------
S 11,075,265
------------------------------------------------------------------------------------------------------------
Z 38
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Stein Roe Trust 130,357,064
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Value Fund A 912,113
------------------------------------------------------------------------------------------------------------
B 1,702,865
------------------------------------------------------------------------------------------------------------
C 176,789
------------------------------------------------------------------------------------------------------------
Z 1,190,367
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Trust VI 72,651,978
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
All-Star Fund A 375,651
------------------------------------------------------------------------------------------------------------
B 1,499,158
------------------------------------------------------------------------------------------------------------
C 390,487
------------------------------------------------------------------------------------------------------------
Z 199,907
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Trust IX 2,465,202
------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------
Growth & Income Fund A 15,676,399
------------------------------------------------------------------------------------------------------------
B 38,455,710
------------------------------------------------------------------------------------------------------------
C 1,403,148
------------------------------------------------------------------------------------------------------------
Z 52
------------------------------------------------------------------------------------------------------------
</TABLE>
OWNERSHIP OF SHARES
As of September 29, 2000, each Trust believes that the Trustees and
officers of the respective Trusts, as a group, owned less than one percent of
each class of shares of each Fund and of each Trust as a whole. As of September
29, 2000, the following shareholders of record owned 5% or more of the
outstanding shares of the noted class of shares of the noted Fund:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------
NAME AND ADDRESS OF NUMBER OF OUTSTANDING PERCENTAGE OF OUTSTANDING
FUND AND CLASS SHAREHOLDER SHARES OF CLASS OWNED SHARES OF CLASS OWNED
-----------------------------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
B-1
<PAGE>
<TABLE>
<S> <C> <C> <C>
OPPORTUNITIES FUND
CLASS A
Merrill Lynch Pierce Fenner & Smith 1,969.582 13.95%
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
Ricky E. Theobold TOD 2,581.844 18.29%
Jennifer L. Theobold
Subject to STA TOD Rules
4141 Sweeney Lane
Hillsboro, OH 45133
Investors Bank & Trust Co. Custodian 940.557 6.66%
Thomas Hunt Terry III IRA
153 Red Oak
Seguin, TX 78155-7411
Leonard J. Rickelman 810.458 5.74%
Bernice C. Rickelman
Leonard & Bernice Rickleman Rev Trust
U/A 3/19/1993
1365 250th Avenue
West Point, IA 52656-9218
Virginia M. Ladd 1,194.659 8.46%
4036 Baronne Way
Memphis, TN 38117-2908
CLASS B
Merrill Lynch Pierce Fenner & Smith 5,354.224 8.25%
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
AG Edwards & Sons Inc. Custodian 4,208.596 6.48%
P.O. Box 360
West Point, NY 10997
CLASS C
Ann M. Cochran 884.630 22.82%
P.O. Box 666
Fillmore, CA 93016-0666
Raymond James & Assoc., Inc. CSDN 366.647 9.45%
6145 Cumberland Ct.
Mentor, OH 44060
</TABLE>
B-2
<PAGE>
<TABLE>
<S> <C> <C> <C>
CLASS Z
Colonial Management Associates, Inc. 37.546 100.00%
Attn: Finance Department
One Financial Center
Boston, MA 02111-2621
VALUE FUND
CLASS A
Keyport Life Insurance Company 353,105.445 38.71%
c/o Chris Westfall
125 High Street
Boston, MA 02111
Merrill Lynch Pierce Fenner & Smith 66,689.040 7.31%
4800 Deer Lake Drive E. 3rd Floor
Jacksonville, FL 32246
CLASS B
Merrill Lynch Pierce Fenner & Smith 127,630.269 7.50%
4800 Deer Lake Drive E. 3rd Floor
Jacksonville, FL 32246
CLASS C
Keyport Life Insurance Company 34,228.114 19.36%
c/o Chris Westfall
125 High Street
Boston, MA 02111
Merrill Lynch Pierce Fenner & Smith 16,528.538 9.35%
4800 Deer Lake Drive E. 3rd Floor
Jacksonville, FL 32246
CLASS Z
Colonial Counselor Growth Portfolio 709,862.779 59.63%
c/o Christie McCullough
245 Summer Street
Boston, MA 02111
Colonial Counselor Select Balanced Portfolio 450,511.620 37.85%
c/o Christie McCullough
245 Summer Street
Boston, MA 02111
ALL-STAR FUND
CLASS A
Peter Stovall Cook Trustee 20,621.624 5.49%
Peter Stovall Cook Living Trust
U/A 01/21/1999
1763 Las Gallinas
San Rafael, CA 94903
Rodney G. Island 30,239.074 8.05%
P.O. Box 528
Redwood Valley, CA 95470
</TABLE>
B-3
<PAGE>
<TABLE>
<S> <C> <C>
CLASS C
Russell J. Ohlson Trustee 47,125.353 12.07%
The Russell J. Ohlson Trust
U/A 1/28/1994
P.O. Box 806
Bodega Bay, CA 94923
RGB Display Corp 40,270.079 10.31%
22525 Kingston Lane
Grass Valley, CA 95949
CLASS Z
Liberty Asset Management Company 199,906.542 100.00%
Attn: Michael Santilli
600 Atlantic Avenue
Boston, MA 02210
GROWTH & INCOME FUND
CLASS C
Merrill Lynch Pierce Fenner & Smith 91,069.436 6.49%
For the Sole Benefit of its Customers
Attn: Fund Administration #970X8
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
Banc One Securities Corp 93,538.117 6.67%
FBO The One Select Portfolio
733 Greencrest Drive
Westerville, OH 43081
CLASS Z
Colonial Management Associates, Inc. 52.015 100.00%
Attn: Finance Department
One Financial Center
Boston, MA 02111-2621
</TABLE>
OWNERSHIP OF SHARES UPON CONSUMMATION OF ACQUISITION
As of September 29, 2000, the shareholders of record that owned 5% or more of
the outstanding shares of the above noted class of shares of the above noted
Fund would own the following percentage of the Acquiring Fund upon consummation
of the Acquisition:
--------------------------------------------------------------------------------
PERCENTAGE OF OUTSTANDING
SHARES OF CLASS OWNED
NAME AND ADDRESS OF UPON CONSUMMATION OF
FUND AND CLASS SHAREHOLDER ACQUISITION
--------------------------------------------------------------------------------
OPPORTUNITIES FUND
CLASS A
-------
Merrill Lynch Pierce Fenner & Smith 0.02%
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
Ricky E. Theobold TOD 0.02%
Jennifer L. Theobold
Subject to STA TOD Rules
4141 Sweeney Lane
Hillsboro, OH 45133
Investors Bank & Trust Co. Custodian 0.01%
Thomas Hunt Terry III IRA
153 Red Oak
Seguin, TX 78155-7411
Leonard J. Rickelman 0.01%
Bernice C. Rickelman
Leonard & Bernice Rickleman Rev Trust
U/A 3/19/1993
1365 250th Avenue
West Point, IA 52656-9218
Virginia M. Ladd 0.01%
4036 Baronne Way
Memphis, TN 38117-2908
CLASS B
-------
Merrill Lynch Pierce Fenner & Smith 0.02%
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
AG Edwards & Sons Inc. Custodian 0.01%
P.O. Box 360
West Point, NY 10997
CLASS C
-------
Ann M. Cochran 0.07%
P.O. Box 666
Fillmore, CA 93016-0666
Raymond James & Assoc., Inc. CSDN 0.02%
6145 Cumberland Ct.
Mentor, OH 44060
CLASS Z
-------
Colonial Management Associates, Inc. 0.01%
Attn: Finance Department
One Financial Center
Boston, MA 02111-2621
VALUE FUND
CLASS A
-------
Keyport Life Insurance Company 1.23%
c/o Chris Westfall
125 High Street
Boston, MA 02111
Merrill Lynch Pierce Fenner & Smith 0.23%
4800 Deer Lake Drive E. 3rd Floor
Jacksonville, FL 32246
CLASS B
-------
Merrill Lynch Pierce Fenner & Smith 0.17%
4800 Deer Lake Drive E. 3rd Floor
Jacksonville, FL 32246
CLASS C
-------
Keyport Life Insurance Company 1.08%
c/o Chris Westfall
125 High Street
Boston, MA 02111
Merrill Lynch Pierce Fenner & Smith 0.52%
4800 Deer Lake Drive E. 3rd Floor
Jacksonville, FL 32246
CLASS Z
-------
Colonial Counselor Growth Portfolio 50.27%
c/o Christie McCullough
245 Summer Street
Boston, MA 02111
Colonial Counselor Select Balanced Portfolio 31.90%
c/o Christie McCullough
245 Summer Street
Boston, MA 02111
ALL-STAR FUND
CLASS A
-------
Peter Stovall Cook Trustee 0.07%
Peter Stovall Cook Living Trust
U/A 01/21/1999
1763 Las Gallinas
San Rafael, CA 94903
Rodney G. Island 0.11%
P.O. Box 528
Redwood Valley, CA 95470
CLASS C
-------
Russell J. Ohlson Trustee 0.06%
The Russell J. Ohlson Trust
U/A 1/28/1994
P.O. Box 806
Bodega Bay, CA 94923
RGB Display Corp 0.05%
22525 Kingston Lane
Grass Valley, CA 95949
CLASS Z
-------
Liberty Asset Management Company 14.61%
Attn: Michael Santilli
600 Atlantic Avenue
Boston, MA 02210
GROWTH & INCOME FUND
CLASS C
-------
Merrill Lynch Pierce Fenner & Smith 5.09%
For the Sole Benefit of its Customers
Attn: Fund Administration #970X8
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
Banc One Securities Corp 5.22%
FBO The One Select Portfolio
733 Greencrest Drive
Westerville, OH 43081
CLASS Z
-------
Colonial Management Associates, Inc. 0.01%
Attn: Finance Department
One Financial Center
Boston, MA 02111-2621
B-4
<PAGE>
INFORMATION CONCERNING EXECUTIVE OFFICERS
The following table sets forth certain information about the executive officers
of each Fund:
<TABLE>
<CAPTION>
EXECUTIVE OFFICER YEAR OF ELECTION AS
NAME & AGE OFFICE AND PRINCIPAL OCCUPATION (1) EXECUTIVE OFFICER
----------------- ----------------------------------- -------------------
<S> <C> <C>
Stephen E. Gibson President of the Liberty Funds since June, 1998; Chairman of 1998
(46) the Board since July, 1998, Chief Executive Officer and
President since December, 1996 and Director, since July,
1996 of CMA (formerly Executive Vice President from
July, 1996 to December, 1996); Chairman of the Board,
Director, Chief Executive Officer and President of Liberty
Funds Group LLC (LFG) since December, 1998 (formerly
Director, Chief Executive Officer and President of The
Colonial Group, Inc. (TCG) from December, 1996 to
December, 1998); Director of Stein Roe & Farnham
Incorporated (SR&F) since September, 2000, President since
January, 2000 and Vice Chairman since August, 1998
(formerly Assistant Chairman and Executive Vice President
from August, 1998 to January, 2000) (formerly Managing
Director of Marketing of Putnam Investments, June, 1992 to
July, 1996.)
Pamela A. McGrath Treasurer and Chief Financial Officer of the Liberty Funds and 1999
(46) Liberty All-Star Funds since April, 2000; Treasurer, Chief
Financial Officer and Vice President of LFG since
December, 1999; Chief Financial Officer, Treasurer and
Senior Vice President of CMA since December, 1999;
Director of Offshore Accounting for Putnam Investments
from May, 1998 to October, 1999; Managing Director of
Scudder Kemper Investments from October, 1984 to December,
1997.
</TABLE>
(1) Except as otherwise noted, each individual has held the office indicated or
other offices in the same company for the last five years.
B-5
<PAGE>
ADDITIONAL INFORMATION CONCERNING TRUSTEE COMPENSATION
The current Board of Trustees of the Liberty Mutual Funds received the
following compensation from each Fund as of each Fund's fiscal year end(1):
<TABLE>
<CAPTION>
--------------------------------------------------------------
GROWTH &
VALUE FUND INCOME FUND
--------------------------------------------------------------
6/30/00 6/30/00
--------------------------------------------------------------
<S> <C> <C>
Mr. Bleasdale $700(2) $5,278(3)
--------------------------------------------------------------
Ms. Collins 635 4,787
--------------------------------------------------------------
Mr. Grinnell 661 4,989
--------------------------------------------------------------
Mr. Lowry 654 4,931
--------------------------------------------------------------
Mr. Macera 631 4,761
--------------------------------------------------------------
Mr. Mayer 661 4,989
--------------------------------------------------------------
Mr. Moody 666(4) 5,029(5)
---------------------------------------------------------------
Mr. Neuhauser 671 5,040
---------------------------------------------------------------
Mr. Stitzel 638 4,809
---------------------------------------------------------------
Ms. Verville 630(6) 4,748(7)
---------------------------------------------------------------
</TABLE>
The current Board of Trustees of the Liberty Mutual Funds received the following
compensation from the All-Star Fund as of the Fund's fiscal year end:
<TABLE>
<CAPTION>
--------------------------------------------
ALL-STAR FUND(8)
--------------------------------------------
12/31/99
--------------------------------------------
<S> <C>
Mr. Grinnell $2,549
--------------------------------------------
Mr. Lowry 2,549
--------------------------------------------
Mr. Mayer 2,549
--------------------------------------------
Ms. Neuhauser 2,549
--------------------------------------------
</TABLE>
The following table sets forth the total compensation paid to each Trustee by
the Liberty Mutual Funds for the calendar year ended December 31, 1999.
<TABLE>
<CAPTION>
----------------------------------------------------------
TRUSTEE TOTAL COMPENSATION
----------------------------------------------------------
<S> <C>
Mr. Bleasdale $103,000(9)
----------------------------------------------------------
Ms. Collins 96,000
----------------------------------------------------------
Mr. Grinnell 100,000
----------------------------------------------------------
Mr. Lowry 97,000
----------------------------------------------------------
Mr. Macera 95,000
----------------------------------------------------------
Mr. Mayer 101,000
----------------------------------------------------------
Mr. Moody 91,000(10)
----------------------------------------------------------
Mr. Neuhauser 101,252
----------------------------------------------------------
Mr. Stitzel 95,000
----------------------------------------------------------
Ms. Verville 96,000(11)
----------------------------------------------------------
</TABLE>
For the calendar year ended December 31, 1999, certain of the Trustees received
the following compensation in their capacities as Trustees or Directors of the
Liberty All-Star Equity Fund, the Liberty All-Star Growth Fund, Inc. and Liberty
Funds Trust IX (together, the "Liberty All-Star Funds"):
<TABLE>
<CAPTION>
Total Compensation From Liberty
All-Star Funds For The Calendar
Trustee Year Ended December 31, 1999 (12)
------- ---------------------------------
<S> <C>
Robert J. Birnbaum $25,000
James E. Grinnell 25,000
Richard W. Lowry 25,000
William E. Mayer 25,000
John J. Neuhauser 25,000
</TABLE>
The current Board of Trustees of the Stein Roe Trust received the following
compensation from the Fund as of the Fund's fiscal year end:
<TABLE>
<CAPTION>
--------------------------------------------
OPPORTUNITIES
FUND
--------------------------------------------
9/30/00
--------------------------------------------
<S> <C>
Mr. Bacon $1,300
--------------------------------------------
Mr. Boyd 1,400
--------------------------------------------
Mr. Hacker 1,300
--------------------------------------------
Ms. Kelly 1,300
--------------------------------------------
Mr. Nelson 1,200
--------------------------------------------
Mr. Theobald 1,200
--------------------------------------------
</TABLE>
--------------------------------------
(1) The Funds do not currently provide pension or retirement plan benefits to
the Trustees.
(2) Includes $345 payable in later years as deferred compensation.
(3) Includes $2,576 payable in later years as deferred compensation.
(4) Total compensation of $666 for the fiscal year ended June 30, 2000, will
be payable in later years as deferred compensation.
(5) Total compensation of $5,029 for the fiscal year ended June 30, 2000,
will be payable in later years as deferred compensation.
(6) Total compensation of $630 for the fiscal year ended June 30, 2000, will
be payable in later years as deferred compensation.
(7) Total compensation of $4,748 for the fiscal year ended June 30, 2000,
will be payable in later years as deferred compensation.
(8) Liberty Funds Trust IX, Liberty All-Star Equity Fund and Liberty All-Star
Growth Fund, Inc., each of which has the same Board of Trustees, pay
aggregate Trustees' fees of $25,000 per annum, assuming a minimum of four
meetings are held and attended, one-third of which is allocated among the
three funds on a per fund basis and the remaining two-thirds of which is
allocated based on net assets.
(9) Includes $52,000 payable in later years as deferred compensation.
(10) Total compensation of $91,000 for the calendar year ended December 31,
1999, will be payable in later years as deferred compensation.
(11) Total compensation of $96,000 for the calendar year ended December 31,
1999, will be payable in later years as deferred compensation.
(12) The Liberty All-Star Funds are advised by Liberty Asset Management
Company ("LAMCO"). LAMCO is an indirect wholly-owned subsidiary of
Liberty Financial Companies, Inc. (an intermediate parent of the
Advisor of each Fund).
B-6
<PAGE>
The following table sets forth the total compensation paid to each Trustee by
the Stein Roe Funds for the fiscal year ended September 30, 1999.
<TABLE>
<CAPTION>
----------------------------------------------------------
TRUSTEE TOTAL COMPENSATION(13)
----------------------------------------------------------
<S> <C>
Mr. Bacon $117,850
----------------------------------------------------------
Mr. Boyd 104,100
----------------------------------------------------------
Mr. Hacker 93,900
----------------------------------------------------------
Ms. Kelly 103,400
----------------------------------------------------------
Mr. Nelson 103,900
----------------------------------------------------------
Mr. Theobald 103,400
----------------------------------------------------------
</TABLE>
(13) At September 30, 1999, the Stein Roe Fund Complex consisted of 12 series
of the Trust, one series of Liberty-Stein Roe Funds Trust, four series of
Liberty-Stein Roe Funds Municipal Trust, four series of Liberty-Stein Roe
Funds Income Trust, Five Series of Liberty Stein Roe Advisor Trust, five
series of SteinRoe Variable Investment Trust, 12 portfolios of SR&F Base
Trust, Liberty-Stein Roe Advisor Floating Rate Fund, Liberty-Stein Roe
Institutional Floating Rate Income Fund, and Stein Roe Floating Rate
Limited Liability Company.
B-7
<PAGE>
Appendix C
----------
Capitalization
The following table shows on an unaudited basis the capitalization of each of
the Opportunities Fund, the Value Fund, the All-Star Fund and the Growth &
Income Fund as of June 30, 2000, and on a pro forma combined basis, giving
effect to the acquisition of the assets and liabilities of each Acquired Fund by
the Growth & Income Fund at net asset value as of that date:
<TABLE>
<CAPTION>
Opportunities Value All-Star Growth & Income Pro Forma Pro Forma
Fund Fund Fund Fund Adjustments (1) Combined (2)
<S> <C> <C> <C> <C> <C> <C>
Class A
Net asset value $ 259,166 $ 10,441,098 $ 4,299,897 $309,356,714 (88,871) $324,268,004
Shares outstanding 9,814 920,529 368,742 15,017,711 (575,631) 15,741,165
Net asset value per share $ 26.41 $ 11.34 $ 11.66 $ 20.60 $ 20.60
Class B
Net asset value $ 1,269,238 $ 19,380,181 $ 16,346,839 $822,643,366 (236,071) $859,403,553
Shares outstanding 48,240 1,714,187 1,415,688 41,382,562 (1,331,122) 43,229,555
Net asset value per share $ 26.31 $ 11.31 $ 11.55 $ 19.88 $ 19.88
Class C
Net asset value $ 75,057 $ 1,934,018 $ 4,524,072 $ 29,281,763 (14,477) $ 35,800,433
Shares outstanding 2,853 171,022 391,868 1,465,147 (239,972) 1,790,918
Net asset value per share $ 26.31 $ 11.31 $ 11.54 $ 19.99 $ 19.99
Class Z
Net asset value $ 1,004 $ 13,687,128 $ 2,338,265 $ 1,077 (13,961) $ 16,013,513
Shares outstanding 38 1,206,557 199,907 52 (633,328) 773,226
Net asset value per share $ 26.42 $ 11.34 $ 11.70 $ 20.71 $ 20.71
Class S (3)
Net asset value $306,223,844 (71,396) $306,152,448
Shares outstanding 11,601,266 3,185,013 14,786,279
Net asset value per share $ 26.40 $ 20.71
</TABLE>
(1) Adjustment reflects a payable to the general partner of the Portfolio for
its remaining net assets after withdrawal of the Liberty Value Opportunities
Fund's investment in the Portfolio of $173,579, in addition to one time proxy,
accounting, legal and other costs of the reorganization of $71,770, $36,365,
$35,389 and $281,253 to be borne by the Opportunities Fund, the Value Fund, the
All-Star Fund and the Growth & Income Fund respectively.
(2) Assumes the Acquisitions were consummated on June 30, 2000, and is for
information purposes only. No assurance can be given as to how many shares of
the Growth & Income Fund will be received by the shareholders of each Acquired
Fund on the date the Acquisitions take place, and the foregoing should not be
relied upon to reflect the number of shares of the Growth & Income Fund that
actually will be received on or after such date.
(3) Opportunities Fund shares will be exchanged for new Class S shares of the
Growth & Income Fund upon consummation of the Acquisition. Initial per share
value of Class S shares is presumed to be equal to that of current Class Z
shares.
C-1
<PAGE>
Capitalization
The following table shows on an unaudited basis the capitalization of each of
the Opportunities Fund, the Value Fund and the Growth & Income Fund as of June
30, 2000, and on a pro forma combined basis, giving effect to the acquisition of
only the assets and liabilities of the Opportunities Fund and the Value Fund by
the Growth & Income Fund at net asset value as of that date:
<TABLE>
<CAPTION>
Opportunities Value Growth & Income Pro Forma Pro Forma
Fund Fund Fund Adjustments (1) Combined (2)
<S> <C> <C> <C> <C> <C>
Class A
Net asset value $ 259,166 $ 10,441,098 $309,356,714 (83,339) $319,973,639
Shares outstanding 9,814 920,529 15,017,711 (415,353) 15,532,701
Net asset value per share $ 26.41 $ 11.34 $ 20.60 $ 20.60
Class B
Net asset value $ 1,269,238 $ 19,380,181 $822,643,366 (215,042) $843,077,743
Shares outstanding 48,240 1,714,187 41,382,562 (736,652) 42,408,337
Net asset value per share $ 26.31 $ 11.31 $ 19.88 $ 19.88
Class C
Net asset value $ 75,057 $ 1,934,018 $ 29,281,763 (8,657) $ 31,282,181
Shares outstanding 2,853 171,022 1,465,147 (74,131) 1,564,891
Net asset value per share $ 26.31 $ 11.31 $ 19.99 $ 19.99
Class Z
Net asset value $ 1,004 $ 13,687,128 $ 1,077 (10,953) $ 13,678,256
Shares outstanding 38 1,206,557 52 (546,181) 660,466
Net asset value per share $ 26.42 $ 11.34 $ 20.71 $ 20.71
Class S (3)
Net asset value $306,223,844 (71,396) $306,152,448
Shares outstanding 11,601,266 3,185,013 14,786,279
Net asset value per share $ 26.40 $ 20.71
</TABLE>
(1) Adjustment reflects a payable to the general partner of the Portfolio for
its remaining net assets after withdrawal of the Liberty Value Opportunities
Fund's investment in the Portfolio of $173,579, in addition to one time proxy,
accounting legal and other costs of the reorganization of $71,770, $36,365 and
$281,253 to be born by Liberty Value Opportunities Fund, Liberty Value Fund and
Liberty Growth & Income Fund respectively.
(2) Assumes the Acquisitions were consummated on June 30, 2000, and is for
information purposes only. No assurance can be given as to how many shares of
the Growth & Income Fund will be received by the shareholders of each Acquired
Fund on the date the Acquisitions take place, and the foregoing should not be
relied upon to reflect the number of shares of the Growth & Income Fund that
actually will be received on or after such date.
(3) Opportunities Fund shares will be exchanged for new Class S shares of the
Growth & Income Fund upon consummation of the Acquisition. Initial per share
value of Class S shares is presumed to be equal to that of current Class Z
shares.
C-2
<PAGE>
Capitalization
The following table shows on an unaudited basis the capitalization of each of
the Opportunities Fund, the All-Star Fund and the Growth & Income Fund as of
June 30, 2000, and on a pro forma combined basis, giving effect to the
acquisition of only the assets and liabilities of the Opportunities Fund and the
All-Star Fund by the Growth & Income Fund at net asset value as of that date:
<TABLE>
<CAPTION>
Opportunities All-Star Growth & Income Pro Forma Pro Forma
Fund Fund Fund Adjustments (1) Combined (2)
<S> <C> <C> <C> <C> <C>
Class A
Net asset value $ 259,166 $ 4,299,897 $309,356,714 (80,516) $313,835,261
Shares outstanding 9,814 368,742 15,017,711 (161,546) 15,234,721
Net asset value per share $ 26.41 $ 11.66 $ 20.60 $ 20.60
Class B
Net asset value $ 1,269,238 $ 16,346,839 $822,643,366 (220,562) $840,038,881
Shares outstanding 48,240 1,415,688 41,382,562 (591,013) 42,255,477
Net asset value per share $ 26.31 $ 11.55 $ 19.88 $ 19.88
Class C
Net asset value $ 75,057 $ 4,524,072 $ 29,281,763 (12,929) $ 33,867,963
Shares outstanding 2,853 391,868 1,465,147 (165,622) 1,694,246
Net asset value per share $ 26.31 $ 11.54 $ 19.99 $ 19.99
Class Z
Net asset value $ 1,004 $ 2,338,265 $ 1,077 (3,008) $ 2,337,338
Shares outstanding 38 199,907 52 (87,137) 112,860
Net asset value per share $ 26.42 $ 11.70 $ 20.71 $ 20.71
Class S (3)
Net asset value $306,223,844 (71,396) $306,152,448
Shares outstanding 11,601,266 3,185,013 14,786,279
Net asset value per share $ 26.40 $ 20.71
</TABLE>
(1) Adjustment reflects a payable to the general partner of the Portfolio for
its remaining net assets after withdrawal of the Liberty Value Opportunities
Fund's investment in the Portfolio of $173,579, in addition to one time proxy,
accounting, legal and other costs of the reorganization of $71,770, $35,389, and
$281,253 to be borne by the Opportunities Fund, the All-Star Fund and the Growth
& Income Fund, respectively.
(2) Assumes the Acquisitions were consummated on June 30, 2000, and is for
information purposes only. No assurance can be given as to how many shares of
the Growth & Income Fund will be received by the shareholders of each Acquired
Fund on the date the Acquisitions take place, and the foregoing should not be
relied upon to reflect the number of shares of the Growth & Income Fund that
actually will be received on or after such date.
(3) Opportunities Fund shares will be exchanged for new Class S shares of the
Growth & Income Fund upon consummation of the Acquisition. Initial per share
value of Class S shares is presumed to be equal to that of current Class Z
shares.
C-3
<PAGE>
Capitalization
The following table shows on an unaudited basis the capitalization of each of
the Value Fund, the All-Star Fund and the Growth & Income Fund as of June 30,
2000, and on a pro forma combined basis, giving effect to the acquisition of
only the assets and liabilities of the Value Fund and the All-Star Fund by the
Growth & Income Fund at net asset value as of that date:
<TABLE>
<CAPTION>
Value All-Star Growth & Income Pro Forma Pro Forma
Fund Fund Fund Adjustments (1) Combined (2)
<S> <C> <C> <C> <C> <C>
Class A
Net asset value $ 10,441,098 $ 4,299,897 $309,356,714 (88,811) $324,008,898
Shares outstanding 920,529 368,742 15,017,711 (578,395) 15,728,587
Net asset value per share $ 11.34 $ 11.66 $ 20.60 $ 20.60
Class B
Net asset value $ 19,380,181 $ 16,346,839 $822,643,366 (235,775) $858,134,611
Shares outstanding 1,714,187 1,415,688 41,382,562 (1,346,712) 43,165,725
Net asset value per share $ 11.31 $ 11.55 $ 19.88 $ 19.88
Class C
Net asset value $ 1,934,018 $ 4,524,072 $ 29,281,763 (14,460) $ 35,725,393
Shares outstanding 171,022 391,868 1,465,147 (240,874) 1,787,163
Net asset value per share $ 11.31 $ 11.54 $ 19.99 $ 19.99
Class Z
Net asset value $ 13,687,128 $ 2,338,265 $ 1,077 (13,961) $ 16,012,509
Shares outstanding 1,206,557 199,907 52 (633,337) 773,179
Net asset value per share $ 11.34 $ 11.70 $ 20.71 $ 20.71
</TABLE>
(1) One time proxy, accounting, legal and other costs of the reorganization of
$36,365, $35,389 and $281,253 to be borne by the Value Fund, the All-Star Fund
and the Growth & Income Fund respectively.
(2) Assumes the Acquisitions were consummated on June 30, 2000, and is for
information purposes only. No assurance can be given as to how many shares of
the Growth & Income Fund will be received by the shareholders of each Acquired
Fund on the date the Acquisitions take place, and the foregoing should not be
relied upon to reflect the number of shares of the Growth & Income Fund that
actually will be received on or after such date.
C-4
<PAGE>
Capitalization
The following table shows on an unaudited basis the capitalization of each of
the Opportunities Fund and the Growth & Income Fund as of June 30, 2000, and on
a pro forma combined basis, giving effect to the acquisition of only the assets
and liabilities of the Opportunities Fund by the Growth & Income Fund at net
asset value as of that date:
<TABLE>
<CAPTION>
Opportunities Growth & Income Pro Forma Pro Forma
Fund Fund Adjustments (1) Combined (2)
<S> <C> <C> <C> <C>
Class A
Net asset value $ 259,166 $309,356,714 (74,984) $309,540,896
Shares outstanding 9,814 15,017,711 (1,268) 15,026,257
Net asset value per share $ 26.41 $ 20.60 $ 20.60
Class B
Net asset value $ 1,269,238 $822,643,366 (199,533) $823,713,071
Shares outstanding 48,240 41,382,562 3,457 41,434,259
Net asset value per share $ 26.31 $ 19.88 $ 19.88
Class C
Net asset value $ 75,057 $ 29,281,763 (7,109) $ 29,349,711
Shares outstanding 2,853 1,465,147 220 1,468,220
Net asset value per share $ 26.31 $ 19.99 $ 19.99
Class Z
Net asset value $ 1,004 $ 1,077 0 $ 2,081
Shares outstanding 38 52 10 100
Net asset value per share $ 26.42 $ 20.71 $ 20.71
Class S (3)
Net asset value $306,223,844 (71,396) $306,152,448
Shares outstanding 11,601,266 3,185,013 14,786,279
Net asset value per share $ 26.40 $ 20.71
</TABLE>
(1) Adjustment reflects a payable to the general partner of the Portfolio for
its remaining net assets after withdrawal of the Liberty Value Opportunities
Fund's investment in the Portfolio of $173,579, in addition to one time proxy,
accounting, legal and other costs of the reorganization of $71,770 and $281,253
to be borne by the Opportunities Fund and the Growth & Income Fund,
respectively.
(2) Assumes the Acquisition was consummated on June 30, 2000, and is for
information purposes only. No assurance can be given as to how many shares of
the Growth & Income Fund will be received by the shareholders of the
Opportunities Fund on the date the Acquisition takes place, and the foregoing
should not be relied upon to reflect the number of shares of the Growth & Income
Fund that actually will be received on or after such date.
(3) Opportunities Fund shares will be exchanged for new Class S shares of the
Growth & Income Fund upon consummation of the Acquisition. Initial per share
value of Class S shares is presumed to be equal to that of current Class Z
shares.
<PAGE>
Capitalization
The following table shows on an unaudited basis the capitalization of each of
the All-Star Fund and the Growth & Income Fund as of June 30, 2000, and on a pro
forma combined basis, giving effect to the acquisition of only the assets and
liabilities of the All-Star Fund by the Growth & Income Fund at net asset value
as of that date:
<TABLE>
<CAPTION>
All-Star Growth & Income Pro Forma Pro Forma
Fund Fund Adjustments (1) Combined (2)
<S> <C> <C> <C> <C>
Class A
Net asset value $ 4,299,897 $309,356,714 (80,456) $313,576,155
Shares outstanding 368,742 15,017,711 (164,310) 15,222,143
Net asset value per share $ 11.66 $ 20.60 $ 20.60
Class B
Net asset value $ 16,346,839 $822,643,366 (220,266) $838,769,939
Shares outstanding 1,415,688 41,382,562 (606,603) 42,191,647
Net asset value per share $ 11.55 $ 19.88 $ 19.88
Class C
Net asset value $ 4,524,072 $ 29,281,763 (12,912) $ 33,792,923
Shares outstanding 391,868 1,465,147 (166,524) 1,690,491
Net asset value per share $ 11.54 $ 19.99 $ 19.99
Class Z
Net asset value $ 2,338,265 $ 1,077 (3,008) $ 2,336,334
Shares outstanding 199,907 52 (87,147) 112,812
Net asset value per share $ 11.70 $ 20.71 $ 20.71
</TABLE>
(1) One time proxy, accounting, legal and other costs of the reorganization of
$35,389 and $281,253 to be borne by the All-Star Fund and the Growth & Income
Fund respectively.
(2) Assumes the Acquisition was consummated on June 30, 2000, and is for
information purposes only. No assurance can be given as to how many shares of
the Growth & Income Fund will be received by the shareholders of the All-Star
Fund on the date the Acquisition takes place, and the foregoing should not be
relied upon to reflect the number of shares of the Growth & Income Fund that
actually will be received on or after such date.
<PAGE>
Capitalization
The following table shows on an unaudited basis the capitalization of each of
the Value Fund and the Growth & Income Fund as of June 30, 2000, and on a pro
forma combined basis, giving effect to the acquisition of only the assets and
liabilities of the Value Fund by the Growth & Income Fund at net asset value as
of that date:
<TABLE>
<CAPTION>
Value Growth & Income Pro Forma Pro Forma
Fund Fund Adjustments (1) Combined (2)
<S> <C> <C> <C> <C>
Class A
Net asset value $ 10,441,098 $309,356,714 (83,279) $319,714,533
Shares outstanding 920,529 15,017,711 (418,117) 15,520,123
Net asset value per share $ 11.34 $ 20.60 $ 20.60
Class B
Net asset value $ 19,380,181 $822,643,366 (214,746) $841,808,801
Shares outstanding 1,714,187 41,382,562 (752,242) 42,344,507
Net asset value per share $ 11.31 $ 19.88 $ 19.88
Class C
Net asset value $ 1,934,018 $ 29,281,763 (8,640) $ 31,207,141
Shares outstanding 171,022 1,465,147 (75,031) 1,561,138
Net asset value per share $ 11.31 $ 19.99 $ 19.99
Class Z
Net asset value $ 13,687,128 $ 1,077 (10,953) $ 13,677,252
Shares outstanding 1,206,557 52 (546,191) 660,418
Net asset value per share $ 11.34 $ 20.71 $ 20.71
</TABLE>
(1) One time proxy, accounting, legal and other costs of the reorganization of
$36,365 and $281,253 to be borne by the Value Fund and the Growth & Income Fund,
respectively.
(2) Assumes the Acquisition was consummated on June 30, 2000, and is for
information purposes only. No assurance can be given as to how many shares of
the Growth & Income Fund will be received by the shareholders of the Value Fund
on the date the Acquisition takes place, and the foregoing should not be relied
upon to reflect the number of shares of the Growth & Income Fund that actually
will be received on or after such date.
<PAGE>
APPENDIX D
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE AS OF JUNE 30, 2000
LIBERTY GROWTH & INCOME FUND
PORTFOLIO MANAGEMENT REPORT
MAINTAINED STRATEGY IN A CHALLENGING ENVIRONMENT
For the 12-month period ended June 30, 2000, the Fund's Class A shares had
a total return of 1.43%, not including the sales charge. This return was much
better than comparable large capitalization value funds ranked by Morningstar
(TM), which earned a return of negative 5.21% for the same period. Both the Fund
and its peer group lagged the S&P 500 Index, which had a total return of 7.24%
for the 12 months.
The past year again proved challenging for the disciplined investment style
we employ. Our focus continues to be on finding stocks within the S&P 500 Index
with strong potential for return that offer currently attractive prices. Our
bias toward value stocks proved to be out of favor through most of the year.
Also, the Fund's highly diversified approach, investing in each segment of the
S&P 500 Index without placing major emphasis in a particular sector, prevented
us from taking full advantage of the most attractive areas of the market. In the
first half of the fiscal year, technology stocks again proved to be the dominant
force. Those stocks slowed their pace early in 2000, but by then, the market as
a whole pulled back a bit from the significant rise it has enjoyed in recent
years.
HELPED BY GOOD STOCK SELECTION
The Fund's return benefited from our disciplined investment strategy and
our ability to identify and purchase some of the best stocks within different
industries represented in the S&P 500 Index. Another reason we were able to
maintain solid performance in this difficult environment was a slightly
heavier-than-average weighting in energy and semiconductor stocks.
FINANCIAL STOCKS SUFFER DUE TO RATE HIKES
One of the most significant trends of the past year was that the Federal
Reserve raised short-term interest rates by 1.5%. This led to volatility for
most of the bond market, and the interest rate hikes had a negative effect on
financial companies. The bottom line of these firms can be negatively affected
by rising interest rates, and the upward trend in rates generally drove
investors away from stocks of financial firms, depressing their prices.
A PERIOD OF MODEST EXPECTATIONS
D-1
<PAGE>
Many investors may have come to expect the markets to continue to deliver
double-digit returns, which has been the case for several years. There has been
an unprecedented run of strength, but it appears that, for the near term, it may
make sense to maintain more modest expectations. The first half of 2000 was
generally a difficult period for stocks, notable for extreme market volatility.
While we anticipate that the volatility will continue, we expect the environment
to improve slightly for stocks through the rest of 2000. The Federal Reserve
appears to be finished raising interest rates for now, assuming their efforts to
date are successful in slowing economic growth and keeping inflation under
control. If that scenario occurs, investors are likely to breathe easier.
However, the sustained bull run in the stock market has resulted in high stock
prices relative to company earnings. This adds a certain amount of risk to the
environment. We believe the best way to cope with that risk is to maintain a
broadly diversified portfolio, a strategy we will continue to employ in this
Fund.
Effective August 1, 2000, HARVEY B. HIRSHHORN and SCOTT SCHERMERHORN became
managers of the Fund, replacing Mark Stoeckle. Mr. Hirschhorn and Mr.
Schermerhorn are senior vice presidents of Colonial Management Associates, Inc.
Because economic and market conditions change frequently, there can be no
assurance that the trends described in this report will continue or come to
pass. An investment in the Fund offers significant long-term growth potential,
but also involves certain risks. The Fund may be affected by stock market
fluctuations that occur in response to economic and business developments.
Changes in interest rates, changes in financial strength of issuers of lower
rated bonds, and foreign, political and economic developments also may affect
Fund performance.
PERFORMANCE INFORMATION
GROWTH AND INCOME FUND'S INVESTMENT PERFORMANCE VS. STANDARD & POOR'S 500 INDEX
PERFORMANCE OF A $10,000 INVESTMENT 7/1/92 - 6/30/00
<TABLE>
<CAPTION>
LGIF without LGIF with
sales charge sales charge S&P 500 Index
----------------------------------------------------------
<S> <C> <C> <C>
07/01/92 $10,000 $ 9,425 $10,000
07/31/92 10,421 9,821 10,408
08/31/92 10,140 9,557 10,195
09/31/92 10,210 9,623 10,315
10/31/92 10,289 9,698 10,351
11/30/92 10,660 10,047 10,703
12/31/92 10,957 10,327 10,834
01/31/93 11,088 10,450 10,925
02/28/93 11,078 10,441 11,074
03/31/93 11,599 10,932 11,307
04/30/93 11,359 10,706 11,034
05/31/93 11,750 11,074 11,328
06/30/93 11,891 11,207 11,361
07/31/93 11,790 11,112 11,316
08/31/93 12,232 11,529 11,745
09/30/93 12,413 11,699 11,654
10/31/93 12,494 11,775 11,895
11/30/93 12,283 11,576 11,782
12/31/93 12,512 11,793 11,925
01/31/94 12,770 12,036 12,331
02/28/94 12,471 11,754 11,996
03/31/94 12,017 11,326 11,474
04/30/94 12,038 11,345 11,621
05/31/94 12,182 11,482 11,811
06/30/94 11,896 11,212 11,521
07/31/94 12,144 11,446 11,899
08/31/94 12,684 11,954 12,386
09/30/94 12,528 11,807 12,084
10/31/94 12,694 11,964 12,355
11/30/94 12,297 11,573 11,905
12/31/94 12,469 11,752 12,081
01/31/95 12,781 12,046 12,394
02/28/95 13,382 12,612 12,876
03/31/95 13,704 12,916 13,256
04/30/95 14,005 13,199 13,646
05/31/95 14,583 13,744 14,190
06/30/95 14,851 13,997 14,519
07/31/95 15,332 14,451 15.000
08/31/95 15,244 14,367 15,037
09/30/95 15,769 14,863 15,672
10/31/95 15,669 14,768 15,616
11/30/95 16,240 15,307 16,300
12/31/95 16,148 15,219 16,614
01/31/96 16,585 15,632 17,179
02/29/96 16,852 15,883 17,339
03/31/96 16,864 15,895 17,505
04/30/96 17,483 16,478 17,763
05/31/96 17,920 16,890 18,219
06/30/96 17,650 16,635 18,288
07/31/96 16,698 15,738 17,480
08/31/96 17,223 16,232 17,849
09/30/96 17,979 16,945 18,852
10/31/96 18,443 17,382 19,372
11/30/96 19,796 18,658 20,835
12/31/96 19,325 18,214 20,422
01/31/97 20,651 19,463 21,697
02/28/97 20,690 19,500 21,868
03/31/97 19,960 18,812 20,972
04/30/97 21,167 19,950 22,222
05/31/97 22,427 21,137 23,579
06/30/97 23,319 21,978 24,629
07/31/97 25,446 23,983 26,587
08/31/97 24,489 23,081 25,098
09/30/97 25,858 24,371 26,471
10/31/97 24,622 23,206 25,587
11/30/97 25,553 24,084 26,771
12/31/97 26,123 24,621 27,232
01/31/98 26,392 24,874 27,531
02/28/98 28,311 26,683 29,516
03/31/98 29,703 27,995 31,028
04/30/98 29,689 27,981 31,344
05/31/98 28,926 27,262 30,805
06/30/98 30,004 28,279 32,056
07/31/98 29,464 27,770 31,716
08/31/98 24,700 23,280 27,133
09/30/98 25,794 24,311 28,872
10/31/98 27,922 26,317 31,216
11/30/98 29,645 27,940 33,108
12/31/98 31,362 29,558 35,015
01/31/99 32,193 30,342 36,479
02/28/99 30,847 29,073 35,344
03/31/99 31,865 30,033 36,758
04/30/99 32,741 30,859 38,181
05/31/99 32,286 30,430 37,280
06/30/99 34,197 32,231 39,341
07/31/99 33,305 31,390 38,118
08/31/99 32,929 31,035 37,927
09/30/99 31,677 29,856 36,888
10/31/99 33,008 31,110 39,223
11/30/99 33,367 31,449 40,019
12/31/99 34,939 32,930 42,372
01/31/00 33,070 31,168 40,245
02/29/00 31,790 29,962 39,485
03/31/00 35,360 33,327 43,346
04/30/00 35,360 33,327 42,042
05/31/00 35,123 33,104 41,180
06/30/00 34,688 32,693 42,193
</TABLE>
The Standard & Poor's 500 Index is an unmanaged index that tracks the
performance of 500 widely held, large capitalization U.S. stocks. Unlike mutual
funds, indexes are not investments, do not incur fees or expenses and are not
professionally managed. It is not possible to invest directly in an index.
AVERAGE ANNUAL TOTAL RETURNS AS OF 6/30/00
<TABLE>
<CAPTION>
Share Class A B C Z
Inception Date 7/1/92 7/1/92 7/1/94 1/11/99
-----------------------------------------------------------------------------------------------------------------
Without With Without With Without With Without
sales sales sales sales sales sales sales
charge charge charge charge charge charge charge
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 1.43% -4.40% 0.64% -4.03% 0.68% -0.25% 1.72%
5 years 18.49% 17.10% 17.59% 17.38% 17.59% 17.59% 18.60%
Life of Fund 16.81% 15.95% 15.91% 15.91% 15.92% 15.92% 16.88%
</TABLE>
D-2
<PAGE>
Past performance cannot predict future results. Returns and value of an
investment will vary resulting in a gain or a loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 5.75% sales charge for Class A shares, the appropriate Class B
contingent deferred sales charge for the holding period after purchase as
follows: through first year-5%, second year-4%, third year-3%, fourth year-3%,
fifth year-2%, sixth year-1%, thereafter-0% and the Class C contingent deferred
sales charge of 1% for the first year only. Performance for different share
classes will vary based on differences in sales charges and fees associated with
each class.
Classes C and Z share performance information includes returns of the Fund's
Class B and Class A shares respectively (as their expense structure more closely
resembles that of the newer classes) for periods prior to the inception of the
newer classes. Share class returns are not restated to reflect any expense
differential (e.g., Rule 12b-1 fees) between the older and newer class shares.
Had the expense differential been reflected, the returns for the periods prior
to the inception of the newer classes would have been different.
Performance results reflect any voluntary waivers or reimbursements of Fund
expenses by the Advisor or its affiliates. Absent these waivers or reimbursement
arrangements, performance results would have been lower.
CHANGE IN VALUE OF A $10,000 INVESTMENT IN ALL SHARE CLASSES FROM 7/1/92 -
6/30/00
<TABLE>
<CAPTION>
With Sales Charge Without Sales Charge
----------------- --------------------
<S> <C> <C>
Class A $32,693 $34,688
Class B $32,606 $32,606
Class C $32,626 $32,626
Class Z -- $34,849
</TABLE>
NET ASSET VALUE PER SHARE
Class A $20.60
Class B $19.88
Class C $19.99
Class Z $20.70
DISTRIBUTIONS DECLARED PER SHARE (7/1/99 - 6/30/00)
Class A $1.500
Class B $1.500
Class C $1.500
Class Z $1.500
HOLDINGS
TOP 10 HOLDINGS AS OF 6/30/00
D-3
<PAGE>
<TABLE>
<S> <C>
General Electric 2.9%
Citigroup 2.7%
Intel 2.7%
Cisco Systems 2.5%
Exxon Mobil 2.5%
Pfizer 1.6%
Sbc Communications 1.5%
Royal Dutch Petroleum 1.3%
American Int'l Group 1.3%
IBM 1.2%
</TABLE>
Holdings are calculated as a percentage of net assets. Because the fund is
actively managed, there can be no guarantee the fund will continue to hold these
securities in the future.
SECTOR BREAKDOWNS AS OF 6/30/00
<TABLE>
<S> <C>
Technologies: 22.2%
Financials: 19.0%
Consumer Staples: 10.4%
Energy: 10.3%
Healthcare: 9.6%
Capital Goods: 8.4%
Comm. Services: 6.6%
Consumer Cyclical: 6.0%
Basic Materials: 3.4%
Utilities: 2.6%
Transportation: 1.5%
</TABLE>
The sector classifications used on this page are based upon the advisor's
defined criteria as used in the investment process.
Because the fund is actively managed, there can be no guarantee the fund will
continue to maintain these sector allocations in the future.
D-4
<PAGE>
LIBERTY MUTUAL FUNDS
STEIN ROE MUTUAL FUNDS
ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111
Dear Shareholder:
Your Fund will hold a special meeting on December 19, 2000 at 10:00 a.m. Eastern
Time, at the offices of Colonial Management Associates, Inc. You will be asked
to vote on the acquisition of your Fund and on the election of eleven Trustees.
A formal Notice of Special Meeting of Shareholders appears on the next few
pages, followed by the combined prospectus/proxy statement which explains in
more detail the proposals to be considered. We hope that you can attend the
Meeting in person; however, we urge you in any event to vote your shares at your
earliest convenience.
Your Fund is part of one of several proposed acquisitions and liquidations of
funds in the Liberty and Stein Roe Fund groups proposed by Liberty Financial
Companies, Inc., the indirect parent of each of the investment advisors to the
Liberty and Stein Roe Funds. The overall purposes of these acquisitions and
liquidations include streamlining and rationalizing the product offerings of the
Liberty and Stein Roe Funds, reducing fund expense ratios by creating larger,
more efficient funds and permitting the Liberty organization to focus its
portfolio management resources on a more focused group of portfolios. Please
review the enclosed prospectus/proxy statement for a more detailed description
of the proposed acquisition of your Fund and the specific reasons it is being
proposed.
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. YOU CAN VOTE
EASILY AND QUICKLY AT OUR WEB SITE, BY MAIL, BY FAX (NOT AVAILABLE FOR ALL
SHAREHOLDERS; REFER TO ENCLOSED PROXY INSERT), BY PHONE OR IN PERSON. TO VOTE
THROUGH OUR WEB SITE, JUST FOLLOW THE SIMPLE INSTRUCTIONS THAT APPEAR ON THE
ENCLOSED PROXY INSERT. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE HAS BEEN ENCLOSED
FOR YOUR CONVENIENCE. PLEASE HELP YOUR FUND AVOID THE EXPENSE OF A FOLLOW-UP
MAILING BY VOTING TODAY!
Your Fund is using Shareholder Communications Corporation ("SCC"), a
professional proxy solicitation firm, to assist shareholders in the voting
process. As the date of the special meeting approaches, if we have not yet
received your vote, you may receive a telephone call from SCC reminding you to
exercise your right to vote.
Please take a few moments to review the details of each proposal. If you have
any questions regarding the combined prospectus/proxy statement, please feel
free to call the contact number listed in the enclosed prospectus/proxy
statement.
We appreciate your participation and prompt response in these matters and thank
you for your continued support.
Sincerely,
/s/ Stephen E. Gibson
Stephen E. Gibson, President
November 8, 2000
[Job Code]
<PAGE>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS TO BE HELD
DECEMBER 19, 2000
LIBERTY FUNDS TRUST II
ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS 02111
STEIN ROE SMALL CAP TIGER FUND
NOTICE IS HEREBY GIVEN that a Special Meeting of the shareholders of
the Stein Roe Small Cap Tiger Fund will be held at 10:00 a.m. on Tuesday,
December 19, 2000, at the offices of Colonial Management Associates, Inc., One
Financial Center, Boston, Massachusetts 02111 for these purposes:
1. To approve an Agreement and Plan of Reorganization providing
for the sale of all of the assets of the Stein Roe Small Cap
Tiger Fund to, and the assumption of all of the liabilities of
the Stein Roe Small Cap Tiger Fund by, the Liberty Newport
Asia Pacific Fund in exchange for shares of the Liberty
Newport Asia Pacific Fund and the distribution of such shares
to the shareholders of the Stein Roe Small Cap Tiger Fund in
complete liquidation of the Stein Roe Small Cap Tiger Fund.
2. To elect eleven Trustees.
3. To consider and act upon any other matters that properly come
before the meeting and any adjourned session of the meeting.
Shareholders of record at the close of business on September 29, 2000
are entitled to notice of and to vote at the meeting and any adjourned session.
By order of the Board of Trustees,
William J. Ballou, Assistant Secretary
November 8, 2000
NOTICE: YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. YOU
CAN VOTE EASILY AND QUICKLY AT OUR WEB SITE, BY PHONE, BY MAIL, BY FAX
(NOT AVAILABLE FOR ALL SHAREHOLDERS; REFER TO ENCLOSED PROXY INSERT) OR
IN PERSON. TO VOTE THROUGH OUR WEB SITE, JUST FOLLOW THE SIMPLE
INSTRUCTIONS THAT APPEAR ON THE ENCLOSED PROXY INSERT. PLEASE HELP YOUR
FUND AVOID THE EXPENSE OF A FOLLOW-UP MAILING BY VOTING TODAY!
<PAGE>
COMBINED PROSPECTUS AND PROXY STATEMENT
NOVEMBER 8, 2000
ACQUISITION OF THE ASSETS AND LIABILITIES OF
LIBERTY NEWPORT TIGER CUB FUND CLASSES A, B AND C AND
STEIN ROE SMALL CAP TIGER FUND CLASS S
c/o Liberty Funds Trust II
One Financial Center
Boston, Massachusetts 02111
1-800-426-3750
BY AND IN EXCHANGE FOR SHARES OF
LIBERTY NEWPORT ASIA PACIFIC FUND
c/o Liberty Funds Trust VI
One Financial Center
Boston, Massachusetts 02111
1-800-426-3750
TABLE OF CONTENTS
Synopsis.......................................................................
Proposal 1 - Acquisition of the Liberty Newport Tiger Cub Fund Classes A, B
and C and the Stein Roe Small Cap Tiger Fund Class S by the Liberty
Newport Asia Pacific Fund.........................................
Principal Investment Risks................................................
Information about the Acquisition.........................................
Proposal 2 - Election of Trustees..............................................
General........................................................................
Voting Information........................................................
Appendix A - Agreement and Plan of Reorganization..............................
Appendix B - Fund Information..................................................
Appendix C - Capitalization....................................................
Appendix D - Management's Discussion of Fund Performance for the Liberty
Newport Asia Pacific Fund.........................................
This combined Prospectus/Proxy Statement contains information you
should know before voting on the proposed acquisition of the Liberty Newport
Tiger Cub Fund Class A, B and C shares and the Stein Roe Small Cap Tiger Fund
Class S Shares (collectively, the "Tiger Cub Fund") by the Liberty Newport Asia
Pacific Fund (the "Asia Pacific Fund") or voting on the other proposals to be
considered at a Special Meeting of Shareholders of the Tiger Cub Fund (the
"Meeting"), which will be held at 10:00 a.m. Eastern Time on December 19, 2000,
at the offices of Colonial Management Associates, Inc. ("Colonial"), One
Financial Center, Boston,
<PAGE>
Massachusetts 02111. Please read this Prospectus/Proxy Statement and keep it for
future reference.
Proposal 1 in this Prospectus/Proxy Statement relates to the proposed
acquisition of the Tiger Cub Fund by the Asia Pacific Fund (the "Acquisition").
If the Acquisition occurs, you will become a shareholder of the Asia Pacific
Fund. The Asia Pacific Fund seeks long-term growth. If the Agreement and Plan of
Reorganization is approved by the shareholders of the Tiger Cub Fund and the
Acquisition occurs, the Tiger Cub Fund will transfer all of the assets and
liabilities attributable to each class of its shares to the Asia Pacific Fund in
exchange for shares of the same class (with the exception of Class S shares of
the Tiger Cub Fund which will be exchanged for Class Z shares of the Asia
Pacific Fund) with the same aggregate net asset value as the assets and
liabilities transferred. After that exchange, shares of each class received by
the Tiger Cub Fund will be distributed pro rata to its shareholders of the same
class.
Proposal 2 in this Prospectus/Proxy Statement relates to the election
of Trustees of Liberty Funds Trust II ("Trust II"), of which the Tiger Cub Fund
is a series.
Please review the enclosed Prospectuses and Annual Report of the Asia
Pacific Fund. Each of these documents is incorporated in this Prospectus/Proxy
Statement by reference. The following documents have also been filed with the
Securities and Exchange Commission (the "SEC") and are incorporated in this
Prospectus/Proxy Statement by reference:
- The Prospectuses of the Tiger Cub Fund dated January 1, 2000,
as supplemented on December 28, 1999, July 14, 2000 and August
1, 2000, regarding Class A, B and C shares; and dated January
1, 2000, as revised on May 1, 2000, regarding Class S shares.
- The Statement of Additional Information of the Tiger Cub Fund
dated January 1, 2000, as revised on April 6, 2000 and as
supplemented on July 14, 2000 and August 21, 2000, regarding
Class A, B and C shares; and dated January 1, 2000, as revised
on May 1, 2000 and as supplemented on August 21, 2000,
regarding Class S shares.
- The Statement of Additional Information of the Asia Pacific
Fund dated November 1, 1999, as supplemented on June 23, 2000
and August 21, 2000.
- The Report of Independent Accountants and financial statements
included in the Annual Report to Shareholders of the Tiger Cub
Fund dated August 31, 1999.
- The financial statements included in the Tiger Cub Fund's
Semi-Annual Report to Shareholders dated February 29, 2000.
- The Statement of Additional Information of the Asia Pacific
Fund dated November 8, 2000 relating to the Acquisition.
-2-
<PAGE>
The Tiger Cub Fund has previously sent its Annual and Semi-Annual
Reports to its shareholders. For a free copy of these Reports or any of the
documents listed above, please call 1-800-426-3750 or write to your Fund at One
Financial Center, Boston, Massachusetts 02111. You may also obtain many of these
documents by accessing our web site at www.libertyfunds.com. Our hearing
impaired shareholders may call Liberty Funds Services, Inc. at 1-800-528-6979 if
you have special TTD equipment. Text-only versions of all the Tiger Cub Fund and
Asia Pacific Fund documents can be viewed online or downloaded from the Edgar
database on the SEC's internet site at www.sec.gov. You can review and copy
information about the Funds by visiting the following location, and you can
obtain copies, upon payment of a duplicating fee, by writing the Public
Reference Room, U.S. Securities and Exchange Commission, Washington, DC
20549-0102. Information on the operation of the Public Reference Room may be
obtained by calling 202-942-8090.
THE SEC HAS NOT APPROVED OR DISAPPROVED THE SHARES OF THE ASIA PACIFIC
FUND OR DETERMINED WHETHER THIS PROSPECTUS/PROXY STATEMENT IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-3-
<PAGE>
SYNOPSIS
THE FOLLOWING QUESTIONS AND RESPONSES PROVIDE AN OVERVIEW OF KEY
FEATURES OF THE ACQUISITION AND OF THE OTHER MATTERS TO BE CONSIDERED
AT THE MEETING AND OF THE INFORMATION CONTAINED IN THIS COMBINED
PROSPECTUS/PROXY STATEMENT. PLEASE REVIEW THE FULL PROSPECTUS/PROXY
STATEMENT PRIOR TO CASTING YOUR VOTE, AS THIS SECTION IS ONLY A
SYNOPSIS OF THE COMPLETE DOCUMENT.
1. WHAT IS BEING PROPOSED?
First, the Trustees of the Funds are recommending in Proposal 1 that
the Asia Pacific Fund acquire the Tiger Cub Fund. This means that the
Asia Pacific Fund would acquire all of the assets and liabilities of
the Tiger Cub Fund in exchange for shares of the Asia Pacific Fund
representing the aggregate net asset value of the Tiger Cub Fund's
assets and liabilities. If Proposal 1 is approved, you will receive
shares of the Asia Pacific Fund with an aggregate net asset value equal
to the aggregate net asset value of your Acquired Fund shares as of the
day before the closing of the Acquisition. The Acquisition is currently
scheduled to take place on or around January 16, 2001.
In addition, the Trustees of the Tiger Cub Fund are recommending in
Proposal 2 that you vote in favor of eleven nominees for Trustees.
2. WHY IS THE ACQUISITION BEING PROPOSED?
The Trustees of Tiger Cub Fund recommend approval of the Acquisition
because it offers shareholders of the Fund an investment in a fund with
similar investment goals and the economies of scale of a larger fund
including a reduction in the fees and expenses of the Fund. In
reviewing the Acquisition, the Trustees also considered that it is
unlikely the Tiger Cub Fund will achieve scale through internal growth
and considered the tax-free nature of the Acquisition as opposed to
other alternatives for the Funds and for shareholders and other tax
considerations. Please review "Reasons for the Acquisition" in Proposal
1 of this Prospectus/Proxy Statement for a full description of the
factors considered by the Trustees.
SHAREHOLDERS OF THE TIGER CUB FUND SHOULD NOTE THAT THE ASIA PACIFIC
FUND INVESTS PRIMARILY IN "LARGE CAP" STOCKS, NOT "SMALL CAP" STOCKS
LIKE THE TIGER CUB FUND.
3. WHAT CLASS OF SHARES WILL YOU RECEIVE IN THE ASIA PACIFIC FUND IF THE
ACQUISITION OCCURS?
You will receive the same class of shares of the Asia Pacific Fund that
you currently own in the Tiger Cub Fund. The shares will have the same
exchange rights and will bear the same contingent deferred sales
-4-
<PAGE>
charges ("CDSCs"), if applicable, as your current shares.
4. HOW DO THE INVESTMENT GOALS, STRATEGIES AND POLICIES OF THE TIGER CUB
FUND AND THE ASIA PACIFIC FUND COMPARE?
This table shows the investment goals and primary investment
strategies of each Fund:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
TIGER CUB FUND ASIA PACIFIC FUND
---------------------------------------------------------------------------------------------------
INVESTMENT GOAL: The Tiger Cub Fund seeks INVESTMENT GOAL: The Asia Pacific Fund
capital appreciation. seeks long-term growth.
---------------------------------------------------------------------------------------------------
<S> <C>
PRIMARY INVESTMENT STRATEGIES: PRIMARY INVESTMENT STRATEGIES:
The Tiger Cub Fund seeks to achieve its The Asia Pacific Fund seeks to achieve its
goal as follows: goal as follows:
- The Fund invests primarily in - The Fund invests at least 80% of
stocks of companies located in the ten total assets in stocks of companies
Tiger countries of Asia. whose principal activities are in Asia
- The Fund generally purchases or the Pacific Basin with a
stocks of well-established smaller cap significant portion in Japan and Hong
companies with histories of consistent Kong.
earnings growth in industries with - The Fund invests in stocks of
attractive or improving prospects. companies of any size, whose earnings
- The Fund invests at least 65% of the advisor believes are in a strong
total assets in small cap companies growth trend or are undervalued.
(defined as stocks with market caps
under $2.8 billion at the time of
purchase).
- The Fund invests up to 35% of
total assets in large cap companies.
</TABLE>
The investment policies of the Tiger Cub Fund and the Asia
Pacific Fund are substantially similar except that the Asia Pacific
Fund is a non-diversified fund, while the Tiger Cub Fund is
diversified.
5. HOW DO THE MANAGEMENT FEES AND EXPENSES OF THE FUNDS COMPARE AND WHAT
ARE THEY ESTIMATED TO BE FOLLOWING THE ACQUISITION?
The following tables allow you to compare the sales charges and
management fees and expenses of the Tiger Cub Fund and the Asia Pacific
Fund and to analyze the estimated expenses that Newport Fund
Management, Inc. ("Newport"), advisor to the Asia Pacific Fund, expects
the combined fund to bear in the first year following the Acquisition.
Sales charges are paid directly by shareholders to Liberty Funds
Distributor, Inc., each Fund's distributor. Annual Fund Operating
Expenses are deducted from the Fund. They include
-5-
<PAGE>
management and administration fees, 12b-1 fees and administrative
costs, including pricing and custody services. The Annual Fund
Operating Expenses shown in the table below represent expenses incurred
by the Tiger Cub Fund for its last fiscal year ended August 31, 1999
and by the Asia Pacific Fund for its last fiscal year ended June 30,
2000.
SHAREHOLDER FEES(1)
(paid directly from your investment)
<TABLE>
<CAPTION>
TIGER CUB FUND ASIA PACIFIC FUND
-------------- -----------------
CLASS A CLASS B CLASS C CLASS S CLASS A CLASS B CLASS C CLASS S CLASS Z
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum sales charge (load) on
purchases (%) (as a percentage
of the offering price) 5.75 0.00 0.00 0.00 5.75 0.00 0.00 0.00 0.00
---------------------------------------------------------------------------------------------------------------------------------
Maximum deferred sales charge
(load) on redemptions (%) (as a
percentage of the lesser of
purchase price or redemption
price) 1.00(2) 5.00 1.00 0.00 1.00(2) 5.00 1.00 0.00 0.00
---------------------------------------------------------------------------------------------------------------------------------
Redemption fee (%) (as a
percentage of amount redeemed,
if applicable) (3) (3) (3) (3) (3) (3) (3) (3) (3)
</TABLE>
--------
(1) A $10 annual fee is deducted from accounts of less than $1,000 and paid to
the transfer agent.
(2) This charge applies only to certain Class A shares bought without an initial
sales charge that are sold within 18 months of purchase.
(3) There is a $7.50 charge for wiring sale proceeds to your bank.
ANNUAL FUND OPERATING EXPENSES
(deducted directly from Fund assets)
<TABLE>
<CAPTION>
TIGER CUB FUND ASIA PACIFIC FUND
-------------- -----------------
CLASS A CLASS B CLASS C CLASS S CLASS A CLASS B CLASS C CLASS S CLASS Z
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management fee (%) 1.40 1.40 1.40 1.40 1.25 1.25 1.25 1.25 1.25
------------------------------------------------------------------------------------------------------------------------
Distribution and service (12b-1)
fees(%) 0.25 1.00 1.00 0.00 0.25 1.00 1.00 0.00 0.00
------------------------------------------------------------------------------------------------------------------------
Other expenses(6) (%) 1.95 1.95 1.95 1.95 1.61 1.61 1.61 1.61 1.61
------------------------------------------------------------------------------------------------------------------------
Total annual fund operating
expenses (4)(5) (%) 3.60 4.35 4.35 3.35 3.11 3.86 3.86 2.86 2.86
</TABLE>
<TABLE>
<CAPTION>
ASIA PACIFIC FUND (PRO FORMA COMBINED)
CLASS A CLASS B CLASS C CLASS S CLASS Z
<S> <C> <C> <C> <C> <C>
Management fee (%) 1.25 1.25 1.25 1.25 1.25
--------------------------------------------------------------------------------------
Distribution and service (12b-1) 0.25 1.00 1.00 0.00 0.00
fees (%)
--------------------------------------------------------------------------------------
Other expenses (%) 0.94 0.94 0.94 0.94 0.94
--------------------------------------------------------------------------------------
Total annual fund operating 2.44 3.19 3.19 2.19 2.19
expenses (%)(7)
</TABLE>
--------
(4) The Asia Pacific Fund's advisor and administrator have voluntarily agreed
to waive advisory and administration fees and reimburse the Fund for
certain expenses so that the total annual fund operating expenses
(exclusive of distribution and service fees, brokerage commissions,
interest, taxes and extraordinary expenses, if any) will not exceed 1.90%.
As a result, the actual management fee for each share class would be 0.29%,
other expenses for each share class would be 1.61% and total annual fund
operating expenses for Class A, B, C and Z shares would be 2.15%, 2.90%,
2.90% and 1.90%, respectively. This arrangement may be modified or
terminated by the advisor at any time.
-6-
<PAGE>
(5) The Tiger Cub Fund's advisor and administrator have voluntarily agreed to
waive advisory and administration fees and reimburse the Fund for certain
expenses so that the total annual fund operating expenses (exclusive of
distribution and service fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) will not exceed 2.00% for Class A, B, C and
S shares. As a result, for Class A, B, C and S shares, the actual
management and administration fees for each share class would be 0.05%,
other expenses for each share class would be 1.95% and total annual fund
operating expenses for Class A, B, C and S shares would be 2.25%, 3.00%,
3.00% and 2.00%, respectively. This arrangement may be modified or
terminated by the advisor at any time.
(6) "Other expenses" for the Tiger Cub Fund's Class S shares are estimated
based on the annual operating expenses of the Fund's Class A, B and C
shares.
(7) The Asia Pacific Fund's advisor and administrator have voluntarily agreed
to waive advisory and administration fees and reimburse the Fund for
certain expenses so that the total annual fund operating expenses
(exclusive of distribution and service fees, brokerage commissions,
interest, taxes and extraordinary expenses, if any) will not exceed 1.90%.
As a result, the actual management fee for each share class would be 0.96%,
other expenses for each share class would be 0.94% and total annual fund
operating expenses for Class A, B, C and Z shares would be 2.15%, 2.90%,
2.90% and 1.90%, respectively. This arrangement may be modified or
terminated by the advisor at any time.
EXAMPLE EXPENSES
Example Expenses help you compare the cost of investing in the Tiger Cub Fund
and the Asia Pacific Fund currently with the cost of investing in the combined
fund on a pro forma basis and also allows you to compare this with the cost of
investing in other mutual funds. The table does not take into account any
expense reduction arrangements discussed in the footnotes to the Annual Fund
Operating Expenses table. It uses the following hypothetical conditions:
- $10,000 initial investment
- 5% total return for each year
- Each Fund's operating expenses remain the same
- Assumes reinvestment of all dividends and distributions
- Assumes Class B shares convert to Class A shares after eight
years
EXAMPLE EXPENSES
(your actual costs may be higher or lower)
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
TIGER CUB FUND
Class A $917 $1,614 $2,332 $4,215
Class B: did not sell your shares $436 $1,318 $2,211 $4,341
sold all your
shares at end of period $936 $1,618 $2,411 $4,341
Class C: did not sell your shares $436 $1,318 $2,211 $4,494
sold all your shares
at end of period $536 $1,318 $2,211 $4,494
Class S $338 $1,030 $1,745 $3,640
ASIA PACIFIC FUND
Class A $871 $1,480 $2,111 $3,799
Class B: did not sell your shares $388 $1,178 $1,986 $3,926
</TABLE>
-7-
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
sold all your shares at
end of period $888 $1,478 $2,186 $3,926
Class C: did not sell your shares $388 $1,178 $1,986 $4,087
sold all your
shares at end of period $488 $1,178 $1,986 $4,087
Class S $289 $ 886 $1,508 $3,185
Class Z $289 $ 886 $1,508 $3,185
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
ASIA PACIFIC FUND
(pro forma combined)
Class A $808 $1,292 $1,801 $3,192
Class B: did not sell your shares $322 $ 983 $1,669 $3,322
sold all your
shares at end of period $822 $1,283 $1,869 $3,322
Class C: did not sell your shares $322 $ 983 $1,669 $3,494
sold all your
shares at end of period $422 $ 983 $1,669 $3,494
Class S $222 $ 685 $1,175 $2,524
Class Z $222 $ 685 $1,175 $2,524
</TABLE>
Significant assumptions underlying the pro forma Annual Fund Operating Expenses
and Example Expenses are as follows: (1) the current contractual agreements will
remain in place; (2) certain fixed costs involved in operating the Tiger Cub
Fund are eliminated; and (3) expense ratios are based on pro forma combined
average net assets for the year ended June 30, 2000.
6. WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF THE ACQUISITION?
The Acquisition is expected to be tax free to you for federal income
tax purposes. This means that no gain or loss will be recognized by the
Tiger Cub Fund or its shareholders as a result of the Acquisition.
The cost basis and holding period of your Tiger Cub Fund shares are
expected to carry over to your new shares in the Asia Pacific Fund.
-8-
<PAGE>
PROPOSAL 1 - ACQUISITION OF THE LIBERTY NEWPORT TIGER CUB FUND CLASSES A, B AND
C AND THE STEIN ROE SMALL CAP TIGER FUND CLASS S BY THE LIBERTY
NEWPORT ASIA PACIFIC FUND
THE PROPOSAL
You are being asked to approve the Agreement and Plan of
Reorganization dated October 26, 2000. A form of Agreement and Plan of
Reorganization is attached as Appendix A to the Prospectus/Proxy Statement. By
approving the Agreement and Plan of Reorganization, you are also approving the
Acquisition of the Tiger Cub Fund by the Asia Pacific Fund under the Agreement
and Plan of Reorganization.
PRINCIPAL INVESTMENT RISKS
WHAT ARE THE PRINCIPAL INVESTMENT RISKS OF THE ASIA PACIFIC FUND, AND HOW DO
THEY COMPARE WITH THE TIGER CUB FUND?
Because the Funds have similar goals and strategies, the potential
risks associated with each Fund are similar. The actual risks of investing in
each Fund depend on the securities held in each Fund's portfolio and on market
conditions, both of which change over time. Please see the enclosed Prospectuses
of the Asia Pacific Fund for a description of the principal investment risks of
the Fund.
INFORMATION ABOUT THE ACQUISITION
TERMS OF THE AGREEMENT AND PLAN OF REORGANIZATION
If approved by the shareholders of the Tiger Cub Fund, the Acquisition
is expected to occur on or around January 16, 2001, under the Agreement and Plan
of Reorganization attached as Appendix A to this combined Prospectus/Proxy
Statement. Please review Appendix A. The following is a brief summary of the
principal terms of the Agreement and Plan of Reorganization:
- The Tiger Cub Fund will transfer all of the assets and
liabilities attributable to each class of shares of the Tiger
Cub Fund to the Asia Pacific Fund in exchange for shares of
the same class of the Asia Pacific Fund with an aggregate net
asset value equal to the net value of the transferred assets
and liabilities.
- The Acquisition will occur on the next business day after the
time (currently scheduled to be 4:00 p.m. Eastern Time on
January 12, 2001 or such other date and time as the parties
may determine) when the assets of each Fund are valued for
purposes of the Acquisition (the "Valuation Date").
-9-
<PAGE>
- The shares of each class of the Asia Pacific Fund received by
the Tiger Cub Fund will be distributed to the shareholders of
the same class of the Tiger Cub Fund pro rata in accordance
with their percentage ownership of each class of the Tiger Cub
Fund in full liquidation of the Tiger Cub Fund.
- After the Acquisition, the Tiger Cub Fund will be terminated,
and its affairs will be wound up in an orderly fashion.
- The Acquisition requires approval by the Tiger Cub Fund's
shareholders and satisfaction of a number of other conditions;
the Acquisition may be terminated at any time with the
approval of the Trustees of both Funds.
A shareholder who objects to the Acquisition will not be entitled under
Massachusetts law or the Declaration of Trust (the "Declaration") to demand
payment for, or an appraisal of, his or her shares. However, shareholders should
be aware that the Acquisition as proposed is not expected to result in
recognition of gain or loss to shareholders for federal income tax purposes and
that, if the Acquisition is consummated, shareholders will be free to redeem the
shares which they receive in the transaction at their then-current net asset
value. In addition, shares may be redeemed at any time prior to the consummation
of the Acquisition.
SHARES YOU WILL RECEIVE
If the Acquisition occurs, you will receive shares in the Asia Pacific
Fund of the same class as the shares that you currently own in the Tiger Cub
Fund. In comparison to the shares you currently own, the shares you receive will
have the following characteristics:
- The shares you receive will have an aggregate net asset value
equal to the aggregate net asset value of your current shares
as of the business day before the closing of the Acquisition.
- If applicable, your Asia Pacific Fund shares will bear the
same sales charges, redemption fees and CDSCs as your current
shares, but for purposes of determining the CDSC applicable to
any redemption, the new shares will continue to age from the
date you purchased your Tiger Cub Fund shares.
- The procedures for purchasing and redeeming your shares will
not change as a result of the Acquisition.
-10-
<PAGE>
- You will have the same exchange options as you currently have.
- You will have the same voting rights as you currently have,
but as a shareholder of the Asia Pacific Fund and of Trust VI.
REASONS FOR THE ACQUISITION
The Trustees of each Trust, including all Trustees who are not
"interested persons" of the Trust, have determined that the Acquisition would be
in the best interests of each Fund's shareholders. The Trustees have unanimously
approved the Acquisition and recommend that you vote in favor of the Acquisition
by approving the Agreement and Plan of Reorganization attached as Appendix A to
this Prospectus/Proxy Statement.
The Acquisition is one of several proposed acquisitions and
liquidations of funds in the Liberty and Stein Roe Fund groups proposed by
Liberty Financial Companies, Inc. ("Liberty Financial"), the indirect parent of
each of the investment advisors to the Liberty and Stein Roe Funds. The overall
purposes of these acquisitions and liquidations include streamlining and
rationalizing the product offerings of the Liberty and Stein Roe Funds, reducing
fund expense ratios by creating larger, more efficient funds and permitting the
Liberty organization to focus its portfolio management resources on a more
focused group of portfolios.
In proposing the Acquisition Liberty Financial presented to the
Trustees the following reasons for the Tiger Cub Fund to enter into the
Acquisition:
- The Acquisition is expected to create a larger fund with similar
investment goals and strategies to the Tiger Cub Fund, but with
lower operating expenses as a percentage of fund assets. This
expense ratio reduction would benefit Tiger Cub Fund shareholders,
since operating expenses are paid by the fund and reduce the
investment return to fund shareholders. Although, as explained
below, it is not possible to predict future expense ratios with
certainty, information provided to the Trustees by Liberty Financial
indicated that, based on the assets of the Tiger Cub and Asia
Pacific Funds on July 31, 2000 and the Funds' current expense
structures, the Asia Pacific Fund's annualized expense ratio
(excluding 12b-1 fees) immediately after the Acquisition would be
about 0.10% lower than the Tiger Cub Fund's current expense ratio
(for example, for Class A shares, a 1.90% expense ratio (assuming
voluntary expense limitation continues) for the Asia Pacific Fund,
as compared to 2.00% (assuming voluntary expense limitation
continues) currently for the Class A shares of the Tiger Cub Fund).
If the voluntary expense limitation were to be discontinued, the
Asia Pacific Fund's annualized expense ratio (excluding 12b-1 fees)
immediately after the Acquisition would be 0.75% lower than the
Tiger Cub Fund's current expense ratio (for example, for Class A
shares, a 2.83% expense ratio for the Tiger Cub Fund, as compared to
2.08% currently for the Asia Pacific Fund).
-11-
<PAGE>
Note that the 12b-1 fees on Classes A, B and C on each fund are 0.25%, 1.00% and
1.00%, respectively.
- The Tiger Cub Fund is not likely to achieve the scale necessary to
reduce Fund expenses through sales growth. In this connection,
Liberty Financial indicated to the Trustees that it was not willing
to continue subsidizing the Fund's operations (through fee waiver or
expense assumptions) over the long term.
- The Acquisition is intended to permit the Tiger Cub Fund's
shareholders to exchange their investment for an investment in the
Asia Pacific Fund without recognizing gain or loss for federal
income tax purposes. By contrast, if a Tiger Cub Fund shareholder
redeemed his or her shares to invest in another fund, like the Asia
Pacific Fund, the transaction would likely be a taxable event for
such shareholder. Similarly, if the Tiger Cub Fund were liquidated
or reorganized in a taxable transaction, the transaction would
likely be a taxable event for the Fund's shareholders. After the
Acquisition, shareholders may redeem any or all of their Asia
Pacific Fund shares at net asset value (subject to any applicable
CDSC) at any time, at which point they would recognize a taxable
gain or loss.
In reviewing the Acquisition, the Trustees also considered the change
for Tiger Cub Fund shareholders from a small cap fund to a fund with an
investment program focusing on larger capitalization stocks. The Trustees also
considered the possible limitation on the future use of losses of the Tiger Cub
Fund to offset future taxable capital gains required to be distributed to
shareholders.
The projected post-Acquisition expense reductions presented above are
based upon numerous material assumptions, including that: (1) the current
contractual agreements will remain in place; and (2) certain fixed costs
involved in operating the Tiger Cub Fund are eliminated. Although these
projections represent good faith estimates, there can be no assurance that any
particular level of expenses or expense savings will be achieved, because
expenses depend on a variety of factors, including the future level of fund
assets, many of which factors are beyond the control of the Asia Pacific Fund or
Liberty Financial.
In addition, the Trustees considered the relative Fund performance
results which are based on the factors and assumptions set forth below under
Performance Information. No assurance can be given that the Asia Pacific Fund
will achieve any particular level of performance after the Acquisition.
If the Acquisition does not occur, Liberty Financial has indicated that
it may recommend to the Trustees that the Tiger Cub Fund be liquidated.
-12-
<PAGE>
PERFORMANCE INFORMATION
The charts below show the percentage gain or loss in each calendar year
for the 10-year period ending December 31, 1999 or, if shorter, since inception,
for the Class A shares of the Asia Pacific Fund and the Class S shares of the
Tiger Cub Fund. They should give you a general idea of how each Fund's return
has varied from year-to-year. The graphs include the effects of Fund expenses,
but not sales charges (if applicable to the Fund's shares). Returns would be
lower if any applicable sales charges were included. The calculations of total
return assume the reinvestment of all dividends and capital gain distributions
on the reinvestment date. Past performance is not an indication of future
results. Performance results include the effect of expense reduction
arrangements, if any. If these arrangements were not in place, then the
performance results would have been lower. Any expense reduction arrangements
may be discontinued at any time.
Additional discussion of the manner of calculation of total return is
contained in each Fund's respective Prospectus and Statement of Additional
Information, which are incorporated by reference in this Prospectus/Proxy
Statement.
TIGER CUB FUND
<TABLE>
<CAPTION>
---------------------------------------------------------------------
1997 1998 1999
---------------------------------------------------------------------
<S> <C> <C> <C>
100%
75%
69.20%
50%
25%
0%
-14.64%
-25%
-28.05%
-50%
</TABLE>
<TABLE>
<S> <C>
The Fund's year-to-date total return through For period shown in bar chart:
September 30, 2000 was -18.57%. Best quarter: Second Quarter 1999, +51.51%
Worst quarter: Second Quarter 1998, -31.28%
</TABLE>
ASIA PACIFIC FUND
<TABLE>
<CAPTION>
------------------------------------------
1999
------------------------------------------
<S> <C>
125%
121.46%
100%
75%
50%
0%
</TABLE>
<TABLE>
<S> <C>
The Fund's year-to-date total return through For period shown in bar chart:
September 30, 2000 was -19.75%. Best quarter: Fourth Quarter 1999, +35.67%
Worst quarter: First Quarter 1999, +12.51%
</TABLE>
-13-
<PAGE>
The next table lists each Fund's average annual total return for each
class of its shares for the one-year, five-year and ten-year periods ending
December 31, 1999, or for the life of the Fund through December 31, 1999, if
shorter, as the case may be, including the applicable sales charge for Class A,
B and C shares of the Tiger Cub Fund and Asia Pacific Fund. This table is
intended to provide you with some indication of the risks of investing in the
Funds. At the bottom of each table, you can compare the Funds' performance with
one or more indices or averages.
TIGER CUB FUND *
<TABLE>
<CAPTION>
INCEPTION
DATE 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND
<S> <C> <C> <C> <C> <C>
Class A (%) 6/3/96 68.81 N/A N/A (0.09)
Class B (%) 6/3/96 67.65 N/A N/A (0.88)
Class C (%) 6/3/96 67.59 N/A N/A (0.79)
Class S (%) 6/3/96 69.20 N/A N/A 0.11
MSCI Pacific Index (%) N/A 42.58 N/A N/A (0.17)**
Lipper Average (%) N/A 76.12 N/A N/A 1.13 **
</TABLE>
ASIA PACIFIC FUND +
<TABLE>
<CAPTION>
INCEPTION
DATE 1 YEAR 5 YEARS 10 YEARS LIFE OF FUND
<S> <C> <C> <C> <C> <C>
Class A (%) 8/19/98 121.46 N/A N/A 120.34
Class B (%) 8/19/98 120.10 N/A N/A 118.84
Class C (%) 8/19/98 119.95 N/A N/A 118.73
Class Z (%) 8/13/99 121.68 N/A N/A 120.50
MSCI Free Index (%) N/A 56.65 N/A N/A _____
Morningstar Average (%) N/A 73.84 N/A N/A _____
</TABLE>
* The Tiger Cub Fund's return is compared to the MSCI Pacific Region
(ex-Japan) Index ("MSCI Pacific Index"), a broad-based, unmanaged index
that tracks the performance of stocks in the Pacific Rim in countries other
than Japan. Unlike the Fund, indices are not investments and do not incur
fees or expenses. The Tiger Cub Fund is also compared to the funds included
in the Lipper Pacific Ex-Japan Funds category average ("Lipper Average"),
which is calculated by Lipper, Inc. The Lipper Average is composed of funds
with similar investment objectives to the Tiger Cub Fund.
+ The Asia Pacific Fund's return is compared to the MSCI AC Asia Pacific Free
Index ("MSCI Free Index"), an unmanaged index that tracks the performance
of Asian Pacific Securities. Unlike the Fund, indices are not investments,
do not incur fees or expenses and are not professionally managed. The Asia
Pacific Fund's return is also compared to the average return of funds
included in the Morningstar Pacific/Asia ex-Japan Stock category average
("Morningstar Average"). This Morningstar Average, which is calculated by
Morningstar, Inc., is composed of funds with similar investment styles as
measured by their underlying portfolio holdings.
** From May 31, 1996 through December 31, 1999.
FEDERAL INCOME TAX CONSEQUENCES
The Acquisition is intended to be a tax-free reorganization. The
closing of the Acquisition will be conditioned on receipt of an opinion from
Ropes & Gray to the effect that, on the basis of existing law under specified
-14-
<PAGE>
sections of the Internal Revenue Code of 1986, as amended (the "Code"), for
federal income tax purposes:
- under Section 361 or Section 354 of the Code, respectively, no
gain or loss will be recognized by the Tiger Cub Fund or the
shareholders of the Tiger Cub Fund as a result of the
Acquisition;
- under Section 358 of the Code, the tax basis of the Asia
Pacific Fund shares you receive will be the same, in the
aggregate, as the aggregate tax basis of your Tiger Cub Fund
shares;
- under Section 1223(1) of the Code, your holding period for the
Asia Pacific Fund shares you receive will include the holding
period for your Tiger Cub Fund shares if you hold Tiger Cub
Fund shares as a capital asset;
- under Section 1032 of the Code, no gain or loss will be
recognized by the Asia Pacific Fund as a result of the
Acquisition;
- under Section 362(b) of the Code, the Asia Pacific Fund's tax
basis in the assets that the Asia Pacific Fund receives from
the Tiger Cub Fund will be the same as the Tiger Cub Fund's
basis in such assets; and
- under Section 1223(2) of the Code, the Asia Pacific Fund's
holding period in such assets will include the Tiger Cub
Fund's holding period in such assets.
The opinion will be based on certain factual certifications made by
officers of each Fund's Trust. The opinion is not a guarantee that the tax
consequences of the Acquisition will be as described above. Prior to the closing
of the Acquisition, the Tiger Cub Fund and the Asia Pacific Fund will each
distribute to their shareholders all of their respective investment company
taxable income and net realized capital gains, which have not previously been
distributed to shareholders. Such distributions or dividends will be taxable to
the Tiger Cub Fund's shareholders.
This description of the federal income tax consequences of the
Acquisition does not take into account your particular facts and circumstances.
Consult your own tax advisor about the effect of state, local, foreign, and
other tax laws.
THE TRUSTEES OF THE TIGER CUB FUND UNANIMOUSLY RECOMMEND APPROVAL OF THE
AGREEMENT AND PLAN OF REORGANIZATION.
The Declaration establishing Trust II provides that any series of Trust
II (such as the Tiger Cub Fund) may be terminated by a two-thirds vote of the
series' shares or by notice from the Trustees to the shareholders. The Trust
believes that, under this provision, no shareholder vote is required to approve
the Acquisition, although the provision could also be interpreted to require a
two-thirds
-15-
<PAGE>
vote, if the Acquisition is submitted for shareholder approval. The Declaration
also provides that it may be amended by the Trustees, upon majority vote of the
shareholders of the affected series. To eliminate any uncertainty about whether
any shareholder vote is required to approve the Acquisition, the Trustees will
consider any vote in favor of the Acquisition to be a vote in favor of amending
the Declaration to provide that the Tiger Cub Fund may be terminated by majority
vote of the Tiger Cub Fund's shares entitled to vote (or by Trustee notice to
shareholders), and will so amend the Declaration if a majority of the Tiger Cub
Fund's shareholders entitled to vote on the proposal vote in favor of such
proposal.
REQUIRED VOTE FOR PROPOSAL 1
Approval of the Agreement and Plan of Reorganization dated October 26,
2000 between Trust II on behalf of the Tiger Cub Fund and Trust VI on behalf of
the Asia Pacific Fund will require the affirmative vote of a majority of the
shares of the Tiger Cub Fund outstanding at the record date for the Meeting.
PROPOSAL 2 - ELECTION OF TRUSTEES
THE PROPOSAL
You are being asked to approve the election of four new members as well
as seven of the currently serving members of the Board of Trustees of Trust II,
of which the Tiger Cub Fund is a series. All of the nominees listed below,
except for the proposed four new members (Ms. Kelly and Messrs. Hacker, Nelson
and Theobald), are currently members of the Board of Trustees of Trust II, as
well as nine Liberty closed-end funds and seven (or, in the case of Messrs.
Lowry, Mayer and Neuhauser, eight) other Liberty open-end trusts (collectively,
the "Liberty Mutual Funds"), and have served in that capacity continuously since
originally elected or appointed. All of the currently serving members, other
than Mr. Palombo, have been previously elected by the shareholders of Trust II.
The proposed four new members currently serve on the Board of Trustees of two
Stein Roe closed-end funds and seven Stein Roe open-end trusts, and were
recommended for election as Trustees of the Liberty Mutual Funds by the Board of
Trustees at a meeting held on October 25, 2000. Each of the nominees elected
will serve as a Trustee of
-16-
<PAGE>
Trust II until the next meeting of shareholders of Trust II called for the
purpose of electing a Board of Trustees, and until a successor is elected and
qualified or until death, retirement, resignation or removal.
Currently, two different boards of trustees are responsible for
overseeing substantially all of the Liberty and Stein Roe Funds. Liberty
Financial and the Trust II's Trustees have agreed that shareholder
interests can more effectively be represented by a single board with
responsibility for overseeing substantially all of the Liberty and Stein Roe
Funds. Creation of a single, consolidated board should also provide certain
administrative efficiencies and potential future cost savings for both the
Liberty and Stein Roe Funds and Liberty Financial. The nominees listed below
will be the members of the single, consolidated Board of Trustees. The persons
named in the enclosed proxy card intend to vote at the Meeting in favor of the
election of the nominees named below as Trustees of Trust II (if so instructed).
If any nominee listed below becomes unavailable for election, the enclosed proxy
card may be voted for a substitute nominee in the discretion of the proxy
holder(s).
INFORMATION ABOUT THE NOMINEES
Set forth below is information concerning each of the nominees.
<TABLE>
<CAPTION>
NOMINEE NAME & AGE PRINCIPAL OCCUPATION(1) AND DIRECTORSHIPS
TRUSTEE SINCE
<S> <C> <C>
Douglas A. Hacker Executive Vice President and Chief New nominee
(43) Financial Officer of UAL, Inc. (airline)
since July 1999; Senior Vice President and
Chief Financial Officer of UAL, Inc. prior
thereto.
Janet Langford Kelly Executive Vice President--Corporate New nominee
(41) Development, General Counsel, and
Secretary of Kellogg Company since September 1999; Senior
Vice President, Secretary and General Counsel of Sara Lee
Corporation (branded, packaged, consumer-products
manufacturer) from 1995 to August 1999; partner at Sidley
& Austin (law firm) prior thereto.
Richard W. Lowry Private Investor since August 1987. 1995
(64) (Formerly Chairman and Chief Executive
Officer of U.S. Plywood Corporation from August 1985 to
August 1987.)
Salvatore Macera Private Investor. (Formerly Executive Vice 1998
(69) President and Director of Itek Corporation
(electronics) from 1975 to 1981.)
William E. Mayer(2) Partner, Park Avenue Equity Partners 1994
(60) (venture capital); Director, Johns
Manville; Director, Lee Enterprises;
Director, WR Hambrecht & Co. (Formerly
Dean, College of Business and Management,
University of Maryland, from October 1992
to November 1996.)
</TABLE>
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<TABLE>
<S> <C> <C>
John J. Neuhauser Academic Vice President and Dean of 1985
(57) Faculties, Boston College, since August
1999. (Formerly Dean, Boston College School of
Management, from September 1977 to September 1999.)
Charles Nelson Van Voorhis Professor of Political Economy New nominee
(57) of the University of Washington.
Joseph R. Palombo(3) Vice President of the Stein Roe Mutual 2000
(47) Funds since April 1999; Executive Vice
President and Director of Colonial
Management Associates, Inc. and Stein Roe
& Farnham Incorporated since April 1999;
Executive Vice President and Chief
Administrative Officer of Liberty Funds
Group LLC since April 1999. (Formerly
Chief Operating Officer, Putnam Mutual
Funds, from 1994 to 1998.)
Thomas E. Stitzel Business Consultant; Chartered Financial 1998
(64) Analyst. (Formerly Professor of Finance,
from 1975 to 1999, and Dean, from 1977 to
1991, College of Business, Boise State
University.)
Thomas C. Theobald Managing Director, William Blair Capital New nominee
(62) Partners (private equity investing) since
1994; Chief Executive Officer and Chairman of the Board
of Directors of Continental Bank Corporation from 1987 to
1994.
Anne-Lee Verville Consultant. (Formerly General Manager, 1998
(54) Global Education Industry, from 1994 to
1997, and President, Applications Solutions Division, IBM
Corporation (global education and global applications),
from 1991 to 1994.)
</TABLE>
(1) Except as otherwise noted, each individual has held the office indicated
or other offices in the same company for the last five years.
(2) Mr. Mayer is not affiliated with Liberty Financial, but is an
"interested person," as defined in the Investment Company Act of 1940,
as amended (the "1940 Act"), because of his affiliation with WR
Hambrecht & Co. (a registered broker-dealer).
(3) Mr. Palombo is an "interested person," as defined in the 1940 Act,
because of his affiliation with Liberty Financial.
TRUSTEES' COMPENSATION
The members of the Board of Trustees will serve as Trustees of the
Liberty and Stein Roe Funds, for which service each Trustee, except for Mr.
Palombo, will receive an annual retainer of $45,000, and attendance fees of
$8,000 for each regular joint meeting and $1,000 for each special joint meeting.
The Board of Trustees is expected to hold six regular joint meetings each year.
Committee chairs will receive an
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additional annual retainer of $5,000, and receive $1,000 for each special
meeting attended on a day other than a regular joint meeting day. Committee
members will receive an additional annual retainer of $1,000, and receive $1,000
for each special meeting attended on a day other than a regular joint meeting
day. Two-thirds of the Trustees' fees are allocated among the Liberty and Stein
Roe Funds based on each Fund's relative net assets, and one-third of the fees is
divided equally among the Liberty and Stein Roe Funds.
The Liberty Mutual Funds do not currently provide pension or retirement
plan benefits to the Trustees. However, certain Trustees currently serving on
the Board of Trustees of Trust II who are not continuing on the combined Board
of Trustees of the Liberty and Stein Roe Funds will receive payments at an
annual rate equal to their 1999 Trustee compensation for the lesser of two years
or until the date they would otherwise have retired at age 72. These payments
will be made quarterly, beginning in 2001. Liberty Financial and the Liberty
Mutual Funds will each bear one-half of the cost of the payments; the Liberty
Mutual Funds' portion of the payments will be allocated among the Liberty Mutual
Funds based on each fund's share of the Trustee fees for 2000.
Further information concerning the Trustees' compensation is included
in Appendix B.
MEETINGS AND CERTAIN COMMITTEES
Composition. The current Board of Trustees of the Liberty Mutual Funds
consists of two interested and nine non-interested Trustees. Mr. Mayer is not
affiliated with Liberty Financial or any of its affiliates, but is considered
interested as a result of his affiliation with a broker-dealer.
Audit Committee. The Audit Committee of the Liberty Mutual Funds,
consisting of Ms. Verville (Chairperson) and Messrs. Bleasdale, Grinnell, Lowry,
Macera and Moody, all of whom are non-interested Trustees, recommends to the
Board of Trustees the independent accountants to serve as auditors, reviews with
the independent accountants the results of the auditing engagement and internal
accounting procedures and considers the independence of the independent
accountants, the range of their audit services and their fees.
Compensation Committee. The Compensation Committee of the Liberty
Mutual Funds, consisting of Messrs. Neuhauser (Chairman), Grinnell and Stitzel
and Ms. Collins, all of whom are non-interested Trustees, reviews compensation
of the Board of Trustees.
Governance Committee. The Governance Committee of the Liberty Mutual
Funds, consisting of Messrs. Bleasdale (Chairman), Lowry, Mayer and Moody and
Ms. Verville, all of whom are non-interested Trustees, except for Mr. Mayer
(Mr. Mayer is interested as a result of his affiliation with a broker-dealer,
but is not affiliated with Liberty Financial or any of its affiliates),
recommends to the Board of Trustees, among other things, nominees for trustee
and for appointments to various committees. The Committee will consider
candidates for trustee recommended by shareholders. Written recommendations with
supporting information should be directed to the Committee in care of the Tiger
Cub Fund.
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<PAGE>
Record of Board and Committee Meetings. During the fiscal year ended
August 31, 2000, Trust II (excluding the Liberty Money Market Fund) held six
meetings, the Audit Committee held four meetings, the Compensation Committee
held one meeting, and the Governance Committee held five meetings.
During the most recently completed fiscal year, each of the current
Trustees attended more than 75% of the meetings of the Board of Trustees and the
committees of which such Trustee is a member.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF TRUST II VOTE FOR
PROPOSAL 2.
REQUIRED VOTE FOR PROPOSAL 2
A plurality of the votes cast at the Meeting, if a quorum is
represented, is required for the election of each Trustee to the Board of
Trustees of Trust II. Since the number of Trustees has been fixed at eleven,
this means that the eleven persons receiving the highest number of votes will
be elected.
GENERAL
VOTING INFORMATION
The Trustees of Trust II are soliciting proxies from the shareholders
of the Tiger Cub Fund in connection with the Meeting, which has been called to
be held at 10:00 a.m. Eastern Time on December 19, 2000 at Colonial's offices,
One Financial Center, Boston, Massachusetts. The meeting notice, this combined
Prospectus/Proxy Statement and proxy cards are being mailed to shareholders
beginning on or about November 8, 2000.
INFORMATION ABOUT PROXIES AND THE CONDUCT OF THE MEETING
Solicitation of Proxies. Proxies will be solicited primarily by mailing
this combined Prospectus/Proxy Statement and its enclosures, but proxies may
also be solicited through further mailings, telephone calls, personal interviews
or e-mail by officers of the Tiger Cub Fund or by employees or agents of Newport
and its affiliated companies. In addition, SCC has been engaged to assist in the
solicitation of proxies, at an estimated cost of $700,000 total for all of the
proposed acquisitions of funds in the Liberty and Stein Roe Fund groups
scheduled to take place in January 2001.
VOTING PROCESS
You can vote in any one of the following five ways:
a. By mail, by filling out and returning the enclosed proxy card;
b. By phone, by calling 1-800-732-3683 and following the
instructions;
c. By internet, by visiting our Web site at www.libertyfunds.com
and clicking on "Proxy Voting;"
d. By fax (not available for all shareholders; refer to enclosed
proxy insert); or
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<PAGE>
e. In person at the Meeting.
Shareholders who owned shares on the record date, September 29, 2000,
are entitled to vote at the Meeting. Shareholders are entitled to cast one vote
for each share owned on the record date. We encourage you to vote by internet,
using the 12-digit or 14-digit "control" number that appears on the enclosed
proxy card. Voting by internet will reduce expenses by saving postage costs. If
you choose to vote by mail or by fax, and you are an individual account owner,
please sign exactly as your name appears on the proxy card. Either owner of a
joint account may sign the proxy card, but the signer's name must exactly match
the name that appears on the card.
Costs of Solicitation. The costs of the Meeting, including the costs of
soliciting proxies, and the costs of the Acquisition will be borne by the
following parties in the following percentages: the Asia Pacific Fund __%, the
Tiger Cub Fund __%, Liberty Financial __%.
Voting and Tabulation of Proxies. Shares represented by duly executed
proxies will be voted as instructed on the proxy. If no instructions are given,
the proxy will be voted in favor of each Proposal. You can revoke your proxy by
sending a signed, written letter of revocation to the Assistant Secretary of the
Tiger Cub Fund, by properly executing and submitting a later-dated proxy or by
attending the Meeting and voting in person.
Votes cast in person or by proxy at the Meeting will be counted by
persons appointed by the Tiger Cub Fund as tellers for the Meeting (the
"Tellers"). Thirty percent (30%) of the shares of any Fund outstanding on the
record date, present in person or represented by proxy, constitutes a quorum for
the transaction of business by the shareholders of the Tiger Cub Fund at the
Meeting. Shareholders of the Tiger Cub Fund vote together with the shareholders
of the other series of Trust II for the election of Trustees; thirty percent
(30%) of the outstanding shares of Trust II constitutes a quorum for voting on
the election of Trustees. In determining whether a quorum is present, the
Tellers will count shares represented by proxies that reflect abstentions and
"broker non-votes" as shares that are present and entitled to vote. Since these
shares will be counted as present, but not as voting in favor of any proposal,
these shares will have the same effect as if they cast votes against Proposal 1
and will have no effect on the outcome of Proposal 2. "Broker non-votes" are
shares held by brokers or nominees as to which (i) the broker or nominee does
not have discretionary voting power and (ii) the broker or nominee has not
received instructions from the beneficial owner or other person who is entitled
to instruct how the shares will be voted.
Advisor's, Distributor's and Administrator's Addresses. The address of
each Fund's investment advisor, Newport Fund Management Inc., is 580 California
Street, Suite 1960, San Francisco, California 94104. The address of each Fund's
principal underwriter, Liberty Funds Distributor, Inc., is One Financial Center,
Boston, Massachusetts 02111. The address of each Fund's administrator, Colonial
Management Associates, Inc., is One Financial Center, Boston, Massachusetts
02111.
Outstanding Shares and Significant Shareholders. Appendix B to this
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<PAGE>
Prospectus/Proxy Statement lists for the Tiger Cub Fund and Trust II the total
number of shares outstanding as of September 29, 2000 for each class of the
shares of the Fund and the Trust entitled to vote at the Meeting. It also lists
for the Asia Pacific Fund the total number of shares outstanding as of September
29, 2000 for each class of the Fund's shares. It also identifies holders of more
than 5% or 25% of any class of shares of each Fund, and contains information
about the executive officers and Trustees of the Funds and their shareholdings
in the Funds.
Adjournments; Other Business. If the Tiger Cub Fund has not received
enough votes by the time of the Meeting to approve any Proposal the persons
named as proxies may propose that the Meeting be adjourned one or more times to
permit further solicitation of proxies. Any adjournment requires the affirmative
vote of a majority of the total number of shares of the Tiger Cub Fund that are
present in person or by proxy on the question when the adjournment is being
voted on. The persons named as proxies will vote in favor of any such
adjournment all proxies that they are entitled to vote in favor of the relevant
Proposal (or in favor of any nominee, in the case of Proposal 2). They will vote
against any such adjournment any proxy that directs them to vote against the
Proposal (or against all nominees, in the case of Proposal 2). They will not
vote any proxy that directs them to abstain from voting on the Proposal in
question.
The Meeting has been called to transact any business that properly
comes before it. The only business that management of the Tiger Cub Fund intends
to present or knows that others will present is Proposal 1 and Proposal 2, as
described above. If any other matters properly come before the Meeting, and on
all matters incidental to the conduct of the Meeting, the persons named as
proxies intend to vote the proxies in accordance with their judgment, unless the
Assistant Secretary of the Tiger Cub Fund has previously received written
contrary instructions from the shareholder entitled to vote the shares.
Shareholder Proposals at Future Meetings. Trust II, of which the Tiger
Cub Fund is a series, does not hold annual or other regular meetings of
shareholders. Shareholder proposals to be presented at any future meeting of
shareholders of the Fund or Trust II must be received by the Tiger Cub Fund or
Trust II in writing a reasonable amount of time before the Trust solicits
proxies for that meeting, in order to be considered for inclusion in the proxy
materials for that meeting.
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<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION dated as of October 26, 2000
by and among Liberty Funds Trust II (the "Trust"), a Massachusetts business
trust established under a Declaration of Trust dated February 14, 1980, as
amended, on behalf of Liberty Newport Tiger Cub Fund, Classes A, B and C shares
and Stein Roe Small Cap Tiger Fund, Class S shares (the "Acquired Fund"), a
series of the Trust, Liberty Funds Trust VI (the "Acquiring Trust"), a
Massachusetts business trust established under a Declaration of Trust dated
January 3, 1992, as amended, on behalf of Liberty Newport Asia Pacific Fund (the
"Acquiring Fund"), a series of the Acquiring Trust, and Liberty Financial
Companies, Inc.
This Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of Section 368(a) of the
United States Internal Revenue Code of 1986, as amended (the "Code"), and any
successor provision. The reorganization will consist of the transfer of all of
the assets of the Acquired Fund in exchange solely for Class A, B, C, Z and S
shares of beneficial interest of the Acquiring Fund ("Acquiring Shares") and the
assumption by Acquiring Fund of the liabilities of the Acquired Fund (other than
certain expenses of the reorganization contemplated hereby) and the distribution
of such Acquiring Shares to the shareholders of the Acquired Fund in liquidation
of the Acquired Fund, all upon the terms and conditions set forth in this
Agreement.
In consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF ACQUIRED FUND IN EXCHANGE FOR
ASSUMPTION OF LIABILITIES AND ACQUIRING SHARES AND LIQUIDATION
OF ACQUIRED FUND.
1.1 Subject to the terms and conditions herein set forth and on
the basis of the representations and warranties contained
herein,
(a) The Trust, on behalf of the Acquired Fund, will
transfer and deliver to the Acquiring Fund, and the
Acquiring Fund will acquire, all the assets of the
Acquired Fund as set forth in paragraph 1.2.
(b) The Acquiring Fund will assume all of the Acquired
Fund's liabilities and obligations of any kind
whatsoever, whether absolute, accrued, contingent or
otherwise in existence on the Closing Date (as defined
in paragraph 1.2 hereof) (the "Obligations"), except
that expenses of reorganization contemplated hereby to
be paid by the Acquired Fund pursuant to paragraphs 1.5
and 9.2 shall not be assumed or paid by the Acquiring
Fund, and
(c) The Acquiring Fund will issue and deliver to the
Acquired Fund in exchange for such assets the number of
Acquiring Shares (including fractional shares, if any)
determined by dividing the net asset value of the
Acquired Fund, computed in the manner and as of the
time and date set forth in paragraph 2.1, by the net
asset value of one Acquiring Share, computed in the
manner and as of the time and date set forth in
paragraph 2.2. Such transactions shall take place at
the closing provided for in paragraph 3.1 (the
"Closing").
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<PAGE>
1.2 The assets of the Acquired Fund to be acquired by the
Acquiring Fund shall consist of all cash, securities,
dividends and interest receivable, receivables for shares sold
and all other assets which are owned by the Acquired Fund on
the closing date provided in paragraph 3.1 (the "Closing
Date") and any deferred expenses, other than unamortized
organizational expenses, shown as an asset on the books of the
Acquired Fund on the Closing Date.
1.3 As provided in paragraph 3.4, as soon after the Closing Date
as is conveniently practicable (the "Liquidation Date"), the
Acquired Fund will liquidate and distribute pro rata to its
shareholders of record ("Acquired Fund Shareholders"),
determined as of the close of business on the Valuation Date
(as defined in paragraph 2.1), the Acquiring Shares received
by the Acquired Fund pursuant to paragraph 1.1. Such
liquidation and distribution will be accomplished by the
transfer of the Acquiring Shares then credited to the account
of the Acquired Fund on the books of the Acquiring Fund to
open accounts on the share records of Acquiring Fund in the
names of the Acquired Fund Shareholders and representing the
respective pro rata number of Acquiring Shares due such
shareholders. The Acquiring Fund shall not be obligated to
issue certificates representing Acquiring Shares in connection
with such exchange.
1.4 With respect to Acquiring Shares distributable pursuant to
paragraph 1.3 to an Acquired Fund Shareholder holding a
certificate or certificates for shares of the Acquired Fund,
if any, on the Valuation Date, the Acquiring Trust will not
permit such shareholder to receive Acquiring Share
certificates therefor, exchange such Acquiring Shares for
shares of other investment companies, effect an account
transfer of such Acquiring Shares, or pledge or redeem such
Acquiring Shares until the Acquiring Trust has been notified
by the Acquired Fund or its agent that such Shareholder has
surrendered all his or her outstanding certificates for
Acquired Fund shares or, in the event of lost certificates,
posted adequate bond.
1.5 [RESERVED]
1.6 As promptly as possible after the Closing Date, the Acquired
Fund shall be terminated pursuant to the provisions of the
laws of the Commonwealth of Massachusetts, and, after the
Closing Date, the Acquired Fund shall not conduct any business
except in connection with its liquidation.
2. VALUATION.
2.1 For the purpose of paragraph 1, the value of the Acquired
Fund's assets to be acquired by the Acquiring Fund hereunder
shall be the net asset value computed as of the close of
regular trading on the New York Stock Exchange on the business
day next preceding the Closing (such time and date being
herein called the "Valuation Date") using the valuation
procedures set forth in the Declaration of Trust of the
Acquiring Trust and the then current prospectus or statement
of additional information of the Acquiring Fund, after
deduction for the expenses of the reorganization contemplated
hereby to be paid by the Acquired Fund pursuant to paragraphs
1.5, and shall be certified by the Acquired Fund.
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2.2 For the purpose of paragraph 2.1, the net asset value of an
Acquiring Share shall be the net asset value per share
computed as of the close of regular trading on the New York
Stock Exchange on the Valuation Date, using the valuation
procedures set forth in the Declaration of Trust of the
Acquiring Trust and the then current prospectus or
prospectuses and the statement of additional information or
statements of additional information of the Acquiring Fund
(collectively, as from time to time amended and supplemented,
the "Acquiring Fund Prospectus").
3. CLOSING AND CLOSING DATE.
3.1 The Closing Date shall be on January 16, 2001, or on such
other date as the parties may agree in writing. The Closing
shall be held at 9:00 a.m. at the offices of Colonial
Management Associates, Inc., One Financial Center, Boston,
Massachusetts 02111, or at such other time and/or place as the
parties may agree.
3.2 The portfolio securities of the Acquired Fund shall be made
available by the Acquired Fund to The Chase Manhattan Bank, as
custodian for the Acquiring Fund (the "Custodian"), for
examination no later than five business days preceding the
Valuation Date. On the Closing Date, such portfolio securities
and all the Acquired Fund's cash shall be delivered by the
Acquired Fund to the Custodian for the account of the
Acquiring Fund, such portfolio securities to be duly endorsed
in proper form for transfer in such manner and condition as to
constitute good delivery thereof in accordance with the custom
of brokers or, in the case of portfolio securities held in the
U.S. Treasury Department's book-entry system or by the
Depository Trust Company, Participants Trust Company or other
third party depositories, by transfer to the account of the
Custodian in accordance with Rule 17f-4 or Rule 17f-5, as the
case may be, under the Investment Company Act of 1940 (the
"1940 Act") and accompanied by all necessary federal and state
stock transfer stamps or a check for the appropriate purchase
price thereof. The cash delivered shall be in the form of
currency or certified or official bank checks, payable to the
order of "The Chase Manhattan Bank, custodian for Acquiring
Fund."
3.3 In the event that on the Valuation Date (a) the New York Stock
Exchange shall be closed to trading or trading thereon shall
be restricted, or (b) trading or the reporting of trading on
said Exchange or elsewhere shall be disrupted so that accurate
appraisal of the value of the net assets of the Acquired Fund
or the Acquiring Fund is impracticable, the Closing Date shall
be postponed until the first business day after the day when
trading shall have been fully resumed and reporting shall have
been restored; provided that if trading shall not be fully
resumed and reporting restored within three business days of
the Valuation Date, this Agreement may be terminated by either
of the Trust or the Acquiring Trust upon the giving of written
notice to the other party.
3.4 At the Closing, the Acquired Fund or its transfer agent shall
deliver to the Acquiring Fund or its designated agent a list
of the names and addresses of the Acquired Fund Shareholders
and the number of outstanding shares of beneficial interest of
the Acquired Fund owned by each Acquired Fund Shareholder, all
as of the close of business on the Valuation Date, certified
by the Secretary or Assistant Secretary of the Trust. The
Acquiring Trust will provide to the Acquired Fund evidence
satisfactory to the Acquired Fund that the Acquiring Shares
issuable pursuant to paragraph 1.1 have been credited to the
Acquired Fund's account on the books of the Acquiring Fund. On
the Liquidation Date, the Acquiring Trust will provide to the
Acquired Fund evidence satisfactory to the
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Acquired Fund that such Acquiring Shares have been credited
pro rata to open accounts in the names of the Acquired Fund
shareholders as provided in paragraph 1.3.
3.5 At the Closing each party shall deliver to the other such
bills of sale, instruments of assumption of liabilities,
checks, assignments, stock certificates, receipts or other
documents as such other party or its counsel may reasonably
request in connection with the transfer of assets, assumption
of liabilities and liquidation contemplated by paragraph 1.
4. REPRESENTATIONS AND WARRANTIES.
4.1 The Trust, on behalf of the Acquired Fund, represents and
warrants the following to the Acquiring Trust and to the
Acquiring Fund as of the date hereof and agrees to confirm the
continuing accuracy and completeness in all material respects
of the following on the Closing Date:
(a) The Trust is a business trust duly organized, validly
existing and in good standing under the laws of the
Commonwealth of Massachusetts;
(b) The Trust is a duly registered investment company
classified as a management company of the open-end type
and its registration with the Securities and Exchange
Commission as an investment company under the 1940 Act
is in full force and effect, and the Acquired Fund is a
separate series thereof duly designated in accordance
with the applicable provisions of the Declaration of
Trust of the Trust and the 1940 Act;
(c) The Trust is not in violation in any material respect
of any provision of its Declaration of Trust or By-laws
or of any agreement, indenture, instrument, contract,
lease or other undertaking to which the Trust is a
party or by which the Acquired Fund is bound, and the
execution, delivery and performance of this Agreement
will not result in any such violation;
(d) The Trust has no material contracts or other
commitments (other than this Agreement and such other
contracts as may be entered into in the ordinary course
of its business) which if terminated may result in
material liability to the Acquired Fund or under which
(whether or not terminated) any material payments for
periods subsequent to the Closing Date will be due from
the Acquired Fund;
(e) No litigation or administrative proceeding or
investigation of or before any court or governmental
body is presently pending or threatened against the
Acquired Fund, any of its properties or assets, or any
person whom the Acquired Fund may be obligated to
indemnify in connection with such litigation,
proceeding or investigation. The Acquired Fund knows of
no facts which might form the basis for the institution
of such proceedings, and is not a party to or subject
to the provisions of any order, decree or judgment of
any court or governmental body which materially and
adversely affects its business or its ability to
consummate the transactions contemplated hereby;
(f) The statement of assets and liabilities, the statement
of operations, the statement of changes in net assets,
and the schedule of investments as at and for the two
years
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<PAGE>
ended August 31, 1999 of the Acquired Fund, audited by
Ernst & Young LLP [and the statement of assets, the
statement of changes in net assets and the schedule of
investments for the six months ended February 29,
2000,], copies of which have been furnished to the
Acquiring Fund, fairly reflect the financial condition
and results of operations of the Acquired Fund as of
such dates and for the periods then ended in accordance
with generally accepted accounting principles
consistently applied, and the Acquired Fund has no
known liabilities of a material amount, contingent or
otherwise, other than those shown on the statements of
assets referred to above or those incurred in the
ordinary course of its business since February 29,
2000;
(g) Since February 29, 2000, there has not been any
material adverse change in the Acquired Fund's
financial condition, assets, liabilities or business
(other than changes occurring in the ordinary course of
business), or any incurrence by the Acquired Fund of
indebtedness, except as disclosed in writing to the
Acquiring Fund. For the purposes of this subparagraph
(g), distributions of net investment income and net
realized capital gains, changes in portfolio
securities, changes in the market value of portfolio
securities or net redemptions shall be deemed to be in
the ordinary course of business;
(h) By the Closing Date, all federal and other tax returns
and reports of the Acquired Fund required by law to
have been filed by such date (giving effect to
extensions) shall have been filed, and all federal and
other taxes shown to be due on said returns and reports
shall have been paid so far as due, or provision shall
have been made for the payment thereof, and to the best
of the Acquired Fund's knowledge no such return is
currently under audit and no assessment has been
asserted with respect to such returns;
(i) For all taxable years and all applicable quarters of
such years from the date of its inception, the Acquired
Fund has met the requirements of subchapter M of the
Code, for treatment as a "regulated investment company"
within the meaning of Section 851 of the Code. Neither
the Trust nor the Acquired Fund has at any time since
its inception been liable for nor is now liable for any
material excise tax pursuant to Section 852 or 4982 of
the Code. The Acquired Fund has duly filed all federal,
state, local and foreign tax returns which are required
to have been filed, and all taxes of the Acquired Fund
which are due and payable have been paid except for
amounts that alone or in the aggregate would not
reasonably be expected to have a material adverse
effect. The Acquired Fund is in compliance in all
material respects with applicable regulations of the
Internal Revenue Service pertaining to the reporting of
dividends and other distributions on and redemptions of
its capital stock and to withholding in respect of
dividends and other distributions to shareholders, and
is not liable for any material penalties which could be
imposed thereunder;
(j) The authorized capital of the Trust consists of an
unlimited number of shares of beneficial interest with
no par value, of multiple series and classes. All
issued and outstanding shares of the Acquired Fund are,
and at the Closing Date will be, duly and validly
issued and outstanding, fully paid and (except as set
forth in the Acquired Fund's then current prospectus or
prospectuses and statement of additional information or
statements of additional information (collectively, as
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<PAGE>
amended or supplemented from time to time, the
"Acquired Fund Prospectus")), non-assessable by the
Acquired Fund and will have been issued in compliance
with all applicable registration or qualification
requirements of federal and state securities laws. No
options, warrants or other rights to subscribe for or
purchase, or securities convertible into, any shares of
beneficial interest of the Acquired Fund are
outstanding and none will be outstanding on the Closing
Date (except that Class B shares of the Acquired Fund
convert automatically into Class A shares, as set forth
in the Acquired Fund Prospectus);
(k) The Acquired Fund's investment operations from
inception to the date hereof have been in compliance in
all material respects with the investment policies and
investment restrictions set forth in its prospectus and
statement of additional information as in effect from
time to time, except as previously disclosed in writing
to the Acquiring Fund;
(l) The execution, delivery and performance of this
Agreement has been duly authorized by the Trustees of
the Trust, and, upon approval thereof by the required
majority of the shareholders of the Acquired Fund, this
Agreement will constitute the valid and binding
obligation of the Acquired Fund enforceable in
accordance with its terms except as the same may be
limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of
creditors' rights generally and other equitable
principles;
(m) The Acquiring Shares to be issued to the Acquired Fund
pursuant to paragraph 1 will not be acquired for the
purpose of making any distribution thereof other than
to the Acquired Fund Shareholders as provided in
paragraph 1.3; and
(n) The information provided by the Acquired Fund for use
in the Registration Statement and Proxy Statement
referred to in paragraph 5.3 shall be accurate and
complete in all material respects and shall comply with
federal securities and other laws and regulations
applicable thereto.
(o) No consent, approval, authorization or order of any
court or governmental authority is required for the
consummation by the Acquired Fund of the transactions
contemplated by this Agreement, except such as may be
required under the Securities Act of 1933, as amended
(the "1933 Act"), the Securities Exchange Act of 1934,
as amended (the "1934 Act"), the 1940 Act and state
insurance, securities or blue sky laws (which term as
used herein shall include the laws of the District of
Columbia and of Puerto Rico).
(p) At the Closing Date, the Trust, on behalf of the
Acquired Fund will have good and marketable title to
its assets to be transferred to the Acquiring Fund
pursuant to paragraph 1.1 and will have full right,
power and authority to sell, assign, transfer and
deliver the Investments (as defined below) and any
other assets and liabilities of the Acquired Fund to be
transferred to the Acquiring Fund pursuant to this
Agreement. At the Closing Date, subject only to the
delivery of the Investments and any such other assets
and liabilities and payment therefor as contemplated by
this Agreement, the Acquiring Fund will acquire good
and marketable title thereto and will acquire the
Investments and any such other assets and liabilities
subject to no encumbrances, liens or security interests
whatsoever and without any
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<PAGE>
restrictions upon the transfer thereof, except as
previously disclosed to the Acquiring Fund. As used in
this Agreement, the term "Investments" shall mean the
Acquired Fund's investments shown on the schedule of
its investments as of February 29, 2000 referred to in
Section 4.1(f) hereof, as supplemented with such
changes in the portfolio as the Acquired Fund shall
make, and changes resulting from stock dividends, stock
split-ups, mergers and similar corporate actions
through the Closing Date.
(q) At the Closing Date, the Acquired Fund will have sold
such of its assets, if any, as are necessary to assure
that, after giving effect to the acquisition of the
assets of the Acquired Fund pursuant to this Agreement,
the Acquiring Fund will remain in compliance with such
mandatory investment restrictions as are set forth in
the Acquiring Fund Prospectus, as amended through the
Closing Date.
(r) No registration of any of the Investments would be
required if they were, as of the time of such transfer,
the subject of a public distribution by either of the
Acquiring Fund or the Acquired Fund, except as
previously disclosed by the Acquired Fund to the
Acquiring Fund.
4.2 The Acquiring Trust, on behalf of the Acquiring Fund,
represents and warrants the following to the Trust and to the
Acquired Fund as of the date hereof and agrees to confirm the
continuing accuracy and completeness in all material respects
of the following on the Closing Date:
(a) The Acquiring Trust is a business trust duly organized,
validly existing and in good standing under the laws of
The Commonwealth of Massachusetts;
(b) The Acquiring Trust is a duly registered investment
company classified as a management company of the
open-end type and its registration with the Securities
and Exchange Commission as an investment company under
the 1940 Act is in full force and effect, and the
Acquiring Fund is a separate series thereof duly
designated in accordance with the applicable provisions
of the Declaration of Trust of the Acquiring Trust and
the 1940 Act;
(c) The Acquiring Fund Prospectus conforms in all material
respects to the applicable requirements of the 1933 Act
and the rules and regulations of the Securities and
Exchange Commission thereunder and does not include any
untrue statement of a material fact or omit to state
any material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading, and there are no material contracts to
which the Acquiring Fund is a party that are not
referred to in such Prospectus or in the registration
statement of which it is a part;
(d) At the Closing Date, the Acquiring Fund will have good
and marketable title to its assets;
(e) The Acquiring Trust is not in violation in any material
respect of any provisions of its Declaration of Trust
or By-laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the
Acquiring Trust is a party or by
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<PAGE>
which the Acquiring Fund is bound, and the execution,
delivery and performance of this Agreement will not
result in any such violation;
(f) No litigation or administrative proceeding or
investigation of or before any court or governmental
body is presently pending or threatened against the
Acquiring Fund or any of its properties or assets. The
Acquiring Fund knows of no facts which might form the
basis for the institution of such proceedings, and is
not a party to or subject to the provisions of any
order, decree or judgment of any court or governmental
body which materially and adversely affects its
business or its ability to consummate the transactions
contemplated hereby;
(g) The statement of assets, the statement of operations,
the statement of changes in assets and the schedule of
investments as at and for the two years ended
June 30, 2000 of the Acquiring Fund, audited by
PricewaterhouseCoopers LLP, copies of which have been
furnished to the Acquired Fund, fairly reflect the
financial condition and results of operations of the
Acquiring Fund as of such dates and the results of its
operations for the periods then ended in accordance
with generally accepted accounting principles
consistently applied, and the Acquiring Fund has no
known liabilities of a material amount, contingent or
otherwise, other than those shown on the statements of
assets referred to above or those incurred in the
ordinary course of its business since June 30, 2000;
(h) Since June 30, 2000, there has not been any material
adverse change in the Acquiring Fund's financial
condition, assets, liabilities or business (other than
changes occurring in the ordinary course of
business), or any incurrence by the Acquiring Fund of
indebtedness. For the purposes of this subparagraph
(h), changes in portfolio securities, changes in the
market value of portfolio securities or net redemptions
shall be deemed to be in the ordinary course of
business;
(i) By the Closing Date, all federal and other tax returns
and reports of the Acquiring Fund required by law to
have been filed by such date (giving effect to
extensions) shall have been filed, and all federal and
other taxes shown to be due on said returns and reports
shall have been paid so far as due, or provision shall
have been made for the payment thereof, and to the best
of the Acquiring Fund's knowledge no such return is
currently under audit and no assessment has been
asserted with respect to such returns;
(j) For each fiscal year of its operation, the Acquiring
Fund has met the requirements of Subchapter M of the
Code for qualification as a regulated investment
company;
(k) The authorized capital of the Acquiring Trust consists
of an unlimited number of shares of beneficial
interest, no par value, of such number of different
series as the Board of Trustees may authorize from time
to time. The outstanding shares of beneficial interest
in the Acquiring Fund are, and at the Closing Date
will be, divided into Class A shares, Class B shares,
Class C shares, Class Z shares and Class S shares each
having the characteristics described in the Acquiring
Fund Prospectus. All issued and outstanding shares of
the Acquiring Fund are, and at the Closing Date will
be, duly and validly issued and outstanding, fully paid
and
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<PAGE>
non-assessable (except as set forth in the Acquiring
Fund Prospectus) by the Acquiring Trust, and will have
been issued in compliance with all applicable
registration or qualification requirements of federal
and state securities laws. Except for Class B shares
which convert to Class A shares after the expiration of
a period of time, no options, warrants or other rights
to subscribe for or purchase, or securities convertible
into, any shares of beneficial interest in the
Acquiring Fund of any class are outstanding and none
will be outstanding on the Closing Date;
(l) The Acquiring Fund's investment operations from
inception to the date hereof have been in compliance in
all material respects with the investment policies and
investment restrictions set forth in its prospectus and
statement of additional information as in effect from
time to time;
(m) The execution, delivery and performance of this
Agreement have been duly authorized by all necessary
action on the part of the Acquiring Trust, and this
Agreement constitutes the valid and binding obligation
of the Acquiring Trust and the Acquiring Fund
enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally and other
equitable principles;
(n) The Acquiring Shares to be issued and delivered to the
Acquired Fund pursuant to the terms of this Agreement
will at the Closing Date have been duly authorized and,
when so issued and delivered, will be duly and validly
issued Class A shares, Class B shares, Class C shares,
Class Z shares and Class S shares of beneficial
interest in the Acquiring Fund, and will be fully paid
and non-assessable (except as set forth in the
Acquiring Fund Prospectus) by the Acquiring Trust, and
no shareholder of the Acquiring Trust will have any
preemptive right of subscription or purchase in respect
thereof; and
(o) The information to be furnished by the Acquiring Fund
for use in the Registration Statement and Proxy
Statement referred to in paragraph 5.3 shall be
accurate and complete in all material respects and
shall comply with federal securities and other laws and
regulations applicable thereto.
(p) No consent, approval, authorization or order of any
court or governmental authority is required for the
consummation by the Acquiring Fund of the transactions
contemplated by this Agreement, except such as may be
required under 1933 Act, the 1934 Act, the 1940 Act and
state insurance, securities or blue sky laws (which
term as used herein shall include the laws of the
District of Columbia and of Puerto Rico).
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<PAGE>
5. COVENANTS OF THE ACQUIRED FUND AND THE ACQUIRING FUND.
The Acquiring Trust, on behalf of the Acquiring Fund, and the Trust, on
behalf of the Acquired Fund, each hereby covenants and agrees with the other as
follows:
5.1 The Acquiring Fund and the Acquired Fund each will operate its
business in the ordinary course between the date hereof and
the Closing Date, it being understood that such ordinary
course of business will include regular and customary periodic
dividends and distributions.
5.2 The Acquired Fund will call a meeting of its shareholders to
be held prior to the Closing Date to consider and act upon
this Agreement and take all other reasonable action necessary
to obtain the required shareholder approval of the
transactions contemplated hereby.
5.3 In connection with the Acquired Fund shareholders' meeting
referred to in paragraph 5.2, the Acquired Fund will prepare a
Proxy Statement for such meeting, to be included in a
Registration Statement on Form N-14 (the "Registration
Statement") which the Acquiring Trust will prepare and file
for the registration under the 1933 Act of the Acquiring
Shares to be distributed to the Acquired Fund shareholders
pursuant hereto, all in compliance with the applicable
requirements of the 1933 Act, the 1934 Act, and the 1940 Act.
5.4 The information to be furnished by the Acquired Fund for use
in the Registration Statement and the information to be
furnished by the Acquiring Fund for use in the Proxy
Statement, each as referred to in paragraph 5.3, shall be
accurate and complete in all material respects and shall
comply with federal securities and other laws and regulations
thereunder applicable thereto.
5.5 The Acquiring Fund will advise the Acquired Fund promptly if
at any time prior to the Closing Date the assets of the
Acquired Fund include any securities which the Acquiring Fund
is not permitted to acquire.
5.6 Subject to the provisions of this Agreement, the Acquired Fund
and the Acquiring Fund will each take, or cause to be taken,
all action, and do or cause to be done, all things reasonably
necessary, proper or advisable to cause the conditions to the
other party's obligations to consummate the transactions
contemplated hereby to be met or fulfilled and otherwise to
consummate and make effective such transactions.
5.7 The Acquiring Fund will use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the
1940 Act and such of the state securities or "Blue Sky" laws
as it may deem appropriate in order to continue its operations
after the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRED FUND.
The obligations of the Acquired Fund to consummate the
transactions provided for herein shall be subject, at its
election, to the performance by the Acquiring Trust and the
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<PAGE>
Acquiring Fund of all the obligations to be performed by them
hereunder on or before the Closing Date and, in addition
thereto, to the following further conditions:
6.1 The Acquiring Trust, on behalf of the Acquiring Fund, shall
have delivered to the Trust a certificate executed in its name
by its President or Vice President and its Treasurer or
Assistant Treasurer, in form satisfactory to the Trust and
dated as of the Closing Date, to the effect that the
representations and warranties of the Acquiring Trust on
behalf of the Acquiring Fund made in this Agreement are true
and correct at and as of the Closing Date, except as they may
be affected by the transactions contemplated by this
Agreement, and that the Acquiring Trust and the Acquiring Fund
have complied with all the covenants and agreements and
satisfied all of the conditions on their parts to be performed
or satisfied under this Agreement at or prior to the Closing
Date.
6.2 The Trust shall have received a favorable opinion from Ropes &
Gray, counsel to the Acquiring Trust for the transactions
contemplated hereby, dated the Closing Date and, in a form
satisfactory to the Trust, to the following effect:
(a) The Acquiring Trust is a business trust duly organized
and validly existing under the laws of The Commonwealth
of Massachusetts and has power to own all of its
properties and assets and to carry on its business as
presently conducted, and the Acquiring Fund is a
separate series thereof duly constituted in accordance
with the applicable provisions of the 1940 Act and the
Declaration of Trust and By-laws of the Acquiring
Trust; (b) this Agreement has been duly authorized,
executed and delivered on behalf of the Acquiring Fund
and, assuming the Prospectus and Registration Statement
referred to in paragraph 5.3 complies with applicable
federal securities laws and assuming the due
authorization, execution and delivery of this Agreement
by the Trust on behalf of the Acquired Fund, is the
valid and binding obligation of the Acquiring Fund
enforceable against the Acquiring Fund in accordance
with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other similar
laws affecting the enforcement of creditors' rights
generally and other equitable principles; (c) the
Acquiring Fund has the power to assume the liabilities
to be assumed by it hereunder and upon consummation of
the transactions contemplated hereby the Acquiring Fund
will have duly assumed such liabilities; (d) the
Acquiring Shares to be issued for transfer to the
shareholders of the Acquired Fund as provided by this
Agreement are duly authorized and upon such transfer
and delivery will be validly issued and outstanding and
fully paid and nonassessable Class A shares, Class B
shares, Class C shares, Class Z shares and Class S
shares of beneficial interest in the Acquiring Fund,
and no shareholder of the Acquiring Fund has any
preemptive right of subscription or purchase in respect
thereof; (e) the execution and delivery of this
Agreement did not, and the performance by the Acquiring
Trust and the Acquiring Fund of their respective
obligations hereunder will not, violate the Acquiring
Trust's Declaration of Trust or By-laws, or any
provision of any agreement known to such counsel to
which the Acquiring Trust or the Acquiring Fund is a
party or by which either of them is bound or, to the
knowledge of such counsel, result in the acceleration
of any obligation or the imposition of any penalty
under any agreement, judgment, or decree to which the
Acquiring Trust or the Acquiring Fund is a party or by
which either of them is bound; (f) to the knowledge of
such counsel, no consent, approval, authorization or
order of any court or governmental authority is
required for the consummation by the Acquiring
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<PAGE>
Trust or the Acquiring Fund of the transactions
contemplated by this Agreement except such as may be
required under state securities or "Blue Sky" laws or
such as have been obtained; (g) except as previously
disclosed, pursuant to section 4.2(f) above, such
counsel does not know of any legal or governmental
proceedings relating to the Acquiring Trust or the
Acquiring Fund existing on or before the date of
mailing of the Prospectus referred to in paragraph 5.3
or the Closing Date required to be described in the
Registration Statement referred to in paragraph 5.3
which are not described as required; (h) the Acquiring
Trust is registered with the Securities and Exchange
Commission as an investment company under the 1940 Act;
and (i) to the best knowledge of such counsel, no
litigation or administrative proceeding or
investigation of or before any court or governmental
body is presently pending or threatened as to the
Acquiring Trust or the Acquiring Fund or any of their
properties or assets and neither the Acquiring Trust
nor the Acquiring Fund is a party to or subject to the
provisions of any order, decree or judgment of any
court or governmental body, which materially and
adversely affects its business.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND.
The obligations of the Acquiring Fund to complete the
transactions provided for herein shall be subject, at its
election, to the performance by the Acquired Fund of all the
obligations to be performed by it hereunder on or before the
Closing Date and, in addition thereto, to the following
further conditions:
7.1 The Trust, on behalf of the Acquired Fund, shall have
delivered to the Acquiring Trust a certificate executed in its
name by its President or Vice President and its Treasurer or
Assistant Treasurer, in form and substance satisfactory to the
Acquiring Trust and dated the Closing Date, to the effect that
the representations and warranties of the Acquired Fund made
in this Agreement are true and correct at and as of the
Closing Date, except as they may be affected by the
transactions contemplated by this Agreement, and that the
Trust and the Acquired Fund have complied with all the
covenants and agreements and satisfied all of the conditions
on its part to be performed or satisfied under this Agreement
at or prior to the Closing Date;
7.2 The Acquiring Trust shall have received a favorable opinion
from Ropes & Gray, counsel to the Trust, dated the Closing
Date and in a form satisfactory to the Acquiring Trust, to
the following effect:
(a) The Trust is a business trust duly organized and
validly existing under the laws of the Commonwealth of
Massachusetts and has corporate power to own all of its
properties and assets and to carry on its business as
presently conducted, and the Acquired Fund is a
separate series thereof duly constituted in accordance
with the applicable provisions of the 1940 Act and the
Declaration of Trust of the Trust; (b) this Agreement
has been duly authorized, executed and delivered on
behalf of the Acquired Fund and, assuming the Proxy
Statement referred to in paragraph 5.3 complies with
applicable federal securities laws and assuming the due
authorization, execution and delivery of this Agreement
by the Acquiring Trust on behalf of the Acquiring Fund,
is the valid and binding obligation of the Acquired
Fund enforceable against the Acquired Fund in
accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or
other
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<PAGE>
similar laws affecting the enforcement of creditors'
rights generally and other equitable principles; (c)
the Acquired Fund has the power to sell, assign,
transfer and deliver the assets to be transferred by it
hereunder, and, upon consummation of the transactions
contemplated hereby, the Acquired Fund will have duly
transferred such assets to the Acquiring Fund; (d) the
execution and delivery of this Agreement did not, and
the performance by the Trust and the Acquired Fund of
their respective obligations hereunder will not,
violate the Trust's Declaration of Trust or By-laws, or
any provision of any agreement known to such counsel to
which the Trust or the Acquired Fund is a party or by
which either of them is bound or, to the knowledge of
such counsel, result in the acceleration of any
obligation or the imposition of any penalty under any
agreement, judgment, or decree to which the Trust or
the Acquired Fund is a party or by which either of them
is bound; (e) to the knowledge of such counsel, no
consent, approval, authorization or order of any court
or governmental authority is required for the
consummation by the Trust or the Acquired Fund of the
transactions contemplated by this Agreement, except
such as may be required under state securities or "Blue
Sky" laws or such as have been obtained; (f) such
counsel does not know of any legal or governmental
proceedings relating to the Trust or the Acquired Fund
existing on or before the date of mailing of the
Prospectus referred to in paragraph 5.3 or the Closing
Date required to be described in the Registration
Statement referred to in paragraph 5.3 which are not
described as required; (g) the Trust is registered with
the Securities and Exchange Commission as an investment
company under the 1940 Act; and (h) to the best
knowledge of such counsel, no litigation or
administrative proceeding or investigation of or before
any court or governmental body is presently pending or
threatened as to the Trust or the Acquired Fund or any
of its properties or assets and neither the Trust nor
the Acquired Fund is a party to or subject to the
provisions of any order, decree or judgment of any
court or governmental body, which materially and
adversely affects its business.
7.3 The Acquired Fund shall have furnished to the Acquiring Fund
tax returns, signed by a partner of PricewaterhouseCoopers LLP
for the fiscal year ended August 31, 2000 and signed pro forma
tax returns for the period from September 1, 2000 to the
Closing Date (which pro forma tax returns shall be furnished
promptly after the Closing Date).
7.4 Prior to the Closing Date, the Acquired Fund shall have
declared a dividend or dividends which, together with all
previous dividends, shall have the effect of distributing all
of the Acquired Fund's investment company taxable income for
its taxable years ending on or after August 31, 2000 and on or
prior to the Closing Date (computed without regard to any
deduction for dividends paid), and all of its net capital
gains realized in each of its taxable years ending on or after
August 31, 2000 and on or prior to the Closing Date.
7.5 The Acquired Fund shall have furnished to the Acquiring Fund a
certificate, signed by the President (or any Vice President)
and the Treasurer of the Trust, as to the adjusted tax basis
in the hands of the Acquired Fund of the securities delivered
to the Acquiring Fund pursuant to this Agreement.
7.6 The custodian of the Acquired Fund shall have delivered to the
Acquiring Fund a certificate identifying all of the assets of
the Acquired Fund held by such custodian as of the Valuation
Date.
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<PAGE>
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH OF THE
ACQUIRING FUND AND THE ACQUIRED FUND.
The respective obligations of the Trust and the Acquiring Trust
hereunder are each subject to the further conditions that on or before the
Closing Date:
8.1 This Agreement and the transactions contemplated herein shall
have been approved by the vote of the required majority of the
holders of the outstanding shares of the Acquired Fund of
record on the record date for the meeting of its shareholders
referred to in paragraph 5.2;
8.2 On the Closing Date no action, suit or other preceding shall
be pending before any court or governmental agency in which it
is sought to restrain or prohibit, or obtain damages or other
relief in connection with, this Agreement or the transactions
contemplated hereby;
8.3 All consents of other parties and all other consents, orders
and permits of federal, state and local regulatory authorities
(including those of the Securities and Exchange Commission and
of state Blue Sky and securities authorities) deemed necessary
by the Trust or the Acquiring Trust to permit consummation, in
all material respects, of the transactions contemplated hereby
shall have been obtained, except where failure to obtain any
such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of the
Acquiring Fund or the Acquired Fund.
8.4 The Registration Statement referred to in paragraph 5.3 shall
have become effective under the 1933 Act and no stop order
suspending the effectiveness thereof shall have been issued
and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the
1933 Act;
8.5 The Trust shall have received a favorable opinion of Ropes &
Gray satisfactory to the Trust and the Acquiring Trust shall
have received a favorable opinion of Ropes & Gray satisfactory
to the Acquiring Trust, each substantially to the effect that,
for federal income tax purposes:
(a) The acquisition by the Acquiring Fund of the assets of
the Acquired Fund in exchange for the Acquiring Fund's
assumption of the Obligations of the Acquired Fund and
issuance of the Acquiring Shares, followed by the
distribution by the Acquired Fund of such the Acquiring
Shares to the shareholders of the Acquired Fund in
exchange for their shares of the Acquired Fund, all as
provided in paragraph 1 hereof, will constitute a
reorganization within the meaning of Section 368(a) of
the Code, and the Acquired Fund and the Acquiring Fund
will each be "a party to a reorganization" within the
meaning of Section 368(b) of the Code;
(b) No gain or loss will be recognized to the Acquired Fund
(i) upon the transfer of its assets to the Acquiring
Fund in exchange for the Acquiring Shares or (ii) upon
the distribution of the Acquiring Shares to the
shareholders of the Acquired Fund as contemplated in
paragraph 1 hereof;
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<PAGE>
(c) No gain or loss will be recognized to the Acquiring
Fund upon the receipt of the assets of the Acquired
Fund in exchange for the assumption of the Obligations
and issuance of the Acquiring Shares as contemplated in
paragraph 1 hereof;
(d) The tax basis of the assets of the Acquired Fund
acquired by the Acquiring Fund will be the same as the
basis of those assets in the hands of the Acquired Fund
immediately prior to the transfer, and the holding
period of the assets of the Acquired Fund in the hands
of the Acquiring Fund will include the period during
which those assets were held by the Acquired Fund;
(e) The shareholders of the Acquired Fund will recognize no
gain or loss upon the exchange of their shares of the
Acquired Fund for the Acquiring Shares;
(f) The tax basis of the Acquiring Shares to be received by
each shareholder of the Acquired Fund will be the same
in the aggregate as the aggregate tax basis of the
shares of the Acquired Fund surrendered in exchange
therefor;
(g) The holding period of the Acquiring Shares to be
received by each shareholder of the Acquired Fund will
include the period during which the shares of the
Acquired Fund surrendered in exchange therefor were
held by such shareholder, provided such shares of the
Acquired Fund were held as a capital asset on the date
of the exchange.
(h) Acquiring Fund will succeed to and take into account
the items of Acquired Fund described in Section 381(c)
of the Code, subject to the conditions and limitations
specified in Sections 381, 382, 383 and 384 of the Code
and the regulations thereunder.
8.6 At any time prior to the Closing, any of the foregoing
conditions of this Agreement may be waived jointly by the
Board of Trustees of the Trust and the Board of Trustees of
the Acquiring Trust if, in their judgment, such waiver will
not have a material adverse effect on the interests of the
shareholders of the Acquired Fund and the Acquiring Fund.
9. BROKERAGE FEES AND EXPENSES.
9.1 The Trust, on behalf of the Acquired Fund, and the Acquiring
Trust, on behalf of the Acquiring Fund, each represents and
warrants to the other that there are no brokers or finders
entitled to receive any payments in connection with the
transactions provided for herein.
9.2 The Acquiring Trust, on behalf of the Acquiring Fund, shall
pay all fees paid to governmental authorities for the
registration or qualification of the Acquiring Shares. The
other expenses of the transactions contemplated by this
Agreement shall be borne by the following parties in the
percentages indicated: (a) the Trust, on behalf of the
Acquired Fund, __%, (b) the Acquiring Trust, on behalf of the
Acquiring Fund, __%, and (c) Liberty Financial Companies, Inc.
__%.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES.
10.1 The Trust on behalf of the Acquired Fund and the Acquiring
Trust on behalf of the Acquiring Fund agree that neither party
has made any representation, warranty or
A-15
<PAGE>
covenant not set forth herein and that this Agreement
constitutes the entire agreement between the parties.
10.2 The representations, warranties and covenants contained in
this Agreement or in any document delivered pursuant hereto or
in connection herewith shall not survive the consummation of
the transactions contemplated hereunder except paragraphs 1.1,
1.3, 1.5, 1.6, 5.4, 9, 10, 13 and 14.
11. TERMINATION.
11.1 This Agreement may be terminated by the mutual agreement of
the Acquiring Trust and the Trust. In addition, either the
Acquiring Trust or the Trust may at its option terminate this
Agreement at or prior to the Closing Date because:
(a) Of a material breach by the other of any
representation, warranty, covenant or agreement
contained herein to be performed by the other party at
or prior to the Closing Date; or
(b) A condition herein expressed to be precedent to the
obligations of the terminating party has not been met
and it reasonably appears that it will not or cannot be
met.
(c) If the transactions contemplated by this Agreement have
not been substantially completed by May 31, 2001 this
Agreement shall automatically terminate on that date
unless a later date is agreed to by both the Trust and
the Acquiring Trust.
11.2 If for any reason the transactions contemplated by this
Agreement are not consummated, no party shall be liable to any
other party for any damages resulting therefrom, including
without limitation consequential damages.
12. AMENDMENTS.
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of the
Trust on behalf of the Acquired Fund and the Acquiring Trust on behalf of the
Acquiring Fund; provided, however, that following the shareholders' meeting
called by the Acquired Fund pursuant to paragraph 5.2 no such amendment may have
the effect of changing the provisions for determining the number of the
Acquiring Shares to be issued to shareholders of the Acquired Fund under this
Agreement to the detriment of such shareholders without their further approval.
13. NOTICES.
Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy or certified mail addressed to: Liberty Funds Trust II, One
Financial Center, Boston, MA 02111 attention Secretary or to Liberty Funds
Trust VI, One Financial Center, Boston, MA 02111 attention Secretary.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
NON-RECOURSE.
A-16
<PAGE>
14.1 The article and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in
accordance with the domestic substantive laws of The
Commonwealth of Massachusetts, without giving effect to any
choice or conflicts of law rule or provision that would result
in the application of the domestic substantive laws of any
other jurisdiction.
14.4 This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns,
but no assignment or transfer hereof or of any rights or
obligations hereunder shall be made by any party without the
written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties
hereto and their respective successors and assigns, any rights
or remedies under or by reason of this Agreement.
14.5 A copy of the Declaration of Trust of the Trust and the
Declaration of Trust of the Acquiring Trust are each on file
with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that no trustee,
officer, agent or employee of either the Trust or the
Acquiring Trust shall have any personal liability under this
Agreement, and that this Agreement is binding only upon the
assets and properties of the Acquired Fund and the Acquiring
Fund.
A-17
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed as a sealed instrument by its President or Vice
President and its corporate seal to be affixed thereto and attested by its
Secretary or Assistant Secretary.
LIBERTY FUNDS TRUST II,
on behalf of Liberty Newport Tiger Cub
Fund, Class A, B and C shares and Stein
Roe Small Cap Tiger Fund, Class S shares
By: ____________________________________
Name: __________________________________
Title: _________________________________
ATTEST:
___________________________________
Name: _____________________________
Title: ____________________________
LIBERTY FUNDS TRUST VI,
on behalf of Liberty Newport Asia
Pacific Fund
By: ____________________________________
Name: __________________________________
Title: _________________________________
ATTEST:
____________________________________
Name: ______________________________
Title: _____________________________
Solely for purposes of Section 9.2
of the Agreement:
LIBERTY FINANCIAL COMPANIES, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
ATTEST:
__________________________________
Name: ____________________________
Title: ___________________________
A-18
<PAGE>
APPENDIX B
FUND INFORMATION
SHARES OUTSTANDING AND ENTITLED TO VOTE OF THE TIGER CUB FUND AND TRUST II AND
SHARES OUTSTANDING OF THE ASIA PACIFIC FUND AND TRUST VI
For each class of the Tiger Cub Fund's shares and Trust II's shares
entitled to vote at the Meeting, and for each class of the Asia Pacific Fund's
shares and Trust VI's shares, the number of shares outstanding as of
September 29, 2000 was as follows:
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
NUMBER OF SHARES OUTSTANDING
FUND OR TRUST CLASS AND ENTITLED TO VOTE
-----------------------------------------------------------------------------------------
<S> <C> <C>
Tiger Cub Fund
-----------------------------------------------------------------------------------------
A 454,618
-----------------------------------------------------------------------------------------
B 731,504
-----------------------------------------------------------------------------------------
C 93,673
-----------------------------------------------------------------------------------------
S 42,916
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Trust II 1,322,710
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Asia Pacific Fund A 425,886
-----------------------------------------------------------------------------------------
B 52,040
-----------------------------------------------------------------------------------------
C 236,850
-----------------------------------------------------------------------------------------
Z 91,433
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Trust VI 72,651,978
-----------------------------------------------------------------------------------------
</TABLE>
OWNERSHIP OF SHARES
As of September 29, 2000, each Trust believes that the Trustees and
officers of each Trust, as a group, owned less than one percent of each class of
shares of each Fund and of each Trust as a whole. As of September 29, 2000, the
following shareholders of record owned 5% or more of the outstanding shares of
the noted class of shares of the noted Fund:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
NUMBER OF
OUTSTANDING
SHARES OF PERCENTAGE OF OUTSTANDING
FUND AND CLASS NAME AND ADDRESS OF SHAREHOLDER CLASS OWNED SHARES OF CLASS OWNED
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
TIGER CUB FUND
CLASS A
Merrill Lynch Pierce Fenner & Smith 57,689.649 12.69%
For the Sole Benefit of its Customers
Attn: Fund Administration #97KF8
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
CLASS B
Merrill Lynch Pierce Fenner & Smith 133,319.380 18.23%
For the Sole Benefit of its Customers
Attn: Fund Administration #97KF8
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
</TABLE>
B-1
<PAGE>
<TABLE>
<S> <C> <C> <C>
CLASS C
Merrill Lynch Pierce Fenner & Smith 30,732.970 32.81%
For the Sole Benefit of its Customers
Attn: Fund Administration #97KF8
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
T. Graham Christopher MD 5,547.463 5.92%
Vaira Pelekis-Christopher MD
8727 Talbot Road
Edmonds, WA 98026
Raymond James & Assoc Inc. Cust 5,509.587 5.88%
N. 28 W. 24398 Watertown Road
Pewaukee, WI 53072
CLASS S
US Bank NA Custodian IRA 3,201.677 7.46%
Nathan Schlessinger
1 E. Wacker Drive
Suite 2600
Chicago, IL 60601
Diane G. Haglund 3,340.757 7.78%
Terrence G. Haglund
149 Stone Lake Ct.
Yorktown, VA 23693-3715
ASIA PACIFIC FUND
CLASS A
Colonial Management Associates, Inc. 244,505.198 57.41%*
Attn: Phil Iudice/Controller
One Financial Center
11th Floor
Boston, MA 02111-2621
CLASS C
Colonial Management Associates, Inc. 10,605.322 20.38%*
Attn: Phil Iudice/Controller
One Financial Center
11th Floor
Boston, MA 02111-2621
Merrill Lynch Pierce Fenner & Smith 8,378.478 16.10%
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
CLASS Z
Colonial Counselor Growth Portfolio 61,928.635 67.73%
c/o Christie McCullough
245 Summer Street
Boston, MA 02111
Colonial Counselor Select Balanced Portfolio 29,225.670 31.96%
c/o Christie McCullough
245 Summer Street
Boston, MA 02111
</TABLE>
----------------------------
B-2
<PAGE>
* Entity owned 25% or more of the outstanding shares of beneficial interest of
the Asia Pacific Fund, and therefore may be presumed to "control" such Fund,
as that term is defined in the Investment Company Act of 1940, as amended.
OWNERSHIP OF SHARES UPON CONSUMMATION OF ACQUISITION
As of September 29, 2000, the shareholders of record that owned 5%
or more of the outstanding shares of the above noted class of shares of the
above noted Fund would own the following percentage of the Acquiring Fund upon
consummation of the Acquisition:
--------------------------------------------------------------------------------
PERCENTAGE OF OUTSTANDING
SHARES OF CLASS OWNED
NAME AND ADDRESS OF UPON CONSUMMATION OF
FUND AND CLASS SHAREHOLDER ACQUISITION
--------------------------------------------------------------------------------
TIGER CUB FUND
CLASS A
Merrill Lynch Pierce Fenner & Smith 3.56%
For the Sole Benefit of its Customers
Attn: Fund Administration #97KF8
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
CLASS B
Merrill Lynch Pierce Fenner & Smith 9.38%
For the Sole Benefit of its Customers
Attn: Fund Administration #97KF8
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
CLASS C
Merrill Lynch Pierce Fenner & Smith 12.13%
For the Sole Benefit of its Customers
Attn: Fund Administration #97KF8
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
T. Graham Christopher MD 2.19%
Vaira Pelekis-Christopher MD
8727 Talbot Road
Edmonds, WA 98026
Raymond James & Assoc Inc. Cust 2.18%
N. 28 W. 24398 Watertown Road
Pewaukee, WI 53072
CLASS S
US Bank NA Custodian IRA 1.35%
Nathan Schlessinger
1 E. Wacker Drive
Suite 2600
Chicago, IL 60601
Diane G. Haglund 1.41%
Terrence G. Haglund
149 Stone Lake Ct.
Yorktown, VA 23693-3715
ASIA PACIFIC FUND
CLASS A
Colonial Management Associates, Inc. 39.82%
Attn: Phil Iudice/Controller
One Financial Center
11th Floor
Boston, MA 02111-2621
CLASS C
Colonial Management Associates, Inc. 11.27%
Attn: Phil Iudice/Controller
One Financial Center
11th Floor
Boston, MA 02111-2621
Merrill Lynch Pierce Fenner & Smith 8.90%
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive E. 2nd Floor
Jacksonville, FL 32246-6484
CLASS Z
Colonial Counselor Growth Portfolio 68.78%
c/o Christie McCullough
245 Summer Street
Boston, MA 02111
Colonial Counselor Select Balanced Portfolio 31.96%
c/o Christie McCullough
245 Summer Street
Boston, MA 02111
INFORMATION CONCERNING EXECUTIVE OFFICERS
The following table sets forth certain information about the executive officers
of each Fund:
<TABLE>
<CAPTION>
EXECUTIVE OFFICER YEAR OF ELECTION AS
NAME & AGE OFFICE AND PRINCIPAL OCCUPATION (1) EXECUTIVE OFFICER
---------- ----------------------------------- -----------------
<S> <C> <C>
Stephen E. Gibson President of the Liberty Funds since June, 1998; Chairman of 1998
(46) the Board since July, 1998, Chief Executive Officer and
President since December, 1996 and Director, since July,
1996 of CMA (formerly Executive Vice President from July,
1996 to December, 1996); Chairman of the Board, Director,
Chief Executive Officer and President of Liberty Funds
Group LLC (LFG) since December, 1998 (formerly Director,
Chief Executive Officer and President of The Colonial
Group, Inc. (TCG) from December, 1996 to December, 1998);
Director of Stein Roe & Farnham Incorporated (SR&F) since
September, 2000 President since, January, 2000 and Vice
Chairman since August, 1998 (formerly Assistant Chairman
and Executive Vice President from August, 1998 to January,
2000) (formerly Managing Director of Marketing of Putnam
Investments, June, 1992 to July, 1996.)
Pamela A. McGrath Treasurer and Chief Financial Officer of the Liberty Funds and 1999
(46) Liberty All-Star Funds since April, 2000; Treasurer, Chief
Financial Officer and Vice President of LFG since
December, 1999; Chief Financial Officer, Treasurer and
Senior Vice President of CMA since December, 1999;
Director of Offshore Accounting for Putnam Investments
from May, 1998 to October, 1999; Managing Director of
Scudder Kemper Investments from October, 1984 to December,
1997.
</TABLE>
(1) Except as otherwise noted, each individual has held the office
indicated or other offices in the same company for the last five years.
B-3
<PAGE>
ADDITIONAL INFORMATION CONCERNING TRUSTEE COMPENSATION
The current Board of Trustees received the following compensation from each Fund
as of each Fund's fiscal year end and for the calendar year ended December 31,
1999(1):
<TABLE>
<CAPTION>
---------------------------------------------------------------------------
TIGER CUB ASIA PACIFIC
FUND FUND
8/31/99 6/30/00
---------------------------------------------------------------------------
<S> <C> <C>
Mr. Bleasdale $747(2) $588(3)
---------------------------------------------------------------------------
Ms. Collins 624 533
---------------------------------------------------------------------------
Mr. Grinnell 650 555
---------------------------------------------------------------------------
Mr. Lowry 630 549
---------------------------------------------------------------------------
Mr. Macera 538 530
---------------------------------------------------------------------------
Mr. Mayer 631 555
---------------------------------------------------------------------------
Mr. Moody 614(4) 561(5)
---------------------------------------------------------------------------
Mr. Neuhauser 661 564
---------------------------------------------------------------------------
Mr. Stitzel 538 536
---------------------------------------------------------------------------
Ms. Verville 549(6) 528(7)
---------------------------------------------------------------------------
</TABLE>
The following table sets forth the total compensation paid to each Trustee by
the Liberty Mutual Funds for the calendar year ended December 31, 1999.
<TABLE>
<CAPTION>
----------------------------------------------------------------
Trustee Total Compensation
----------------------------------------------------------------
<S> <C>
Mr. Bleasdale $103,000(8)
----------------------------------------------------------------
Ms. Collins 96,000
----------------------------------------------------------------
Mr. Grinnell 100,000
----------------------------------------------------------------
Mr. Lowry 97,000
----------------------------------------------------------------
Mr. Macera 95,000
----------------------------------------------------------------
Mr. Mayer 101,000
----------------------------------------------------------------
Mr. Moody 91,000(9)
----------------------------------------------------------------
Mr. Neuhauser 101,252
----------------------------------------------------------------
Mr. Stitzel 95,000
----------------------------------------------------------------
Ms. Verville 96,000(10)
----------------------------------------------------------------
</TABLE>
For the calendar year ended December 31, 1999, certain of the Trustees received
the following compensation in their capacities as Trustees or Directors of the
Liberty All-Star Equity Fund, the Liberty All-Star Growth Fund, Inc. and Liberty
Funds Trust IX (together, the "Liberty All-Star Funds"):
Total Compensation From Liberty
All-Star Funds For The Calendar
Trustee Year Ended December 31, 1999 (11)
------- ---------------------------------
Robert J. Birnbaum $25,000
James E. Grinnell 25,000
Richard W. Lowry 25,000
William E. Mayer 25,000
John J. Neuhauser 25,000
(1) The Funds do not currently provide pension or retirement plan benefits to
the Trustees.
(2) Includes $344 payable in later years as deferred compensation.
(3) Includes $290 payable in later years as deferred compensation.
(4) Total compensation of $614 for the fiscal year ended August 31, 1999,
will be payable in later years as deferred compensation.
(5) Total compensation of $561 for the fiscal year ended June 30, 2000,
will be payable in later years as deferred compensation.
(6) Total compensation of $549 for the fiscal year ended August 31, 1999,
will be payable in later years as deferred compensation.
(7) Total compensation of $528 for the fiscal year ended June 30, 2000,
will be payable in later years as deferred compensation.
(8) Includes $52,000 payable in later years as deferred compensation.
(9) Total compensation of $91,000 for the calendar year ended December 31,
1999, will be payable in later years as deferred compensation.
(10) Total compensation of $96,000 for the calendar year ended December 31,
1999, will be payable in later years as deferred compensation.
(11) The Liberty All-Star Funds are advised by Liberty Asset Management
Company ("LAMCO"). LAMCO is an indirect wholly-owned subsidiary of
Liberty Financial Companies, Inc. (an intermediate parent of the
Advisor of each Fund).
B-4
<PAGE>
APPENDIX C
CAPITALIZATION
The following table shows on an unaudited basis the capitalization of each of
the Tiger Cub Fund and the Asia Pacific Fund as of June 30, 2000, and on a pro
forma combined basis, giving effect to the acquisition of the assets and
liabilities of the Tiger Cub Fund by the Asia Pacific Fund at net asset value as
of that date:
<TABLE>
<CAPTION>
TIGER CUB ASIA PACIFIC PRO FORMA PRO FORMA
FUND FUND ADJUSTMENTS(1) COMBINED(2)
---------- ------------ ----------- -----------
Class A
<S> <C> <C> <C> <C>
Net asset value $4,897,892 $10,205,355 (26,500) $15,076,747
Shares outstanding 527,298 415,705 (327,877) 615,126
Net asset value per share $9.29 $24.55 $24.51
Class B
Net asset value $6,979,125 $5,832,909 (25,272) $12,786,762
Shares outstanding 775,216 240,066 (488,210) 527,072
Net asset value per share $9.00 $24.30 $24.26
Class C
Net asset value $905,753 $1,383,496 (4,178) $2,285,071
Shares outstanding 100,390 56,997 (63,118) 94,269
Net asset value per share $9.02 $24.27 $24.24
Class S
Net asset value $229,625 (556) $ 229,069
Shares outstanding 24,608 (15,277) 9,331
Net asset value per share $9.33 $24.55
Class Z
Net asset value $1,984,923 (2,846) $1,982,077
Shares outstanding 80,730 0 80,730
Net asset value per share $24.59 $24.55
</TABLE>
(1) Adjustments reflect one time proxy, accounting, legal and other costs of
the reorganization of $31,525 and $27,828 to be borne by the Tiger Cub Fund
and the Asia Pacific Fund, respectively.
(2) Assumes the Acquisition was consummated on June 30, 2000, and is for
information purposes only. No assurance can be given as to how many shares
of the Asia Pacific Fund will be received by the shareholders of the Tiger
Cub Fund on the date the Acquisition takes place, and the foregoing should
not be relied upon to reflect the number of shares of the Asia Pacific Fund
that actually will be received on or after such date.
C-1
<PAGE>
APPENDIX D
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE AS OF JUNE 30, 2000
LIBERTY NEWPORT ASIA PACIFIC FUND
PORTFOLIO MANAGEMENT REPORT
---------------------------
THE FUND HELD UP WELL DURING A VOLATILE PERIOD
For the 12-month period ended June 30, 2000, the Asia Pacific Fund's Class
A shares had a total return of 36.18% without a sales charge. It outperformed
its benchmark, the Morgan Stanley Capital International (MSCI) All Countries
Asia Pacific Free Index, which had a total return of 17.49% for the same
period. The Fund's strong performance was attributable to a general economic
recovery throughout the Pacific Basin. Although many markets gave back some of
their gains during the volatile second quarter of 2000, investors who held on
throughout the 12-month period were well-rewarded.
ALL EYES ON JAPAN'S LONG-TERM RECOVERY
The Japanese market finally came to life during 1999 following years of
sluggishness. The benchmark Nikkei hit a three-year high of 20,000 during early
2000 before settling back during the second quarter. Part of the reason for this
pullback was the uncertainty created by the death of Prime Minister Krizo
Obuchi, who was replaced by Yoshiro Mori.
Japan is experiencing what we term a "micro-recovery," as corporate profits
are sharply higher but gross domestic product (GDP) has struggled to forge into
positive territory. Our long-term view is that the micro-recovery will win out,
assuming that the government is able to check its spending and thereby reduce
the country's debt. However, investors should note that the Fund's position in
Japan (39.9% of total investment) is reduced from the levels of prior reports,
and is substantially underweighted compared to the Fund's regional benchmark,
the MSCI All Country Asia Pacific Free Index. This underweighting does not
reflect a negative stance on Japan, but rather the fact that we are able to find
better growth opportunities elsewhere.
THE FACE OF ASIA IS CHANGING
The financial crisis of 1997-1998 left a permanent imprint on Asia's
investment landscape. Much of Southeast Asia, once the driving force of the
Pacific Basin, has not been able to reform itself to meet the Fund's criteria of
market liquidity and long-term growth in GDP. Our attention and enthusiasm has
shifted to Greater China, which now accounts for approximately 41% of total
investments.
Another area of growing interest is India, currently 1.5% of total
investments.
D-1
<PAGE>
India is following China's lead and is moving rapidly toward a more open,
free-market economy. India is not yet a major market and many risks remain.
However, it is worth noting that India and China together account for
approximately 40% of the world's population. The prospect of the economies of
India, China and Japan all growing at the same time has no modern precedent and
is one of the most powerful wild cards of the decade ahead.
POLITICS DOMINATE THE 2000 HEADLINES
The first six months of 2000 included many important events that could
shape the region for years to come. In May, the U.S. Congress voted in favor of
permanent normal trade relations with China, a decisive step towards China's
long-sought entry into the World Trade Organization.
The second quarter also saw the election of Chen Shui Bian to the
presidency of Taiwan. Chen was the opposition candidate and therefore the least
favorite of China. The market was expected to fall with the change in status quo
but instead it rose because Chen was conciliatory toward China and China took a
wait-and-see stance. Our investment in Taiwan (4.2% of total investments) has,
to this point, been held back because of concerns about political risks and
capital controls, so we will be watching the new administration with special
interest.
OUTLOOK: CONTINUED ECONOMIC RECOVERY
We believe that the worst of the Asian economic crisis is behind us. High-
quality companies that have survived over the past two-and-a-half years are now
dominant in their industries, and they should continue to strengthen their
market positions.
While there are undoubtedly hurdles to overcome, we believe that the
positive developments over the past year can be sustained.
/s/Christopher H. Legallet
/s/David R. Smith
CHRISTOPHER H. LEGALLET and DAVID R. SMITH are co-managers of the Asia
Pacific Fund. Mr. Legallet is Chief Investment Officer and a senior vice
president of Newport Fund Management, Inc., and Mr. Smith is a senior vice
president of Newport Fund Management, Inc.
International investing offers significant long-term growth potential, but also
involves certain risks. Because many of the Asian countries are considered
emerging markets, they are subject to a greater degree of social, political,
currency and economic instability.
D-2
<PAGE>
The Morgan Stanley Capital International (MSCI) All Country Asia Pacific Free
Index is an unmanaged index that invests in stocks in the Pacific Basin. Unlike
mutual funds, indexes are not investments, do not incur fees or charges and are
not professionally managed. It is not possible to invest directly in an index.
PERFORMANCE INFORMATION
-----------------------
ASIA PACIFIC FUND INVESTMENT PERFORMANCE VS. MSCI AC ASIA PAC FREE INDEX
[LINE CHART: Initial and subsequent account values at end of each of the
most recently completed ten fiscal years]
PERFORMANCE OF A $10,000 INVESTMENT IN SHARE CLASSES FROM 8/19/98 - 6/30/00
<TABLE>
<CAPTION>
MSCI AC Asia
Without sales charge With sales charge Pac Free Index
--------------------------------------------------------------------------------
<S> <C> <C> <C>
8/98 $10,000 $ 9,425 $ 8,762
9/98 10,770 10,152 8,770
10/98 12,809 12,072 10,320
11/98 13,590 12,809 10,885
12/98 14,041 13,234 11,198
1/99 13,637 12,853 11,248
2/99 13,839 13,043 10,998
3/99 15,797 14,889 12,344
4/99 18,138 17,095 13,324
5/99 17,211 16,222 12,551
6/99 20,234 19,070 13,878
7/99 21,810 20,556 14,709
8/99 22,660 21,357 14,605
9/99 22,916 21,559 15,020
10/99 23,980 22,601 15,599
11/99 27,855 26,253 16,420
12/99 31,092 29,304 17,456
1/00 29,105 27,431 16,761
2/00 29,431 27,739 16,234
3/00 30,552 28,795 17,352
4/00 28,026 26,414 16,073
5/00 26,162 24,658 15,170
6/00 26,098 24,598 16,200
</TABLE>
The Morgan Stanley Capital International All Country Asia Pacific Free Index is
an unmanaged index that tracks the performance of stocks traded on stock
exchanges in Pacific Basin countries, including Australia, Hong Kong, India,
Indonesia, Japan, Malaysia, New Zealand, the People's Republic of China, the
Philippines, Singapore, South Korea, Taiwan and Thailand. Unlike mutual funds,
indexes are not investments, do not incur fees or charges and are not
professionally managed. It is not possible to invest directly in an index.
AVERAGE ANNUAL TOTAL RETURNS AS OF 6/30/00
<TABLE>
<CAPTION>
Share Class A B C Z
Inception Date 8/19/98 8/19/98 8/19/98 8/12/99
----------------------------------------------------------------------------------------------------------------
Without With Without With Without With Without
Sales Sales Sales Sales Sales Sales Sales
Charge Charge Charge Charge Charge Charge Charge
<S> <C> <C> <C> <C> <C> <C> <C>
1 year 36.18% 28.35% 35.43% 30.43% 35.27% 34.27% 36.49%
Life 67.35% 62.11% 66.25% 64.86% 66.15% 66.15% 67.55%
</TABLE>
PERFORMANCE OF A $10,000 INVESTMENT IN ALL SHARE CLASSES FROM 8/19/98 - 6/30/00
<TABLE>
<CAPTION>
WITHOUT WITH SALES
SALES CHARGE CHARGE
<S> <C> <C>
Class A $26,098 $24,598
Class B $25,781 $25,381
Class C $25,750 $25,750
Class Z $26,157 -
</TABLE>
Past performance cannot predict future results. Returns and value of an
investment will vary resulting in a gain or a loss on sale. All results shown
assume reinvestment of distributions. The "with sales charge" returns include
the maximum 5.75% sales charge for Class A shares, the appropriate Class B
contingent deferred sales charge for the holding period after purchase as
follows: through first year-5%, second year-4%, third year-3%, fourth year-3%,
fifth year-2%, sixth year-1%, thereafter-0% and the Class C contingent deferred
sales charge of 1% for the first year only. Performance for different share
classes will vary based on differences in sales charges and fees associated with
each class.
Class Z shares (newer class shares) performance includes returns of the Fund's
Class A shares (the oldest existing fund class) for periods prior to the
inception date of the newer class shares. The Class A share returns are not
restated to reflect any expense differential (e.g., 12b-1 fees) between Class A
and the
D-3
<PAGE>
newer Class shares. Had the expense differential been reflected, the returns for
the period prior to the inception of the Class Z shares would have been higher.
NET ASSET VALUE AS OF 6/30/00
Class A $24.55
Class B $24.31
Class C $24.28
Class Z $24.59
DISTRIBUTIONS DECLARED PER SHARE FROM 7/1/99 - 6/30/00
Class A $1.325
Class B $1.277
Class C $1.277
Class Z $1.341
HOLDINGS
--------
TOP 5 HOLDINGS AS OF 6/30/00
1. China Mobile 4.6%
2. PetroChina 4.6%
3. Li & Fung 3.9%
4. Sony 3.6%
5. Samsung Electronics 3.5%
Top five holdings are calculated as a percentage of net assets. Because the Fund
is actively managed, there can be no guarantee the Fund will continue to
maintain these holdings in the future.
TOP 5 COUNTRY BREAKDOWN AS OF 6/30/00
1. Japan 39.9%
2. Hong Kong 37.0%
3. Singapore 7.9%
4. Korea 7.0%
5. Taiwan 4.2%
Top five holdings are calculated as a percentage of total investments. Because
the Fund is actively managed, there can be no guarantee the Fund will continue
to maintain this country breakdown in the future.
TOP FIVE SECTORS
Tech: Hardware 20.2%
Financial 14.1%
D-4
<PAGE>
Consumer/Retail 11.4%
Telecom 11.1%
Real Estate 6.4%
Industry sector weightings are calculated as a percentage of net assets. Because
the Fund is actively managed, there can be no guarantee the Fund will continue
to maintain these sector weightings in the future.
D-5
<PAGE>
LIBERTY FUNDS TRUST VI
LIBERTY GROWTH & INCOME FUND
FORM N-14
PART B
STATEMENT OF ADDITIONAL INFORMATION
November 8, 2000
This Statement of Additional Information (the "SAI") relates to the
proposed Acquisition (the "Acquisition") of the Stein Roe Growth & Income Fund
(the "Stein Roe Fund"), a series of Liberty-Stein Roe Funds Investment Trust,
the Liberty Value Fund (the "Value Fund") a series of Liberty Funds Trust VI and
the Liberty All-Star Growth & Income Fund (the "All-Star Fund"), a series of
Liberty Funds Trust IX, (together, the "Acquired Funds"), by the Liberty Growth
& Income Fund (the "Acquiring Fund"), a series of Liberty Funds Trust VI.
This SAI contains information which may be of interest to shareholders
but which is not included in the Prospectus/Proxy Statement dated November 8,
2000 (the "Prospectus/Proxy Statement") of the Acquiring Fund which relates to
the Acquisition. As described in the Prospectus/Proxy Statement, the Acquisition
would involve the transfer of all the assets of the Acquired Funds in exchange
for shares of the Acquiring Fund and the assumption of all the liabilities of
each of the Acquired Funds. Each of the Acquired Funds would distribute the
Acquiring Fund shares it receives to its shareholders in complete liquidation of
the Acquired Fund.
This SAI is not a prospectus and should be read in conjunction with the
Prospectus/Proxy Statement. The Prospectus/Proxy Statement has been filed with
the Securities and Exchange Commission and is available upon request and without
charge by writing to your Fund at One Financial Center, Boston, Massachusetts
02111 or by calling 1-800-426-3750.
Table of Contents
<TABLE>
<S> <C>
I. Additional Information about the Acquiring Fund.............................................
II. Additional Information about the Acquired Funds.............................................
III. Financial Statements........................................................................
</TABLE>
<PAGE>
I. Additional Information about the Acquiring Fund.
Incorporated by reference to Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A (filed on October 18, 1999) of Liberty Funds
Trust VI (Registration Statement Nos. 33-45117 and 811-6529).
II. Additional Information about the Acquired Funds.
With respect to the Opportunities Fund, incorporated by reference to
Post-Effective Amendment No. 65 to the Registration Statement on Form N-1A
(filed on January 28, 2000) of Liberty-Stein Roe Funds Investment Trust
(Registration Statement Nos. 33-11351 and 811-4978).
With respect to the Value Fund, incorporated by reference to
Post-Effective Amendment No. 19 to the Registration Statement on Form N-1A
(filed on October 18, 1999) of Liberty Funds Trust VI (Registration Statement
Nos. 33-45117 and 811-6529).
With respect to the All-Star Fund, incorporated by reference to
Post-Effective Amendment No. 3 to the Registration Statement on Form N-1A (filed
on March 17, 2000) of Liberty Funds Trust IX (Registration Statement Nos.
333-66819 and 811-09095).
III. Financial Statements.
This SAI is accompanied by (i) the Annual Report for the year ended
June 30, 2000 of the Acquiring Fund; (ii) the Semi-Annual Report for the six
months ended March 31, 2000 and the Annual Report for the year ended September
30, 1999 of the Opportunities Fund; (iii) the Annual Report for the year ended
June 30, 2000 of the Value Fund; (iv) the Semi-Annual Report for the six months
ended June 30, 2000 and the Annual Report for the year ended December 31, 1999
of the All-Star Fund, all of which contain historical financial information
regarding such Funds. Such reports have been filed with the Securities and
Exchange Commission and are incorporated herein by reference.
Pro forma financial statements of the Acquiring Fund for the
Acquisition are provided on the following pages.
-2-
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH LIBERTY SR&F GROWTH
& INCOME GROWTH & PRO FORMA & INCOME LIBERTY GROWTH PRO FORMA
PORTFOLIO INCOME FUND COMBINED PORTFOLIO & INCOME FUND COMBINED MARKET
SHARES SHARES SHARES MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS
Agriculture, Forestry & Fishing
CANADIAN NATL RAILWAY CO 133,100 133,100 $ 3,884,856 $ 3,884,856
-------------- ---------------
Finance, Insurance & Real Estate
ACE LIMITED 81,700 81,700 2,287,600 2,287,600
AMBAC FINANCIAL GROUP INC 40,500 40,500 2,219,906 2,219,906
AMER INTERNATIONAL GROUP INC 132,275 132,275 15,542,313 15,542,313
AMERICAN EXPRESS CO 240,000 144,000 384,000 $ 12,510,000 7,506,000 20,016,000
AXA FINANICAL INC 140,500 140,500 4,777,000 4,777,000
BANK OF AMERICA CORP 67,896 231,234 299,130 2,919,528 9,943,062 12,862,590
BEAR STEARNS COMPANIES INC 30,173 30,173 1,255,951 1,255,951
CAPITAL ONE FINANCIAL CORP 72,100 72,100 3,217,463 3,217,463
CHASE MANHATTAN CORP (NEW) 193,200 186,450 379,650 8,899,275 8,588,353 17,487,628
CINCINNATI FINANCIAL CORP 188,300 188,300 5,919,681 5,919,681
CITIGROUP INC 244,810 523,300 768,110 14,749,803 31,528,825 46,278,628
CITY NATIONAL CORP 119,500 119,500 4,242,250 4,242,250
FANNIE MAE 161,000 163,400 324,400 8,402,188 8,527,438 16,929,625
FLEET BOSTON FINANCIAL CORP 348,600 348,600 11,852,400 11,852,400
FREDDIE MAC 108,300 108,300 4,386,150 4,386,150
GOLDEN STATE BANCORP 171,300 171,300 3,083,400 3,083,400
GOLDEN WEST FINANCIAL CORP 89,100 89,100 3,636,394 3,636,394
HCA-THE HEALTHCARE CORP 346,100 346,100 10,512,788 10,512,788
HOUSEHOLD INTERNATIONAL INC 83,300 83,300 3,462,156 3,462,156
J P MORGAN & CO INC 55,100 55,100 6,067,888 6,067,888
KNIGHT TRADING GROUP INC 59,800 59,800 1,782,788 1,782,788
LEHMAN BROTHERS HLDG INC 100,900 100,900 9,541,356 9,541,356
LOEWS CORP 42,000 42,000 2,520,000 2,520,000
MBNA CORP 210,300 210,300 5,704,388 5,704,388
MGIC INV CORP 123,000 123,000 5,596,500 5,596,500
MORGAN STANLEY DEAN WITTER 165,900 165,900 13,811,175 13,811,175
NATIONWIDE FINANCIAL SERV A 228,700 228,700 7,518,513 7,518,513
PACIFIC CENTURY FINL CORP 145,500 145,500 2,127,938 2,127,938
PMI GROUP INC 131,100 131,100 6,227,250 6,227,250
PNC FINANCIAL SERVICES GROUP 104,900 104,900 4,917,188 4,917,188
PROVIDIAN FINANCIAL CORP 30,100 30,100 2,709,000 2,709,000
SOVEREIGN BANCORP INC 505,200 505,200 3,552,188 3,552,188
UNIONBANCAL CORPORATION 155,100 155,100 2,879,044 2,879,044
UNITED HEALTHCARE CORP 126,700 126,700 10,864,525 10,864,525
WELLS FARGO & CO 156,660 57,800 214,460 6,070,575 2,239,750 8,310,325
------------- -------------- ---------------
53,551,368 230,548,616 284,099,984
------------- -------------- ---------------
Manufacturing
ADC TELECOMMUNICATIONS INC 81,500 81,500 6,835,813 6,835,813
AGILENT TECHNOLOGIES INC 28,986 28,986 2,137,718 2,137,718
ALCOA INC 111,400 111,400 3,230,600 3,230,600
AMGEN INC 80,800 80,800 5,676,200 5,676,200
ANALOG DEVICES INC. 82,900 82,900 6,300,400 6,300,400
ANHEUSER BUSCH INC 162,600 162,600 12,144,188 12,144,188
APPLE COMPUTER INC 49,600 49,600 2,597,800 2,597,800
APPLIED MATLS 80,000 129,200 209,200 7,250,000 11,708,750 18,958,750
APPLIED MICRO CIRCUITS CORP 11,600 11,600 1,145,500 1,145,500
ATMEL CORP 116,900 116,900 4,310,688 4,310,688
AVON PRODUCTS INC 40,000 40,000 1,780,000 1,780,000
BAUSCH & LOMB INC 125,200 125,200 9,687,350 9,687,350
BAXTER INTERNATIONAL INC 95,000 95,000 6,679,688 6,679,688
BECKMAN COULTER INC 29,100 29,100 1,698,713 1,698,713
BESTFOODS 190,600 190,600 13,199,050 13,199,050
BIOMET INC 127,000 127,000 4,881,563 4,881,563
BOEING CO 99,600 332,800 432,400 4,164,525 13,915,200 18,079,725
BP AMOCO PLC-ADR 242,810 150,000 392,810 13,733,940 8,484,375 22,218,315
BRISTOL-MYERS SQUIBB CO 150,000 166,200 316,200 8,737,500 9,681,150 18,418,650
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH LIBERTY SR&F GROWTH
& INCOME GROWTH & PRO FORMA & INCOME LIBERTY GROWTH PRO FORMA
PORTFOLIO INCOME FUND COMBINED PORTFOLIO & INCOME FUND COMBINED MARKET
SHARES SHARES SHARES MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS
BRUNSWICK CORP 227,400 227,400 3,766,313 3,766,313
CHEVRON CORP 119,200 119,200 10,109,650 10,109,650
CISCO SYSTEMS INC 90,000 456,200 546,200 5,720,625 28,997,213 34,717,838
COCA COLA CO 19,700 19,700 1,131,519 1,131,519
COMPAQ COMPUTER CORP 195,000 195,000 4,984,688 4,984,688
COMVERSE TECH 32,200 32,200 2,994,600 2,994,600
CORNING INCORPORATED 21,100 21,100 5,694,363 5,694,363
DELPHI AUTOMOTIVE SYSTEMS 253,600 253,600 3,693,050 3,693,050
DOW CHEMICAL CO 350,500 350,500 10,580,719 10,580,719
ECOLAB INC 250,000 250,000 9,765,625 9,765,625
EI DUPONT DE NEMOURS & CO INC 29,179 60,200 89,379 1,276,581 2,633,750 3,910,331
ELI LILLY & CO 114,500 114,500 11,435,688 11,435,688
EMC CORP 108,400 108,400 8,340,025 8,340,025
EMERSON ELECTRIC CO 50,000 50,000 3,018,750 3,018,750
EXXON MOBIL CORPORATION 365,165 365,165 28,665,453 28,665,453
FMC CORP 43,200 43,200 2,505,600 2,505,600
FORD MOTOR CO 266,300 266,300 11,450,900 11,450,900
GATEWAY INC 51,000 51,000 2,894,250 2,894,250
GENERAL ELECTRIC CO 234,000 640,500 874,500 12,402,000 33,946,500 46,348,500
GEORGIA PACIFIC (TIMBER GRP) 75,000 75,000 1,621,875 1,621,875
GEORGIA PACIFIC CORP 170,000 170,000 4,462,500 4,462,500
GILLETTE CO 134,400 134,400 4,695,600 4,695,600
GRANT PRIDECO INC 164,800 164,800 4,120,000 4,120,000
HEWLETT-PACKARD CO 90,400 90,400 11,288,700 11,288,700
HONEYWELL INTERNATIONAL INC 152,500 77,437 229,937 5,137,344 2,608,659 7,746,003
HUBBELL INC CL B 70,400 70,400 1,795,200 1,795,200
INTEL CORP 40,000 232,800 272,800 5,347,500 31,122,450 36,469,950
INTERNATIONAL GAME TECH 61,300 61,300 1,624,450 1,624,450
INTERNATIONAL PAPER CO 180,700 180,700 5,387,119 5,387,119
INTL BUSINESS MACHINES CORP 105,000 130,800 235,800 11,504,063 14,330,775 25,834,838
JOHNSON & JOHNSON 69,900 69,900 7,121,063 7,121,063
JOHNSON CONTROLS INC 81,500 81,500 4,181,969 4,181,969
KIMBERLY CLARK CORP 66,000 66,000 3,786,750 3,786,750
LEAR CORP 140,000 140,000 2,800,000 2,800,000
LITTLEFUSE INC 35,000 35,000 1,715,000 1,715,000
LOCKHEED MARTIN CORP 422,400 422,400 10,480,800 10,480,800
LSI LOGIC CORP 53,200 53,200 2,879,450 2,879,450
LUCENT TECHNOLOGIES INC 42,800 42,800 2,535,900 2,535,900
LYONDELL PETRO 211,300 211,300 3,539,275 3,539,275
MERCK & CO INC 155,800 155,800 11,938,175 11,938,175
MICROCHIP TECHNOLOGY 115,800 115,800 6,747,159 6,747,159
MINNESOTA MINING & MFG CO 130,300 130,300 10,749,750 10,749,750
MOTOROLA INC 45,000 45,000 1,307,813 1,307,813
MYLAN LABORATORIES, INC 238,600 238,600 4,354,450 4,354,450
NOKIA CORP ADR 112,400 112,400 5,612,975 5,612,975
PACCAR INC 137,100 137,100 5,441,156 5,441,156
PEPSI BOTTLING GROUP 324,800 324,800 9,480,100 9,480,100
PEPSICO INC 262,800 262,800 11,678,175 11,678,175
PFIZER INC 316,250 388,675 704,925 15,180,000 18,656,400 33,836,400
PHARMACIA CORPORATION 149,500 149,500 7,727,281 7,727,281
PHILIP MORRIS CO INC 203,000 280,400 483,400 5,392,188 7,448,125 12,840,313
PROCTER & GAMBLE CO 81,000 157,300 238,300 4,637,250 9,005,425 13,642,675
QUAKER OATS CO 121,000 121,000 9,090,125 9,090,125
ROYAL DUTCH PETRO-NY SHARES 254,300 254,300 15,655,344 15,655,344
SABRE HOLDINGS CORP 36,132 36,132 1,029,762 1,029,762
SARA LEE CORP 144,000 144,000 2,781,000 2,781,000
SCHERING-PLOUGH CORP 86,400 86,400 4,363,200 4,363,200
TEMPLE INLAND INC 24,700 24,700 1,037,400 1,037,400
TERADYNE INC 62,400 62,400 4,586,400 4,586,400
TEXAS INSTRUMENTS INC 78,400 78,400 5,385,100 5,385,100
TRIBUNE CO 100,000 100,000 3,500,000 3,500,000
UNION CARBIDE CORP 111,100 111,100 5,499,450 5,499,450
UNITED TECHNOLOGIES CORP 170,500 170,500 10,038,188 10,038,188
USG CORP NEW 63,300 63,300 1,922,738 1,922,738
VISTEON CORP 33,288 33,288 403,611 403,611
WEATHERFORD INTERNATIONAL 164,800 164,800 6,561,100 6,561,100
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH LIBERTY SR&F GROWTH
& INCOME GROWTH & PRO FORMA & INCOME LIBERTY GROWTH PRO FORMA
PORTFOLIO INCOME FUND COMBINED PORTFOLIO & INCOME FUND COMBINED MARKET
SHARES SHARES SHARES MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS
WESTVACO CORP 268,600 268,600 6,664,638 6,664,638
WEYERHAEUSER CO 50,800 50,800 2,184,400 2,184,400
WHIRLPOOL CORP 85,100 85,100 3,967,788 3,967,788
------------- -------------- ---------------
170,529,308 559,572,362 730,101,670
------------- -------------- ---------------
Mining & Energy
BURLINGTON RESOURCES INC 76,000 76,000 2,907,000 2,907,000
COFLEXIP-SPONSORED ADR 23,270 23,270 1,407,835 1,407,835
CONOCO INC-CL B 61,421 61,421 1,508,653 1,508,653
CONOCO INC-CL A 104,800 104,800 2,305,600 2,305,600
DIAMOND OFFSHORE DRILLING 195,800 195,800 6,877,475 6,877,475
ENRON CORP 115,000 115,000 7,417,500 7,417,500
FALCON DRILLING COMPANY INC 521,800 521,800 12,294,913 12,294,913
PETROLEUM GEO SERVICES ADR 239,100 239,100 4,079,644 4,079,644
SCHLUMBERGER LTD 161,900 161,900 12,081,788 12,081,788
TRANSOCEAN SEDCO FOREX INC 31,343 31,343 1,674,892 1,674,892
------------- -------------- ---------------
11,231,753 41,323,545 52,555,299
------------- -------------- ---------------
Retail Trade
BEST BUY INC 128,500 128,500 8,127,625 8,127,625
CIRCUIT CITY STORES INC 100,700 100,700 3,341,981 3,341,981
CVS CORP 159,200 159,200 6,368,000 6,368,000
DARDEN RESTURANTS INC 206,000 206,000 3,347,500 3,347,500
FEDERATED DEPT STORES INC NEW 80,000 80,000 2,700,000 2,700,000
HOME DEPOT INC 69,150 69,150 3,453,178 3,453,178
RADIOSHACK CORP 93,700 93,700 4,439,038 4,439,038
TARGET CORP 61,400 61,400 3,561,200 3,561,200
TJX COMPANIES, INC 252,800 252,800 4,740,000 4,740,000
WALGREEN CO 280,000 280,000 9,012,500 9,012,500
WAL-MART STORES INC 150,000 150,700 300,700 8,643,750 8,684,088 17,327,838
------------- -------------- ---------------
25,096,250 41,322,609 66,418,859
------------- -------------- ---------------
Services
ADOBE SYSTEMS INC 73,500 73,500 9,555,000 9,555,000
AMERICA ONLINE INC 113,000 113,000 5,960,750 5,960,750
AUTOMATIC DATA PROCESSING INC 105,600 105,600 5,656,200 5,656,200
CHECK POINT SOFTWARE TECH 5,700 5,700 1,206,975 1,206,975
DUN & BRADSTREET CORP 214,800 214,800 6,148,650 6,148,650
FIRST DATA CORP 129,600 129,600 6,431,400 6,431,400
HARRAH'S ENTERTAINMENT INC 88,500 88,500 1,852,969 1,852,969
HERTZ CORP-CL A 60,000 60,000 1,683,750 1,683,750
INTERPUBLIC GROUP COS INC 121,200 121,200 5,211,600 5,211,600
MANPOWER 128,600 128,600 4,115,200 4,115,200
MICROSOFT CORP 158,700 158,700 12,696,000 12,696,000
NETWORK APPLIANCE INC 15,400 15,400 1,239,700 1,239,700
ORACLE CORP 148,400 148,400 12,474,875 12,474,875
SUN MICROSYSTEMS INC 123,800 123,800 11,258,063 11,258,063
TIME WARNER INC 16,400 16,400 1,246,400 1,246,400
USA NETWORKS INC 101,500 101,500 2,194,938 2,194,938
WALT DISNEY PRODUCTIONS 155,500 155,500 6,035,344 6,035,344
------------- -------------- ---------------
6,895,350 88,072,463 94,967,813
------------- -------------- ---------------
Transportation, Communications,
Electric, Gas and Sanitary Services
A T & T CORP 65,333 348,100 413,433 2,066,156 11,008,663 13,074,819
AMR CORP 50,000 50,000 1,321,875 1,321,875
AT & T WIRELESS CORP 178,200 178,200 4,967,325 4,967,325
BELL ATLANTIC CORP 190,320 122,600 312,920 9,670,635 6,229,613 15,900,248
BELLSOUTH CORP 147,300 147,300 6,278,663 6,278,663
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH LIBERTY SR&F GROWTH
& INCOME GROWTH & PRO FORMA & INCOME LIBERTY GROWTH PRO FORMA
PORTFOLIO INCOME FUND COMBINED PORTFOLIO & INCOME FUND COMBINED MARKET
SHARES SHARES SHARES MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS
BURLINGTON NORTH SANTA FE CORP 200,000 200,000 4,587,500 4,587,500
CHRIS-CRAFT INDUSTIRES INC 61,800 61,800 4,082,663 4,082,663
COMCAST CORP-SPECIAL CL A 30,000 46,500 76,500 1,215,000 1,883,250 3,098,250
CONTINENTAL AIRLINES CL B 160,000 160,000 7,520,000 7,520,000
DELTA AIR LINES INC 79,600 79,600 4,024,775 4,024,775
DUKE ENERGY 60,100 60,100 3,388,138 3,388,138
EDISON INTERNATIONAL 235,700 235,700 4,831,850 4,831,850
ENTERGY CORP 252,400 252,400 6,862,125 6,862,125
GTE CORP 201,400 201,400 12,537,150 12,537,150
KANSAS CITY SOUTHN INDS INC 131,900 131,900 11,697,881 11,697,881
P G & E CORP 116,000 116,000 2,856,500 2,856,500
PMC-SIERRA INC 16,800 16,800 2,985,150 2,985,150
RF MICRO DEVICES INC 47,400 47,400 4,153,425 4,153,425
SBC COMMUNICATIONS INC 409,400 409,400 17,706,550 17,706,550
SPRINT CORP (FON GROUP) 189,200 189,200 9,649,200 9,649,200
TELEPHONE & DATA 24,300 24,300 2,436,075 2,436,075
TXU CORP 164,500 164,500 4,852,750 4,852,750
UAL INC 56,000 56,000 3,258,500 3,258,500
UNICOM CORPORATION 160,400 160,400 6,205,475 6,205,475
UNION PACIFIC CORP 137,900 137,900 5,128,156 5,128,156
US CELLULAR CORP 29,700 29,700 1,871,100 1,871,100
------------- -------------- ---------------
38,079,047 127,197,094 165,276,141
------------- -------------- ---------------
Wholesale Trade
SYSCO CORP 182,600 182,600 7,692,025 7,692,025
-------------- ---------------
Total Common Stocks 305,383,077 1,099,613,570 1,404,996,647
------------- -------------- ---------------
<CAPTION>
CASH EQUIVALENTS Par Par Par
<S> <C> <C> <C> <C> <C> <C>
ASSOCIATES FIRST CAPITAL 0.00% 7/3/2000 $ 2,130,000 $ 2,130,000 2,129,178 2,129,178
WARBURG REPURCHASE AGREEMENT
6.60% 7/3/2000 $ 25,932,000 25,932,000 25,932,000 25,932,000
------------- -------------- ---------------
Total Cash Equivalents 2,129,178 25,932,000 28,061,178
------------- -------------- ---------------
TOTAL INVESTMENTS (COST OF $157,157,695,
$976,414,426 AND $1,133,572,121,
RESPECTIVELY) $ 307,512,255 $1,125,545,570 $ 1,433,057,825
============= ============== ===============
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINING CONDENSED STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F Growth Liberty Value Liberty
& Income Opportunities Growth & Income Pro Forma Pro Forma
Portfolio Fund Fund Adjustments Combined
<S> <C> <C> <C> <C> <C>
Investments, at value $ 307,512,255 $ 308,179,637 $ 1,125,545,570 $ (308,179,637)(a) $1,433,057,825
Cash 3,884 -- 176 -- 4,060
Receivable for investments sold -- -- -- -- --
Payable for investments purchased -- -- -- -- --
Other assets less other liabilities 837,077 (351,328) 35,737,174 (526,602)(b) 35,696,321
Net assets $ 308,353,216 $ 307,828,309 $ 1,161,282,920 $ (308,706,239) $1,468,758,206
Class A:
Net assets $ 259,166 $ 309,356,714 (74,984) $ 309,540,896
Shares outstanding 9,814 15,017,711 (1,268) $ 15,026,257
Net asset value $ 26.41 $ 20.60 $ 20.60
Class B:
Net assets $ 1,269,238 $ 822,643,366 (199,533) $ 823,713,071
Shares outstanding 48,240 41,382,562 3,457 $ 41,434,259
Net asset value $ 26.31 $ 19.88 $ 19.88
Class C:
Net assets $ 75,057 $ 29,281,763 (7,109) $ 29,349,711
Shares outstanding 2,853 1,465,147 220 $ 1,468,220
Net asset value $ 26.31 $ 19.99 $ 19.99
Class Z:
Net assets $ 1,004 $ 1,077 -- $ 2,081
Shares outstanding 38 52 10 $ 100
Net asset value $ 26.42 $ 20.71 $ 20.71
Class S:
Net assets $ 306,223,844 (71,396) $ 306,152,448
Shares outstanding 11,601,266 3,185,013 (c) $ 14,786,279
Net asset value $ 26.40 $ 20.71
</TABLE>
Footnotes to pro forma statement of assets and liabilities
(a) - Adjustment represents the elimination the Liberty Value Opportunities
Fund's investment in the Portfolio, as the master/feeder structure will be
dissolved, with the the securities held by the Portfolio withdrawn from
the Portfolio by the Liberty Value Opportunities Fund prior to the merger.
(b) - Adjustment reflects a payable to the general partner of the Portfolio
for its remaining net assets after withdrawal of the Liberty Value
Opportunities Fund's investment in the Portfolio of $173,579, in addition
to one time proxy, accounting, legal and other costs of the reorganization
of $71,770 and $281,253 to be borne by the Opportunities Fund and the
Growth & Income Fund, respectively.
(c) - Opportunities Fund shares are exchanged for new Class S shares of the
Growth & Income Fund, to be established upon consummation of the merger.
Initial per share value of Class S shares is presumed to equal that of
current Class Z shares.
<PAGE>
PRO FORMA COMBINING CONDENSED STATEMENT OF OPERATIONS FOR THE TWELVE
MONTH PERIOD ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F Growth Liberty Value Liberty
& Income Opportunities Growth & Income Pro Forma Pro Forma
Portfolio Fund Fund Adjustments Combined
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends 4,456,261 4,451,174 15,573,131 (4,456,261)(a) 20,024,304
Interest 1,058,561 1,056,847 1,966,931 (1,058,561)(a) 3,023,778
---------- ----------- ------------ ----------- ------------
Total investment income 5,514,823 5,508,021 17,540,062 (5,514,823) 23,048,082
EXPENSES
Management fee 2,190,101 -- 9,452,952 (6,728)(b) 11,636,325
Administration fee -- 545,843 -- (545,843)(b) --
Service fee - Class A, B, C -- 866 3,099,842 -- (b) 3,100,708
Distribution fee - Class A -- 23 -- (23)(b) --
Distribution fee - Class B -- 2,118 6,593,089 -- (b) 6,595,207
Distribution fee - Class C -- 130 244,861 -- (b) 244,991
Transfer agent fee - Class A,
B, C, Z -- 819 -- (819)(b) --
Transfer agent fee - Class S -- 799,640 -- (799,640)(b) --
Transfer agent fee 6,000 -- 2,728,605 461,443 (c) 3,196,048
Bookkeeping fee 32,875 32,847 420,040 25,252 (b) 511,014
Trustees fee 17,578 9,169 56,473 (26,111)(d) 57,109
Expenses allocated --
from SRF Growth & Income
Portfolio -- 2,271,293 -- (2,271,293)(a) --
All other expenses 27,280 269,696 1,052,407 (350,383)(e) 999,000
---------- ----------- ------------ ----------- ------------
Total operating expenses 2,273,834 3,932,444 23,648,269 (3,514,145) 26,340,402
NET INVESTMENT INCOME (LOSS) 3,240,989 1,575,577 (6,108,207) (2,000,678) (3,292,320)
NET REALIZED & UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on:
Investments 32,232,665 32,215,860 183,532,200 (32,232,665)(a) 215,748,060
Closed futures contracts 748,773 693,167 -- (748,773)(a) 693,167
Foreign currency transactions (1,375) (749) -- 1,375 (a) (749)
---------- ----------- ------------ ----------- ------------
Net Realized Gain 32,980,063 32,908,278 183,532,200 (32,980,063) 216,440,478
Change in net unrealized
appreciation/depreciation
during the period on investments 63,450,655 63,542,407 (170,105,574) (63,450,655)(a) (106,563,167)
---------- ----------- ------------ ----------- ------------
Net Gain 96,430,719 96,450,685 13,426,626 (96,430,719) 109,877,311
---------- ----------- ------------ ----------- ------------
Increase in Net Assets from
Operations 99,671,708 98,026,261 7,318,419 (98,431,397) 106,584,991
</TABLE>
(a) Due to elimination of master/feeder structure.
(b) Based on the contract in effect for the surviving fund.
(c) Based on the contract in effect for the surviving fund. Note that a new
transfer agent fee structure was implemented for the Growth & Income Fund
effective January 1, 2000. The pro forma combined transfer agent fee shown
assumes this new agreement was in effect for the entire twelve-month period
ended June 30, 2000.
(d) Based on trustee compensation plan for the surviving fund.
(e) Decrease due to the elimination of duplicative expenses achieved by merging
the funds.
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY
LIBERTY GROWTH & PRO FORMA LIBERTY LIBERTY GROWTH PRO FORMA
VALUE FUND INCOME FUND COMBINED VALUE FUND & INCOME FUND COMBINED MARKET
SHARES SHARES SHARES MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS
Agriculture, Forestry & Fishing
CANADIAN NATL RAILWAY CO 133,100 133,100 $ 3,884,856 $ 3,884,856
--------------- ---------------
Finance, Insurance & Real Estate
ACE LIMITED 81,700 81,700 2,287,600 2,287,600
AETNA INC 10,900 10,900 $ 699,644 699,644
AMBAC FINANCIAL GROUP INC 40,500 40,500 2,219,906 2,219,906
AMER INTERNATIONAL GROUP INC 132,275 132,275 15,542,313 15,542,313
AMERICAN EXPRESS CO 144,000 144,000 7,506,000 7,506,000
AON CORP 33,200 33,200 1,031,275 1,031,275
AXA FINANICAL INC 140,500 140,500 4,777,000 4,777,000
BANK OF AMERICA CORP 231,234 231,234 9,943,062 9,943,062
BANK ONE 31,000 31,000 823,438 823,438
BEAR STEARNS COMPANIES INC 30,173 30,173 1,255,951 1,255,951
CAPITAL ONE FINANCIAL CORP 72,100 72,100 3,217,463 3,217,463
CHASE MANHATTAN CORP (NEW) 186,450 186,450 8,588,353 8,588,353
CINCINNATI FINANCIAL CORP 188,300 188,300 5,919,681 5,919,681
CITIGROUP INC 523,300 523,300 31,528,825 31,528,825
CITY NATIONAL CORP 119,500 119,500 4,242,250 4,242,250
FANNIE MAE 163,400 163,400 8,527,438 8,527,438
FIRSTAR CORP 18,000 18,000 379,125 379,125
FLEET BOSTON FINANCIAL CORP 16,100 348,600 364,700 547,400 11,852,400 12,399,800
FREDDIE MAC 19,500 108,300 127,800 789,750 4,386,150 5,175,900
GOLDEN STATE BANCORP 171,300 171,300 3,083,400 3,083,400
GOLDEN WEST FINANCIAL CORP 89,100 89,100 3,636,394 3,636,394
HCA-THE HEALTHCARE CORP 346,100 346,100 10,512,788 10,512,788
HOUSEHOLD INTERNATIONAL INC 83,300 83,300 3,462,156 3,462,156
J P MORGAN & CO INC 55,100 55,100 6,067,888 6,067,888
KNIGHT TRADING GROUP INC 59,800 59,800 1,782,788 1,782,788
LEHMAN BROTHERS HLDG INC 100,900 100,900 9,541,356 9,541,356
LOEWS CORP 42,000 42,000 2,520,000 2,520,000
MBNA CORP 210,300 210,300 5,704,388 5,704,388
MGIC INV CORP 123,000 123,000 5,596,500 5,596,500
MORGAN STANLEY DEAN WITTER 165,900 165,900 13,811,175 13,811,175
NATIONWIDE FINANCIAL SERV A 228,700 228,700 7,518,513 7,518,513
PACIFIC CENTURY FINL CORP 145,500 145,500 2,127,938 2,127,938
PMI GROUP INC 131,100 131,100 6,227,250 6,227,250
PNC FINANCIAL SERVICES GROUP 104,900 104,900 4,917,188 4,917,188
PROVIDIAN FINANCIAL CORP 30,100 30,100 2,709,000 2,709,000
SOVEREIGN BANCORP INC 505,200 505,200 3,552,188 3,552,188
UNIONBANCAL CORPORATION 155,100 155,100 2,879,044 2,879,044
UNITED HEALTHCARE CORP 5,900 126,700 132,600 505,925 10,864,525 11,370,450
WASHINGTON MUTUAL INC 23,100 23,100 667,013 667,013
WELLS FARGO & CO 57,800 57,800 2,239,750 2,239,750
XL CAPITAL LTD-CLASS A 20,700 20,700 1,120,388 1,120,388
------------ --------------- ---------------
6,563,956 230,548,616 237,112,573
------------ --------------- ---------------
Manufacturing
ABBOTT LABS 31,600 31,600 1,408,175 1,408,175
ADC TELECOMMUNICATIONS INC 81,500 81,500 6,835,813 6,835,813
AGILENT TECHNOLOGIES INC 28,986 28,986 2,137,718 2,137,718
ALCOA INC 111,400 111,400 3,230,600 3,230,600
AMERADA HESS CORP 17,000 17,000 1,049,750 1,049,750
AMGEN INC 80,800 80,800 5,676,200 5,676,200
ANALOG DEVICES INC. 82,900 82,900 6,300,400 6,300,400
ANHEUSER BUSCH INC 162,600 162,600 12,144,188 12,144,188
APPLE COMPUTER INC 49,600 49,600 2,597,800 2,597,800
APPLIED MATLS 129,200 129,200 11,708,750 11,708,750
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY
LIBERTY GROWTH & PRO FORMA LIBERTY LIBERTY GROWTH PRO FORMA
VALUE FUND INCOME FUND COMBINED VALUE FUND & INCOME FUND COMBINED MARKET
SHARES SHARES SHARES MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS
APPLIED MICRO CIRCUITS CORP 11,600 11,600 1,145,500 1,145,500
ATMEL CORP 116,900 116,900 4,310,688 4,310,688
BAUSCH & LOMB INC 125,200 125,200 9,687,350 9,687,350
BECKMAN COULTER INC 29,100 29,100 1,698,713 1,698,713
BESTFOODS 21,800 190,600 212,400 1,509,650 13,199,050 14,708,700
BOEING CO 25,700 332,800 358,500 1,074,581 13,915,200 14,989,781
BOSTON SCIENTIFIC CORP 19,700 19,700 432,169 432,169
BP AMOCO PLC-ADR 150,000 150,000 8,484,375 8,484,375
BRISTOL-MYERS SQUIBB CO 166,200 166,200 9,681,150 9,681,150
BRUNSWICK CORP 227,400 227,400 3,766,313 3,766,313
CHEVRON CORP 6,300 119,200 125,500 534,319 10,109,650 10,643,969
CISCO SYSTEMS INC 456,200 456,200 28,997,213 28,997,213
COCA COLA CO 19,700 19,700 1,131,519 1,131,519
COMPAQ COMPUTER CORP 18,100 18,100 462,681 462,681
COMVERSE TECH 32,200 32,200 2,994,600 2,994,600
CORNING INCORPORATED 21,100 21,100 5,694,363 5,694,363
DELPHI AUTOMOTIVE SYSTEMS 41,282 253,600 294,882 601,169 3,693,050 4,294,219
DOW CHEMICAL CO 350,500 350,500 10,580,719 10,580,719
EASTMAN KODAK CO 15,000 15,000 892,500 892,500
EI DUPONT DE NEMOURS & CO INC 60,200 60,200 2,633,750 2,633,750
ELI LILLY & CO 114,500 114,500 11,435,688 11,435,688
EMC CORP 108,400 108,400 8,340,025 8,340,025
EMERSON ELECTRIC CO 15,400 15,400 929,775 929,775
EXXON MOBIL CORPORATION 365,165 365,165 28,665,453 28,665,453
FMC CORP 43,200 43,200 2,505,600 2,505,600
FORD MOTOR CO 266,300 266,300 11,450,900 11,450,900
GATEWAY INC 51,000 51,000 2,894,250 2,894,250
GENERAL ELECTRIC CO 640,500 640,500 33,946,500 33,946,500
GENERAL MILLS INC 16,500 16,500 631,125 631,125
GEORGIA PACIFIC CORP 20,300 20,300 532,875 532,875
GRANT PRIDECO INC 164,800 164,800 4,120,000 4,120,000
HEWLETT-PACKARD CO 90,400 90,400 11,288,700 11,288,700
HONEYWELL INTERNATIONAL INC 77,437 77,437 2,608,659 2,608,659
INGERSOLL RAND CO 15,900 15,900 639,975 639,975
INTEL CORP 232,800 232,800 31,122,450 31,122,450
INTERNATIONAL GAME TECH 61,300 61,300 1,624,450 1,624,450
INTERNATIONAL PAPER CO 180,700 180,700 5,387,119 5,387,119
INTL BUSINESS MACHINES CORP 130,800 130,800 14,330,775 14,330,775
JOHNSON & JOHNSON 69,900 69,900 7,121,063 7,121,063
JOHNSON CONTROLS INC 81,500 81,500 4,181,969 4,181,969
KIMBERLY CLARK CORP 13,200 66,000 79,200 757,350 3,786,750 4,544,100
LOCKHEED MARTIN CORP 422,400 422,400 10,480,800 10,480,800
LSI LOGIC CORP 53,200 53,200 2,879,450 2,879,450
LUCENT TECHNOLOGIES INC 42,800 42,800 2,535,900 2,535,900
LYONDELL PETRO 211,300 211,300 3,539,275 3,539,275
MATTEL INC 56,800 56,800 749,050 749,050
MERCK & CO INC 14,300 155,800 170,100 1,095,738 11,938,175 13,033,913
MICROCHIP TECHNOLOGY 115,800 115,800 6,747,159 6,747,159
MINNESOTA MINING & MFG CO 9,600 130,300 139,900 792,000 10,749,750 11,541,750
MOTOROLA INC 12,900 12,900 374,906 374,906
MYLAN LABORATORIES, INC 238,600 238,600 4,354,450 4,354,450
NABISCO HOLDINGS CORP 16,800 16,800 882,000 882,000
NIKE INC CL B 25,100 25,100 999,294 999,294
NOKIA CORP ADR 112,400 112,400 5,612,975 5,612,975
PACCAR INC 137,100 137,100 5,441,156 5,441,156
PEPSI BOTTLING GROUP 324,800 324,800 9,480,100 9,480,100
PEPSICO INC 22,000 262,800 284,800 977,625 11,678,175 12,655,800
PFIZER INC 388,675 388,675 18,656,400 18,656,400
PHILIP MORRIS CO INC 48,600 280,400 329,000 1,290,938 7,448,125 8,739,063
PRAXAIR INC 15,000 15,000 561,563 561,563
PROCTER & GAMBLE CO 20,500 157,300 177,800 1,173,625 9,005,425 10,179,050
QUAKER OATS CO 121,000 121,000 9,090,125 9,090,125
ROYAL DUTCH PETRO-NY SHARES 17,600 254,300 271,900 1,083,500 15,655,344 16,738,844
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY
LIBERTY GROWTH & PRO FORMA LIBERTY LIBERTY GROWTH PRO FORMA
VALUE FUND INCOME FUND COMBINED VALUE FUND & INCOME FUND COMBINED MARKET
SHARES SHARES SHARES MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS
SARA LEE CORP 72,100 72,100 1,392,431 1,392,431
SCHERING-PLOUGH CORP 24,100 86,400 110,500 1,217,050 4,363,200 5,580,250
SHERWIN WILLIAMS CO 38,700 38,700 819,956 819,956
TEMPLE INLAND INC 24,700 24,700 1,037,400 1,037,400
TERADYNE INC 62,400 62,400 4,586,400 4,586,400
TEXACO INC 13,800 13,800 734,850 734,850
TEXAS INSTRUMENTS INC 78,400 78,400 5,385,100 5,385,100
UNITED TECHNOLOGIES CORP 7,700 170,500 178,200 453,338 10,038,188 10,491,525
USG CORP NEW 63,300 63,300 1,922,738 1,922,738
USX-MARATHON GROUP 34,300 34,300 859,644 859,644
VISTEON CORP 33,288 33,288 403,611 403,611
WEATHERFORD INTERNATIONAL 164,800 164,800 6,561,100 6,561,100
WESTVACO CORP 268,600 268,600 6,664,638 6,664,638
WEYERHAEUSER CO 50,800 50,800 2,184,400 2,184,400
WHIRLPOOL CORP 85,100 85,100 3,967,788 3,967,788
XEROX CORP 34,400 34,400 713,800 713,800
------------ --------------- ---------------
27,627,400 559,572,362 587,199,762
------------ --------------- ---------------
Mining & Energy
ANADARKO PETROLEUM 19,100 19,100 941,869 941,869
BURLINGTON RESOURCES INC 76,000 76,000 2,907,000 2,907,000
COFLEXIP-SPONSORED ADR 23,270 23,270 1,407,835 1,407,835
DIAMOND OFFSHORE DRILLING 18,000 195,800 213,800 632,250 6,877,475 7,509,725
FALCON DRILLING COMPANY INC 521,800 521,800 12,294,913 12,294,913
PETROLEUM GEO SERVICES ADR 239,100 239,100 4,079,644 4,079,644
SCHLUMBERGER LTD 161,900 161,900 12,081,788 12,081,788
TRANSOCEAN SEDCO FOREX INC 31,343 31,343 1,674,892 1,674,892
------------ --------------- ---------------
1,574,119 41,323,545 42,897,664
------------ --------------- ---------------
Retail Trade
ALBERTSONS INC 27,500 27,500 914,375 914,375
BEST BUY INC 128,500 128,500 8,127,625 8,127,625
CIRCUIT CITY STORES INC 100,700 100,700 3,341,981 3,341,981
CVS CORP 159,200 159,200 6,368,000 6,368,000
DARDEN RESTURANTS INC 206,000 206,000 3,347,500 3,347,500
FEDERATED DEPT STORES INC NEW 10,700 10,700 361,125 361,125
HOME DEPOT INC 69,150 69,150 3,453,178 3,453,178
MCDONALDS CORP 18,700 18,700 615,931 615,931
NORDSTROM INC 23,100 23,100 557,288 557,288
RADIOSHACK CORP 93,700 93,700 4,439,038 4,439,038
TARGET CORP 61,400 61,400 3,561,200 3,561,200
WAL-MART STORES INC 150,700 150,700 8,684,088 8,684,088
------------ --------------- ---------------
2,448,719 41,322,609 43,771,328
------------ --------------- ---------------
Services
ADOBE SYSTEMS INC 73,500 73,500 9,555,000 9,555,000
AMERICA ONLINE INC 113,000 113,000 5,960,750 5,960,750
AUTOMATIC DATA PROCESSING INC 105,600 105,600 5,656,200 5,656,200
CHECK POINT SOFTWARE TECH 5,700 5,700 1,206,975 1,206,975
DUN & BRADSTREET CORP 214,800 214,800 6,148,650 6,148,650
FIRST DATA CORP 19,100 129,600 148,700 947,838 6,431,400 7,379,238
HARRAH'S ENTERTAINMENT INC 88,500 88,500 1,852,969 1,852,969
MANPOWER 128,600 128,600 4,115,200 4,115,200
MICROSOFT CORP 158,700 158,700 12,696,000 12,696,000
NETWORK APPLIANCE INC 15,400 15,400 1,239,700 1,239,700
ORACLE CORP 148,400 148,400 12,474,875 12,474,875
SUN MICROSYSTEMS INC 123,800 123,800 11,258,063 11,258,063
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY
LIBERTY GROWTH & PRO FORMA LIBERTY LIBERTY GROWTH PRO FORMA
VALUE FUND INCOME FUND COMBINED VALUE FUND & INCOME FUND COMBINED MARKET
SHARES SHARES SHARES MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS
TIME WARNER INC 16,400 16,400 1,246,400 1,246,400
USA NETWORKS INC 101,500 101,500 2,194,938 2,194,938
WALT DISNEY PRODUCTIONS 20,300 155,500 175,800 787,894 6,035,344 6,823,238
------------ --------------- ---------------
1,735,731 88,072,463 89,808,194
------------ --------------- ---------------
Transportation, Communications,
Electric, Gas and Sanitary
Services
AT & T CORP 26,600 348,100 374,700 841,225 11,008,663 11,849,888
AT & T WIRELESS CORP 178,200 178,200 4,967,325 4,967,325
BELL ATLANTIC CORP 122,600 122,600 6,229,613 6,229,613
BELLSOUTH CORP 147,300 147,300 6,278,663 6,278,663
CHRIS-CRAFT INDUSTRIES INC 61,800 61,800 4,082,663 4,082,663
COMCAST CORP-SPECIAL CL A 46,500 46,500 1,883,250 1,883,250
DELTA AIR LINES INC 79,600 79,600 4,024,775 4,024,775
DUKE ENERGY 60,100 60,100 3,388,138 3,388,138
EDISON INTERNATIONAL 235,700 235,700 4,831,850 4,831,850
ENTERGY CORP 18,600 252,400 271,000 505,688 6,862,125 7,367,813
GTE CORP 201,400 201,400 12,537,150 12,537,150
PG & E CORP 10,700 116,000 126,700 263,488 2,856,500 3,119,988
PMC-SIERRA INC 16,800 16,800 2,985,150 2,985,150
RF MICRO DEVICES INC 47,400 47,400 4,153,425 4,153,425
SBC COMMUNICATIONS INC 409,400 409,400 17,706,550 17,706,550
SOUTHERN CO 24,800 24,800 578,150 578,150
SPRINT CORP (FON GROUP) 189,200 189,200 9,649,200 9,649,200
TELEPHONE & DATA 24,300 24,300 2,436,075 2,436,075
TIDEWATER INC 14,900 14,900 536,400 536,400
TXU CORP 164,500 164,500 4,852,750 4,852,750
UAL INC 56,000 56,000 3,258,500 3,258,500
UNICOM CORPORATION 160,400 160,400 6,205,475 6,205,475
UNION PACIFIC CORP 11,300 137,900 149,200 420,219 5,128,156 5,548,375
US CELLULAR CORP 29,700 29,700 1,871,100 1,871,100
WORLDCOM INC 16,600 16,600 761,526 761,526
------------ --------------- ---------------
3,906,695 127,197,094 131,103,789
------------ --------------- ---------------
Wholesale Trade
SYSCO CORP 182,600 182,600 7,692,025 7,692,025
--------------- ---------------
Total Common Stocks 43,856,620 1,099,613,570 1,143,470,190
------------ --------------- ---------------
<CAPTION>
CASH EQUIVALENTS Par Par Par
<S> <C> <C> <C> <C> <C> <C>
WARBURG REPURCHASE AGREEMENT
6.60% 7/3/2000 $ 1,567,000 $25,932,000 $27,499,000 1,567,000 25,932,000 27,499,000
------------ --------------- ---------------
TOTAL INVESTMENTS (COST OF
$43,810,733, $976,414,426 AND
$1,020,225,159, RESPECTIVELY) $ 45,423,620 $ 1,125,545,570 $ 1,170,969,190
============ =============== ===============
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINING CONDENSED STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Liberty Liberty
Value Growth & Income Pro Forma Pro Forma
Fund Fund Adjustments Combined
<S> <C> <C> <C> <C>
Investments, at value $45,423,620 $1,125,545,570 $ -- $1,170,969,190
Cash 342 176 -- 518
Receivable for investments sold -- -- -- --
Payable for investments purchased -- -- -- --
Other assets less other liabilities 18,463 35,737,174 (317,618) (a) 35,438,019
Net assets $45,442,425 $1,161,282,920 $(317,618) $1,206,407,727
Class A:
Net assets $10,441,098 $ 309,356,714 (83,279) $ 319,714,533
Shares outstanding 920,529 15,017,711 (418,117) $ 15,520,123
Net asset value $ 11.34 $ 20.60 $ 20.60
Class B:
Net assets $19,380,181 $ 822,643,366 (214,746) $ 841,808,801
Shares outstanding 1,714,187 41,382,562 (752,242) $ 42,344,507
Net asset value $ 11.31 $ 19.88 $ 19.88
Class C:
Net assets $ 1,934,018 $ 29,281,763 (8,640) $ 31,207,141
Shares outstanding 171,022 1,465,147 (75,031) $ 1,561,138
Net asset value $ 11.31 $ 19.99 $ 19.99
Class Z:
Net assets $13,687,128 $ 1,077 (10,953) $ 13,677,252
Shares outstanding 1,206,557 52 (546,191) $ 660,418
Net asset value $ 11.34 $ 20.71 $ 20.71
</TABLE>
(a) One time proxy, accounting, legal and other costs of the reorganization of
$36,365 and $281,253 to be borne by the Value Fund and the Growth &
Income Fund, respectively.
<PAGE>
PRO FORMA COMBINING CONDENSED STATEMENT OF OPERATIONS FOR THE TWELVE MONTH
PERIOD ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY LIBERTY
VALUE GROWTH & INCOME PRO FORMA PRO FORMA
FUND FUND ADJUSTMENTS COMBINED
------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends 852,965 15,573,131 -- 16,426,096
Interest 46,028 1,966,931 -- 2,012,959
---------- ------------ ------------- ------------
Total investment income 898,993 17,540,062 -- 18,439,055
EXPENSES
Management fee 356,825 9,452,952 (89,207)(a) 9,720,570
Service fee - Class A, B, C 80,902 3,099,842 -- (a) 3,180,744
Distribution fee - Class B 144,648 6,593,089 -- (a) 6,737,737
Distribution fee - Class C 11,951 244,861 -- (a) 256,812
Transfer agent fee 94,869 2,728,605 (262,818)(d) 2,560,656
Bookkeeping fee 27,000 420,040 (15,850)(a) 431,190
Trustees fee 7,463 56,473 (17,323)(b) 46,613
All other expenses 129,672 1,052,407 (264,579)(c) 917,500
---------- ------------ ------------- ------------
Total operating expenses 853,330 23,648,269 (649,777) 23,851,822
---------- ------------ ------------- ------------
Expense reimbursement (281,305) -- 281,305 (a) --
---------- ------------ ------------- ------------
Net Expenses 572,025 23,648,269 (368,472) 23,851,822
NET INVESTMENT INCOME (LOSS) 326,968 (6,108,207) 368,472 (5,412,767)
NET REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain (loss) on investments (5,244,334) 183,532,200 -- 178,287,866
Change in net unrealized depreciation
during the period on investments (1,924,598) (170,105,574) -- (172,030,171)
---------- ------------ ------------- ------------
Net Gain (Loss) (7,168,932) 13,426,626 -- 6,257,695
---------- ------------ ------------- ------------
Increase (Decrease) in Net Assets from Operations (6,841,963) 7,318,419 368,472 844,927
</TABLE>
(a) Based on the contract in effect for the surviving fund.
(b) Based on trustee compensation plan for the surviving fund.
(c) Decrease due to the elimination of duplicative expenses achieved by merging
the funds.
(d) Based on the contract in effect for the surviving fund. Note that a new
transfer agent fee structure was implemented for the Growth & Income Fund
effective January 1, 2000. The pro forma combined transfer agent fee shown
assumes this new agreement was in effect for the entire twelve-month period
ended June 30, 2000.
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH & LIBERTY ALL-STAR
GROWTH & INCOME FUND INCOME FUND PRO FORMA COMBINED GROWTH & INCOME FUND
SHARES SHARES SHARES MARKET VALUE
<S> <C> <C> <C> <C>
COMMON STOCKS
Agriculture, Forestry & Fishing
CANADIAN NATL RAILWAY CO 133,100 133,100
Construction
HALLIBURTON CO 2,975 2,975 $ 140,383
------------
Finance, Insurance & Real Estate
ABN AMRO HOLDING NV ADR 3,286 3,286 80,712
ACE LIMITED 10,950 81,700 92,650 306,600
AFLAC INC 4,271 4,271 196,199
ALLMERICA FINANCIAL CORP 3,375 3,375 176,766
AMBAC FINANCIAL GROUP INC 1,300 40,500 41,800 71,256
AMER INTERNATIONAL GROUP INC 1,100 132,275 133,375 129,250
AMERICAN EXPRESS CO 144,000 144,000
ASTORIA FINANCIAL CORP 600 600 15,450
AXA FINANICAL INC 4,300 140,500 144,800 146,200
BANK OF AMERICA CORP 700 231,234 231,934 30,100
BANK ONE 4,100 4,100 108,906
BEAR STEARNS COMPANIES INC 30,173 30,173
C.I.T. GROUP INC-A 2,000 2,000 32,500
CAPITAL ONE FINANCIAL CORP 1,000 72,100 73,100 44,625
CHASE MANHATTAN CORP (NEW) 3,250 186,450 189,700 149,703
CIGNA CORP 2,275 2,275 212,713
CINCINNATI FINANCIAL CORP 188,300 188,300
CITIGROUP INC 8,490 523,300 531,790 511,523
CITY NATIONAL CORP 119,500 119,500
COUNTRYWIDE CREDIT INDUSTRIES 10,593 10,593 321,100
FANNIE MAE 400 163,400 163,800 20,875
FIRST UNION CORP 2,800 2,800 69,475
FLEET BOSTON FINANCIAL CORP 4,000 348,600 352,600 136,000
FREDDIE MAC 9,096 108,300 117,396 368,388
GOLDEN STATE BANCORP 171,300 171,300
GOLDEN WEST FINANCIAL CORP 89,100 89,100
GOLDMAN SACHS GROUP INC 500 500 47,438
HCA-THE HEALTHCARE CORP 346,100 346,100
HOUSEHOLD INTERNATIONAL INC 83,300 83,300
J P MORGAN & CO INC 55,100 55,100
KEYCORP 1,200 1,200 21,150
KIMCO REALTY CORP 1,700 1,700 69,700
KNIGHT TRADING GROUP INC 59,800 59,800
LEHMAN BROTHERS HLDG INC 100,900 100,900
LOEWS CORP 42,000 42,000
MBNA CORP 210,300 210,300
METLIFE INC 1,700 1,700 35,806
MGIC INV CORP 123,000 123,000
MORGAN STANLEY DEAN WITTER 1,900 165,900 167,800 158,175
NATIONWIDE FINANCIAL SERV A 228,700 228,700
PACIFIC CENTURY FINL CORP 145,500 145,500
PMI GROUP INC 131,100 131,100
PNC FINANCIAL SERVICES GROUP 3,350 104,900 108,250 157,031
PROGRESSIVE CORP OHIO 4,900 4,900 362,600
PROVIDIAN FINANCIAL CORP 2,650 30,100 32,750 238,500
SCHWAB (CHARLES) CORP 7,950 7,950 267,319
SOVEREIGN BANCORP INC 505,200 505,200
STARWOOD HOTELS & RESORTS WOR 2,600 2,600 84,013
TRIZEC HAHN CORP 8,400 8,400 150,150
U.S. BANCORP 3,000 3,000 57,750
UNIONBANCAL CORPORATION 155,100 155,100
UNITED HEALTHCARE CORP 126,700 126,700
VORNADO REALTY TRUST 1,500 1,500 52,125
WASHINGTON MUTUAL INC 2,000 2,000 57,750
WELLPOINT HEALTH NETWORKS 2,100 2,100 152,119
WELLS FARGO & CO 4,193 57,800 61,993 162,479
XL CAPITAL LTD-CLASS A 4,090 4,090 221,371
ZIONS BANCORPORATION 1,300 1,300 59,658
------------
5,483,474
------------
Manufacturing
</TABLE>
<TABLE>
<CAPTION>
LIBERTY GROWTH & PRO FORMA COMBINED
INCOME FUND MARKET MARKET
VALUE VALUE
<S> <C> <C>
COMMON STOCKS
Agriculture, Forestry & Fishing
CANADIAN NATL RAILWAY CO $ 3,884,856 $ 3,884,856
------------ ------------
Construction
HALLIBURTON CO 140,383
------------
Finance, Insurance & Real Estate
ABN AMRO HOLDING NV ADR 80,712
ACE LIMITED 2,287,600 2,594,200
AFLAC INC 196,199
ALLMERICA FINANCIAL CORP 176,766
AMBAC FINANCIAL GROUP INC 2,219,906 2,291,162
AMER INTERNATIONAL GROUP INC 15,542,313 15,671,563
AMERICAN EXPRESS CO 7,506,000 7,506,000
ASTORIA FINANCIAL CORP 15,450
AXA FINANICAL INC 4,777,000 4,923,200
BANK OF AMERICA CORP 9,943,062 9,973,162
BANK ONE 108,906
BEAR STEARNS COMPANIES INC 1,255,951 1,255,951
C.I.T. GROUP INC-A 32,500
CAPITAL ONE FINANCIAL CORP 3,217,463 3,262,088
CHASE MANHATTAN CORP (NEW) 8,588,353 8,738,056
CIGNA CORP 212,713
CINCINNATI FINANCIAL CORP 5,919,681 5,919,681
CITIGROUP INC 31,528,825 32,040,348
CITY NATIONAL CORP 4,242,250 4,242,250
COUNTRYWIDE CREDIT INDUSTRIES 321,100
FANNIE MAE 8,527,438 8,548,313
FIRST UNION CORP 69,475
FLEET BOSTON FINANCIAL CORP 11,852,400 11,988,400
FREDDIE MAC 4,386,150 4,754,538
GOLDEN STATE BANCORP 3,083,400 3,083,400
GOLDEN WEST FINANCIAL CORP 3,636,394 3,636,394
GOLDMAN SACHS GROUP INC 47,438
HCA-THE HEALTHCARE CORP 10,512,788 10,512,788
HOUSEHOLD INTERNATIONAL INC 3,462,156 3,462,156
J P MORGAN & CO INC 6,067,888 6,067,888
KEYCORP 21,150
KIMCO REALTY CORP 69,700
KNIGHT TRADING GROUP INC 1,782,788 1,782,788
LEHMAN BROTHERS HLDG INC 9,541,356 9,541,356
LOEWS CORP 2,520,000 2,520,000
MBNA CORP 5,704,388 5,704,388
METLIFE INC 35,806
MGIC INV CORP 5,596,500 5,596,500
MORGAN STANLEY DEAN WITTER 13,811,175 13,969,350
NATIONWIDE FINANCIAL SERV A 7,518,513 7,518,513
PACIFIC CENTURY FINL CORP 2,127,938 2,127,938
PMI GROUP INC 6,227,250 6,227,250
PNC FINANCIAL SERVICES GROUP 4,917,188 5,074,219
PROGRESSIVE CORP OHIO 362,600
PROVIDIAN FINANCIAL CORP 2,709,000 2,947,500
SCHWAB (CHARLES) CORP 267,319
SOVEREIGN BANCORP INC 3,552,188 3,552,188
STARWOOD HOTELS & RESORTS WOR 84,013
TRIZEC HAHN CORP 150,150
U.S. BANCORP 57,750
UNIONBANCAL CORPORATION 2,879,044 2,879,044
UNITED HEALTHCARE CORP 10,864,525 10,864,525
VORNADO REALTY TRUST 52,125
WASHINGTON MUTUAL INC 57,750
WELLPOINT HEALTH NETWORKS 152,119
WELLS FARGO & CO 2,239,750 2,402,229
XL CAPITAL LTD-CLASS A 221,371
ZIONS BANCORPORATION 59,658
------------ ------------
230,548,616 236,032,090
------------ ------------
Manufacturing
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH & LIBERTY ALL-STAR
GROWTH & INCOME FUND INCOME FUND PRO FORMA COMBINED GROWTH & INCOME FUND
SHARES SHARES SHARES MARKET VALUE
COMMON STOCKS
<S> <C> <C> <C> <C>
3COM CORPORATION 1,100 1,100 63,388
ADC TELECOMMUNICATIONS INC 81,500 81,500
AGILENT TECHNOLOGIES INC 1,200 28,986 30,186 88,500
ALCAN ALUMINUM LTD 5,000 5,000 155,000
ALCOA INC 7,560 111,400 118,960 219,240
ALLEGHENY TECHNOLOGIES INC 1,200 1,200 21,600
ALZA CORP 1,500 1,500 88,688
AMERICAN HOME PRODUCTS CORP 600 600 35,250
AMGEN INC 3,250 80,800 84,050 228,313
ANALOG DEVICES INC. 82,900 82,900
ANHEUSER BUSCH INC 2,100 162,600 164,700 156,843
APPLE COMPUTER INC 49,600 49,600
APPLIED MATLS 2,900 129,200 132,100 262,813
APPLIED MICRO CIRCUITS CORP 11,600 11,600
ATMEL CORP 116,900 116,900
AVENTIS -SPON ADR 1,100 1,100 79,819
AVON PRODUCTS INC 9,184 9,184 408,688
BAKER HUGHES INC 800 800 25,600
BAUSCH & LOMB INC 125,200 125,200
BAXTER INTERNATIONAL INC 4,400 4,400 309,375
BECKMAN COULTER INC 29,100 29,100
BESTFOODS 1,100 190,600 191,700 76,175
BIOGEN INC 3,050 3,050 196,725
BOEING CO 3,793 332,800 336,593 158,595
BP AMOCO PLC-ADR 150,000 150,000
BRISTOL-MYERS SQUIBB CO 3,200 166,200 169,400 186,400
BRUNSWICK CORP 227,400 227,400
CATERPILLAR INC 3,755 3,755 127,201
CHEVRON CORP 119,200 119,200
CISCO SYSTEMS INC 7,400 456,200 463,600 470,363
CLOROX CO 500 500 22,406
COCA COLA CO 700 19,700 20,400 40,206
COMPAQ COMPUTER CORP 7,000 7,000 178,938
COMVERSE TECH 32,200 32,200
COOPER INDUSTRIES INC 700 700 22,794
CORNING INCORPORATED 21,100 21,100
DEERE & CO 9,500 9,500 351,500
DELL COMPUTER CORPORATION 8,900 8,900 438,881
DELPHI AUTOMOTIVE SYSTEMS 253,600 253,600
DIAGEO PLC ADR 5,193 5,193 184,676
DOVER CORP 3,793 3,793 153,854
DOW CHEMICAL CO 350,500 350,500
EI DUPONT DE NEMOURS & CO INC 2,900 60,200 63,100 126,875
ELI LILLY & CO 1,000 114,500 115,500 99,875
EMC CORP 1,000 108,400 109,400 76,938
EMERSON ELECTRIC CO 3,306 3,306 199,600
EXXON MOBIL CORPORATION 3,916 365,165 369,081 307,406
FMC CORP 43,200 43,200
FORD MOTOR CO 600 266,300 266,900 25,800
GATEWAY INC 51,000 51,000
GENERAL ELECTRIC CO 2,700 640,500 643,200 143,100
GILLETTE CO 4,350 4,350 151,978
GRANT PRIDECO INC 164,800 164,800
H J HEINZ CO 1,400 1,400 61,250
HEWLETT-PACKARD CO 1,600 90,400 92,000 199,800
HONEYWELL INTERNATIONAL INC 900 77,437 78,337 30,319
ILLINOIS TOOL WORKS INC 2,800 2,800 159,600
INGERSOLL RAND CO 2,525 2,525 101,631
INTEL CORP 5,450 232,800 238,250 728,597
INTERNATIONAL GAME TECH 61,300 61,300
INTERNATIONAL PAPER CO 180,700 180,700
INTL BUSINESS MACHINES CORP 1,720 130,800 132,520 188,448
INTUIT INC 1,700 1,700 70,338
JDS UNIPHASE CORP 1,050 1,050 125,869
JOHNSON & JOHNSON 69,900 69,900
JOHNSON CONTROLS INC 81,500 81,500
KIMBERLY CLARK CORP 3,400 66,000 69,400 195,075
LEAR CORP 2,800 2,800 56,000
LOCKHEED MARTIN CORP 422,400 422,400
LSI LOGIC CORP 53,200 53,200
LUCENT TECHNOLOGIES INC 2,800 42,800 45,600 165,900
LYONDELL PETRO 211,300 211,300
</TABLE>
<TABLE>
<CAPTION>
LIBERTY GROWTH &
INCOME FUND MARKET PRO FORMA COMBINED
VALUE MARKET VALUE
COMMON STOCKS
<S> <C> <C>
3COM CORPORATION 63,388
ADC TELECOMMUNICATIONS INC 6,835,813 6,835,813
AGILENT TECHNOLOGIES INC 2,137,718 2,226,218
ALCAN ALUMINUM LTD 155,000
ALCOA INC 3,230,600 3,449,840
ALLEGHENY TECHNOLOGIES INC 21,600
ALZA CORP 88,688
AMERICAN HOME PRODUCTS CORP 35,250
AMGEN INC 5,676,200 5,904,513
ANALOG DEVICES INC. 6,300,400 6,300,400
ANHEUSER BUSCH INC 12,144,188 12,301,031
APPLE COMPUTER INC 2,597,800 2,597,800
APPLIED MATLS 11,708,750 11,971,563
APPLIED MICRO CIRCUITS CORP 1,145,500 1,145,500
ATMEL CORP 4,310,688 4,310,688
AVENTIS -SPON ADR 79,819
AVON PRODUCTS INC 408,688
BAKER HUGHES INC 25,600
BAUSCH & LOMB INC 9,687,350 9,687,350
BAXTER INTERNATIONAL INC 309,375
BECKMAN COULTER INC 1,698,713 1,698,713
BESTFOODS 13,199,050 13,275,225
BIOGEN INC 196,725
BOEING CO 13,915,200 14,073,795
BP AMOCO PLC-ADR 8,484,375 8,484,375
BRISTOL-MYERS SQUIBB CO 9,681,150 9,867,550
BRUNSWICK CORP 3,766,313 3,766,313
CATERPILLAR INC 127,201
CHEVRON CORP 10,109,650 10,109,650
CISCO SYSTEMS INC 28,997,212 29,467,575
CLOROX CO 22,406
COCA COLA CO 1,131,519 1,171,725
COMPAQ COMPUTER CORP 178,938
COMVERSE TECH 2,994,600 2,994,600
COOPER INDUSTRIES INC 22,794
CORNING INCORPORATED 5,694,363 5,694,363
DEERE & CO 351,500
DELL COMPUTER CORPORATION 438,881
DELPHI AUTOMOTIVE SYSTEMS 3,693,050 3,693,050
DIAGEO PLC ADR 184,676
DOVER CORP 153,854
DOW CHEMICAL CO 10,580,719 10,580,719
EI DUPONT DE NEMOURS & CO INC 2,633,750 2,760,625
ELI LILLY & CO 11,435,688 11,535,563
EMC CORP 8,340,025 8,416,963
EMERSON ELECTRIC CO 199,600
EXXON MOBIL CORPORATION 28,665,453 28,972,859
FMC CORP 2,505,600 2,505,600
FORD MOTOR CO 11,450,900 11,476,700
GATEWAY INC 2,894,250 2,894,250
GENERAL ELECTRIC CO 33,946,500 34,089,600
GILLETTE CO 151,978
GRANT PRIDECO INC 4,120,000 4,120,000
H J HEINZ CO 61,250
HEWLETT-PACKARD CO 11,288,700 11,488,500
HONEYWELL INTERNATIONAL INC 2,608,659 2,638,978
ILLINOIS TOOL WORKS INC 159,600
INGERSOLL RAND CO 101,631
INTEL CORP 31,122,450 31,851,047
INTERNATIONAL GAME TECH 1,624,450 1,624,450
INTERNATIONAL PAPER CO 5,387,119 5,387,119
INTL BUSINESS MACHINES CORP 14,330,775 14,519,223
INTUIT INC 70,338
JDS UNIPHASE CORP 125,869
JOHNSON & JOHNSON 7,121,063 7,121,063
JOHNSON CONTROLS INC 4,181,969 4,181,969
KIMBERLY CLARK CORP 3,786,750 3,981,825
LEAR CORP 56,000
LOCKHEED MARTIN CORP 10,480,800 10,480,800
LSI LOGIC CORP 2,879,450 2,879,450
LUCENT TECHNOLOGIES INC 2,535,900 2,701,800
LYONDELL PETRO 3,539,275 3,539,275
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH & LIBERTY ALL-STAR
GROWTH & INCOME FUND INCOME FUND PRO FORMA COMBINED GROWTH & INCOME FUND
SHARES SHARES SHARES MARKET VALUE
COMMON STOCKS
<S> <C> <C> <C> <C>
MAXIM INTEGRATED PRODUCTS INC 4,550 4,550 309,116
MEDTRONIC INC 2,400 2,400 119,550
MERCK & CO INC 155,800 155,800
MICROCHIP TECHNOLOGY 115,800 115,800
MINNESOTA MINING & MFG CO 4,142 130,300 134,442 341,715
MOTOROLA INC 1,560 1,560 45,338
MYLAN LABORATORIES, INC 238,600 238,600
NEWS CORP LTD ADR 1,400 1,400 76,300
NOKIA CORP ADR 4,500 112,400 116,900 224,719
NORTEL NETWORKS CORP 700 700 47,775
PACCAR INC 137,100 137,100
PE CORP-PE BIOSYSTEMS GROUP 300 300 19,763
PEPSI BOTTLING GROUP 324,800 324,800
PEPSICO INC 262,800 262,800
PFIZER INC 7,025 388,675 395,700 337,200
PHARMACIA CORPORATION 8,796 8,796 454,643
PHILIP MORRIS CO INC 2,800 280,400 283,200 74,375
PROCTER & GAMBLE CO 1,850 157,300 159,150 105,913
QUAKER OATS CO 121,000 121,000
ROHM & HAAS CO 1,900 1,900 65,550
ROYAL DUTCH PETRO-NY SHARES 700 254,300 255,000 43,094
SABRE HOLDINGS CORP 4,230 4,230 120,555
SARA LEE CORP 6,300 6,300 121,669
SCHERING-PLOUGH CORP 1,100 86,400 87,500 55,550
SEAGATE TECHNOLOGY INC 600 600 33,000
SEAGRAMS CO. LTD. 1,000 1,000 58,000
TELLABS INC 400 400 27,375
TEMPLE INLAND INC 1,000 24,700 25,700 42,000
TERADYNE INC 62,400 62,400
TEXAS INSTRUMENTS INC 900 78,400 79,300 61,819
TEXTRON INC 2,600 2,600 141,213
TOSCO CORP 800 800 22,650
TYCO INT'L LTD 3,600 3,600 170,550
UNITED TECHNOLOGIES CORP 170,500 170,500
USG CORP NEW 63,300 63,300
UST INC 4,200 4,200 61,688
USX-MARATHON GROUP 4,800 4,800 120,300
VISTEON CORP 75 33,288 33,363 909
WEATHERFORD INTERNATIONAL 164,800 164,800
WESTVACO CORP 268,600 268,600
WEYERHAEUSER CO 50,800 50,800
WHIRLPOOL CORP 85,100 85,100
----------
11,268,551
----------
Mining & Energy
APACHE CORP 2,800 2,800 164,675
BURLINGTON RESOURCES INC 7,500 76,000 83,500 286,875
COFLEXIP-SPONSORED ADR 23,270 23,270
CONOCO INC -CL B 5,800 5,800 142,463
CONOCO INC-CL A 6,450 6,450 141,900
DEVON ENERGY CORPORATION 2,708 2,708 152,156
DIAMOND OFFSHORE DRILLING 195,800 195,800
FALCON DRILLING COMPANY INC 521,800 521,800
GLOBAL MARINE INC 1,100 1,100 31,006
OCCIDENTAL PETROLEUM 7,700 7,700 162,181
PETROLEUM GEO SERVICES ADR 239,100 239,100
SCHLUMBERGER LTD 161,900 161,900
TRANSOCEAN SEDCO FOREX INC 31,343 31,343
----------
1,081,256
----------
Retail Trade
BEST BUY INC 128,500 128,500
CIRCUIT CITY STORES INC 600 100,700 101,300 19,913
COSTCO WHOLESALE CORP 2,550 2,550 84,150
CVS CORP 159,200 159,200
DARDEN RESTURANTS INC 206,000 206,000
FEDERATED DEPT STORES INC NEW 4,500 4,500 151,875
HARCOURT GENERAL INC 4,725 4,725 256,922
HOME DEPOT INC 4,600 69,150 73,750 229,713
</TABLE>
<TABLE>
<CAPTION>
LIBERTY GROWTH &
INCOME FUND PRO FORMA COMBINED
MARKET VALUE MARKET VALUE
COMMON STOCKS
<S> <C> <C>
MAXIM INTEGRATED PRODUCTS INC 309,116
MEDTRONIC INC 119,550
MERCK & CO INC 11,938,175 11,938,175
MICROCHIP TECHNOLOGY 6,747,159 6,747,159
MINNESOTA MINING & MFG CO 10,749,750 11,091,465
MOTOROLA INC 45,338
MYLAN LABORATORIES, INC 4,354,450 4,354,450
NEWS CORP LTD ADR 76,300
NOKIA CORP ADR 5,612,975 5,837,694
NORTEL NETWORKS CORP 47,775
PACCAR INC 5,441,156 5,441,156
PE CORP-PE BIOSYSTEMS GROUP 19,763
PEPSI BOTTLING GROUP 9,480,100 9,480,100
PEPSICO INC 11,678,175 11,678,175
PFIZER INC 18,656,400 18,993,600
PHARMACIA CORPORATION 454,643
PHILIP MORRIS CO INC 7,448,125 7,522,500
PROCTER & GAMBLE CO 9,005,425 9,111,338
QUAKER OATS CO 9,090,125 9,090,125
ROHM & HAAS CO 65,550
ROYAL DUTCH PETRO-NY SHARES 15,655,344 15,698,438
SABRE HOLDINGS CORP 120,555
SARA LEE CORP 121,669
SCHERING-PLOUGH CORP 4,363,200 4,418,750
SEAGATE TECHNOLOGY INC 33,000
SEAGRAMS CO. LTD. 58,000
TELLABS INC 27,375
TEMPLE INLAND INC 1,037,400 1,079,400
TERADYNE INC 4,586,400 4,586,400
TEXAS INSTRUMENTS INC 5,385,100 5,446,919
TEXTRON INC 141,213
TOSCO CORP 22,650
TYCO INT'L LTD 170,550
UNITED TECHNOLOGIES CORP 10,038,188 10,038,188
USG CORP NEW 1,922,738 1,922,738
UST INC 61,688
USX-MARATHON GROUP 120,300
VISTEON CORP 403,611 404,520
WEATHERFORD INTERNATIONAL 6,561,100 6,561,100
WESTVACO CORP 6,664,638 6,664,638
WEYERHAEUSER CO 2,184,400 2,184,400
WHIRLPOOL CORP 3,967,788 3,967,788
----------- -----------
559,572,362 570,840,912
----------- -----------
Mining & Energy
APACHE CORP 164,675
BURLINGTON RESOURCES INC 2,907,000 3,193,875
COFLEXIP-SPONSORED ADR 1,407,835 1,407,835
CONOCO INC -CL B 142,463
CONOCO INC-CL A 141,900
DEVON ENERGY CORPORATION 152,156
DIAMOND OFFSHORE DRILLING 6,877,475 6,877,475
FALCON DRILLING COMPANY INC 12,294,913 12,294,913
GLOBAL MARINE INC 31,006
OCCIDENTAL PETROLEUM 162,181
PETROLEUM GEO SERVICES ADR 4,079,644 4,079,644
SCHLUMBERGER LTD 12,081,788 12,081,788
TRANSOCEAN SEDCO FOREX INC 1,674,892 1,674,892
----------- -----------
41,323,545 42,404,801
----------- -----------
Retail Trade
BEST BUY INC 8,127,625 8,127,625
CIRCUIT CITY STORES INC 3,341,981 3,361,894
COSTCO WHOLESALE CORP 84,150
CVS CORP 6,368,000 6,368,000
DARDEN RESTURANTS INC 3,347,500 3,347,500
FEDERATED DEPT STORES INC NEW 151,875
HARCOURT GENERAL INC 256,922
HOME DEPOT INC 3,453,178 3,682,891
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH & LIBERTY ALL-STAR
GROWTH & INCOME FUND INCOME FUND PRO FORMA COMBINED GROWTH & INCOME FUND
SHARES SHARES SHARES MARKET VALUE
COMMON STOCKS
<S> <C> <C> <C> <C>
LIMITED INC 6,000 6,000 129,750
MAY DEPARTMENT STORES CO 5,214 5,214 125,136
MCDONALDS CORP 5,112 5,112 168,377
RADIOSHACK CORP 93,700 93,700
SAFEWAY INC 2,400 2,400 108,300
TARGET CORP 600 61,400 62,000 34,800
TIFFANY & CO 1,300 1,300 87,750
TJX COMPANIES, INC 1,400 1,400 26,250
WAL-MART STORES INC 3,150 150,700 153,850 181,519
---------
1,604,453
---------
Services
ADOBE SYSTEMS INC 73,500 73,500
AMERICA ONLINE INC 1,200 113,000 114,200 63,300
AUTOMATIC DATA PROCESSING INC 105,600 105,600
CENDANT CORP 2,100 2,100 29,400
CHECK POINT SOFTWARE TECH 5,700 5,700
CITRIX SYS INC 500 500 9,469
COMPUTER ASSOCIATES INT'L INC 11,423 11,423 584,715
DUN & BRADSTREET CORP 214,800 214,800
ELECTRONIC DATA SYSTEMS CORP 900 900 37,125
FIRST DATA CORP 129,600 129,600
GENENTECH INC 800 800 137,600
HARRAH'S ENTERTAINMENT INC 88,500 88,500
MANPOWER 128,600 128,600
MICROSOFT CORP 4,250 158,700 162,950 340,000
NETWORK APPLIANCE INC 15,400 15,400
NEWS CORP LTD-SPONS ADR PRF 4,548 4,548 216,030
ORACLE CORP 600 148,400 149,000 50,438
PARAMETRIC TECHNOLOGY CORP 6,400 6,400 70,400
PAYCHEX INC 6,150 6,150 258,300
PIXAR INC 2,200 2,200 77,550
SENSORMATIC ELECTRONICS CORP 1,600 1,600 25,300
SIEBEL SYSTEMS INC 2,650 2,650 433,441
SUN MICROSYSTEMS INC 1,600 123,800 125,400 145,500
</TABLE>
<TABLE>
<CAPTION>
LIBERTY GROWTH &
INCOME FUND MARKET PRO FORMA COMBINED
VALUE MARKET VALUE
COMMON STOCKS
<S> <C> <C>
LIMITED INC 129,750
MAY DEPARTMENT STORES CO 125,136
MCDONALDS CORP 168,377
RADIOSHACK CORP 4,439,038 4,439,038
SAFEWAY INC 108,300
TARGET CORP 3,561,200 3,596,000
TIFFANY & CO 87,750
TJX COMPANIES, INC 26,250
WAL-MART STORES INC 8,684,087 8,865,606
---------- ----------
41,322,609 42,927,062
---------- ----------
Services
ADOBE SYSTEMS INC 9,555,000 9,555,000
AMERICA ONLINE INC 5,960,750 6,024,050
AUTOMATIC DATA PROCESSING INC 5,656,200 5,656,200
CENDANT CORP 29,400
CHECK POINT SOFTWARE TECH 1,206,975 1,206,975
CITRIX SYS INC 9,469
COMPUTER ASSOCIATES INT'L INC 584,715
DUN & BRADSTREET CORP 6,148,650 6,148,650
ELECTRONIC DATA SYSTEMS CORP 37,125
FIRST DATA CORP 6,431,400 6,431,400
GENENTECH INC 137,600
HARRAH'S ENTERTAINMENT INC 1,852,969 1,852,969
MANPOWER 4,115,200 4,115,200
MICROSOFT CORP 12,696,000 13,036,000
NETWORK APPLIANCE INC 1,239,700 1,239,700
NEWS CORP LTD-SPONS ADR PRF 216,030
ORACLE CORP 12,474,875 12,525,313
PARAMETRIC TECHNOLOGY CORP 70,400
PAYCHEX INC 258,300
PIXAR INC 77,550
SENSORMATIC ELECTRONICS CORP 25,300
SIEBEL SYSTEMS INC 433,441
SUN MICROSYSTEMS INC 11,258,063 11,403,563
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH & LIBERTY ALL-STAR
GROWTH & INCOME FUND INCOME FUND PRO FORMA COMBINED GROWTH & INCOME FUND
SHARES SHARES SHARES MARKET VALUE
COMMON STOCKS
<S> <C> <C> <C> <C>
SYNOPSYS INC 1,900 1,900 65,669
TIME WARNER INC 2,200 16,400 18,600 167,200
USA NETWORKS INC 101,500 101,500
WALT DISNEY PRODUCTIONS 3,600 155,500 159,100 139,725
-------------
2,851,160
-------------
Transportation, Communications,
Electric, Gas and Sanitary
Services
A T & T CORP 4,100 348,100 352,200 129,663
ALLEGIANCE TELECOM INC 250 250 16,000
AMFM INC 3,500 3,500 241,500
AMR CORP 4,000 4,000 105,750
AT & T WIRELESS CORP 178,200 178,200
AT&T CORP-LIBERTY MEDIA A 3,600 3,600 87,300
BELL ATLANTIC CORP 2,400 122,600 125,000 121,950
BELLSOUTH CORP 147,300 147,300
BURLINGTON NORTH SANTA FE CORP 6,647 6,647 152,466
CABLEVISION SYSTEMS CL-A 1,200 1,200 81,450
CARNIVAL CORP-CL A 4,200 4,200 81,900
CHRIS-CRAFT INDUSTRIES INC 61,800 61,800
COLUMBIA ENERGY GROUP 700 700 45,938
COMCAST CORP-SPECIAL CL A 500 46,500 47,000 20,250
COX COMMUNICATIONS INC-CL A 2,150 2,150 97,959
CSX CORP 2,500 2,500 52,969
DELTA AIR LINES INC 3,000 79,600 82,600 151,688
DTE ENERGY CO 800 800 24,450
DUKE ENERGY 60,100 60,100
DYNEGY INC 400 400 27,325
EDISON INTERNATIONAL 235,700 235,700
EL PASO ENERGY CORP 6,200 6,200 315,813
ENTERGY CORP 252,400 252,400
FLORIDA PROGRESS CORP 2,000 2,000 93,750
GLOBAL CROSSING LTD 1,000 1,000 26,313
GTE CORP 2,950 201,400 204,350 183,638
KANSAS CITY SOUTHN INDS INC 3,750 3,750 332,578
LEVEL 3 COMMUNICATIONS 250 250 22,000
P G & E CORP 900 116,000 116,900 22,163
PECO ENERGY CO 4,100 4,100 165,281
PMC-SIERRA INC 16,800 16,800
QWEST COMMUNICATIONS INTL 500 500 24,844
RELIANT ENERGY INC 5,400 5,400 159,638
RF MICRO DEVICES INC 47,400 47,400
SBC COMMUNICATIONS INC 9,959 409,400 419,359 430,727
SOUTHWEST AIRLINES CO 8,650 8,650 163,809
SPRINT CORP (FON GROUP) 3,253 189,200 192,453 165,903
SPRINT CORP PCS 500 500 29,750
TELEPHONE & DATA 24,300 24,300
TXU CORP 164,500 164,500
UAL INC 56,000 56,000
UNICOM CORPORATION 160,400 160,400
UNION PACIFIC CORP 1,400 137,900 139,300 52,063
UNITED PARCEL SERVICE-CL B 2,300 2,300 135,700
US CELLULAR CORP 29,700 29,700
WASTE MANAGEMENT INC 1,200 1,200 22,800
WILLIAMS COMPANIES INC 1,900 1,900 79,206
WORLDCOM INC 5,200 5,200 238,550
-------------
4,103,080
-------------
Wholesale Trade
SYSCO CORP 182,600 182,600
Total Common Stocks 26,532,356
-------------
CASH EQUIVALENTS Par Par Par
WARBURG REPURCHASE AGREEMENT
6.60% 7/3/2000 972,000 $ 25,932,000 26,904,000 972,000
-------------
TOTAL INVESTMENTS (COST OF
$25,098,509, $976,414,426 AND
$1,001,512,935, RESPECTIVELY) $ 27,504,356
=============
</TABLE>
<TABLE>
<CAPTION>
LIBERTY GROWTH &
INCOME FUND MARKET PRO FORMA COMBINED
VALUE MARKET VALUE
COMMON STOCKS
<S> <C> <C>
SYNOPSYS INC 65,669
TIME WARNER INC 1,246,400 1,413,600
USA NETWORKS INC 2,194,938 2,194,938
WALT DISNEY PRODUCTIONS 6,035,344 6,175,069
-------------- ---------------
88,072,463 90,923,623
-------------- ---------------
Transportation, Communications,
Electric, Gas and Sanitary
Services
A T & T CORP 11,008,662 11,138,325
ALLEGIANCE TELECOM INC 16,000
AMFM INC 241,500
AMR CORP 105,750
AT & T WIRELESS CORP 4,967,325 4,967,325
AT&T CORP-LIBERTY MEDIA A 87,300
BELL ATLANTIC CORP 6,229,613 6,351,563
BELLSOUTH CORP 6,278,663 6,278,663
BURLINGTON NORTH SANTA FE CORP 152,466
CABLEVISION SYSTEMS CL-A 81,450
CARNIVAL CORP-CL A 81,900
CHRIS-CRAFT INDUSTRIES INC 4,082,663 4,082,663
COLUMBIA ENERGY GROUP 45,938
COMCAST CORP-SPECIAL CL A 1,883,250 1,903,500
COX COMMUNICATIONS INC-CL A 97,959
CSX CORP 52,969
DELTA AIR LINES INC 4,024,775 4,176,463
DTE ENERGY CO 24,450
DUKE ENERGY 3,388,138 3,388,138
DYNEGY INC 27,325
EDISON INTERNATIONAL 4,831,850 4,831,850
EL PASO ENERGY CORP 315,813
ENTERGY CORP 6,862,125 6,862,125
FLORIDA PROGRESS CORP 93,750
GLOBAL CROSSING LTD 26,313
GTE CORP 12,537,150 12,720,788
KANSAS CITY SOUTHN INDS INC 332,578
LEVEL 3 COMMUNICATIONS 22,000
P G & E CORP 2,856,500 2,878,663
PECO ENERGY CO 165,281
PMC-SIERRA INC 2,985,150 2,985,150
QWEST COMMUNICATIONS INTL 24,844
RELIANT ENERGY INC 159,638
RF MICRO DEVICES INC 4,153,425 4,153,425
SBC COMMUNICATIONS INC 17,706,550 18,137,277
SOUTHWEST AIRLINES CO 163,809
SPRINT CORP (FON GROUP) 9,649,200 9,815,103
SPRINT CORP PCS 29,750
TELEPHONE & DATA 2,436,075 2,436,075
TXU CORP 4,852,750 4,852,750
UAL INC 3,258,500 3,258,500
UNICOM CORPORATION 6,205,475 6,205,475
UNION PACIFIC CORP 5,128,156 5,180,219
UNITED PARCEL SERVICE-CL B 135,700
US CELLULAR CORP 1,871,100 1,871,100
WASTE MANAGEMENT INC 22,800
WILLIAMS COMPANIES INC 79,206
WORLDCOM INC 238,550
-------------- ---------------
127,197,093 131,300,173
-------------- ---------------
Wholesale Trade
SYSCO CORP 7,692,025 7,692,025
-------------- ---------------
Total Common Stocks 1,099,613,570 1,126,145,926
-------------- ---------------
CASH EQUIVALENTS
WARBURG REPURCHASE AGREEMENT
6.60% 7/3/2000 25,932,000 26,904,000
-------------- ---------------
TOTAL INVESTMENTS (COST OF
$25,098,509, $976,414,426 and
$1,001,512,935, respectively) $1,125,545,570 $ 1,153,049,926
============== ===============
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINING CONDENSED STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Liberty All-Star Liberty
Growth & Income Growth & Income Pro Forma Pro Forma
Fund Fund Adjustments Combined
---- ---- ----------- --------
<S> <C> <C> <C> <C>
Investments, at value $ 27,504,356 $ 1,125,545,570 $ - $1,153,049,926
Cash 4,096 176 - 4,272
Receivable for investments sold - - - -
Payable for investments purchased - - - -
Other assets less other liabilities 621 35,737,174 (316,642)(a) 35,421,153
Net assets $ 27,509,073 $ 1,161,282,920 $ (316,642) $1,188,475,351
Class A:
Net assets $ 4,299,897 $ 309,356,714 (80,456) $ 313,576,155
Shares outstanding 368,742 15,017,711 (164,310) $ 15,222,143
Net asset value $ 11.66 $ 20.60 $ 20.60
Class B:
Net assets $ 16,346,839 $ 822,643,366 (220,266) $ 838,769,939
Shares outstanding 1,415,688 41,382,562 (606,603) $ 42,191,647
Net asset value $ 11.55 $ 19.88 $ 19.88
Class C:
Net assets $ 4,524,072 $ 29,281,763 (12,912) $ 33,792,923
Shares outstanding 391,868 1,465,147 (166,524) $ 1,690,491
Net asset value $ 11.54 $ 19.99 $ 19.99
Class Z:
Net assets $ 2,338,265 $ 1,077 (3,008) $ 2,336,334
Shares outstanding 199,907 52 (87,147) $ 112,812
Net asset value $ 11.70 $ 20.71 $ 20.71
</TABLE>
(a) One time proxy, accounting, legal and other costs of the reorganization of
$35,389 and $281,253 to be borne by the All-Star Fund and Growth & Income Fund,
respectively.
<PAGE>
PRO FORMA COMBINING CONDENSED STATEMENT OF OPERATIONS FOR THE TWELVE MONTH
PERIOD ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY
GROWTH & GROWTH & PRO FORMA PRO FORMA
INCOME INCOME FUND ADJUSTMENTS COMBINED
-------- ----------- ----------- --------
INVESTMENT INCOME
<S> <C> <C> <C> <C>
Dividends 268,398 15,573,131 - 15,841,529
Interest 37,185 1,966,931 - 2,004,115
---------- ------------ ---------- ------------
Total investment income 17,540,062 - 17,845,645
305,583
EXPENSES
Management fee 132,571 9,452,952 - (a) 9,585,523
Administration fee 44,190 - (44,190)(a) -
Service fee - Class A, B, C 49,748 3,099,842 - (a) 3,149,590
Distribution fee - Class B 95,935 6,593,089 - (a) 6,689,024
Distribution fee - Class C 27,559 244,861 - (a) 272,420
Transfer agent fee 46,431 2,728,605 (259,171)(d) 2,515,865
Bookkeeping fee 27,000 420,040 (21,477)(a) 425,563
Trustees fee 12,950 56,473 (23,532)(b) 45,891
All other expenses 221,950 1,052,407 (388,357)(c) 886,000
---------- ------------ ---------- ------------
Total operating expenses 658,334 23,648,269 (736,727) 23,569,876
---------- ------------ ---------- ------------
Expense reimbursement (208,902) - 208,902 (a) -
---------- ------------ ---------- ------------
Net Expenses 449,432 23,648,269 (527,825) 23,569,876
NET INVESTMENT LOSS (143,849) (6,108,207) 527,825 (5,724,232)
NET REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain (loss) on investments (118,211) 183,532,200 - 183,413,989
Change in net unrealized
appreciation/depreciation
during the period on investments 1,816,980 (170,105,574) - (168,288,594)
---------- ------------ ---------- ------------
Net Gain 1,698,769 13,426,626 - 15,125,395
---------- ------------ ---------- ------------
Increase in Net Assets from Operations 1,554,920 7,318,419 527,825 9,401,163
</TABLE>
(a) Based on the contract in effect for the surviving fund.
(b) Based on trustee compensation plan for the surviving fund.
(c) Decrease due to the elimination of duplicative expenses achieved by merging
the funds.
(d) Based on the contract in effect for the surviving fund. Note that a new
transfer agent fee structure was implemented for the Growth & Income Fund
effective January 1, 2000. The pro forma combined transfer agent fee shown
assumes this new agreement was in effect for the entire twelve-month period
ended June 30, 2000.
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH & LIBERTY LIBERTY GROWTH & PRO FORMA
INCOME PORTFOLIO VALUE INCOME FUND COMBINED
SHARES FUND SHARES SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
Agriculture, Forestry & Fishing
CANADIAN NATL RAILWAY CO 133,100 133,100
Finance, Insurance & Real Estate
ACE LIMITED 81,700 81,700
AETNA INC 10,900 10,900
AMBAC FINANCIAL GROUP INC 40,500 40,500
AMER INTERNATIONAL GROUP INC 132,275 132,275
AMERICAN EXPRESS CO 240,000 144,000 384,000
AON CORP 33,200 33,200
AXA FINANICAL INC 140,500 140,500
BANK OF AMERICA CORP 67,896 231,234 299,130
BANK ONE 31,000 31,000
BEAR STEARNS COMPANIES INC 30,173 30,173
CAPITAL ONE FINANCIAL CORP 72,100 72,100
CHASE MANHATTAN CORP (NEW) 193,200 186,450 379,650
CINCINNATI FINANCIAL CORP 188,300 188,300
CITIGROUP INC 244,810 523,300 768,110
CITY NATIONAL CORP 119,500 119,500
FANNIE MAE 161,000 163,400 324,400
FIRSTAR CORP 18,000 18,000
FLEET BOSTON FINANCIAL CORP 16,100 348,600 364,700
FREDDIE MAC 19,500 108,300 127,800
GOLDEN STATE BANCORP 171,300 171,300
GOLDEN WEST FINANCIAL CORP 89,100 89,100
HCA-THE HEALTHCARE CORP 346,100 346,100
HOUSEHOLD INTERNATIONAL INC 83,300 83,300
J P MORGAN & CO INC 55,100 55,100
KNIGHT TRADING GROUP INC 59,800 59,800
LEHMAN BROTHERS HLDG INC 100,900 100,900
LOEWS CORP 42,000 42,000
MBNA CORP 210,300 210,300
MGIC INV CORP 123,000 123,000
MORGAN STANLEY DEAN WITTER 165,900 165,900
NATIONWIDE FINANCIAL SERV A 228,700 228,700
PACIFIC CENTURY FINL CORP 145,500 145,500
PMI GROUP INC 131,100 131,100
PNC FINANCIAL SERVICES GROUP 104,900 104,900
PROVIDIAN FINANCIAL CORP 30,100 30,100
SOVEREIGN BANCORP INC 505,200 505,200
UNIONBANCAL CORPORATION 155,100 155,100
UNITED HEALTHCARE CORP 5,900 126,700 132,600
WASHINGTON MUTUAL INC 23,100 23,100
WELLS FARGO & CO 156,660 57,800 214,460
SR&F GROWTH & LIBERTY LIBERTY GROWTH & PRO FORMA
INCOME PORTFOLIO VALUE FUND INCOME FUND COMBINED
MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C> <C>
COMMON STOCKS
Agriculture, Forestry & Fishing
CANADIAN NATL RAILWAY CO $ 3,884,856 $ 3,884,856
----------- -----------
Finance, Insurance & Real Estate
ACE LIMITED 2,287,600 2,287,600
AETNA INC $ 699,644 699,644
AMBAC FINANCIAL GROUP INC 2,219,906 2,219,906
AMER INTERNATIONAL GROUP INC 15,542,313 15,542,313
AMERICAN EXPRESS CO $ 12,510,000 7,506,000 20,016,000
AON CORP 1,031,275 1,031,275
AXA FINANICAL INC 4,777,000 4,777,000
BANK OF AMERICA CORP 2,919,528 9,943,062 12,862,590
BANK ONE 823,438 823,438
BEAR STEARNS COMPANIES INC 1,255,951 1,255,951
CAPITAL ONE FINANCIAL CORP 3,217,463 3,217,463
CHASE MANHATTAN CORP (NEW) 8,899,275 8,588,353 17,487,628
CINCINNATI FINANCIAL CORP 5,919,681 5,919,681
CITIGROUP INC 14,749,803 31,528,825 46,278,628
CITY NATIONAL CORP 4,242,250 4,242,250
FANNIE MAE 8,402,188 8,527,438 16,929,625
FIRSTAR CORP 379,125 379,125
FLEET BOSTON FINANCIAL CORP 547,400 11,852,400 12,399,800
FREDDIE MAC 789,750 4,386,150 5,175,900
GOLDEN STATE BANCORP 3,083,400 3,083,400
GOLDEN WEST FINANCIAL CORP 3,636,394 3,636,394
HCA-THE HEALTHCARE CORP 10,512,788 10,512,788
HOUSEHOLD INTERNATIONAL INC 3,462,156 3,462,156
J P MORGAN & CO INC 6,067,888 6,067,888
KNIGHT TRADING GROUP INC 1,782,788 1,782,788
LEHMAN BROTHERS HLDG INC 9,541,356 9,541,356
LOEWS CORP 2,520,000 2,520,000
MBNA CORP 5,704,388 5,704,388
MGIC INV CORP 5,596,500 5,596,500
MORGAN STANLEY DEAN WITTER 13,811,175 13,811,175
NATIONWIDE FINANCIAL SERV A 7,518,513 7,518,513
PACIFIC CENTURY FINL CORP 2,127,938 2,127,938
PMI GROUP INC 6,227,250 6,227,250
PNC FINANCIAL SERVICES GROUP 4,917,188 4,917,188
PROVIDIAN FINANCIAL CORP 2,709,000 2,709,000
SOVEREIGN BANCORP INC 3,552,188 3,552,188
UNIONBANCAL CORPORATION 2,879,044 2,879,044
UNITED HEALTHCARE CORP 505,925 10,864,525 11,370,450
WASHINGTON MUTUAL INC 667,013 667,013
WELLS FARGO & CO 6,070,575 2,239,750 8,310,325
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH & LIBERTY LIBERTY GROWTH & PRO FORMA
INCOME PORTFOLIO VALUE INCOME FUND COMBINED
SHARES FUND SHARES SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
XL CAPITAL LTD-CLASS A 20,700 20,700
Manufacturing
ABBOTT LABS 31,600 31,600
ADC TELECOMMUNICATIONS INC 81,500 81,500
AGILENT TECHNOLOGIES INC 28,986 28,986
ALCOA INC 111,400 111,400
AMERADA HESS CORP 17,000 17,000
AMGEN INC 80,800 80,800
ANALOG DEVICES INC. 82,900 82,900
ANHEUSER BUSCH INC 162,600 162,600
APPLE COMPUTER INC 49,600 49,600
APPLIED MATLS 80,000 129,200 209,200
APPLIED MICRO CIRCUITS CORP 11,600 11,600
ATMEL CORP 116,900 116,900
AVON PRODUCTS INC 40,000 40,000
BAUSCH & LOMB INC 125,200 125,200
BAXTER INTERNATIONAL INC 95,000 95,000
BECKMAN COULTER INC 29,100 29,100
BESTFOODS 21,800 190,600 212,400
BIOMET INC 127,000 127,000
BOEING CO 99,600 25,700 332,800 458,100
BOSTON SCIENTIFIC CORP 19,700 19,700
BP AMOCO PLC-ADR 242,810 150,000 392,810
BRISTOL-MYERS SQUIBB CO 150,000 166,200 316,200
BRUNSWICK CORP 227,400 227,400
CHEVRON CORP 6,300 119,200 125,500
CISCO SYSTEMS INC 90,000 456,200 546,200
COCA COLA CO 19,700 19,700
COMPAQ COMPUTER CORP 195,000 18,100 213,100
COMVERSE TECH 32,200 32,200
CORNING INCORPORATED 21,100 21,100
DELPHI AUTOMOTIVE SYSTEMS 41,282 253,600 294,882
DOW CHEMICAL CO 350,500 350,500
EASTMAN KODAK CO 15,000 15,000
ECOLAB INC 250,000 250,000
EI DUPONT DE NEMOURS & CO INC 29,179 60,200 89,379
ELI LILLY & CO 114,500 114,500
EMC CORP 108,400 108,400
EMERSON ELECTRIC CO 50,000 15,400 65,400
EXXON MOBIL CORPORATION 365,165 365,165
FMC CORP 43,200 43,200
FORD MOTOR CO 266,300 266,300
GATEWAY INC 51,000 51,000
SR&F GROWTH & LIBERTY LIBERTY GROWTH & PRO FORMA
INCOME PORTFOLIO VALUE FUND INCOME FUND COMBINED
MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C> <C>
COMMON STOCKS
XL CAPITAL LTD-CLASS A 1,120,388 1,120,388
------------- ------------ --------------- ---------------
53,551,368 6,563,956 230,548,616 290,663,941
------------- ------------ --------------- ---------------
Manufacturing
ABBOTT LABS 1,408,175 1,408,175
ADC TELECOMMUNICATIONS INC 6,835,813 6,835,813
AGILENT TECHNOLOGIES INC 2,137,718 2,137,718
ALCOA INC 3,230,600 3,230,600
AMERADA HESS CORP 1,049,750 1,049,750
AMGEN INC 5,676,200 5,676,200
ANALOG DEVICES INC. 6,300,400 6,300,400
ANHEUSER BUSCH INC 12,144,188 12,144,188
APPLE COMPUTER INC 2,597,800 2,597,800
APPLIED MATLS 7,250,000 11,708,750 18,958,750
APPLIED MICRO CIRCUITS CORP 1,145,500 1,145,500
ATMEL CORP 4,310,688 4,310,688
AVON PRODUCTS INC 1,780,000 1,780,000
BAUSCH & LOMB INC 9,687,350 9,687,350
BAXTER INTERNATIONAL INC 6,679,688 6,679,688
BECKMAN COULTER INC 1,698,713 1,698,713
BESTFOODS 1,509,650 13,199,050 14,708,700
BIOMET INC 4,881,563 4,881,563
BOEING CO 4,164,525 1,074,581 13,915,200 19,154,306
BOSTON SCIENTIFIC CORP 432,169 432,169
BP AMOCO PLC-ADR 13,733,940 8,484,375 22,218,315
BRISTOL-MYERS SQUIBB CO 8,737,500 9,681,150 18,418,650
BRUNSWICK CORP 3,766,313 3,766,313
CHEVRON CORP 534,319 10,109,650 10,643,969
CISCO SYSTEMS INC 5,720,625 28,997,213 34,717,838
COCA COLA CO 1,131,519 1,131,519
COMPAQ COMPUTER CORP 4,984,688 462,681 5,447,369
COMVERSE TECH 2,994,600 2,994,600
CORNING INCORPORATED 5,694,363 5,694,363
DELPHI AUTOMOTIVE SYSTEMS 601,169 3,693,050 4,294,219
DOW CHEMICAL CO 10,580,719 10,580,719
EASTMAN KODAK CO 892,500 892,500
ECOLAB INC 9,765,625 9,765,625
EI DUPONT DE NEMOURS & CO INC 1,276,581 2,633,750 3,910,331
ELI LILLY & CO 11,435,688 11,435,688
EMC CORP 8,340,025 8,340,025
EMERSON ELECTRIC CO 3,018,750 929,775 3,948,525
EXXON MOBIL CORPORATION 28,665,453 28,665,453
FMC CORP 2,505,600 2,505,600
FORD MOTOR CO 11,450,900 11,450,900
GATEWAY INC 2,894,250 2,894,250
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH & LIBERTY LIBERTY GROWTH & PRO FORMA
INCOME PORTFOLIO VALUE INCOME FUND COMBINED
SHARES FUND SHARES SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
GENERAL ELECTRIC CO 234,000 640,500 874,500
GENERAL MILLS INC 16,500 16,500
GEORGIA PACIFIC (TIMBER GRP) 75,000 75,000
GEORGIA PACIFIC CORP 170,000 20,300 190,300
GILLETTE CO 134,400 134,400
GRANT PRIDECO INC 164,800 164,800
HEWLETT-PACKARD CO 90,400 90,400
HONEYWELL INTERNATIONAL INC 152,500 77,437 229,937
HUBBELL INC CL B 70,400 70,400
INGERSOLL RAND CO 15,900 15,900
INTEL CORP 40,000 232,800 272,800
INTERNATIONAL GAME TECH 61,300 61,300
INTERNATIONAL PAPER CO 180,700 180,700
INTL BUSINESS MACHINES CORP 105,000 130,800 235,800
JOHNSON & JOHNSON 69,900 69,900
JOHNSON CONTROLS INC 81,500 81,500
KIMBERLY CLARK CORP 13,200 66,000 79,200
LEAR CORP 140,000 140,000
LITTLEFUSE INC 35,000 35,000
LOCKHEED MARTIN CORP 422,400 422,400
LSI LOGIC CORP 53,200 53,200
LUCENT TECHNOLOGIES INC 42,800 42,800
LYONDELL PETRO 211,300 211,300
MATTEL INC 56,800 56,800
MERCK & CO INC 14,300 155,800 170,100
MICROCHIP TECHNOLOGY 115,800 115,800
MINNESOTA MINING & MFG CO 9,600 130,300 139,900
MOTOROLA INC 45,000 12,900 57,900
MYLAN LABORATORIES, INC 238,600 238,600
NABISCO HOLDINGS CORP 16,800 16,800
NIKE INC CL B 25,100 25,100
NOKIA CORP ADR 112,400 112,400
PACCAR INC 137,100 137,100
PEPSI BOTTLING GROUP 324,800 324,800
PEPSICO INC 22,000 262,800 284,800
PFIZER INC 316,250 388,675 704,925
PHARMACIA CORPORATION 149,500 149,500
PHILIP MORRIS CO INC 203,000 48,600 280,400 532,000
PRAXAIR INC 15,000 15,000
PROCTER & GAMBLE CO 81,000 20,500 157,300 258,800
QUAKER OATS CO 121,000 121,000
ROYAL DUTCH PETRO-NY SHARES 17,600 254,300 271,900
SABRE HOLDINGS CORP 36,132 36,132
SARA LEE CORP 144,000 72,100 216,100
SCHERING-PLOUGH CORP 24,100 86,400 110,500
SHERWIN WILLIAMS CO 38,700 38,700
TEMPLE INLAND INC 24,700 24,700
SR&F GROWTH & LIBERTY LIBERTY GROWTH & PRO FORMA
INCOME PORTFOLIO VALUE FUND INCOME FUND COMBINED
MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C> <C>
COMMON STOCKS
GENERAL ELECTRIC CO 12,402,000 33,946,500 46,348,500
GENERAL MILLS INC 631,125 631,125
GEORGIA PACIFIC (TIMBER GRP) 1,621,875 1,621,875
GEORGIA PACIFIC CORP 4,462,500 532,875 4,995,375
GILLETTE CO 4,695,600 4,695,600
GRANT PRIDECO INC 4,120,000 4,120,000
HEWLETT-PACKARD CO 11,288,700 11,288,700
HONEYWELL INTERNATIONAL INC 5,137,344 2,608,659 7,746,003
HUBBELL INC CL B 1,795,200 1,795,200
INGERSOLL RAND CO 639,975 639,975
INTEL CORP 5,347,500 31,122,450 36,469,950
INTERNATIONAL GAME TECH 1,624,450 1,624,450
INTERNATIONAL PAPER CO 5,387,119 5,387,119
INTL BUSINESS MACHINES CORP 11,504,063 14,330,775 25,834,838
JOHNSON & JOHNSON 7,121,063 7,121,063
JOHNSON CONTROLS INC 4,181,969 4,181,969
KIMBERLY CLARK CORP 757,350 3,786,750 4,544,100
LEAR CORP 2,800,000 2,800,000
LITTLEFUSE INC 1,715,000 1,715,000
LOCKHEED MARTIN CORP 10,480,800 10,480,800
LSI LOGIC CORP 2,879,450 2,879,450
LUCENT TECHNOLOGIES INC 2,535,900 2,535,900
LYONDELL PETRO 3,539,275 3,539,275
MATTEL INC 749,050 749,050
MERCK & CO INC 1,095,738 11,938,175 13,033,913
MICROCHIP TECHNOLOGY 6,747,159 6,747,159
MINNESOTA MINING & MFG CO 792,000 10,749,750 11,541,750
MOTOROLA INC 1,307,813 374,906 1,682,719
MYLAN LABORATORIES, INC 4,354,450 4,354,450
NABISCO HOLDINGS CORP 882,000 882,000
NIKE INC CL B 999,294 999,294
NOKIA CORP ADR 5,612,975 5,612,975
PACCAR INC 5,441,156 5,441,156
PEPSI BOTTLING GROUP 9,480,100 9,480,100
PEPSICO INC 977,625 11,678,175 12,655,800
PFIZER INC 15,180,000 18,656,400 33,836,400
PHARMACIA CORPORATION 7,727,281 7,727,281
PHILIP MORRIS CO INC 5,392,188 1,290,938 7,448,125 14,131,250
PRAXAIR INC 561,563 561,563
PROCTER & GAMBLE CO 4,637,250 1,173,625 9,005,425 14,816,300
QUAKER OATS CO 9,090,125 9,090,125
ROYAL DUTCH PETRO-NY SHARES 1,083,500 15,655,344 16,738,844
SABRE HOLDINGS CORP 1,029,762 1,029,762
SARA LEE CORP 2,781,000 1,392,431 4,173,431
SCHERING-PLOUGH CORP 1,217,050 4,363,200 5,580,250
SHERWIN WILLIAMS CO 819,956 819,956
TEMPLE INLAND INC 1,037,400 1,037,400
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH & LIBERTY LIBERTY GROWTH & PRO FORMA
INCOME PORTFOLIO VALUE INCOME FUND COMBINED
SHARES FUND SHARES SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
TERADYNE INC 62,400 62,400
TEXACO INC 13,800 13,800
TEXAS INSTRUMENTS INC 78,400 78,400
TRIBUNE CO 100,000 100,000
UNION CARBIDE CORP 111,100 111,100
UNITED TECHNOLOGIES CORP 7,700 170,500 178,200
USG CORP NEW 63,300 63,300
USX-MARATHON GROUP 34,300 34,300
VISTEON CORP 33,288 33,288
WEATHERFORD INTERNATIONAL 164,800 164,800
WESTVACO CORP 268,600 268,600
WEYERHAEUSER CO 50,800 50,800
WHIRLPOOL CORP 85,100 85,100
XEROX CORP 34,400 34,400
Mining & Energy
ANADARKO PETROLEUM 19,100 19,100
BURLINGTON RESOURCES INC 76,000 76,000
COFLEXIP-SPONSORED ADR 23,270 23,270
CONOCO INC -CL B 61,421 61,421
CONOCO INC-CL A 104,800 104,800
DIAMOND OFFSHORE DRILLING 18,000 195,800 213,800
ENRON CORP 115,000 115,000
FALCON DRILLING COMPANY INC 521,800 521,800
PETROLEUM GEO SERVICES ADR 239,100 239,100
SCHLUMBERGER LTD 161,900 161,900
TRANSOCEAN SEDCO FOREX INC 31,343 31,343
Retail Trade
ALBERTSONS INC 27,500 27,500
BEST BUY INC 128,500 128,500
CIRCUIT CITY STORES INC 100,700 100,700
CVS CORP 159,200 159,200
DARDEN RESTURANTS INC 206,000 206,000
FEDERATED DEPT STORES INC NEW 80,000 10,700 90,700
HOME DEPOT INC 69,150 69,150
MCDONALDS CORP 18,700 18,700
NORDSTROM INC 23,100 23,100
RADIOSHACK CORP 93,700 93,700
TARGET CORP 61,400 61,400
TJX COMPANIES, INC 252,800 252,800
</TABLE>
<TABLE>
<CAPTION>
SR&F GROWTH & LIBERTY LIBERTY GROWTH & PRO FORMA
INCOME PORTFOLIO VALUE INCOME FUND COMBINED
SHARES FUND SHARES SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
TERADYNE INC 4,586,400 4,586,400
TEXACO INC 734,850 734,850
TEXAS INSTRUMENTS INC 5,385,100 5,385,100
TRIBUNE CO 3,500,000 3,500,000
UNION CARBIDE CORP 5,499,450 5,499,450
UNITED TECHNOLOGIES CORP 453,338 10,038,188 10,491,525
USG CORP NEW 1,922,738 1,922,738
USX-MARATHON GROUP 859,644 859,644
VISTEON CORP 403,611 403,611
WEATHERFORD INTERNATIONAL 6,561,100 6,561,100
WESTVACO CORP 6,664,638 6,664,638
WEYERHAEUSER CO 2,184,400 2,184,400
WHIRLPOOL CORP 3,967,788 3,967,788
XEROX CORP 713,800 713,800
--------------- --------------- --------------- --------------
170,529,308 27,627,400 559,572,362 757,729,070
--------------- --------------- --------------- ---------------
Mining & Energy
ANADARKO PETROLEUM 941,869 941,869
BURLINGTON RESOURCES INC 2,907,000 2,907,000
COFLEXIP-SPONSORED ADR 1,407,835 1,407,835
CONOCO INC -CL B 1,508,653 1,508,653
CONOCO INC-CL A 2,305,600 2,305,600
DIAMOND OFFSHORE DRILLING 632,250 6,877,475 7,509,725
ENRON CORP 7,417,500 7,417,500
FALCON DRILLING COMPANY INC 12,294,913 12,294,913
PETROLEUM GEO SERVICES ADR 4,079,644 4,079,644
SCHLUMBERGER LTD 2,081,788 2,081,788
TRANSOCEAN SEDCO FOREX INC 1,674,892 1,674,892
--------------- --------------- --------------- --------------
11,231,753 1,574,119 41,323,545 54,129,417
--------------- --------------- --------------- ---------------
Retail Trade
ALBERTSONS INC 914,375 914,375
BEST BUY INC 8,127,625 8,127,625
CIRCUIT CITY STORES INC 3,341,981 3,341,981
CVS CORP 6,368,000 6,368,000
DARDEN RESTURANTS INC 3,347,500 3,347,500
FEDERATED DEPT STORES INC NEW 2,700,000 361,125 3,061,125
HOME DEPOT INC 3,453,178 3,453,178
MCDONALDS CORP 615,931 615,931
NORDSTROM INC 557,288 557,288
RADIOSHACK CORP 4,439,038 4,439,038
TARGET CORP 3,561,200 3,561,200
TJX COMPANIES, INC 4,740,000 4,740,000
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH & LIBERTY LIBERTY GROWTH & PRO FORMA
INCOME PORTFOLIO VALUE INCOME FUND COMBINED
SHARES FUND SHARES SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
WALGREEN CO 280,000 280,000
WAL-MART STORES INC 150,000 150,700 300,700
Services
ADOBE SYSTEMS INC 73,500 73,500
AMERICA ONLINE INC 113,000 113,000
AUTOMATIC DATA PROCESSING INC 105,600 105,600
CHECK POINT SOFTWARE TECH 5,700 5,700
DUN & BRADSTREET CORP 214,800 214,800
FIRST DATA CORP 19,100 129,600 148,700
HARRAH'S ENTERTAINMENT INC 88,500 88,500
HERTZ CORP-CL A 60,000 60,000
INTERPUBLIC GROUP COS INC 121,200 121,200
MANPOWER 128,600 128,600
MICROSOFT CORP 158,700 158,700
NETWORK APPLIANCE INC 15,400 15,400
ORACLE CORP 148,400 148,400
SUN MICROSYSTEMS INC 123,800 123,800
TIME WARNER INC 16,400 16,400
USA NETWORKS INC 101,500 101,500
WALT DISNEY PRODUCTIONS 20,300 155,500 175,800
Transportation, Communications,
Electric, Gas and Sanitary Services
A T & T CORP 65,333 26,600 348,100 440,033
AMR CORP 50,000 50,000
AT & T WIRELESS CORP 178,200 178,200
BELL ATLANTIC CORP 190,320 122,600 312,920
BELLSOUTH CORP 147,300 147,300
BURLINGTON NORTH SANTA FE CORP 200,000 200,000
CHRIS-CRAFT INDUSTIRES INC 61,800 61,800
COMCAST CORP-SPECIAL CL A 30,000 46,500 76,500
CONTINENTAL AIRLINES CL B 160,000 160,000
DELTA AIR LINES INC 79,600 79,600
DUKE ENERGY 60,100 60,100
EDISON INTERNATIONAL 235,700 235,700
ENTERGY CORP 18,600 252,400 271,000
GTE CORP 201,400 201,400
KANSAS CITY SOUTHN INDS INC 131,900 131,900
P G & E CORP 10,700 116,000 126,700
PMC-SIERRA INC 16,800 16,800
RF MICRO DEVICES INC 47,400 47,400
</TABLE>
<TABLE>
<CAPTION>
SR&F GROWTH & LIBERTY LIBERTY GROWTH & PRO FORMA
INCOME PORTFOLIO VALUE INCOME FUND COMBINED
SHARES FUND SHARES SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
WALGREEN CO 9,012,500 9,012,500
WAL-MART STORES INC 8,643,750 8,684,088 17,327,838
------------- ------------ -------------- -----------
25,096,250 2,448,719 41,322,609 68,867,578
------------- ------------ -------------- -----------
Services
ADOBE SYSTEMS INC 9,555,000 9,555,000
AMERICA ONLINE INC 5,960,750 5,960,750
AUTOMATIC DATA PROCESSING INC 5,656,200 5,656,200
CHECK POINT SOFTWARE TECH 1,206,975 1,206,975
DUN & BRADSTREET CORP 6,148,650 6,148,650
FIRST DATA CORP 947,838 6,431,400 7,379,238
HARRAH'S ENTERTAINMENT INC 1,852,969 1,852,969
HERTZ CORP-CL A 1,683,750 1,683,750
INTERPUBLIC GROUP COS INC 5,211,600 5,211,600
MANPOWER 4,115,200 4,115,200
MICROSOFT CORP 12,696,000 12,696,000
NETWORK APPLIANCE INC 1,239,700 1,239,700
ORACLE CORP 12,474,875 12,474,875
SUN MICROSYSTEMS INC 11,258,063 11,258,063
TIME WARNER INC 1,246,400 1,246,400
USA NETWORKS INC 2,194,938 2,194,938
WALT DISNEY PRODUCTIONS 787,894 6,035,344 6,823,238
------------- ------------ -------------- -----------
6,895,350 1,735,731 88,072,463 96,703,544
------------- ------------ -------------- -----------
Transportation, Communications,
Electric, Gas and Sanitary Services
A T & T CORP 2,066,156 841,225 11,008,663 13,916,044
AMR CORP 1,321,875 1,321,875
AT & T WIRELESS CORP 4,967,325 4,967,325
BELL ATLANTIC CORP 9,670,635 6,229,613 15,900,248
BELLSOUTH CORP 6,278,663 6,278,663
BURLINGTON NORTH SANTA FE CORP 4,587,500 4,587,500
CHRIS-CRAFT INDUSTIRES INC 4,082,663 4,082,663
COMCAST CORP-SPECIAL CL A 1,215,000 1,883,250 3,098,250
CONTINENTAL AIRLINES CL B 7,520,000 7,520,000
DELTA AIR LINES INC 4,024,775 4,024,775
DUKE ENERGY 3,388,138 3,388,138
EDISON INTERNATIONAL 4,831,850 4,831,850
ENTERGY CORP 505,688 6,862,125 7,367,813
GTE CORP 12,537,150 12,537,150
KANSAS CITY SOUTHN INDS INC 11,697,881 11,697,881
P G & E CORP 263,488 2,856,500 3,119,988
PMC-SIERRA INC 2,985,150 2,985,150
RF MICRO DEVICES INC 4,153,425 4,153,425
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH & LIBERTY LIBERTY GROWTH & PRO FORMA
INCOME PORTFOLIO VALUE INCOME FUND COMBINED
SHARES FUND SHARES SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
SBC COMMUNICATIONS INC 409,400 409,400
SOUTHERN CO 24,800 24,800
SPRINT CORP (FON GROUP) 189,200 189,200
TELEPHONE & DATA 24,300 24,300
TIDEWATER INC 14,900 14,900
TXU CORP 164,500 164,500
UAL INC 56,000 56,000
UNICOM CORPORATION 160,400 160,400
UNION PACIFIC CORP 11,300 137,900 149,200
US CELLULAR CORP 29,700 29,700
WORLDCOM INC 16,600 16,600
Wholesale Trade
SYSCO CORP 182,600 182,600
Total Common Stocks
CASH EQUIVALENTS Par Par Par Par
ASSOCIATES FIRST CAPITAL 0.00% 7/3/2000 $ 2,130,000 2,130,000
WARBURG REPURCHASE AGREEMENT
6.60% 7/3/2000 $ 1,567,000 $ 25,932,000 27,499,000
Total Cash Equivalents
TOTAL INVESTMENTS (COST OF $157,
157,695, $43,810,733, $976,414,426
AND $1,177,382,854, RESPECTIVELY)
SR&F GROWTH & LIBERTY LIBERTY GROWTH & PRO FORMA
INCOME PORTFOLIO VALUE FUND INCOME FUND COMBINED
MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C> <C>
COMMON STOCKS
SBC COMMUNICATIONS INC 17,706,550 17,706,550
SOUTHERN CO 578,150 578,150
SPRINT CORP (FON GROUP) 9,649,200 9,649,200
TELEPHONE & DATA 2,436,075 2,436,075
TIDEWATER INC 536,400 536,400
TXU CORP 4,852,750 4,852,750
UAL INC 3,258,500 3,258,500
UNICOM CORPORATION 6,205,475 6,205,475
UNION PACIFIC CORP 420,219 5,128,156 5,548,375
US CELLULAR CORP 1,871,100 1,871,100
WORLDCOM INC 761,526 761,526
------------- ------------ --------------- ---------------
38,079,047 3,906,695 127,197,094 169,182,836
------------- ------------ --------------- ---------------
Wholesale Trade
SYSCO CORP 7,692,025 7,692,025
--------------- ---------------
Total Common Stocks 305,383,077 43,856,620 1,099,613,570 1,448,853,267
------------- ------------ --------------- ---------------
CASH EQUIVALENTS
ASSOCIATES FIRST CAPITAL 0.00% 7/3/2000 2,129,178 2,129,178
WARBURG REPURCHASE AGREEMENT
6.60% 7/3/2000 1,567,000 25,932,000 27,499,000
------------- ------------ --------------- ---------------
Total Cash Equivalents 2,129,178 1,567,000 25,932,000 29,628,178
------------- ------------ --------------- ---------------
TOTAL INVESTMENTS (COST OF $157,
157,695, $43,810,733, $976,414,426
AND $1,177,382,854, RESPECTIVELY) $ 307,512,255 $ 45,423,620 $ 1,125,545,570 $ 1,478,481,445
============= ============ =============== ===============
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINING CONDENSED STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F Liberty Liberty
Growth & Income Value Opportunities Value
Portfolio Fund Fund
<S> <C> <C> <C>
Investments, at value $ 307,512,255 $ 308,179,637 $45,423,620
Cash 3,884 - 342
Receivable for investments sold - - -
Payable for investments purchased - - -
Other assets less other liabilities 837,077 (351,328) 18,463
Net assets $ 308,353,216 $ 307,828,309 $45,442,425
Class A:
Net assets $ 259,166 $10,441,098
Shares outstanding 9,814 920,529
Net asset value $ 26.41 $ 11.34
Class B:
Net assets $ 1,269,238 $19,380,181
Shares outstanding 48,240 1,714,187
Net asset value $ 26.31 $ 11.31
Class C:
Net assets $ 75,057 $1,934,018
Shares outstanding 2,853 171,022
Net asset value $ 26.31 $ 11.31
Class Z:
Net assets $ 1,004 $13,687,128
Shares outstanding 38 1,206,557
Net asset value $ 26.42 $ 11.34
Class S:
Net assets $ 306,223,844
Shares outstanding 11,601,266
Net asset value $ 26.40
Liberty
Growth & Income Pro Forma Pro Forma
Fund Adjustments Combined
<S> <C> <C> <C>
Investments, at value $ 1,125,545,570 $(308,179,637) (a) $ 1,478,481,445
Cash 176 - 4,402
Receivable for investments sold - - -
Payable for investments purchased - - -
Other assets less other liabilities 35,737,174 (562,967) (b) 35,678,419
Net assets $ 1,161,282,920 $(308,742,604) $ 1,514,164,266
Class A:
Net assets $ 309,356,714 (83,339) $ 319,973,639
Shares outstanding 15,017,711 (415,353) $ 15,532,701
Net asset value $ 20.60 $ 20.60
Class B:
Net assets $ 822,643,366 (215,042) $ 843,077,743
Shares outstanding 41,382,562 (736,652) $ 42,408,337
Net asset value $ 19.88 $ 19.88
Class C:
Net assets $ 29,281,763 (8,657) $ 31,282,181
Shares outstanding 1,465,147 (74,131) $ 1,564,891
Net asset value $ 19.99 $ 19.99
Class Z:
Net assets $ 1,077 (10,953) $ 13,678,256
Shares outstanding 52 (546,181) $ 660,466
Net asset value $ 20.71 $ 20.71
Class S:
Net assets (71,396) $ 306,152,448
Shares outstanding 3,185,013 (c) $ 14,786,279
Net asset value $ 20.71
</TABLE>
Footnotes to pro forma statement of assets and liabilities
(a) - Adjustment represents the elimination the Liberty Value Opportunities
Fund's investment in the Portfolio, as the master/feeder structure will be
dissolved, with the the securities held by the Portfolio withdrawn from
the Portfolio by the Liberty Value Opportunities Fund prior to the merger.
(b) - Adjustment reflects a payable to the general partner of the Portfolio
for its remaining net assets after withdrawal of the Liberty Value
Opportunities Fund's investment in the Portfolio of $173,579, in addition
to one time proxy, accounting, legal and other costs of the reorganization
of $71,770, $36,365 and and $281,253 to be borne by Liberty Value
Opportunities Fund, Liberty Value Fund and Liberty Growth & Income Fund
respectively.
(c) - Liberty Value Opportunities Fund shares are exchanged for new Class S
shares of Liberty Growth & Income Fund, to be established upon
consummation of the merger. Initial per share value of Class S shares is
presumed to equal that of current Class Z shares.
<PAGE>
PRO FORMA COMBINING CONDENSED STATEMENT OF OPERATIONS FOR THE TWELVE MONTH
PERIOD ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SRF Liberty Value Liberty
Growth & Income Opportunities Value
Portfolio Fund Fund
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends 4,456,261 4,451,174 852,965
Interest 1,058,561 1,056,847 46,028
------------- ------------ -----------
Total investment income 5,514,823 5,508,021 898,993
EXPENSES
Management fee 2,190,101 - 356,825
Administration fee - 545,843 -
Service fee - Class A, B, C - 866 80,902
Distribution fee - Class A - 23 -
Distribution fee - Class B - 2,118 144,648
Distribution fee - Class C - 130 11,951
Transfer agent fee - Class A, B, C, Z - 819 -
Transfer agent fee - Class S - 799,640 -
Transfer agent fee 6,000 - 94,869
Bookkeeping fee 32,875 32,847 27,000
Trustees fee 17,578 9,169 7,463
Expenses allocated
from SRF Growth & Income Portfolio - 2,271,293 -
All other expenses 27,280 269,696 129,672
------------- ------------ -----------
Total operating expenses 2,273,834 3,932,444 853,330
------------- ------------ -----------
Expense reimbursement - - (281,305)
------------- ------------ -----------
Net Expenses 2,273,834 3,932,444 572,025
NET INVESTMENT INCOME (LOSS) 3,240,989 1,575,577 326,968
NET REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments 32,232,665 32,215,860 (5,244,334)
Closed futures contracts 748,773 693,167 -
Foreign currency transactions (1,375) (749) -
------------- ------------ -----------
Net Realized Gain (Loss) 32,980,063 32,908,278 (5,244,334)
Change in net unrealized appreciation/
depreciation during the period on investments 63,450,655 63,542,407 (1,924,598)
------------- ------------ -----------
Net Gain (Loss) 96,430,719 96,450,685 (7,168,932)
------------- ------------ -----------
Increase (Decrease) in Net Assets from Operations 99,671,708 98,026,261 (6,841,963)
Liberty
Growth & Income Pro Forma Pro Forma
Fund Adjustments Combined
<C> <C> <C>
INVESTMENT INCOME
Dividends 15,573,131 (4,456,261) (c) 20,877,270
Interest 1,966,931 (1,058,561) (c) 3,069,806
--------------- -------------
Total investment income 17,540,062 (5,514,823) 23,947,075
EXPENSES
Management fee 9,452,952 (95,934) (a) 11,903,944
Administration fee - (545,843) (a) -
Service fee - Class A, B, C 3,099,842 - (a) 3,181,610
Distribution fee - Class A - (23) (a) -
Distribution fee - Class B 6,593,089 - (a) 6,739,855
Distribution fee - Class C 244,861 - (a) 256,942
Transfer agent fee - Class A, B, C, Z - (819) (a) -
Transfer agent fee - Class S - (799,640) (a) -
Transfer agent fee 2,728,605 455,334 (e) 3,284,808
Bookkeeping fee 420,040 9,402 (a) 522,164
Trustees fee 56,473 (32,131) (b) 58,552
Expenses allocated -
from SRF Growth & Income Portfolio - (2,271,293) (c) -
All other expenses 1,052,407 (403,775) (d) 1,048,000
--------------- ------------- -------------
Total operating expenses 23,648,269 (1,438,168) 26,995,875
--------------- ------------- -------------
Expense reimbursement - 281,305 (a) -
--------------- ------------- -------------
Net Expenses 23,648,269 (1,156,863) 26,995,875
NET INVESTMENT INCOME (LOSS) (6,108,207) 1,156,863 (3,048,800)
NET REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments 183,532,200 (32,232,665) (c) 210,503,726
Closed futures contracts - (748,773) (c) 693,167
Foreign currency transactions - 1,375 (c) (749)
--------------- -------------
Net Realized Gain (Loss) 183,532,200 (32,980,063) 211,196,143
Change in net unrealized appreciation/
depreciation during the period on investments (170,105,574) (63,450,655) (c) (108,487,764)
--------------- ------------- -------------
Net Gain (Loss) 13,426,626 (96,430,719) 102,708,379
--------------- ------------- -------------
Increase (Decrease) in Net Assets from Operations 7,318,419 (95,273,856) 99,659,579
</TABLE>
(a) Based on the contract in effect for the surviving fund.
(b) Based on trustee compensation plan for the surviving fund.
(c) Due to elimination of master/feeder structure.
(d) Decrease due to the elimination of duplicative expenses achieved by merging
the funds.
(e) Based on the contract in effect for the surviving fund. Note that a new
transfer agent fee structure was implemented for Liberty Growth & Income
Fund effective January 1, 2000. The pro forma combined transfer agent fee
shown assumes this new agreement was in effect for the entire twelve-month
period ended June 30, 2000.
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH
& INCOME LIBERTY LIBERTY GROWTH
PORTFOLIO ALL-STAR GROWTH & INCOME FUND PRO FORMA
SHARES & INCOME FUND SHARES COMBINED
SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
Agriculture, Forestry & Fishing
CANADIAN NATL RAILWAY CO 133,100 133,100
Construction
HALLIBURTON CO 2,975 2,975
Finance, Insurance & Real Estate
ABN AMRO HOLDING NV ADR 3,286 3,286
ACE LIMITED 10,950 81,700 92,650
AFLAC INC 4,271 4,271
ALLMERICA FINANCIAL CORP 3,375 3,375
AMBAC FINANCIAL GROUP INC 1,300 40,500 41,800
AMER INTERNATIONAL GROUP INC 1,100 132,275 133,375
AMERICAN EXPRESS CO 240,000 144,000 384,000
ASTORIA FINANCIAL CORP 600 600
AXA FINANICAL INC 4,300 140,500 144,800
BANK OF AMERICA CORP 67,896 700 231,234 299,830
BANK ONE 4,100 4,100
BEAR STEARNS COMPANIES INC 30,173 30,173
C.I.T. GROUP INC-A 2,000 2,000
CAPITAL ONE FINANCIAL CORP 1,000 72,100 73,100
CHASE MANHATTAN CORP (NEW) 193,200 3,250 186,450 382,900
CIGNA CORP 2,275 2,275
CINCINNATI FINANCIAL CORP 188,300 188,300
CITIGROUP INC 244,810 8,490 523,300 776,600
CITY NATIONAL CORP 119,500 119,500
COUNTRYWIDE CREDIT INDUSTRIES 10,593 10,593
FANNIE MAE 161,000 400 163,400 324,800
FIRST UNION CORP 2,800 2,800
FLEET BOSTON FINANCIAL CORP 4,000 348,600 352,600
FREDDIE MAC 9,096 108,300 117,396
GOLDEN STATE BANCORP 171,300 171,300
GOLDEN WEST FINANCIAL CORP 89,100 89,100
GOLDMAN SACHS GROUP INC 500 500
HCA-THE HEALTHCARE CORP 346,100 346,100
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME GROWTH & LIBERTY GROWTH & PRO FORMA
PORTFOLIO INCOME FUND INCOME FUND COMBINED MARKET
MARKET VALUE MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C>
COMMON STOCKS
Agriculture, Forestry & Fishing
CANADIAN NATL RAILWAY CO $3,884,856 $3,884,856
-------------- --------------
Construction
HALLIBURTON CO $140,383 $140,383
----------- --------------
Finance, Insurance & Real Estate
ABN AMRO HOLDING NV ADR 80,712 80,712
ACE LIMITED 306,600 2,287,600 2,594,200
AFLAC INC 196,199 196,199
ALLMERICA FINANCIAL CORP 176,766 176,766
AMBAC FINANCIAL GROUP INC 71,256 2,219,906 2,291,163
AMER INTERNATIONAL GROUP INC 129,250 15,542,313 15,671,563
AMERICAN EXPRESS CO $12,510,000 7,506,000 20,016,000
ASTORIA FINANCIAL CORP 15,450 15,450
AXA FINANICAL INC 146,200 4,777,000 4,923,200
BANK OF AMERICA CORP 2,919,528 30,100 9,943,062 12,892,690
BANK ONE 108,906 108,906
BEAR STEARNS COMPANIES INC 1,255,951 1,255,951
C.I.T. GROUP INC-A 32,500 32,500
CAPITAL ONE FINANCIAL CORP 44,625 3,217,463 3,262,088
CHASE MANHATTAN CORP (NEW) 8,899,275 149,703 8,588,353 17,637,331
CIGNA CORP 212,713 212,713
CINCINNATI FINANCIAL CORP 5,919,681 5,919,681
CITIGROUP INC 14,749,803 511,523 31,528,825 46,790,150
CITY NATIONAL CORP 4,242,250 4,242,250
COUNTRYWIDE CREDIT INDUSTRIES 321,100 321,100
FANNIE MAE 8,402,188 20,875 8,527,438 16,950,500
FIRST UNION CORP 69,475 69,475
FLEET BOSTON FINANCIAL CORP 136,000 11,852,400 11,988,400
FREDDIE MAC 368,388 4,386,150 4,754,538
GOLDEN STATE BANCORP 3,083,400 3,083,400
GOLDEN WEST FINANCIAL CORP 3,636,394 3,636,394
GOLDMAN SACHS GROUP INC 47,438 47,438
HCA-THE HEALTHCARE CORP 10,512,788 10,512,788
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH
& INCOME LIBERTY LIBERTY GROWTH
PORTFOLIO ALL-STAR GROWTH & INCOME FUND PRO FORMA
SHARES & INCOME FUND SHARES COMBINED
SHARES SHARES
COMMON STOCKS
<S> <C> <C> <C> <C>
HOUSEHOLD INTERNATIONAL INC 83,300 83,300
J P MORGAN & CO INC 55,100 55,100
KEYCORP 1,200 1,200
KIMCO REALTY CORP 1,700 1,700
KNIGHT TRADING GROUP INC 59,800 59,800
LEHMAN BROTHERS HLDG INC 100,900 100,900
LOEWS CORP 42,000 42,000
MBNA CORP 210,300 210,300
METLIFE INC 1,700 1,700
MGIC INV CORP 123,000 123,000
MORGAN STANLEY DEAN WITTER 1,900 165,900 167,800
NATIONWIDE FINANCIAL SERV A 228,700 228,700
PACIFIC CENTURY FINL CORP 145,500 145,500
PMI GROUP INC 131,100 131,100
PNC FINANCIAL SERVICES GROUP 3,350 104,900 108,250
PROGRESSIVE CORP OHIO 4,900 4,900
PROVIDIAN FINANCIAL CORP 2,650 30,100 32,750
SCHWAB (CHARLES) CORP 7,950 7,950
SOVEREIGN BANCORP INC 505,200 505,200
STARWOOD HOTELS & RESORTS WOR 2,600 2,600
TRIZEC HAHN CORP 8,400 8,400
U.S. BANCORP 3,000 3,000
UNIONBANCAL CORPORATION 155,100 155,100
UNITED HEALTHCARE CORP 126,700 126,700
VORNADO REALTY TRUST 1,500 1,500
WASHINGTON MUTUAL INC 2,000 2,000
WELLPOINT HEALTH NETWORKS 2,100 2,100
WELLS FARGO & CO 156,660 4,193 57,800 218,653
XL CAPITAL LTD-CLASS A 4,090 4,090
ZIONS BANCORPORATION 1,300 1,300
Manufacturing
3COM CORPORATION 1,100 1,100
ADC TELECOMMUNICATIONS INC 81,500 81,500
AGILENT TECHNOLOGIES INC 1,200 28,986 30,186
ALCAN ALUMINUM LTD 5,000 5,000
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME GROWTH & LIBERTY GROWTH & PRO FORMA
PORTFOLIO INCOME FUND INCOME FUND COMBINED MARKET
MARKET VALUE MARKET VALUE MARKET VALUE VALUE
COMMON STOCKS
<S> <C> <C> <C> <C>
HOUSEHOLD INTERNATIONAL INC 3,462,156 3,462,156
J P MORGAN & CO INC 6,067,888 6,067,888
KEYCORP 21,150 21,150
KIMCO REALTY CORP 69,700 69,700
KNIGHT TRADING GROUP INC 1,782,788 1,782,788
LEHMAN BROTHERS HLDG INC 9,541,356 9,541,356
LOEWS CORP 2,520,000 2,520,000
MBNA CORP 5,704,388 5,704,388
METLIFE INC 35,806 35,806
MGIC INV CORP 5,596,500 5,596,500
MORGAN STANLEY DEAN WITTER 158,175 13,811,175 13,969,350
NATIONWIDE FINANCIAL SERV A 7,518,513 7,518,513
PACIFIC CENTURY FINL CORP 2,127,938 2,127,938
PMI GROUP INC 6,227,250 6,227,250
PNC FINANCIAL SERVICES GROUP 157,031 4,917,188 5,074,219
PROGRESSIVE CORP OHIO 362,600 362,600
PROVIDIAN FINANCIAL CORP 238,500 2,709,000 2,947,500
SCHWAB (CHARLES) CORP 267,319 267,319
SOVEREIGN BANCORP INC 3,552,188 3,552,188
STARWOOD HOTELS & RESORTS WOR 84,013 84,013
TRIZEC HAHN CORP 150,150 150,150
U.S. BANCORP 57,750 57,750
UNIONBANCAL CORPORATION 2,879,044 2,879,044
UNITED HEALTHCARE CORP 10,864,525 10,864,525
VORNADO REALTY TRUST 52,125 52,125
WASHINGTON MUTUAL INC 57,750 57,750
WELLPOINT HEALTH NETWORKS 152,119 152,119
WELLS FARGO & CO 6,070,575 162,479 2,239,750 8,472,804
XL CAPITAL LTD-CLASS A 221,371 221,371
ZIONS BANCORPORATION 59,658 59,658
------------ ----------- -------------- --------------
53,551,368 5,483,474 230,548,616 289,583,458
------------ ----------- -------------- --------------
Manufacturing
3COM CORPORATION 63,388 63,388
ADC TELECOMMUNICATIONS INC 6,835,813 6,835,813
AGILENT TECHNOLOGIES INC 88,500 2,137,718 2,226,218
ALCAN ALUMINUM LTD 155,000 155,000
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH
& INCOME LIBERTY LIBERTY GROWTH
PORTFOLIO ALL-STAR GROWTH & INCOME FUND PRO FORMA
SHARES & INCOME FUND SHARES COMBINED
SHARES SHARES
COMMON STOCKS
<S> <C> <C> <C> <C>
ALCOA INC 7,560 111,400 118,960
ALLEGHENY TECHNOLOGIES INC 1,200 1,200
ALZA CORP 1,500 1,500
AMERICAN HOME PRODUCTS CORP 600 600
AMGEN INC 3,250 80,800 84,050
ANALOG DEVICES INC. 82,900 82,900
ANHEUSER BUSCH INC 2,100 162,600 164,700
APPLE COMPUTER INC 49,600 49,600
APPLIED MATLS 80,000 2,900 129,200 212,100
APPLIED MICRO CIRCUITS CORP 11,600 11,600
ATMEL CORP 116,900 116,900
AVENTIS -SPON ADR 1,100 1,100
AVON PRODUCTS INC 40,000 9,184 49,184
BAKER HUGHES INC 800 800
BAUSCH & LOMB INC 125,200 125,200
BAXTER INTERNATIONAL INC 95,000 4,400 99,400
BECKMAN COULTER INC 29,100 29,100
BESTFOODS 1,100 190,600 191,700
BIOGEN INC 3,050 3,050
BIOMET INC 127,000 127,000
BOEING CO 99,600 3,793 332,800 436,193
BP AMOCO PLC-ADR 242,810 150,000 392,810
BRISTOL-MYERS SQUIBB CO 150,000 3,200 166,200 319,400
BRUNSWICK CORP 227,400 227,400
CATERPILLAR INC 3,755 3,755
CHEVRON CORP 119,200 119,200
CISCO SYSTEMS INC 90,000 7,400 456,200 553,600
CLOROX CO 500 500
COCA COLA CO 700 19,700 20,400
COMPAQ COMPUTER CORP 195,000 7,000 202,000
COMVERSE TECH 32,200 32,200
COOPER INDUSTRIES INC 700 700
CORNING INCORPORATED 21,100 21,100
DEERE & CO 9,500 9,500
DELL COMPUTER CORPORATION 8,900 8,900
DELPHI AUTOMOTIVE SYSTEMS 253,600 253,600
DIAGEO PLC ADR 5,193 5,193
DOVER CORP 3,793 3,793
DOW CHEMICAL CO 350,500 350,500
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME GROWTH & LIBERTY GROWTH & PRO FORMA
PORTFOLIO INCOME FUND INCOME FUND COMBINED MARKET
MARKET VALUE MARKET VALUE MARKET VALUE VALUE
COMMON STOCKS
<S> <C> <C> <C> <C>
ALCOA INC 219,240 3,230,600 3,449,840
ALLEGHENY TECHNOLOGIES INC 21,600 21,600
ALZA CORP 88,688 88,688
AMERICAN HOME PRODUCTS CORP 35,250 35,250
AMGEN INC 228,313 5,676,200 5,904,513
ANALOG DEVICES INC. 6,300,400 6,300,400
ANHEUSER BUSCH INC 156,844 12,144,188 12,301,031
APPLE COMPUTER INC 2,597,800 2,597,800
APPLIED MATLS 7,250,000 262,813 11,708,750 19,221,563
APPLIED MICRO CIRCUITS CORP 1,145,500 1,145,500
ATMEL CORP 4,310,688 4,310,688
AVENTIS -SPON ADR 79,819 79,819
AVON PRODUCTS INC 1,780,000 408,688 2,188,688
BAKER HUGHES INC 25,600 25,600
BAUSCH & LOMB INC 9,687,350 9,687,350
BAXTER INTERNATIONAL INC 6,679,688 309,375 6,989,063
BECKMAN COULTER INC 1,698,713 1,698,713
BESTFOODS 76,175 13,199,050 13,275,225
BIOGEN INC 196,725 196,725
BIOMET INC 4,881,563 4,881,563
BOEING CO 4,164,525 158,595 13,915,200 18,238,320
BP AMOCO PLC-ADR 13,733,940 8,484,375 22,218,315
BRISTOL-MYERS SQUIBB CO 8,737,500 186,400 9,681,150 18,605,050
BRUNSWICK CORP 3,766,313 3,766,313
CATERPILLAR INC 127,201 127,201
CHEVRON CORP 10,109,650 10,109,650
CISCO SYSTEMS INC 5,720,625 470,363 28,997,213 35,188,200
CLOROX CO 22,406 22,406
COCA COLA CO 40,206 1,131,519 1,171,725
COMPAQ COMPUTER CORP 4,984,688 178,938 5,163,625
COMVERSE TECH 2,994,600 2,994,600
COOPER INDUSTRIES INC 22,794 22,794
CORNING INCORPORATED 5,694,363 5,694,363
DEERE & CO 351,500 351,500
DELL COMPUTER CORPORATION 438,881 438,881
DELPHI AUTOMOTIVE SYSTEMS 3,693,050 3,693,050
DIAGEO PLC ADR 184,676 184,676
DOVER CORP 153,854 153,854
DOW CHEMICAL CO 10,580,719 10,580,719
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH
& INCOME LIBERTY LIBERTY GROWTH
PORTFOLIO ALL-STAR GROWTH & INCOME FUND PRO FORMA
SHARES & INCOME FUND SHARES COMBINED
COMMON STOCKS SHARES SHARES
<S> <C> <C> <C> <C>
ECOLAB INC 250,000 250,000
EI DUPONT DE NEMOURS & CO INC 29,179 2,900 60,200 92,279
ELI LILLY & CO 1,000 114,500 115,500
EMC CORP 1,000 108,400 109,400
EMERSON ELECTRIC CO 50,000 3,306 53,306
EXXON MOBIL CORPORATION 3,916 365,165 369,081
FMC CORP 43,200 43,200
FORD MOTOR CO 600 266,300 266,900
GATEWAY INC 51,000 51,000
GENERAL ELECTRIC CO 234,000 2,700 640,500 877,200
GEORGIA PACIFIC (TIMBER GRP) 75,000 75,000
GEORGIA PACIFIC CORP 170,000 170,000
GILLETTE CO 134,400 4,350 138,750
GRANT PRIDECO INC 164,800 164,800
H J HEINZ CO 1,400 1,400
HEWLETT-PACKARD CO 1,600 90,400 92,000
HONEYWELL INTERNATIONAL INC 152,500 900 77,437 230,837
HUBBELL INC CL B 70,400 70,400
ILLINOIS TOOL WORKS INC 2,800 2,800
INGERSOLL RAND CO 2,525 2,525
INTEL CORP 40,000 5,450 232,800 278,250
INTERNATIONAL GAME TECH 61,300 61,300
INTERNATIONAL PAPER CO 180,700 180,700
INTL BUSINESS MACHINES CORP 105,000 1,720 130,800 237,520
INTUIT INC 1,700 1,700
JDS UNIPHASE CORP 1,050 1,050
JOHNSON & JOHNSON 69,900 69,900
JOHNSON CONTROLS INC 81,500 81,500
KIMBERLY CLARK CORP 3,400 66,000 69,400
LEAR CORP 140,000 2,800 142,800
LITTLEFUSE INC 35,000 35,000
LOCKHEED MARTIN CORP 422,400 422,400
LSI LOGIC CORP 53,200 53,200
LUCENT TECHNOLOGIES INC 2,800 42,800 45,600
LYONDELL PETRO 211,300 211,300
MAXIM INTEGRATED PRODUCTS INC 4,550 4,550
MEDTRONIC INC 2,400 2,400
MERCK & CO INC 155,800 155,800
MICROCHIP TECHNOLOGY 115,800 115,800
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME GROWTH & LIBERTY GROWTH & PRO FORMA
PORTFOLIO INCOME FUND INCOME FUND COMBINED MARKET
COMMON STOCKS MARKET VALUE MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C>
ECOLAB INC 9,765,625 9,765,625
EI DUPONT DE NEMOURS & CO INC 1,276,581 126,875 2,633,750 4,037,206
ELI LILLY & CO 99,875 11,435,688 11,535,563
EMC CORP 76,938 8,340,025 8,416,963
EMERSON ELECTRIC CO 3,018,750 199,600 3,218,350
EXXON MOBIL CORPORATION 307,406 28,665,453 28,972,859
FMC CORP 2,505,600 2,505,600
FORD MOTOR CO 25,800 11,450,900 11,476,700
GATEWAY INC 2,894,250 2,894,250
GENERAL ELECTRIC CO 12,402,000 143,100 33,946,500 46,491,600
GEORGIA PACIFIC (TIMBER GRP) 1,621,875 1,621,875
GEORGIA PACIFIC CORP 4,462,500 4,462,500
GILLETTE CO 4,695,600 151,978 4,847,578
GRANT PRIDECO INC 4,120,000 4,120,000
H J HEINZ CO 61,250 61,250
HEWLETT-PACKARD CO 199,800 11,288,700 11,488,500
HONEYWELL INTERNATIONAL INC 5,137,344 30,319 2,608,659 7,776,321
HUBBELL INC CL B 1,795,200 1,795,200
ILLINOIS TOOL WORKS INC 159,600 159,600
INGERSOLL RAND CO 101,631 101,631
INTEL CORP 5,347,500 728,597 31,122,450 37,198,547
INTERNATIONAL GAME TECH 1,624,450 1,624,450
INTERNATIONAL PAPER CO 5,387,119 5,387,119
INTL BUSINESS MACHINES CORP 11,504,063 188,448 14,330,775 26,023,285
INTUIT INC 70,338 70,338
JDS UNIPHASE CORP 125,869 125,869
JOHNSON & JOHNSON 7,121,063 7,121,063
JOHNSON CONTROLS INC 4,181,969 4,181,969
KIMBERLY CLARK CORP 195,075 3,786,750 3,981,825
LEAR CORP 2,800,000 56,000 2,856,000
LITTLEFUSE INC 1,715,000 1,715,000
LOCKHEED MARTIN CORP 10,480,800 10,480,800
LSI LOGIC CORP 2,879,450 2,879,450
LUCENT TECHNOLOGIES INC 165,900 2,535,900 2,701,800
LYONDELL PETRO 3,539,275 3,539,275
MAXIM INTEGRATED PRODUCTS INC 309,116 309,116
MEDTRONIC INC 119,550 119,550
MERCK & CO INC 11,938,175 11,938,175
MICROCHIP TECHNOLOGY 6,747,159 6,747,159
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH
& INCOME LIBERTY LIBERTY GROWTH
PORTFOLIO ALL-STAR GROWTH & INCOME FUND PRO FORMA
SHARES & INCOME FUND SHARES COMBINED
COMMON STOCKS SHARES SHARES
<S> <C> <C> <C> <C>
MINNESOTA MINING & MFG CO 4,142 130,300 134,442
MOTOROLA INC 45,000 1,560 46,560
MYLAN LABORATORIES, INC 238,600 238,600
NEWS CORP LTD ADR 1,400 1,400
NOKIA CORP ADR 4,500 112,400 116,900
NORTEL NETWORKS CORP 700 700
PACCAR INC 137,100 137,100
PE CORP-PE BIOSYSTEMS GROUP 300 300
PEPSI BOTTLING GROUP 324,800 324,800
PEPSICO INC 262,800 262,800
PFIZER INC 316,250 7,025 388,675 711,950
PHARMACIA CORPORATION 149,500 8,796 158,296
PHILIP MORRIS CO INC 203,000 2,800 280,400 486,200
PROCTER & GAMBLE CO 81,000 1,850 157,300 240,150
QUAKER OATS CO 121,000 121,000
ROHM & HAAS CO 1,900 1,900
ROYAL DUTCH PETRO-NY SHARES 700 254,300 255,000
SABRE HOLDINGS CORP 36,132 4,230 40,362
SARA LEE CORP 144,000 6,300 150,300
SCHERING-PLOUGH CORP 1,100 86,400 87,500
SEAGATE TECHNOLOGY INC 600 600
SEAGRAMS CO. LTD. 1,000 1,000
TELLABS INC 400 400
TEMPLE INLAND INC 1,000 24,700 25,700
TERADYNE INC 62,400 62,400
TEXAS INSTRUMENTS INC 900 78,400 79,300
TEXTRON INC 2,600 2,600
TOSCO CORP 800 800
TRIBUNE CO 100,000 100,000
TYCO INT'L LTD 3,600 3,600
UNION CARBIDE CORP 111,100 111,100
UNITED TECHNOLOGIES CORP 170,500 170,500
USG CORP NEW 63,300 63,300
UST INC 4,200 4,200
USX-MARATHON GROUP 4,800 4,800
VISTEON CORP 75 33,288 33,363
WEATHERFORD INTERNATIONAL 164,800 164,800
WESTVACO CORP 268,600 268,600
WEYERHAEUSER CO 50,800 50,800
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME GROWTH & LIBERTY GROWTH & PRO FORMA
PORTFOLIO INCOME FUND INCOME FUND COMBINED MARKET
COMMON STOCKS MARKET VALUE MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C>
MINNESOTA MINING & MFG CO 341,715 10,749,750 11,091,465
MOTOROLA INC 1,307,813 45,338 1,353,150
MYLAN LABORATORIES, INC 4,354,450 4,354,450
NEWS CORP LTD ADR 76,300 76,300
NOKIA CORP ADR 224,719 5,612,975 5,837,694
NORTEL NETWORKS CORP 47,775 47,775
PACCAR INC 5,441,156 5,441,156
PE CORP-PE BIOSYSTEMS GROUP 19,763 19,763
PEPSI BOTTLING GROUP 9,480,100 9,480,100
PEPSICO INC 11,678,175 11,678,175
PFIZER INC 15,180,000 337,200 18,656,400 34,173,600
PHARMACIA CORPORATION 7,727,281 454,643 8,181,925
PHILIP MORRIS CO INC 5,392,188 74,375 7,448,125 12,914,688
PROCTER & GAMBLE CO 4,637,250 105,913 9,005,425 13,748,588
QUAKER OATS CO 9,090,125 9,090,125
ROHM & HAAS CO 65,550 65,550
ROYAL DUTCH PETRO-NY SHARES 43,094 15,655,344 15,698,438
SABRE HOLDINGS CORP 1,029,762 120,555 1,150,317
SARA LEE CORP 2,781,000 121,669 2,902,669
SCHERING-PLOUGH CORP 55,550 4,363,200 4,418,750
SEAGATE TECHNOLOGY INC 33,000 33,000
SEAGRAMS CO. LTD. 58,000 58,000
TELLABS INC 27,375 27,375
TEMPLE INLAND INC 42,000 1,037,400 1,079,400
TERADYNE INC 4,586,400 4,586,400
TEXAS INSTRUMENTS INC 61,819 5,385,100 5,446,919
TEXTRON INC 141,213 141,213
TOSCO CORP 22,650 22,650
TRIBUNE CO 3,500,000 3,500,000
TYCO INT'L LTD 170,550 170,550
UNION CARBIDE CORP 5,499,450 5,499,450
UNITED TECHNOLOGIES CORP 10,038,188 10,038,188
USG CORP NEW 1,922,738 1,922,738
UST INC 61,688 61,688
USX-MARATHON GROUP 120,300 120,300
VISTEON CORP 909 403,611 404,520
WEATHERFORD INTERNATIONAL 6,561,100 6,561,100
WESTVACO CORP 6,664,638 6,664,638
WEYERHAEUSER CO 2,184,400 2,184,400
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH
& INCOME LIBERTY LIBERTY GROWTH
PORTFOLIO ALL-STAR GROWTH & INCOME FUND PRO FORMA
SHARES & INCOME FUND SHARES COMBINED
SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
WHIRLPOOL CORP 85,100 85,100
Mining & Energy
APACHE CORP 2,800 2,800
BURLINGTON RESOURCES INC 7,500 76,000 83,500
COFLEXIP-SPONSORED ADR 23,270 23,270
CONOCO INC -CL B 61,421 5,800 67,221
CONOCO INC-CL A 104,800 6,450 111,250
DEVON ENERGY CORPORATION 2,708 2,708
DIAMOND OFFSHORE DRILLING 195,800 195,800
ENRON CORP 115,000 115,000
FALCON DRILLING COMPANY INC 521,800 521,800
GLOBAL MARINE INC 1,100 1,100
OCCIDENTAL PETROLEUM 7,700 7,700
PETROLEUM GEO SERVICES ADR 239,100 239,100
SCHLUMBERGER LTD 161,900 161,900
TRANSOCEAN SEDCO FOREX INC 31,343 31,343
Retail Trade
BEST BUY INC 128,500 128,500
CIRCUIT CITY STORES INC 600 100,700 101,300
COSTCO WHOLESALE CORP 2,550 2,550
CVS CORP 159,200 159,200
DARDEN RESTURANTS INC 206,000 206,000
FEDERATED DEPT STORES INC NEW 80,000 4,500 84,500
HARCOURT GENERAL INC 4,725 4,725
HOME DEPOT INC 4,600 69,150 73,750
LIMITED INC 6,000 6,000
MAY DEPARTMENT STORES CO 5,214 5,214
MCDONALDS CORP 5,112 5,112
RADIOSHACK CORP 93,700 93,700
SAFEWAY INC 2,400 2,400
TARGET CORP 600 61,400 62,000
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME GROWTH & LIBERTY GROWTH & PRO FORMA
PORTFOLIO INCOME FUND INCOME FUND COMBINED MARKET
MARKET VALUE MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C>
COMMON STOCKS
WHIRLPOOL CORP 3,967,788 3,967,788
------------ ----------- -------------- --------------
170,529,308 11,268,551 559,572,362 741,370,221
------------ ----------- -------------- --------------
Mining & Energy
APACHE CORP 164,675 164,675
BURLINGTON RESOURCES INC 286,875 2,907,000 3,193,875
COFLEXIP-SPONSORED ADR 1,407,835 1,407,835
CONOCO INC -CL B 1,508,653 142,463 1,651,116
CONOCO INC-CL A 2,305,600 141,900 2,447,500
DEVON ENERGY CORPORATION 152,156 152,156
DIAMOND OFFSHORE DRILLING 6,877,475 6,877,475
ENRON CORP 7,417,500 7,417,500
FALCON DRILLING COMPANY INC 12,294,913 12,294,913
GLOBAL MARINE INC 31,006 31,006
OCCIDENTAL PETROLEUM 162,181 162,181
PETROLEUM GEO SERVICES ADR 4,079,644 4,079,644
SCHLUMBERGER LTD 12,081,788 12,081,788
TRANSOCEAN SEDCO FOREX INC 1,674,892 1,674,892
------------ ----------- -------------- --------------
11,231,753 1,081,256 41,323,545 53,636,554
------------ ----------- -------------- --------------
Retail Trade
BEST BUY INC 8,127,625 8,127,625
CIRCUIT CITY STORES INC 19,913 3,341,981 3,361,894
COSTCO WHOLESALE CORP 84,150 84,150
CVS CORP 6,368,000 6,368,000
DARDEN RESTURANTS INC 3,347,500 3,347,500
FEDERATED DEPT STORES INC NEW 2,700,000 151,875 2,851,875
HARCOURT GENERAL INC 256,922 256,922
HOME DEPOT INC 229,713 3,453,178 3,682,891
LIMITED INC 129,750 129,750
MAY DEPARTMENT STORES CO 125,136 125,136
MCDONALDS CORP 168,377 168,377
RADIOSHACK CORP 4,439,038 4,439,038
SAFEWAY INC 108,300 108,300
TARGET CORP 34,800 3,561,200 3,596,000
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH
& INCOME LIBERTY LIBERTY GROWTH
PORTFOLIO ALL-STAR GROWTH & INCOME FUND PRO FORMA
SHARES & INCOME FUND SHARES COMBINED
SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
TIFFANY & CO 1,300 1,300
TJX COMPANIES, INC 252,800 1,400 254,200
WALGREEN CO 280,000 280,000
WAL-MART STORES INC 150,000 3,150 150,700 303,850
Services
ADOBE SYSTEMS INC 73,500 73,500
AMERICA ONLINE INC 1,200 113,000 114,200
AUTOMATIC DATA PROCESSING INC 105,600 105,600
CENDANT CORP 2,100 2,100
CHECK POINT SOFTWARE TECH 5,700 5,700
CITRIX SYS INC 500 500
COMPUTER ASSOCIATES INT'L INC 11,423 11,423
DUN & BRADSTREET CORP 214,800 214,800
ELECTRONIC DATA SYSTEMS CORP 900 900
FIRST DATA CORP 129,600 129,600
GENENTECH INC 800 800
HARRAH'S ENTERTAINMENT INC 88,500 88,500
HERTZ CORP-CL A 60,000 60,000
INTERPUBLIC GROUP COS INC 121,200 121,200
MANPOWER 128,600 128,600
MICROSOFT CORP 4,250 158,700 162,950
NETWORK APPLIANCE INC 15,400 15,400
NEWS CORP LTD-SPONS ADR PRF 4,548 4,548
ORACLE CORP 600 148,400 149,000
PARAMETRIC TECHNOLOGY CORP 6,400 6,400
PAYCHEX INC 6,150 6,150
PIXAR INC 2,200 2,200
SENSORMATIC ELECTRONICS CORP 1,600 1,600
SIEBEL SYSTEMS INC 2,650 2,650
SUN MICROSYSTEMS INC 1,600 123,800 125,400
SYNOPSYS INC 1,900 1,900
TIME WARNER INC 2,200 16,400 18,600
USA NETWORKS INC 101,500 101,500
WALT DISNEY PRODUCTIONS 3,600 155,500 159,100
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME GROWTH & LIBERTY GROWTH & PRO FORMA
PORTFOLIO INCOME FUND INCOME FUND COMBINED MARKET
MARKET VALUE MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C>
COMMON STOCKS
TIFFANY & CO 87,750 87,750
TJX COMPANIES, INC 4,740,000 26,250 4,766,250
WALGREEN CO 9,012,500 9,012,500
WAL-MART STORES INC 8,643,750 181,519 8,684,088 17,509,356
------------ ----------- -------------- --------------
25,096,250 1,604,453 41,322,609 68,023,313
------------ ----------- -------------- --------------
Services
ADOBE SYSTEMS INC 9,555,000 9,555,000
AMERICA ONLINE INC 63,300 5,960,750 6,024,050
AUTOMATIC DATA PROCESSING INC 5,656,200 5,656,200
CENDANT CORP 29,400 29,400
CHECK POINT SOFTWARE TECH 1,206,975 1,206,975
CITRIX SYS INC 9,469 9,469
COMPUTER ASSOCIATES INT'L INC 584,715 584,715
DUN & BRADSTREET CORP 6,148,650 6,148,650
ELECTRONIC DATA SYSTEMS CORP 37,125 37,125
FIRST DATA CORP 6,431,400 6,431,400
GENENTECH INC 137,600 137,600
HARRAH'S ENTERTAINMENT INC 1,852,969 1,852,969
HERTZ CORP-CL A 1,683,750 1,683,750
INTERPUBLIC GROUP COS INC 5,211,600 5,211,600
MANPOWER 4,115,200 4,115,200
MICROSOFT CORP 340,000 12,696,000 13,036,000
NETWORK APPLIANCE INC 1,239,700 1,239,700
NEWS CORP LTD-SPONS ADR PRF 216,030 216,030
ORACLE CORP 50,438 12,474,875 12,525,313
PARAMETRIC TECHNOLOGY CORP 70,400 70,400
PAYCHEX INC 258,300 258,300
PIXAR INC 77,550 77,550
SENSORMATIC ELECTRONICS CORP 25,300 25,300
SIEBEL SYSTEMS INC 433,441 433,441
SUN MICROSYSTEMS INC 145,500 11,258,063 11,403,563
SYNOPSYS INC 65,669 65,669
TIME WARNER INC 167,200 1,246,400 1,413,600
USA NETWORKS INC 2,194,938 2,194,938
WALT DISNEY PRODUCTIONS 139,725 6,035,344 6,175,069
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH
& INCOME LIBERTY LIBERTY GROWTH
PORTFOLIO ALL-STAR GROWTH & INCOME FUND PRO FORMA
SHARES & INCOME FUND SHARES COMBINED
SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
Transportation, Communications, Electric, Gas
and Sanitary Services
A T & T CORP 65,333 4,100 348,100 417,533
ALLEGIANCE TELECOM INC 250 250
AMFM INC 3,500 3,500
AMR CORP 50,000 4,000 54,000
AT & T WIRELESS CORP 178,200 178,200
AT&T CORP-LIBERTY MEDIA A 3,600 3,600
BELL ATLANTIC CORP 190,320 2,400 122,600 315,320
BELLSOUTH CORP 147,300 147,300
BURLINGTON NORTH SANTA FE CORP 200,000 6,647 206,647
CABLEVISION SYSTEMS CL-A 1,200 1,200
CARNIVAL CORP-CL A 4,200 4,200
CHRIS-CRAFT INDUSTIRES INC 61,800 61,800
COLUMBIA ENERGY GROUP 700 700
COMCAST CORP-SPECIAL CL A 30,000 500 46,500 77,000
CONTINENTAL AIRLINES CL B 160,000 160,000
COX COMMUNICATIONS INC-CL A 2,150 2,150
CSX CORP 2,500 2,500
DELTA AIR LINES INC 3,000 79,600 82,600
DTE ENERGY CO 800 800
DUKE ENERGY 60,100 60,100
DYNEGY INC 400 400
EDISON INTERNATIONAL 235,700 235,700
EL PASO ENERGY CORP 6,200 6,200
ENTERGY CORP 252,400 252,400
FLORIDA PROGRESS CORP 2,000 2,000
GLOBAL CROSSING LTD 1,000 1,000
GTE CORP 2,950 201,400 204,350
KANSAS CITY SOUTHN INDS INC 131,900 3,750 135,650
LEVEL 3 COMMUNICATIONS 250 250
P G & E CORP 900 116,000 116,900
PECO ENERGY CO 4,100 4,100
PMC-SIERRA INC 16,800 16,800
QWEST COMMUNICATIONS INTL 500 500
RELIANT ENERGY INC 5,400 5,400
RF MICRO DEVICES INC 47,400 47,400
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME GROWTH & LIBERTY GROWTH & PRO FORMA
PORTFOLIO INCOME FUND INCOME FUND COMBINED MARKET
MARKET VALUE MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C>
COMMON STOCKS
6,895,350 2,851,160 88,072,463 97,818,973
--------- --------- ---------- ----------
Transportation, Communications, Electric,
Gas and Sanitary Services
A T & T CORP 2,066,156 129,663 11,008,663 13,204,481
ALLEGIANCE TELECOM INC 16,000 16,000
AMFM INC 241,500 241,500
AMR CORP 1,321,875 105,750 1,427,625
AT & T WIRELESS CORP 4,967,325 4,967,325
AT&T CORP-LIBERTY MEDIA A 87,300 87,300
BELL ATLANTIC CORP 9,670,635 121,950 6,229,613 16,022,198
BELLSOUTH CORP 6,278,663 6,278,663
BURLINGTON NORTH SANTA FE CORP 4,587,500 152,466 4,739,966
CABLEVISION SYSTEMS CL-A 81,450 81,450
CARNIVAL CORP-CL A 81,900 81,900
CHRIS-CRAFT INDUSTIRES INC 4,082,663 4,082,663
COLUMBIA ENERGY GROUP 45,938 45,938
COMCAST CORP-SPECIAL CL A 1,215,000 20,250 1,883,250 3,118,500
CONTINENTAL AIRLINES CL B 7,520,000 7,520,000
COX COMMUNICATIONS INC-CL A 97,959 97,959
CSX CORP 52,969 52,969
DELTA AIR LINES INC 151,688 4,024,775 4,176,463
DTE ENERGY CO 24,450 24,450
DUKE ENERGY 3,388,138 3,388,138
DYNEGY INC 27,325 27,325
EDISON INTERNATIONAL 4,831,850 4,831,850
EL PASO ENERGY CORP 315,813 315,813
ENTERGY CORP 6,862,125 6,862,125
FLORIDA PROGRESS CORP 93,750 93,750
GLOBAL CROSSING LTD 26,313 26,313
GTE CORP 183,638 12,537,150 12,720,788
KANSAS CITY SOUTHN INDS INC 11,697,881 332,578 12,030,459
LEVEL 3 COMMUNICATIONS 22,000 22,000
P G & E CORP 22,163 2,856,500 2,878,663
PECO ENERGY CO 165,281 165,281
PMC-SIERRA INC 2,985,150 2,985,150
QWEST COMMUNICATIONS INTL 24,844 24,844
RELIANT ENERGY INC 159,638 159,638
RF MICRO DEVICES INC 4,153,425 4,153,425
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F GROWTH
& INCOME LIBERTY LIBERTY GROWTH
PORTFOLIO ALL-STAR GROWTH & INCOME FUND PRO FORMA
SHARES & INCOME FUND SHARES COMBINED
SHARES SHARES
<S> <C> <C> <C> <C>
COMMON STOCKS
SBC COMMUNICATIONS INC 9,959 409,400 419,359
SOUTHWEST AIRLINES CO 8,650 8,650
SPRINT CORP (FON GROUP) 3,253 189,200 192,453
SPRINT CORP PCS 500 500
TELEPHONE & DATA 24,300 24,300
TXU CORP 164,500 164,500
UAL INC 56,000 56,000
UNICOM CORPORATION 160,400 160,400
UNION PACIFIC CORP 1,400 137,900 139,300
UNITED PARCEL SERVICE-CL B 2,300 2,300
US CELLULAR CORP 29,700 29,700
WASTE MANAGEMENT INC 1,200 1,200
WILLIAMS COMPANIES INC 1,900 1,900
WORLDCOM INC 5,200 5,200
Wholesale Trade
SYSCO CORP 182,600 182,600
Total Common Stocks
CASH EQUIVALENTS Par Par Par Par
ASSOCIATES FIRST CAPITAL 0.00% 7/3/2000 $2,130,000 $2,130,000
WARBURG REPURCHASE AGREEMENT
6.60% 7/3/2000 $972,000 $25,932,000 26,904,000
Total Cash Equivalents
TOTAL INVESTMENTS (COST OF $157,157,695,
$25,098,509, $976,414,426 AND $1,158,670,630,
RESPECTIVELY)
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME GROWTH & LIBERTY GROWTH & PRO FORMA
PORTFOLIO INCOME FUND INCOME FUND COMBINED MARKET
MARKET VALUE MARKET VALUE MARKET VALUE VALUE
<S> <C> <C> <C> <C>
COMMON STOCKS
SBC COMMUNICATIONS INC 430,727 17,706,550 18,137,277
SOUTHWEST AIRLINES CO 163,809 163,809
SPRINT CORP (FON GROUP) 165,903 9,649,200 9,815,103
SPRINT CORP PCS 29,750 29,750
TELEPHONE & DATA 2,436,075 2,436,075
TXU CORP 4,852,750 4,852,750
UAL INC 3,258,500 3,258,500
UNICOM CORPORATION 6,205,475 6,205,475
UNION PACIFIC CORP 52,063 5,128,156 5,180,219
UNITED PARCEL SERVICE-CL B 135,700 135,700
US CELLULAR CORP 1,871,100 1,871,100
WASTE MANAGEMENT INC 22,800 22,800
WILLIAMS COMPANIES INC 79,206 79,206
WORLDCOM INC 238,550 238,550
------------ ----------- -------------- --------------
38,079,047 4,103,080 127,197,094 169,379,221
------------ ----------- -------------- --------------
Wholesale Trade
SYSCO CORP 7,692,025 7,692,025
-------------- --------------
Total Common Stocks 305,383,077 26,532,356 1,099,613,570 1,431,529,004
------------ ----------- -------------- --------------
CASH EQUIVALENTS
ASSOCIATES FIRST CAPITAL 0.00% 7/3/2000 2,129,178 2,129,178
WARBURG REPURCHASE AGREEMENT
6.60% 7/3/2000 972,000 25,932,000 26,904,000
------------ ----------- -------------- --------------
Total Cash Equivalents 2,129,178 972,000 25,932,000 29,033,178
------------ ----------- -------------- --------------
TOTAL INVESTMENTS (COST OF $157,157,695,
$25,098,509, $976,414,426 AND $1,158,670,630,
RESPECTIVELY) $307,512,255 $27,504,356 $1,125,545,570 $1,460,562,181
============ =========== ============== ==============
</TABLE>
<PAGE>
PRO FORMA COMBINING CONDENSED STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Liberty
SR&F Liberty All-Star Liberty
Growth & Value Growth & Growth &
Income Opportunities Income Income Pro Forma Pro Forma
Portfolio Fund Fund Fund Adjustments Combined
<S> <C> <C> <C> <C> <C> <C>
Investments, at value $307,512,255 $308,179,637 $27,504,356 $1,125,545,570 $(308,179,637) (a) $1,460,562,181
Cash 3,884 - 4,096 176 - 8,156
Receivable for
investments sold - - - - - -
Payable for investments
purchased - - - - - -
Other assets less
other liabilities 837,077 (351,328) 621 35,737,174 (561,991) (b) 35,661,553
Net assets $308,353,216 $307,828,309 $27,509,073 $1,161,282,920 $(308,741,628) $1,496,231,890
Class A:
Net assets $259,166 $4,299,897 $309,356,714 (80,516) $313,835,261
Shares outstanding 9,814 368,742 15,017,711 (161,546) $15,234,721
Net asset value $26.41 $11.66 $20.60 $20.60
Class B:
Net assets $1,269,238 $16,346,839 $822,643,366 (220,562) $840,038,881
Shares outstanding 48,240 1,415,688 41,382,562 (591,013) $42,255,477
Net asset value $26.31 $11.55 $19.88 $19.88
Class C:
Net assets $75,057 $4,524,072 $29,281,763 (12,929) $33,867,963
Shares outstanding 2,853 391,868 1,465,147 (165,622) $1,694,246
Net asset value $26.31 $11.54 $19.99 $19.99
Class Z:
Net assets $1,004 $2,338,265 $1,077 (3,008) $2,337,338
Shares outstanding 38 199,907 52 (87,137) $112,860
Net asset value $26.42 $11.70 $20.71 $20.71
Class S:
Net assets $306,223,844 (71,396) $306,152,448
Shares outstanding 11,601,266 3,185,013 (c) $14,786,279
Net asset value $26.40 $20.71
</TABLE>
Footnotes to pro forma statement of assets and liabilities
(a) - Adjustment represents the elimination the Liberty Value Opportunities
Fund's investment in the Portfolio, as the master/feeder structure will be
dissolved, with the the securities held by the Portfolio withdrawn from
the Portfolio by the Liberty Value Opportunities Fund prior to the merger.
(b) - Adjustment reflects a payable to the general partner of the Portfolio
for its remaining net assets after withdrawal of the Liberty Value
Opportunities Fund's investment in the Portfolio of $173,579, in addition
to one time proxy, accounting, legal and other costs of the reorganization
of $71,770, $35,389 and $281,253 to be borne by Liberty Value
Opportunities Fund, Liberty All Star Growth & Income Fund and Liberty
Growth & Income Fund respectively.
(c) - Liberty Value Opportunities Fund shares are exchanged for new Class S
shares of Liberty Growth & Income Fund, to be established upon
consummation of the merger. Initial per share value of Class S shares is
presumed to equal that of current Class Z shares.
<PAGE>
PRO FORMA COMBINING CONDENSED STATEMENT OF OPERATIONS FOR THE TWELVE
MONTH PERIOD ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY LIBERTY
SRF GROWTH VALUE ALL-STAR LIBERTY
& INCOME OPPORTUNITIES GROWTH & GROWTH & PRO FORMA PRO FORMA
PORTFOLIO FUND INCOME INCOME FUND ADJUSTMENTS COMBINED
--------- ---- ------ ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends 4,456,261 4,451,174 268,398 15,573,131 (4,456,261)(c) 20,292,703
Interest 1,058,561 1,056,847 37,185 1,966,931 (1,058,561)(c) 3,060,962
---------- ---------- --------- ------------ ----------- ------------
Total investment income 5,514,823 5,508,021 305,583 17,540,062 (5,514,823) 23,353,665
EXPENSES
Management fee 2,190,101 - 132,571 9,452,952 (6,727)(a) 11,768,897
Administration fee - 545,843 44,190 - (590,033)(a) -
Service fee - Class A, B, C - 866 49,748 3,099,842 -(a) 3,150,456
Distribution fee - Class A - 23 - - (23)(a) -
Distribution fee - Class B - 2,118 95,935 6,593,089 -(a) 6,691,142
Distribution fee - Class C - 130 27,559 244,861 -(a) 272,550
Transfer agent fee - Class A, B, C, Z - 819 - - (819)(a) -
Transfer agent fee - Class S - 799,640 - - (799,640)(a) -
Transfer agent fee 6,000 - 46,431 2,728,605 458,981(e) 3,240,017
Bookkeeping fee 32,875 32,847 27,000 420,040 3,775(a) 516,537
Trustees fee 17,578 9,169 12,950 56,473 (38,340)(b) 57,830
Expenses allocated -
from SRF Growth & Income Portfolio - 2,271,293 - - (2,271,293)(c) -
All other expenses 27,280 269,696 221,950 1,052,407 (551,833)(d) 1,019,500
---------- ---------- --------- ------------ ----------- ------------
Total operating expenses 2,273,834 3,932,444 658,334 23,648,269 (3,795,952) 26,716,929
---------- ---------- --------- ------------ ----------- ------------
Expense reimbursement - - (208,902) - 208,902(a) -
---------- ---------- --------- ------------ ----------- ------------
Net Expenses 2,273,834 3,932,444 449,432 23,648,269 (3,587,050) 26,716,929
NET INVESTMENT INCOME (LOSS) 3,240,989 1,575,577 (143,849) (6,108,207) 1,927,773 (3,363,264)
NET REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain (loss) on:
Investments 32,232,665 32,215,860 (118,211) 183,532,200 (32,232,665)(c) 215,629,848
Closed futures contracts 748,773 693,167 - - (748,773)(c) 693,167
Foreign currency transactions (1,375) (749) - - 1,375(c) (749)
---------- ---------- --------- ------------ ----------- ------------
Net Realized Gain (Loss) 32,980,063 32,908,278 (118,211) 183,532,200 (32,980,063) 216,322,266
Change in net unrealized
appreciation/depreciation
during the period on investments 63,450,655 63,542,407 1,816,980 (170,105,574) (63,450,655)(c) (104,746,187)
---------- ---------- --------- ------------ ----------- ------------
Net Gain 96,430,719 96,450,685 1,698,769 13,426,626 (96,430,719) 111,576,079
---------- ---------- --------- ------------ ----------- ------------
Increase in Net Assets from Operations 99,671,708 98,026,261 1,554,920 7,318,419 (94,502,946) 108,212,815
</TABLE>
(a) Based on the contract in effect for the surviving fund.
(b) Based on trustee compensation plan for the surviving fund.
(c) Due to elimination of master/feeder structure.
(d) Decrease due to the elimination of duplicative expenses achieved by merging
the funds.
(e) Based on the contract in effect for the surviving fund. Note that a new
transfer agent fee structure was implemented for Liberty Growth & Income
Fund effective January 1, 2000. The pro forma combined transfer agent fee
shown assumes this new agreement was in effect for the entire twelve-month
period ended June 30, 2000.
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH LIBERTY VALUE
LIBERTY VALUE GROWTH & INCOME & INCOME FUND PRO FORMA FUND MARKET
FUND SHARES FUND SHARES SHARES COMBINED SHARES VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
Agriculture, Forestry & Fishing
CANADIAN NATL RAILWAY CO 133,100 133,100
Construction
HALLIBURTON CO 2,975 2,975
Finance, Insurance & Real Estate
ABN AMRO HOLDING NV ADR 3,286 3,286
ACE LIMITED 10,950 81,700 92,650
AETNA INC 10,900 10,900 $ 699,644
AFLAC INC 4,271 4,271
ALLMERICA FINANCIAL CORP 3,375 3,375
AMBAC FINANCIAL GROUP INC 1,300 40,500 41,800
AMER INTERNATIONAL GROUP INC 1,100 132,275 133,375
AMERICAN EXPRESS CO 144,000 144,000
AON CORP 33,200 33,200 1,031,275
ASTORIA FINANCIAL CORP 600 600
AXA FINANICAL INC 4,300 140,500 144,800
BANK OF AMERICA CORP 700 231,234 231,934
BANK ONE 31,000 4,100 35,100 823,438
BEAR STEARNS COMPANIES INC 30,173 30,173
C.I.T. GROUP INC-A 2,000 2,000
CAPITAL ONE FINANCIAL CORP 1,000 72,100 73,100
CHASE MANHATTAN CORP (NEW) 3,250 186,450 189,700
CIGNA CORP 2,275 2,275
CINCINNATI FINANCIAL CORP 188,300 188,300
CITIGROUP INC 8,490 523,300 531,790
CITY NATIONAL CORP 119,500 119,500
COUNTRYWIDE CREDIT INDUSTRIES 10,593 10,593
FANNIE MAE 400 163,400 163,800
FIRST UNION CORP 2,800 2,800
FIRSTAR CORP 18,000 18,000 379,125
FLEET BOSTON FINANCIAL CORP 16,100 4,000 348,600 368,700 547,400
FREDDIE MAC 19,500 9,096 108,300 136,896 789,750
GOLDEN STATE BANCORP 171,300 171,300
GOLDEN WEST FINANCIAL CORP 89,100 89,100
GOLDMAN SACHS GROUP INC 500 500
HCA-THE HEALTHCARE CORP 346,100 346,100
HOUSEHOLD INTERNATIONAL INC 83,300 83,300
J P MORGAN & CO INC 55,100 55,100
KEYCORP 1,200 1,200
KIMCO REALTY CORP 1,700 1,700
KNIGHT TRADING GROUP INC 59,800 59,800
LEHMAN BROTHERS HLDG INC 100,900 100,900
</TABLE>
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH &
GROWTH & INCOME INCOME FUND PRO FORMA COMBINED
FUND MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C>
COMMON STOCKS
Agriculture, Forestry & Fishing
CANADIAN NATL RAILWAY CO $ 3,884,856 $ 3,884,856
---------------- ------------------
Construction
HALLIBURTON CO $ 140,383 140,383
----------------- ------------------
Finance, Insurance & Real Estate
ABN AMRO HOLDING NV ADR 80,712 80,712
ACE LIMITED 306,600 2,287,600 2,594,200
AETNA INC 699,644
AFLAC INC 196,199 196,199
ALLMERICA FINANCIAL CORP 176,766 176,766
AMBAC FINANCIAL GROUP INC 71,256 2,219,906 2,291,162
AMER INTERNATIONAL GROUP INC 129,250 15,542,313 15,671,563
AMERICAN EXPRESS CO 7,506,000 7,506,000
AON CORP 1,031,275
ASTORIA FINANCIAL CORP 15,450 15,450
AXA FINANICAL INC 146,200 4,777,000 4,923,200
BANK OF AMERICA CORP 30,100 9,943,062 9,973,162
BANK ONE 108,906 932,344
BEAR STEARNS COMPANIES INC 1,255,951 1,255,951
C.I.T. GROUP INC-A 32,500 32,500
CAPITAL ONE FINANCIAL CORP 44,625 3,217,463 3,262,088
CHASE MANHATTAN CORP (NEW) 149,703 8,588,353 8,738,056
CIGNA CORP 212,713 212,713
CINCINNATI FINANCIAL CORP 5,919,681 5,919,681
CITIGROUP INC 511,523 31,528,825 32,040,348
CITY NATIONAL CORP 4,242,250 4,242,250
COUNTRYWIDE CREDIT INDUSTRIES 321,100 321,100
FANNIE MAE 20,875 8,527,438 8,548,313
FIRST UNION CORP 69,475 69,475
FIRSTAR CORP 379,125
FLEET BOSTON FINANCIAL CORP 136,000 11,852,400 12,535,800
FREDDIE MAC 368,388 4,386,150 5,544,288
GOLDEN STATE BANCORP 3,083,400 3,083,400
GOLDEN WEST FINANCIAL CORP 3,636,394 3,636,394
GOLDMAN SACHS GROUP INC 47,438 47,438
HCA-THE HEALTHCARE CORP 10,512,788 10,512,788
HOUSEHOLD INTERNATIONAL INC 3,462,156 3,462,156
J P MORGAN & CO INC 6,067,888 6,067,888
KEYCORP 21,150 21,150
KIMCO REALTY CORP 69,700 69,700
KNIGHT TRADING GROUP INC 1,782,788 1,782,788
LEHMAN BROTHERS HLDG INC 9,541,356 9,541,356
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH LIBERTY VALUE
LIBERTY VALUE GROWTH & INCOME & INCOME FUND PRO FORMA FUND MARKET
FUND SHARES FUND SHARES SHARES COMBINED SHARES VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
LOEWS CORP 42,000 42,000
MBNA CORP 210,300 210,300
METLIFE INC 1,700 1,700
MGIC INV CORP 123,000 123,000
MORGAN STANLEY DEAN WITTER 1,900 165,900 167,800
NATIONWIDE FINANCIAL SERV A 228,700 228,700
PACIFIC CENTURY FINL CORP 145,500 145,500
PMI GROUP INC 131,100 131,100
PNC FINANCIAL SERVICES GROUP 3,350 104,900 108,250
PROGRESSIVE CORP OHIO 4,900 4,900
PROVIDIAN FINANCIAL CORP 2,650 30,100 32,750
SCHWAB (CHARLES) CORP 7,950 7,950
SOVEREIGN BANCORP INC 505,200 505,200
STARWOOD HOTELS & RESORTS WOR 2,600 2,600
TRIZEC HAHN CORP 8,400 8,400
U.S. BANCORP 3,000 3,000
UNIONBANCAL CORPORATION 155,100 155,100
UNITED HEALTHCARE CORP 5,900 126,700 132,600 505,925
VORNADO REALTY TRUST 1,500 1,500
WASHINGTON MUTUAL INC 23,100 2,000 25,100 667,013
WELLPOINT HEALTH NETWORKS 2,100 2,100
WELLS FARGO & CO 4,193 57,800 61,993
XL CAPITAL LTD-CLASS A 20,700 4,090 24,790 1,120,388
ZIONS BANCORPORATION 1,300 1,300
--------------
6,563,956
--------------
Manufacturing
3COM CORPORATION 1,100 1,100
ABBOTT LABS 31,600 31,600 1,408,175
ADC TELECOMMUNICATIONS INC 81,500 81,500
AGILENT TECHNOLOGIES INC 1,200 28,986 30,186
ALCAN ALUMINUM LTD 5,000 5,000
ALCOA INC 7,560 111,400 118,960
ALLEGHENY TECHNOLOGIES INC 1,200 1,200
ALZA CORP 1,500 1,500
AMERADA HESS CORP 17,000 17,000 1,049,750
AMERICAN HOME PRODUCTS CORP 600 600
AMGEN INC 3,250 80,800 84,050
ANALOG DEVICES INC. 82,900 82,900
ANHEUSER BUSCH INC 2,100 162,600 164,700
APPLE COMPUTER INC 49,600 49,600
APPLIED MATLS 2,900 129,200 132,100
APPLIED MICRO CIRCUITS CORP 11,600 11,600
ATMEL CORP 116,900 116,900
AVENTIS -SPON ADR 1,100 1,100
AVON PRODUCTS INC 9,184 9,184
</TABLE>
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH &
GROWTH & INCOME INCOME FUND PRO FORMA COMBINED
FUND MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C>
COMMON STOCKS
LOEWS CORP 2,520,000 2,520,000
MBNA CORP 5,704,388 5,704,388
METLIFE INC 35,806 35,806
MGIC INV CORP 5,596,500 5,596,500
MORGAN STANLEY DEAN WITTER 158,175 13,811,175 13,969,350
NATIONWIDE FINANCIAL SERV A 7,518,513 7,518,513
PACIFIC CENTURY FINL CORP 2,127,938 2,127,938
PMI GROUP INC 6,227,250 6,227,250
PNC FINANCIAL SERVICES GROUP 157,031 4,917,188 5,074,219
PROGRESSIVE CORP OHIO 362,600 362,600
PROVIDIAN FINANCIAL CORP 238,500 2,709,000 2,947,500
SCHWAB (CHARLES) CORP 267,319 267,319
SOVEREIGN BANCORP INC 3,552,188 3,552,188
STARWOOD HOTELS & RESORTS WOR 84,013 84,013
TRIZEC HAHN CORP 150,150 150,150
U.S. BANCORP 57,750 57,750
UNIONBANCAL CORPORATION 2,879,044 2,879,044
UNITED HEALTHCARE CORP 10,864,525 11,370,450
VORNADO REALTY TRUST 52,125 52,125
WASHINGTON MUTUAL INC 57,750 724,763
WELLPOINT HEALTH NETWORKS 152,119 152,119
WELLS FARGO & CO 162,479 2,239,750 2,402,229
XL CAPITAL LTD-CLASS A 221,371 1,341,759
ZIONS BANCORPORATION 59,658 59,658
----------------- ---------------- ------------------
5,483,474 230,548,616 242,596,046
----------------- ---------------- ------------------
Manufacturing
3COM CORPORATION 63,388 63,388
ABBOTT LABS 1,408,175
ADC TELECOMMUNICATIONS INC 6,835,813 6,835,813
AGILENT TECHNOLOGIES INC 88,500 2,137,718 2,226,218
ALCAN ALUMINUM LTD 155,000 155,000
ALCOA INC 219,240 3,230,600 3,449,840
ALLEGHENY TECHNOLOGIES INC 21,600 21,600
ALZA CORP 88,688 88,688
AMERADA HESS CORP 1,049,750
AMERICAN HOME PRODUCTS CORP 35,250 35,250
AMGEN INC 228,313 5,676,200 5,904,513
ANALOG DEVICES INC. 6,300,400 6,300,400
ANHEUSER BUSCH INC 156,843 12,144,188 12,301,031
APPLE COMPUTER INC 2,597,800 2,597,800
APPLIED MATLS 262,813 11,708,750 11,971,563
APPLIED MICRO CIRCUITS CORP 1,145,500 1,145,500
ATMEL CORP 4,310,688 4,310,688
AVENTIS -SPON ADR 79,819 79,819
AVON PRODUCTS INC 408,688 408,688
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH LIBERTY VALUE
LIBERTY VALUE GROWTH & INCOME & INCOME FUND PRO FORMA FUND MARKET
FUND SHARES FUND SHARES SHARES COMBINED SHARES VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
BAKER HUGHES INC 800 800
BAUSCH & LOMB INC 125,200 125,200
BAXTER INTERNATIONAL INC 4,400 4,400
BECKMAN COULTER INC 29,100 29,100
BESTFOODS 21,800 1,100 190,600 213,500 1,509,650
BIOGEN INC 3,050 3,050
BOEING CO 25,700 3,793 332,800 362,293 1,074,581
BOSTON SCIENTIFIC CORP 19,700 19,700 432,169
BP AMOCO PLC-ADR 150,000 150,000
BRISTOL-MYERS SQUIBB CO 3,200 166,200 169,400
BRUNSWICK CORP 227,400 227,400
CATERPILLAR INC 3,755 3,755
CHEVRON CORP 6,300 119,200 125,500 534,319
CISCO SYSTEMS INC 7,400 456,200 463,600
CLOROX CO 500 500
COCA COLA CO 700 19,700 20,400
COMPAQ COMPUTER CORP 18,100 7,000 25,100 462,681
COMVERSE TECH 32,200 32,200
COOPER INDUSTRIES INC 700 700
CORNING INCORPORATED 21,100 21,100
DEERE & CO 9,500 9,500
DELL COMPUTER CORPORATION 8,900 8,900
DELPHI AUTOMOTIVE SYSTEMS 41,282 253,600 294,882 601,169
DIAGEO PLC ADR 5,193 5,193
DOVER CORP 3,793 3,793
DOW CHEMICAL CO 350,500 350,500
EASTMAN KODAK CO 15,000 15,000 892,500
EI DUPONT DE NEMOURS & CO INC 2,900 60,200 63,100
ELI LILLY & CO 1,000 114,500 115,500
EMC CORP 1,000 108,400 109,400
EMERSON ELECTRIC CO 15,400 3,306 18,706 929,775
EXXON MOBIL CORPORATION 3,916 365,165 369,081
FMC CORP 43,200 43,200
FORD MOTOR CO 600 266,300 266,900
GATEWAY INC 51,000 51,000
GENERAL ELECTRIC CO 2,700 640,500 643,200
GENERAL MILLS INC 16,500 16,500 631,125
GEORGIA PACIFIC CORP 20,300 20,300 532,875
GILLETTE CO 4,350 4,350
GRANT PRIDECO INC 164,800 164,800
H J HEINZ CO 1,400 1,400
HEWLETT-PACKARD CO 1,600 90,400 92,000
HONEYWELL INTERNATIONAL INC 900 77,437 78,337
ILLINOIS TOOL WORKS INC 2,800 2,800
INGERSOLL RAND CO 15,900 2,525 18,425 639,975
INTEL CORP 5,450 232,800 238,250
INTERNATIONAL GAME TECH 61,300 61,300
INTERNATIONAL PAPER CO 180,700 180,700
</TABLE>
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH &
GROWTH & INCOME INCOME FUND PRO FORMA COMBINED
FUND MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C>
COMMON STOCKS
BAKER HUGHES INC 25,600 25,600
BAUSCH & LOMB INC 9,687,350 9,687,350
BAXTER INTERNATIONAL INC 309,375 309,375
BECKMAN COULTER INC 1,698,713 1,698,713
BESTFOODS 76,175 13,199,050 14,784,875
BIOGEN INC 196,725 196,725
BOEING CO 158,595 13,915,200 15,148,376
BOSTON SCIENTIFIC CORP 432,169
BP AMOCO PLC-ADR 8,484,375 8,484,375
BRISTOL-MYERS SQUIBB CO 186,400 9,681,150 9,867,550
BRUNSWICK CORP 3,766,313 3,766,313
CATERPILLAR INC 127,201 127,201
CHEVRON CORP 10,109,650 10,643,969
CISCO SYSTEMS INC 470,363 28,997,212 29,467,575
CLOROX CO 22,406 22,406
COCA COLA CO 40,206 1,131,519 1,171,725
COMPAQ COMPUTER CORP 178,938 641,619
COMVERSE TECH 2,994,600 2,994,600
COOPER INDUSTRIES INC 22,794 22,794
CORNING INCORPORATED 5,694,363 5,694,363
DEERE & CO 351,500 351,500
DELL COMPUTER CORPORATION 438,881 438,881
DELPHI AUTOMOTIVE SYSTEMS 3,693,050 4,294,219
DIAGEO PLC ADR 184,676 184,676
DOVER CORP 153,854 153,854
DOW CHEMICAL CO 10,580,719 10,580,719
EASTMAN KODAK CO 892,500
EI DUPONT DE NEMOURS & CO INC 126,875 2,633,750 2,760,625
ELI LILLY & CO 99,875 11,435,688 11,535,563
EMC CORP 76,938 8,340,025 8,416,963
EMERSON ELECTRIC CO 199,600 1,129,375
EXXON MOBIL CORPORATION 307,406 28,665,453 28,972,859
FMC CORP 2,505,600 2,505,600
FORD MOTOR CO 25,800 11,450,900 11,476,700
GATEWAY INC 2,894,250 2,894,250
GENERAL ELECTRIC CO 143,100 33,946,500 34,089,600
GENERAL MILLS INC 631,125
GEORGIA PACIFIC CORP 532,875
GILLETTE CO 151,978 151,978
GRANT PRIDECO INC 4,120,000 4,120,000
H J HEINZ CO 61,250 61,250
HEWLETT-PACKARD CO 199,800 11,288,700 11,488,500
HONEYWELL INTERNATIONAL INC 30,319 2,608,659 2,638,978
ILLINOIS TOOL WORKS INC 159,600 159,600
INGERSOLL RAND CO 101,631 741,606
INTEL CORP 728,597 31,122,450 31,851,047
INTERNATIONAL GAME TECH 1,624,450 1,624,450
INTERNATIONAL PAPER CO 5,387,119 5,387,119
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH LIBERTY VALUE
LIBERTY VALUE GROWTH & INCOME & INCOME FUND PRO FORMA FUND MARKET
FUND SHARES FUND SHARES SHARES COMBINED SHARES VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
INTL BUSINESS MACHINES CORP 1,720 130,800 132,520
INTUIT INC 1,700 1,700
JDS UNIPHASE CORP 1,050 1,050
JOHNSON & JOHNSON 69,900 69,900
JOHNSON CONTROLS INC 81,500 81,500
KIMBERLY CLARK CORP 13,200 3,400 66,000 82,600 757,350
LEAR CORP 2,800 2,800
LOCKHEED MARTIN CORP 422,400 422,400
LSI LOGIC CORP 53,200 53,200
LUCENT TECHNOLOGIES INC 2,800 42,800 45,600
LYONDELL PETRO 211,300 211,300
MATTEL INC 56,800 56,800 749,050
MAXIM INTEGRATED PRODUCTS INC 4,550 4,550
MEDTRONIC INC 2,400 2,400
MERCK & CO INC 14,300 155,800 170,100 1,095,738
MICROCHIP TECHNOLOGY 115,800 115,800
MINNESOTA MINING & MFG CO 9,600 4,142 130,300 144,042 792,000
MOTOROLA INC 12,900 1,560 14,460 374,906
MYLAN LABORATORIES, INC 238,600 238,600
NABISCO HOLDINGS CORP 16,800 16,800 882,000
NEWS CORP LTD ADR 1,400 1,400
NIKE INC CL B 25,100 25,100 999,294
NOKIA CORP ADR 4,500 112,400 116,900
NORTEL NETWORKS CORP 700 700
PACCAR INC 137,100 137,100
PE CORP-PE BIOSYSTEMS GROUP 300 300
PEPSI BOTTLING GROUP 324,800 324,800
PEPSICO INC 22,000 262,800 284,800 977,625
PFIZER INC 7,025 388,675 395,700
PHARMACIA CORPORATION 8,796 8,796
PHILIP MORRIS CO INC 48,600 2,800 280,400 331,800 1,290,938
PRAXAIR INC 15,000 15,000 561,563
PROCTER & GAMBLE CO 20,500 1,850 157,300 179,650 1,173,625
QUAKER OATS CO 121,000 121,000
ROHM & HAAS CO 1,900 1,900
ROYAL DUTCH PETRO-NY SHARES 17,600 700 254,300 272,600 1,083,500
SABRE HOLDINGS CORP 4,230 4,230
SARA LEE CORP 72,100 6,300 78,400 1,392,431
SCHERING-PLOUGH CORP 24,100 1,100 86,400 111,600 1,217,050
SEAGATE TECHNOLOGY INC 600 600
SEAGRAMS CO. LTD. 1,000 1,000
SHERWIN WILLIAMS CO 38,700 38,700 819,956
TELLABS INC 400 400
TEMPLE INLAND INC 1,000 24,700 25,700
TERADYNE INC 62,400 62,400
TEXACO INC 13,800 13,800 734,850
TEXAS INSTRUMENTS INC 900 78,400 79,300
TEXTRON INC 2,600 2,600
</TABLE>
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH &
GROWTH & INCOME INCOME FUND PRO FORMA COMBINED
FUND MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C>
COMMON STOCKS
INTL BUSINESS MACHINES CORP 188,448 14,330,775 14,519,223
INTUIT INC 70,338 70,338
JDS UNIPHASE CORP 125,869 125,869
JOHNSON & JOHNSON 7,121,063 7,121,063
JOHNSON CONTROLS INC 4,181,969 4,181,969
KIMBERLY CLARK CORP 195,075 3,786,750 4,739,175
LEAR CORP 56,000 56,000
LOCKHEED MARTIN CORP 10,480,800 10,480,800
LSI LOGIC CORP 2,879,450 2,879,450
LUCENT TECHNOLOGIES INC 165,900 2,535,900 2,701,800
LYONDELL PETRO 3,539,275 3,539,275
MATTEL INC 749,050
MAXIM INTEGRATED PRODUCTS INC 309,116 309,116
MEDTRONIC INC 119,550 119,550
MERCK & CO INC 11,938,175 13,033,913
MICROCHIP TECHNOLOGY 6,747,159 6,747,159
MINNESOTA MINING & MFG CO 341,715 10,749,750 11,883,465
MOTOROLA INC 45,338 420,244
MYLAN LABORATORIES, INC 4,354,450 4,354,450
NABISCO HOLDINGS CORP 882,000
NEWS CORP LTD ADR 76,300 76,300
NIKE INC CL B 999,294
NOKIA CORP ADR 224,719 5,612,975 5,837,694
NORTEL NETWORKS CORP 47,775 47,775
PACCAR INC 5,441,156 5,441,156
PE CORP-PE BIOSYSTEMS GROUP 19,763 19,763
PEPSI BOTTLING GROUP 9,480,100 9,480,100
PEPSICO INC 11,678,175 12,655,800
PFIZER INC 337,200 18,656,400 18,993,600
PHARMACIA CORPORATION 454,643 454,643
PHILIP MORRIS CO INC 74,375 7,448,125 8,813,438
PRAXAIR INC 561,563
PROCTER & GAMBLE CO 105,913 9,005,425 10,284,963
QUAKER OATS CO 9,090,125 9,090,125
ROHM & HAAS CO 65,550 65,550
ROYAL DUTCH PETRO-NY SHARES 43,094 15,655,344 16,781,938
SABRE HOLDINGS CORP 120,555 120,555
SARA LEE CORP 121,669 1,514,100
SCHERING-PLOUGH CORP 55,550 4,363,200 5,635,800
SEAGATE TECHNOLOGY INC 33,000 33,000
SEAGRAMS CO. LTD. 58,000 58,000
SHERWIN WILLIAMS CO 819,956
TELLABS INC 27,375 27,375
TEMPLE INLAND INC 42,000 1,037,400 1,079,400
TERADYNE INC 4,586,400 4,586,400
TEXACO INC 734,850
TEXAS INSTRUMENTS INC 61,819 5,385,100 5,446,919
TEXTRON INC 141,213 141,213
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH LIBERTY VALUE
LIBERTY VALUE GROWTH & INCOME & INCOME FUND PRO FORMA FUND MARKET
FUND SHARES FUND SHARES SHARES COMBINED SHARES VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
TOSCO CORP 800 800
TYCO INT'L LTD 3,600 3,600
UNITED TECHNOLOGIES CORP 7,700 170,500 178,200 453,338
USG CORP NEW 63,300 63,300
UST INC 4,200 4,200
USX-MARATHON GROUP 34,300 4,800 39,100 859,644
VISTEON CORP 75 33,288 33,363
WEATHERFORD INTERNATIONAL 164,800 164,800
WESTVACO CORP 268,600 268,600
WEYERHAEUSER CO 50,800 50,800
WHIRLPOOL CORP 85,100 85,100
XEROX CORP 34,400 34,400 713,800
--------------
27,627,400
--------------
Mining & Energy
ANADARKO PETROLEUM 19,100 19,100 941,869
APACHE CORP 2,800 2,800
BURLINGTON RESOURCES INC 7,500 76,000 83,500
COFLEXIP-SPONSORED ADR 23,270 23,270
CONOCO INC -CL B 5,800 5,800
CONOCO INC-CL A 6,450 6,450
DEVON ENERGY CORPORATION 2,708 2,708
DIAMOND OFFSHORE DRILLING 18,000 195,800 213,800 632,250
FALCON DRILLING COMPANY INC 521,800 521,800
GLOBAL MARINE INC 1,100 1,100
OCCIDENTAL PETROLEUM 7,700 7,700
PETROLEUM GEO SERVICES ADR 239,100 239,100
SCHLUMBERGER LTD 161,900 161,900
TRANSOCEAN SEDCO FOREX INC 31,343 31,343
--------------
1,574,119
--------------
Retail Trade
ALBERTSONS INC 27,500 27,500 914,375
BEST BUY INC 128,500 128,500
CIRCUIT CITY STORES INC 600 100,700 101,300
COSTCO WHOLESALE CORP 2,550 2,550
CVS CORP 159,200 159,200
DARDEN RESTURANTS INC 206,000 206,000
FEDERATED DEPT STORES INC NEW 10,700 4,500 15,200 361,125
HARCOURT GENERAL INC 4,725 4,725
HOME DEPOT INC 4,600 69,150 73,750
LIMITED INC 6,000 6,000
MAY DEPARTMENT STORES CO 5,214 5,214
MCDONALDS CORP 18,700 5,112 23,812 615,931
</TABLE>
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH &
GROWTH & INCOME INCOME FUND PRO FORMA COMBINED
FUND MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C>
COMMON STOCKS
TOSCO CORP 22,650 22,650
TYCO INT'L LTD 170,550 170,550
UNITED TECHNOLOGIES CORP 10,038,187 10,491,525
USG CORP NEW 1,922,738 1,922,738
UST INC 61,688 61,688
USX-MARATHON GROUP 120,300 979,944
VISTEON CORP 909 403,611 404,520
WEATHERFORD INTERNATIONAL 6,561,100 6,561,100
WESTVACO CORP 6,664,638 6,664,638
WEYERHAEUSER CO 2,184,400 2,184,400
WHIRLPOOL CORP 3,967,788 3,967,788
XEROX CORP 713,800
----------------- ---------------- ------------------
11,268,551 559,572,362 598,468,313
----------------- ---------------- ------------------
Mining & Energy
ANADARKO PETROLEUM 941,869
APACHE CORP 164,675 164,675
BURLINGTON RESOURCES INC 286,875 2,907,000 3,193,875
COFLEXIP-SPONSORED ADR 1,407,835 1,407,835
CONOCO INC -CL B 142,463 142,463
CONOCO INC-CL A 141,900 141,900
DEVON ENERGY CORPORATION 152,156 152,156
DIAMOND OFFSHORE DRILLING 6,877,475 7,509,725
FALCON DRILLING COMPANY INC 12,294,913 12,294,913
GLOBAL MARINE INC 31,006 31,006
OCCIDENTAL PETROLEUM 162,181 162,181
PETROLEUM GEO SERVICES ADR 4,079,644 4,079,644
SCHLUMBERGER LTD 12,081,788 12,081,788
TRANSOCEAN SEDCO FOREX INC 1,674,892 1,674,892
----------------- ---------------- ------------------
1,081,256 41,323,545 43,978,920
----------------- ---------------- ------------------
Retail Trade
ALBERTSONS INC 914,375
BEST BUY INC 8,127,625 8,127,625
CIRCUIT CITY STORES INC 19,913 3,341,981 3,361,894
COSTCO WHOLESALE CORP 84,150 84,150
CVS CORP 6,368,000 6,368,000
DARDEN RESTURANTS INC 3,347,500 3,347,500
FEDERATED DEPT STORES INC NEW 151,875 513,000
HARCOURT GENERAL INC 256,922 256,922
HOME DEPOT INC 229,713 3,453,178 3,682,891
LIMITED INC 129,750 129,750
MAY DEPARTMENT STORES CO 125,136 125,136
MCDONALDS CORP 168,377 784,308
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH LIBERTY VALUE
LIBERTY VALUE GROWTH & INCOME & INCOME FUND PRO FORMA FUND MARKET
FUND SHARES FUND SHARES SHARES COMBINED SHARES VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
NORDSTROM INC 23,100 23,100 557,288
RADIOSHACK CORP 93,700 93,700
SAFEWAY INC 2,400 2,400
TARGET CORP 600 61,400 62,000
TIFFANY & CO 1,300 1,300
TJX COMPANIES, INC 1,400 1,400
WAL-MART STORES INC 3,150 150,700 153,850
--------------
2,448,719
--------------
Services
ADOBE SYSTEMS INC 73,500 73,500
AMERICA ONLINE INC 1,200 113,000 114,200
AUTOMATIC DATA PROCESSING INC 105,600 105,600
CENDANT CORP 2,100 2,100
CHECK POINT SOFTWARE TECH 5,700 5,700
CITRIX SYS INC 500 500
COMPUTER ASSOCIATES INT'L INC 11,423 11,423
DUN & BRADSTREET CORP 214,800 214,800
ELECTRONIC DATA SYSTEMS CORP 900 900
FIRST DATA CORP 19,100 129,600 148,700 947,838
GENENTECH INC 800 800
HARRAH'S ENTERTAINMENT INC 88,500 88,500
MANPOWER 128,600 128,600
MICROSOFT CORP 4,250 158,700 162,950
NETWORK APPLIANCE INC 15,400 15,400
NEWS CORP LTD-SPONS ADR PRF 4,548 4,548
ORACLE CORP 600 148,400 149,000
PARAMETRIC TECHNOLOGY CORP 6,400 6,400
PAYCHEX INC 6,150 6,150
PIXAR INC 2,200 2,200
SENSORMATIC ELECTRONICS CORP 1,600 1,600
SIEBEL SYSTEMS INC 2,650 2,650
SUN MICROSYSTEMS INC 1,600 123,800 125,400
SYNOPSYS INC 1,900 1,900
TIME WARNER INC 2,200 16,400 18,600
USA NETWORKS INC 101,500 101,500
WALT DISNEY PRODUCTIONS 20,300 3,600 155,500 179,400 787,894
--------------
1,735,731
--------------
Transportation, Communications,
Electric, Gas and Sanitary Services
A T & T CORP 26,600 4,100 348,100 378,800 841,225
ALLEGIANCE TELECOM INC 250 250
AMFM INC 3,500 3,500
AMR CORP 4,000 4,000
</TABLE>
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH &
GROWTH & INCOME INCOME FUND PRO FORMA COMBINED
FUND MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C>
COMMON STOCKS
NORDSTROM INC 557,288
RADIOSHACK CORP 4,439,038 4,439,038
SAFEWAY INC 108,300 108,300
TARGET CORP 34,800 3,561,200 3,596,000
TIFFANY & CO 87,750 87,750
TJX COMPANIES, INC 26,250 26,250
WAL-MART STORES INC 181,519 8,684,088 8,865,606
----------------- ---------------- ------------------
1,604,453 41,322,609 45,375,781
----------------- ---------------- ------------------
Services
ADOBE SYSTEMS INC 9,555,000 9,555,000
AMERICA ONLINE INC 63,300 5,960,750 6,024,050
AUTOMATIC DATA PROCESSING INC 5,656,200 5,656,200
CENDANT CORP 29,400 29,400
CHECK POINT SOFTWARE TECH 1,206,975 1,206,975
CITRIX SYS INC 9,469 9,469
COMPUTER ASSOCIATES INT'L INC 584,715 584,715
DUN & BRADSTREET CORP 6,148,650 6,148,650
ELECTRONIC DATA SYSTEMS CORP 37,125 37,125
FIRST DATA CORP 6,431,400 7,379,238
GENENTECH INC 137,600 137,600
HARRAH'S ENTERTAINMENT INC 1,852,969 1,852,969
MANPOWER 4,115,200 4,115,200
MICROSOFT CORP 340,000 12,696,000 13,036,000
NETWORK APPLIANCE INC 1,239,700 1,239,700
NEWS CORP LTD-SPONS ADR PRF 216,030 216,030
ORACLE CORP 50,438 12,474,875 12,525,313
PARAMETRIC TECHNOLOGY CORP 70,400 70,400
PAYCHEX INC 258,300 258,300
PIXAR INC 77,550 77,550
SENSORMATIC ELECTRONICS CORP 25,300 25,300
SIEBEL SYSTEMS INC 433,441 433,441
SUN MICROSYSTEMS INC 145,500 11,258,063 11,403,563
SYNOPSYS INC 65,669 65,669
TIME WARNER INC 167,200 1,246,400 1,413,600
USA NETWORKS INC 2,194,938 2,194,938
WALT DISNEY PRODUCTIONS 139,725 6,035,344 6,962,963
----------------- ---------------- ------------------
2,851,160 88,072,463 92,659,354
----------------- ---------------- ------------------
Transportation, Communications,
Electric, Gas and Sanitary Services
A T & T CORP 129,663 11,008,663 11,979,550
ALLEGIANCE TELECOM INC 16,000 16,000
AMFM INC 241,500 241,500
AMR CORP 105,750 105,750
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH LIBERTY VALUE
LIBERTY VALUE GROWTH & INCOME & INCOME FUND PRO FORMA FUND MARKET
FUND SHARES FUND SHARES SHARES COMBINED SHARES VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
AT & T WIRELESS CORP 178,200 178,200
AT&T CORP-LIBERTY MEDIA A 3,600 3,600
BELL ATLANTIC CORP 2,400 122,600 125,000
BELLSOUTH CORP 147,300 147,300
BURLINGTON NORTH SANTA FE CORP 6,647 6,647
CABLEVISION SYSTEMS CL-A 1,200 1,200
CARNIVAL CORP-CL A 4,200 4,200
CHRIS-CRAFT INDUSTRIES INC 61,800 61,800
COLUMBIA ENERGY GROUP 700 700
COMCAST CORP-SPECIAL CL A 500 46,500 47,000
COX COMMUNICATIONS INC-CL A 2,150 2,150
CSX CORP 2,500 2,500
DELTA AIR LINES INC 3,000 79,600 82,600
DTE ENERGY CO 800 800
DUKE ENERGY 60,100 60,100
DYNEGY INC 400 400
EDISON INTERNATIONAL 235,700 235,700
EL PASO ENERGY CORP 6,200 6,200
ENTERGY CORP 18,600 252,400 271,000 505,688
FLORIDA PROGRESS CORP 2,000 2,000
GLOBAL CROSSING LTD 1,000 1,000
GTE CORP 2,950 201,400 204,350
KANSAS CITY SOUTHN INDS INC 3,750 3,750
LEVEL 3 COMMUNICATIONS 250 250
P G & E CORP 10,700 900 116,000 127,600 263,488
PECO ENERGY CO 4,100 4,100
PMC-SIERRA INC 16,800 16,800
QWEST COMMUNICATIONS INTL 500 500
RELIANT ENERGY INC 5,400 5,400
RF MICRO DEVICES INC 47,400 47,400
SBC COMMUNICATIONS INC 9,959 409,400 419,359
SOUTHERN CO 24,800 24,800 578,150
SOUTHWEST AIRLINES CO 8,650 8,650
SPRINT CORP (FON GROUP) 3,253 189,200 192,453
SPRINT CORP PCS 500 500
TELEPHONE & DATA 24,300 24,300
TIDEWATER INC 14,900 14,900 536,400
TXU CORP 164,500 164,500
UAL INC 56,000 56,000
UNICOM CORPORATION 160,400 160,400
UNION PACIFIC CORP 11,300 1,400 137,900 150,600 420,219
UNITED PARCEL SERVICE-CL B 2,300 2,300
US CELLULAR CORP 29,700 29,700
WASTE MANAGEMENT INC 1,200 1,200
WILLIAMS COMPANIES INC 1,900 1,900
WORLDCOM INC 16,600 5,200 21,800 761,526
--------------
3,906,695
--------------
</TABLE>
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH &
GROWTH & INCOME INCOME FUND PRO FORMA COMBINED
FUND MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C>
COMMON STOCKS
AT & T WIRELESS CORP 4,967,325 4,967,325
AT&T CORP-LIBERTY MEDIA A 87,300 87,300
BELL ATLANTIC CORP 121,950 6,229,613 6,351,563
BELLSOUTH CORP 6,278,663 6,278,663
BURLINGTON NORTH SANTA FE CORP 152,466 152,466
CABLEVISION SYSTEMS CL-A 81,450 81,450
CARNIVAL CORP-CL A 81,900 81,900
CHRIS-CRAFT INDUSTRIES INC 4,082,663 4,082,663
COLUMBIA ENERGY GROUP 45,938 45,938
COMCAST CORP-SPECIAL CL A 20,250 1,883,250 1,903,500
COX COMMUNICATIONS INC-CL A 97,959 97,959
CSX CORP 52,969 52,969
DELTA AIR LINES INC 151,688 4,024,775 4,176,463
DTE ENERGY CO 24,450 24,450
DUKE ENERGY 3,388,138 3,388,138
DYNEGY INC 27,325 27,325
EDISON INTERNATIONAL 4,831,850 4,831,850
EL PASO ENERGY CORP 315,813 315,813
ENTERGY CORP 6,862,125 7,367,813
FLORIDA PROGRESS CORP 93,750 93,750
GLOBAL CROSSING LTD 26,313 26,313
GTE CORP 183,638 12,537,150 12,720,788
KANSAS CITY SOUTHN INDS INC 332,578 332,578
LEVEL 3 COMMUNICATIONS 22,000 22,000
P G & E CORP 22,163 2,856,500 3,142,150
PECO ENERGY CO 165,281 165,281
PMC-SIERRA INC 2,985,150 2,985,150
QWEST COMMUNICATIONS INTL 24,844 24,844
RELIANT ENERGY INC 159,638 159,638
RF MICRO DEVICES INC 4,153,425 4,153,425
SBC COMMUNICATIONS INC 430,727 17,706,550 18,137,277
SOUTHERN CO 578,150
SOUTHWEST AIRLINES CO 163,809 163,809
SPRINT CORP (FON GROUP) 165,903 9,649,200 9,815,103
SPRINT CORP PCS 29,750 29,750
TELEPHONE & DATA 2,436,075 2,436,075
TIDEWATER INC 536,400
TXU CORP 4,852,750 4,852,750
UAL INC 3,258,500 3,258,500
UNICOM CORPORATION 6,205,475 6,205,475
UNION PACIFIC CORP 52,063 5,128,156 5,600,438
UNITED PARCEL SERVICE-CL B 135,700 135,700
US CELLULAR CORP 1,871,100 1,871,100
WASTE MANAGEMENT INC 22,800 22,800
WILLIAMS COMPANIES INC 79,206 79,206
WORLDCOM INC 238,550 1,000,076
----------------- ---------------- ------------------
4,103,080 127,197,094 135,206,868
----------------- ---------------- ------------------
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH LIBERTY VALUE
LIBERTY VALUE GROWTH & INCOME & INCOME FUND PRO FORMA FUND MARKET
FUND SHARES FUND SHARES SHARES COMBINED SHARES VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
Wholesale Trade
SYSCO CORP 182,600 182,600
Total Common Stocks 43,856,620
--------------
CASH EQUIVALENTS Par Par Par Par
WARBURG REPURCHASE AGREEMENT
6.60% 7/3/2000 $ 1,567,000 $ 972,000 $ 25,932,000 28,471,000 1,567,000
--------------
TOTAL INVESTMENTS (COST OF
$43,810,733, $25,098,509,
$976,414,426 AND
$1,045,323,668, RESPECTIVELY) $ 45,423,620
==============
</TABLE>
<TABLE>
<CAPTION>
LIBERTY ALL-STAR LIBERTY GROWTH &
GROWTH & INCOME INCOME FUND PRO FORMA COMBINED
FUND MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C>
COMMON STOCKS
Wholesale Trade
SYSCO CORP 7,692,025 7,692,025
---------------- ------------------
Total Common Stocks 26,532,356 1,099,613,570 1,170,002,546
----------------- ---------------- ------------------
CASH EQUIVALENTS
WARBURG REPURCHASE AGREEMENT
6.60% 7/3/2000 972,000 25,932,000 28,471,000
----------------- ---------------- ------------------
TOTAL INVESTMENTS (COST OF
$43,810,733, $25,098,509,
$976,414,426 AND
$1,045,323,668, RESPECTIVELY) $ 27,504,356 $ 1,125,545,570 $ 1,198,473,546
================= ================ ==================
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINING CONDENSED STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
Liberty Liberty All-Star Liberty
Value Growth & Income Growth & Income Pro Forma Pro Forma
Fund Fund Fund Adjustments Combined
<S> <C> <C> <C> <C> <C>
Investments, at value $ 45,423,620 $ 27,504,356 $ 1,125,545,570 $ - $1,198,473,546
Cash 342 4,096 176 - 4,614
Receivable for investments sold - - - - -
Payable for investments purchased - - - - -
Other assets less other liabilities 18,463 621 35,737,174 (353,007)(a) 35,403,251
Net assets $ 45,442,425 $ 27,509,073 $ 1,161,282,920 $ (353,007) $1,233,881,411
Class A:
Net assets $ 10,441,098 $ 4,299,897 $ 309,356,714 (88,811) $ 324,008,898
Shares outstanding 920,529 368,742 15,017,711 (578,395) $ 15,728,587
Net asset value $ 11.34 $ 11.66 $ 20.60 $ 20.60
Class B:
Net assets $ 19,380,181 $ 16,346,839 $ 822,643,366 (235,775) $ 858,134,611
Shares outstanding 1,714,187 1,415,688 41,382,562 (1,346,712) $ 43,165,725
Net asset value $ 11.31 $ 11.55 $ 19.88 $ 19.88
Class C:
Net assets $ 1,934,018 $ 4,524,072 $ 29,281,763 (14,460) $ 35,725,393
Shares outstanding 171,022 391,868 1,465,147 (240,874) $ 1,787,163
Net asset value $ 11.31 $ 11.54 $ 19.99 $ 19.99
Class Z:
Net assets $ 13,687,128 $ 2,338,265 $ 1,077 (13,961) $ 16,012,509
Shares outstanding 1,206,557 199,907 52 (633,337) $ 773,179
Net asset value $ 11.34 $ 11.70 $ 20.71 $ 20.71
</TABLE>
(a) One time proxy, accounting, legal and other costs of the reorganization of
$36,365, $35,389 and $281,253 to be borne by Liberty Value Fund, Liberty All
Star Growth & Income Fund and Liberty Growth & Income Fund respectively.
<PAGE>
PRO FORMA COMBINING CONDENSED STATEMENT OF OPERATIONS FOR THE TWELVE MONTH
PERIOD ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY
ALL-STAR LIBERTY
LIBERTY GROWTH & GROWTH & PRO FORMA PRO FORMA
VALUE FUND INCOME INCOME FUND ADJUSTMENTS COMBINED
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends 852,965 268,398 15,573,131 - 16,694,494
Interest 46,028 37,185 1,966,931 - 2,050,144
---------- --------- ------------ -------- ------------
Total investment income 898,993 305,583 17,540,062 - 18,744,638
EXPENSES
Management fee 356,825 132,571 9,452,952 (89,206)(a) 9,853,142
Administration fee - 44,190 - (44,190)(a) -
Service fee - Class A, B, C 80,902 49,748 3,099,842 - (a) 3,230,492
Distribution fee - Class B 144,648 95,935 6,593,089 - (a) 6,833,672
Distribution fee - Class C 11,951 27,559 244,861 - (a) 284,371
Transfer agent fee 94,869 46,431 2,728,605 (265,280)(d) 2,604,625
Bookkeeping fee 27,000 27,000 420,040 (37,326)(a) 436,714
Trustees fee 7,463 12,950 56,473 (29,552)(b) 47,334
All other expenses 129,672 221,950 1,052,407 (463,029)(c) 941,000
---------- --------- ------------ -------- ------------
Total operating expenses 853,330 658,334 23,648,269 (928,583) 24,231,350
---------- --------- ------------ -------- ------------
Expense reimbursement (281,305) (208,902) - 490,207 (a) -
---------- --------- ------------ -------- ------------
Net Expenses 572,025 449,432 23,648,269 (438,376) 24,231,350
NET INVESTMENT INCOME (LOSS) 326,968 (143,849) (6,108,207) 438,376 (5,486,712)
NET REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain (loss) on investments (5,244,334) (118,211) 183,532,200 - 178,169,654
Change in net unrealized appreciation/depreciation
during the period on investments (1,924,598) 1,816,980 (170,105,574) - (170,213,191)
---------- --------- ------------ -------- ------------
Net Gain (Loss) (7,168,932) 1,698,769 13,426,626 - 7,956,463
---------- --------- ------------ -------- ------------
Increase (Decrease) in Net Assets from Operations (6,841,963) 1,554,920 7,318,419 438,376 2,469,751
</TABLE>
(a) Based on the contract in effect for the surviving fund.
(b) Based on trustee compensation plan for the surviving fund.
(c) Decrease due to the elimination of duplicative expenses achieved by merging
the funds.
(d) Based on the contract in effect for the surviving fund. Note that a new
transfer agent fee structure was implemented for Liberty Growth & Income
Fund effective January 1, 2000. The pro forma combined transfer agent fee
shown assumes this new agreement was in effect for the entire twelve-month
period ended June 30, 2000.
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH ALL-STAR LIBERTY
& INCOME LIBERTY GROWTH & GROWTH & PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND INCOME COMBINED
SHARES SHARES SHARES FUND SHARES SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
Agriculture, Forestry & Fishing
CANADIAN NATL RAILWAY CO 133,100 133,100
Construction
HALLIBURTON CO 2,975 2,975
Finance, Insurance & Real Estate
ABN AMRO HOLDING NV ADR 3,286 3,286
ACE LIMITED 10,950 81,700 92,650
AETNA INC 10,900 10,900
AFLAC INC 4,271 4,271
ALLMERICA FINANCIAL CORP 3,375 3,375
AMBAC FINANCIAL GROUP INC 1,300 40,500 41,800
AMER INTERNATIONAL GROUP INC 1,100 132,275 133,375
AMERICAN EXPRESS CO 240,000 144,000 384,000
AON CORP 33,200 33,200
ASTORIA FINANCIAL CORP 600 600
AXA FINANICAL INC 4,300 140,500 144,800
BANK OF AMERICA CORP 67,896 700 231,234 299,830
BANK ONE 31,000 4,100 35,100
BEAR STEARNS COMPANIES INC 30,173 30,173
C.I.T. GROUP INC-A 2,000 2,000
CAPITAL ONE FINANCIAL CORP 1,000 72,100 73,100
CHASE MANHATTAN CORP (NEW) 193,200 3,250 186,450 382,900
CIGNA CORP 2,275 2,275
CINCINNATI FINANCIAL CORP 188,300 188,300
CITIGROUP INC 244,810 8,490 523,300 776,600
CITY NATIONAL CORP 119,500 119,500
COUNTRYWIDE CREDIT INDUSTRIES 10,593 10,593
FANNIE MAE 161,000 400 163,400 324,800
FIRST UNION CORP 2,800 2,800
FIRSTAR CORP 18,000 18,000
FLEET BOSTON FINANCIAL CORP 16,100 4,000 348,600 368,700
FREDDIE MAC 19,500 9,096 108,300 136,896
GOLDEN STATE BANCORP 171,300 171,300
GOLDEN WEST FINANCIAL CORP 89,100 89,100
GOLDMAN SACHS GROUP INC 500 500
HCA-THE HEALTHCARE CORP 346,100 346,100
HOUSEHOLD INTERNATIONAL INC 83,300 83,300
J P MORGAN & CO INC 55,100 55,100
KEYCORP 1,200 1,200
KIMCO REALTY CORP 1,700 1,700
KNIGHT TRADING GROUP INC 59,800 59,800
LEHMAN BROTHERS HLDG INC 100,900 100,900
LOEWS CORP 42,000 42,000
MBNA CORP 210,300 210,300
METLIFE INC 1,700 1,700
MGIC INV CORP 123,000 123,000
MORGAN STANLEY DEAN WITTER 1,900 165,900 167,800
NATIONWIDE FINANCIAL SERV A 228,700 228,700
PACIFIC CENTURY FINL CORP 145,500 145,500
PMI GROUP INC 131,100 131,100
PNC FINANCIAL SERVICES GROUP 3,350 104,900 108,250
PROGRESSIVE CORP OHIO 4,900 4,900
PROVIDIAN FINANCIAL CORP 2,650 30,100 32,750
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME LIBERTY GROWTH & LIBERTY GROWTH PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND & INCOME FUND COMBINED
MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
Agriculture, Forestry & Fishing
CANADIAN NATL RAILWAY CO $ 3,884,856 $ 3,884,856
-------------- --------------
Construction
HALLIBURTON CO $ 140,383 140,383
------------ --------------
Finance, Insurance & Real Estate
ABN AMRO HOLDING NV ADR 80,712 80,712
ACE LIMITED 306,600 2,287,600 2,594,200
AETNA INC $ 699,644 699,644
AFLAC INC 196,199 196,199
ALLMERICA FINANCIAL CORP 176,766 176,766
AMBAC FINANCIAL GROUP INC 71,256 2,219,906 2,291,163
AMER INTERNATIONAL GROUP INC 129,250 15,542,313 15,671,563
AMERICAN EXPRESS CO $ 12,510,000 7,506,000 20,016,000
AON CORP 1,031,275 1,031,275
ASTORIA FINANCIAL CORP 15,450 15,450
AXA FINANICAL INC 146,200 4,777,000 4,923,200
BANK OF AMERICA CORP 2,919,528 30,100 9,943,062 12,892,690
BANK ONE 823,438 108,906 932,344
BEAR STEARNS COMPANIES INC 1,255,951 1,255,951
C.I.T. GROUP INC-A 32,500 32,500
CAPITAL ONE FINANCIAL CORP 44,625 3,217,463 3,262,088
CHASE MANHATTAN CORP (NEW) 8,899,275 149,703 8,588,353 17,637,331
CIGNA CORP 212,713 212,713
CINCINNATI FINANCIAL CORP 5,919,681 5,919,681
CITIGROUP INC 14,749,803 511,523 31,528,825 46,790,150
CITY NATIONAL CORP 4,242,250 4,242,250
COUNTRYWIDE CREDIT INDUSTRIES 321,100 321,100
FANNIE MAE 8,402,188 20,875 8,527,438 16,950,500
FIRST UNION CORP 69,475 69,475
FIRSTAR CORP 379,125 379,125
FLEET BOSTON FINANCIAL CORP 547,400 136,000 11,852,400 12,535,800
FREDDIE MAC 789,750 368,388 4,386,150 5,544,288
GOLDEN STATE BANCORP 3,083,400 3,083,400
GOLDEN WEST FINANCIAL CORP 3,636,394 3,636,394
GOLDMAN SACHS GROUP INC 47,438 47,438
HCA-THE HEALTHCARE CORP 10,512,788 10,512,788
HOUSEHOLD INTERNATIONAL INC 3,462,156 3,462,156
J P MORGAN & CO INC 6,067,888 6,067,888
KEYCORP 21,150 21,150
KIMCO REALTY CORP 69,700 69,700
KNIGHT TRADING GROUP INC 1,782,788 1,782,788
LEHMAN BROTHERS HLDG INC 9,541,356 9,541,356
LOEWS CORP 2,520,000 2,520,000
MBNA CORP 5,704,388 5,704,388
METLIFE INC 35,806 35,806
MGIC INV CORP 5,596,500 5,596,500
MORGAN STANLEY DEAN WITTER 158,175 13,811,175 13,969,350
NATIONWIDE FINANCIAL SERV A 7,518,513 7,518,513
PACIFIC CENTURY FINL CORP 2,127,938 2,127,938
PMI GROUP INC 6,227,250 6,227,250
PNC FINANCIAL SERVICES GROUP 157,031 4,917,188 5,074,219
PROGRESSIVE CORP OHIO 362,600 362,600
PROVIDIAN FINANCIAL CORP 238,500 2,709,000 2,947,500
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH ALL-STAR LIBERTY
& INCOME LIBERTY GROWTH & GROWTH & PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND INCOME COMBINED
SHARES SHARES SHARES FUND SHARES SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
SCHWAB (CHARLES) CORP 7,950 7,950
SOVEREIGN BANCORP INC 505,200 505,200
STARWOOD HOTELS & RESORTS WOR 2,600 2,600
TRIZEC HAHN CORP 8,400 8,400
U.S. BANCORP 3,000 3,000
UNIONBANCAL CORPORATION 155,100 155,100
UNITED HEALTHCARE CORP 5,900 126,700 132,600
VORNADO REALTY TRUST 1,500 1,500
WASHINGTON MUTUAL INC 23,100 2,000 25,100
WELLPOINT HEALTH NETWORKS 2,100 2,100
WELLS FARGO & CO 156,660 4,193 57,800 218,653
XL CAPITAL LTD-CLASS A 20,700 4,090 24,790
ZIONS BANCORPORATION 1,300 1,300
Manufacturing
3COM CORPORATION 1,100 1,100
ABBOTT LABS 31,600 31,600
ADC TELECOMMUNICATIONS INC 81,500 81,500
AGILENT TECHNOLOGIES INC 1,200 28,986 30,186
ALCAN ALUMINUM LTD 5,000 5,000
ALCOA INC 7,560 111,400 118,960
ALLEGHENY TECHNOLOGIES INC 1,200 1,200
ALZA CORP 1,500 1,500
AMERADA HESS CORP 17,000 17,000
AMERICAN HOME PRODUCTS CORP 600 600
AMGEN INC 3,250 80,800 84,050
ANALOG DEVICES INC. 82,900 82,900
ANHEUSER BUSCH INC 2,100 162,600 164,700
APPLE COMPUTER INC 49,600 49,600
APPLIED MATLS 80,000 2,900 129,200 212,100
APPLIED MICRO CIRCUITS CORP 11,600 11,600
ATMEL CORP 116,900 116,900
AVENTIS -SPON ADR 1,100 1,100
AVON PRODUCTS INC 40,000 9,184 49,184
BAKER HUGHES INC 800 800
BAUSCH & LOMB INC 125,200 125,200
BAXTER INTERNATIONAL INC 95,000 4,400 99,400
BECKMAN COULTER INC 29,100 29,100
BESTFOODS 21,800 1,100 190,600 213,500
BIOGEN INC 3,050 3,050
BIOMET INC 127,000 127,000
BOEING CO 99,600 25,700 3,793 332,800 461,893
BOSTON SCIENTIFIC CORP 19,700 19,700
BP AMOCO PLC-ADR 242,810 150,000 392,810
BRISTOL-MYERS SQUIBB CO 150,000 3,200 166,200 319,400
BRUNSWICK CORP 227,400 227,400
CATERPILLAR INC 3,755 3,755
CHEVRON CORP 6,300 119,200 125,500
CISCO SYSTEMS INC 90,000 7,400 456,200 553,600
CLOROX CO 500 500
COCA COLA CO 700 19,700 20,400
COMPAQ COMPUTER CORP 195,000 18,100 7,000 220,100
COMVERSE TECH 32,200 32,200
COOPER INDUSTRIES INC 700 700
CORNING INCORPORATED 21,100 21,100
DEERE & CO 9,500 9,500
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME LIBERTY GROWTH & LIBERTY GROWTH PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND & INCOME FUND COMBINED
MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
SCHWAB (CHARLES) CORP 267,319 267,319
SOVEREIGN BANCORP INC 3,552,188 3,552,188
STARWOOD HOTELS & RESORTS WOR 84,013 84,013
TRIZEC HAHN CORP 150,150 150,150
U.S. BANCORP 57,750 57,750
UNIONBANCAL CORPORATION 2,879,044 2,879,044
UNITED HEALTHCARE CORP 505,925 10,864,525 11,370,450
VORNADO REALTY TRUST 52,125 52,125
WASHINGTON MUTUAL INC 667,013 57,750 724,763
WELLPOINT HEALTH NETWORKS 152,119 152,119
WELLS FARGO & CO 6,070,575 162,479 2,239,750 8,472,804
XL CAPITAL LTD-CLASS A 1,120,388 221,371 1,341,759
ZIONS BANCORPORATION 59,658 59,658
------------- ------------ ------------ -------------- --------------
53,551,368 6,563,956 5,483,474 230,548,616 296,147,414
------------- ------------ ------------ -------------- --------------
Manufacturing
3COM CORPORATION 63,388 63,388
ABBOTT LABS 1,408,175 1,408,175
ADC TELECOMMUNICATIONS INC 6,835,813 6,835,813
AGILENT TECHNOLOGIES INC 88,500 2,137,718 2,226,218
ALCAN ALUMINUM LTD 155,000 155,000
ALCOA INC 219,240 3,230,600 3,449,840
ALLEGHENY TECHNOLOGIES INC 21,600 21,600
ALZA CORP 88,688 88,688
AMERADA HESS CORP 1,049,750 1,049,750
AMERICAN HOME PRODUCTS CORP 35,250 35,250
AMGEN INC 228,313 5,676,200 5,904,513
ANALOG DEVICES INC. 6,300,400 6,300,400
ANHEUSER BUSCH INC 156,844 12,144,188 12,301,031
APPLE COMPUTER INC 2,597,800 2,597,800
APPLIED MATLS 7,250,000 262,813 11,708,750 19,221,563
APPLIED MICRO CIRCUITS CORP 1,145,500 1,145,500
ATMEL CORP 4,310,688 4,310,688
AVENTIS -SPON ADR 79,819 79,819
AVON PRODUCTS INC 1,780,000 408,688 2,188,688
BAKER HUGHES INC 25,600 25,600
BAUSCH & LOMB INC 9,687,350 9,687,350
BAXTER INTERNATIONAL INC 6,679,688 309,375 6,989,063
BECKMAN COULTER INC 1,698,713 1,698,713
BESTFOODS 1,509,650 76,175 13,199,050 14,784,875
BIOGEN INC 196,725 196,725
BIOMET INC 4,881,563 4,881,563
BOEING CO 4,164,525 1,074,581 158,595 13,915,200 19,312,901
BOSTON SCIENTIFIC CORP 432,169 432,169
BP AMOCO PLC-ADR 13,733,940 8,484,375 22,218,315
BRISTOL-MYERS SQUIBB CO 8,737,500 186,400 9,681,150 18,605,050
BRUNSWICK CORP 3,766,313 3,766,313
CATERPILLAR INC 127,201 127,201
CHEVRON CORP 534,319 10,109,650 10,643,969
CISCO SYSTEMS INC 5,720,625 470,363 28,997,213 35,188,200
CLOROX CO 22,406 22,406
COCA COLA CO 40,206 1,131,519 1,171,725
COMPAQ COMPUTER CORP 4,984,688 462,681 178,938 5,626,306
COMVERSE TECH 2,994,600 2,994,600
COOPER INDUSTRIES INC 22,794 22,794
CORNING INCORPORATED 5,694,363 5,694,363
DEERE & CO 351,500 351,500
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH ALL-STAR LIBERTY
& INCOME LIBERTY GROWTH & GROWTH & PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND INCOME COMBINED
SHARES SHARES SHARES FUND SHARES SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
DELL COMPUTER CORPORATION 8,900 8,900
DELPHI AUTOMOTIVE SYSTEMS 41,282 253,600 294,882
DIAGEO PLC ADR 5,193 5,193
DOVER CORP 3,793 3,793
DOW CHEMICAL CO 350,500 350,500
EASTMAN KODAK CO 15,000 15,000
ECOLAB INC 250,000 250,000
EI DUPONT DE NEMOURS & CO INC 29,179 2,900 60,200 92,279
ELI LILLY & CO 1,000 114,500 115,500
EMC CORP 1,000 108,400 109,400
EMERSON ELECTRIC CO 50,000 15,400 3,306 68,706
EXXON MOBIL CORPORATION 3,916 365,165 369,081
FMC CORP 43,200 43,200
FORD MOTOR CO 600 266,300 266,900
GATEWAY INC 51,000 51,000
GENERAL ELECTRIC CO 234,000 2,700 640,500 877,200
GENERAL MILLS INC 16,500 16,500
GEORGIA PACIFIC (TIMBER GRP) 75,000 75,000
GEORGIA PACIFIC CORP 170,000 20,300 190,300
GILLETTE CO 134,400 4,350 138,750
GRANT PRIDECO INC 164,800 164,800
H J HEINZ CO 1,400 1,400
HEWLETT-PACKARD CO 1,600 90,400 92,000
HONEYWELL INTERNATIONAL INC 152,500 900 77,437 230,837
HUBBELL INC CL B 70,400 70,400
ILLINOIS TOOL WORKS INC 2,800 2,800
INGERSOLL RAND CO 15,900 2,525 18,425
INTEL CORP 40,000 5,450 232,800 278,250
INTERNATIONAL GAME TECH 61,300 61,300
INTERNATIONAL PAPER CO 180,700 180,700
INTL BUSINESS MACHINES CORP 105,000 1,720 130,800 237,520
INTUIT INC 1,700 1,700
JDS UNIPHASE CORP 1,050 1,050
JOHNSON & JOHNSON 69,900 69,900
JOHNSON CONTROLS INC 81,500 81,500
KIMBERLY CLARK CORP 13,200 3,400 66,000 82,600
LEAR CORP 140,000 2,800 142,800
LITTLEFUSE INC 35,000 35,000
LOCKHEED MARTIN CORP 422,400 422,400
LSI LOGIC CORP 53,200 53,200
LUCENT TECHNOLOGIES INC 2,800 42,800 45,600
LYONDELL PETRO 211,300 211,300
MATTEL INC 56,800 56,800
MAXIM INTEGRATED PRODUCTS INC 4,550 4,550
MEDTRONIC INC 2,400 2,400
MERCK & CO INC 14,300 155,800 170,100
MICROCHIP TECHNOLOGY 115,800 115,800
MINNESOTA MINING & MFG CO 9,600 4,142 130,300 144,042
MOTOROLA INC 45,000 12,900 1,560 59,460
MYLAN LABORATORIES, INC 238,600 238,600
NABISCO HOLDINGS CORP 16,800 16,800
NEWS CORP LTD ADR 1,400 1,400
NIKE INC CL B 25,100 25,100
NOKIA CORP ADR 4,500 112,400 116,900
NORTEL NETWORKS CORP 700 700
PACCAR INC 137,100 137,100
PE CORP-PE BIOSYSTEMS GROUP 300 300
PEPSI BOTTLING GROUP 324,800 324,800
PEPSICO INC 22,000 262,800 284,800
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME LIBERTY GROWTH & LIBERTY GROWTH PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND & INCOME FUND COMBINED
MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
DELL COMPUTER CORPORATION 438,881 438,881
DELPHI AUTOMOTIVE SYSTEMS 601,169 3,693,050 4,294,219
DIAGEO PLC ADR 184,676 184,676
DOVER CORP 153,854 153,854
DOW CHEMICAL CO 10,580,719 10,580,719
EASTMAN KODAK CO 892,500 892,500
ECOLAB INC 9,765,625 9,765,625
EI DUPONT DE NEMOURS & CO INC 1,276,581 126,875 2,633,750 4,037,206
ELI LILLY & CO 99,875 11,435,688 11,535,563
EMC CORP 76,938 8,340,025 8,416,963
EMERSON ELECTRIC CO 3,018,750 929,775 199,600 4,148,125
EXXON MOBIL CORPORATION 307,406 28,665,453 28,972,859
FMC CORP 2,505,600 2,505,600
FORD MOTOR CO 25,800 11,450,900 11,476,700
GATEWAY INC 2,894,250 2,894,250
GENERAL ELECTRIC CO 12,402,000 143,100 33,946,500 46,491,600
GENERAL MILLS INC 631,125 631,125
GEORGIA PACIFIC (TIMBER GRP) 1,621,875 1,621,875
GEORGIA PACIFIC CORP 4,462,500 532,875 4,995,375
GILLETTE CO 4,695,600 151,978 4,847,578
GRANT PRIDECO INC 4,120,000 4,120,000
H J HEINZ CO 61,250 61,250
HEWLETT-PACKARD CO 199,800 11,288,700 11,488,500
HONEYWELL INTERNATIONAL INC 5,137,344 30,319 2,608,659 7,776,321
HUBBELL INC CL B 1,795,200 1,795,200
ILLINOIS TOOL WORKS INC 159,600 159,600
INGERSOLL RAND CO 639,975 101,631 741,606
INTEL CORP 5,347,500 728,597 31,122,450 37,198,547
INTERNATIONAL GAME TECH 1,624,450 1,624,450
INTERNATIONAL PAPER CO 5,387,119 5,387,119
INTL BUSINESS MACHINES CORP 11,504,063 188,448 14,330,775 26,023,285
INTUIT INC 70,338 70,338
JDS UNIPHASE CORP 125,869 125,869
JOHNSON & JOHNSON 7,121,063 7,121,063
JOHNSON CONTROLS INC 4,181,969 4,181,969
KIMBERLY CLARK CORP 757,350 195,075 3,786,750 4,739,175
LEAR CORP 2,800,000 56,000 2,856,000
LITTLEFUSE INC 1,715,000 1,715,000
LOCKHEED MARTIN CORP 10,480,800 10,480,800
LSI LOGIC CORP 2,879,450 2,879,450
LUCENT TECHNOLOGIES INC 165,900 2,535,900 2,701,800
LYONDELL PETRO 3,539,275 3,539,275
MATTEL INC 749,050 749,050
MAXIM INTEGRATED PRODUCTS INC 309,116 309,116
MEDTRONIC INC 119,550 119,550
MERCK & CO INC 1,095,738 11,938,175 13,033,913
MICROCHIP TECHNOLOGY 6,747,159 6,747,159
MINNESOTA MINING & MFG CO 792,000 341,715 10,749,750 11,883,465
MOTOROLA INC 1,307,813 374,906 45,338 1,728,056
MYLAN LABORATORIES, INC 4,354,450 4,354,450
NABISCO HOLDINGS CORP 882,000 882,000
NEWS CORP LTD ADR 76,300 76,300
NIKE INC CL B 999,294 999,294
NOKIA CORP ADR 224,719 5,612,975 5,837,694
NORTEL NETWORKS CORP 47,775 47,775
PACCAR INC 5,441,156 5,441,156
PE CORP-PE BIOSYSTEMS GROUP 19,763 19,763
PEPSI BOTTLING GROUP 9,480,100 9,480,100
PEPSICO INC 977,625 11,678,175 12,655,800
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH ALL-STAR LIBERTY
& INCOME LIBERTY GROWTH & GROWTH & PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND INCOME COMBINED
SHARES SHARES SHARES FUND SHARES SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
PFIZER INC 316,250 7,025 388,675 711,950
PHARMACIA CORPORATION 149,500 8,796 158,296
PHILIP MORRIS CO INC 203,000 48,600 2,800 280,400 534,800
PRAXAIR INC 15,000 15,000
PROCTER & GAMBLE CO 81,000 20,500 1,850 157,300 260,650
QUAKER OATS CO 121,000 121,000
ROHM & HAAS CO 1,900 1,900
ROYAL DUTCH PETRO-NY SHARES 17,600 700 254,300 272,600
SABRE HOLDINGS CORP 36,132 4,230 40,362
SARA LEE CORP 144,000 72,100 6,300 222,400
SCHERING-PLOUGH CORP 24,100 1,100 86,400 111,600
SEAGATE TECHNOLOGY INC 600 600
SEAGRAMS CO. LTD. 1,000 1,000
SHERWIN WILLIAMS CO 38,700 38,700
TELLABS INC 400 400
TEMPLE INLAND INC 1,000 24,700 25,700
TERADYNE INC 62,400 62,400
TEXACO INC 13,800 13,800
TEXAS INSTRUMENTS INC 900 78,400 79,300
TEXTRON INC 2,600 2,600
TOSCO CORP 800 800
TRIBUNE CO 100,000 100,000
TYCO INT'L LTD 3,600 3,600
UNION CARBIDE CORP 111,100 111,100
UNITED TECHNOLOGIES CORP 7,700 170,500 178,200
USG CORP NEW 63,300 63,300
UST INC 4,200 4,200
USX-MARATHON GROUP 34,300 4,800 39,100
VISTEON CORP 75 33,288 33,363
WEATHERFORD INTERNATIONAL 164,800 164,800
WESTVACO CORP 268,600 268,600
WEYERHAEUSER CO 50,800 50,800
WHIRLPOOL CORP 85,100 85,100
XEROX CORP 34,400 34,400
Mining & Energy
ANADARKO PETROLEUM 19,100 19,100
APACHE CORP 2,800 2,800
BURLINGTON RESOURCES INC 7,500 76,000 83,500
COFLEXIP-SPONSORED ADR 23,270 23,270
CONOCO INC -CL B 61,421 5,800 67,221
CONOCO INC-CL A 104,800 6,450 111,250
DEVON ENERGY CORPORATION 2,708 2,708
DIAMOND OFFSHORE DRILLING 18,000 195,800 213,800
ENRON CORP 115,000 115,000
FALCON DRILLING COMPANY INC 521,800 521,800
GLOBAL MARINE INC 1,100 1,100
OCCIDENTAL PETROLEUM 7,700 7,700
PETROLEUM GEO SERVICES ADR 239,100 239,100
SCHLUMBERGER LTD 161,900 161,900
TRANSOCEAN SEDCO FOREX INC 31,343 31,343
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME LIBERTY GROWTH & LIBERTY GROWTH PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND & INCOME FUND COMBINED
MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
PFIZER INC 15,180,000 337,200 18,656,400 34,173,600
PHARMACIA CORPORATION 7,727,281 454,643 8,181,925
PHILIP MORRIS CO INC 5,392,188 1,290,938 74,375 7,448,125 14,205,625
PRAXAIR INC 561,563 561,563
PROCTER & GAMBLE CO 4,637,250 1,173,625 105,913 9,005,425 14,922,213
QUAKER OATS CO 9,090,125 9,090,125
ROHM & HAAS CO 65,550 65,550
ROYAL DUTCH PETRO-NY SHARES 1,083,500 43,094 15,655,344 16,781,938
SABRE HOLDINGS CORP 1,029,762 120,555 1,150,317
SARA LEE CORP 2,781,000 1,392,431 121,669 4,295,100
SCHERING-PLOUGH CORP 1,217,050 55,550 4,363,200 5,635,800
SEAGATE TECHNOLOGY INC 33,000 33,000
SEAGRAMS CO. LTD. 58,000 58,000
SHERWIN WILLIAMS CO 819,956 819,956
TELLABS INC 27,375 27,375
TEMPLE INLAND INC 42,000 1,037,400 1,079,400
TERADYNE INC 4,586,400 4,586,400
TEXACO INC 734,850 734,850
TEXAS INSTRUMENTS INC 61,819 5,385,100 5,446,919
TEXTRON INC 141,213 141,213
TOSCO CORP 22,650 22,650
TRIBUNE CO 3,500,000 3,500,000
TYCO INT'L LTD 170,550 170,550
UNION CARBIDE CORP 5,499,450 5,499,450
UNITED TECHNOLOGIES CORP 453,338 10,038,188 10,491,525
USG CORP NEW 1,922,738 1,922,738
UST INC 61,688 61,688
USX-MARATHON GROUP 859,644 120,300 979,944
VISTEON CORP 909 403,611 404,520
WEATHERFORD INTERNATIONAL 6,561,100 6,561,100
WESTVACO CORP 6,664,638 6,664,638
WEYERHAEUSER CO 2,184,400 2,184,400
WHIRLPOOL CORP 3,967,788 3,967,788
XEROX CORP 713,800 713,800
------------- ------------ ------------ -------------- --------------
170,529,308 27,627,400 11,268,551 559,572,362 768,997,621
------------- ------------ ------------ -------------- --------------
Mining & Energy
ANADARKO PETROLEUM 941,869 941,869
APACHE CORP 164,675 164,675
BURLINGTON RESOURCES INC 286,875 2,907,000 3,193,875
COFLEXIP-SPONSORED ADR 1,407,835 1,407,835
CONOCO INC -CL B 1,508,653 142,463 1,651,116
CONOCO INC-CL A 2,305,600 141,900 2,447,500
DEVON ENERGY CORPORATION 152,156 152,156
DIAMOND OFFSHORE DRILLING 632,250 6,877,475 7,509,725
ENRON CORP 7,417,500 7,417,500
FALCON DRILLING COMPANY INC 12,294,913 12,294,913
GLOBAL MARINE INC 31,006 31,006
OCCIDENTAL PETROLEUM 162,181 162,181
PETROLEUM GEO SERVICES ADR 4,079,644 4,079,644
SCHLUMBERGER LTD 12,081,788 12,081,788
TRANSOCEAN SEDCO FOREX INC 1,674,892 1,674,892
------------- ------------ ------------ -------------- --------------
11,231,753 1,574,119 1,081,256 41,323,545 55,210,673
------------- ------------ ------------ -------------- --------------
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH ALL-STAR LIBERTY
& INCOME LIBERTY GROWTH & GROWTH & PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND INCOME COMBINED
SHARES SHARES SHARES FUND SHARES SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
Retail Trade
ALBERTSONS INC 27,500 27,500
BEST BUY INC 128,500 128,500
CIRCUIT CITY STORES INC 600 100,700 101,300
COSTCO WHOLESALE CORP 2,550 2,550
CVS CORP 159,200 159,200
DARDEN RESTURANTS INC 206,000 206,000
FEDERATED DEPT STORES INC NEW 80,000 10,700 4,500 95,200
HARCOURT GENERAL INC 4,725 4,725
HOME DEPOT INC 4,600 69,150 73,750
LIMITED INC 6,000 6,000
MAY DEPARTMENT STORES CO 5,214 5,214
MCDONALDS CORP 18,700 5,112 23,812
NORDSTROM INC 23,100 23,100
RADIOSHACK CORP 93,700 93,700
SAFEWAY INC 2,400 2,400
TARGET CORP 600 61,400 62,000
TIFFANY & CO 1,300 1,300
TJX COMPANIES, INC 252,800 1,400 254,200
WALGREEN CO 280,000 280,000
WAL-MART STORES INC 150,000 3,150 150,700 303,850
Services
ADOBE SYSTEMS INC 73,500 73,500
AMERICA ONLINE INC 1,200 113,000 114,200
AUTOMATIC DATA PROCESSING INC 105,600 105,600
CENDANT CORP 2,100 2,100
CHECK POINT SOFTWARE TECH 5,700 5,700
CITRIX SYS INC 500 500
COMPUTER ASSOCIATES INT'L INC 11,423 11,423
DUN & BRADSTREET CORP 214,800 214,800
ELECTRONIC DATA SYSTEMS CORP 900 900
FIRST DATA CORP 19,100 129,600 148,700
GENENTECH INC 800 800
HARRAH'S ENTERTAINMENT INC 88,500 88,500
HERTZ CORP-CL A 60,000 60,000
INTERPUBLIC GROUP COS INC 121,200 121,200
MANPOWER 128,600 128,600
MICROSOFT CORP 4,250 158,700 162,950
NETWORK APPLIANCE INC 15,400 15,400
NEWS CORP LTD-SPONS ADR PRF 4,548 4,548
ORACLE CORP 600 148,400 149,000
PARAMETRIC TECHNOLOGY CORP 6,400 6,400
PAYCHEX INC 6,150 6,150
PIXAR INC 2,200 2,200
SENSORMATIC ELECTRONICS CORP 1,600 1,600
SIEBEL SYSTEMS INC 2,650 2,650
SUN MICROSYSTEMS INC 1,600 123,800 125,400
SYNOPSYS INC 1,900 1,900
TIME WARNER INC 2,200 16,400 18,600
USA NETWORKS INC 101,500 101,500
WALT DISNEY PRODUCTIONS 20,300 3,600 155,500 179,400
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME LIBERTY GROWTH & LIBERTY GROWTH PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND & INCOME FUND COMBINED
MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS
Retail Trade
ALBERTSONS INC 914,375 914,375
BEST BUY INC 8,127,625 8,127,625
CIRCUIT CITY STORES INC 19,913 3,341,981 3,361,894
COSTCO WHOLESALE CORP 84,150 84,150
CVS CORP 6,368,000 6,368,000
DARDEN RESTURANTS INC 3,347,500 3,347,500
FEDERATED DEPT STORES INC NEW 2,700,000 361,125 151,875 3,213,000
HARCOURT GENERAL INC 256,922 256,922
HOME DEPOT INC 229,713 3,453,178 3,682,891
LIMITED INC 129,750 129,750
MAY DEPARTMENT STORES CO 125,136 125,136
MCDONALDS CORP 615,931 168,377 784,308
NORDSTROM INC 557,288 557,288
RADIOSHACK CORP 4,439,038 4,439,038
SAFEWAY INC 108,300 108,300
TARGET CORP 34,800 3,561,200 3,596,000
TIFFANY & CO 87,750 87,750
TJX COMPANIES, INC 4,740,000 26,250 4,766,250
WALGREEN CO 9,012,500 9,012,500
WAL-MART STORES INC 8,643,750 181,519 8,684,088 17,509,356
------------- ------------ ------------ -------------- --------------
25,096,250 2,448,719 1,604,453 41,322,609 70,472,031
------------- ------------ ------------ -------------- --------------
Services
ADOBE SYSTEMS INC 9,555,000 9,555,000
AMERICA ONLINE INC 63,300 5,960,750 6,024,050
AUTOMATIC DATA PROCESSING INC 5,656,200 5,656,200
CENDANT CORP 29,400 29,400
CHECK POINT SOFTWARE TECH 1,206,975 1,206,975
CITRIX SYS INC 9,469 9,469
COMPUTER ASSOCIATES INT'L INC 584,715 584,715
DUN & BRADSTREET CORP 6,148,650 6,148,650
ELECTRONIC DATA SYSTEMS CORP 37,125 37,125
FIRST DATA CORP 947,838 6,431,400 7,379,238
GENENTECH INC 137,600 137,600
HARRAH'S ENTERTAINMENT INC 1,852,969 1,852,969
HERTZ CORP-CL A 1,683,750 1,683,750
INTERPUBLIC GROUP COS INC 5,211,600 5,211,600
MANPOWER 4,115,200 4,115,200
MICROSOFT CORP 340,000 12,696,000 13,036,000
NETWORK APPLIANCE INC 1,239,700 1,239,700
NEWS CORP LTD-SPONS ADR PRF 216,030 216,030
ORACLE CORP 50,438 12,474,875 12,525,313
PARAMETRIC TECHNOLOGY CORP 70,400 70,400
PAYCHEX INC 258,300 258,300
PIXAR INC 77,550 77,550
SENSORMATIC ELECTRONICS CORP 25,300 25,300
SIEBEL SYSTEMS INC 433,441 433,441
SUN MICROSYSTEMS INC 145,500 11,258,063 11,403,563
SYNOPSYS INC 65,669 65,669
TIME WARNER INC 167,200 1,246,400 1,413,600
USA NETWORKS INC 2,194,938 2,194,938
WALT DISNEY PRODUCTIONS 787,894 139,725 6,035,344 6,962,963
------------- ------------ ------------ -------------- --------------
6,895,350 1,735,731 2,851,160 88,072,463 99,554,704
------------- ------------ ------------ -------------- --------------
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH ALL-STAR LIBERTY
& INCOME LIBERTY GROWTH & GROWTH & PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND INCOME COMBINED
SHARES SHARES SHARES FUND SHARES SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
Transportation, Communications,
Electric, Gas and Sanitary Services
A T & T CORP 65,333 26,600 4,100 348,100 444,133
ALLEGIANCE TELECOM INC 250 250
AMFM INC 3,500 3,500
AMR CORP 50,000 4,000 54,000
AT & T WIRELESS CORP 178,200 178,200
AT&T CORP-LIBERTY MEDIA A 3,600 3,600
BELL ATLANTIC CORP 190,320 2,400 122,600 315,320
BELLSOUTH CORP 147,300 147,300
BURLINGTON NORTH SANTA FE CORP 200,000 6,647 206,647
CABLEVISION SYSTEMS CL-A 1,200 1,200
CARNIVAL CORP-CL A 4,200 4,200
CHRIS-CRAFT INDUSTIRES INC 61,800 61,800
COLUMBIA ENERGY GROUP 700 700
COMCAST CORP-SPECIAL CL A 30,000 500 46,500 77,000
CONTINENTAL AIRLINES CL B 160,000 160,000
COX COMMUNICATIONS INC-CL A 2,150 2,150
CSX CORP 2,500 2,500
DELTA AIR LINES INC 3,000 79,600 82,600
DTE ENERGY CO 800 800
DUKE ENERGY 60,100 60,100
DYNEGY INC 400 400
EDISON INTERNATIONAL 235,700 235,700
EL PASO ENERGY CORP 6,200 6,200
ENTERGY CORP 18,600 252,400 271,000
FLORIDA PROGRESS CORP 2,000 2,000
GLOBAL CROSSING LTD 1,000 1,000
GTE CORP 2,950 201,400 204,350
KANSAS CITY SOUTHN INDS INC 131,900 3,750 135,650
LEVEL 3 COMMUNICATIONS 250 250
P G & E CORP 10,700 900 116,000 127,600
PECO ENERGY CO 4,100 4,100
PMC-SIERRA INC 16,800 16,800
QWEST COMMUNICATIONS INTL 500 500
RELIANT ENERGY INC 5,400 5,400
RF MICRO DEVICES INC 47,400 47,400
SBC COMMUNICATIONS INC 9,959 409,400 419,359
SOUTHERN CO 24,800 24,800
SOUTHWEST AIRLINES CO 8,650 8,650
SPRINT CORP (FON GROUP) 3,253 189,200 192,453
SPRINT CORP PCS 500 500
TELEPHONE & DATA 24,300 24,300
TIDEWATER INC 14,900 14,900
TXU CORP 164,500 164,500
UAL INC 56,000 56,000
UNICOM CORPORATION 160,400 160,400
UNION PACIFIC CORP 11,300 1,400 137,900 150,600
UNITED PARCEL SERVICE-CL B 2,300 2,300
US CELLULAR CORP 29,700 29,700
WASTE MANAGEMENT INC 1,200 1,200
WILLIAMS COMPANIES INC 1,900 1,900
WORLDCOM INC 16,600 5,200 21,800
Wholesale Trade
SYSCO CORP 182,600 182,600
Total Common Stocks
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME LIBERTY GROWTH & LIBERTY GROWTH PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND & INCOME FUND COMBINED
MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS
Transportation, Communications,
Electric, Gas and Sanitary Services
A T & T CORP 2,066,156 841,225 129,663 11,008,663 14,045,706
ALLEGIANCE TELECOM INC 16,000 16,000
AMFM INC 241,500 241,500
AMR CORP 1,321,875 105,750 1,427,625
AT & T WIRELESS CORP 4,967,325 4,967,325
AT&T CORP-LIBERTY MEDIA A 87,300 87,300
BELL ATLANTIC CORP 9,670,635 121,950 6,229,613 16,022,198
BELLSOUTH CORP 6,278,663 6,278,663
BURLINGTON NORTH SANTA FE CORP 4,587,500 152,466 4,739,966
CABLEVISION SYSTEMS CL-A 81,450 81,450
CARNIVAL CORP-CL A 81,900 81,900
CHRIS-CRAFT INDUSTIRES INC 4,082,663 4,082,663
COLUMBIA ENERGY GROUP 45,938 45,938
COMCAST CORP-SPECIAL CL A 1,215,000 20,250 1,883,250 3,118,500
CONTINENTAL AIRLINES CL B 7,520,000 7,520,000
COX COMMUNICATIONS INC-CL A 97,959 97,959
CSX CORP 52,969 52,969
DELTA AIR LINES INC 151,688 4,024,775 4,176,463
DTE ENERGY CO 24,450 24,450
DUKE ENERGY 3,388,138 3,388,138
DYNEGY INC 27,325 27,325
EDISON INTERNATIONAL 4,831,850 4,831,850
EL PASO ENERGY CORP 315,813 315,813
ENTERGY CORP 505,688 6,862,125 7,367,813
FLORIDA PROGRESS CORP 93,750 93,750
GLOBAL CROSSING LTD 26,313 26,313
GTE CORP 183,638 12,537,150 12,720,788
KANSAS CITY SOUTHN INDS INC 11,697,881 332,578 12,030,459
LEVEL 3 COMMUNICATIONS 22,000 22,000
P G & E CORP 263,488 22,163 2,856,500 3,142,150
PECO ENERGY CO 165,281 165,281
PMC-SIERRA INC 2,985,150 2,985,150
QWEST COMMUNICATIONS INTL 24,844 24,844
RELIANT ENERGY INC 159,638 159,638
RF MICRO DEVICES INC 4,153,425 4,153,425
SBC COMMUNICATIONS INC 430,727 17,706,550 18,137,277
SOUTHERN CO 578,150 578,150
SOUTHWEST AIRLINES CO 163,809 163,809
SPRINT CORP (FON GROUP) 165,903 9,649,200 9,815,103
SPRINT CORP PCS 29,750 29,750
TELEPHONE & DATA 2,436,075 2,436,075
TIDEWATER INC 536,400 536,400
TXU CORP 4,852,750 4,852,750
UAL INC 3,258,500 3,258,500
UNICOM CORPORATION 6,205,475 6,205,475
UNION PACIFIC CORP 420,219 52,063 5,128,156 5,600,438
UNITED PARCEL SERVICE-CL B 135,700 135,700
US CELLULAR CORP 1,871,100 1,871,100
WASTE MANAGEMENT INC 22,800 22,800
WILLIAMS COMPANIES INC 79,206 79,206
WORLDCOM INC 761,526 238,550 1,000,076
------------- ------------ ------------ -------------- --------------
38,079,047 3,906,695 4,103,080 127,197,094 173,285,916
------------- ------------ ------------ -------------- --------------
Wholesale Trade
SYSCO CORP 7,692,025 7,692,025
-------------- --------------
Total Common Stocks 305,383,077 43,856,620 26,532,356 1,099,613,570 1,475,385,624
------------- ------------ ------------ -------------- --------------
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINED PORTFOLIO OF INVESTMENTS
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH ALL-STAR LIBERTY
& INCOME LIBERTY GROWTH & GROWTH & PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND INCOME COMBINED
SHARES SHARES SHARES FUND SHARES SHARES
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
CASH EQUIVALENTS Par Par Par Par Par
ASSOCIATES FIRST CAPITAL 0.00% 7/3/2000 $ 2,130,000 $ 2,130,000
WARBURG REPURCHASE AGREEMENT
6.60% 7/3/2000 $ 1,567,000 $ 972,000 $ 25,932,000 28,471,000
Total Cash Equivalents
TOTAL INVESTMENTS
(COST OF $157,157,695, $43,810,733,
$25,098,509, $976,414,426 AND
$1,202,481,363, RESPECTIVELY)
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
SR&F GROWTH & ALL-STAR
INCOME LIBERTY GROWTH & LIBERTY GROWTH PRO FORMA
PORTFOLIO VALUE FUND INCOME FUND & INCOME FUND COMBINED
MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE MARKET VALUE
<S> <C> <C> <C> <C> <C> <C>
COMMON STOCKS
CASH EQUIVALENTS
ASSOCIATES FIRST CAPITAL 0.00% 7/3/2000 2,129,178 2,129,178
WARBURG REPURCHASE AGREEMENT
6.60% 7/3/2000 1,567,000 972,000 25,932,000 28,471,000
------------- ------------ ------------ -------------- --------------
Total Cash Equivalents 2,129,178 1,567,000 972,000 25,932,000 30,600,178
------------- ------------ ------------ -------------- --------------
TOTAL INVESTMENTS
(COST OF $157,157,695, $43,810,733,
$25,098,509, $976,414,426 AND
$1,202,481,363, RESPECTIVELY) $ 307,512,255 $ 45,423,620 $ 27,504,356 $1,125,545,570 $1,505,985,801
============= ============ ============ ============== ==============
</TABLE>
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINING CONDENSED STATEMENT OF ASSETS AND LIABILITIES
AS OF JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
SR&F Liberty Value Liberty Liberty All-Star
Growth & Income Opportunities Value Growth & Income
Portfolio Fund Fund Fund
<S> <C> <C> <C> <C>
Investments, at value $ 307,512,255 $ 308,179,637 $45,423,620 $ 27,504,356
Cash 3,884 - 342 4,096
Receivable for investments sold - - - -
Payable for investments purchased - - - -
Other assets less other liabilities 837,077 (351,328) 18,463 621
Net assets $ 308,353,216 $ 307,828,309 $45,442,425 $ 27,509,073
Class A:
Net assets $ 259,166 $10,441,098 $ 4,299,897
Shares outstanding 9,814 920,529 368,742
Net asset value $ 26.41 $ 11.34 $ 11.66
Class B:
Net assets $ 1,269,238 $19,380,181 $ 16,346,839
Shares outstanding 48,240 1,714,187 1,415,688
Net asset value $ 26.31 $ 11.31 $ 11.55
Class C:
Net assets $ 75,057 $ 1,934,018 $ 4,524,072
Shares outstanding 2,853 171,022 391,868
Net asset value $ 26.31 $ 11.31 $ 11.54
Class Z:
Net assets $ 1,004 $13,687,128 $ 2,338,265
Shares outstanding 38 1,206,557 199,907
Net asset value $ 26.42 $ 11.34 $ 11.70
Class S:
Net assets $ 306,223,844
Shares outstanding 11,601,266
Net asset value $ 26.40
</TABLE>
<TABLE>
<CAPTION>
Liberty
Growth & Income Pro Forma Pro Forma
Fund Adjustments Combined
<S> <C> <C> <C>
Investments, at value $ 1,125,545,570 $(308,179,637)(a) $1,505,985,801
Cash 176 - 8,498
Receivable for investments sold - - -
Payable for investments purchased - - -
Other assets less other liabilities 35,737,174 (598,356)(b) 35,643,651
Net assets $ 1,161,282,920 $(308,777,993) $1,541,637,950
Class A:
Net assets $ 309,356,714 (88,871) $ 324,268,004
Shares outstanding 15,017,711 (575,631) $ 15,741,165
Net asset value $ 20.60 $ 20.60
Class B:
Net assets $ 822,643,366 (236,071) $ 859,403,553
Shares outstanding 41,382,562 (1,331,122) $ 43,229,555
Net asset value $ 19.88 19.88
Class C:
Net assets $ 29,281,763 (14,477) $ 35,800,433
Shares outstanding 1,465,147 (239,972) $ 1,790,918
Net asset value $ 19.99 $ 19.99
Class Z:
Net assets $ 1,077 (13,961) $ 16,013,513
Shares outstanding 52 (633,328) $ 773,226
Net asset value $ 20.71 $ 20.71
Class S:
Net assets (71,396) $ 306,152,448
Shares outstanding 3,185,013 (c) $ 14,786,279
Net asset value $ 20.71
</TABLE>
Footnotes to pro forma statement of assets and liabilities
(a) - Adjustment represents the elimination the Liberty Value Opportunities
Fund's investment in the Portfolio, as the master/feeder structure will be
dissolved, with the the securities held by the Portfolio withdrawn from
the Portfolio by the Liberty Value Opportunities Fund prior to the merger.
(b) - Adjustment reflects a payable to the general partner of the Portfolio
for its remaining net assets after withdrawal of the Liberty Value
Opportunities Fund's investment in the Portfolio of $173,579, in addition
to one time proxy, accounting, legal and other costs of the reorganization
of $71,770, and $281,253 to be borne by Liberty Value Opportunities Fund,
and Liberty Growth & Income Fund respectively.
(c) - Liberty Value Opportunities Fund shares are exchanged for new Class S
shares of Liberty Growth & Income Fund, to be established upon
consummation of the merger. Initial per share value of Class S shares is
presumed to equal that of current Class Z shares.
<PAGE>
PRO FORMA COMBINING CONDENSED STATEMENT OF OPERATIONS FOR THE TWELVE MONTH
PERIOD ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY LIBERTY
SRF GROWTH VALUE ALL-STAR
& INCOME OPPORTUNITIES LIBERTY GROWTH &
PORTFOLIO FUND VALUE FUND INCOME
-------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends 4,456,261 4,451,174 852,965 268,398
Interest 1,058,561 1,056,847 46,028 37,185
----------- ---------- ---------- ---------
Total investment income 5,514,823 5,508,021 898,993 305,583
EXPENSES
Management fee 2,190,101 - 356,825 132,571
Administration fee - 545,843 - 44,190
Service fee - Class A, B, C - 866 80,902 49,748
Distribution fee - Class A - 23 - -
Distribution fee - Class B - 2,118 144,648 95,935
Distribution fee - Class C - 130 11,951 27,559
Transfer agent fee - Class A, B, C, Z - 819 - -
Transfer agent fee - Class S - 799,640 - -
Transfer agent fee 6,000 - 94,869 46,431
Bookkeeping fee 32,875 32,847 27,000 27,000
Trustees fee 17,578 9,169 7,463 12,950
Expenses allocated
from SRF Growth & Income Portfolio - 2,271,293 - -
All other expenses 27,280 269,696 129,672 221,950
----------- ---------- ---------- ---------
Total operating expenses 2,273,834 3,932,444 853,330 658,334
----------- ---------- ---------- ---------
Expense reimbursement - - (281,305) (208,902)
----------- ---------- ---------- ---------
Net Expenses 2,273,834 3,932,444 572,025 449,432
NET INVESTMENT INCOME (LOSS) 3,240,989 1,575,577 326,968 (143,849)
NET REALIZED & UNREALIZED GAIN (LOSS) Net realized gain (loss) on:
Investments 32,232,665 32,215,860 (5,244,334) (118,211)
Closed futures contracts 748,773 693,167 - -
Foreign currency transactions (1,375) (749) - -
----------- ---------- ---------- ---------
Net Realized Gain (Loss) 32,980,063 32,908,278 (5,244,334) (118,211)
Change in net unrealized appreciation/depreciation
during the period on investments 63,450,655 63,542,407 (1,924,598) 1,816,980
----------- ---------- ---------- ---------
Net Gain (Loss) 96,430,719 96,450,685 (7,168,932) 1,698,769
----------- ---------- ---------- ---------
Increase (Decrease) in Net Assets from Operations 99,671,708 98,026,261 (6,841,963) 1,554,920
</TABLE>
<TABLE>
<CAPTION>
LIBERTY
GROWTH & PRO FORMA PRO FORMA
INCOME FUND ADJUSTMENTS COMBINED
------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends 15,573,131 (4,456,261)(c) 21,145,668 21,145,668
Interest 1,966,931 (1,058,561)(c) 3,106,991
------------ ----------- ------------
Total investment income 17,540,062 (5,514,823) 24,252,658
EXPENSES
Management fee 9,452,952 2,094,167 (a) 12,036,515
Administration fee - (590,033)(a) -
Service fee - Class A, B, C 3,099,842 - (a) 3,231,358
Distribution fee - Class A - (23)(a) -
Distribution fee - Class B 6,593,089 - (a) 6,835,790
Distribution fee - Class C 244,861 - (a) 284,501
Transfer agent fee - Class A, B, C, Z - (819)(a) -
Transfer agent fee - Class S - (799,640)(a) -
Transfer agent fee 2,728,605 458,873 (e) 3,328,778
Bookkeeping fee 420,040 20,801 (a) 527,688
Trustees fee 56,473 (26,781)(b) 59,274
Expenses allocated -
from SRF Growth & Income Portfolio - (2,271,293)(c) -
All other expenses 1,052,407 (594,725)(d) 1,079,000
------------ ----------- ------------
Total operating expenses 23,648,269 (1,709,473) 27,382,904
------------ ----------- ------------
Expense reimbursement - 490,207 (a) -
------------ ----------- ------------
Net Expenses 23,648,269 (1,219,266) 27,382,904
NET INVESTMENT INCOME (LOSS) (6,108,207) 1,219,266 (3,130,246)
NET REALIZED & UNREALIZED GAIN (LOSS) Net realized gain (loss) on:
Investments 183,532,200 (32,232,665)(c) 210,385,514
Closed futures contracts - (748,773)(c) 693,167
Foreign currency transactions - 1,375 (c) (749)
------------ ------------
Net Realized Gain (Loss) 183,532,200 (32,980,063) 211,077,932
Change in net unrealized appreciation/depreciation
during the period on investments (170,105,574) (63,450,655)(c) (106,670,785)
------------ ----------- ------------
Net Gain (Loss) 13,426,626 (96,430,719) 104,407,148
------------ ----------- ------------
Increase (Decrease) in Net Assets from Operations 7,318,419 1,219,266 101,276,902
</TABLE>
(a) Based on the contract in effect for the surviving fund.
(b) Based on trustee compensation plan for the surviving fund.
(c) Due to elimination of master/feeder structure.
(d) Decrease due to the elimination of duplicative expenses achieved by merging
the funds.
(e) Based on the contract in effect for the surviving fund. Note that a new
transfer agent fee structure was implemented for Liberty Growth & Income
Fund effective January 1, 2000. The pro forma combined Transfer agent fee
shown assumes this new agreement was in effect for the entire twelve-month
period ended June 30, 2000.
<PAGE>
LIBERTY FUNDS TRUST VI
LIBERTY NEWPORT ASIA PACIFIC FUND
FORM N-14
PART B
STATEMENT OF ADDITIONAL INFORMATION
November 8, 2000
This Statement of Additional Information (the "SAI") relates to the
proposed Acquisition (the "Acquisition") of the Liberty Newport Tiger Cub Fund
Class A, B and C shares and the Stein Roe Small Cap Tiger Fund Class S shares
(together, the "Acquired Fund"), a series of Liberty Funds Trust II, by the
Liberty Newport Asia Pacific Fund (the "Acquiring Fund"), a series of Liberty
Funds Trust VI.
This SAI contains information which may be of interest to shareholders
but which is not included in the Prospectus/Proxy Statement dated November 8,
2000 (the "Prospectus/Proxy Statement") of the Acquiring Fund which relates to
the Acquisition. As described in the Prospectus/Proxy Statement, the Acquisition
would involve the transfer of all the assets of the Acquired Fund in exchange
for shares of the Acquiring Fund and the assumption of all the liabilities of
the Acquired Fund. The Acquired Fund would distribute the Acquiring Fund shares
it receives to its shareholders in complete liquidation of the Acquired Fund.
This SAI is not a prospectus and should be read in conjunction with the
Prospectus/Proxy Statement. The Prospectus/Proxy Statement has been filed with
the Securities and Exchange Commission and is available upon request and without
charge by writing to your Fund at One Financial Center, Boston, Massachusetts
02111 or by calling 1-800-426-3750.
TABLE OF CONTENTS
I. Additional Information about the Acquiring Fund..............
II. Additional Information about the Acquired Funds..............
III. Financial Statements.........................................
<PAGE>
I. ADDITIONAL INFORMATION ABOUT THE ACQUIRING FUND.
Incorporated by reference to Post-Effective Amendment No. 19 to the
Registration Statement on Form N-1A (filed on October 18, 1999) of Liberty Funds
Trust VI (Registration Statement Nos. 33-45117 and 811-6529).
II. ADDITIONAL INFORMATION ABOUT THE ACQUIRED FUND.
Incorporated by reference to Post-Effective Amendment No. 44 to the
Registrant's Registration Statement Form N-1A (filed on December 22, 1999) of
Liberty Funds Trust II (Registration Nos. 2-66976 and 811-3009).
III. FINANCIAL STATEMENTS.
This SAI is accompanied by the Annual Report for the year ended June
30, 2000 of the Acquiring Fund and the Semi-Annual Report for the six months
ended February 29, 2000 and the Annual Report for the year ended August 31, 1999
of the Acquired Fund, which contain historical financial information regarding
such Funds. Such reports have been filed with the Securities and Exchange
Commission and are incorporated herein by reference.
Pro forma financial statements of the Acquiring Fund for the
Acquisition are provided on the following pages.
-2-
<PAGE>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
PRO FORMA COMBINING CONDENSED STATEMENT OF ASSETS AND LIABILITIES As of June 30,
2000 (Unaudited)
Stein Roe Small Cap Tiger Fund merges into Liberty Newport Asia Pacific Fund
<TABLE>
<CAPTION>
STEIN ROE LIBERTY
SMALL CAP NEWPORT ASIA
TIGER PACIFIC PRO FORMA PRO FORMA
FUND FUND ADJUSTMENTS COMBINED
------------ ------------ ----------- ------------
<S> <C> <C> <C> <C>
Investments, at market value $ 12,945,519 $ 19,036,449 $ 31,981,968
Cash -- -- --
Receivable for investments sold -- -- --
Payable for investments purchased . -- -- --
Other assets less other liabilities 66,876 370,234 (59,353)(a) 377,757
Net assets $ 13,012,395 $ 19,406,683 $ 32,359,725
Class A
Net assets $ 4,897,892 $ 10,205,355 (26,500) $ 15,076,747
Shares outstanding 527,298 415,705 (327,877) 615,126
Net asset value $ 9.29 $ 24.55 $ 24.51
Class B
Net assets $ 6,979,125 $ 5,832,909 (25,272) $ 12,786,762
Shares outstanding 775,216 240,066 (488,210) 527,072
Net asset value $ 9.00 $ 24.30 $ 24.26
Class C
Net assets $ 905,753 $ 1,383,496 (4,178) $ 2,285,071
Shares outstanding 100,390 56,997 (63,118) 94,269
Net asset value $ 9.02 $ 24.27 $ 24.24
Class S
Net assets $ 229,625 (556) $ 229,069
Shares outstanding 24,608 (15,277) 9,331
Net asset value $ 9.33 $ 24.55
Net Assets - Class Z $ 1,984,923 (2,846) $ 1,982,077
Shares - Class Z 80,730 0 80,730
Net asset value per share - Class Z $ 24.59 $ 24.55
</TABLE>
(a) Adjustment reflects one time proxy, accounting, legal and other costs of the
reorganization of $31,525 and $27,828 to be borne by Stein Roe Small Cap Tiger
Fund and Liberty Newport Asia Pacific Fund respectively.
<PAGE>
PRO FORMA COMBINING CONDENSED STATEMENT OF OPERATIONS FOR THE TWELVE MONTH
PERIOD ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
<CAPTION>
LIBERTY NEWPORT
STEIN ROE SMALL ASIA PACIFIC PRO FORMA PRO FORMA
CAP TIGER FUND FUND ADJUSTMENTS COMBINED
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends 325,886 153,566 -- 479,452
Interest 40,869 58,040 -- 98,909
--------- --------- -------- ---------
Total investment income 366,755 211,607 -- 578,361
EXPENSES
Management fee 158,391 140,737 (20,659)(a) 278,469
Administration fee 34,433 35,184 -- (a) 69,617
Service fee - Class A, B, C 34,278 30,798 -- (a) 65,076
Distribution fee - Class B 55,784 26,808 -- (a) 82,592
Distribution fee - Class C 7,552 6,918 -- (a) 14,470
Transfer agent fee 33,229 34,941 3,034 (b) 71,204
Bookkeeping fee 27,000 27,000 (27,000)(a) 27,000
Trustees fee 5,898 6,271 (6,819)(c) 5,350
All other expenses 167,497 158,210 (167,207)(d) 158,500
--------- --------- -------- ---------
Total operating expenses 524,062 466,867 (218,651) 772,278
--------- --------- -------- ---------
Expense reimbursement (150,985) (134,943) 204,878 (e) (81,050)
--------- --------- -------- ---------
Net Expenses 373,077 331,924 (13,773) 691,228
NET INVESTMENT LOSS (6,322) (120,317) 13,773 (112,867)
NET REALIZED & UNREALIZED GAIN (LOSS)
Net realized gain on:
Investments 1,633,995 453,115 -- 2,087,110
Foreign currency transactions (10,803) (42,669) -- (53,471)
--------- --------- -------- ---------
Net Realized Gain 1,623,193 410,446 -- 2,033,638
Change in net unrealized appreciation/depreciation
during the period on:
Investments (410,614) 2,323,797 -- 1,913,182
Foreign currency transactions (3,039) 443 -- (2,596)
--------- --------- -------- ---------
Net Change in Unrealized Appreciation/Depreciation (413,653) 2,324,240 -- 1,910,586
--------- --------- -------- ---------
Net Gain 1,209,539 2,734,685 -- 3,944,225
--------- --------- -------- ---------
Increase in Net Assets from Operations 1,203,217 2,614,368 13,773 3,831,358
</TABLE>
(a) Based on the contract in effect for the surviving Fund.
(b) Based on the contract in effect for the surviving Fund. Note that a new
transfer agent fee structure was implemented for the Asia Pacific Fund
effective January 1, 2000. The pro forma combined transfer agent fee shown
assumes this new agreement was in effect for the entire twelve-month period
ended June 30, 2000.
(c) Based on trustee compensation plan for the surviving Fund.
(d) Decrease due to the elimination of duplicative expenses achieved by merging
the Funds.
(e) Based on the voluntary expense limitation currently in effect for the
surviving Fund.
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS (UNAUDITED) STEIN ROE
JUNE 30, 2000 SMALL CAP TIGER FUND
------------------------------
COUNTRY SHARES VALUE
<S> <C> <C> <C>
COMMON STOCK - 94.0%
CONSTRUCTION - 0.7%
SPECIAL TRADE CONTRACTORS - 0.7%
Zhejaing Expressway Co. Ltd. HK 1,000,000 $ 170,609
FINANCE, INSURANCE
AND REAL ESTATE 17.8%
DEPOSITORY INSTITUTIONS - 5.9%
Commonwealth Bank of Australia Au
DBS Bank Ltd. Si
Hang Seng Bank Ltd. HK 25,000 237,313
HSBC Holdings PLC HK
Overseas-Chinese Banking Corp. Ltd. Si
Suruga Bank, Ltd. Ja
---------
237,313
FINANCIAL SERVICES - 0.1%
Aeon Credit Service Ltd. Ja
HOLDING COMPANIES - 4.6%
Citic Pacific Ltd. HK
Dickson Concepts International Ltd. HK 500,000 455,385
Hutchison Whampoa Ltd. HK
Singapore Tech Engineering Ltd. Si
---------
455,385
INSURANCE CARRIERS - 0.6%
Thai Reinsurance Co Ltd. Th 239,850 208,060
NONDEPOSITORY CREDIT INSTITUTIONS - 1.5%
Acom Co., Ltd. Ja
Aiful Corporation Ja
Takefuji Corp. Ja
REAL ESTATE - 5.1%
Cheung Kong Holdings Ltd. HK 25,000 276,598
City Developments Ltd. Si 54,000 209,333
HKR International Ltd. HK 349,200 139,983
Sun Hung Kai Properties Ltd. HK 29,000 208,323
---------
834,237
MANUFACTURING - 27.1%
CHEMICALS & ALLIED PRODUCTS - 1.2%
Takeda Chemical Industries Ltd. Ja
COMMUNICATIONS EQUIPMENT - 3.2%
AsiaInfo Holdings, Inc.(a) 3,000 134,063
Matsushita Communication Industrial Co. Ja
Sony Corp. Ja
---------
134,063
ELECTRONIC & ELECTRICAL EQUIPMENT - 0.9%
Yamaichi Electronics Co., Ltd. Ja
Yokowo Co., Ltd. Ja
ELECTRONIC COMPONENTS - 6.6%
Kyocera Corp. Ja
Murata Manufacturing Co., Ltd. Ja
Rohm Company Ltd. Ja
Samsung Electronics Ko
TCL International Holdings HK 500,000 182,795
Tokyo Denpa Co. Ltd. Ja
United Microelectronics Corp., Ltd.
---------
182,795
ELECTRICAL INDUSTRIAL EQUIPMENT - 0.3%
Sodick Co., Ltd. (a) Ja
FOOD & KINDRED PRODUCTS - 1.3%
Ito En Ltd. Ja
Thai Union Frozen Products Th 160,000 340,860
---------
340,860
HOUSEHOLD APPLIANCES - 0.6%
Guangdong Kelon Electric Holdings, Class H HK 379,000 205,408
MACHINERY & COMPUTER EQUIPMENT - 3.2%
Canon, Inc. Ja
Fujitsu Ltd. Ja
Union Tool Ja
WYSE Technology Taiwan Ltd. Tw 139,000 248,820
---------
248,820
MEASURING & ANALYZING INSTRUMENTS - 6.1%
Avimo Singapore Ltd. Si 380,000 716,753
China Hong Kong Photo Products Holdings Ltd. HK 2,898,000 360,596
Keyence Corp. Ja
PT Modern Photo Film - Foreign Shares In 1,293,000 236,174
Venture Manufacturing Singapore Ltd. Si 50,000 509,156
1,822,679
MISCELLANEOUS MANUFACTURING - 0.4%
Secom Co., Ltd. Ja
</TABLE>
<TABLE>
<CAPTION>
Liberty Newport Pro-forma
Asia Pacific Fund Combined Fund
----------------------------------------------------------
Shares Value Shares Value
<S> <C> <C> <C> <C>
COMMON STOCK - 94.0%
CONSTRUCTION - 0.7%
SPECIAL TRADE CONTRACTORS - 0.7%
Zhejaing Expressway Co. Ltd. 328,000 $ 55,960 1,328,000 $ 226,569
FINANCE, INSURANCE
AND REAL ESTATE - 17.8%
DEPOSITORY INSTITUTIONS - 5.9%
Commonwealth Bank of Australia 8,650 142,957 8,650 142,957
DBS Bank Ltd. 50,771 652,134 50,771 652,134
Hang Seng Bank Ltd. 14,000 132,895 39,000 370,208
HSBC Holdings PLC 48,193 552,430 48,193 552,430
Overseas-Chinese Banking Corp. Ltd. 16,850 116,015 16,850 116,015
Suruga Bank, Ltd. 8,000 132,504 8,000 132,504
---------- ----------
1,728,935 1,966,248
FINANCIAL SERVICES - 0.1%
Aeon Credit Service Ltd. 800 47,538 800 47,538
HOLDING COMPANIES - 4.6%
Citic Pacific Ltd. 44,000 230,284 44,000 230,284
Dickson Concepts International Ltd. 500,000 455,385
Hutchison Whampoa Ltd. 47,000 590,846 47,000 590,846
Singapore Tech Engineering Ltd. 156,000 229,259 156,000 229,259
----------- ----------
1,050,389 1,505,774
INSURANCE CARRIERS - 0.6%
Thai Reinsurance Co Ltd. 239,850 208,060
NONDEPOSITORY CREDIT INSTITUTIONS - 1.5%
Acom Co., Ltd. 3,600 302,886 3,600 302,886
Aiful Corporation 1,350 124,533 1,350 124,533
Takefuji Corp. 600 72,496 600 72,496
----------- ----------
499,915 499,915
REAL ESTATE - 5.1%
Cheung Kong Holdings Ltd. 53,000 586,388 78,000 862,986
City Developments Ltd. 54,000 209,333
HKR International Ltd. 349,200 139,983
Sun Hung Kai Properties Ltd. 39,000 280,158 68,000 488,481
----------- ----------
866,546 1,700,783
MANUFACTURING - 27.1%
CHEMICALS & ALLIED PRODUCTS - 1.2%
Takeda Chemical Industries Ltd. 6,000 393,888 6,000 393,888
COMMUNICATIONS EQUIPMENT - 3.2%
AsiaInfo Holdings, Inc.(a) 2,300 102,781 5,300 236,844
Matsushita Communication Industrial Co. 1,000 116,770 1,000 116,770
Sony Corp. 7,500 700,339 7,500 700,339
----------- ----------
919,890 1,053,953
ELECTRONIC & ELECTRICAL EQUIPMENT - 0.9%
Yamaichi Electronics Co., Ltd. 5,000 161,762 5,000 161,762
Yokowo Co., Ltd. 5,000 127,570 5,000 127,570
----------- ----------
289,332 289,332
ELECTRONIC COMPONENTS - 6.6%
Kyocera Corp. 2,100 356,338 2,100 356,338
Murata Manufacturing Co., Ltd. 2,000 287,116 2,000 287,116
Rohm Company Ltd. 1,000 292,397 1,000 292,397
Samsung Electronics 2,030 671,871 2,030 671,871
TCL International Holdings 500,000 182,795
Tokyo Denpa Co. Ltd. 3,000 187,323 3,000 187,323
United Microelectronics Corp., Ltd. 68,400 190,340 68,400 190,340
----------- ----------
1,985,385 2,168,180
ELECTRICAL INDUSTRIAL EQUIPMENT - 0.3%
Sodick Co., Ltd. (a) 10,000 82,437 10,000 82,437
FOOD & KINDRED PRODUCTS - 1.3%
Ito En Ltd. 1,000 73,854 1,000 73,854
Thai Union Frozen Products 160,000 340,860
----------- ----------
73,854 414,714
HOUSEHOLD APPLIANCES - 0.6%
Guangdong Kelon Electric Holdings, Class H 379,000 205,408
MACHINERY & COMPUTER EQUIPMENT - 3.2%
Canon, Inc. 9,000 448,217 9,000 448,217
Fujitsu Ltd. 7,000 242,313 7,000 242,313
Union Tool 1,100 119,317 1,100 119,317
WYSE Technology Taiwan Ltd. 139,000 248,820
----------- ----------
809,847 1,058,667
MEASURING & ANALYZING INSTRUMENTS - 6.1%
Avimo Singapore Ltd. 380,000 716,753
China Hong Kong Photo Products Holdings Ltd. 2,898,000 360,596
Keyence Corp. 600 198,076 600 198,076
PT Modern Photo Film - Foreign Shares 1,293,000 236,174
Venture Manufacturing Singapore Ltd. 50,000 509,156
----------- ----------
198,076 2,020,755
MISCELLANEOUS MANUFACTURING - 0.4%
Secom Co., Ltd. 2,000 146,199 2,000 146,199
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
PRINTING & PUBLISHING - 2.7%
Singapore Press Holdings Ltd. Si
South China Morning Post HK 340,000 263,867
----------
263,867
RUBBER & PLASTIC - 0.6%
PT Dynaplast - Foreign Shares In 1,397,500 191,446
MINING & ENERGY - 3.4%
NONMETALLIC, EXCEPT FUELS - 0.7%
Eastern Water Resources Development
& Management Ltd. - Foreign Shares Th 332,000 241,408
OIL & GAS EXTRACTION - 2.7%
PetroChina Co., Ltd.(a) HK
RETAIL TRADE - 10.2%
APPAREL & ACCESSORY STORES - 4.6%
Esprit Holdings Ltd. HK 278,000 288,855
Giordano International Ltd. HK 200,000 304,018
Glorious Sun Enterprises HK 900,000 251,103
----------
843,976
FOOD STORES - 0.5%
President Chain Store Corp. Tw
GENERAL MERCHANDISE STORES - 1.6%
Don Quijote Co., Ltd. Ja
RYOHIN KEIKAKU CO LTD Ja
Seven-Eleven Japan Co. Ltd. Ja
----------
HOME FURNISHINGS & EQUIPMENT - 0.5%
Yamada Denki Co. Ja
MISCELLANEOUS RETAIL - 2.0%
Foster's Brewing Group Ltd. Au
Matsumotokiyoshi Ja
Sa Sa International Holdings Ltd. HK 1,500,000 215,506
----------
215,506
RESTAURANTS - 1.0%
Cafe de Coral Holdings Ltd. HK 500,000 179,588
SERVICES - 11.0%
AMUSEMENT & RECREATION - 0.3%
People Co., Ltd. Ja
AUTO REPAIR, RENTAL & PARKING - 1.1%
Park 24 Co. Ltd. Ja
BUSINESS SERVICES - 0.3%
Oracle Corp. Japan Ja
Oracle Corp. Japan - New Shares Ja
COMPUTER RELATED SERVICES - 7.5%
AsiaContent.Com HK 4,800 18,300
Bellsystem 24, Inc. Ja
Computer & Technologies Hldg. HK 270,000 275,348
Datacraft Asia Ltd. Si 136,980 1,205,424
Fujitsu Support & Services, Inc. Ja
Gigamedia ADR Tw
Orix Corp. Ja
SINA.Com (a) HK 1,200 30,750
Sunevision Holdings HK 41,207 33,037
Synnex Technology International Corp. Tw
----------
1,562,859
COMPUTER SOFTWARE - 1.8%
NIIT Ltd. In
Taiwan Semiconductor Manufacturing Co. (a) Tw
TRANSPORTATION, COMMUNICATIONS, ELECTRIC,
GAS & SANITARY SERVICES - 12.3%
AIR TRANSPORTATION - 0.8%
Beijing Capital International Airport Co., Ltd. CH 400,000 75,940
China Unicom Ltd. (a) HK
----------
75,940
COMMUNICATIONS - 0.1%
Advanced Information Services Th
ELECTRIC SERVICES - 0.1%
Hong Kong Electric Holdings Ltd. HK
GAS SERVICES - 2.0%
Hong Kong & China Gas Co., Ltd. HK 229,508 257,607
SANITARY SERVICES - 0.2%
Sanix, Inc. Ja --
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
PRINTING & PUBLISHING - 2.7%
Singapore Press Holdings Ltd. 31,400 490,526 31,400 490,526
South China Morning Post 194,000 150,559 534,000 414,426
---------- ----------
641,085 904,952
RUBBER & PLASTIC - 0.6%
PT Dynaplast - Foreign Shares 1,397,500 191,446
MINING & ENERGY - 3.4%
NONMETALLIC, EXCEPT FUELS - 0.7%
Eastern Water Resources Development
& Management Ltd. - Foreign Shares 332,000 241,408
OIL & GAS EXTRACTION - 2.7%
PetroChina Co., Ltd.(a) 4,248,000 882,775 4,248,000 882,775
RETAIL TRADE - 10.2%
APPAREL & ACCESSORY STORES - 4.6%
Esprit Holdings Ltd. 259,000 269,113 537,000 557,968
Giordano International Ltd. 262,000 398,263 462,000 702,281
Glorious Sun Enterprises 900,000 251,103
---------- ----------
667,376 1,511,352
FOOD STORES - 0.5%
President Chain Store Corp. 43,680 163,489 43,680 163,489
GENERAL MERCHANDISE STORES - 1.6%
Don Quijote Co., Ltd. 1,200 209,394 1,200 209,394
RYOHIN KEIKAKU CO LTD 1,200 152,801 1,200 152,801
Seven-Eleven Japan Co. Ltd. 2,000 167,327 2,000 167,327
---------- ----------
529,522 529,522
HOME FURNISHINGS & EQUIPMENT - 0.5%
Yamada Denki Co. 2,000 179,400 2,000 179,400
MISCELLANEOUS RETAIL - 2.0%
Foster's Brewing Group Ltd. 62,857 176,326 62,857 176,326
Matsumotokiyoshi 2,600 272,703 2,600 272,703
Sa Sa International Holdings Ltd. 1,500,000 215,506
---------- ----------
449,029 664,535
RESTAURANTS - 1.0%
Cafe de Coral Holdings Ltd. 410,000 147,263 910,000 326,851
SERVICES - 11.0%
AMUSEMENT & RECREATION - 0.3%
People Co., Ltd. 1,200 96,208 1,200 96,208
AUTO REPAIR, RENTAL & PARKING - 1.1%
Park 24 Co. Ltd. 3,000 376,627 3,000 376,627
BUSINESS SERVICES - 0.3%
Oracle Corp. Japan 200 72,439 200 72,439
Oracle Corp. Japan - New Shares 100 36,739 100 36,739
---------- ----------
109,178 109,178
COMPUTER RELATED SERVICES - 7.5%
AsiaContent.Com 4,800 18,300
Bellsystem 24, Inc. 200 98,095 200 98,095
Computer & Technologies Hldg. 270,000 275,348
Datacraft Asia Ltd. 3,120 27,456 140,100 1,232,880
Fujitsu Support & Services, Inc. 1,800 178,268 1,800 178,268
Gigamedia ADR 600 7,275 600 7,275
Orix Corp. 3,120 460,555 3,120 460,555
SINA.Com (a) 1,700 43,563 2,900 74,313
Sunevision Holdings 41,207 33,037
Synnex Technology International Corp. 22,000 118,145 22,000 118,145
---------- ----------
933,357 2,496,216
COMPUTER SOFTWARE - 1.8%
NIIT Ltd. 5,500 272,272 5,500 272,272
Taiwan Semiconductor Manufacturing Co. (a) 67,840 322,364 67,840 322,364
---------- ----------
594,636 594,636
TRANSPORTATION, COMMUNICATIONS, ELECTRIC,
GAS & SANITARY SERVICES - 12.3%
AIR TRANSPORTATION - 0.8%
Beijing Capital International Airport Co., Ltd. 400,000 75,940
China Unicom Ltd. (a) 88,000 186,823 88,000 186,823
---------- ----------
186,823 262,763
COMMUNICATIONS - 0.1%
Advanced Information Services 3,600 44,822 3,600 44,822
ELECTRIC SERVICES - 0.1%
Hong Kong Electric Holdings Ltd. 10,500 33,808 10,500 33,808
GAS SERVICES - 2.0%
Hong Kong & China Gas Co., Ltd. 366,190 411,022 595,698 668,629
SANITARY SERVICES - 0.2%
Sanix, Inc. 1,200 63,384 1,200 63,384
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
TELECOMMUNICATIONS - 9.1%
China Telecom Ltd. (a)(b) HK 100,000 889,989
Korea Telecom Corp. ADR Ko
Locus Corp. Ko 2,300 186,699
Nippon Telegraph & Telephone Corp. Ja
SK Telecom Ko
------------
1,076,688
WHOLESALE TRADE - 11.5%
DURABLE GOODS - 11.5%
Johnson Electric Holdings Ltd. HK 131,800 1,246,889
Li & Fung Ltd. HK 269,000 1,345,759
Softbank Corp. Ja
------------
2,592,648
TOTAL COMMON STOCKS (COST $9,833,517,
$14,327,139 AND $24,160,656) 12,341,762
WARRANTS - 0.6%
RETAIL TRADE - 0.6%
RESTAURANTS
Jollibee Foods Corp. (cost $294,000) Ph 669,500 185,757
SHORT-TERM OBLIGATIONS - 2.0% PAR
Lehman Brothers Repurchase Agreement $418,000 418,000
------------
TOTAL INVESTMENTS - 96.6% 12,945,519
OTHER ASSETS, LESS LIABILITIES - 3.4% 66,876
------------
NET ASSETS - 100.0% $ 13,012,395
============
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
TELECOMMUNICATIONS - 9.1%
China Telecom Ltd. (a)(b) 101,000 898,889 201,000 1,788,878
Korea Telecom Corp. ADR 3,600 174,150 3,600 174,150
Locus Corp. 2,300 186,699
Nippon Telegraph & Telephone Corp. 28 372,383 28 372,383
SK Telecom 1,450 474,705 1,450 474,705
------------- -------------
1,920,127 2,996,815
WHOLESALE TRADE - 11.5%
DURABLE GOODS - 11.5%
Johnson Electric Holdings Ltd. 34,000 321,657 165,800 1,568,546
Li & Fung Ltd. 152,000 760,429 421,000 2,106,188
Softbank Corp. 900 122,241 900 122,241
------------- -------------
1,204,327 3,796,975
TOTAL COMMON STOCKS (COST $9,833,517,
$14,327,139 AND $24,160,656) 18,782,449 31,560,354
WARRANTS - 0.6%
RETAIL TRADE - 0.6%
RESTAURANTS
Jollibee Foods Corp. (cost $294,000) 669,500 185,757
SHORT-TERM OBLIGATIONS - 2.0% PAR PAR
Lehman Brothers Repurchase Agreement $254,000 254,000 $672,000 672,000
------------- -------------
TOTAL INVESTMENTS - 96.6% 19,036,449 32,418,111
OTHER ASSETS, LESS LIABILITIES - 3.4% 370,234 (58,386)(C)
------------- -------------
NET ASSETS - 100.0% $ 19,406,683 $ 32,359,725
============== =============
</TABLE>
NOTES TO SCHEDULE OF INVESTMENTS:
(a) Non-income producing security.
(b) The value of this security represents fair value as determined in good faith
under the direction of the Trustees.
(c) Adjusted for one time proxy, accounting, legal and other costs of the
reorganization of $31,525 and $27,828 to be borne by Stein Roe Small Cap Tiger
Fund and Liberty Newport Asia Pacific Fund respectively.
ADR American Depositary Receipts
<PAGE>
Part C. OTHER INFORMATION
-----------------
Item 15. Indemnification
Article VIII of the Registrant's Agreement and Declaration of Trust, as amended,
provides for indemnification of the Registrant's Trustees and officers. The
effect of the relevant section of Article VIII of the Registrant's Agreement and
Declaration of Trust, as amended, is to provide indemnification for each of the
Registrant's Trustees and officers against liabilities and counsel fees
reasonably incurred in connection with the defense of any legal proceeding in
which such Trustee or officer may be involved by reason of being or having been
a Trustee or officer, except with respect to any matter as to which such Trustee
or officer shall have been adjudicated not to have acted in good faith in the
reasonable belief that such Trustee's or officer's action was in the best
interest of the Registrant, and except that no Trustee or officer shall be
indemnified against any liability to the Registrant or its shareholders to which
such Trustee or officer shall otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such Trustee's or officer's office.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to Trustees, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 16. Exhibits
(1)(a) Agreement and Declaration of Trust(3)
(1)(b) Amendment No. 1 to the Agreement and Declaration of
Trust(6)
(2) Amended By-Laws dated 4/1/99(6)
(3) Not Applicable
(4)(a) Form of Agreement and Plan of Reorganization between
Liberty Value Opportunities Fund and Liberty Growth &
Income Fund
(4)(b) Form of Agreement and Plan of Reorganization between
Liberty Value Fund and Liberty Growth & Income Fund
(4)(c) Form of Agreement and Plan of Reorganization between
Liberty All-Star Growth & Income Fund and Liberty
Growth & Income Fund
(4)(d) Form of Agreement and Plan of Reorganization between
Stein Roe Small Cap Tiger Fund, Class S shares,
Liberty Newport Tiger Cub Fund, Class A, B, C and Z
shares and Liberty Growth & Income Fund
(5) Article III, Section 4, Article V, Section 1, Article
VIII Section 4 and Article IX Sections 1 and 7 of the
Agreement and Declaration of Trust, as amended, and
Sections 2.1, 2.3 and 2.5 of the By-Laws, as amended,
each define the rights of shareholders
(6)(a) Form of Management Agreement between Liberty Funds
Trust VI on behalf of Liberty Growth & Income Fund
(formerly Colonial U.S. Growth & Income Fund) and
Colonial Management Associates, Inc.(1)
(6)(b) Amendment No. 1 to Management Agreement between
Liberty Funds Trust VI on behalf of Liberty Growth &
Income Fund (formerly Colonial U.S. Growth & Income
Fund) and Colonial Management Associates, Inc.(5)
(6)(c) Form of Management Agreement between Liberty Funds
Trust VI on behalf of Liberty Newport Asia Pacific
Fund and Newport Fund Management, Inc.(6)
(7)(a) Distribution Agreement between the Registrant and
Liberty Funds Distributor, Inc.(6)
(7)(b) Appendix I to the Distribution Agreement between the
Registrant and Liberty Funds Distributor, Inc. -
filed as Exhibit (e)(2) in Part C, Item 23 of
Post-Effective Amendment No. 63 to the Registration
Statement on Form N-1A of Liberty Funds Trust I
(File Nos. 2-41251 & 811-2214), filed with the
Commission on or about July 19, 2000, and is hereby
incorporated by reference and made a part of this
Registration Statement
(7)(c) Form of Selling Agreement - filed as Exhibit 6.(b) in
Part C, Item 24(b) of Post-Effective Amendment No. 49
to the Registration Statement on Form N-1A of Liberty
Funds Trust I (File Nos. 2-41251 & 811-2214), filed
with the Commission on or about November 20, 1998, and
is hereby incorporated by reference and made a part of
this Registration Statement
(7)(d) Form of Asset Retention Agreement(2)
(8) Discussion of trustee compensation is incorporated by
reference from the second paragraph under the
sub-caption "Trustee Compensation" in the
Proxy/Prospectus filed herewith.
(9)(a) Global Custody Agreement with The Chase Manhattan Bank
(4)
(9)(b) Amendment No. 13 to Appendix A of Global Custody
Agreement with The Chase Manhattan Bank - filed as
Exhibit (g)(2) in Part C, Item 23 of Post-Effective
Amendment No. 63 to the Registration Statement on Form
N-1A of Liberty Funds Trust I (File Nos. 2-41251 &
811-2214), filed with the Commission on or about July
19, 2000, and is hereby incorporated by reference and
made a part of this Registration Statement
(10)(a) Rule 12b-1 Distribution Plan - filed as Exhibit (m) in
Part C, Item 23 of Post-Effective Amendment No. 63 to
the Registration Statement on Form N-1A of Liberty
Funds Trust I (File Nos. 2-41251 & 811-2214), filed
with the Commission on or about July 19, 2000, and is
hereby incorporated by reference and made a part of
this Registration Statement
(10)(b) 12b-1 Plan Implementing Agreement between the
Registrant and Liberty Funds Distributor, Inc.(6)
(10)(c) Appendix I to the 12b-1 Plan Implementing Agreement
between the Registrant and Liberty Funds Distributor,
Inc. - filed as Exhibit (e)(4) in Part C, Item 23 of
Post-Effective Amendment No. 63 to the Registration
Statement on Form N-1A of Liberty Funds Trust I
(File Nos. 2-41251 & 811-2214), filed with the
Commission on or about July 19, 2000, and is hereby
incorporated by reference and made a part of this
Registration Statement
(10)(d) Plan pursuant to Rule 18f-3(d) under the Investment
Company Act of 1940 - filed as Exhibit (o) in Part C,
Item 23 of Post-Effective Amendment No. 63 to the
Registration Statement on Form N-1A of Liberty Funds
Trust I (File Nos. 2-41251 & 811-2214), filed with the
Commission on or about July 19, 2000, and is hereby
incorporated by reference and made a part of this
Registration Statement
(11)(a) Opinion and Consent of Counsel of Ropes & Gray with
respect to the Acquisition of Liberty Value
Opportunities Fund
(11)(b) Opinion and Consent of Counsel of Ropes & Gray with
respect to the Acquisition of Liberty Value Fund
(11)(c) Opinion and Consent of Counsel of Ropes & Gray with
respect to the Acquisition of Liberty All-Star Growth
and Income Fund
(11)(d) Opinion and Consent of Counsel of Ropes & Gray with
respect to the Acquisition of Stein Roe Small Cap
Tiger Fund, Class S shares and Liberty Newport Tiger
Cub Fund, Class A, B, C and Z shares
(12)(a) Opinion and Consent of Counsel on Tax Matters and
Consequences to Shareholders of Bell, Boyd & Lloyd
and Ropes & Gray with respect to the Acquisition of
Liberty Value Opportunities Fund
(12)(b) Opinion and Consent of Counsel on Tax Matters and
Consequences to Shareholders of Ropes & Gray with
respect to the Acquisition of Liberty Value Fund
(12)(c) Opinion and Consent of Counsel on Tax Matters and
Consequences to Shareholders of Ropes & Gray with
respect to the Acquisition of Liberty All-Star Growth
and Income Fund
(12)(d) Opinion and Consent of Counsel on Tax Matters and
Consequences to Shareholders of Ropes & Gray with
respect to the Acquisition of Stein Roe Small Cap
Tiger Fund, Class S shares and Liberty Newport Tiger
Cub Fund, Class A, B, C and Z shares
(13) Not Applicable
(14)(a) Consent of Independent Accountants (PWC)
(14)(b) Consent of Independent Accountants (Arthur Andersen)
(15) Not Applicable
(16)(a) Power of Attorney for: Tom Bleasdale, Lora S. Collins,
James E. Grinnell, Richard W. Lowry, Salvatore Macera,
William E. Mayer, James L. Moody, Jr., John J.
Neuhauser, Thomas E. Stitzel and Anne-Lee Verville -
filed with Part C, Item 23 of Post-Effective Amendment
No. 62 to the Registration Statement on Form N-1A of
Liberty Funds Trust I (File Nos. 2-41251 and
811-2214), filed with the Commission on or about
May 17, 2000 and is hereby incorporated by reference
and made a part of this Registration Statement
(16)(b) Power of Attorney for Joseph R. Palombo - filed with
Part C, Item 23 of Post-Effective Amendment No. 27 to
the Registration Statement on Form N-1A of Liberty
Funds Trust V (File Nos. 33-12109 and 811-5030), filed
with the Commission on or about August 31, 2000 and is
hereby incorporated by reference and made a part of
this Registration Statement
(17)(a) Amended and Restated Shareholders' Servicing and
Transfer Agent Agreement as amended(2)
(17)(b) Amendment No. 18 to Schedule A of Amended and Restated
Shareholders' Servicing and Transfer Agent Agreement
as amended - filed as Exhibit (h)(2) in Part C, Item
23 of Post-Effective Amendment No. 62 to the
Registration Statement on Form N-1A of Liberty Funds
Trust I (File Nos. 2-41251 and 811-2214), filed with
the Commission on or about May 17, 2000, and is hereby
incorporated by reference and made a part of this
Registration Statement
(17)(c) Amendment No. 23 to Appendix I of Amended and Restated
Shareholders' Servicing and Transfer Agent Agreement
as amended - filed as Exhibit (h)(3) in Part C, Item
23 of Post-Effective Amendment No. 63 to the
Registration Statement on Form N-1A of Liberty Funds
Trust I (File Nos. 2-41251 & 811-2214), filed with the
Commission on or about July 19, 2000, and is hereby
incorporated by reference and made a part of this
Registration Statement
(17)(d) Pricing and Bookkeeping Agreement(2)
(17)(e) Amendment to Appendix I of Pricing and Bookkeeping
Agreement - filed as Exhibit (h)(5) in Part C, Item 23
of Post-Effective Amendment No. 63 to the Registration
Statement on Form N-1A of Liberty Funds Trust I (File
Nos. 2-41251 & 811-2214), filed with the Commission on
or about July 19, 2000, and is hereby incorporated by
reference and made a part of this Registration
Statement
(17)(f) Amended and Restated Credit Agreement with Bank of
America - filed as Exhibit (h)(8) in Part C, Item 23
of Post-Effective Amendment No. 110 to the
Registration Statement on Form N-1A of Liberty Funds
Trust III (File Nos. 2-15184 and 811-881), filed with
the Commission on or about August 12, 1999, and is
hereby incorporated by reference and made part of this
Registration Statement
(17)(g) Amendment dated June 30, 2000 to the Amended and
Restated Credit Agreement with Bank of America filed
as Exhibit (h)(8) in Part C, Item 23 of Post-Effective
Amendment No. 115 to the Registration Statement on
Form N-1A of Liberty Funds Trust III (File Nos.
2-15184 and 811-881), filed with the Commission on or
about October 4, 2000, and is hereby incorporated by
reference and made a part of this Registration
Statement
(17)(h) Form of Administration Agreement with Colonial
Management Associates, Inc. on behalf of Liberty
Newport Asia Pacific Fund(6)
(17)(i) Code of Ethics of The Liberty Funds, Colonial
Management Associates, Inc. and Liberty Funds
Distributor, Inc. - filed in Part C, Item 23 of
Post-Effective Amendment No. 27 to the Registration
Statement of Liberty Funds Trust V, (File Nos.
33-12109 and 811-5030), filed with the Commission on
or about August 31, 2000, and is hereby incorporated
and made a part of this Registration Statement
(17)(j) Form of Proxy Card and Proxy Insert (Liberty Value
Opportunities Fund)
(17)(k) Form of Proxy Card and Proxy Insert (Liberty Value
Fund)
(17)(l) Form of Proxy Card and Proxy Insert (Liberty All-Star
Growth & Income Fund)
(17)(m) Form of Proxy Card and Proxy Insert (Stein Roe Small
Cap Tiger Fund)
(17)(n) The following documents, each filed via EDGAR and
listed with their filing accession number, are
incorporated by reference into the Proxy/Prospectus
and the Statement of Additional Information for the
funds referenced below:
o The Prospectuses of the Opportunities Fund dated November 22, 1999, with
respect to Class A, B and C shares and Class Z shares -
0000773757-99-000117
o As supplemented on February 1, 2000 - 0000773757-00-000008
o As supplemented on August 2, 2000 - 0000021832-00-000175
o As supplemented on August 15, 2000 - 0000021832-00-000192
o As supplemented on August 21, 2000 - 0000021832-00-000184
o The Prospectus of the Opportunities Fund dated February 1, 2000, with
respect to Class S shares - 0000773757-00-000004
o As supplemented on February 11, 2000 - 0000773757-00-000016
o As supplemented on April 20, 2000 - 0000773757-00-000023
o As supplemented on June 5, 2000 - 0000021832-00-000100
o As supplemented on June 23, 2000 - 0000021832-00-000114
o As supplemented on July 14, 2000 - 0000021832-00-000123
o As supplemented on August 2, 2000 - 0000021832-00-000175
o As supplemented on August 11, 2000 - 0000021832-00-000179
o As supplemented on August 28, 2000 - 0000021832-00-000209
o As supplemented on September 1, 2000- 0000021832-00-000219
o The Prospectuses of the Value Fund dated November 1, 1999 -
0000021832-99-000045
o As supplemented on December 28, 1999 - 0000276716-99-000023
o As supplemented on July 28, 2000 - 0000021832-00-000158
o As supplemented on August 1, 2000 - 0000883163-00-000072
o As supplemented on August 15, 2000 - 0000021832-00-000185
o The Prospectuses of the All-Star Fund dated March 17, 2000 -
0000021832-00-000049
o As supplemented on August 1, 2000 - 0000883163-00-000074
o As supplemented on August 15, 2000 - 0000021832-00-000185
o The Statement of Additional Information of the Opportunities Fund dated
November 22, 1999, with respect to Class A, B, C and Z shares -
0000773757-99-000117
o As supplemented on June 23, 2000- 0000021832-00-000114
o The Statement of Additional Information of the Opportunities Fund dated
February 1, 2000, with respect to Class S shares - 0000773757-00-000004
o As supplemented on June 23, 2000 - 0000021832-00-000114
o The Statement of Additional Information of the Value Fund dated November 1,
1999 - 0000021832-99-000045
o As supplemented on June 23, 2000 - 0000021832-00-000114
o As supplemented on August 21, 2000 - 0000021832-00-000188
o The Statement of Additional Information of the All-Star Fund dated March
17, 2000 - 0000021832-00-000049
o As supplemented on June 27, 2000 - 0000021832-00-000107
o As supplemented on August 21, 2000 - 0000021832-00-000188
o The Statement of Additional Information of the Growth & Income Fund dated
November 1, 1999 - 0000021832-99-000045
o As supplemented on June 23, 2000 - 0000021832-00-000114
o As supplemented on August 21, 2000 - 0000021832-00-000188
o The Report of Independent Accountants and financial statements included in
the Annual Report to Shareholders of the Opportunities Fund dated September
30, 1999 - 0000891804-99-002390
o The financial statements included in the Opportunities Fund's Semi-Annual
Report to Shareholders dated March 31, 2000 - 0000891804-00-001047
o The Report of Independent Accountants and financial statements included in
the Annual Report to Shareholders of the Value Fund dated June 30, 2000 -
0000950135-00-004447
o The Report of Independent Accountants and financial statements included in
the Annual Report to Shareholders of the All-Star Fund dated December 31,
1999 - 0000950135-00-001342
o The financial statements included in the All-Star Fund's Semi-Annual Report
to Shareholders dated June 30, 2000 - 0000950135-00-004268
o The Report of Independent Accountants and financial statements included in
the Annual Report to Shareholders of the Growth & Income Fund dated June
30, 2000 - 0000950156-00-000466
o The Statement of Additional Information of the Growth & Income Fund dated
November 8, 2000 relating to the Acquisitions.
o The Prospectus of the Tiger Cub Fund dated January 1, 2000 regarding Class
A, B and C shares - 0000883163-00-000001
o As supplemented on July 14, 2000 - 0000883163-00-000062
o As supplemented on and August 1, 2000 - 0000883163-00-000068
o The Prospectus of the Tiger Cub Fund dated January 1, 2000, as revised on May
1, 2000 regarding Class S shares - 0000883163-00-000036
o The Statement of Additional Information of the Tiger Cub Fund dated January 1,
2000, as revised on April 6, 2000 regarding Class A, B and C shares -
0000883163-00-000028
o As supplemented on August 21, 2000 - 0000021832-00-000188
o As supplemented on July 14, 2000 - 0000883163-00-000062
o The Statement of Additional Information of the Tiger Cub Fund dated January
1, 2000, as revised on May 1, 2000 regarding Class S shares - 0000883163-00-
000036
o As supplemented on August 21, 2000 - 0000021832-00-000188
o The Statement of Additional Information of the Asia Pacific Fund dated
November 1, 1999 - 0000021832-99-000045
o As supplemented on June 23, 2000 - 0000021832-00-000114
o As supplemented on August 21, 2000 - 0000021832-00-000188
o The Report of Independent Accountants and financial statements included in
the Annual Report to Shareholders of the Tiger Cub Fund dated August 31, 1999 -
0000950135-99-004953
o The financial statements included in the Tiger Cub Fund's Semi-Annual
Report to Shareholders dated February 29, 2000 - 0000950135-00-002628
o The financial statements included in the Asia Fund's Semi-Annual
Report to Shareholders dated December 31, 1999 - 0000950156-00-000148
o The Report of Independent Accountants and financial statements included in
the Annual Report to Shareholders of the Asia Fund dated June 30, 2000 -
0000950156-00-000465
o The Statement of Additional Information of the Asia Pacific Fund dated
November 8, 2000 relating to the Acquisition.
o Post-Effective Amendment No. 20 to the Registration Statement of Liberty
Funds Trust VI relating to the Prospectus and Statement of Additional
Information of Liberty Newport Asia Pacific Fund, Class S and Liberty
Growth and Income Fund, Class S - 0000021832-00-000252
-------------------------------------
(1) Incorporated by reference to the Registrant's Post-Effective Amendment
No. 7 on Form N-1A, filed with the Securities and Exchange Commission
on October 11, 1995.
(2) Incorporated by reference to the Registrant's Post-Effective Amendment
No. 10 on Form N-1A, filed with the Securities and Exchange Commission
on or about September 27, 1996.
(3) Incorporated by reference to the Registrant's Post-Effective Amendment
No. 11 on Form N-1A, filed with the Securities and Exchange Commission
on or about October 28, 1996.
(4) Incorporated by reference to the Registrant's Post-Effective Amendment
No. 13 on Form N-1A, filed with the Securities and Exchange Commission
on or about October 24, 1997.
(5) Incorporated by reference to the Registrant's Post-Effective Amendment
No. 16 on Form N-1A, filed with the Securities and Exchange Commission
on or about November 25, 1998.
(6) Incorporated by reference to the Registrant's Post-Effective Amendment
No. 17 on Form N-1A, filed with the Securities and Exchange Commission
on or about May 24, 1999.
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this Registration Statement by any
person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act, the reoffering
prospectus will contain the information called for by the
applicable registration form for reofferings by persons who may
be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an
amendment to this Registration Statement and will not be used
until the amendment is effective, and that, in determining any
liability under the 1933 Act, each post-effective amendment
shall be deemed to be a new registration statement for the
securities offered therein, and the offering of the securities
at that time shall be deemed to be the initial bona fide
offering of them.
<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust of Liberty Funds Trust VI
(Trust), as amended, is on file with the Secretary of The Commonwealth of
Massachusetts and notice is hereby given that this Registration Statement has
been executed on behalf of the Trust by officers of the Trust as officers and by
its Trustees as trustees and not individually, and the obligations of or arising
out of this Registration Statement are not binding upon any of the Trustees,
officers or shareholders of the Trust individually but are binding only upon the
assets and property of Liberty Funds Trust VI.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the Registrant, in the City of Boston and Commonwealth of
Massachusetts, on the 5th day of October, 2000.
LIBERTY FUNDS TRUST VI
By:/s/STEPHEN E. GIBSON
-----------------------------
Stephen E. Gibson
President
As required by the Securities Act of 1933, this Registration Statement has been
signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/STEPHEN E. GIBSON President (chief October 5, 2000
----------------- executive officer)
Stephen E. Gibson
/s/PAMELA A. MCGRATH Treasurer and Chief October 5, 2000
----------------- Financial Officer (principal
Pamela A. McGrath financial and accounting
officer)
<PAGE>
/s/TOM BLEASDALE* Trustee
-------------------
Tom Bleasdale
/s/LORA S. COLLINS* Trustee
-------------------
Lora S. Collins
/s/JAMES E. GRINNELL* Trustee
---------------------
James E. Grinnell
/s/RICHARD W. LOWRY* Trustee
--------------------
Richard W. Lowry
/s/SALVATORE MACERA* Trustee
-------------------
Salvatore Macera
*/s/ WILLIAM J. BALLOU
----------------------
William J. Ballou
/s/WILLIAM E. MAYER* Trustee Attorney-in-fact
-------------------- For each Trustee
William E. Mayer October 5, 2000
/s/JAMES L. MOODY, JR. * Trustee
---------------------
James L. Moody, Jr.
/s/JOHN J. NEUHAUSER* Trustee
---------------------
John J. Neuhauser
/s/JOSEPH R. PALOMBO* Trustee
---------------------
Joseph R. Palombo
/s/THOMAS E. STITZEL* Trustee
---------------------
Thomas E. Stitzel
/s/ANNE-LEE VERVILLE* Trustee
---------------------
Anne-Lee Verville
<PAGE>
EXHIBIT INDEX
Exhibit
(4)(a) Form of Agreement and Plan of Reorganization between Liberty
Value Opportunities Fund and Liberty Growth & Income Fund
(4)(b) Form of Agreement and Plan of Reorganization between Liberty
Value Fund and Liberty Growth & Income Fund
(4)(c) Form of Agreement and Plan of Reorganization between Liberty
All-Star Growth & Income Fund and Liberty Growth & Income Fund
(4)(d) Form of Agreement and Plan of Reorganization between
Stein Roe Small Cap Tiger Fund, Class S shares,
Liberty Newport Tiger Cub Fund, Class A, B, C and Z
shares and Liberty Growth & Income Fund
(11)(a) Opinion and Consent of Counsel of Ropes & Gray with respect to
the Acquisition of Liberty Value Opportunities Fund
(11)(b) Opinion and Consent of Counsel of Ropes & Gray with respect to
the Acquisition of Liberty Value Fund
(11)(c) Opinion and Consent of Counsel of Ropes & Gray with respect to
the Acquisition of Liberty All-Star Growth and Income Fund
(11)(d) Opinion and Consent of Counsel of Ropes & Gray with respect to
the Acquisition of Stein Roe Small Cap Tiger Fund, Class S shares
and Liberty Newport Tiger Cub Fund, Class A, B, C and Z shares
(12)(a) Opinion and Consent of Counsel on Tax Matters and
Consequences to Shareholders of Bell, Boyd & Lloyd
and Ropes & Gray with respect to the Acquisition of
Liberty Value Opportunities Fund
(12)(b) Opinion and Consent of Counsel on Tax Matters and Consequences to
Shareholders of Ropes & Gray with respect to the Acquisition of
Liberty Value Fund
(12)(c) Opinion and Consent of Counsel on Tax Matters and Consequences to
Shareholders of Ropes & Gray with respect to the Acquisition of
Liberty All-Star Growth and Income Fund
(12)(d) Opinion and Consent of Counsel on Tax Matters and Consequences to
Shareholders of Ropes & Gray with respect to the Acquisition of
Stein Roe Small Cap Tiger Fund, Class S shares and Liberty
Newport Tiger Cub Fund, Class A, B, C and Z shares
(14)(a) Consent of Independent Accountants (PWC)
(14)(b) Consent of Independent Accountants (Arthur Anderson)
(17)(j) Form of Proxy Card and Proxy Insert (Liberty Value Opportunities
Fund)
(17)(k) Form of Proxy Card and Proxy Insert (Liberty Value Fund)
(17)(l) Form of Proxy Card and Proxy Insert (Liberty All-Star Growth &
Income Fund)
(17)(m) Form of Proxy Card and Proxy Insert (Stein Roe Small Cap Tiger
Fund)
