-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SkIHDLNFPapul508QsWdbqKVasHoD5gLReb0OTpRSZbc5hDmJvl+p2tDkMIHyv/F ejLc+0md5zRGQqpod8nTGA== 0000021847-98-000103.txt : 19980911 0000021847-98-000103.hdr.sgml : 19980911 ACCESSION NUMBER: 0000021847-98-000103 CONFORMED SUBMISSION TYPE: DEFS14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981030 FILED AS OF DATE: 19980910 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLONIAL TRUST I CENTRAL INDEX KEY: 0000021832 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046143403 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: SEC FILE NUMBER: 811-02214 FILM NUMBER: 98707465 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL HIGH YIELD SECURITIES TRUST DATE OF NAME CHANGE: 19910917 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL HIGH YIELD SECURITIES INC DATE OF NAME CHANGE: 19850909 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL SENIOR SECURITIES INC DATE OF NAME CHANGE: 19810909 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLONIAL TRUST III CENTRAL INDEX KEY: 0000021847 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 046012903 FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: SEC FILE NUMBER: 811-00881 FILM NUMBER: 98707466 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL GROWTH SHARES TRUST DATE OF NAME CHANGE: 19910917 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL GROWTH SHARES INC DATE OF NAME CHANGE: 19860827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLONIAL TRUST IV CENTRAL INDEX KEY: 0000276716 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 042651415 FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: SEC FILE NUMBER: 811-02865 FILM NUMBER: 98707467 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL TAX EXEMPT TRUST DATE OF NAME CHANGE: 19910917 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL TAX EXEMPT HIGH YIELD TRUST DATE OF NAME CHANGE: 19851117 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL TAX MANAGED TRUST DATE OF NAME CHANGE: 19841009 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLONIAL TRUST II / CENTRAL INDEX KEY: 0000315665 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 046452949 FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: SEC FILE NUMBER: 811-03009 FILM NUMBER: 98707468 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL MONEY MARKET FUND DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL TRUST II DATE OF NAME CHANGE: 19920505 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL MONEY MARKET TRUST/MA/ DATE OF NAME CHANGE: 19910917 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLONIAL TRUST V CENTRAL INDEX KEY: 0000810891 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: SEC FILE NUMBER: 811-05030 FILM NUMBER: 98707469 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CTR CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 FORMER COMPANY: FORMER CONFORMED NAME: COLONIAL MASSACHUSETTS TAX EXEMPT TRUST DATE OF NAME CHANGE: 19911016 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LFC UTILITIES TRUST CENTRAL INDEX KEY: 0000878606 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: SEC FILE NUMBER: 811-06393 FILM NUMBER: 98707470 BUSINESS ADDRESS: STREET 1: ONE SOUTH WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3123687842 MAIL ADDRESS: STREET 1: 1 SOUTH WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COLONIAL TRUST VI CENTRAL INDEX KEY: 0000883163 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046700215 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: SEC FILE NUMBER: 811-06529 FILM NUMBER: 98707471 BUSINESS ADDRESS: STREET 1: ONE FINANCIAL CENTER CITY: BOSTON STATE: MA ZIP: 02111 BUSINESS PHONE: 6174263750 DEFS14A 1 COMPLEX PROXY COLONIAL MUTUAL FUNDS One Financial Center, Boston, Massachusetts 02111 (617) 426-3750 Dear Shareholder: The Colonial Mutual Funds, as listed in the Notice of Special Meetings of Shareholders, will hold special meetings on October 30, 1998 at 10:00 a.m. Eastern Time, at the offices of Colonial Management Associates, Inc. (CMA), the Colonial Mutual Funds' investment adviser and/or administrator. An exhibit summarizing the proposals and the voting process (Exhibit A attached hereto) and formal Notice of Special Meetings of Shareholders appear on the next few pages, followed by the proxy statement which explains in more detail the proposals to be considered. We hope that you can attend the Meetings in person; however, we urge you in any event to vote your shares at your earliest convenience. 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) OR IN PERSON. TO VOTE THROUGH OUR WEB SITE, JUST FOLLOW THE SIMPLE INSTRUCTIONS THAT APPEAR ON THE ENCLOSED PROXY INSERT. PLEASE HELP YOUR COLONIAL MUTUAL FUND AVOID THE EXPENSE OF A FOLLOW-UP MAILING BY VOTING TODAY! The Colonial Mutual Funds are using Shareholder Communications Corporation (SCC), a professional proxy solicitation firm, to assist shareholders in the voting process. As the date of the special meetings 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 proxy statement, please feel free to call SCC at 1-800-733-8481, ext. 400. Our hearing impaired shareholders may call Colonial Investors Service Center, Inc., the Colonial Mutual Funds' transfer agent, at 1-800-528-6979 if you have special TTD equipment. 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 September 9, 1998 D-85/497F-0998 EXHIBIT A Throughout this exhibit and the proxy statement, the Funds, which are managed and/or administered by CMA, are referred to collectively as the "Colonial Mutual Funds". The following table lists the proposals, the affected Funds and the page of the proxy statement the proposals are discussed in greater detail: - ---------------------------------------------------------------------------- Colonial Mutual Fund Whose Shareholders are Entitled to Table of Proposals Vote Contents - ---------------------------------------------------------------------------- 1. To elect a Board of Each Colonial Mutual Fund Page 6 Trustees. - ---------------------------------------------------------------------------- 2. To amend fundamental Each Colonial Mutual Fund Page 11 investment policies (except for Colonial regarding borrowing and Municipal Money Market Fund, lending. LFC Utilities Trust and Colonial Money Market Fund) - ---------------------------------------------------------------------------- 3. To reclassify the Colonial High Yield Page 17 fundamental investment Securities Fund, Colonial policy regarding the Income Fund, Colonial purchase of illiquid Intermediate U.S. Government securities. Fund, The Colonial Fund, Colonial Federal Securities Fund, Colonial Global Equity Fund, Colonial International Horizons Fund, Colonial Tax-Exempt Fund, Colonial Tax-Exempt Insured Fund, Colonial High Yield Municipal Fund, Newport Japan Opportunities Fund, Newport Tiger Cub Fund, Newport Greater China Fund and Colonial Utilities Fund - ----------------------------------------------------------------------------
- ---------------------------------------------------------------------------- 4. To amend the Colonial California Page 18 fundamental investment Tax-Exempt Fund policy regarding diversification. - ---------------------------------------------------------------------------- 5. To approve policies for Each Colonial Mutual Fund Page 19 a master fund/feeder fund (except for Colonial Global structure. Utilities Fund, Colonial Municipal Money Market Fund, LFC Utilities Trust and Colonial Money Market Fund) - ----------------------------------------------------------------------------
VOTING PROCESS. You can vote in any one of the following four ways: a. By internet, by visiting our Web site at www.libertyfunds.com and clicking on "Proxy Voting;" b. By mail, by filling out and returning the enclosed proxy card; c. By fax (not available for all shareholders; refer to enclosed proxy insert); or d. In person at the Meetings. Shareholders who owned shares on the Record Date, August 21, 1998, are entitled to vote at the Meetings. 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 Fund 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. Whichever method you choose, please carefully read the proxy statement which outlines in more detail the proposals you are asked to vote on. NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS TO BE HELD ON OCTOBER 30, 1998 COLONIAL TRUST I COLONIAL TRUST IV Colonial High Yield Securities Fund Colonial High Yield Municipal Fund Colonial Income Fund Colonial Intermediate Tax-Exempt Fund Colonial Strategic Income Fund Colonial Tax-Exempt Fund Stein Roe Advisor Tax-Managed Colonial Tax-Exempt Insured Fund Growth Fund Colonial Municipal Money Market Fund Colonial Utilities Fund COLONIAL TRUST II COLONIAL TRUST V Colonial Money Market Fund Colonial California Tax-Exempt Fund Colonial Intermediate Colonial Connecticut Tax-Exempt U.S. Government Fund Fund Colonial Short Duration Colonial Florida Tax-Exempt Fund U.S. Government Fund Colonial Massachusetts Tax-Exempt Newport Japan Opportunities Fund Fund Newport Greater China Fund Colonial Michigan Tax-Exempt Fund Newport Tiger Cub Fund Colonial Minnesota Tax-Exempt Fund Colonial New York Tax-Exempt Fund Colonial North Carolina Tax-Exempt Fund Colonial Ohio Tax-Exempt Fund COLONIAL TRUST III COLONIAL TRUST VI The Colonial Fund Colonial Aggressive Growth Fund Colonial Federal Securities Fund Colonial Equity Income Fund Colonial Global Equity Fund Colonial International Equity Fund Colonial International Horizons Fund Colonial Small Cap Value Fund Colonial Select Value Fund Colonial U.S. Growth & Income Fund Colonial Strategic Balanced Fund Colonial Global Utilities Fund LFC UTILITIES TRUST (master fund of Colonial Global Utilities Fund)
1 NOTICE IS HEREBY GIVEN that Special Meetings of Shareholders (Meetings) of the Colonial Mutual Funds listed above will be held at the offices of Liberty Funds Distributor, Inc., the Colonial Mutual Funds' distributor and Colonial Management Associates, Inc., the Colonial Mutual Funds' investment adviser and/or administrator, One Financial Center, Boston, Massachusetts 02111 on Friday, October 30, 1998 at 10:00 a.m. Eastern Time. The purpose of the Meetings is to consider and act upon the following proposals and to transact such other business as may properly come before the Meetings or any adjournments thereof. PROPOSALS: 1. Shareholders of each Trust vote: To elect a Board of Trustees for that Trust; 2. Shareholders of the Colonial Mutual Funds (except for Colonial Municipal Money Market Fund, Colonial Money Market Fund and LFC Utilities Trust) vote: To amend fundamental investment policies regarding borrowing and lending; 3. Shareholders of Colonial High Yield Securities Fund, Colonial Income Fund, Colonial Intermediate U.S. Government Fund, The Colonial Fund, Colonial Federal Securities Fund, Colonial Global Equity Fund, Colonial International Horizons Fund, Colonial Tax-Exempt Fund, Colonial Tax-Exempt Insured Fund, Colonial High Yield Municipal Fund, Newport Japan Opportunities Fund, Newport Tiger Cub Fund, Newport Greater China Fund and Colonial Utilities Fund vote: To reclassify the fundamental investment policy regarding the purchase of illiquid securities; 4. Shareholders of Colonial California Tax-Exempt Fund vote: To amend the fundamental investment policy regarding diversification; 2 5. Shareholders of the Colonial Mutual Funds (except for Colonial Global Utilities Fund, Colonial Municipal Money Market Fund, Colonial Money Market Fund and LFC Utilities Trust) vote: To approve policies for a master fund/feeder fund structure; and 6. Transact such other business as may properly come before the Meetings or any adjournment thereof. By order of the Board of Trustees, Nancy L. Conlin, Secretary September 9, 1998 NOTICE: 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) OR IN PERSON. TO VOTE THROUGH OUR WEB SITE, JUST FOLLOW THE SIMPLE INSTRUCTIONS THAT APPEAR ON THE ENCLOSED PROXY INSERT. PLEASE HELP YOUR COLONIAL MUTUAL FUND AVOID THE EXPENSE OF A FOLLOW-UP MAILING BY VOTING TODAY! 3 SPECIAL MEETINGS OF SHAREHOLDERS COLONIAL MUTUAL FUNDS PROXY STATEMENT General Information September 9, 1998 This proxy statement, which is divided into the following four parts, is a combined proxy statement for all of the Colonial Mutual Funds listed in the Notice of Special Meetings of Shareholders: Part 1. Overview. Page 4 Part 2. Proposals. Page 6 Part 3. Information Regarding Voting and Shareholder Meetings. Page 21 Part 4. Fund Information. Page 24 If at any time you have any questions regarding the information contained in the proxy statement, please call SCC at 1-800-733-8481, ext. 400. This proxy statement was first mailed to shareholders on September 9, 1998. PART 1. OVERVIEW. The Board of Trustees of the Colonial Mutual Funds has called Special Meetings of Shareholders (Meetings) for 10:00 a.m. Eastern Time, Friday, October 30, 1998, for the purposes described in the accompanying Notice of Special Meetings of Shareholders and as summarized below. The purpose of this proxy statement is to provide you with additional information regarding the proposals to be voted on at the Meetings and to request your proxy to vote in favor of the proposals. Set forth below is a summary of each proposal that the Board of Trustees recommends that you consider: PROPOSAL 1. ELECTION OF A BOARD OF TRUSTEES. We ask that you consider the election of thirteen nominees as members of the Board of Trustees. Each nominee, if elected, will serve as a trustee of the Colonial Mutual Funds until the next meetings of shareholders or until a successor is elected, or until death, resignation, removal or retirement. 4 PROPOSAL 2. AMEND FUNDAMENTAL INVESTMENT POLICIES REGARDING BORROWING AND LENDING. We ask that you approve amending the fundamental investment policies regarding borrowing and lending so that we can establish an interfund lending program for all of the Colonial Mutual Funds. This program would permit your Colonial Mutual Fund to borrow money from another Colonial Mutual Fund as needed to satisfy redemption requests. In addition, the program would allow your Colonial Mutual Fund to lend money to another Colonial Mutual Fund to meet its temporary borrowing needs. Normally, the Colonial Mutual Funds have sufficient cash to satisfy daily redemption requests. However, there are times when a Fund could be short on cash which would delay payment of redemption proceeds for up to seven days. Generally, the interfund lending program would allow the Colonial Mutual Funds to meet redemption requests on the next business day after the request was received. The Board of Trustees believes that the program will benefit the Colonial Mutual Funds by facilitating a Fund's flexibility to use the most cost-effective alternative to satisfy these short-term borrowing requirements. PROPOSAL 3. RECLASSIFY A FUNDAMENTAL INVESTMENT POLICY REGARDING THE PURCHASE OF ILLIQUID SECURITIES. Each Colonial Mutual Fund has adopted as a fundamental investment policy a limit (either 10% or 15%) on the amount of illiquid securities that may be held by the Colonial Mutual Fund. The policy was made a fundamental policy because of regulatory and business conditions at the time. With the passage of time and the change in regulatory standards, this policy is no longer required to be stated as a fundamental policy. Therefore, in order to simplify and modernize the Colonial Mutual Funds' fundamental investment policies, the Colonial Mutual Funds' Board of Trustees recommends reclassifying this policy as "non-fundamental". PROPOSAL 4. AMEND THE FUNDAMENTAL INVESTMENT POLICY REGARDING DIVERSIFICATION. We ask that you approve amending the fundamental investment policy concerning diversification to change the Colonial California Tax-Exempt Fund (California Fund) from a diversified fund to a non-diversified fund. The California Fund was organized as a diversified investment company for marketing reasons and for the more favorable tax treatment under California law for diversified funds. Because the marketing reasons and the tax reasons for diversified funds no longer exist, we are asking that the shareholders of the California Fund approve an amendment of 5 the fundamental investment policy regarding diversification so that that the Fund can change from a diversified fund to a non-diversified fund. This change would increase management flexibility by allowing the Fund to take larger positions in issuers. PROPOSAL 5. APPROVE POLICIES FOR A MASTER FUND/FEEDER FUND STRUCTURE. We ask that you approve policies so that your Colonial Mutual Fund has the ability to convert to a master fund/feeder fund structure. The Board of Trustees has no present plans to convert any of the Colonial Mutual Funds to a master fund/feeder fund structure; however, in the future, it may be advantageous to convert the Colonial Mutual Funds to obtain greater efficiencies. Currently, the Colonial Mutual Funds' fundamental policies do not allow for such a structure. Obtaining your approval now would eliminate expenses and delays associated with subsequent shareholder meetings. Your Colonial Mutual Fund would only be able to convert to a master fund/feeder fund if the Board of Trustees believes it is in the best interest of both you and your Colonial Mutual Fund. PART 2. PROPOSALS. PROPOSAL 1. TO ELECT A BOARD OF TRUSTEES. The purpose of this proposal is to elect four new members as well as the currently serving members of the Board of Trustees of the Colonial Mutual Funds. All of the nominees listed below, except for the proposed four new members (Ms. Verville, Messrs. Carberry, Macera and Dr. Stitzel), are currently members of the Board of Trustees of the Colonial Mutual Funds, five Colonial closed-end funds and Newport Tiger Fund, and have served in that capacity continuously since originally elected or appointed. Ms. Verville, Messrs. Carberry, Macera and Dr. Stitzel were recommended for election as Trustees of the Colonial Mutual Funds by the Board of Trustees at a meeting held on June 18, 1998. Each of the nominees elected will serve as a Trustee of each of the Colonial Mutual Funds until the next meetings of shareholders of the Colonial Mutual Funds 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. 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 each Colonial Mutual Fund (if so instructed). 6 The following table sets forth certain information about each nominee:
Year of Election or Recommended for Election Nominee Name & Age Principal Occupation (1) and Directorships as Trustee - ------------------ ------------------------------------------------------ Robert J. Birnbaum Retired (formerly Special Counsel, 1995 (70) Dechert Price & Rhoads (law) from September, 1988 to December, 1993). Director or Trustee: Liberty All-Star Equity Fund, Liberty All-Star Growth Fund, Inc., The Emerging Germany Fund. Tom Bleasdale Retired (formerly Chairman of the Board 1987 (68) and Chief Executive Officer, Shore Bank & Trust Company (banking) from 1992 to 1993). Director: Empire Company Limited. John Carberry(2) Senior Vice President of Liberty 1998 (51) Financial Companies, Inc. (formerly Managing Director, Salomon Brothers (investment banking) from January, 1988 to January, 1998). Lora S. Collins Attorney (formerly Attorney, Kramer, 1991 (62) Levin, Naftalis & Frankel (law) from September, 1986 to November, 1996). James E. Grinnell Private Investor since November, 1988. 1995 (68) Director or Trustee: Liberty All-Star Equity Fund, Liberty All-Star Growth Fund, Inc. Richard W. Lowry Private Investor since August, 1987. 1995 (62) Director or Trustee: Liberty All-Star Equity Fund, Liberty All-Star Growth Fund, Inc. Salvatore Macera Private Investor (formerly Executive Vice 1998 (67) President of Itek Corp. and President of Itek Optical & Electronic Industries, Inc. (electronics)). Trustee: Liberty Variable Investment Trust, Stein Roe Variable Investment Trust. 7 Year of Election or Recommended for Election Nominee Name & Age Principal Occupation (1) and Directorships as Trustee - ------------------ ------------------------------------------------------- William E. Mayer(3) Partner, Development Capital, LLC 1994 (57) (investments) (formerly Dean of the College of Business and Management, University of Maryland (higher education) from October, 1992 to November, 1996; Dean of the Simon Graduate School of Business, University of Rochester (higher education) from October, 1991 to July, 1992). Director or Trustee: Hambrecht & Quist Incorporated, Chart House Enterprises, Johns Manville, Liberty All-Star Equity Fund. James L. Moody, Jr. Retired (formerly Chairman of the Board 1986 (66) from May, 1994 to May, 1997, Chief Executive Officer and Director from May, 1973 to May, 1992, Hannaford Bros. Co. (food distributor)). Director or Trustee: Penobscot Shoe Co., Staples, Inc., UNUM Corporation, IDEXX Laboratories, Inc., Empire Company Limited. John J. Neuhauser Dean of the School of Management, Boston 1985 (55) College (higher education) since 1977. Director or Trustee: Hyde Athletic Industries, Inc., Liberty All-Star Equity Fund, Liberty All-Star Growth Fund, Inc. Thomas E. Stitzel Professor of Finance, College of 1998 (58) Business, Boise State University (higher education); Business consultant and author. Trustee: Liberty Variable Investment Trust, Stein Roe Variable Investment Trust. Robert L. Sullivan Retired Partner, KPMG Peat Marwick LLP 1989 (70) (management consulting) (formerly self-employed management consultant). Anne-Lee Verville Consultant (formerly General Manager, 1998 (51) Global Education Industry from 1994 to 1997, and President, Applications Solutions Division from 1991 to 1994, IBM Corporation (global education and global applications).
- --------------------------- (1) Except as otherwise noted, each individual has held the office indicated or other offices in the same company for the last five years. 8 (2) Mr. Carberry is an "interested person," as defined in the Investment Company Act of 1940 (1940 Act), because of his affiliation with Liberty Financial Companies, Inc. (Liberty Financial), an indirect majority-owned subsidiary of Liberty Mutual Insurance Company. (3) Mr. Mayer is an "interested person," as defined in the 1940 Act because of his affiliation with Hambrecht & Quist Incorporated (a registered broker-dealer). Trustees' Compensation; Meetings and Committees A. Trustees' Compensation. The Board of Trustees serve as Trustees of the Colonial Mutual Funds, including Newport Tiger Fund and five Colonial closed-end funds, for which each Trustee 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 and the lead Trustee receive an annual retainer of $5,000 and the Committee chairs receive $1,000 for each special meeting attended on a day other than a regular joint meeting day. Committee members receive an annual retainer of $1,000 and $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 Colonial Mutual Funds based on each Colonial Mutual Fund's relative net assets, and one-third of the fees are divided equally among the Colonial Mutual Funds. Further information concerning the Trustees' compensation is disclosed under Part 4. Fund Information on page 24. B. Meetings and Committees. The current Board of Trustees of the Colonial Mutual Funds, consists of one interested and eight non-interested Trustees. The Audit Committee of the Colonial Mutual Funds, consisting of Messrs. Bleasdale, Grinnell, Lowry, Moody and Sullivan, 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. The Compensation Committee of the Colonial Mutual Funds, consisting of Ms. Collins and Messrs. Birnbaum, Grinnell and Neuhauser, all of whom are non-interested Trustees, reviews compensation of the Board of Trustees. 9 The Governance Committee of the Colonial Mutual Funds, consisting of Messrs. Bleasdale, Lowry, Mayer, Moody and Sullivan (Mr. Mayer being the only interested member), 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 applicable Colonial Mutual Fund. The Board of Trustees and the Committees held the following number of meetings during the following fiscal years ended: October 31, 1997 of Colonial Trust III and Stein Roe Advisor Tax-Managed Growth Fund (10/31/97 Funds); November 30, 1997 of Colonial Trust IV (11/30/97 Funds); December 31, 1997 of Colonial Trust I (excluding Stein Roe Advisor Tax-Managed Growth Fund) (12/31/97 Funds); January 31, 1998 of Colonial Trust V (1/31/98 Funds); June 30, 1998 of Colonial Trust VI, Colonial Money Market Fund and Colonial Municipal Money Market Fund (6/30/98 Funds); and August 31, 1998 of Colonial Trust II and Colonial Federal Securities Fund (8/31/98 Funds); as follows: - -----------------------------------------------------------------------
10/31/97 Funds 11/30/97 Funds 12/31/97 Funds - ----------------------------------------------------------------------- Board of Trustees 6 6 6 - ----------------------------------------------------------------------- Audit Committee 3 2 2 - ----------------------------------------------------------------------- Compensation Committee 3 2 2 - ----------------------------------------------------------------------- Governance Committee 4 3 5 - ----------------------------------------------------------------------- 1/31/98 Funds 6/30/98 Funds 8/31/98 Funds - ----------------------------------------------------------------------- Board of Trustees 6 6 6 - ----------------------------------------------------------------------- Audit Committee 3 3 3 - ----------------------------------------------------------------------- Compensation Committee 2 2 1 - ----------------------------------------------------------------------- Governance Committee 4 4 5 - -----------------------------------------------------------------------
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. If any nominee listed above becomes unavailable for election, the enclosed proxy card may be voted for a substitute nominee in the discretion of the proxy holder(s). THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF EACH COLONIAL MUTUAL FUND VOTE FOR PROPOSAL 1. 10 REQUIRED VOTE FOR PROPOSAL 1 For each Colonial Mutual Fund, a plurality of the votes cast at the Meetings, if a quorum is represented, is required for the election of each Trustee. PROPOSAL 2. TO AMEND FUNDAMENTAL INVESTMENT POLICIES REGARDING BORROWING AND LENDING (Each Colonial Mutual Fund except for Colonial Money Market Fund, Colonial Municipal Money Market Fund and LFC Utilities Trust - herein referred to for purposes of this Proposal 2 as "Colonial Funds") A. Purpose of This Proposal. The Board of Trustees has approved an interfund lending program for the Colonial Funds and any affiliated funds and related changes to the Colonial Funds' investment policies on borrowing and lending. The program will allow one Colonial Fund to lend money to another Colonial Fund if it makes good financial sense for both Colonial Funds to do so. The Colonial Funds do not currently intend to use this program to leverage their investments. The Colonial Funds intend to submit an application to the Securities and Exchange Commission (SEC) to participate in such a program. B. Reasons for Colonial Funds to Participate in an Interfund Lending Program. When available cash is not sufficient to meet shareholder redemptions, it may be advantageous for a Colonial Fund to borrow money for a short time instead of raising cash by selling portfolio securities, which would be disruptive to the Fund's investment strategy. The Board of Trustees believes that the program will benefit the Colonial Funds by facilitating a Colonial Fund's flexibility to use the most cost-effective alternative to satisfy these short-term borrowing requirements. The Board of Trustees also believes that a Colonial Fund needing cash may be able to obtain lower interest rates on short-term borrowing through an interfund lending program and that the Colonial Fund lending the cash may be able to obtain a higher rate of return with interest rates on alternative short-term investments. Interfund lending would be permitted only if the terms are at least as favorable as the terms each Colonial Fund could otherwise negotiate with a third party and if the transaction is conducted in accordance with certain safeguards set forth on pages 12 and 13. (These safeguards are generally imposed by the SEC as conditions to the SEC's authorization to enter into such a program.) C. Current Policy on Borrowing. Normally, the Colonial Funds have sufficient cash to satisfy daily redemption requests. However, there are times when a Colonial Fund could be short on cash while awaiting settlement of its 11 securities trades (typically a three business day process). Pursuant to current law, the Colonial Fund could defer payment of sale proceeds for up to seven days. However, generally, the interfund lending program would allow the Colonial Funds to borrow money to meet redemption requests on the next business day after the request was received. The Colonial Funds currently maintain a $200 million committed credit facility with Bank of America National Trust and Savings Association for short-term borrowing needs. It is expected that the interfund lending program will supplement, rather than replace, the credit facility as a means of satisfying these borrowing needs. D. Current Policy on Lending. The Colonial Funds maintain cash reserves to satisfy daily redemption requests. The Colonial Funds may put their cash reserves to work by entering into repurchase agreements whereby a Colonial Fund buys a security from a bank or dealer, which is obligated to buy it back at a fixed price and time. Basically, the repurchase agreement arrangements are loans from the Colonial Funds to the bank or dealer. The difference between the purchase and resale prices represents the Colonial Funds' interest on the loan. E. The Interfund Lending Program Will Allow the Colonial Funds to Match the Borrowing and Lending Needs of Different Funds. The interfund lending program would allow CMA, the Colonial Funds' investment adviser and/or administrator, on any given day to match up the Colonial Funds wishing to borrow money to satisfy redemption requests and the Colonial Funds wishing to lend money to banks to generate additional income. CMA could arrange loans between the matched Colonial Funds, pursuant to the master loan agreement and the SEC's conditions for this program. By arranging loans between the matched Colonial Funds instead of banks, the Colonial Funds will be able to borrow money more cost effectively and lend money more profitably. F. Credit Risks. When one Colonial Fund lends money to another Colonial Fund, the lending Colonial Fund is subject to credit risks if the borrowing Colonial Fund fails to repay the loan. The Colonial Funds presently face similar risks when lending money to a bank through repurchase agreements. The Board of Trustees believes that the risk is extremely minimal in both cases. To minimize credit risks, the Colonial Funds will not be permitted to participate in the program unless participating in the program provides a more favorable interest rate than the interest rate a bank can offer. Also, if a Colonial Fund borrows or lends money through the program, the borrowing or lending activity must be consistent with its investment objective and investment policies. Other important safeguards for the Colonial Funds include the following: a. Interfund loan rates will be determined by a pre-established formula based on quotations from independent banks. b. If a Colonial Fund has outstanding borrowings from all 12 sources greater than 10% of its total assets, then the Colonial Fund must secure each additional outstanding interfund loan by the pledge of segregated collateral. c. A Colonial Fund may not make interfund loans in excess of 5% (equity funds), 7.5% (bond funds) or 10% (money market funds) of its net assets. d. A Colonial Fund's interfund loan to any one Colonial Fund shall not exceed 5% of the lending Colonial Fund's net assets. e. An interfund loan may not be outstanding for more than seven days. f. A Colonial Fund's interfund borrowings may not exceed 125% of the Colonial Fund's total redemptions for the preceding seven days. g. CMA must allocate interfund loans on an equitable basis among funds, without the intervention of the portfolio manager of any Colonial Fund. h. Reports must be made to the Board of Trustees with respect to any interfund loans, and the Board of Trustees will monitor the program to ensure that each Colonial Fund's participation is appropriate. G. Changes to Fundamental Policies to Permit Participation in the Interfund Lending Program and to Increase the Permitted Amount of Borrowing. The Colonial Funds' current fundamental investment policies regarding borrowing and lending do not allow for the interfund lending program. The Board of Trustees recommends that the Colonial Funds' shareholders vote to amend the current fundamental investment policies on borrowing and lending to allow for such a program. 1. Borrowing Policies, as Described Below: a. The Colonial Funds' current fundamental investment policies with respect to borrowing are as follows: (i) Newport Greater China Fund, Newport Japan Opportunities Fund, Newport Tiger Cub Fund, Colonial High Yield Municipal Fund and Stein Roe Advisor Tax-Managed Growth Fund may: "Issue senior securities only through borrowing money from banks for temporary or emergency purposes up to 10% of its net assets." 13 (ii) Colonial Global Equity Fund, Colonial International Horizons Fund, Colonial Strategic Balanced Fund, Colonial Intermediate Tax-Exempt Fund, Colonial Utilities Fund, Colonial Tax-Exempt Fund, Colonial Tax-Exempt Insured Fund, Colonial Aggressive Growth Fund, Colonial U.S. Growth & Income Fund, Colonial International Equity Fund, Colonial Equity Income Fund, Colonial Small Cap Value Fund, Colonial High Yield Securities Fund, Colonial Income Fund, Colonial Strategic Income Fund, Colonial Short Duration U.S. Government Fund, Colonial Intermediate U.S. Government Fund, Colonial Federal Securities Fund, The Colonial Fund and Colonial Select Value Fund may: "Issue senior securities only through borrowing money from banks for temporary or emergency purposes up to 10% of its net assets; however, the Fund will not purchase additional portfolio securities while borrowings exceed 5% of net assets." (iii) Colonial California Tax-Exempt Fund, Colonial Connecticut Tax-Exempt Fund, Colonial Florida Tax-Exempt Fund, Colonial Massachusetts Tax-Exempt Fund, Colonial Michigan Tax-Exempt Fund, Colonial Minnesota Tax-Exempt Fund, Colonial New York Tax-Exempt Fund, Colonial North Carolina Tax-Exempt Fund and Colonial Ohio Tax-Exempt Fund may: "Issue senior securities only through borrowing money from banks for temporary or emergency purposes up to 10% of its net assets (entering into repurchase agreements and other similar instruments is not considered the issuance of a senior security); however, the Fund will not purchase additional portfolio securities while borrowings exceed 5% of net assets." (iv) Colonial Global Utilities Fund may: "Issue senior securities (as defined in the Act and the rules thereunder) or borrow money, except that as temporary measure for extraordinary or emergency purposes, each of the Fund and the Portfolio may borrow from banks in aggregate amounts at any one time outstanding not exceeding 33 1/3% of the total assets (including the amount borrowed) of the Fund or Portfolio, respectively, valued at market; and neither the Fund nor the Portfolio may purchase any securities at any time when borrowings exceed 5% of the total assets of the Fund or the Portfolio, respectively (taken at market value); and except that the Fund and the Portfolio may enter into options and futures transactions." 14 b. The Board of Trustees recommends amending the above fundamental investment policies regarding borrowing for each Colonial Fund as set forth below. In addition to amending these policies to permit interfund borrowings, the Board of Trustees recommends amending these policies to permit each Colonial Fund to borrow up to 33 1/3% of its total assets. The Colonial Funds' current policies of limiting borrowings to 10% of assets and only for temporary or emergency purposes were adopted a number of years ago in response to certain regulatory requirements or business or industry conditions that no longer exist. These proposed changes will not materially affect how the Colonial Funds are managed because the Funds will continue their policy of not leveraging their assets: "The Fund may borrow from banks, other affiliated funds and other entities to the extent permitted by applicable law, provided that the Fund's borrowings shall not exceed 33 1/3% of the value of its total assets (including the amount borrowed) less liabilities (other than borrowings) or such other percentage permitted by law." 2. Lending Policies, as Described Below: a. The Colonial Funds' current fundamental investment policies with respect to lending are as follows: Each Colonial Fund's, with the exception of Colonial Global Utilities Fund, current fundamental investment policies with respect to lending is as follows: "The Fund may make loans through lending of securities not exceeding 30% of total assets, through the purchase of debt instruments or similar evidences of indebtedness typically sold privately to financial institutions and through repurchase agreements." b. Colonial Global Utilities Fund's current fundamental investment policy with respect to lending is as follows: "The Fund may make loans to other persons except (a) through the lending of securities held by the Fund or the Portfolio, but not in excess of 30% of the total assets of the Fund or the Portfolio, respectively, or (b) through the purchase of debt securities in accordance with the respective investment policies of the Fund and the Portfolio." 15 The Board of Trustees recommends amending the above fundamental investment policy regarding lending for each Colonial Fund as set forth below. In addition to amending these policies to permit interfund lending, the Board of Trustees recommends amending these policies to permit the Colonial Funds to engage in securities lending without limitation. The Funds have no present intention of engaging in securities lending. "The Fund may make loans (a) through lending of securities, (b) through the purchase of debt instruments or similar evidences of indebtedness typically sold privately to financial institutions, (c) through an interfund lending program with other affiliated funds provided that no such loan may be made if, as a result, the aggregate of such loans would exceed 33 1/3% of the value of its total assets (taken at market value at the time of such loans) and (d) through repurchase agreements." THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF EACH COLONIAL FUND VOTE FOR PROPOSAL 2. REQUIRED VOTE FOR PROPOSAL 2 For each Colonial Fund, approval requires the affirmative vote of a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the Colonial Fund, which means the affirmative vote of the lesser of (1) more than 50% of the outstanding shares of the Colonial Fund or (2) 67% or more of the shares of the Colonial Fund present at the Meetings if more than 50% of the outstanding shares of the Colonial Fund are represented at the Meetings in person or by proxy. 16 PROPOSAL 3. TO RECLASSIFY THE FUNDAMENTAL INVESTMENT POLICY REGARDING THE PURCHASE OF ILLIQUID SECURITIES (Colonial High Yield Securities Fund, Colonial Income Fund, Colonial Intermediate U.S. Government Fund, The Colonial Fund, Colonial Federal Securities Fund, Colonial Global Equity Fund, Colonial International Horizons Fund, Colonial Tax-Exempt Fund, Colonial Tax-Exempt Insured Fund, Colonial High Yield Municipal Fund, Newport Japan Opportunities Fund, Newport Tiger Cub Fund, Newport Greater China Fund and Colonial Utilities Fund - herein referred to for purposes of this Proposal 3 as the "Colonial Funds"). Each Colonial Fund has adopted as a fundamental investment policy a limit (either 10% or 15%) on the amount of illiquid securities that may be held by the Colonial Fund. The policy was made a fundamental policy because of regulatory and business conditions at the time. With the passage of time and the change in regulatory standards, this policy is no longer required to be stated as a fundamental policy. Therefore, in order to simplify and modernize the Colonial Funds' fundamental investment policies, the Colonial Funds' Board of Trustees recommends reclassifying this policy as "non-fundamental". A non-fundamental investment policy may be changed by a Fund's Board of Trustees without shareholder approval. Many of the Colonial Funds' fundamental investment policies on illiquid securities limit the Colonial Funds' investments in illiquid securities to 10% of assets. At the time these policies were adopted, this policy reflected the position of the SEC. However, several years ago the SEC modified this policy to permit open-end funds (other than money market funds) to invest up to 15% of their net assets in illiquid securities. Therefore, in order to achieve greater uniformity among all of the Colonial Mutual Funds, the Colonial Funds' Board of Trustees has approved increasing the permitted amount of illiquid assets the Colonial Funds' can invest in to 15% of a Fund's net assets. Although this change would allow the Colonial Funds greater investment flexibility, if the Colonial Funds increased their investments in illiquid securities, it could increase the Colonial Funds' level of investment risk due to the relative difficulty of disposing of illiquid securities. THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF EACH APPLICABLE COLONIAL FUND VOTE FOR PROPOSAL 3. 17 REQUIRED VOTE FOR PROPOSAL 3 For each Colonial Fund, approval requires the affirmative vote of a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the Colonial Fund, which means the affirmative vote of the lesser of (1) more than 50% of the outstanding shares of the Colonial Fund or (2) 67% or more of the shares of the Colonial Fund present at the Meetings if more than 50% of the outstanding shares of the Colonial Fund are represented at the Meetings in person or by proxy. PROPOSAL 4. TO AMEND THE FUNDAMENTAL INVESTMENT POLICY REGARDING DIVERSIFICATION (Colonial California Tax-Exempt Fund herein referred to as the "California Fund") The California Fund was organized in 1986 as a diversified investment company under the 1940 Act. As a diversified fund the California Fund may not, with respect to 75% of its assets, invest more than 5% of its assets in a single company or own more than 10% of the securities of a single company. The California Fund was organized as a diversified fund because of marketing reasons and for the more favorable tax treatment under California law for diversified funds. However, there is no longer a tax reason favoring diversified funds because the California law which distinguished diversified funds from non-diversified funds has since been repealed. In addition, the marketing reasons in favor of a diversified fund no longer exist. The Board of Trustees recommends that the California Fund be changed from a diversified fund to a non-diversified fund which would increase management flexibility by allowing the Fund to take larger positions in issuers. CMA currently advises eight other state municipal funds, all of which are organized as non-diversified funds. Because the California Fund's status as a diversified fund is a fundamental investment policy, this policy would need to be eliminated to effect this change. The current fundamental investment policy provides that the Fund may: "Not concentrate more than 25% of its total assets in any one industry [or with respect to 75% of total assets purchase any security (other than obligations of U.S. government and cash items including receivables) if as a result more than 5% of its total assets would then be invested in securities of a single issuer or purchase the voting securities of an issuer if, as a result of such purchase the Fund would own more than 10% of the outstanding voting shares of such issuer]." 18 The Board of Trustees of the California Fund recommends that the bracketed language in the above policy be deleted. THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF THE CALIFORNIA FUND VOTE FOR PROPOSAL 4. REQUIRED VOTE FOR PROPOSAL 4 Approval requires the affirmative vote of a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the California Fund, which means the affirmative vote of the lesser of (1) more than 50% of the outstanding shares of the California Fund or (2) 67% or more of the shares of the California Fund present at the Meetings if more than 50% of the outstanding shares of the California Fund are represented at the Meetings in person or by proxy. PROPOSAL 5. TO APPROVE POLICIES FOR A MASTER FUND/FEEDER FUND STRUCTURE (Each Colonial Mutual Fund except for Colonial Global Utilities Fund, Colonial Municipal Money Market Fund, LFC Utilities Trust and Colonial Money Market Fund - herein referred to for purposes of this Proposal 5 as "Colonial Funds") A. Overview of Master Fund/Feeder Fund Structure. "Master fund/feeder fund" refers to a structure in which a fund (a feeder fund) seeks to achieve its investment objective by investing all or substantially all of its assets in shares of, or interests in, another fund (the master fund) having a similar investment objective and policies as the feeder fund. The master fund, in turn, invests in individual securities. Typically, a master fund will have more than one feeder fund, with each feeder fund marketed to a particular class or classes of investors or through a different distribution channel. For example, shares of one feeder fund might be offered to individual investors, shares of another feeder fund to institutions, and shares of a third to retirement plans or their participants. The primary reason to use the master fund/feeder fund structure is to provide a mechanism to pool, in a single master fund, investments of different investor classes, resulting in a larger portfolio, investment and administrative efficiencies and economies of scale. The diagram below compares each Colonial Fund's current structure to a typical master fund/feeder fund structure. CMA currently acts as administrator for three funds that utilize a master fund/feeder fund structure, Colonial Global Utilities Fund, Colonial Municipal Money Market Fund and Colonial Money Market Fund. 19 CURRENT STRUCTURE Fund Shareholders ---------- Individual Securities Fund ---------- MASTER FUND/FEEDER FUND STRUCTURE Fund Shareholders Other Feeder Fund Shareholders - ---- ------------- ------------- Fund* Other Feeder Other Feeder - ---- Fund* Fund* ------------- ------------- ------------- Individual Securities Master Fund ------------- *Each feeder fund holds only interests in the master feeder B. No Current Plans to Convert any of the Colonial Funds to a Master Fund/Feeder Fund Structure. The Board of Trustees has no present plans to convert any of the Colonial Funds to a master fund/feeder fund structure. However, in the future it may be advantageous for the Colonial Funds to be converted in order to obtain greater efficiencies. The Board of Trustees is proposing new disclosure to the Colonial Funds' Statements of Additional Information which would eliminate having to obtain a subsequent shareholder vote before implementing a conversion. This would eliminate the expenses and delays associated with subsequent shareholder meetings if any of the Colonial Funds wish to convert to a master fund/feeder fund structure. Any such conversions would need to be approved by the Board of Trustees and notification of the conversion would be provided to shareholders. C. Management under a Master Fund/Feeder Fund Structure. The Colonial Funds would not be managed significantly differently under a master fund/feeder fund structure. The master fund in which the assets of the feeder fund would invest would have a similar investment objective and substantially the same investment policies as the feeder fund. Therefore, the master fund will invest in the same types of securities in which the feeder fund is authorized to invest. D. Changes to Fundamental Investment Policies to Allow the Conversion to a Master Fund/Feeder Fund Structure. Currently, the Colonial Funds have fundamental investment policies that may not permit the Funds to organize as a 20 master fund/feeder fund. The Board of Trustees recommends adding the following sentence to each Colonial Fund's Statement of Additional Information to clarify that the Funds may be organized as a master fund/feeder fund structure: "Notwithstanding the investment policies and restrictions of the Fund, the Fund may invest all or a portion of its investable assets in investment companies with substantially the same investment objective, policies and restrictions as the Fund." THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF EACH COLONIAL FUND VOTE FOR PROPOSAL 5. REQUIRED VOTE FOR PROPOSAL 5 For each Colonial Fund, approval requires the affirmative vote of a "majority of the outstanding voting securities" (as defined in the 1940 Act) of the Colonial Fund, which means the affirmative vote of the lesser of (1) more than 50% of the outstanding shares of the Colonial Fund or (2) 67% or more of the shares of the Colonial Fund present at the Meetings if more than 50% of the outstanding shares of the Colonial Fund are represented at the Meetings in person or by proxy. PART 3. INFORMATION REGARDING VOTING AND SHAREHOLDER MEETINGS. This section provides further information regarding the methods of voting and shareholder meetings. In Parts 3 and 4, the following acronym codes will be used to identify the Colonial Mutual Funds: - ------------------------------------------------------------------------------
COLONIAL MUTUAL COLONIAL MUTUAL CODE FUND CODE FUND - ------------------------------------------------------------------------------ CAGF Colonial Aggressive CMMMF Colonial Municipal Money Growth Fund Market Fund - ------------------------------------------------------------------------------ CCATEF Colonial California CNYTEF Colonial New York Tax-Exempt Fund Tax-Exempt Fund - ------------------------------------------------------------------------------ CCTTEF Colonial Connecticut CNCTEF Colonial North Carolina Tax-Exempt Fund Tax-Exempt Fund - ------------------------------------------------------------------------------ CEIF Colonial Equity Income COHTEF Colonial Ohio Tax-Exempt Fund Fund - ------------------------------------------------------------------------------ CFSF Colonial Federal CSVF Colonial Select Value Securities Fund Fund - ------------------------------------------------------------------------------
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COLONIAL MUTUAL COLONIAL MUTUAL CODE FUND CODE FUND - ------------------------------------------------------------------------------ CFLTEF Colonial Florida CSDUSGF Colonial Short Duration Tax-Exempt Fund U.S. Government Fund - ------------------------------------------------------------------------------ CGEF Colonial Global Equity CSCVF Colonial Small Cap Value Fund Fund - ------------------------------------------------------------------------------ CGUF Colonial Global Utilities CSBF Colonial Strategic Fund Balanced Fund - ------------------------------------------------------------------------------ CHYMF Colonial High Yield CSIF Colonial Strategic Municipal Fund Income Fund - ------------------------------------------------------------------------------ CHYSF Colonial High Yield CTEF Colonial Tax-Exempt Fund Securities Fund - ------------------------------------------------------------------------------ CIF Colonial Income Fund CTEIF Colonial Tax-Exempt Insured Fund - ------------------------------------------------------------------------------ CITEF Colonial Intermediate CUSG&IF Colonial U.S. Growth & Tax-Exempt Fund Income Fund - ------------------------------------------------------------------------------ CIEF Colonial International CUF Colonial Utilities Fund Equity Fund - ------------------------------------------------------------------------------ CIHF Colonial International NGCF Newport Greater China Horizons Fund Fund - ------------------------------------------------------------------------------ CIUSGF Colonial Intermediate NJOF Newport Japan U.S. Government Fund Opportunities Fund - ------------------------------------------------------------------------------ CMATEF Colonial Massachusetts NTCF Newport Tiger Cub Fund Tax-Exempt Fund - ------------------------------------------------------------------------------ CMITEF Colonial Michigan SRATMGF Stein Roe Advisor Tax-Exempt Fund Tax-Managed Growth Fund - ------------------------------------------------------------------------------ CMNTEF Colonial Minnesota TCF The Colonial Fund Tax-Exempt Fund - ------------------------------------------------------------------------------ CMMF Colonial Money Market Fund - ------------------------------------------------------------------------------
A. Proxy Solicitation Methods. Shareholders of the Colonial Mutual Funds entitled to vote at the Meetings will receive proxy materials in the mail. The Funds have engaged the services of SCC to assist in the solicitation of proxies. As the date approaches, if your vote is not received, you may receive a call from SCC reminding you to exercise your right to vote. At this time, you may elect to vote your shares telephonically. B. Proxy Solicitation Costs. The Colonial Mutual Funds will bear the cost of the solicitation which includes printing of proxy materials, mailing and the tabulation of votes. By voting as soon as you receive your proxy materials, you will help reduce the cost of additional mailings. The cost of this assistance for each Colonial Mutual Fund is not expected to exceed the following: - ------------------------------------------------------------------------------
CODE SOLICITATION COST CODE SOLICITATION COST - ------------------------------------------------------------------------------ CAGF $ 253.03 CMMMF $ 938.43 - ------------------------------------------------------------------------------ CCATEF 19,112.35 CNYTEF 5,886.40 - ------------------------------------------------------------------------------ CCTTEF 8,984.98 CNCTEF 1,811.32 - ------------------------------------------------------------------------------ CEIF 270.68 COHTEF 5,674.61 - ------------------------------------------------------------------------------
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CODE SOLICITATION COST CODE SOLICITATION COST - ------------------------------------------------------------------------------ CFLTEF $3,434.25 CSDUSGF $ 730.66 - ------------------------------------------------------------------------------ CGEF 7,899.05 CSCVF 45,037.53 - ------------------------------------------------------------------------------ CGUF 10,641.49 CSBF 9,341.94 - ------------------------------------------------------------------------------ CHYMF 10,697.38 CSIF 93,289.67 - ------------------------------------------------------------------------------ CHYSF 65,482.02 CTEF 155,422.60 - ------------------------------------------------------------------------------ CIF 8,617.58 CTEIF 11,553.25 - ------------------------------------------------------------------------------ CITEF 1,182.35 CUSG&IF 56,600.47 - ------------------------------------------------------------------------------ CIEF 318.20 CUF 58,690.72 - ------------------------------------------------------------------------------ CIHF 4,417.63 NGCF 2,614.14 - ------------------------------------------------------------------------------ CIUSGF 57,232.91 NJOF 707.20 - ------------------------------------------------------------------------------ CMATEF 13,107.65 NTCF 507.14 - ------------------------------------------------------------------------------ CMITEF 2,826.62 SRATMGF 9,828.25 - ------------------------------------------------------------------------------ CMNTEF 2,871.71 TCF 94,877.33 - ------------------------------------------------------------------------------ CMMF 10,633.37 - ------------------------------------------------------------------------------
C. Record Date and Quorum. Shareholders of record at the close of business on August 21, 1998 (Record Date) will have one vote for each share held. Holders of 30% of the shares of each Colonial Mutual Fund outstanding on the Record Date constitute a quorum and must be present in person or represented by proxy for business to be transacted at the Meetings. Regardless of how you vote ("For", "Against" or "Abstain"), your shares will be counted as present and entitled to vote for purposes of determining the presence of a quorum. If a shareholder withholds authority or abstains, or the proxy reflects a "broker non-vote" (i.e., shares held by brokers or nominees as to which (i) instructions have not been received from the beneficial owners or persons entitled to vote and (ii) the broker or nominee does not have discretionary voting power on a particular matter), it will have the effect of votes (a) present for purposes of determining a quorum for each proposal and (b) against proposals 2 through 5. With respect to the election of Trustees, withheld authority, abstentions and broker non-votes have no effect on the outcome of the voting. D. Revoking Your Proxy. You may revoke your proxy at any time up until the voting results are announced at the Meetings. You may revoke your vote by writing to the Secretary of the Colonial Mutual Funds, Nancy L. Conlin, One Financial Center, 11th Floor, Boston, MA 02111-2621. You may also revoke your proxy by voting again by using one of the following four ways: (a) by accessing our Web site; (b) by using your enclosed proxy card; (c) by fax (not available for all shareholders; refer to the enclosed proxy insert) or (d) voting in person at the Meetings. You may also revoke your vote telephonically by calling SCC at 1-800-733-8481, ext. 400. E. Shareholder Proposals. Proposals of shareholders which are intended to be considered for inclusion in the Colonial Mutual Funds' proxy statement must be received within a reasonable amount of time prior to any meetings. The Colonial Mutual Funds do not currently intend to hold shareholder meetings in 1999. 23 F. Annual/Semiannual Reports. Further information concerning a Colonial Mutual Fund is contained in its most recent Annual and/or Semiannual Report to Shareholders, which is obtainable free of charge by writing Colonial Management Associates, Inc. at One Financial Center, Boston, Massachusetts 02111 or by calling 1-800-426-3750. G. Litigation. The Colonial Mutual Funds are not currently involved in any material litigation. H. Other Matters. As of the date of this proxy statement, only the business mentioned in proposals 1 through 5 of the Notice of the Special Meetings of Shareholders is contemplated to be presented. If any procedural or other matters come before the Meetings, your proxy shall be voted in accordance with the best judgement of the proxy holder(s). PART 4. FUND INFORMATION. As of the Record Date, each Colonial Mutual Fund had the following outstanding shares of beneficial interest: - ------------------------------------------------------------------------------
Colonial Mutual Outstanding Outstanding Outstanding Fund Class A Shares Class B Shares Class C Shares - -------------------------------------------------------------------------------- CAGF 268,758.135 26,771.041 26,771.041 - -------------------------------------------------------------------------------- CCATEF 32,400,146.953 12,890,626.843 474,529.507 - -------------------------------------------------------------------------------- CCTTEF 10,141,305.759 10,698,330.296 97,781.547 - -------------------------------------------------------------------------------- CEIF 288,525.965 28,435.352 28,435.352 - -------------------------------------------------------------------------------- CFSF 73,716,460.196 6,409,315.499 118,430.005 - -------------------------------------------------------------------------------- CFLTEF 3,993,359.583 4,121,107.178 21,017.548 - -------------------------------------------------------------------------------- CGEF 3,283,932.027 5,802,351.659 128,008.496 - -------------------------------------------------------------------------------- CGUF 11,484,342.541 310,902.581 65,179.301 - -------------------------------------------------------------------------------- CHYMF 5,846,793.310 12,487,183.728 219,208.169 - -------------------------------------------------------------------------------- CHYSF 82,049,942.693 73,989,961.320 3,672,214.503 - -------------------------------------------------------------------------------- CIF 18,269,799.767 5,900,175.384 244,639.951 - -------------------------------------------------------------------------------- CITEF 1,523,326.893 1,154,387.179 51,784.876 - -------------------------------------------------------------------------------- CIEF 424,522.196 26,635.440 26,635.440 - -------------------------------------------------------------------------------- CIHF 4,521,528.683 4,942,915.290 101,249.890 - -------------------------------------------------------------------------------- CIUSGF 96,734,012.364 58,456,490.995 128,929.718 - -------------------------------------------------------------------------------- CMATEF 22,327,495.855 7,360,884.297 68,850.387 - -------------------------------------------------------------------------------- CMITEF 5,229,889.732 1,720,425.993 132,041.164 - -------------------------------------------------------------------------------- CMNTEF 4,299,569.722 2,757,626.257 28,337.462 - -------------------------------------------------------------------------------- CMMF 150,772,800.926 85,360.016.882 3,180,254.372 - -------------------------------------------------------------------------------- CMMMF 15,251,195.851 1,072,264.491 176,361.970 - -------------------------------------------------------------------------------- CNYTEF 7,448,504.056 7,128,138.527 54,119.317 - -------------------------------------------------------------------------------- CNCTEF 2,146,629.410 2,240,399.282 31,122.425 - -------------------------------------------------------------------------------- COHTEF 7,859,911.727 5,615,925.413 34,384.790 - --------------------------------------------------------------------------------
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Colonial Mutual Outstanding Outstanding Outstanding Fund Class A Shares Class B Shares Class C Shares - -------------------------------------------------------------------------------- CSVF 18,490,619.364 14,118,058.996 519,225.129 - -------------------------------------------------------------------------------- CSDUSGF 715,214.819 465,440.836 188,174.998 - -------------------------------------------------------------------------------- CSBF 3,627,192.234 6,699,434.186 522,293.523 - -------------------------------------------------------------------------------- CSIF 111,318,653.872 118,485,850.229 3,516,330.770 - -------------------------------------------------------------------------------- CTEF 176,640,372.434 25,624,211.212 76,563.553 - -------------------------------------------------------------------------------- CTEIF 20,159,120.312 4,425,468.506 45,914.890 - -------------------------------------------------------------------------------- CUSG&IF 15,486,000.415 35,551,509.673 1,486,854.385 - -------------------------------------------------------------------------------- CUF 16,879,655.973 35,231,583.273 95,902.501 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Colonial Outstanding Outstanding Outstanding Outstanding Mutual Fund Class A Class B Class C Class Z Shares Shares Shares Shares - ------------------------------------------------------------------------------- NGCF 5,004,104.686 261,047.301 70,002.288 7,629.129 - -------------------------------------------------------------------------------- NJOF 339,565.273 714,699.634 219,804.196 165,847.083 - -------------------------------------------------------------------------------- NTCF 958,051.647 842,983.120 199,875.970 6,545.056 - -------------------------------------------------------------------------------- CSCVF 11,968,896.237 11,835,189.666 1,224,703.773 289,884.515 - -------------------------------------------------------------------------------- TCF 91,107,248.464 62,431,087.372 499,010.594 2,091,027.073 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Colonial Outstanding Outstanding Outstanding Outstanding Mutual Fund Class A Class B Class C Class E Shares Shares Shares Shares - -------------------------------------------------------------------------------- SRATMGF 3,225,374.095 8,339,535.697 1,361,774.224 49,241.939 - -------------------------------------------------------------------------------- - ---------------------------------------------------------------- Colonial Outstanding Outstanding Outstanding Mutual Fund Class F Class G Class H Shares Shares Shares - ---------------------------------------------------------------- SRATMGF 82,137.932 234,626.946 265,919.666 - ----------------------------------------------------------------
As of the Record Date, the following persons were known to own beneficially 5% or more of the applicable outstanding Class(es) of shares of the following Colonial Mutual Funds: - ------------------------------------------------------------------------------
Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ CHYSF B & C Merrill Lynch, Pierce 11,751,780.349(B) 15.88% Fenner & Smith, Inc. 1,095,080.125(C) 29.82% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------
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Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ CIF B & C Merrill Lynch, Pierce, 644,623.827 (B) 10.92% Fenner & Smith, Inc. 181,145.502 (C) 74.04% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CIF C Colonial Management 16,293.420 6.66% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------- CSIF A, B Merrill Lynch, Pierce, 8,984,359.812(A) 8.07% & C Fenner & Smith, Inc. 9,592,148.088(B) 8.09% 4800 Deer Lake Drive E. 411,340.554 (C) 11.59% Jacksonville, FL 32246 - ------------------------------------------------------------------------------ SRATMGF A,B Merrill Lynch, Pierce 308,011.429 (A) 9.54% & C Fenner & Smith, Inc. 1,542,214.448(B) 18.49% 4800 Dear Lake Drive E. 238,904.005(C) 17.54% Jacksonville, FL 32246 - ------------------------------------------------------------------------------ SRATMGF E & F Colonial Management 10,000.000(E) 20.30% Associates, Inc. 10,000.000(F) 12.17% One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ SRATMGF E Benjamin Jacobs 4,943.796 10.03% Advantage Plan Trust 1080 Saddlebrook Road Mountainside, NJ 07092 - ------------------------------------------------------------------------------ SRATMGF E Cynthia Steinhauser 3,641.268 7.39% Gift Plan Trust 4226 SW Vesta Street Portland, OR 87219 - ------------------------------------------------------------------------------ SRATMGF F Brieana B. Jones 6,189.332 7.53% Gift Plan Trust 16150 Isla Maria Circle Moreno Valley, CA 92553 - ------------------------------------------------------------------------------ CMMF A Liberty Funds 13,158,913.420 8.72% Distributor, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CMMF A Liberty Financial 16,661,643.040 11.05% Companies, Inc. 600 Atlantic Avenue Boston, MA 02110 - ------------------------------------------------------------------------------ CMMF A John A. McNeice, Jr. 8,018,863.120 5.31% 47 Green Street Canton, MA 02021 - ------------------------------------------------------------------------------ CMMF A Centre Reinsurance LTD 7,792,471.210 5.16% Crawford House P.O. Box 2566 Hamilton HM KX Bermuda - ------------------------------------------------------------------------------
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Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ CMMF C Colonial Management 997,249.670 31.35% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CIUSGF B & C Merrill Lynch, Pierce 4,193,778.709(B) 7.17% Fenner & Smith, Inc. 17,186.470(C) 13.33% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CIUSGF C Colonial Management 16,006.888 12.41% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CIUSGF C BA Investment 15,356.177 11.91% Services, Inc. 12,273.633 9.51% 185 Berry Street San Francisco, CA 94107 - ------------------------------------------------------------------------------ CIUSGF C James Keith TTEE 13,485.412 10.45% Keith Family Living Trust 1 Thompson Ave. W. W. St. Paul, MN 55118 - ------------------------------------------------------------------------------ CIUSGF C BankBoston NA Cust. 8,336.742 6.46% Margaret Cappella IRA 95 Leland Avenue Columbus, OH 43214 - ------------------------------------------------------------------------------ CSDUSGF A Transport Insurance 96,838.927 13.53% Company Trust Account 4100 Harry Hines Dallas, TX 75219 - ------------------------------------------------------------------------------ CSDUSGF A Arban & Carosi Inc. 103,446.476 14.46% 13800 Dawson Beach Road Woodbridge, VA 22191 - ------------------------------------------------------------------------------ CSDUSGF A BA Investment 50,571.943 7.07% Services, Inc. 185 Berry Street San Francisco, CA 94107 - ------------------------------------------------------------------------------ CSDUSGF B & C Merrill Lynch, Pierce 104,413.906(B) 22.43% Fenner & Smith, Inc. 25,689.315(C) 13.65% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CSDUSGF C St Marys Hospital 68,122.561 36.20% Physicians Practice Fund 56 Franklin Street Waterbury, CT 06706 - ------------------------------------------------------------------------------
27 - ------------------------------------------------------------------------------
Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ CSDUSGF C Colonial Management 31,250.903 16.60% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ NJOF A, B & Merrill Lynch, Pierce 31,662.375(A) 9.32% C Fenner & Smith, Inc, 199,685.718(B) 27.93% 4800 Deer Lake Drive 51,997.244(C) 23.65% Jacksonville, FL 32246 - ------------------------------------------------------------------------------ NJOF A, C Liberty Financial 25,060.488(A) 7.38% & Z Companies, Inc. 25,061.236(C) 11.40% 600 Atlantic Avenue 125,301.438(Z) 75.55% Boston, MA 02110 - ------------------------------------------------------------------------------ NJOF C Donaldson Lufkin 11,949.525 5.43% Jenrette Securities Corp. Inc. P.O. Box 2052 Jersey City, NJ 07303 - ------------------------------------------------------------------------------ NJOF C PaineWebber FBO 11,298.351 5.14% Sean W. Martin & Alison L. Martin 22 Swettenham Road Singapore 248109 Singapore - ------------------------------------------------------------------------------ NJOF Z Thomas C. Theobald 23,446.974 14.13% 222 West Adams Street Chicago, IL 60606 - ------------------------------------------------------------------------------ NJOF Z Harold W. Cogger 9,055.208 5.45% P.O. Box 418 Hamilton, MA 01936 - ------------------------------------------------------------------------------ NGCF A, B Merrill Lynch, Pierce 1,126,276.476(A) 22.50% & C Fenner & Smith Inc. 95,078.931(B) 36.42% 4800 Dear Lake Drive E. 24,557.593(C) 35.08% Jacksonville, FL 32246 - ------------------------------------------------------------------------------ NGCF C & Z Colonial Management 7,533.814(C) 10.76% Associates, Inc. 7,540.555(Z) 98.83% One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ NGCF C PaineWebber FBO 4,931.920 7.04% Nancy P. Howland 551 E. Evergreen Ave. Wyndmoor, PA 19038 - ------------------------------------------------------------------------------ NTCF A, B Merrill Lynch, Pierce 69,829.387(A) 7.28% & C Fenner & Smith, Inc. 113,826.492(B) 13.50% 4800 Deer Lake Drive E. 32,929.426(C) 16.47% Jacksonville, FL 32246 - ------------------------------------------------------------------------------
28 - ------------------------------------------------------------------------------
Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ NTCF C PaineWebber FBO 78,475.336 39.26% Paul W. Kinney & E. Yukiko Kinney 100 B Plantation Drive Titusville, FL 32780 - ------------------------------------------------------------------------------ NTCF Z BankBoston NA 1,070.641 16.35% Custodian Robert B. Cameron Rollover IRA 6 Robertson Terrace Mill Valley, CA 94941 - ------------------------------------------------------------------------------ NTCF Z BankBoston NA 822.199 12.56% Custodian Thomas F. Keleher IRA 3045 Corrales Road Corrales, NM 87048 - ------------------------------------------------------------------------------ NTCF Z Thomas R. Tuttle & 664.011 10.14% Sylvia C. Tuttle TTEE Tuttle Revocable Trust 440 Davis Court San Francisco, CA 94111 - ------------------------------------------------------------------------------ NTCF Z US Clearing Corp. 514.403 7.85% 26 Broadway New York, NY 10004 - ------------------------------------------------------------------------------ NTCF Z BankBoston NA 432.923 6.61% Custodian Lindsay Cook IRA 48 Arapahoe Road Newton, MA 02165 - ------------------------------------------------------------------------------ NTCF Z Gretchen C. Keleher 413.650 6.32% 3045 Corrales Road Corrales, NM 87048 - ------------------------------------------------------------------------------ NTCF Z Peter D. Keleher 411.523 6.28% 3045 Corrales Road Corrales, NM 87048 - ------------------------------------------------------------------------------ TCF C Merrill Lynch, Pierce 42,934.067 8.60% Fenner & Smith, Inc. 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ TCF Z Liberty Northwest 1,274,245.264 60.93% Insurance Corp. 825 N.E. Multnomah St. Portland, OR 97232 - ------------------------------------------------------------------------------ TCF Z The Colonial Group, Inc. 573,388.702 27.42% Profit-Sharing Plan One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------
29 - ------------------------------------------------------------------------------
Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ TCF Z Charles Schwab & Co. 243,136.706 11.62% Inc. Cust. 101 Montgomery Street San Francisco, CA 94104-4122 - ------------------------------------------------------------------------------ CFSF A, B Merrill Lynch, Pierce 5,152,378.447(A) 6.98% & C Fenner & Smith, Inc. 902,046.326(B) 14.07% 4800 Deer Lake Drive E. 15,845.426(C) 13.37% Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CFSF C Dental Laboratory 20,376.048 17.20% Assoc. of the State of New York 1 Barstow Road Great Neck, NY 11021 - ------------------------------------------------------------------------------ CFSF C BA Investment 18,399.678 15.53% Services, Inc. 185 Berry Street San Francisco, CA 94107 - ------------------------------------------------------------------------------ CFSF C Colonial Management 9,864.494 8.32% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CFSF C Rick D. Bullis & 6,912.442 5.83% Diane J. Bullis JTWROS 524 North 6th Street St. Clair, MI 48079 - ------------------------------------------------------------------------------ CGEF B & C Merrill Lynch, Pierce 882,172.083(B) 15.20% Fenner & Smith, Inc. 15,361.873(C) 12.00% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CGEF C Colonial Management 7,278.907 5.68% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CGEF C BA Investment 6,601.739 5.15% Services, Inc. 185 Berry Street San Francisco, CA 94107 - ------------------------------------------------------------------------------ CIHF A Charles Schwab & Co. 245,077.803 5.42% Inc. Cust. 101 Montgomery Street San Francisco, CA 94104-4122 - ------------------------------------------------------------------------------ CIHF B & C Merrill Lynch, 686,080.302(B) 13.88% Pierce, Fenner & 17,647.229(C) 17.42% Smith, Inc. 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------
30 - ------------------------------------------------------------------------------
Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ CIHF C Colonial Management 9,015.797 8.90% Associates, Inc. 7,695.886 7.60% One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CSVF B & C Merrill Lynch, Pierce 901,137.300(B) 6.38% Fenner & Smith, Inc. 148,044.122(C) 28.51% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CSVF C Banc One Securities 36,256.399 6.98% Corp. FBO The One Select Portfolio 733 Greencrest Drive Westerville, OH 43081 - ------------------------------------------------------------------------------ CSBF A Sales Marketing 211,599.802 5.83% Services Inc. P.O. Box 516 Metairie, LA 70004 - ------------------------------------------------------------------------------ CGUF B & C Merrill Lynch, Pierce 28,630.477(B) 9.20% Fenner & Smith, Inc. 10,016.435(C) 15.36% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CGUF B Maxine A. Smith & 16,605.703 5.34% S.M. Ciaramitaro Ronald J. Smith Marital Trust 7115 Carriage Creek Dr. Washington TWP, MI 48094-2808 - ------------------------------------------------------------------------------ CGUF C Colonial Management 27,633.426 42.39% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CGUF C PaineWebber CDN FBO 5,862.836 8.99% PaineWebber C/F Burgess IRA P.O. Box 3321 Weehawken, NJ 07087 - ------------------------------------------------------------------------------ CHYMF B & C Merrill Lynch, Pierce 1,584,557.070(B) 12.68% Fenner & Smith, Inc. 103,223.282(C) 47.08% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CHYMF C Lehman Brothers Inc. 51,228.657 23.36% P.O. Box 29198 Brooklyn, NY 11202 - ------------------------------------------------------------------------------ CITEF A, B Merrill Lynch, Pierce 119,637.925(A) 7.85% & C Fenner & Smith, Inc. 91,232.129(B) 7.90% 4800 Deer Lake Drive E. 12,376.000(C) 23.89% Jacksonville, FL 32246 - ------------------------------------------------------------------------------
31 - ------------------------------------------------------------------------------
Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ CITEF A Stein Roe Services Inc. 246,894.342 16.20% 1 South Wacker Drive Chicago, IL 60606-4614 - ------------------------------------------------------------------------------ CITEF C Colonial Management 13,086.218 25.27% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CITEF C PaineWebber FBO 13,440.000 25.95% Miriam Fish Reisman 15 October Drive Weston, CT 06883-1507 - ------------------------------------------------------------------------------ CITEF C Robert J. Morehead 12,531.328 24.19% Dorothy L. Morehead 721 McIntyre Road Minden, LA 71055 - ------------------------------------------------------------------------------ CTEF B & C Merrill Lynch, Pierce 1,794,885.090(B) 7.00% Fenner & Smith, Inc. 9,781.308(C) 12.77% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CTEF C Richard E. Fox 27,091.049 35.38% & Ann B. Fox 764 53rd Street Oakland, CA 94609 - ------------------------------------------------------------------------------ CTEF C Colonial Management 7,557.895 9.87% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CTEF C BA Investment 8,948.670 11.68% Services, Inc. 185 Berry Street San Francisco, CA 94107 - ------------------------------------------------------------------------------ CTEF C Jean P. Rodney 4,752.982 6.20% 102 Howard Road West Chester, PA 19380 - ------------------------------------------------------------------------------ CTEIF B Merrill Lynch, Pierce 229,670.077 5.18% Fenner & Smith, Inc. 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CTEIF C Colonial Management 12,293.937 26.77% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CTEIF C Josephine Taylor 11,876.485 25.86% 327 Liberty Boulevard Phillipsburg, NJ 08865 - ------------------------------------------------------------------------------
32 - ------------------------------------------------------------------------------
Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ CTEIF C BA Investment 6,913.721 15.05% Services, Inc. 185 Berry Street San Francisco, CA 94107 - ------------------------------------------------------------------------------ CTEIF C Don C. Fisher & 3,769.329 8.20% Colleen Fisher JTWROS P.O. Box 701 Jackson, WY 83001 - ------------------------------------------------------------------------------ CTEIF C Joseph P. Connelly 3,297.998 7.18% 560 Blanning Drive Dallas, TX 75218 - ------------------------------------------------------------------------------ CTEIF C Edward D. Jones & Co. 2,965.199 6.45% F/A/O Wilma I. Engebretson P.O. Box 2500 Maryland Heights, MO 63043-8500 - ------------------------------------------------------------------------------ CMMMF A Prudential Securities 2,363,321.940 15.49% FBO Jeff Filmore 4 Technology Drive Peabody, MA 01960 - ------------------------------------------------------------------------------ CMMMF A Gretchen Henstorf 786,711.620 5.15% 1217 3rd Avenue West Seattle, WA 98119 - ------------------------------------------------------------------------------ CMMMF B RSBCO 214,910.970 20.04% FBO Julianne F. Cole P.O. Drawer 1410 Ruston, LA 71273-1410 - ------------------------------------------------------------------------------ CMMMF B Alan Baker Co. 128,422.070 11.97% 160 Sylvester Road South San Francisco, CA 94080-6014 - ------------------------------------------------------------------------------ CMMMF B Charles R. Matties & 94,190.420 8.78% Laura B. Matties 84 Overbrook Road West Hartford, CT 06107 - ------------------------------------------------------------------------------ CMMMF B John F. Milan & 75,924.060 7.08% Cheryl L. Milan 2165 Willow Circle Shelby Township, MI 48316 - ------------------------------------------------------------------------------ CMMMF C PJH Prime Account 31,271.510 17.73% Steven J. Kalscheur 3234 Valley Spring Rd. Mount Horeb, WI 53572 - ------------------------------------------------------------------------------
33
- ------------------------------------------------------------------------------- Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ CMMMF C Donaldson Lufkin 38,996.650 22.11% Jenrette Securities Corp. Inc. P.O. Box 2052 Jersey City, NJ 07303 - ------------------------------------------------------------------------------ CMMMF C Colonial Management 102,543.260 58.14% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CUF A, B Merrill Lynch, Pierce, 1,000,818.794(A) 5.92% & C Fenner & Smith, Inc. 5,992,972.756(B) 17.01% 4800 Deer Lake Drive E.14,634.957(C) 15.26% Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CUF C Colonial Management 6,295.479 6.56% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CUF C Donaldson Lufkin 6,072.705 6.33% Jenrette Securities 5,709.326 5.95% Corp. Inc. P.O. Box 2052 Jersey City, NJ 07303 - ------------------------------------------------------------------------------ CUF C PJH Prime Account 7,171.097 7.47% Mary Ann Ressmeyer 18579 St Mellion Place Eden Prairie, MN 55347 - ------------------------------------------------------------------------------ CCATEF A, B Merrill Lynch, Pierce, 2,617,583.770(A) 8.07% & C Fenner & Smith, Inc. 871,458.932(B) 6.76% 4800 Deer Lake Drive E.35,673.522(C) 7.51% Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CCATEF C BA Investment 40,916.389 8.62% Services, Inc. 39,903.925 8.40% 185 Berry Street 37,333.242 7.86% San Francisco, CA 26,662.708 5.61% 94107 26,438.537 5.57% 26,420.187 5.56% - ------------------------------------------------------------------------------ CCTTEF A, B Merrill Lynch, Pierce 1,235,225.072(A) 12.17% & C Fenner & Smith, Inc. 1,943,060.293(B) 18.16% 4800 Deer Lake Drive E. 29,338.185(C) 30.00% Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CCTTEF C Colonial Management 13,556.661 13.86% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CCTTEF C PaineWebber FBO 17,624.021 18.02% Linda R. Brill 715 Den Road Stamford, CT 06903 - ------------------------------------------------------------------------------
34
- ------------------------------------------------------------------------------ Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ CCTEF C John Gaetano 13,737.741 14.04% 91 Atwater Avenue Derby, CT 06478 - ------------------------------------------------------------------------------ CFLTEF A & B Merrill Lynch, Pierce, 650,307.966(A) 16.28% Fenner & Smith, Inc. 776,118.168(B) 18.83% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CFLTEF C Colonial Management 13,565.242 64.54% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CFLTEF C Dorothy C. Fisher & 6,486.306 30.86% Harry F. Fisher, Jr. 1048 Main Street Sebastian, FL 32958 - ------------------------------------------------------------------------------ CMATEF A & C Merrill Lynch, Pierce, 1,155,493.771(A) 5.17% Fenner & Smith, Inc. 12,597.645(C) 18.29% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CMATEF C Colonial Management 13,120.182 19.05% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CMATEF C Sybil N. Wetzler & 10,773.730 15.64% Teresa A. Wetzler-Finn & Steven A. Finn TTEE 5 Tallyho Lane Andover, MA 01810 - ------------------------------------------------------------------------------ CMATEF C Teresa A. Wetzler-Finn 9,218.398 13.38% & Lawrence A. Wetzler 5 Tallyho Lance Andover, MA 01810 - ------------------------------------------------------------------------------ CMATEF C Robert G. Mitchell & 6,080.962 8.83% Marilyn N. Mitchell P.O. Box 1154 South Chatham, MA 02659 - ------------------------------------------------------------------------------ CMATEF C Sybil N. Wetzler & 4,658.533 6.76% Teresa A. Wetzler-Finn 5 Tallyho Lane Andover, MA 01810 - ------------------------------------------------------------------------------ CMATEF C Donaldson Lufkin 3,747.583 5.44% Jenrette Securities Corporation Inc. P.O. Box 2052 Jersey City, NJ 07303 - ------------------------------------------------------------------------------
35 - ------------------------------------------------------------------------------
Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ CMITEF A & B Merrill Lynch, Pierce, 592,930.797(A) 11.33% Fenner & Smith, Inc. 428,744.155(B) 24.92% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CMITEF C Colonial Management 14,538.568 11.01% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CMITEF C Kozak Distributors Inc. 71,431.535 54.09% 11500 Conant Hamtramck, MI 48212 - ------------------------------------------------------------------------------ CMITEF C Mary Petrucella 18,319.863 13.87% Tod James M. Petrucella Tod Jeff Peterucella 4457 Lutz Drive Warren, MI 48092 - ------------------------------------------------------------------------------ CMITEF C Alphonse C. Degrez 8,412.829 6.37% Antoinette P. Degrez 28349 Bohn Street Roseville, MI 48066 - ------------------------------------------------------------------------------ CMNTEF B & C Merrill Lynch, Pierce 237,673.776(B) 8.61% Fenner & Smith, Inc. 3,801.085(C) 13.41% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CMNTEF C Colonial Management 14,175.668 50.02% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CMNTEF C Luella C. Bellomo 7,591.084 26.78% 1857 Eagle Ridge Drive St Paul, MN 55118 - ------------------------------------------------------------------------------ CMNTEF C SAI Shouachai Lee & 2,059.361 7.26% Joua Xiong Lee 256 W George Street St Paul, MN 55107 - ------------------------------------------------------------------------------ CNYTEF A & B Merrill Lynch, Pierce 1,048,728.121(A) 14.07% Fenner & Smith, Inc. 1,397,994.655(B) 19.61% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CNYTEF C Milan Svilar 18,255.281 33.73% 6443 Fitchett Street Rego Park, NY 11379 - ------------------------------------------------------------------------------ CNYTEF C J.C. Bradford & Co . 13,661.202 25.24% Cust. FBO Nancy Panuccio 330 Commerce Street Nashville, TN 37201 - ------------------------------------------------------------------------------
36 - ------------------------------------------------------------------------------
Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ CNYTEF C Marie T. Wright 6,977.572 12.89% 300 East 34th Street New York, NY 10016 - ------------------------------------------------------------------------------ CNYTEF C Colonial Management 14,417.715 26.64% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CNCTEF A Frank M. Drendel 174,599.291 8.13% 330 17th Avenue NW Hickory, NC 28601 - ------------------------------------------------------------------------------ CNCTEF B Merrill Lynch, 166,391.821 7.42% Pierce, Fenner & Smith, Inc. 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CNCTEF C Colonial Management 14,216.840 45.68% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CNCTEF C Wheat, First 7,528.400 24.18% Securities, Inc. Patricia T. Arnold & John T. Arnold 7616 Wellesley Park N. Raleigh, NC 27615 - ------------------------------------------------------------------------------ CNCTEF C PaineWebber FBO 5,241.365 16.84% Ronald W. Mann 112 Black Oak Place Chapel Hill, NC 27514 - ------------------------------------------------------------------------------ CNCTEF C PaineWebber FBO 3,460.417 11.11% Matt Lynch & Lynda N. Lynch 1428 Mountainview Road North Wilkesboro, NC 28659-8027 - ------------------------------------------------------------------------------ COHTEF A, B Merrill Lynch, Pierce 565,202.560(A) 7.19% & C Fenner & Smith, Inc. 352,970.135(B) 6.28% 4800 Deer Lake Drive E.3,887.343(C) 11.30% Jacksonville, FL 32246 - ------------------------------------------------------------------------------ COHTEF C Colonial Management 13,778.015 40.07% Associates, Inc. One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ COHTEF C Ruth Ann Black TTEE 12,936.611 37.62% 750 Ashley Drive Chillicothe, OH 45601 - ------------------------------------------------------------------------------
37
- ------------------------------------------------------------------------------ Colonial Class Percentage Mutual of Number of of Shares Fund Shares Name and Address Shares Owned Owned - ------------------------------------------------------------------------------ COHTEF C Lova R. Woods 3,782.821 11.00% Leo Woods 232 Columbis Avenue Chillicothe, OH 45601 - ------------------------------------------------------------------------------ CAGF A, B Keyport Life 267,599.468(A) 99.56% & C Insurance Company 26,771.041(B) 100.00% 125 High Street 26,771.041(C) 100.00% Boston, MA 02101 - ------------------------------------------------------------------------------ CEIF A, B Keyport Life 288,150.421(A) 99.86% & C Insurance Company 28,435.352(B) 100.00% 125 High Street 28,435.352(C) 100.00% Boston, MA 02101 - ------------------------------------------------------------------------------ CIEF A, B Colonial Management 424,522.196(A) 100.00% & C Associates, Inc. 26,635.440(B) 100.00% One Financial Center 26,635.440(C) 100.00% Boston, MA 02111 - ------------------------------------------------------------------------------ CSCVF A, B Merrill Lynch, Pierce, 5,927,255.122(A) 49.52% & C Fenner & Smith, Inc. 1,971,674.075(B) 16.65% 4800 Deer Lake Drive E. 464,750.694(C) 37.94% Jacksonville, FL 32246 - ------------------------------------------------------------------------------ CSCVF Z The Colonial Group, Inc.187,436.422 64.65% Profit-Sharing Plan One Financial Center Boston, MA 02111 - ------------------------------------------------------------------------------ CSCVF Z Charles Schwab & Co. 102,203.103 35.25% Inc. Cust. 101 Montgomery Street San Francisco, CA 94104-4122 - ------------------------------------------------------------------------------ CUSG&IF B & C Merrill Lynch, Pierce 2,538,243.580(B) 7.13% Fenner & Smith, Inc. 119,366.980(C) 8.02% 4800 Deer Lake Drive E. Jacksonville, FL 32246 - ------------------------------------------------------------------------------
38 The following table sets forth certain information about the executive officers of each Colonial Mutual Fund:
Executive Officer Office with the Colonial Mutual Funds; Year of Election as Name & Age Principal Occupation (1) Executive Officer - ---------- ------------------------ ----------------- Stephen E. Gibson President of the Colonial Mutual Funds 1998 (44) since June, 1998; President, Chief Executive Officer and Director, Colonial Management Associates, Inc. (Adviser) and The Colonial Group, Inc. (TCG) since December, 1996; Chairman of the Board and Director, Liberty Funds Distributor, Inc. since December, 1996 (formerly Managing Director of Marketing, Putnam Investments from June, 1992 to July, 1996). Davey S. Scoon Vice President of the Colonial Mutual 1993 (51) Funds since June, 1993; Executive Vice President since July, 1993 and Director since March, 1985 of the Adviser (formerly Senior Vice President and Treasurer from March, 1985 to July, 1993); Executive Vice President and Chief Operating Officer of TCG since March, 1995 (formerly Vice President - Finance and Administration and Treasurer from November, 1985 to March, 1995). Timothy J. Jacoby Treasurer and Chief Financial Officer 1996 (43) of the Colonial Mutual Funds since October, 1996 (formerly Controller and Chief Accounting Officer from October, 1997 to February, 1998); Senior Vice President of the Adviser since September, 1996 (formerly Senior Vice President, Fidelity Accounting and Custody Services from September, 1993 to August, 1990 and Assistant Treasurer to Fidelity Group of Funds from August, 1990 to September, 1993).
39
Executive Officer Office with the Colonial Mutual Funds; Year of Election as Name & Age Principal Occupation (1) Executive Officer - ---------- ------------------------ ----------------- J. Kevin Controller and Chief Accounting 1998 Connaughton Officer of the Colonial Mutual Funds (33) since February, 1998; Vice President of the Adviser since February, 1998 (formerly Senior Tax Manager, Coopers & Lybrand, LLP from April, 1996 to January, 1998; Vice President, 440 Financial Group/First Data Investor Services Group from March, 1994 to April, 1996; Vice President, The Boston Company (subsidiary of Mellon Bank) from December, 1993 to March, 1994; Assistant Vice President and Tax Manager, Mellon Bank from March, 1992 to December, 1993). Nancy L. Conlin Secretary of the Colonial Mutual Funds 1998 (44) since April, 1998 (formerly Assistant Secretary from July, 1994 to April, 1998); Director, Senior Vice President, General Counsel, Secretary and Clerk of the Adviser since April, 1998 (formerly Vice President, Counsel, Assistant Secretary and Assistant Clerk from July, 1994 to April, 1998), Vice President - Legal, General Counsel and Clerk of TCG since April, 1998 (formerly Assistant Clerk from July, 1994 to April, 1998).
(1) Except as otherwise noted, each individual has held the office indicated or other offices in the same company for the last five years. As of the Record Date, the executive officers and the current Board of Trustees as a group were known to beneficially own less than 1% of each of the outstanding Class(es) of shares of each of the Colonial Mutual Funds. 40 The current Board of Trustees received the following compensation from each Colonial Mutual Fund as of each Fund's fiscal year end and for the calendar year ended December 31, 1997:
- ----------------------------------------------------------------------------- COLONIAL MUTUAL FUND CFSF CFSF CIUSGF CSDUSGF NJOF NGCF - ----------------------------------------------------------------------------- Fiscal Year End 10/31/96 8/31/97(1)8/31/97 8/31/97 8/31/97 8/31/97 - ----------------------------------------------------------------------------- Trustee: - ----------------------------------------------------------------------------- Mr. Birnbaum $5,874 $4,236 $5,295 $719 $570 $44 - ----------------------------------------------------------------------------- Mr. Bleasdale 6,562(2) 4,833(3) 6,041(4) 828(5) 582(6) 61(7) - ----------------------------------------------------------------------------- Ms. Collins 5,534 4,232 5,296 719 571 44 - ----------------------------------------------------------------------------- Mr. Grinnell 5,894 4,272(8) 5,343(9) 727(10) 576(11) 45 - ----------------------------------------------------------------------------- Mr. Lowry 5,998 4,266 5,342 726 576 45 - ----------------------------------------------------------------------------- Mr. Mayer 5,776 4,046 5,062 688 537 37 - ----------------------------------------------------------------------------- Mr. Moody 6,728(12) 4,465(13) 5,585(14) 758(15) 592(16) 46(17) - ----------------------------------------------------------------------------- Mr. Neuhauser 5,971 4,282 5,359 726 576 45 - ----------------------------------------------------------------------------- Mr. Sullivan 6,407 4,526 5,663 722 609 48 - -----------------------------------------------------------------------------
- -------- (1) The Fund changed its fiscal year end from October 31 to August 31. Information presented is for the period November 1, 1996 through August 31, 1997. (2) Includes $2,962 payable in later years as deferred compensation. (3) Includes $2,801 payable in later years as deferred compensation (4) Includes $3,491 payable in later years as deferred compensation. (5) Includes $484 payable in later years as deferred compensation. (6) Includes $311 payable in later years as deferred compensation. (7) Includes $46 payable in later years as deferred compensation. (8) Includes $348 payable in later years as deferred compensation. (9) Includes $437 payable in later years as deferred compensation. (10) Includes $57 payable in later years as deferred compensation. (11) Includes $44 payable in later years as deferred compensation. (12) Total compensation of $6,728 payable in later years as deferred compensation. (13) Total compensation of $4,465 payable in later years as deferred compensation. (14) Total compensation of $5,585 payable in later years as deferred compensation. (15) Total compensation of $758 payable in later years as deferred compensation. (16) Total compensation of $592 payable in later years as deferred compensation. (17) Total compensation of $46 payable in later years as deferred compensation. 41
- -------------------------------------------------------------------------- COLONIAL MUTUAL FUND NTCF SRATMGF CGUF TCF CGEF - -------------------------------------------------------------------------- Fiscal Year End 8/31/97 10/31/97(18) 10/31/97(19) 10/31/97 10/31/97 - -------------------------------------------------------------------------- Trustee: - -------------------------------------------------------------------------- Mr. Birnbaum $588 $465 $1,402 $5,741 $1,109 - -------------------------------------------------------------------------- Mr. Bleasdale 680(20) 548(21) 1,588(22) 6,517(23) 579(24) - -------------------------------------------------------------------------- Ms. Collins 589 465 1,403 5,743 1,108 - -------------------------------------------------------------------------- Mr. Grinnell 595(25) 471(26) 1,412(27) 6,076(28) 1,119(29) - -------------------------------------------------------------------------- Mr. Lowry 595 471 1,412 5,783 1,121 - -------------------------------------------------------------------------- Mr. Mayer 553 448 1,345 5,491 1,062 - -------------------------------------------------------------------------- Mr. Moody 611(30) 482(31) 1,471(32) 6,005(33) 1,160(34) - -------------------------------------------------------------------------- Mr. Neuhauser 594 471 1,417 5,801 1,119 - -------------------------------------------------------------------------- Mr. Sullivan 628 505 1,493 6,102 1,179 - --------------------------------------------------------------------------
- ------- (18) Trustee fee information for the Fund is for the period December 31, 1996 through October 31, 1997. (19) Includes compensation paid by LFC Utilities Trust, in which all of the Funds' assets are invested. (20) Includes $402 payable in later years as deferred compensation. (21) Includes $202 payable in later years as deferred compensation. (22) Includes $857 payable in later years as deferred compensation. (23) Includes $3,524 payable in later years as deferred compensation. (24) Includes $579 payable in later years as deferred compensation. (25) Includes $45 payable in later years as deferred compensation. (26) Includes $8 payable in later years as deferred compensation. (27) Includes $73 payable in later years as deferred compensation. (28) Includes $292 payable in later years as deferred compensation. (29) Includes $131 payable in later years as deferred compensation. (30) Total compensation of $611 payable in later years as deferred compensation. (31) Includes $307 payable in later years as deferred compensation. (32) Total compensation of $1,471 payable in later years as deferred compensation. (33) Total compensation of $6,005 payable in later years as deferred compensation. (34) Total compensation of $1,160 payable in later years as deferred compensation. 42
- ---------------------------------------------------------------------- COLONIAL MUTUAL FUND CIHF CSVF CSBF CHYMF CITEF - ---------------------------------------------------------------------- Fiscal Year End 10/31/97 10/31/97 10/31/97 11/30/97 11/30/97 - ---------------------------------------------------------------------- Trustee: - ---------------------------------------------------------------------- Mr. Birnbaum $ 985 $2,394 $1,098 $1,442 $ 837 - ---------------------------------------------------------------------- Mr. Bleasdale 1,116(35) 2,721(36) 1,247(37) 1,635(38) 948(39) - ---------------------------------------------------------------------- Ms. Collins 984 2,391 1,099 1,442 838 - ---------------------------------------------------------------------- Mr. Grinnell 993(40) 2,411(41) 1,106(42) 1,517(43) 884(44) - ---------------------------------------------------------------------- Mr. Lowry 994 2,411 1,106 1,456 843 - ---------------------------------------------------------------------- Mr. Mayer 944 2,291 1,053 1,382 805 - ---------------------------------------------------------------------- Mr. Moody 1,032(45) 2,506(46) 1,149(47) 1,510(48) 879(49) - ---------------------------------------------------------------------- Mr. Neuhauser 993 2,418 1,110 1,456 845 - ---------------------------------------------------------------------- Mr. Sullivan 1,049 2,545 1,169 1,536 888 - ----------------------------------------------------------------------
- ------- (35) Includes $602 payable in later years as deferred compensation. (36) Includes $1,466 payable in later years as deferred compensation. (37) Includes $673 payable in later years as deferred compensation. (38) Includes $882 payable in later years as deferred compensation. (39) Includes $511 payable in later years as deferred compensation. (40) Includes $119 payable in later years as deferred compensation. (41) Includes $241 payable in later years as deferred compensation. (42) Includes $55 payable in later years as deferred compensation. (43) Includes $72 payable in later years as deferred compensation. (44) Includes $42 payable in later years as deferred compensation. (45) Total compensation of $1,032 payable in later years as deferred compensation. (46) Total compensation of $2,506 payable in later years as deferred compensation. (47) Total compensation of $1,149 payable in later years as deferred compensation. (48) Total compensation of $1,510 payable in later years as deferred compensation. (49) Total compensation of $879 payable in later years as deferred compensation. 43
- --------------------------------------------------------------------- COLONIAL MUTUAL FUND CTEF CTEIF CUF CHYSF CIF - --------------------------------------------------------------------- Fiscal Year End 11/30/97 11/30/97 11/30/97 12/31/97 12/31/97 - --------------------------------------------------------------------- Trustee: - --------------------------------------------------------------------- Mr. Birnbaum $12,271 $1,634 $4,554 $4,376 $1,347 - --------------------------------------------------------------------- Mr. Bleasdale 13,858(50) 1,852(51) 6,478(52) 4,582(53) 1,398(54) - --------------------------------------------------------------------- Ms. Collins 12,270 1,632 4,658 4,374 1,348 - --------------------------------------------------------------------- Mr. Grinnell 12,981(55) 1,732(56) 4,816(57) 4,411(58) 1,490(59) - --------------------------------------------------------------------- Mr. Lowry 12,368 1,650 4,569 4,415 1,356 - --------------------------------------------------------------------- Mr. Mayer 11,755 1,566 4,369 4,185 1,289 - --------------------------------------------------------------------- Mr. Moody 12,880(60) 1,712(61) 4,785(62) 4,580(63) 1,412(64) - --------------------------------------------------------------------- Mr. Neuhauser 12,402 1,651 4,607 4,421 1,361 - --------------------------------------------------------------------- Mr. Sullivan 13,039 1,738 4,846 4,654 1,433 - ---------------------------------------------------------------------
- ------- (50) Includes $7,478 payable in later years as deferred compensation. (51) Includes $1,000 payable in later years as deferred compensation. (52) Includes $4,096 payable in later years as deferred compensation. (53) Includes $2,291 payable in later years as deferred compensation. (54) Includes $699 payable in later years as deferred compensation. (55) Includes $612 payable in later years as deferred compensation. (56) Includes $81 payable in later years as deferred compensation. (57) Includes $226 payable in later years as deferred compensation. (58) Includes $440 payable in later years as deferred compensation. (59) Includes $137 payable in later years as deferred compensation. (60) Total compensation of $12,880 payable in later years as deferred compensation. (61) Total compensation of $1,712 payable in later years as deferred compensation. (62) Total compensation of $4,785 payable in later years as deferred compensation. (63) Total compensation of $4,580 payable in later years as deferred compensation. (64) Total compensation of $1,412 payable in later years as deferred compensation. 44 - -------------------------------------------------------------------------
COLONIAL MUTUAL FUND CSIF CCATEF CCTTEF CFLTEF CMATEF - ------------------------------------------------------------------------- Fiscal Year End 12/31/97 1/31/98 1/31/98 1/31/98 1/31/98 - ------------------------------------------------------------------------- Trustee: - ------------------------------------------------------------------------- Mr. Birnbaum $6,531 $2,350 $1,468 $1,086 $2,187 - ------------------------------------------------------------------------- Mr. Bleasdale 6,826(65) 2,334(66) 1,496(67) 1,107(68) 1,850(69) - ------------------------------------------------------------------------- Ms. Collins 6,531 2,351 1,469 1,088 2,188 - ------------------------------------------------------------------------- Mr. Grinnell 7,243(70) 2,462(71) 1,599(72) 1,181(73) 2,210(74) - ------------------------------------------------------------------------- Mr. Lowry 6,587 2,369 1,483 1,096 2,211 - ------------------------------------------------------------------------- Mr. Mayer 6,252 2,262 1,413 1,047 2,116 - ------------------------------------------------------------------------- Mr. Moody 6,840(75) 2,466(76) 1,538(77) 1,140(78) 2,290(79) - ------------------------------------------------------------------------- Mr. Neuhauser 6,603 2,377 1,481 1,098 2,215 - ------------------------------------------------------------------------- Mr. Sullivan 6,950 2,519 1,571 1,159 2,362 - -------------------------------------------------------------------------
- ------- (65) Includes $3,413 payable in later years as deferred compensation. (66) Includes $1,251 payable in later years as deferred compensation. (67) Includes $801 payable in later years as deferred compensation. (68) Includes $592 payable in later years as deferred compensation. (69) Includes $987 payable in later years as deferred compensation. (70) Includes $657 payable in later years as deferred compensation. (71) Includes $192 payable in later years as deferred compensation. (72) Includes $116 payable in later years as deferred compensation. (73) Includes $86 payable in later years as deferred compensation. (74) Includes $151 payable in later years as deferred compensation. (75) Total compensation of $6,840 payable in later years as deferred compensation. (76) Total compensation of $2,466 payable in later years as deferred compensation. (77) Total compensation of $1,538 payable in later years as deferred compensation. (78) Total compensation of $1,140 payable in later years as deferred compensation. (79) Total compensation of $2,290 payable in later years as deferred compensation. 45
- ------------------------------------------------------------------------- COLONIAL MUTUAL FUND CMITEF CMNTEF CNYTEF CNCTEF COHTEF - ------------------------------------------------------------------------- Fiscal Year End 1/31/98 1/31/98 1/31/98 1/31/98 1/31/98 - ------------------------------------------------------------------------- Trustee: - ------------------------------------------------------------------------- Mr. Birnbaum $1,731 $1,063 $1,263 $ 992 $1,350 - ------------------------------------------------------------------------- Mr. Bleasdale 1,051(80) 1,058(81) 1,264(82) 1,077(83) 1,304(84) - ------------------------------------------------------------------------- Ms. Collins 1,731 1,061 1,267 991 1,350 - ------------------------------------------------------------------------- Mr. Grinnell 1,845(85) 1,156(86) 1,379(87) 1,077(88) 1,467(89) - ------------------------------------------------------------------------- Mr. Lowry 1,755 1,070 1,276 1,000 1,363 - ------------------------------------------------------------------------- Mr. Mayer 1,690 1,019 1,219 956 1,299 - ------------------------------------------------------------------------- Mr. Moody 1,808(90) 1,111(91) 1,329(92) 1,039(93) 1,415(94) - ------------------------------------------------------------------------- Mr. Neuhauser 1,759 1,075 1,281 1,005 1,367 - ------------------------------------------------------------------------- Mr. Sullivan 1,893 1,138 1,356 1,061 1,449 - -------------------------------------------------------------------------
- -------- (80) Includes $560 payable in later years as deferred compensation. (81) Includes $565 payable in later years as deferred compensation. (82) Includes $675 payable in later years as deferred compensation. (83) Includes $521 payable in later years as deferred compensation. (84) Includes $694 payable in later years as deferred compensation. (85) Includes $89 payable in later years as deferred compensation. (86) Includes $84 payable in later years as deferred compensation. (87) Includes $102 payable in later years as deferred compensation. (88) Includes $76 payable in later years as deferred compensation. (89) Includes $103 payable in later years as deferred compensation. (90) Total compensation of $1,808 payable in later years as deferred compensation. (91) Total compensation of $1,111 payable in later years as deferred compensation. (92) Total compensation of $1,329 payable in later years as deferred compensation. (93) Total compensation of $1,039 payable in later years as deferred compensation. (94) Total compensation of $1,415 payable in later years as deferred compensation. 46
- -------------------------------------------------------------------------------- COLONIAL MUTUAL FUND CMMMF CAGF CEIF CIEF CSCVF - -------------------------------------------------------------------------------- Fiscal Year End 6/30/98 6/30/98 6/30/98 6/30/98 6/30/98 - -------------------------------------------------------------------------------- Trustee: - -------------------------------------------------------------------------------- Mr. Birnbaum $825 $ 762 $ 762 $ 795 $2,612 - -------------------------------------------------------------------------------- Mr. Bleasdale 936(95) 858(96) 858(97) 897(98) 2,899(99) - -------------------------------------------------------------------------------- Ms. Collins 809 747 747 780 2,539 - -------------------------------------------------------------------------------- Mr. Grinnell 830(100) 763(101) 764(102) 799(103) 2,568(104) - -------------------------------------------------------------------------------- Mr. Lowry 830 764 764 799 2,568 - -------------------------------------------------------------------------------- Mr. Mayer 783 723 723 754 2,498 - -------------------------------------------------------------------------------- Mr. Moody 867(105) 778(106) 778(107) 815(108) 2,668(109) - -------------------------------------------------------------------------------- Mr. Neuhauser 852 785 783 819 2,675 - -------------------------------------------------------------------------------- Mr. Sullivan 919 848 848 886 2,740 - --------------------------------------------------------------------------------
- -------- (95) Includes $482 payable in later years as deferred compensation. (96) Includes $446 payable in later years as deferred compensation. (97) Includes $446 payable in later years as deferred compensation. (98) Includes $467 payable in later years as deferred compensation. (99) Includes $1,433 payable in later years as deferred compensation. (100)Includes $42 payable in later years as deferred compensation. (101)Includes $37 payable in later years as deferred compensation. (102)Includes $37 payable in later years as deferred compensation. (103)Includes $40 payable in later years as deferred compensation. (104)Includes $103 payable in later years as deferred compensation. (105)Total compensation of $867 payable in later years as deferred compensation. (106)Total compensation of $778 payable in later years as deferred compensation. (107)Total compensation of $778 payable in later years as deferred compensation. (108)Total compensation of $815 payable in later years as deferred compensation. (109)Total compensation of $2,668 payable in later years as deferred compensation. 47
- ------------------------------------------------------------------------- TOTAL COMPENSATION PAID COLONIAL FROM COLONIAL FUNDS COMPLEX MUTUAL TO THE BOARD OF TRUSTEES FOR FUND CUSGIF CMMF THE CALENDAR YEAR ENDED - ------------------------------------------------------------------------- Fiscal Year End 6/30/98 6/30/98 12/31/97110(111) - ------------------------------------------------------------------------- Trustee: - ------------------------------------------------------------------------- Mr. Birnbaum $3,465 $1,476 $ 93,949 - ------------------------------------------------------------------------- Mr. Bleasdale 3,922(112) 1,676(113) 106,432(114) - ------------------------------------------------------------------------- Ms. Collins 3,380 1,461 93,949 - ------------------------------------------------------------------------- Mr. Grinnell 3,468(115) 1,496(116) 94,698(117) - ------------------------------------------------------------------------- Mr. Lowry 3,469 1,496 101,445 - ------------------------------------------------------------------------- Mr. Mayer 3,297 1,413 94,698 - ------------------------------------------------------------------------- Mr. Moody 3,566(118) 1,527(119) 98,447(120) - ------------------------------------------------------------------------- Mr. Neuhauser 3,545 1,528 99,945 - ------------------------------------------------------------------------- Mr. Sullivan 3,682 1,618 101,445 - -------------------------------------------------------------------------
- -------- (110)The Colonial Mutual Funds do not currently provide pension or retirement plan benefits to the Trustees. (111)At December 31, 1997, the Colonial Mutual Funds complex consisted of 39 open-end and 5 closed-end management investment company portfolios. (112)Includes $2,002 payable in later years as deferred compensation. (113)Includes $866 payable in later years as deferred compensation. (114)Includes $57,454 payable in later years as deferred compensation. (115)Includes $155 payable in later years as deferred compensation. (116)Includes $76 payable in later years as deferred compensation. (117)Includes $4,797 payable in later years as deferred compensation. (118)Total compensation of $3,566 payable in later years as deferred compensation. (119)Total compensation of $1,527 payable in later years as deferred compensation. (120)Total compensation of $98,447 payable in later years as deferred compensation. 48 The following table sets forth the compensation paid to Messrs. Birnbaum, Grinnell and Lowry in their capacities as Trustees or Directors of the Liberty All-Star Equity Fund and the Liberty All-Star Growth Fund, Inc. (together, Liberty Funds) for service during the calendar year ended December 31, 1997:
- ----------------------------------------------------------------------------- Total Compensation Paid To The Trustees From the Liberty Funds For The Calendar Trustee Year Ended December 31, 1997(121) - ----------------------------------------------------------------------------- Robert J. Birnbaum $26,800 - ----------------------------------------------------------------------------- James E. Grinnell 26,800 - ----------------------------------------------------------------------------- Richard W. Lowry 26,800 - -----------------------------------------------------------------------------
The following table sets forth the compensation paid to Mr. Macera and Dr. Stitzel in their capacities as Trustees of Liberty Variable Investment Trust (Trust), which offers nine funds: Colonial Growth and Income Fund, Variable Series, Stein Roe Global Utilities Fund, Variable Series, Colonial International Fund for Growth, Variable Series, Colonial U.S. Stock Fund, Variable Series, Colonial Strategic Income Fund, Variable Series, Newport Tiger Fund, Variable Series, Liberty All-Star Equity Fund, Variable Series, Colonial Small Cap Value Fund, Variable Series and Colonial High Yield Securities Fund, Variable Series, for serving during the fiscal year ended December 31, 1997:
- ------------------------------------------------------------------------------------ Total Compensation From the Trust and Investment Aggregate 1997 Companies which are Series of Trustee Compensation(122) the Trust in 1997(123) - ------------------------------------------------------------------------------------ Salvatore Macera $12,500 $33,500 - ------------------------------------------------------------------------------------ Dr. Thomas E. Stitzel 12,500 33,500 - ------------------------------------------------------------------------------------
- -------- (121)The Liberty 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 Adviser). (122)Consists of Trustee fees in the amount of (i) a $5,000 annual retainer, (ii) a $1,500 meeting fee for each meeting attended in person and (iii) a $500 meeting fee for each telephone meeting. (123)Includes Trustee fees paid by the Trust and by Stein Roe Variable Investment Trust. 49 PLEASE VOTE PROMPTLY ********************************* Your vote is important, no matter how many shares you own. Please vote on the reverse side of this proxy card and sign in the space(s) provided. Return your completed proxy card in the enclosed envelope today. You may receive additional proxies for other accounts. These are not duplicates; you should sign and return each proxy card in order for your votes to be counted. This proxy is solicited on behalf of the Board of Trustees. The signers of this proxy hereby appoint William J. Ballou, Nancy L. Conlin, Stephen E. Gibson, Timothy J. Jacoby and Davey S. Scoon each of them proxies of the signers, with power of substitution to vote at the Special Meetings of Shareholders to be held at Boston, Massachusetts, on Friday, October 30, 1998, and at any adjournments, as specified herein, and in accordance with their best judgement, on any other business that may properly come before this meeting. After careful review, the Board of Trustees unanimously has recommended a vote "FOR" all matters. Colonial Investors Service Center, Inc. P.O. Box 1722 Boston, Massachusetts 02105-1722 COLONIAL CALIFORNIA TAX-EXEMPT FUND BANKBOSTON NA TTEE KEY PRO SERVICES 401K RETIREMENT PLAN A/C ROBERT R POTVIN 6 HERITAGE DRIVE HOOKSETT NH 03106-2141 PLEASE READ BOTH SIDES OF THIS CARD VOTE TODAY! This proxy, when properly executed, will be voted in the manner directed herein and, absent direction, will be voted FOR Items below. This proxy will be voted in accordance with the holder's best judgement as to any other matter. The Board of Trustees recommends a vote FOR the following Items: 1. Elect the Board of Trustees (Item 1 of the Notice). Robert J. Birnbaum Salvatore Macera Tom Bleasdale James L. Moody, Jr. John Carberry John J. Neuhauser Lora S. Collins Thomas E. Stitzel James E. Grinnell Robert L. Sullivan Richard W. Lowry Anne-Lee Verville William E. Mayer For All For All Nominees Withhold Except | | | | | | Instruction: To withhold authority to vote for any individual nominee, mark the "For All Except" box and strike a line through the name of the nominee. Your shares will be voted for the remaining nominees. 2. To approve or disapprove amending fundamental investment policies regarding borrowing and lending (Item 2 of the Notice) For Against Abstain | | | | | | 3. To approve or disapprove amending the fundamental investment limitation regarding diversification (Item 4 of the Notice). For Against Abstain | | | | | | 4. To approve or disapprove policies for a master fund/feeder fund structure (Item 5 of the Notice). For Against Abstain | | | | | | MARK BOX AT RIGHT FOR ADDRESS CHANGE AND NOTE BELOW | | - ---------------------------------------- - ---------------------------------------- PLEASE MARK, SIGN DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE. Please sign exactly as name or names appear hereon. Joint owners should each sign personally. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. Signature(s) _____________________ Date ___________________________ PLEASE VOTE PROMPTLY ********************************* Your vote is important, no matter how many shares you own. Please vote on the reverse side of this proxy card and sign in the space(s) provided. Return your completed proxy card in the enclosed envelope today. You may receive additional proxies for other accounts. These are not duplicates; you should sign and return each proxy card in order for your votes to be counted. This proxy is solicited on behalf of the Board of Trustees. The signers of this proxy hereby appoint William J. Ballou, Nancy L. Conlin, Stephen E. Gibson, Timothy J. Jacoby and Davey S. Scoon each of them proxies of the signers, with power of substitution to vote at the Special Meetings of Shareholders to be held at Boston, Massachusetts, on Friday, October 30, 1998, and at any adjournments, as specified herein, and in accordance with their best judgement, on any other business that may properly come before this meeting. After careful review, the Board of Trustees unanimously has recommended a vote "FOR" all matters. Colonial Investors Service Center, Inc. P.O. Box 1722 Boston, Massachusetts 02105-1722 COLONIAL GLOBAL UTILITIES TRUST COLONIAL MONEY MARKET TRUST COLONIAL MUNICIPAL MONEY MARKET TRUST LFC UTILITIES TRUST BANKBOSTON NA TTEE KEY PRO SERVICES 401K RETIREMENT PLAN A/C ROBERT R POTVIN 6 HERITAGE DRIVE HOOKSETT NH 03106-2141 PLEASE READ BOTH SIDES OF THIS CARD VOTE TODAY! This proxy, when properly executed, will be voted in the manner directed herein and, absent direction, will be voted FOR Item below. This proxy will be voted in accordance with the holder's best judgement as to any other matter. The Board of Trustees recommends a vote FOR the following Items: 1. Elect the Board of Trustees (Item 1 of the Notice). Robert J. Birnbaum Salvatore Macera Tom Bleasdale James L. Moody, Jr. John Carberry John J. Neuhauser Lora S. Collins Thomas E. Stitzel James E. Grinnell Robert L. Sullivan Richard W. Lowry Anne-Lee Verville William E. Mayer For All For All Nominees Withhold Except | | | | | | Instruction: To withhold authority to vote for any individual nominee, mark the "For All Except" box and strike a line through the name of the nominee. Your shares will be voted for the remaining nominees. MARK BOX AT RIGHT FOR ADDRESS CHANGE AND NOTE BELOW | | - ---------------------------------------- - ---------------------------------------- PLEASE MARK, SIGN DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE. Please sign exactly as name or names appear hereon. Joint owners should each sign personally. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. Signature(s) _____________________ Date ___________________________ PLEASE VOTE PROMPTLY ********************************* Your vote is important, no matter how many shares you own. Please vote on the reverse side of this proxy card and sign in the space(s) provided. Return your completed proxy card in the enclosed envelope today. You may receive additional proxies for other accounts. These are not duplicates; you should sign and return each proxy card in order for your votes to be counted. This proxy is solicited on behalf of the Board of Trustees. The signers of this proxy hereby appoint William J. Ballou, Nancy L. Conlin, Stephen E. Gibson, Timothy J. Jacoby and Davey S. Scoon each of them proxies of the signers, with power of substitution to vote at the Special Meetings of Shareholders to be held at Boston, Massachusetts, on Friday, October 30, 1998, and at any adjournments, as specified herein, and in accordance with their best judgement, on any other business that may properly come before this meeting. After careful review, the Board of Trustees unanimously has recommended a vote "FOR" all matters. Colonial Investors Service Center, Inc. P.O. Box 1722 Boston, Massachusetts 02105-1722 COLONIAL STRATEGIC INCOME FUND COLONIAL SELECT VALUE FUND COLONIAL AGGRESSIVE GROWTH FUND COLONIAL INTERNATIONAL EQUITY FUND COLONIAL EQUITY INCOME FUND COLONIAL SMALL CAP VALUE FUND COLONIAL MASSACHUSETTS TAX-EXEMPT FUND COLONIAL MINNESOTA TAX-EXEMPT FUND COLONIAL MICHIGAN TAX-EXEMPT FUND COLONIAL OHIO TAX-EXEMPT FUND COLONIAL NEW YORK TAX-EXEMPT FUND COLONIAL NORTH CAROLINA TAX-EXEMPT FUND COLONIAL CONNECTICUT TAX-EXEMPT FUND COLONIAL INTERMEDIATE TAX-EXEMPT FUND COLONIAL FLORIDA TAX-EXEMPT FUND COLONIAL STRATEGIC BALANCED FUND COLONIAL SHORT DURATION U.S. GOVERNMENT FUND COLONIAL U.S. GROWTH & INCOME FUND STEIN ROE ADVISOR TAX-MANAGED GROWTH FUND BANKBOSTON NA TTEE KEY PRO SERVICES 401K RETIREMENT PLAN A/C ROBERT R POTVIN 6 HERITAGE DRIVE HOOKSETT NH 03106-2141 PLEASE READ BOTH SIDES OF THIS CARD VOTE TODAY! This proxy, when properly executed, will be voted in the manner directed herein and, absent direction, will be voted FOR Items below. This proxy will be voted in accordance with the holder's best judgement as to any other matter. The Board of Trustees recommends a vote FOR the following Items: 1. Elect the Board of Trustees (Item 1 of the Notice). Robert J. Birnbaum Salvatore Macera Tom Bleasdale James L. Moody, Jr. John Carberry John J. Neuhauser Lora S. Collins Thomas E. Stitzel James E. Grinnell Robert L. Sullivan Richard W. Lowry Anne-Lee Verville William E. Mayer For All For All Nominees Withhold Except | | | | | | Instruction: To withhold authority to vote for any individual nominee, mark the "For All Except" box and strike a line through the name of the nominee. Your shares will be voted for the remaining nominees. 2. To approve or disapprove amending fundamental investment policies regarding borrowing and lending (Item 2 of the Notice) For Against Abstain | | | | | | 3. To approve or disapprove policies for a master fund/feeder fund structure (Item 5 of the Notice). For Against Abstain | | | | | | MARK BOX AT RIGHT FOR ADDRESS CHANGE AND NOTE BELOW | | - ---------------------------------------- - ---------------------------------------- PLEASE MARK, SIGN DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE. Please sign exactly as name or names appear hereon. Joint owners should each sign personally. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. Signature(s) _____________________ Date ___________________________ PLEASE VOTE PROMPTLY ********************************* Your vote is important, no matter how many shares you own. Please vote on the reverse side of this proxy card and sign in the space(s) provided. Return your completed proxy card in the enclosed envelope today. You may receive additional proxies for other accounts. These are not duplicates; you should sign and return each proxy card in order for your votes to be counted. This proxy is solicited on behalf of the Board of Trustees. The signers of this proxy hereby appoint William J. Ballou, Nancy L. Conlin, Stephen E. Gibson, Timothy J. Jacoby and Davey S. Scoon each of them proxies of the signers, with power of substitution to vote at the Special MeetingS of Shareholders to be held at Boston, Massachusetts, on Friday, October 30, 1998, and at any adjournments, as specified herein, and in accordance with their best judgement, on any other business that may properly come before this meeting. After careful review, the Board of Trustees unanimously has recommended a vote "FOR" all matters. Colonial Investors Service Center, Inc. P.O. Box 1722 Boston, Massachusetts 02105-1722 COLONIAL INCOME FUND THE COLONIAL FUND COLONIAL HIGH YIELD SECURITIES FUND COLONIAL TAX-EXEMPT FUND COLONIAL UTILITIES FUND COLONIAL FEDERAL SECURITIES FUND COLONIAL TAX-EXEMPT INSURED FUND COLONIAL INTERMEDIATE U.S. GOVERNMENT FUND COLONIAL GLOBAL EQUITY FUND COLONIAL INTERNATIONAL HORIZONS FUND COLONIAL HIGH YIELD MUNICIPAL FUND NEWPORT JAPAN OPPORTUNITIES FUND NEWPORT TIGER CUB FUND NEWPORT GREATER CHINA FUND BANKBOSTON NA TTEE KEY PRO SERVICES 401K RETIREMENT PLAN A/C ROBERT R POTVIN 6 HERITAGE DRIVE HOOKSETT NH 03106-2141 PLEASE READ BOTH SIDES OF THIS CARD VOTE TODAY! This proxy, when properly executed, will be voted in the manner directed herein and, absent direction, will be voted FOR Items below. This proxy will be voted in accordance with the holder's best judgement as to any other matter. The Board of Trustees recommends a vote FOR the following Items: 1. Elect the Board of Trustees (Item 1 of the Notice). Robert J. Birnbaum Salvatore Macera Tom Bleasdale James L. Moody, Jr. John Carberry John J. Neuhauser Lora S. Collins Thomas E. Stitzel James E. Grinnell Robert L. Sullivan Richard W. Lowry Anne-Lee Verville William E. Mayer For All For All Nominees Withhold Except | | | | | | Instruction: To withhold authority to vote for any individual nominee, mark the "For All Except" box and strike a line through the name of the nominee. Your shares will be voted for the remaining nominees. 2. To approve or disapprove amending fundamental investment policies regarding borrowing and lending (Item 2 of the Notice) For Against Abstain | | | | | | 3. To approve or disapprove reclassifying the fundamental investment policy regarding the purchase of illiquid securities (Item 3 of the Notice). For Against Abstain | | | | | | 4. To approve or disapprove policies for a master fund/feeder fund structure (Item 5 of the Notice). For Against Abstain | | | | | | MARK BOX AT RIGHT FOR ADDRESS CHANGE AND NOTE BELOW | | - ---------------------------------------- - ---------------------------------------- PLEASE MARK, SIGN DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE. Please sign exactly as name or names appear hereon. Joint owners should each sign personally. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. Signature(s) _____________________ Date ___________________________ -----END PRIVACY-ENHANCED MESSAGE-----