PRES14A 1 b39927lvpres14a.txt LIBERTY 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 14A (RULE 14A-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ] -------------------------------------------------------------------------------- Check the appropriate box: [X] Preliminary Proxy Statement [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12 [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST (Name of Registrant as Specified In Its Charter) (Name of Person(s) Filing Proxy Statement) PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: -------------------------------------------------------------------------------- 2 August 6, 2001 Dear Shareholder: The Funds listed in the Notice of Special Meeting of Shareholders will hold a special meeting on September 26, 2001, at 2:00 p.m., to vote on the proposals listed in the proxy statement. Liberty Financial Companies, Inc. ("Liberty Financial"), the parent company of the investment advisors and affiliated sub-advisors, has entered into an agreement to sell its asset management business, including the Funds' investment advisors and their affiliated sub-advisors, to Fleet National Bank ("Fleet"), an indirect wholly-owned subsidiary of FleetBoston Financial Corporation, a U.S. financial holding company. The sale will cause the Funds' current advisory agreements to terminate. In order for the management of each Fund to continue uninterrupted after the sale, we are asking you to approve new advisory agreements, including any sub-advisory and portfolio management agreements, for the Funds. The proposed new advisory agreements are substantially identical to the Funds' current advisory agreements, except as described in the attached proxy statement. NO CHANGES IN ADVISORY FEE RATES OR SERVICES ARE BEING PROPOSED. Your vote is very important. The Boards of Trustees of the Funds listed in the Notice of Special Meeting have approved the new agreements and recommend that you vote in favor of the agreements. The Liberty Variable Investment Trust Board of Trustees also recommends that you vote in favor of the persons proposed for election as Trustees at the special meeting. Please complete, sign and date the enclosed proxy card and return it in the enclosed postage-paid return envelope. This will ensure that your vote is counted, even if you cannot attend the meeting in person. It is important that you vote promptly. If you have any questions about voting, please call the customer service number provided on the insert. Sincerely, STEPHEN E. GIBSON President 3 IMPORTANT NEWS FOR FUND SHAREHOLDERS WHILE WE ENCOURAGE YOU TO READ THE FULL TEXT OF THE ENCLOSED PROXY STATEMENT, HERE'S A BRIEF OVERVIEW OF MATTERS TO BE VOTED UPON. QUESTIONS AND ANSWERS Q. What am I being asked to vote "For" in this proxy? A. You are being asked to vote for proposals to: 1. Approve a new investment advisory agreement for your Fund with your Fund's current investment advisor, on substantially identical terms as the current investment advisory agreement. NO CHANGE IN ADVISORY RATES OR SERVICES IS BEING PROPOSED. 2. Approve a new sub-advisory agreement for your Fund, if applicable, with your Fund's current sub-advisor, on substantially identical terms as the current sub-advisory agreement. NO CHANGE IN SUB-ADVISORY RATES OR SERVICES IS BEING PROPOSED. 3. Approve a new portfolio management agreement for your Fund, if applicable, with your Fund's current portfolio manager, on substantially identical terms as the current portfolio management agreement. NO CHANGE IN SUB-ADVISORY RATES OR SERVICES IS BEING PROPOSED. 4. Elect Trustees for the Liberty Variable Investment Trust. Q. Why am I being asked to vote on new agreements? A. Liberty Financial Companies, Inc. ("Liberty Financial"), the parent company of the investment advisors and affiliated sub-advisors to the Funds listed in the Notice of Special Meeting of shareholders, has entered into an agreement to sell its asset management business, including the Funds' investment advisors and their affiliated sub-advisors, to Fleet National Bank ("Fleet"), an indirect wholly-owned subsidiary of FleetBoston Financial Corporation, a U.S. financial holding company. The sale will result in the termination of the current investment advisory agreements and any sub-advisory agreements and portfolio management agreements for the Funds. The sale will not be completed unless a number of conditions are met. One of the conditions of the sale is that shareholders of a percentage of the Funds and other accounts managed by Liberty Financial affiliates must approve the proposed new agreements. Your 4 Fund's Board of Trustees has approved, and recommends that you approve, new agreements applicable to your Fund. Q. What prompted the sale of Liberty Financial's asset management business to Fleet? A. On November 1, 2000, Liberty Financial announced that it had retained CS First Boston to help explore strategic alternatives, including the possible sale of Liberty Financial. Liberty Financial ultimately determined to sell its asset management business to Fleet. Q. How will the sale of Liberty Financial's asset management business potentially benefit me? A. The Funds' Board of Trustees believes that there may be benefits of scale from combining the asset management businesses of Fleet and Liberty Financial, including the ability to attract and retain key personnel, greater access to resources for investment professionals of the advisors, enhanced technology and customer service, and the expected availability of additional investment options for shareholders of the Funds. Q. How do the proposed new agreements differ from the current agreements? A. The proposed agreements are substantially identical to the current agreements. They differ only in their beginning dates and terms and certain other minor provisions. A comparison of the proposed new agreements is included in the proxy statement under the heading "New Advisory and Sub-Advisory Agreements." Q. Will this change the advisory fees on my Fund? A. No. Advisory fees will remain the same. Q. Will there be any advisor changes? A. No. The advisors that currently manage the Funds are expected to continue to manage the Funds after the sale of Liberty Financial's asset management business, using the same investment strategies and objectives currently in place. Q. How does the Board of Trustees recommend that I vote on these proposals? A. The Board of Trustees recommends that you vote "FOR" each of the proposals. The Board believes that each of these proposals is in the best interests of your Fund and its shareholders. 5 Q. How can I vote my proxy? A. For your convenience, there are two ways you can vote: - By Mail: vote, sign and return the enclosed proxy card - In person: September 26, 2001, at 2:00 p.m. at One Financial Center, Boston, Massachusetts IT IS IMPORTANT THAT YOU VOTE PROMPTLY. 6 LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST (THE "TRUSTS") ONE FINANCIAL CENTER BOSTON, MA 02111 LIBERTY VARIABLE INVESTMENT TRUST Colonial International Fund for Growth, Variable Series Colonial U.S. Growth and Income Fund, Variable Series Colonial Strategic Income Fund, Variable Series Stein Roe Global Utilities Fund, Variable Series Liberty Value Fund, Variable Series Newport Tiger Fund, Variable Series Liberty All-Star Equity Fund, Variable Series Colonial Small Cap Value Fund, Variable Series Colonial High Yield Securities Fund, Variable Series Crabbe Huson Real Estate Investment Fund, Variable Series Colonial Global Equity Fund, Variable Series Colonial International Horizons Fund, Variable Series Liberty S&P 500 Index Fund, Variable Series Rydex Health Care Fund, Variable Series Rydex Financial Services Fund, Variable Series Liberty Select Value Fund, Variable Series Liberty Newport Japan Opportunities Fund, Variable Series STEINROE VARIABLE INVESTMENT TRUST Stein Roe Money Market Fund, Variable Series Liberty Federal Securities Fund, Variable Series Stein Roe Balanced Fund, Variable Series Stein Roe Growth Stock Fund, Variable Series Stein Roe Small Company Growth Fund, Variable Series (the "Funds") 7 NOTICE OF SPECIAL MEETING OF SHAREHOLDERS SEPTEMBER 26, 2001 A Special Meeting of the shareholders of each Fund will be held on September 26, 2001 at 2:00 p.m. at One Financial Center, Boston, Massachusetts for these purposes: 1. To approve a new Investment Advisory Agreement for each of the Funds; 2. To approve a new Sub-Advisory Agreement for each of Colonial International Fund for Growth, Variable Series, Colonial U.S. Growth and Income Fund, Variable Series, Colonial Strategic Income Fund, Variable Series, Stein Roe Global Utilities Fund, Variable Series, Liberty Value Fund, Variable Series, Newport Tiger Fund, Variable Series, Liberty All-Star Equity Fund, Variable Series, Colonial Small Cap Value Fund, Variable Series, Colonial High Yield Securities Fund, Variable Series, Crabbe Huson Real Estate Investment Fund, Variable Series, Colonial Global Equity Fund, Variable Series, Colonial International Horizons Fund, Variable Series, Liberty S&P 500 Index Fund, Variable Series, Rydex Health Care Fund, Variable Series, Rydex Financial Services Fund, Variable Series, Liberty Select Value Fund, Variable Series, Liberty Newport Japan Opportunities Fund, Variable Series, and Stein Roe Balanced Fund, Variable Series; 3. To approve a new Portfolio Management Agreement or new Portfolio Management Agreements for each of Liberty All-Star Equity Fund, Variable Series, Liberty S&P 500 Index Fund, Variable Series, Rydex Health Care Fund, Variable Series and Rydex Financial Services Fund, Variable Series; 4. To elect Trustees of Liberty Variable Investment Trust; and 5. To consider and act upon any other matters that properly come before the meeting and any adjourned session of the meeting. 8 Shareholders of record at the close of business on July 16, 2001 are entitled to notice of and to vote at the meeting and any adjourned session. By order of the Board of Trustees, William J. Ballou Secretary of each Trust August 6, 2001 PLEASE RESPOND. YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. YOU CAN VOTE EASILY AND QUICKLY BY PHONE, BY MAIL OR IN PERSON. 9 PROXY STATEMENT LIBERTY VARIABLE INVESTMENT TRUST STEINROE VARIABLE INVESTMENT TRUST (THE "TRUSTS") ONE FINANCIAL CENTER BOSTON, MA 02111 LIBERTY VARIABLE INVESTMENT TRUST Colonial International Fund for Growth, Variable Series Colonial U.S. Growth and Income Fund, Variable Series Colonial Strategic Income Fund, Variable Series Stein Roe Global Utilities Fund, Variable Series Liberty Value Fund, Variable Series Newport Tiger Fund, Variable Series Liberty All-Star Equity Fund, Variable Series Colonial Small Cap Value Fund, Variable Series Colonial High Yield Securities Fund, Variable Series Crabbe Huson Real Estate Investment Fund, Variable Series Colonial Global Equity Fund, Variable Series Colonial International Horizons Fund, Variable Series Liberty S&P 500 Index Fund, Variable Series Rydex Health Care Fund, Variable Series Rydex Financial Services Fund, Variable Series Liberty Select Value Fund, Variable Series Liberty Newport Japan Opportunities Fund, Variable Series (collectively, the "LVIT Funds") STEINROE VARIABLE INVESTMENT TRUST Stein Roe Money Market Fund, Variable Series Liberty Federal Securities Fund, Variable Series Stein Roe Balanced Fund, Variable Series Stein Roe Growth Stock Fund, Variable Series Stein Roe Small Company Growth Fund, Variable Series (collectively, the "SRVIT Funds" and, together with the LVIT Funds, the "Funds") 10 The Trustees of the Liberty Variable Investment Trust and the SteinRoe Variable Investment Trust (the "Trustees") are soliciting proxies from the shareholders of each of the Funds in connection with a Special Meeting of Shareholders of each Fund (the "Meeting"). The Meeting has been called to be held on September 26, 2001 at 2:00 p.m. at One Financial Center, Boston, Massachusetts. The meeting notice, this Proxy Statement and proxy cards are being sent to shareholders beginning on or about August 6, 2001. The only items of business that the Trustees expect will come before the Meeting are: (1) approval of a new Investment Advisory Agreement for each Fund (each a "New Advisory Agreement") with, as applicable, Liberty Advisory Services Corp. or Stein Roe & Farnham Incorporated (collectively, the "Advisors"); (2) approval of a New Sub-Advisory Agreement (each a "New Sub-Advisory Agreement") for each of Colonial International Fund for Growth, Variable Series, Colonial U.S. Growth and Income Fund, Variable Series, Colonial Strategic Income Fund, Variable Series, Stein Roe Global Utilities Fund, Variable Series, Liberty Value Fund, Variable Series, Newport Tiger Fund, Variable Series, Liberty All-Star Equity Fund, Variable Series, Colonial Small Cap Value Fund, Variable Series, Colonial High Yield Securities Fund, Variable Series, Crabbe Huson Real Estate Investment Fund, Variable Series, Colonial Global Equity Fund, Variable Series, Colonial International Horizons Fund, Variable Series, Liberty S&P 500 Index Fund, Variable Series, Rydex Health Care Fund, Variable Series, Rydex Financial Services Fund, Variable Series, Liberty Select Value Fund, Variable Series, Liberty Newport Japan Opportunities Fund, Variable Series and Stein Roe Balanced Fund, Variable Series (collectively, the "Sub-Advised Funds") with, as applicable, Colonial Management Associates, Inc., Crabbe Huson Group, Inc., Liberty Asset Management Company, Newport Fund Management, Inc., Nordea Securities, Inc. and Stein Roe & Farnham Incorporated (collectively, the "Sub-Advisors"); (3) approval of a new Portfolio Management Agreement or new Portfolio Management Agreements (each a "New Portfolio Management Agreement") for each of the Liberty All-Star Equity Fund, Variable Series, Liberty S&P 500 Index Fund, Variable 2 11 Series, Rydex Health Care Fund, Variable Series and Rydex Financial Services Fund, Variable Series (collectively, the "Portfolio Managed Funds") with, as applicable, Matrapasqua & Associates, Oppenheimer Capital, Boston Partners Asset Management, L.P., Westwood Management Corp., TCW Investment Management Company, Rydex Global Advisors and SSgA Funds Management, Inc. (collectively, the "Portfolio Managers"); and (4) the election of Trustees of Liberty Variable Investment Trust. SUMMARY OF PROPOSALS AND FUNDS AFFECTED*
1. PROPOSAL 3. PROPOSAL TO APPROVE 2. PROPOSAL TO APPROVE A NEW TO APPROVE A NEW INVESTMENT A NEW PORTFOLIO 4. PROPOSAL ADVISORY SUB-ADVISORY MANAGEMENT TO ELECT NAME OF FUND AGREEMENT AGREEMENT AGREEMENT TRUSTEES ------------ ----------- ------------ ----------- ----------- LIBERTY VARIABLE INVESTMENT TRUST Colonial International Fund for Growth, Variable Series X X X Colonial U.S. Growth & Income Fund, Variable Series X X X Colonial Strategic Income Fund, Variable Series X X X Stein Roe Global Utilities Fund, Variable Series X X X Liberty Value Fund, Variable Series X X X Newport Tiger Fund, Variable Series X X X Liberty All-Star Equity Fund, Variable Series X X X X Colonial Small Cap Value Fund, Variable Series X X X Colonial High Yield Securities Fund, Variable Series X X X
3 12
1. PROPOSAL 3. PROPOSAL TO APPROVE 2. PROPOSAL TO APPROVE A NEW TO APPROVE A NEW INVESTMENT A NEW PORTFOLIO 4. PROPOSAL ADVISORY SUB-ADVISORY MANAGEMENT TO ELECT NAME OF FUND AGREEMENT AGREEMENT AGREEMENT TRUSTEES ------------ ----------- ------------ ----------- ----------- Crabbe Huson Real Estate Investment Fund, Variable Series X X X Colonial Global Equity Fund, Variable Series X X X Colonial International Horizons Fund, Variable Series X X X Liberty S&P 500 Index Fund, Variable Series X X X X Rydex Health Care Fund, Variable Series X X X X Rydex Financial Services Fund, Variable Series X X X X Liberty Select Value Fund, Variable Series X X X Liberty Newport Japan Opportunities Fund, Variable Series X X X STEINROE VARIABLE INVESTMENT TRUST Stein Roe Money Market Fund, Variable Series X Liberty Federal Securities Fund, Variable Series X Stein Roe Balanced Fund, Variable Series X X Stein Roe Growth Stock Fund, Variable Series X Stein Roe Small Company Growth Fund, Variable Series X
--------------- * An "X" denotes that the Fund is affected by the proposal and that the Fund's shareholders are being solicited with respect to that proposal. 4 13 PROPOSALS 1, 2 AND 3 NEW ADVISORY, SUB-ADVISORY AND PORTFOLIO MANAGEMENT AGREEMENTS As explained below, the proposed New Advisory Agreement for each Fund, the proposed New Sub-Advisory Agreement for each Sub-Advised Fund and the proposed New Portfolio Management Agreements for each Portfolio Managed Fund (the New Advisory Agreements, the New Sub-Advisory Agreements and the New Portfolio Management Agreements, as applicable for a Fund, are referred to herein collectively as the "New Agreements") are substantially identical (except for their terms and dates (and certain other non-material changes)) to the Investment Advisory Agreement, Sub-Advisory Agreement and Portfolio Management Agreements currently in effect for that Fund (the "Current Advisory Agreement," "Current Sub-Advisory Agreement," and "Current Portfolio Management Agreements," respectively, and, collectively, the "Current Agreements"). The reason the Trustees are proposing a New Advisory Agreement for each Fund, a New Sub-Advisory Agreement for each Sub-Advised Fund and a New Portfolio Management Agreement or New Portfolio Management Agreements for each Portfolio Managed Fund is that the Current Advisory Agreements, Current Sub-Advisory Agreements and Current Portfolio Management Agreements will terminate when the Advisors' parent company, Liberty Financial Companies, Inc. ("LFC"), sells each of the Advisors and its other subsidiaries that operate its asset management business (the "Asset Management Segment"), to Fleet National Bank, a national banking association ("Fleet"). As a result of this acquisition, the Advisors and the other subsidiaries will become direct or indirect, wholly-owned subsidiaries of Fleet. The Investment Company Act of 1940, as amended, (the "Investment Company Act"), provides generally that the advisory agreement of an investment company, as well as any sub-advisory agreement, such as any of the Current Sub-Advisory Agreements and the Current Portfolio Management Agreements, must provide for automatic termination if assigned, such as when the investment advisor or its parent company undergoes a significant change of ownership. In addition, LFC has agreed to sell, in a separate transaction, all of the issued and outstanding capital stock of the subsidiaries constituting the annuity segment of LFC's business to Sun Life Assurance Company of 5 14 Canada, a Canadian corporation (the "Annuity Sale"). The sale of the Asset Management Segment to Fleet and the Annuity Sale are not conditioned on each other. LFC has entered into a Merger Agreement with Liberty Mutual Insurance Company (the majority stockholder of LFC), which provides that, following the acquisition of the Asset Management Segment by Fleet and the Annuity Sale, LFC will merge with and into LFC Acquisition Corporation, a wholly owned subsidiary of Liberty Mutual Insurance Company, with LFC being the surviving corporation (the "Merger"). In connection with the Merger, holders of LFC common stock, other than LFC, Liberty Mutual and their respective direct and indirect subsidiaries and other than those holders of LFC common stock who validly perfect their appraisal rights under Massachusetts law, will be entitled to receive an amount of cash equal to $33.44, subject to adjustment, per share of common stock. Once such merger consideration is paid, such shares will be cancelled. The Trustees have carefully considered the matter and have concluded that it is appropriate to enter into the New Advisory Agreement, New Sub-Advisory Agreement and New Portfolio Management Agreements, as applicable for each Fund, so that the Advisors, Sub-Advisors and Portfolio Managers can continue, following the acquisition of the Asset Management Segment by Fleet, to manage each Fund on the same terms as are now in effect. The Trustees also have approved an interim advisory agreement, sub-advisory agreement and portfolio management agreement for each Fund, as applicable, pursuant to Rule 15a-4 under the Investment Company Act, which will be entered into immediately following the closing of the acquisition of the Asset Management Segment by Fleet only if a particular Fund has not at that time received the requisite shareholder vote for the New Agreements, at the Meeting. See the section "Basis for the Trustees' Recommendations" below for further information on these interim agreements. The acquisition of the Asset Management Segment by Fleet will occur only if various conditions are satisfied (or waived by the parties, if permitted by law). Those conditions include, among others, the receipt of certain government approvals, approval or consent from investment advisory clients of the Advisors, the affiliated Sub-Advisors and other LFC affiliates (including mutual fund clients) which represent a specified percentage of LFC's total assets under management as of March 31, 2001, the avoidance of a certain level of net redemptions from portfolios managed by the Advisors and certain of their affiliates that 6 15 make up the Asset Management Segment and approval of the acquisition by the requisite vote of the shareholders of LFC. LFC currently expects that the acquisition will occur during the latter part of 2001, but the acquisition could be delayed. If the acquisition does not occur, the New Agreements would not be needed because the automatic termination of the Current Agreements would not occur. Under the Investment Company Act, a Fund cannot enter into a New Advisory Agreement and the Advisor cannot enter into a New Sub-Advisory Agreement or a New Portfolio Management Agreement on behalf of a Fund unless the shareholders of that Fund vote to approve the New Advisory Agreement, the New Sub-Advisory Agreement and the New Portfolio Management Agreement(s), as applicable. The Meeting is being held to seek shareholder approval of the New Advisory Agreement for each Fund, the New Sub-Advisory Agreement for each Sub-Advised Fund and the New Portfolio Management Agreement(s) for each Portfolio Managed Fund. NO CHANGE IN ADVISORY OR SUB-ADVISORY FEE RATES OR SERVICES IS BEING PROPOSED. Shareholders of each Fund will vote separately on the New Advisory Agreement for that Fund, shareholders of each Sub-Advised Fund will vote separately on the New Sub-Advisory Agreement for that Fund, and shareholders of each Portfolio Managed Fund will vote separately on the New Portfolio Management Agreement(s) for that Fund. Each share is entitled to cast one vote, and fractional shares are entitled to a proportionate fractional vote. All shares were owned of record by sub-accounts of separate accounts ("Separate Accounts") of life insurance companies (the "Participating Insurance Companies") established to fund benefits under variable annuity contracts and variable life insurance policies issued by the Participating Insurance Companies. As of the Record Date for this Proxy Statement, the Participating Insurance Companies are Keyport Life Insurance Company ("Keyport"), Independence Life & Annuity Company (a wholly-owned subsidiary of Keyport), Keyport Benefit Life Insurance Company (a wholly-owned subsidiary of Keyport), Liberty Life Assurance Company (an affiliate of Keyport), MetLife Investors, Security Benefit Life Insurance Company, Lincoln Life, Great West Life and Annuity Insurance Company, Aegon USA, Transamerica Life Insurance and SAGE Life Assurance Company. As of the date of this Proxy Statement, Keyport, Independence Life & Annuity Company, Keyport Benefit Life Insurance Company and Liberty Life Assurance Company are affiliated with the Advisors. 7 16 The Participating Insurance Companies are mailing copies of this proxy material to the holders of these contracts and policies who, by completing and signing the accompanying proxy cards, will instruct the Separate Accounts how they wish the shares of the Funds to be voted. The Separate Accounts will vote shares of the Funds as instructed on the proxy cards by their contract or policyholders. If no instructions are specified on a proxy returned by a contract or policy holder, the Separate Accounts will vote the shares of the Fund represented thereby in favor of each New Advisory Agreement, New Sub-Advisory Agreement and New Portfolio Management Agreement, as applicable. The Separate Accounts intend to vote shares for which no proxies are returned in the same proportion as the shares for which proxies are returned. In addition, Keyport, which owns shares of certain Funds in its general account, intends to vote such shares in the same proportion as the shares held in its Separate Accounts for which proxies are returned. THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF EACH FUND VOTE TO APPROVE THE NEW ADVISORY AGREEMENT, THE NEW SUB-ADVISORY AGREEMENT AND THE NEW PORTFOLIO MANAGEMENT AGREEMENT(S), AS APPLICABLE, FOR THEIR FUND. REQUIRED VOTE. For each Fund, the vote required to approve each New Advisory Agreement, New Sub-Advisory Agreement and New Portfolio Management Agreement, as applicable, is the lesser of (1) 67% of the shares of that Fund that are present at the Meeting, if the holders of more than 50% of the shares of the Fund outstanding as of the record date are present or represented by proxy at the Meeting, or (2) more than 50% of the shares of the Fund outstanding on the record date. If the required vote is not obtained for any Fund, the Trustees will consider what other actions to take in the best interests of the Funds. DESCRIPTION OF THE NEW ADVISORY AGREEMENTS The New Advisory Agreement for each Fund is substantially identical (but for a few non-material changes) to the Current Advisory Agreement for that Fund, except that the date of each New Advisory Agreement will be the date that Fleet acquires the Asset Management Segment, or such later date on which shareholders of the Funds approve the New Advisory Agreements and the initial term of each new Advisory Agreement expires on July 31, 2003. Appendix A1 to this Proxy Statement sets forth information about the Current Advisory Agree- 8 17 ments, including the dates of the Current Advisory Agreements and the advisory fee rates under both the New Advisory Agreements and the Current Advisory Agreements. Appendix B1 to this Proxy Statement contains the form of the New Advisory Agreement applicable to each Fund. Each Current Advisory Agreement and each New Advisory Agreement matches the form in Appendix B1, except for items specific to a Fund such as the Fund's name and fee rate, and the date of the Agreement. The next several paragraphs briefly summarize some important provisions of the New Advisory Agreements, but for a complete understanding of the Agreements, you should read Appendices A1 and B1. Each New Advisory Agreement essentially provides that the Advisor, under the Trustees' supervision, will: (1) provide investment management and related services to the Trust and the Fund, and (2) provide certain administrative and limited oversight services. The New Advisory Agreement for each Fund provides that it will continue in effect for an initial period beginning on the date Fleet acquires the Asset Management Segment, or such later date on which shareholders of the Funds approve the New Advisory Agreements and ending on July 31, 2003. After that, it will continue in effect from year to year as long as the continuation is approved at least annually (i) by the Trustees or by vote of a majority of the outstanding voting securities of the Fund, and (ii) by vote of a majority of the Trustees who are not "interested persons," as that term is defined in the Investment Company Act, of the Trust or the Advisor (those Trustees who are not "interested persons" of the Trust or an Advisor are referred to below as the "Independent Trustees"). The New Advisory Agreement for each Fund may be terminated without penalty by vote of the Trustees or by vote of a majority of the outstanding voting securities of the Fund, on sixty days' written notice to an Advisor, or by an Advisor upon sixty days' written notice to the Trust, and each terminates automatically in the event of its "assignment" as defined in the Investment Company Act. The Investment Company Act defines "assignment" to include, in general, transactions in which a significant change in the ownership of an investment advisor (including a sub-advisor) or its parent company occurs (such as the acquisition of the Asset Management Segment by Fleet). 9 18 The New Advisory Agreement for each Fund provides that the Advisor will not be liable to the Fund or its shareholders, except for liability arising from the Advisor's willful misfeasance, bad faith, gross negligence or reckless disregard of duty. Colonial Management Associates, Inc. ("Colonial") currently provides administrative services to each Fund under separate administration agreements. These agreements and the agreements discussed in the following paragraphs are not subject to the "assignment" provisions of the Investment Company Act and are not impacted by LFC's sale of the Asset Management Segment to Fleet. The aggregate administrative services fees paid by each Fund to Colonial for the most recently completed fiscal year is set forth in Appendix E. Under the existing administrative agreement, Colonial may make use of its affiliated companies in connection with the administrative services to be provided to a Fund under the contract. Pursuant to an accounting and bookkeeping agreement, Colonial is responsible for providing certain services to the Funds. The aggregate accounting and bookkeeping fees paid by each Fund to Colonial for the most recently completed fiscal year is set forth in Appendix E. Liberty Funds Services, Inc. ("LFSI"), One Financial Center, Boston, MA 02111, is the agent for each Fund for the transfer of shares, disbursement of dividends, and maintenance of shareholder accounting records. The aggregate transfer agency fees paid by each Fund to LFSI for the most recently completed fiscal year are set forth in Appendix E. DESCRIPTION OF THE NEW SUB-ADVISORY AGREEMENTS The New Sub-Advisory Agreements for the Sub-Advised Funds are substantially identical (but for a few non-material changes) to the Current Sub-Advisory Agreements for those funds except that the date of each New Sub-Advisory Agreement will be the date that Fleet acquires the Asset Management Segment, or such later date on which the shareholders of the Funds approve the New Sub-Advisory Agreements and the initial term of each New Sub-Advisory Agreement expires on July 31, 2003. Appendix A2 to this proxy statement sets forth information about the Current Sub-Advisory Agreements, including the dates of the Current Sub-Advisory Agreements and the advisory fee rates under both the New Sub-Advisory Agreements and the Current Sub-Advisory Agreements. Appendix B2 to this proxy statement contains 10 19 forms of the Sub-Advisory Agreements. Each Current Sub-Advisory Agreement and each New Sub-Advisory Agreement matches the relevant form in Appendix B2, except for the changes noted above and items specific to a Fund, such as the Fund's name and fee rate. The next several paragraphs briefly summarize some important provisions of the New Sub-Advisory Agreements, but for a complete understanding of the Agreements, you should read Appendices A2 and B2. The New Sub-Advisory Agreements essentially provide that the Sub-Advisor, under the Trustees' and the Advisor's supervision, will (1) decide what securities to buy and sell for the Fund's (or a portion of the Fund's) portfolio,(except in the case of Liberty All-Star Equity Fund, Variable Series, Liberty S&P 500 Index Fund, Variable Series, Rydex Health Care Fund, Variable Series and Rydex Financial Services Fund, Variable Series), (2) select brokers and dealers to carry out portfolio transactions for the Fund (or the portion of the Fund's portfolio managed by the Sub-Advisor) and (3) report results to the Board of Trustees of the Trust or the Advisor, as appropriate. The New Sub-Advisory Agreements provide that they will continue in effect for an initial period beginning on the date Fleet acquires the Asset Management Segment, or such later date on which the shareholders of the Funds approve the New Sub-Advisory Agreements and ending on July 31, 2003. After that, they will continue in effect from year to year as long as the continuation is approved at least annually (i) by the Trustees or by vote of a majority of the outstanding voting securities of the relevant Fund, and (ii) by vote of a majority of the Independent Trustees. The New Sub-Advisory Agreements may be terminated without penalty (i) by vote of the Trustees or by vote of a majority of the outstanding voting securities of the relevant Fund, on sixty days' written notice to the Sub-Advisor, (ii) in some cases, by the Advisor upon sixty days' written notice to the Sub-Advisor, or (iii) by the Sub-Advisor upon ninety (in some cases sixty) days' written notice to the Advisor and the Trust, and the New Sub-Advisory Agreements terminate automatically in the event of their "assignment," as described above, or upon termination of the Advisory Agreement. The Sub-Advisor will not be liable to the Advisor, the relevant Trust, the relevant Fund or its shareholders, except for liability arising from the Sub-Advisor's willful misfeasance, bad faith, gross negligence or reckless 11 20 disregard of its obligations or duties under the New Sub-Advisory Agreement. DESCRIPTION OF THE NEW PORTFOLIO MANAGEMENT AGREEMENTS The New Portfolio Management Agreements for the Portfolio Managed Funds are identical (but for a few non-material changes) to the Current Portfolio Management Agreements for those funds except that the date of each New Portfolio Management Agreement will be the date that Fleet acquires the Asset Management Segment, or such later date on which the shareholders of the Funds approve the New Portfolio Management Agreements, and the initial term of each New Portfolio Management Agreement expires on July 31, 2003. Appendix A3 to this proxy statement sets forth information about the Current Portfolio Management Agreements, including the dates of the Current Portfolio Management Agreement and the advisory fee rates under both the New Portfolio Management Agreements and the Current Portfolio Management Agreements. Appendix B3 to this proxy statement contains the form of the Portfolio Management Agreements. Each Current Portfolio Management Agreement and each New Portfolio Management Agreement matches the form in Appendix B3, except for the changes noted above and items specific to a Fund, such as the Fund's name and fee rate. The next several paragraphs briefly summarize some important provisions of the New Portfolio Management Agreements, but for a complete understanding of the Agreements, you should read Appendices A3 and B3. The New Portfolio Management Agreements essentially provide that the Portfolio Manager, under the Trustees', the Advisors' and Sub-Advisors' supervision, will (1) decide what securities to buy and sell for the Fund's (or a portion of the Fund's) portfolio, (2) select brokers and dealers to carry out portfolio transactions for the Fund (or the portion of the Fund's portfolio managed by the Portfolio Manager) and (3) report results to the Boards of Trustees of the Trust, the Advisor or Sub-Advisor, as appropriate. The New Portfolio Management Agreements provide that they will continue in effect for an initial period beginning on the date Fleet acquires the Asset Management Segment, or such later date on which the shareholders of the Funds approve the New Sub-Advisory Agreements and ending on July 31, 2003. After that, they will continue in effect from year to year as long as the continuation is approved at least 12 21 annually (i) by the Trustees or by vote of a majority of the outstanding voting securities of the relevant Fund, and (ii) by vote of a majority of the Independent Trustees. The New Portfolio Management Agreements may be terminated without penalty (i) by vote of the Trustees or by vote of a majority of the outstanding voting securities of the relevant Fund, on thirty days' written notice to the Portfolio Manager, (ii) by the Sub-Advisor upon thirty days' written notice to the Portfolio Manager, or (iii) by the Portfolio Manager upon ninety days' written notice to the Sub-Advisor and the Trust, and the New Portfolio Management Agreement terminates automatically in the event of its "assignment," as described above, or upon termination of the Advisory Agreement or Sub-Advisory Agreement. The Portfolio Manager will not be liable to the Advisor, Sub-Advisor, the relevant Trust, the relevant Fund or its shareholders, except for liability arising from the Portfolio Manager's willful misfeasance, bad faith or gross negligence in the performance of its obligations or duties under the New Portfolio Management Agreement. BASIS FOR THE TRUSTEES' RECOMMENDATIONS The Trustees initially met on June 11, 2001 to discuss the proposed acquisition of the Asset Management Segment by Fleet. At that meeting, representatives of LFC made a presentation regarding the terms of the proposed acquisition and representatives of Fleet made a presentation regarding Fleet's structure and asset management business and their plans as they existed at that time for the Asset Management Segment. At a meeting held on June 19, 2001, LFC and Fleet provided the Trustees with additional information that they had requested, and the Trustees also completed their annual review of the contracts for each Fund. The Trustees determined at the June 19, 2001 meeting to recommend that each Fund's shareholders vote to approve the New Advisory Agreement for their Fund and, as applicable, the New Sub-Advisory Agreement and the New Portfolio Management Agreement for their Fund. In coming to that determination, the Trustees gave particular consideration to matters relating to the possible effects on the Advisors, the affiliated Sub-Advisors and the Funds of the acquisition of the Asset 13 22 Management Segment by Fleet. Among other things, the Trustees considered: - the stated intention of Fleet not to make immediate changes to the investment management services provided by the Advisors and to collaborate with the Advisors, in consultation with the Boards of the Funds, to develop and implement a strategy for integrating the investment management businesses of the Advisors with Fleet's investment management business; - certain actions taken by LFC and the Advisors and the affiliated Sub-Advisors to help retain and incent their key personnel; - the general reputation and the financial resources of Fleet and its parent organization; - the potential benefits of scale from combining the asset management businesses of Fleet and LFC, including the ability to attract and retain key personnel and enhance technology and customer service; - the expected additional investment options available to shareholders of the Funds; - the impact of the acquisition of the Asset Management Segment on the different types of investors in the Funds; - the stated intention of Fleet to consult with the Boards of the Funds prior to removing or reducing any voluntary fee waivers or expense limitations; and - the stated intention of Fleet of providing investment professionals of the Advisors with access to greater resources as a result of the acquisition. In addition, the Trustees considered a wide range of information of the type they regularly consider when determining whether to continue a Fund's advisory agreement as in effect from year to year. The Trustees considered information about, among other things: - the Advisors and Sub-Advisors and their respective personnel (including particularly those personnel with responsibilities for providing services to the Funds), resources and investment process; - the terms of the New Advisory Agreements and, where applicable, the New Sub-Advisory Agreements and the New Portfolio Management Agreements; 14 23 - the scope and quality of the services that the Advisors, Sub-Advisors and Portfolio Managers have been providing to the Funds; - the investment performance of each Fund and of similar funds managed by other advisors; - the advisory fee rates payable to the Advisors by the Funds, and by the Advisors to certain Sub-Advisors and Portfolio Managers with respect to the Funds, and by other funds and client accounts managed by the Advisors, the Sub-Advisors and the Portfolio Managers, and payable by similar funds managed by other advisors (Appendix C to this Proxy Statement contains information comparing each Fund's advisory fee schedule to the fee schedule for other funds managed by the Advisor and, where applicable, one or more Sub-Advisors and Portfolio Managers that have investment objectives similar to the particular Fund); - the total expense ratios of the Funds and of similar funds managed by other advisors; and - compensation payable by the Funds to affiliates of the Advisors, the Sub-Advisors and the Portfolio Managers for other services (see Appendix E to this Proxy Statement for more information about that compensation). In addition, the Trustees considered that the agreement relating to the acquisition by Fleet provides that Fleet will (subject to certain qualifications) use all reasonable efforts to assure compliance with Section 15(f) of the Investment Company Act. Section 15(f) provides that a mutual fund investment advisor or its affiliates may receive benefits or compensation in connection with a change of control of the investment advisor (such as Fleet's acquisition of the Asset Management Segment) if two conditions are satisfied. First, for three years after the change of control, at least 75% of the members of the board of any registered investment company advised by the advisor must consist of persons who are not "interested persons," as defined in the Investment Company Act, of the advisor. (No changes in the current composition of the Trustees are required to satisfy that condition.) Second, no "unfair burden" may be imposed on any such registered investment company as a result of the change of control transaction or any express or implied terms, conditions or understandings applicable to the transaction. "Unfair burden" means any arrangement, during the two years after the transaction, by which the investment advisor or any "interested person" 15 24 of the advisor receives or is entitled to receive any compensation, directly or indirectly, from such investment company or its security holders (other than fees for bona fide investment advisory or other services) or from any other person in connection with the purchase or sale of securities or other property to, from or on behalf of such investment company. After carefully considering the information described above, the Trustees, including the Independent Trustees, unanimously voted to approve the New Advisory Agreement for each Fund, the New Sub-Advisory Agreements for the Sub-Advised Funds and the New Portfolio Management Agreement(s) for the Portfolio Managed Funds and to recommend that each Fund's shareholders vote to approve the New Advisory Agreement and, as applicable, the New Sub-Advisory Agreement and the New Portfolio Management Agreement(s) for their Fund. In the event that the shareholders have not approved the New Advisory Agreements, New Sub-Advisory Agreements or New Portfolio Management Agreements, as applicable, by the time of the acquisition of the Asset Management Segment by Fleet, the Advisors, Sub-Advisors and Portfolio Managers will enter into interim advisory agreements, sub-advisory agreements or portfolio management agreements pursuant to Rule 15a-4 under the Investment Company Act, which will take effect immediately following the acquisition of the Asset Management Segment by Fleet (at which time the Current Agreements will terminate due to an assignment). These interim advisory agreements, sub-advisory agreements and portfolio management agreements will be in substantially the forms set forth in Appendices B1, B2 and B3 but also will include certain provisions required by Rule 15a-4 (such as a maximum term of 150 days, a provision that a Fund's Board of Trustees or a majority of the fund's shareholders may terminate the agreement at any time without penalty on not more than 10 days' written notice, and a provision that the compensation earned by the Advisors, Sub-Advisors and Portfolio Managers thereunder will be held in an interest-bearing escrow account until shareholder approval of the relevant New Agreements is obtained, after which the amount in the escrow account (together with any interest) will be paid to the Advisors, Sub-Advisors and Portfolio Managers). If a Fund has not received the requisite shareholder approval for a New Advisory Agreement, New Sub-Advisory Agreement or New Portfolio Management Agreement within 150 days after the closing of 16 25 the acquisition, the Trustees will consider other appropriate arrangements subject to approval in accordance with the Investment Company Act. INFORMATION ABOUT THE ADVISORS, THE SUB-ADVISORS, THE PORTFOLIO MANAGERS AND THE FLEET/LFC TRANSACTION ADVISORS LIBERTY ADVISORY SERVICES CORP. Liberty Advisory Services Corp. ("LASC"), a Massachusetts corporation, located at 125 High Street, Boston, Massachusetts 02110, serves as Manager pursuant to investment advisory agreements between Liberty Variable Investment Trust on behalf of the LVIT Funds and LASC. As of May 31, 2001, LASC managed over $871 million in assets. LASC currently serves as investment advisor for 17 open-end management investment company portfolios. LASC is a direct wholly-owned subsidiary of Keyport Life Insurance Company ("Keyport"), which is an indirect wholly-owned subsidiary of LFC. LFC is a direct majority-owned subsidiary of LFC Management Corporation, which in turn is a direct wholly-owned subsidiary of Liberty Corporate Holdings, Inc., which in turn is a direct wholly-owned subsidiary of LFC Holdings, Inc., which in turn is a direct wholly-owned subsidiary of Liberty Mutual Equity Corporation, which in turn is a direct wholly-owned subsidiary of Liberty Mutual Insurance Company ("Liberty Mutual"). As of June 30, 2001, LFC Management Corporation owned 70.46% of the common stock of LFC and the balance was held by the public and listed on the New York Stock Exchange. LFC is a diversified and integrated asset management organization which provides insurance and investment products to individuals and institutions. The principal executive offices of LFC are located at 600 Atlantic Avenue, 24th Floor, Boston, Massachusetts 02210. Liberty Mutual is an underwriter of workers' compensation insurance and a property and casualty insurer in the United States, organized under the laws of Massachusetts in 1912. The principal business activities of Liberty Mutual's subsidiaries other than LFC are property-casualty insurance, insurance services and life insurance (including group life and health insurance products) marketed through its own sales force. The principal executive offices of LFC Management Corporation, Liberty Corporate Holdings, Inc., and LFC Holdings, Inc., Liberty Mutual and Liberty Mutual Equity Corporation are located at 175 Berkeley Street, Boston, Massachusetts 02117. Prior to the closing of the Annuity Sale, LASC will become a wholly-owned subsidiary of 17 26 Liberty Funds Group LLC ("LFG") and will be acquired by Fleet as part of the Asset Management Segment. Upon completion of the Annuity Sale, ownership of Keyport will be transferred to Sun Life Assurance Company. The directors and principal executive officer of LASC are Philip K. Polkinghorn (principal executive officer and director) and Stewart R. Morrison. Mr. Polkinghorn is the President of Keyport. Mr. Morrison is a Senior Vice President and the Chief Investment Officer of Keyport. The business address of Messrs. Polkinghorn and Morrison is 125 High Street, Boston, Massachusetts 02110. LASC and the Liberty Variable Investment Trust, on behalf of each of the Liberty Value Fund, Variable Series, Colonial International Fund for Growth, Variable Series, Colonial U.S. Growth & Income Fund, Variable Series, Colonial Strategic Income Fund, Variable Series, Colonial Small Cap Value Fund, Variable Series, Colonial High Yield Securities Fund, Variable Series, Colonial International Horizons Fund, Variable Series, Colonial Global Equity Fund, Variable Series, Liberty Select Value Fund, Variable Series, Rydex Financial Services Fund, Variable Series, Rydex Health Care Fund, Variable Series and Liberty S&P 500 Index Fund, Variable Series, have entered into separate Sub-Advisory Agreements with Colonial. LASC and the Liberty Variable Investment Trust, on behalf of the Stein Roe Global Utilities Fund, Variable Series, have entered into a separate Sub-Advisory Agreement with Stein Roe & Farnham Incorporated ("Stein Roe"). LASC and the Liberty Variable Investment Trust, on behalf of each of the Newport Tiger Fund, Variable Series and Liberty Newport Japan Opportunities Fund, Variable Series, have entered into separate Sub-Advisory Agreements with Newport Fund Management, Inc. ("Newport"). LASC and the Liberty Variable Investment Trust, on behalf of the Crabbe Huson Real Estate Investment Fund, Variable Series, have entered into a separate Sub-Advisory Agreement with Crabbe Huson Group, Inc. ("Crabbe Huson"). Liberty Asset Management Company ("LAMCO") sub-advises the Liberty All-Star Equity Fund, Variable Series pursuant to the LASC Management Agreement for such Fund (to which LAMCO is a party). 18 27 The Liberty All-Star Equity Fund, Variable Series' investment program is based upon LAMCO's multi-manager concept. LAMCO allocates the Fund's portfolio assets on an equal basis among a number -- currently five -- of independent investment management organizations ("Portfolio Managers") each of which employs a different investment style, and periodically rebalances the Fund's portfolio among the Portfolio Managers so as to maintain an approximately equal allocation of the portfolio among them throughout all market cycles. Each Portfolio Manager provides these services under a current Portfolio Management Agreement among the Trust, on behalf of the Liberty All-Star Equity Fund, Variable Series, LAMCO and such Portfolio Manager. STEIN ROE & FARNHAM INCORPORATED Stein Roe, a Delaware corporation, located at One South Wacker Drive, Chicago, Illinois 60606, and its predecessor have been providing investment advisory services since 1932. Stein Roe serves as investment advisor pursuant to investment advisory agreements between the SteinRoe Variable Investment Trust on behalf of the SRVIT Funds and Stein Roe. Stein Roe acts as an investment advisor to trustees, investment companies, pension and profit sharing plans, charitable organizations, and other institutional investors. As of May 31, 2001, Stein Roe managed over $23 billion in assets. Stein Roe currently serves as investment advisor or sub-advisor for 38 open-end and 3 closed-end management investment company portfolios. Stein Roe is a wholly-owned subsidiary of LFG, which in turn is an indirect wholly-owned subsidiary of LFC. The directors and principal executive officer of Stein Roe are Stephen E. Gibson (principal executive officer and director), J. Andrew Hilbert, C. Allen Merritt, Jr. and Joseph R. Palombo. Mr. Gibson is the President of Stein Roe. Mr. Palombo is an Executive Vice President of Stein Roe. Mr. Hilbert is the Chief Financial Officer of LFC. Mr. Merritt is the Chief of Staff of LFC. The business address of Messrs. Gibson and Palombo is One Financial Center, Boston, Massachusetts 02111; and that of Messrs. Hilbert and Merritt is 600 Atlantic Avenue, 24th Floor, Boston, Massachusetts 02210. In addition, the following individuals who are officers of the Trusts are also officers of Stein Roe: William J. Ballou, Kevin M. Carome and Kevin S. Jacobs. 19 28 SUB-ADVISORS COLONIAL MANAGEMENT ASSOCIATES, INC. Colonial, a Massachusetts corporation, located at One Financial Center, Boston, Massachusetts 02111, is a wholly-owned subsidiary of LFG, also located at One Financial Center, Boston, Massachusetts 02111, which in turn is a direct wholly-owned subsidiary of Liberty Financial Services, Inc. ("LFS") which is a direct wholly-owned subsidiary of LFC. The principal executive offices of LFS are located at 600 Atlantic Avenue, 24th Floor, Boston, Massachusetts 02110. Colonial and/or its affiliate, Colonial Advisory Services, Inc. ("CASI"), has rendered investment advisory services to investment company, institutional and other clients since 1931. Colonial currently serves as investment advisor, sub-advisor or administrator for 48 open-end and 9 closed-end management investment company portfolios. As of May 31, 2001, Colonial managed and/or administered over $17 billion in assets. The directors of Colonial are Stephen E. Gibson, Joseph R. Palombo and Kevin M. Carome. Mr. Gibson is the President and Chief Executive Officer of Colonial. Mr. Palombo is an Executive Vice President of Colonial. Mr. Carome is a Senior Vice President of Colonial. The business address of Messrs. Gibson and Palombo is One Financial Center, Boston, Massachusetts 02111. The business address of Mr. Carome is 600 Atlantic Avenue, 24th Floor, Boston, Massachusetts 02210. In addition, the following individuals who are officers of the Trusts are also officers of Colonial: William J. Ballou, Barry Finkle, Ellen Harrington, Kevin S. Jacobs, Russell L. Kane and Vincent P. Pietropaolo. NEWPORT FUND MANAGEMENT, INC. Newport, a Virginia corporation, located at 580 California Street, San Francisco, California 94104, serves as an investment advisor and sub-advisor to investment companies. As of May 31, 2001, Newport managed over $912 million in assets. Newport currently serves as investment advisor or sub-advisor for 9 open-end management investment company portfolios. Newport is a direct majority-owned subsidiary of Newport Pacific Management, Inc. ("Newport Pacific"), a California corporation, also located at 580 California Street, San Francisco, California 94104. 20 29 Newport Pacific is a direct wholly-owned subsidiary of Liberty Newport Holdings, Limited, which in turn is a direct wholly-owned subsidiary of LFC. The directors of Newport and Newport Pacific are Lindsay Cook, J. Andrew Hilbert, John M. Mussey and Thomas R. Tuttle. Mr. Cook is an Executive Vice President of LFC. Mr. Hilbert is Chief Financial Officer of LFC. Mr. Mussey is Chairman of Newport and Newport Pacific. Mr. Tuttle is the President and Chief Executive Officer of Newport and Newport Pacific. The business address of Messrs. Cook and Hilbert is 600 Atlantic Avenue, 24th Floor, Boston, Massachusetts 02210; and that of Messrs. Mussey and Tuttle is 580 California Street, San Francisco, California 94104. LIBERTY ASSET MANAGEMENT COMPANY LAMCO, a Delaware corporation, located at 600 Atlantic Avenue, 24th Floor, Boston, Massachusetts 02210, is a direct wholly-owned subsidiary of LFS, which is a direct wholly-owned subsidiary of LFC. As of May 31, 2001, LAMCO managed over $1.4 billion in assets. LAMCO currently serves as investment advisor for 1 open-end and 2 closed-end management investment company portfolios. The directors of LAMCO are Lindsay Cook, J. Andrew Hilbert and William R. Parmentier. Mr. Cook is an Executive Vice President of LFC. Mr. Hilbert is the Chief Financial Officer of LFC. Mr. Parmentier is the President, Chief Executive Officer and Chief Investment Officer of LAMCO. The business address of Messrs. Cook, Hilbert and Parmentier is 600 Atlantic Avenue, 24th Floor, Boston, Massachusetts 02210. NORDEA SECURITIES, INC. Nordea Securities, Inc., d/b/a Nordea Investment Management ("Nordea") in the United States, is located at 13-15 West 54th Street, New York, New York, 10019. Nordea offers a range of equity investment products and services to institutional clients, including private and public retirement funds, unions, endowments, foundations and insurance companies, as well as to mutual fund sponsors on a sub-advisory basis. As of May 31, 2001, Nordea managed over $32 billion in assets. Nordea is an indirect wholly-owned subsidiary of Unibank A/S, which in turn is a direct wholly-owned subsidiary of Nordea Companies Denmark, which in turn is a direct wholly-owned subsidiary of 21 30 Nordea AB. The principal executive offices of Unibank A/S are located at Torvegade 2 DK-1786 Copenhagen V., Denmark. The principal executive offices of Nordea Companies Denmark are located at Strandgrade 3 DK-1786 Copenhagen V., Denmark. The principal executive offices of Nordea AB are located at Hamngatan 10, SE-105 71 Stockholm, Sweden. The directors of Nordea Securities, Inc. are Henrik Bak, Ole Jacobsen, Jerry Murphy, Peter Nyegaard and Finn Pedersen. Mr. Bak is President and Chairman of the Board of Nordea Securities, Inc. Mr. Jacobsen is Managing Director and Head of Nordea Investment Management. Mr. Murphy is Head of Administration, Nordea AB, New York. Mr. Nyegaard is Head of Markets, Nordea AB. Mr. Pedersen is Head of Equities, Aros Maizel. The business address of Messrs. Bak and Murphy is 13-15 West 54th Street, New York, New York, 10019. The business address of Messrs. Nyegaard and Jacobsen is Torvegade 2 DK-1786 Copenhagen V., Denmark. The business address of Mr. Pedersen is Engelbrektsplan, Fill, 4 98 Stockholm, Sweden. CRABBE HUSON GROUP, INC. Crabbe Huson, a Massachusetts corporation, located at 121 S.W. Morrison, Portland, Oregon 97204, has rendered investment advisory services to investment company, institutional or other clients since 1980. As of May 31, 2001, Crabbe Huson managed over $232 million in assets. Crabbe Huson currently serves as investment advisor for 5 open-end management investment company portfolios. Crabbe Huson is a direct, wholly-owned subsidiary of LFC. The directors of Crabbe Huson are Lindsay Cook and J. Andrew Hilbert. Mr. Cook is an Executive Vice President of LFC and the President of Crabbe Huson. Mr. Hilbert is a Senior Vice President and the Chief Financial Officer of LFC. The business address of Messrs. Cook and Hilbert is 600 Atlantic Avenue, 24th Floor, Boston, Massachusetts 02210. PORTFOLIO MANAGERS Information about Liberty All-Star Equity Fund, Variable Series' current Portfolio Managers is set forth below. MASTRAPASQUA & ASSOCIATES. Mastrapasqua & Associates ("Mastrapasqua"), an investment advisor since 1993, is located at 814 Church 22 31 Street, Suite 600, Nashville, Tennessee 37203 and is an independently owned firm. Ownership of Mastrapasqua lies 100% with its officers and trustees. Mastrapasqua's principal executive officer is Frank Mastrapasqua, Ph.D., Chairman and Chief Executive Officer. Mr. Mastrapasqua, Thomas A. Trantum, President, and Mauro Mastrapasqua, First Vice President, may be deemed to be control persons of Mastrapasqua by virtue of their aggregate ownership of more than 25% of the outstanding voting stock of Mastrapasqua. As of May 21, 2001, Mastrapasqua managed $2.25 billion in assets. OPPENHEIMER CAPITAL. Oppenheimer Capital ("Oppenheimer"), an investment advisor since 1969, is located at 1345 Avenue of the Americas, New York, New York 10105, is a Delaware partnership and an indirect wholly-owned subsidiary of Allianz A.G. Oppenheimer's principal executive officer is Kenneth M. Poovey. As of March 31, 2001, Oppenheimer managed over $35.7 billion in assets. BOSTON PARTNERS ASSET MANAGEMENT, L.P. Boston Partners Asset Management, L.P. ("Boston Partners"), an investment advisor since 1995, is located at 28 State Street, 21st Floor, Boston, Massachusetts 02109. The Sole General Partner of Boston Partners is Boston Partners, Inc., a Delaware Subchapter S Corporation. Desmond J. Heathwood is the President of Boston Partners, Inc. As of May 31, 2001, Boston Partners managed over $10.9 billion in assets. WESTWOOD MANAGEMENT CORP. Westwood Management Corp. ("Westwood"), an investment advisor since 1983, is located at 300 Crescent Court, Suite 1300, Dallas, Texas 75201 and is a wholly owned subsidiary of Southwest Securities Group, Inc. Westwood's principal executive officer is Susan M. Byrne and its directors are Ms. Byrne, Brian Casey, Don A. Buchhotz, David Glatstein, and Patricia R. Fraze. As of May 31, 2001, Westwood managed over $3.65 billion in assets. TCW INVESTMENT MANAGEMENT COMPANY. TCW Investment Management Company ("TCW"), located at 865 South Figueroa Street, Los Angeles, California 90017, is a wholly-owned subsidiary of The TCW Group, Inc. ("TCW Group"). Established in 1971, TCW Group's direct and indirect subsidiaries, including TCW, provide a variety of trust, investment management and investment advisory services. Societe Generale Asset Management, S.A. ("SGAM") owns 51% of the TCW Group. SGAM is a wholly-owned subsidiary of Societe Generale, S.A. ("Societe Generale "). Both SGAM and Societe Generale are located at 23 32 29, boulevard Haussmann, Paris, France 75009. The employees and directors of the TCW Group own approximately [47%] and [2%] of the company. [Robert A. Day, who is [Chairman of the Board of Directors] of TCW Group (whose address is care of TCW at the address listed above), may be deemed to be a control person of TCW by virtue of the aggregate ownership by Mr. Day and his family of more than % of the outstanding voting stock of the TCW Group.] Under the terms of an agreement between the TCW Group and SGAM, SGAM will acquire approximately 70% of the TCW Group over the course of the next five years. SGAM and TCW have stated their intention to maintain the personnel, processes, investment strategy and operations of TCW, which will continue to operate under the TCW brand name. As of May 31, 2001, TCW and its affiliates had over $81.5 billion in assets under management or committed to management. Information about Rydex Health Care Fund, Variable Series, and Rydex Financial Services Fund, Variable Series' current Portfolio Manager is set forth below. RYDEX GLOBAL ADVISORS. Rydex Global Advisors ("Rydex"), a Maryland corporation, located at 9601 Blackwell Road, Suite 500, Rockville, Maryland 20850, has been an investment advisor since 1993. As of May 31, 2001, Rydex managed over $5.3 billion in assets. The trustees and principal executive officer of Rydex are Albert P. Viragh, Jr. (principal executive officer and trustee), Corey A. Colehour, J. Kenneth Dalton, John O. Demaret, Patrick T. McCarville and Roger Somers. Mr. Viragh owns a controlling interest in Rydex. Information about Liberty S&P 500 Index Fund, Variable Series' current Portfolio Manager is set forth below. SSGA FUNDS MANAGEMENT, INC. SSgA Funds Management, Inc. ("SSgA FM"), located at Two International Place, Boston, Massachusetts 02110, is one of the State Street Corporation ("SSgA") companies which constitute the investment management business of SSgA. SSgA has been in the business of providing investment advisory services since 1978. As of March 31, 2001, all of the SSgA companies managed approximately $720 billion in assets. SSgA FM is a newly formed entity that manages all of the registered investment company business of SSgA as of May, 2001. As of May 31, 2001, SSgA FM had approximately $53 billion in assets under management. 24 33 The directors of SSgA FM are Gustaff V. Fish, Jr., Agustin Fleites, Timothy B. Harbert and Mitchell H. Shames. Messrs. Fish, Fleites, Harbert and Shames are considered control persons of SSgA FM. DESCRIPTION OF THE TRANSACTION On June 4, 2001, LFC announced that they had entered into a Stock Purchase Agreement with Fleet (the "Purchase Agreement"). Under the Purchase Agreement, Fleet would acquire the Asset Management Segment for a purchase price of $900 million, plus the assumption of $110 million in debt. This price is subject to increase or reduction for: - an increase or a decrease, as the case may be, in the revenue run rate of the Asset Management Segment (a formula amount that is based on a multiple of portfolio assets, excluding the effects of market action) in excess of a 10% threshold between December 31, 2000 and the closing. The maximum purchase price adjustment under this provision would be $180 million; - an increase or decrease, as the case may be, of the tangible net worth of the Asset Management Segment between March 31, 2001 and the closing; - a decline in the market values of the assets under management of the Asset Management Segment in excess of 20% between March 31, 2001 and the closing (excluding the effects of sales and redemptions); and - the settlement of certain inter-company accounts. The transaction will not occur unless various conditions are satisfied (or waived by the parties, if permitted by law). One of these conditions is obtaining approval or consent from investment advisory clients of the Advisors, the affiliated Sub-Advisors and other LFC affiliates that constitute the Asset Management Segment (including fund clients) whose accounts represent 80% of the Asset Management Segment's assets under management as of March 31, 2001. Because of these conditions, approval or disapproval by a Fund's shareholders of a New Advisory Agreement and New Sub-Advisory Agreement, as applicable, for their Fund, taken together with other clients' consents or approvals, could affect whether or not the transaction occurs. As described below, certain officers of the Trusts (including one officer who is also a Trustee of the Trusts) will receive certain payments or benefits if the transaction 25 34 occurs. The transaction will result in the automatic termination of the Current Advisory Agreements and, if applicable, Current Sub-Advisory Agreement for the Sub-Advised Funds, and, if applicable, Current Portfolio Management Agreements for the Portfolio Managed Funds. If for some reason the transaction does not occur, the automatic termination of the Current Advisory Agreements, and, if applicable, Current Sub-Advisory Agreements for the Sub-Advised Funds and, if applicable, Current Portfolio Management Agreements will not occur, and the New Advisory Agreements and, if applicable, New Sub-Advisory Agreements for the Sub-Advised Funds, and, if applicable, New Portfolio Management Agreements will not be entered into, even if they have been approved by the Funds' shareholders. Simultaneously with the signing of the Purchase Agreement, at Fleet's request, Liberty Mutual and LFC entered into a license agreement with Fleet which provides that upon the closing of the acquisition of the Asset Management Segment, Fleet shall be granted a perpetual, royalty free, non-transferable, non-sublicensable, non-exclusive license to use the Liberty mark and trade name, the Statue of Liberty design and other associated marks and trade names used in connection with the Asset Management Segment's business. The license agreement also contains other covenants and provisions more fully set forth in the Fleet license agreement. Neither Liberty Mutual nor LFC will receive compensation or other consideration under the Fleet license agreement. As a result of the acquisition, the Advisors, the affiliated Sub-Advisors and certain of their affiliates that constitute the Asset Management Segment would become wholly-owned, direct or indirect subsidiaries of Fleet. Fleet is a wholly-owned subsidiary of FleetBoston Financial Corporation, a Boston, Massachusetts-based financial holding company. Fleet and its affiliates offer a comprehensive array of financial solutions to approximately 20 million customers in more than 20 countries. Their key lines of business include: - CONSUMER AND INVESTMENT SERVICES -- includes domestic retail banking to consumer and small business customers, community banking, student loan processing, credit card services, and investment services, including mutual funds and investments, retirement planning, large institutional asset management and brokerage; - CORPORATE AND GLOBAL BANKING -- includes commercial finance, including asset-based lending and leasing; international banking in key 26 35 Latin American markets; corporate banking, including specialized industry and institutional lending; and middle market lending, including commercial lending, government banking services, trade services and cash management; and - CAPITAL MARKETS -- includes investment banking services, brokerage, market-making and principal investing. CERTAIN INTERESTS OF FUND TRUSTEES AND OFFICERS. Substantially all full-time employees of LFC and its subsidiaries (including officers of the Trusts and one officer of the Trusts who is also a Trustee of the Trusts) participate in the Liberty Financial Companies, Inc. and Subsidiaries Non-Commissioned Employee Severance and Retention Plan or the Liberty Financial Companies, Inc. and Subsidiaries Commissioned Employees Severance and Retention Plan (the "Retention Plans"). The Retention Plans provide for cash retention bonuses and the full vesting upon a change of control of all outstanding options to purchase shares of stock of LFC ("LFC Options") and shares of restricted stock of LFC ("Restricted Stock") for which the target price in the applicable restricted stock agreement is less than the value of LFC common stock on the date of the change of control, even though some of these LFC Options and Restricted Stock would not otherwise have vested or become fully exercisable prior to the change of control. The Retention Plans also provide for enhanced severance benefits to substantially all employees upon a change of control and additional payments to cover excise tax obligations. With respect to employees of the subsidiaries that constitute the Asset Management Segment, a change of control will be deemed to occur under the Retention Plans upon the completion of the Fleet transaction. CERTAIN BROKERAGE MATTERS In their consideration of the New Advisory Agreements, New Sub-Advisory Agreements and New Portfolio Management Agreements, the Trustees took account of the Advisors', Sub-Advisors', and Portfolio Managers' practices regarding the selection and compensation of brokers and dealers that execute portfolio transactions for the Funds, and the brokers' and dealers' provision of brokerage and research services to the Advisors, Sub-Advisors and Portfolio Managers. The Advisors have informed the Trustees that they do not expect to change these practices as a result of Fleet's acquisition of the Asset Management Segment. A 27 36 summary of these brokerage and soft-dollar practices is set forth in Appendix D. The Advisors may cause portfolio transactions for the Funds to be executed by AlphaTrade Inc. ("AlphaTrade"), a brokerage firm that is affiliated with the Advisors because it is owned by Colonial, which, like Stein Roe and LASC, is a wholly-owned subsidiary of LFC and which is part of the Asset Management Segment. The Funds pay brokerage commissions to AlphaTrade for executing these portfolio transactions. Appendix E contains information about these commission payments. PROPOSAL 4 ELECTION OF TRUSTEES OF LIBERTY VARIABLE INVESTMENT TRUST The purpose of this proposal is to elect eleven members to the Board of Trustees. All of the nominees listed below are currently members of the Board of Trustees, and have served in that capacity continuously since originally elected or appointed. All of the currently serving members, other than Ms. Kelly and Messrs. Hacker, Nelson, Palombo and Theobald, have been previously elected to the Board of Trustees by the shareholders in October, 1998. Ms. Kelly and Messrs. Hacker, Nelson, Palombo and Theobald currently serve on the Boards of Trustees of a number of closed-end funds and open-end trusts in the Liberty Fund Complex and Stein Roe Fund Complex, and were recommended for election as Trustees of the Trust by the then current Board of Trustees of the Trust at a special meeting held on October 25-26, 2000. Each elected Trustee will serve as Trustee until a successor is elected and qualified or until death, retirement, resignation or removal. 28 37 The following table sets forth certain information about each nominee including age as of December 31, 2000 and principal occupation during the past five years:
PRINCIPAL OCCUPATION(a) NOMINEE NAME & AGE AND DIRECTORSHIPS ------------------ ----------------------- Douglas A. Hacker (44) Executive Vice President and Chief Financial Officer of UAL, Inc. (airline) since July, 1999; Senior Vice President and Chief Financial Officer of UAL, Inc. prior thereto. Janet Langford Kelly (42) Executive Vice President -- Corporate Development and Administration, General Counsel, and Secretary, Kellogg Company (food manufacturer) since September, 1999; Senior Vice President, Secretary and General Counsel, Sara Lee Corporation (branded, packaged, consumer-products manufacturer) prior thereto. Richard W. Lowry (64) Private Investor since August, 1987 (formerly Chairman and Chief Executive Officer, U.S. Plywood Corporation (building products manufacturer)). Salvatore Macera (69) Private Investor since 1981 (formerly Executive Vice President and Director of Itek Corporation (electronics) from 1975 to 1981).
29 38
PRINCIPAL OCCUPATION(A) NOMINEE NAME & AGE AND DIRECTORSHIPS ------------------ ----------------------- William E. Mayer(b) (60) Managing Partner, Park Avenue Equity Partners (venture capital) since 1998 (formerly Founding Partner, Development Capital LLC from November, 1996 to 1998; Dean and Professor, College of Business and Management, University of Maryland from October, 1992 to November, 1996); Director, Lee Enterprises (print and on-line media); WR Hambrecht + Co (financial service provider); Systech Retail Systems (retail industry technology provider). Charles R. Nelson (57) Van Voorhis Professor, Department of Economics, University of Washington; consultant on econometric and statistical matters. John J. Neuhauser (57) Academic Vice President and Dean of Faculties since August, 1999, Boston College (formerly Dean, Boston College School of Management from September, 1977 to September, 1999); Director, Saucony, Inc. (athletic footwear).
30 39
PRINCIPAL OCCUPATION(A) NOMINEE NAME & AGE AND DIRECTORSHIPS ------------------ ----------------------- Joseph R. Palombo(c) (47) Chief Operations Officer of Mutual Funds, LFC since August, 2000; Executive Vice President and Director of Colonial since April, 1999; Executive Vice President and Chief Administrative Officer of LFG since April, 1999; Director of Stein Roe since September, 2000; Trustee and Chairman of the Board of Stein Roe Mutual Funds since October, 2000; Manager of Stein Roe Floating Rate Limited Liability Company since October, 2000 (formerly Vice President of the Liberty Funds from April 1999 to August, 2000; Chief Operating Officer, Putnam Mutual Funds from 1994 to 1998). Thomas E. Stitzel (64) Business Consultant since 1999; (formerly Professor of Finance from 1975 to 1999 and Dean from 1977 to 1991, College of Business, Boise State University); Chartered Financial Analyst.
31 40
PRINCIPAL OCCUPATION(A) NOMINEE NAME & AGE AND DIRECTORSHIPS ------------------ ----------------------- Thomas C. Theobald (63) Managing Director, William Blair Capital Partners (private equity investing) since 1994; (formerly Chief Executive Officer and Chairman of the Board of Directors, Continental Bank Corporation); Director of Xerox Corporation (business products and services), Anixter International (network support equipment distributor), Jones Lang LaSalle (real estate management services) and MONY Group (life insurance). Anne-Lee Verville (55) Chairman of the Board of Directors, Enesco Group, Inc. (designer, importer and distributor of giftware and collectibles); Director, LearnSomething.com, Inc. (online educational products and services) since 2000; author and speaker on educational systems needs; (formerly General Manager, Global Education Industry from 1994 to 1997, and President, Applications Solutions Division from 1991 to 1994, IBM Corporation (global education and global applications)).
(a) Except as otherwise noted, each individual has held the office indicated or other offices in the same company for the last five years. (b) Mr. Mayer is an "interested person," as defined in the Investment Company Act because he is a Director of WR Hambrecht + Co. (a registered broker-dealer). 32 41 (c) Mr. Palombo is an "interested person," as defined in the Investment Company Act because he is an affiliate of each Fund's investment advisor and an employee of certain affiliates of the Advisors. As of December 31, 2000, the Stein Roe Fund Complex consisted of the Liberty Floating Rate Fund, the Stein Roe Floating Rate Limited Liability Company, Liberty-Stein Roe Institutional Floating Rate Income Fund, and the following open-end mutual funds: 4 series of Liberty -- Stein Roe Funds Income Trust, 1 series of Liberty -- Stein Roe Funds Trust, 4 series of Liberty -- Stein Roe Funds Municipal Trust, 12 series of Liberty -- Stein Roe Funds Investment Trust, 4 series of Liberty -- Stein Roe Advisor Trust, 5 series of SteinRoe Variable Investment Trust, and 12 portfolios of SR&F Base Trust (together, the "Stein Roe Fund Complex"). At December 31, 2000, the Liberty Fund Complex consisted of 49 open-end and 9 closed-end management investment portfolios in the Liberty Funds Group -- Boston and 17 open-end management investment portfolios in the Liberty Variable Investment Trust (together, the "Liberty Fund Complex"). On December 27, 2000, the Liberty Fund Complex and the Stein Roe Fund Complex were combined and reorganized into one fund complex ("Fund Complex"). Effective on December 27, 2000, the Trustees listed above serve as Trustees for all the Funds in both the Liberty Fund Complex and the Stein Roe Fund Complex except for the SteinRoe Variable Investment Trust. The Trustees, except Ms. Kelly and Messrs. Hacker, Nelson and Theobald, listed above, began serving as Trustees for the SteinRoe Variable Investment Trust on April 5, 2001. Ms. Kelly and Messrs. Hacker, Nelson and Theobald served as Trustees for the SteinRoe Variable Investment Trust prior to April 5, 2001. TRUSTEES' COMPENSATION; MEETINGS AND COMMITTEES TRUSTEES' COMPENSATION. In addition to serving as Trustees of the Liberty Variable Investment Trust, each Trustee and Nominee also serves as a Trustee for other fund complexes all of which are managed by Liberty Advisory Services Corp. or an affiliate of Liberty Advisory Services Corp. ("Liberty Mutual Funds"). The Trustees serve as Trustees of twelve Liberty Mutual Fund Trusts, and fourteen Liberty Mutual Fund closed-end funds and as Managers of the Stein Roe Floating Rate Limited Liability Company. For their services, each 33 42 Trustee, except Mr. Palombo, will receive an annual retainer of $45,000 and attendance fees of $8,000 for each regular joint Board meeting and $1,000 for each special joint Board meeting. Committee chairs receive an annual retainer of $5,000 and $1,000 for each special committee meeting attended on a day other than a regular joint Board meeting day. Other committee members receive an annual retainer of $1,000 and $1,000 for each special committee meeting attended on a day other than a regular joint Board meeting day. Two-thirds of the Trustees' fees will be allocated among all the funds in the Liberty Mutual Funds, including the Funds, based on their relative net assets, and one-third of the fees are divided equally among all the funds in the Liberty Mutual Funds, including the Funds. Further information concerning the Trustees' compensation is included in Appendix G. MEETINGS AND COMMITTEES. The current Board of the Trust consists of two interested and nine non-interested Trustees. AUDIT COMMITTEE. The Audit Committee makes recommendations to the full Board as to the firm of independent accountants to be selected, reviews the methods, scope and results of audits and fees charged by such independent accountants, reviews the Funds' internal accounting procedures and controls. The Audit Committee members for the fiscal year ended December 31, 2000 were Ms. Verville (Chairperson) and Messrs. Bleasdale, Grinnell, Lowry, Macera and Moody, all of whom are non-interested Trustees. The current Audit Committee members are Ms. Verville (Chairperson) and Messrs. Hacker, Macera, Nelson and Neuhauser, all of whom are non-interested Trustees. The Funds currently have no Nominating or Compensation Committee. The Fund has an Audit Committee comprised of Trustees who are not "interested persons" (as defined in the Investment Company Act) of the Fund. The Audit Committee reviews the process for preparing and reviewing financial statements and other audit-related matters as they arise throughout the year. The Audit Committee reviewed the non-audit services provided by the independent accountants of the Fund. The independent accountants, PricewaterhouseCoopers LLP (PWC), discussed with the Board of Trustees the matters required to be discussed by Statement on Auditing Standards No. 61. In addition, the Audit Committee obtained from the independent accountants a formal written statement consistent with 34 43 Independence Standards Board Standard No. 1, "Independence Discussions with Audit Committees," describing all relationships between the independent accountants and the Funds that might bear on the independent accountants' independence. The Audit Committee also discussed with the independent accountants any relationships that may impact their objectivity and independence and satisfied itself as to the independent accountants' independence. The Board of Trustees also reviewed the fees charged by such independent accountants for the various services provided and reviewed the Funds' internal accounting procedures and controls. GOVERNANCE COMMITTEE. The Governance Committee of the Trust, consisting of Messrs. Bleasdale (Chairperson), Lowry, Mayer and Moody and Ms. Verville, all of whom are non-interested Trustees, except for Mr. Mayer (Mr. Mayer is interested as a result of his affiliation with a broker-dealer, but is not affiliated with LFC), in its sole discretion, 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 Fund, Attention: Secretary, One Financial Center, 11th Floor, Boston, Massachusetts 02111-2621. The current Governance Committee members are Messrs. Theobald (Chairperson), Hacker, Lowry and Mayer and Ms. Verville. RECORD OF BOARD AND THE COMMITTEE MEETINGS. The Board and Committees held the following number of meetings during the following fiscal year ended December 31, 2000: The Board of Trustees 6 Audit Committee 5 Compensation Committee 1(1) Nominating Committee 0(1) Governance Committee 2
(1) The Nominating Committee was dissolved in December, 2000. The Governance Committee assumed the duties of the Compensation Committee in December, 2000. During the fiscal year ended December 31, 2000, each of the current Trustees, except for Ms. Kelly and Messrs. Hacker, Nelson, Palombo and Theobald (none of whom served on the Board of Trustees prior to 35 44 December 27, 2000), attended more than 75% of the meetings of the Board and the committees of which such Trustee was 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 FUND VOTE FOR EACH NOMINEE IN PROPOSAL 4. REQUIRED VOTE. A plurality of the votes cast at the Meeting by shareholders of the Trust, if a quorum is represented, is required for the election of each Trustee. Since the number of Trustees for the Trust is fixed at eleven, this means that the eleven persons receiving the highest number of votes will be elected as Trustees of the Trust. OTHER INFORMATION PRINCIPAL UNDERWRITER'S AND ADMINISTRATOR'S ADDRESS. The address of the Funds' principal underwriter, Liberty Funds Distributor, Inc., is One Financial Center, Boston, MA 02111. The address of the LVIT Funds' administrator, Colonial, is One Financial Center, Boston, Massachusetts 02111. The address of the SRVIT Funds' administrator, Stein Roe, is One South Wacker Drive, Chicago, Illinois 60606. FUND ANNUAL AND SEMI-ANNUAL REPORTS. THE FUNDS HAVE PREVIOUSLY SENT THEIR ANNUAL REPORTS AND ANY SUBSEQUENT SEMI-ANNUAL REPORTS TO THEIR SHAREHOLDERS. YOU CAN OBTAIN A COPY OF THESE REPORTS WITHOUT CHARGE BY WRITING TO LIBERTY FUNDS DISTRIBUTOR, INC., ONE FINANCIAL CENTER, BOSTON MASSACHUSETTS 02111 OR BY CALLING 1-800-426-3750 OR BY CALLING OR WRITING THE PARTICIPATING INSURANCE COMPANY WHICH ISSUED YOUR VARIABLE ANNUITY CONTRACT OR VARIABLE LIFE INSURANCE POLICY. OUTSTANDING SHARES AND SIGNIFICANT SHAREHOLDERS. Shareholders of record at the close of business on July 16, 2001 are entitled to notice of and to vote at the Meeting and any adjourned session. Appendix F to this Proxy Statement lists for each Fund the total number of shares outstanding as of July 16, 2001 for each class of the Fund's shares entitled to vote at the Meeting. It also identifies holders of more than 5% of any class of shares of each Fund and contains information about the shareholdings in the Funds by the Trustees and the executive officers of the Funds. All shares were owned of record by sub-accounts of separate 36 45 accounts (Separate Accounts) of life insurance companies (the Participating Insurance Companies) established to fund benefits under variable annuity contracts and variable life insurance policies issued by the Participating Insurance Companies. As of the date of this Proxy Statement, the Participating Insurance Companies are Keyport Life Insurance Company (Keyport), Independence Life & Annuity Company (a wholly-owned subsidiary of Keyport), Keyport Benefit Life Insurance Company (a wholly-owned subsidiary of Keyport), Liberty Life Assurance Company (an affiliate of Keyport), MetLife Investors, Security Benefit Life Insurance Company, Lincoln Life, Great West Life and Annuity Insurance Company, Aegon USA, Transamerica Life Insurance and SAGE Life Assurance Company. As of the date of this Proxy Statement, Keyport, Independence Life & Annuity Company, Keyport Benefit Life Insurance Company and Liberty Life Assurance Company are affiliated with the investment advisor to each Trust. INFORMATION ABOUT PROXIES AND THE CONDUCT OF THE MEETING SOLICITATION OF PROXIES. Proxies will be solicited primarily by mailing this Proxy Statement and its enclosures, but proxies may also be solicited through further mailings, telephone calls, or in person by officers of the Funds or by employees or agents of the Advisors or of LFC and its affiliated companies. COSTS OF SOLICITATION. All of the costs of the Meeting will be paid by LFC or Fleet. None of these costs will be borne by the Funds or their shareholders. VOTING AND TABULATION OF PROXIES. Shares represented by duly executed proxies will be voted as instructed on the proxy. The Participating Insurance Companies are mailing copies of this proxy material to the holders of these contracts and policies who, by completing and signing the accompanying proxy cards, will instruct the Separate Accounts how they wish the shares of the Funds to be voted. The Separate Accounts will vote shares of the Funds as instructed on the proxy cards by their contract or policyholders. If no instructions are specified on a proxy returned by a contract or policy holder, the Separate Accounts will vote the shares of the Fund represented thereby in favor of the election of each person nominated as a Trustee and (if applicable) in favor of each new advisory and sub-advisory agreement. The Separate Accounts intend to vote shares for which no proxies are returned in the same proportion as the shares for which proxies are received. In addition, Keyport, which 37 46 owns shares of certain Funds in its general account, intends to vote such shares in the same proportion as the shares held in its Separate Accounts for which proxies are received and in favor of the nominees for election as Trustees. You may vote by either of the following methods: (1) by mailing the enclosed proxy card or (2) in person at the Meeting. If you mail the enclosed proxy and no choice is indicated for a proposal listed in the attached Notice of Meeting, your proxy will be voted in favor of that proposal, including all of the nominees for election as Trustees. At any time before it has been voted, your proxy may be revoked in one of the following ways: (i) by sending a signed, written letter of revocation to the Secretary of the Trust, (ii) by properly executing a later-dated proxy (by any of the methods of voting described above), or (iii) by attending the Meeting, requesting return of any previously delivered proxy and voting in person. Votes cast in person or by proxy at the Meeting will be counted by persons appointed by the Funds as tellers for the Meeting (the "Tellers"). Thirty percent (30%) of the shares of any Fund outstanding on the record date, present in person or represented by proxy, constitutes a quorum for the transaction of business by the shareholders of that Fund at the Meeting. In determining whether a quorum is present, the Tellers will count shares represented by proxies that reflect abstentions, and "broker non-votes," as shares that are present and entitled to vote. Since these shares will be counted as present, but not as voting in-favor of any proposal, these shares will have the same effect as if they cast votes against the proposal. "Broker non-votes" are shares held by brokers or nominees as to which (i) the broker or nominee does not have discretionary voting power and (ii) the broker or nominee has not received instructions from the beneficial owner or other person who is entitled to instruct how the shares will be voted. ADJOURNMENTS; OTHER BUSINESS. If any Fund has not received enough votes by the time of the Meeting to approve that Fund's New Advisory Agreement, New Sub-Advisory Agreement and New Portfolio Management Agreement(s), as applicable, the persons named as proxies may propose that the Meeting be adjourned one or more times as to that Fund to permit further solicitation of proxies. Any adjournment requires the affirmative vote of more than 50% of the total number of shares of that Fund that are present in person or by proxy when the adjournment is being voted on. The persons named as proxies will vote in favor of any such adjournment all proxies that they are entitled to vote in favor of the 38 47 relevant Fund's New Advisory Agreement, New Sub-Advisory Agreement and New Portfolio Management Agreement(s), as applicable. They will vote against any such adjournment any proxy that directs them to vote against the New Advisory Agreement, New Sub-Advisory Agreement and New Portfolio Management Agreement(s), as applicable. They will not vote any proxy that directs them to abstain from voting on the New Advisory Agreement, New Sub-Advisory Agreement and New Portfolio Management Agreement(s), as applicable. The Meeting has been called to transact any business that properly comes before it. The only business that management of the Funds intends to present or knows that others will present is the approval of the New Advisory Agreements, New Sub-Advisory Agreements and New Portfolio Management Agreements, as applicable, and election of Trustees for the LVIT Funds. If any other matters properly come before the Meeting, and on all matters incidental to the conduct of the Meeting, the persons named as proxies intend to vote the proxies in accordance with their judgment, unless the Secretary of the Funds has previously received written contrary instructions from the shareholder entitled to vote the shares. SHAREHOLDER PROPOSALS AT FUTURE MEETINGS. The Funds do not hold annual or other regular meetings of shareholders. Shareholder proposals to be presented at any future meeting of shareholders of the Funds must be received by the Funds in writing a reasonable time before the Trust begins to print and mail proxies for that meeting, in order to be considered for inclusion in the proxy materials for that meeting. 39 48 APPENDIX A1 ADVISORY AGREEMENTS
--------------------------------------------------------------------------------------- DESCRIPTION OF TRUSTEE ACTION DATE OF LAST ADVISORY FEE REGARDING CURRENT SUBMISSION OF CURRENT RATE SCHEDULE DATE OF ADVISORY AGREEMENT ADVISORY AGREEMENT FOR (ANNUAL RATE CURRENT SINCE BEGINNING SHAREHOLDER APPROVAL OF THE NET ADVISORY OF FUND'S LAST AND REASON FOR NAME OF FUND ASSET VALUE) AGREEMENT FISCAL YEAR SUBMISSION --------------------------------------------------------------------------------------- Colonial 0.90% of May 2, 1994 On June 19, 2001, On February 27, 1995, International assets under (amended the Trustees shareholders approved Fund for $1 billion; February 28, approved the an amendment to the Growth, 0.85% of 1995) current advisory management agreement to Variable assets over agreement allow LFC and its Series $1 billion affiliates to perform certain administrative duties for the Fund --------------------------------------------------------------------------------------- Colonial 0.80% of May 2, 1994 On June 19, 2001, On February 27, 1995, U.S. Growth assets under (amended the Trustees shareholders approved & Income $1 billion; February 28, approved the an amendment to the Fund, 0.70% of 1995) current advisory management agreement to Variable assets over agreement allow LFC and its Series(1) $1 billion affiliates to perform certain administrative duties for the Fund --------------------------------------------------------------------------------------- Colonial 0.65% May 2, 1994 On June 19, 2001, On February 27, 1995, Strategic (amended the Trustees shareholders approved Income Fund, February 28, approved the an amendment to the Variable 1995) current advisory management agreement to Series(2) agreement allow LFC and its affiliates to perform certain administrative duties for the Fund --------------------------------------------------------------------------------------- Stein Roe 0.65% June 7, 1993 On June 19, 2001, On February 27, 1995, Global (amended the Trustees shareholders approved Utilities February 28, approved the an amendment to the Fund, 1995) current advisory management agreement to Variable agreement allow LFC and its Series affiliates to perform certain administrative duties for the Fund ---------------------------------------------------------------------------------------
A1-1 49
--------------------------------------------------------------------------------------- DESCRIPTION OF TRUSTEE ACTION DATE OF LAST ADVISORY FEE REGARDING CURRENT SUBMISSION OF CURRENT RATE SCHEDULE DATE OF ADVISORY AGREEMENT ADVISORY AGREEMENT FOR (ANNUAL RATE CURRENT SINCE BEGINNING SHAREHOLDER APPROVAL OF THE NET ADVISORY OF FUND'S LAST AND REASON FOR NAME OF FUND ASSET VALUE) AGREEMENT FISCAL YEAR SUBMISSION --------------------------------------------------------------------------------------- Liberty 0.65% June 7, 1993 On June 19, 2001, On February 27, 1995, Value Fund, (amended the Trustees shareholders approved Variable February 28, approved the an amendment to the Series 1995) current advisory management agreement to agreement allow LFC and its affiliates to perform certain administrative duties for the Fund --------------------------------------------------------------------------------------- Newport 0.90% May 1, 1995 On June 19, 2001, On May 1, 1995, the Tiger Fund, the Trustees sole shareholder of the Variable approved the Fund approved the Series current advisory Current Advisory agreement Agreement --------------------------------------------------------------------------------------- Liberty All- 0.80% November 15, On June 19, 2001, On November 15, 1997, Star Equity 1997 the Trustees the sole shareholder of Fund, approved the the Fund approved the Variable current advisory Current Advisory Series(3) agreement Agreement --------------------------------------------------------------------------------------- Colonial 0.80% May 19, 1998 On June 19, 2001, On May 19, 1998, the Small Cap the Trustees sole shareholder of the Value Fund, approved the Fund approved the Variable current advisory Current Advisory Series(4) agreement Agreement --------------------------------------------------------------------------------------- Colonial 0.60% May 19, 1998 On June 19, 2001, On May 19, 1998, the High Yield the Trustees sole shareholder of the Securities approved the Fund approved the Fund, current advisory Current Advisory Variable agreement Agreement Series(5) --------------------------------------------------------------------------------------- Crabbe Huson 1.00% June 1, 1999 On June 19, 2001, On June 1, 1999, the Real Estate the Trustees sole shareholder of the Investment approved the Fund approved the Fund, current advisory Current Advisory Variable agreement Agreement Series(6) --------------------------------------------------------------------------------------- Colonial 0.95% of June 1, 1999 On June 19, 2001, On June 1, 1999, the Global assets under the Trustees sole shareholder of the Equity Fund, $1 billion; approved the Fund approved the Variable 0.90% of current advisory Current Advisory Series(7) assets over agreement Agreement $1 billion ---------------------------------------------------------------------------------------
A1-2 50
--------------------------------------------------------------------------------------- DESCRIPTION OF TRUSTEE ACTION DATE OF LAST ADVISORY FEE REGARDING CURRENT SUBMISSION OF CURRENT RATE SCHEDULE DATE OF ADVISORY AGREEMENT ADVISORY AGREEMENT FOR (ANNUAL RATE CURRENT SINCE BEGINNING SHAREHOLDER APPROVAL OF THE NET ADVISORY OF FUND'S LAST AND REASON FOR NAME OF FUND ASSET VALUE) AGREEMENT FISCAL YEAR SUBMISSION --------------------------------------------------------------------------------------- Colonial 0.95% of June 1, 1999 On June 19, 2001, On June 1, 1999, the International assets under the Trustees sole shareholder of the Horizons $1 billion; approved the Fund approved the Fund, 0.90% of current advisory Current Advisory Variable assets over agreement Agreement Series(8) $1 billion --------------------------------------------------------------------------------------- Liberty S&P 0.40% May 30, 2000 On June 19, 2001, On May 30, 2000, the 500 Index the Trustees sole shareholder of the Fund, approved the Fund approved the Variable current advisory Current Advisory Series(9) agreement Agreement --------------------------------------------------------------------------------------- Rydex Health 1.00% May 30, 2000 On June 19, 2001, On May 30, 2000, the Care Fund, the Trustees sole shareholder of the Variable approved the Fund approved the Series(10) current advisory Current Advisory agreement Agreement --------------------------------------------------------------------------------------- Rydex 0.85% May 30, 2000 On June 19, 2001, On May 30, 2000, the Financial the Trustees sole shareholder of the Services approved the Fund approved the Fund, current advisory Current Advisory Variable agreement Agreement Series(11) --------------------------------------------------------------------------------------- Liberty 0.70% May 30, 2000 On June 19, 2001, On May 30, 2000, the Select Value the Trustees sole shareholder of the Fund, approved the Fund approved the Variable current advisory Current Advisory Series(12) agreement Agreement --------------------------------------------------------------------------------------- Liberty 1.20% May 30, 2000 On June 19, 2001, On May 30, 2000, the Newport the Trustees sole shareholder of the Japan approved the Fund approved the Opportunities current advisory Current Advisory Fund, agreement Agreement Variable Series(13) --------------------------------------------------------------------------------------- Stein Roe 0.35% December 9, On June 19, 2001, On December 9, 1988, Money Market 1988 the Trustees the sole shareholder of Fund, approved the the Fund approved the Variable current advisory Current Advisory Series agreement Agreement ---------------------------------------------------------------------------------------
A1-3 51
--------------------------------------------------------------------------------------- DESCRIPTION OF TRUSTEE ACTION DATE OF LAST ADVISORY FEE REGARDING CURRENT SUBMISSION OF CURRENT RATE SCHEDULE DATE OF ADVISORY AGREEMENT ADVISORY AGREEMENT FOR (ANNUAL RATE CURRENT SINCE BEGINNING SHAREHOLDER APPROVAL OF THE NET ADVISORY OF FUND'S LAST AND REASON FOR NAME OF FUND ASSET VALUE) AGREEMENT FISCAL YEAR SUBMISSION --------------------------------------------------------------------------------------- Liberty 0.40% May 1, 1993 On June 19, 2001, On April 14, 1993, Federal the Trustees shareholders approved a Securities approved the new Advisory Agreement Fund, current advisory with Stein Roe to Variable agreement eliminate breakpoints Series in the fee and make it a flat 0.40%. --------------------------------------------------------------------------------------- Stein Roe 0.45% May 1, 1993 On June 19, 2001, On April 14, 1993, Balanced the Trustees shareholders approved a Fund, approved the new Advisory Agreement Variable current advisory with Stein Roe to Series(14) agreement increase the advisory fee from 0.35% to 0.45%. --------------------------------------------------------------------------------------- Stein Roe 0.50% of May 1, 1993 On June 19, 2001, On April 13, 1993, Growth Stock assets under the Trustees shareholders approved a Fund, $1 billion; approved the new Advisory Agreement Variable 0.45% of current advisory with Stein Roe to Series(15) assets over agreement eliminate breakpoints $1 billion in the fee and make it a flat 0.50%. --------------------------------------------------------------------------------------- Stein Roe 0.50% May 1, 1993 On June 19, 2001, On April 14, 1998, Small the Trustees shareholders approved a Company approved the new Advisory Agreement Growth Fund, current advisory with Stein Roe to Variable agreement eliminate breakpoints Series in the fee and make it a flat 0.50%. ---------------------------------------------------------------------------------------
(1) The Colonial U.S. Growth & Income Fund, Variable Series' advisor and distributor have voluntarily agreed to reimburse all expenses including management fees and distribution fees so that total expenses of the Fund (excluding interest, taxes, brokerage and extraordinary expenses) do not exceed 1.00% of average daily net assets. (2) The Colonial Strategic Income Fund, Variable Series' advisor and distributor have voluntarily agreed to reimburse all expenses including management fees and distribution fees so that total expenses of the Fund (excluding interest, taxes, brokerage and A1-4 52 extraordinary expenses) do not exceed 1.00% of average daily net assets. (3) The Liberty All-Star Equity Fund, Variable Series' advisor and distributor have voluntarily agreed to reimburse all expenses including management fees and distribution fees so that total expenses of the Fund (excluding interest, taxes, brokerage and extraordinary expenses) do not exceed 1.00% of average daily net assets. (4) The Colonial Small Cap Value Fund, Variable Series' advisor and distributor have voluntarily agreed to reimburse all expenses including management fees and distribution fees so that total expenses of the Fund (excluding interest, taxes, brokerage and extraordinary expenses) do not exceed 1.10% of average daily net assets. (5) The Colonial High Yield Securities Fund, Variable Series' advisor and distributor have voluntarily agreed to reimburse all expenses including management fees and distribution fees so that total expenses of the Fund (excluding interest, taxes, brokerage and extraordinary expenses) do not exceed 0.95% of average daily net assets. (6) The Crabbe Huson Real Estate Investment Fund, Variable Series' advisor has voluntarily agreed to reimburse all expenses including management fees so that total expenses of the Fund (excluding interest, taxes, 12b-1, brokerage and extraordinary expenses) do not exceed 1.20% of average daily net assets. (7) The Colonial Global Equity Fund, Variable Series' advisor has voluntarily agreed to reimburse all expenses including management fees so that total expenses of the Fund (excluding interest, taxes, 12b-1, brokerage and extraordinary expenses) do not exceed 1.15% of average daily net assets. (8) The Colonial International Horizons Fund, Variable Series' advisor has voluntarily agreed to reimburse all expenses including management fees so that total expenses of the Fund (excluding interest, taxes, 12b-1, brokerage and extraordinary expenses) do not exceed 1.15% of average daily net assets. (9) The Liberty S&P 500 Index Fund, Variable Series' adviser and distributor have voluntarily agreed to reimburse all expenses including management fees and distribution fees so that the total A1-5 53 expenses of the Fund (excluding interest, taxes, brokerage and extraordinary expenses) do not exceed 0.75% of average daily net assets. (10) The Rydex Health Care Fund, Variable Series' adviser and distributor have voluntarily agreed to reimburse all expenses including management fees and distribution fees so that the total expenses of the Fund (excluding interest, taxes, brokerage and extraordinary expenses) do not exceed 1.60% of average daily net assets. (11) The Rydex Financial Services Fund, Variable Series' advisor and distributor have voluntarily agreed to reimburse all expenses including management fees and distribution fees so that total expenses of the Fund (excluding interest, taxes, brokerage and extraordinary expenses) do not exceed 1.45% of average daily net assets. (12) The Liberty Select Value Fund, Variable Series' advisor and distributor have voluntarily agreed to reimburse all expenses including management fees and distribution fees so that total expenses of the Fund (excluding interest, taxes, brokerage and extraordinary expenses) do not exceed 1.10% of average daily net assets. (13) The Liberty Newport Japan Opportunities Fund, Variable Series' advisor and distributor have voluntarily agreed to reimburse all expenses including management fees and distribution fees so that total expenses of the Fund (excluding interest, taxes, brokerage and extraordinary expenses) do not exceed 1.85% of average daily net assets. (14) The Stein Roe Balanced Fund, Variable Series' advisor has voluntarily agreed to reimburse all expenses including management fees so that total expenses of the Fund (excluding interest, taxes, 12b-1, brokerage and extraordinary expenses) do not exceed 0.75% of average daily net assets. (15) The Stein Roe Growth Stock Fund, Variable Series' advisor has voluntarily agreed to reimburse all expenses including management fees so that total expenses of the Fund (excluding interest, taxes, 12b-1, brokerage and extraordinary expenses) do not exceed 0.80% of average daily net assets. A1-6 54 APPENDIX A2 SUB-ADVISORY AGREEMENTS
-------------------------------------------------------------------------------------- SUB-ADVISORY DESCRIPTION OF DATE OF LAST FEE RATE TRUSTEE ACTION SUBMISSION OF CURRENT SCHEDULE REGARDING CURRENT SUB-ADVISORY (ANNUAL RATE DATE OF SUB-ADVISORY AGREEMENT FOR OF AVERAGE CURRENT AGREEMENT SINCE SHAREHOLDER APPROVAL DAILY NET SUB-ADVISORY BEGINNING OF FUND'S AND REASON FOR NAME OF FUND ASSETS)(1) AGREEMENT LAST FISCAL YEAR SUBMISSION -------------------------------------------------------------------------------------- Rydex 0.65% May 30, 2000 On June 19, 2001, On May 30, 2000, the Financial the Trustees sole shareholder of Services approved the the Fund approved the Fund, current sub- Current Sub-Advisory Variable advisory agreement Agreement. Series -------------------------------------------------------------------------------------- Rydex Health 0.80% May 30, 2000 On June 19, 2001, On May 30, 2000, the Care Fund, the Trustees sole shareholder of Variable approved the the Fund approved the Series current sub- Current Sub-Advisory advisory agreement Agreement. -------------------------------------------------------------------------------------- Liberty S&P 0.20% May 30, 2000 On June 19, 2001, On May 30, 2000, the 500 Index the Trustees sole shareholder of Fund, approved the the Fund approved the Variable current sub- Current Sub-Advisory Series advisory agreement Agreement. -------------------------------------------------------------------------------------- Liberty All- 0.60% November 15, On June 19, 2001, On November 15, 1997, Star Equity 1997 the Trustees the sole shareholder Fund, approved the of the Fund approved Variable current sub- the Current Sub- Series advisory agreement Advisory Agreement. -------------------------------------------------------------------------------------- Liberty 0.50% May 30, 2000 On June 19, 2001, On May 30, 2000, the Select Value the Trustees sole shareholder of Fund, approved the the Fund approved the Variable current sub- Current Sub-Advisory Series advisory agreement Agreement. -------------------------------------------------------------------------------------- Colonial 0.60% May 19, 1998 On June 19, 2001, On May 19, 1998, the Small Cap the Trustees sole shareholder of Value Fund, approved the the Fund approved the Variable current sub- Current Sub-Advisory Series advisory agreement Agreement. --------------------------------------------------------------------------------------
A2-1 55
-------------------------------------------------------------------------------------- SUB-ADVISORY DESCRIPTION OF DATE OF LAST FEE RATE TRUSTEE ACTION SUBMISSION OF CURRENT SCHEDULE REGARDING CURRENT SUB-ADVISORY (ANNUAL RATE DATE OF SUB-ADVISORY AGREEMENT FOR OF AVERAGE CURRENT AGREEMENT SINCE SHAREHOLDER APPROVAL DAILY NET SUB-ADVISORY BEGINNING OF FUND'S AND REASON FOR NAME OF FUND ASSETS)(1) AGREEMENT LAST FISCAL YEAR SUBMISSION -------------------------------------------------------------------------------------- Colonial 0.40% May 19, 1998 On June 19, 2001, On May 19, 1998, the High Yield the Trustees sole shareholder of Securities approved the the Fund approved the Fund, current sub- Current Sub-Advisory Variable advisory agreement Agreement. Series -------------------------------------------------------------------------------------- Crabbe Huson 0.80% June 1, 1999 On June 19, 2001, On June 1, 1999, the Real Estate the Trustees sole shareholder of Investment approved the the Fund approved the Fund, current sub- Current Sub- Advisory Variable advisory agreement Agreement. Series -------------------------------------------------------------------------------------- Colonial 0.75% June 1, 1999 On June 19, 2001, On June 1, 1999, the Global the Trustees sole shareholder of Equity Fund, approved the the Fund approved the Variable current sub- Current Sub- Advisory Series advisory agreement Agreement. -------------------------------------------------------------------------------------- Colonial 0.75% June 1, 1999 On June 19, 2001, On June 1, 1999, the International the Trustees sole shareholder of Horizons approved the the Fund approved the Fund, current sub- Current Sub- Advisory Variable advisory agreement Agreement. Series -------------------------------------------------------------------------------------- Liberty 1.00% May 30, 2000 On June 19, 2001, On May 30, 2000, the Newport the Trustees sole shareholder of Japan approved the the Fund approved the Opportunities current sub- Current Sub-Advisory Fund, advisory agreement Agreement. Variable Series -------------------------------------------------------------------------------------- Colonial 0.60% March 24, On June 19, 2001, On February 27, 1995, U.S. Growth 1995 the Trustees shareholders approved & Income approved the a new Sub- Advisory Fund, current sub- Agreement with Variable advisory agreement Colonial. The Series Agreements were identical except for the effective date. --------------------------------------------------------------------------------------
A2-2 56
-------------------------------------------------------------------------------------- SUB-ADVISORY DESCRIPTION OF DATE OF LAST FEE RATE TRUSTEE ACTION SUBMISSION OF CURRENT SCHEDULE REGARDING CURRENT SUB-ADVISORY (ANNUAL RATE DATE OF SUB-ADVISORY AGREEMENT FOR OF AVERAGE CURRENT AGREEMENT SINCE SHAREHOLDER APPROVAL DAILY NET SUB-ADVISORY BEGINNING OF FUND'S AND REASON FOR NAME OF FUND ASSETS)(1) AGREEMENT LAST FISCAL YEAR SUBMISSION -------------------------------------------------------------------------------------- Colonial 0.70% March 24, On June 19, 2001, On February 27, 1995, International 1995 the Trustees shareholders approved Fund for approved the a new Sub- Advisory Growth, current sub- Agreement with Variable advisory agreement Colonial. The Series Agreements were identical except for the effective date. -------------------------------------------------------------------------------------- Colonial 0.45% March 24, On June 19, 2001, On February 27, 1995, Strategic 1994 the Trustees shareholders approved Income Fund, approved the a new Sub- Advisory Variable current sub- Agreement with Series advisory agreement Colonial. The Agreements were identical except for the effective date. -------------------------------------------------------------------------------------- Newport 0.70% May 1, 1995 On June 19, 2001, On May 1, 1995, the Tiger Fund, the Trustees sole shareholder of Variable approved the the Fund approved the Series current sub- Current Sub- Advisory advisory agreement Agreement. -------------------------------------------------------------------------------------- Stein Roe 0.45% November 10, On June 19, 2001, On November 10, 1997, Global 1997 the Trustees shareholders approved Utilities approved the a new Sub- Advisory Fund, current sub- Agreement with Stein Variable advisory agreement Roe. Previous Series sub-advisor was Colonial. -------------------------------------------------------------------------------------- Liberty 0.45% March 24, On June 19, 2001, On February 27, 1995, Value Fund, 1995 the Trustees shareholders approved Variable approved the a new Sub- Advisory Series current sub- Agreement with advisory agreement Colonial. The Agreements were identical except for the effective date. -------------------------------------------------------------------------------------- Stein Roe 0.40% of that On June 19, 2001, On April 5, 2001, Balanced portion of the Trustees shareholders approved Fund, the Fund's approved the the original Variable assets under current sub- Sub-Advisory Series management by advisory agreement Agreement Nordea --------------------------------------------------------------------------------------
(1) The Advisor is solely responsible for paying the Sub-Advisory Fee to the Sub-Advisor from the fees it collects from the Fund. A2-3 57 APPENDIX A3 PORTFOLIO MANAGEMENT AGREEMENTS
------------------------------------------------------------------------------------------ DESCRIPTION OF TRUSTEE ACTION PORTFOLIO REGARDING CURRENT DATE OF LAST MANAGEMENT PORTFOLIO SUBMISSION OF CURRENT FEE RATE MANAGEMENT PORTFOLIO MANAGEMENT SCHEDULE DATE OF CURRENT AGREEMENT SINCE AGREEMENT FOR (ANNUAL RATE OF PORTFOLIO BEGINNING SHAREHOLDER APPROVAL THE NET ASSET MANAGEMENT OF FUND'S LAST AND REASON FOR NAME OF FUND VALUE)(1) AGREEMENT FISCAL YEAR SUBMISSION ------------------------------------------------------------------------------------------ Rydex 0.50%; 0.45% May 30, 2000 On June 19, 2001, On May 30, 2000, the Financial when combined the Trustees sole shareholder of Services assets of the approved the the Fund approved the Fund, Fund and Rydex current Portfolio Current Portfolio Variable Health Care Management Management Agreement. Series Fund, Variable Agreement Series reach $300 million ------------------------------------------------------------------------------------------ Rydex Health 0.50%; 0.45% May 30, 2000 On June 19, 2001, On May 30, 2000, the Care Fund, when combined the Trustees sole shareholder of Variable assets of the approved the the Fund approved the Series Fund and Rydex current Portfolio Current Portfolio Financial Management Management Agreement. Services Fund, Agreement Variable Series reach $300 million ------------------------------------------------------------------------------------------ Liberty S&P $25,000 for the May 30, 2000 On June 19, 2001, On May 30, 2000, the 500 Index first $50 the Trustees sole shareholder of Fund, million and approved the the Fund approved the Variable 0.05% of current Portfolio Current Portfolio Series average daily Management Management Agreement. net assets Agreement thereafter ------------------------------------------------------------------------------------------
A3-1 58
------------------------------------------------------------------------------------------ DESCRIPTION OF TRUSTEE ACTION PORTFOLIO REGARDING CURRENT DATE OF LAST MANAGEMENT PORTFOLIO SUBMISSION OF CURRENT FEE RATE MANAGEMENT PORTFOLIO MANAGEMENT SCHEDULE DATE OF CURRENT AGREEMENT SINCE AGREEMENT FOR (ANNUAL RATE OF PORTFOLIO BEGINNING SHAREHOLDER APPROVAL THE NET ASSET MANAGEMENT OF FUND'S LAST AND REASON FOR NAME OF FUND VALUE)(1) AGREEMENT FISCAL YEAR SUBMISSION ------------------------------------------------------------------------------------------ Liberty All- Mastrapasqua & Mastrapasqua & On June 19, 2001, Approval not required Star Equity Associates -- Associates -- the Trustees by shareholders Fund, 0.30% of the November 1, approved each of pursuant to exemptive Variable assets managed 2000; the Fund's order issued by SEC on Series by that Oppenheimer current Portfolio May 5, 1998 Portfolio Capital -- May Management Manager; 5, 2000; TCW Agreements Oppenheimer Investment Capital -- Management 0.30% of the Company -- assets managed November 1, by that 1999; Westwood Portfolio Management Manager; TCW Corporation -- Investment June 18, 1999; Management Boston Partners Company -- Asset 0.30% of the Management, assets managed L.P. -- June by that 18, 1999 Portfolio Manager; Westwood Management Corporation -- 0.30% of the assets managed by that Portfolio Manager; Boston Partners Asset Management, L.P. -- 0.30% of the assets managed by that Portfolio Manager ------------------------------------------------------------------------------------------
(1) The Sub-Advisor is solely responsible for paying the Portfolio Management Fee to the Portfolio Manager(s) from the fees it collects from the Advisor. A3-2 59 APPENDIX B1 FORM OF INVESTMENT ADVISORY AGREEMENT [FORM 1 OF 3 - LVIT STANDARD FORM] LIBERTY VARIABLE INVESTMENT TRUST [ ] FUND, VARIABLE SERIES [ ] FUND, VARIABLE SERIES MANAGEMENT AGREEMENT MANAGEMENT AGREEMENT ("Agreement"), made this [ ] day of [ ], 2001, between LIBERTY VARIABLE INVESTMENT TRUST, a business trust organized under the laws of The Commonwealth of Massachusetts (the "Trust"), on its own behalf and on behalf of [ ] Fund, Variable Series and [ ] Fund, Variable Series (each a "Fund," and collectively, the "Funds"), and LIBERTY ADVISORY SERVICES CORP., a corporation organized under the laws of The Commonwealth of Massachusetts (the "Manager"). WHEREAS, the Trust has been organized as an open-end management investment company registered as such under the Investment Company Act of 1940, as amended ("Investment Company Act"), and is authorized to issue shares of beneficial interest in one or more separate series (each representing interests in a separate portfolio of securities and other assets), including the Funds, which shares are to be issued and sold to and held by various separate accounts of other insurance companies ("Participating Insurance Companies"); WHEREAS, the Trust heretofore has created various other separate funds which are covered by Management Agreements among the Trust, on its own behalf and on behalf of such other series funds, and the Manager, and the Trust may in the future create additional fund(s) that may be covered by other separate agreements; WHEREAS, the Trust desires the Manager to render certain administrative services and to render total investment management services to the Trust and the Funds, all in the manner and on the terms and conditions hereinafter set forth; B1-1 60 WHEREAS, the Trust authorizes the Manager to enter into sub-advisory agreements with one or more firms registered as investment advisers under the Investment Advisors Act of 1940, as amended (the "Investment Adviser's Act"), or qualifying as a "bank" within the meaning of the Investment Adviser's Act and thereby exempted from the requirement to be so registered, to manage all or a portion of a Fund's assets, as determined by the Manager from time to time (a "Sub- Adviser"); and WHEREAS, the Manager is registered as an investment adviser under the Investment Adviser's Act, and desires to provide services to the Trust and the Funds in consideration of and on the terms and conditions hereinafter set forth; NOW, THEREFORE, the Trust, on its own behalf and on behalf of the Funds, and the Manager hereby agree as follows: 1. EMPLOYMENT OF THE INVESTMENT ADVISER. The Trust hereby employs the Manager (i) to provide certain administrative and limited oversight services and (ii) to provide investment management and related services to the Trust and the Funds, all in the manner set forth in Section 2 of this Agreement, subject to the direction of the Trustees, and for the period, in the manner, and on the terms set forth hereinafter. The Manager hereby accepts such employment and agrees during such period to render the services and to assume the obligations herein set forth. The Manager shall for all purposes herein be deemed to be an independent contractor and, except as expressly provided or authorized (whether herein or otherwise), shall have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. 2. OBLIGATIONS OF, AND SERVICES TO BE PROVIDED BY, THE MANAGER. The Manager undertakes to provide the services hereinafter set forth and to assume the following obligations: A. Administrative Services. (a) The Manager will provide general administrative services as hereinafter set forth ("Administrative Services"), all subject to the overall direction and control of the Board of Trustees of the Trust (the "Board"). (b) Such Administrative Services shall not include investment advisory, custodian, underwriting and distribution, transfer agency or pricing and bookkeeping services, but shall include; (i) provision of office space, B1-2 61 equipment and facilities necessary in connection with the services to be performed hereunder and the maintenance of the headquarters of the Trust; (ii) maintenance of the corporate books and records of the Trust (other than those of its records maintained by the Sub-Advisers referred to in paragraph 2(B)(c) below, the transfer agent, the custodian and the pricing and bookkeeping agent); (iii) administration of all dealings and relationships with the Trustees for meetings of the Board, the scheduling of such meetings and the conduct thereof; (iv) preparation and filing of proxy materials and administration of arrangements for meetings of shareholders or beneficial owners of the Funds; (v) preparation and filing of all required reports and all updating and other amendments to the Trust's Registration Statement under the Investment Company Act, the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations thereunder; (vi) calculation of distributions required or advisable under the Investment Company Act and the Internal Revenue Code of 1986, as amended (the "Code"); (vii) periodic computation and reporting to the Trustees of each Fund's compliance with diversification and other portfolio requirements of the Investment Company Act and the Code; (viii) development and implementation of general shareholder and beneficial owner correspondence and communications relating to the Funds, including the preparation and filing of shareholder and beneficial owner reports as are required or deemed advisable; and (ix) general oversight of the custodial, net asset value computation, portfolio accounting, financial statement preparation, legal, tax and accounting services performed for the Trust or the Funds by others. It is understood that the Manager may, in its discretion and at its expense, delegate some or all of its administrative duties and responsibilities under this subsection 2A to any of its affiliates. B. Investment Advisory Services. (a) The Manager shall have responsibility for the management and investment of the assets of the Funds, subject to and in accordance with the separate investment objectives, policies and limitations of the Funds, as provided in the Trust's Prospectus and Statement of Additional Information and governing instruments, as amended from time to time, and any directions and policies which the Trustees may issue to the Manager from time to time. B1-3 62 (b) The Manager shall provide a continuous investment program for the Funds, shall revise each such program as necessary, and shall monitor implementation of the program. (c) The Manager may delegate its investment responsibilities under paragraph 2B(a) with respect to each Fund to one or more persons or companies registered as investment advisers under the Investment Adviser's Act or qualifying as a "bank" within the meaning of the Investment Adviser's Act and thereby exempted from the requirement to be so registered ("Sub-Advisers") pursuant to an agreement among the Trust, such Fund and each Sub-Adviser ("Sub-Advisory Agreement"). Each Sub-Advisory Agreement may provide that the Sub-Adviser, subject to the control and supervision of the Trustees and the Manager, shall have full investment discretion for the Fund and shall make all determinations with respect to the investment of the Fund's assets or any portion thereof specified by the Manager. Any delegation of duties pursuant to this paragraph shall comply with any applicable provisions of Section 15 of the Investment Company Act, except to the extent permitted by any exemptive order of the Securities and Exchange Commission or similar relief. (d) The Manager shall be solely responsible for paying the fees of each Sub-Adviser from the fees it collects as provided in paragraph 6 below. (e) The Manager shall evaluate possible Sub-Advisers and shall advise the Trustees of the candidates which the Manager believes are best suited to invest the assets of each Fund; shall monitor and evaluate the investment performance of each Sub-Adviser; shall recommend changes of or additions of Sub-Advisers when appropriate; and shall coordinate the investment activities of the Sub-Advisers. (f) It is understood that the Manager may seek advice with respect to the performance of any or all of its duties under paragraphs 2B(b) and (c) from a person or company ("Consultant") pursuant to an agreement among the Manager, the Trust and the Consultant (a "Fund Consulting Agreement"). A Fund Consulting Agreement may provide that the Consultant, subject to the control and supervision of the Trustees and the Manager, shall provide assistance to the Manager with respect to each Fund's investment program, the selection, monitoring and evaluation of Sub-Advisers and the allocation of each Fund's assets to the Sub-Advisers. B1-4 63 (g) The Funds shall be solely responsible for paying the fees of any Consultant. (h) The Manager shall render regular reports to the Trustees relating to the performance of its duties specified in paragraphs 2B(a), (b) and (c). C. Expenses Borne By Manager. To the extent necessary to perform its obligations under this Agreement, the Manager, at its own expense, shall furnish executive and other personnel and office space, equipment and facilities, and shall pay any other expenses incurred by it, in connection with the performance of its duties hereunder, except that the Trust or the Funds, as appropriate, shall reimburse the Manager for its out-of-pocket costs, including telephone, postage and supplies, incurred by it in connection with communications with shareholders and beneficial owners of the Funds. The Manager shall pay all salaries, fees and expenses of Trustees or officers of the Trust who are employees of the Manager. The Manager shall not be obligated to bear any other expenses incidental to the operations and business of the Trust. The Manager shall not be required to pay or provide any credit for services provided by the Trust's custodian, transfer agent or other agents. D. Provision of Information Necessary for Preparation of Registration Statement Amendments and Other Materials. The Manager will make available and provide such information as the Trust may reasonably request for use in the preparation of its Registration Statement, reports and other documents required by federal laws and any securities and insurance laws of the other states and other jurisdictions in which the Trust's shares are sold. E. Code of Ethics. The Manager has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the Investment Company Act and has provided the Trust with a copy of the code of ethics and evidence of its adoption. Within forty-five (45) days of the end of the last calendar quarter of each year while this Agreement is in effect, an executive officer of the Manager shall verify to the Trustees that the Manager has complied with the requirements of Rule 17j-1 during the previous year and that there has been no violation of the Manager's code of ethics or, if such a violation has occurred, that appropriate action was taken in response to such violation. Upon the written request of the Trust, the Manager shall permit the Trust to B1-5 64 examine the reports required to be made to the Manager by Rule 17j-1(c)(1). F. Disqualification. The Manager shall immediately notify the Trustees of the occurrence of any event which would disqualify the Manager from serving as an investment adviser of an investment company pursuant to Section 9(a) of the Investment Company Act or any other applicable statute or regulation. G. Other Obligations and Service. The Manager shall make its officers and employees available to the Trustees and officers of the Trust for consulting and discussions regarding the management of the Trust and its investment activities. 3. EXECUTION AND ALLOCATION OF PORTFOLIO BROKERAGE. A. The Manager, subject to the control and direction of the Trustees, any Sub-Advisers, subject to the control and direction of the Trustees and the Manager, shall have authority and discretion, as appropriate, to select brokers and dealers to execute portfolio transactions for each Fund, and for the selection of the markets on or in which the transactions will be executed. B. In acting pursuant to paragraph 3A, the Manager and the Sub-Advisers may place orders through such brokers and dealers in conformity with the policy with respect to brokerage set forth in the Trust's then effective Registration Statement. C. It is understood that none of the Trust, the Manager or any Sub-Advisers will adopt a formula for allocation of the Trust's brokerage, except as may be provided for in the custody agreement with the Trust's Custodian. D. It is understood that the Manager or a Sub-Adviser may, to the extent permitted by applicable laws and regulations, aggregate securities to be sold or purchased for a Fund and for other clients in order to obtain the most favorable price and efficient execution. In that event, allocation of the securities purchased or sold, as well as expenses incurred in the transaction, will be made by the Manager or Sub-Adviser, as the case may be, in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Trust and to its other clients, and in conformity with any applicable policies adopted by the Board of Trustees. B1-6 65 E. The Manager shall provide such reports as the Trustees may reasonably request with respect to each Fund's total brokerage and the manner in which that brokerage was allocated. 4. EXPENSES OF THE TRUST. It is understood that the Trust (or each of its funds (including the Funds), where applicable) will pay, or will enter into arrangements that require third parties to pay, all of the expenses of the Trust or such funds, other than those expressly assumed by the Manager herein, including without limitation: A. Advisory, sub-advisory and administrative fees; B. Fees for services of independent public accountants; C. Legal and consulting fees; D. Transfer agent, custodian and portfolio recordkeeping and tax information services; E. Expenses of periodic calculations of the funds' net asset values and of equipment for communication among the funds' custodian, transfer agent and others; F. Taxes and the preparation of the funds' tax returns; G. Brokerage fees and commissions; H. Interest; I. Costs of Board of Trustees and shareholder meetings; J. Updates and printing of prospectuses and reports to shareholders; K. Fees for filing reports with regulatory bodies and the maintenance of the Trust's existence; L. Membership dues for industry trade associations; M. Fees to federal authorities for the registration of the shares of the funds; N. Fees and expenses of Trustees who are not directors, officers, employees or stockholders of the Manager of its affiliates; O. Insurance and fidelity bond premiums; and B1-7 66 P. Litigation and other extraordinary expenses of a non-recurring nature. 5. ACTIVITIES AND AFFILIATES OF THE MANAGER. A. The Trust acknowledges that the Manager or one or more of its affiliates may have investment or administrative responsibilities or render investment advice to or perform other investment advisory services for other individuals or entities, and that the Manager, its affiliates or any of its or their directors, officers, agents or employees may buy, sell or trade in securities for its or their respective accounts ("Affiliated Accounts"). Subject to the provisions of paragraph 3, the Trust agrees that the Manager or its affiliates may give advice or exercise investment responsibility and take such other action with respect to Affiliated Accounts which may differ from the advice given or the timing or nature of action with respect to the Funds, provided that the Manager acts in good faith. The Trust acknowledges that one or more of the Affiliated Accounts may at any time hold, acquire, increase, decrease, dispose of or otherwise deal with positions in investments in which the Fund may have an interest. The Manager shall have no obligation to recommend for the Funds a position in any investment which an Affiliated Account may acquire, and the Trust shall have no first refusal, co-investment or other rights in respect of any such investment, either for the Funds or otherwise. B. Subject to and in accordance with the Declaration of Trust and By-Laws of the Trust as currently in effect and the Investment Company Act and the rules thereunder, it is understood that Trustees, officers and agents of the Trust and shareholders of the Trust are or may be interested persons as defined by the Investment Company Act ("Interested Persons") of the Manager or its affiliates as directors, officers, agents and shareholders of the Manager or its affiliates; that directors, officers, agents and shareholders of the Manager or its affiliates are or may be Interested Persons of the Trust as Trustees, officers, agents, shareholders or otherwise; that the Manager or its affiliates may be Interested Persons of the Trust as shareholders or otherwise; and that the effect of any such interests shall be governed by said Declaration of Trust, By-Laws and the Investment Company Act and the rules thereunder. B1-8 67 6. COMPENSATION OF THE MANAGER. For all services to be rendered and payments made pursuant to this Agreement, the Trust, on its own behalf and on behalf of Funds, will pay the Manager monthly in arrears a fee at an annual rate equal to [ ]%, in the case of [ ] Fund, Variable Series, and [ ]%, in the case of [ ] Fund, Variable Series, of the net asset value of such Fund. The fee shall be accrued for each calendar day and the sum of the daily fee accruals shall be paid monthly on or before the tenth day of the following calendar month. The daily accruals of the fee will be computed by (i) multiplying the annual percentage rate referred to above by the fraction the numerator of which is one and the denominator of which is the number of calendar days in the year, and (ii) multiplying the product obtained pursuant to clause (i) above by the net asset value of such Fund as determined in accordance with the Trust's Prospectus as of the previous business day on which such Fund was open for business. The foregoing fee shall be prorated for any month during which this Agreement is in effect for only a portion of the month. 7. LIABILITIES OF THE MANAGER. A. Except as provided below, in the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of obligations or duties hereunder on the part of the Manager, the Manager shall not be subject to liability to the Trust or to any shareholder of the Trust for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security. B. The Manager shall indemnify and hold harmless the Trust from any loss, cost, expense or damage resulting from the failure of any Sub-Advisor to comply with (i) any statement included in the Prospectus and Statement of Additional Information of the Trust, or (ii) instructions given by the Manager to any Sub-Advisor for the purpose of ensuring the Trust's compliance with securities, tax and other requirements applicable to the Trust's business and the investment activities of its Funds; provided, however, that the indemnification provided in this paragraph 7B shall apply only to the extent that a Sub-Adviser is liable to the Trust and, after demand by the Trust, is unable or refuses to discharge its obligations to the Trust. B1-9 68 C. No provision of this Agreement shall be construed to protect any Trustee or officer of the Trust, or the Manager, from liability in violation of Sections 17(h) and (i) of the Investment Company Act. 8. EFFECTIVE DATE: TERM. This Agreement shall become effective on the later of (i) the date first written above or (ii) the date on which the offer and sale of shares of the Fund has been registered under the Securities Act and the Investment Company Act pursuant to an effective Registration Statement of the Trust on Form N-1A and shall continue until [ ], and from year to year thereafter, but only so long as such continuance is specifically approved at least annually by a vote of the Trustees, including the vote of a majority of the Trustees who are not interested persons of the Trust, cast in person at a meeting called for the purpose of voting on such approval, or by vote of a majority of the outstanding voting securities. The aforesaid provision shall be construed in a manner consistent with the Investment Company Act and the rules and regulations thereunder. 9. ASSIGNMENT. No assignment of this Agreement shall be made by the Manager, and this Agreement shall terminate automatically in the event of any such assignment. The Manager shall notify the Trust in writing in advance of any proposed change of control to enable the Trust to take the steps necessary to enter into a new advisory contract. 10. AMENDMENT This Agreement may be amended at any time, but only by written Agreement between the Manager and the Trust, which is subject to the approval of the Trustees of the Trust and the shareholders of any affected Fund in the manner required by the Investment Company Act and the rules thereunder. 11. TERMINATION. This Agreement: (a) may at any time be terminated without payment of any penalty, by the Trust (by the Board of Trustees of the Trust or by the vote of a majority of the outstanding voting securities of the Fund) on sixty (60) days' written notice to the Manager; (b) shall immediately terminate in the event of its assignment; and B1-10 69 (c) may be terminated by the Manager on sixty (60) days written notice to the Trust. 12. DEFINITIONS. As used in this Agreement, the terms "affiliated person," "assignment," "control," "interested person" and "vote of a majority of the outstanding voting securities" shall have the meanings set forth in the Investment Company Act and the rules and regulations thereunder, subject to any applicable orders of exemption issued by the SEC. 13. NOTICE. Any notice under this Agreement shall be given in writing addressed and delivered or mailed postpaid to the other party to this Agreement at its principal place of business. 14. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 15. SHAREHOLDER LIABILITY. The Manager is hereby expressly put on notice of the limitation of shareholder liability as set forth in the Declaration of Trust of the Trust and agrees that obligations assumed by the Trust pursuant to this Agreement shall be limited in all cases to the Trust and its assets, and if the liability relates to one or more Funds, the obligations thereunder shall be limited to the respective assets of such Funds. The Manager further agrees that it shall not seek satisfaction of any such obligation from the shareholders of the Funds, nor from the Trustees or any individual Trustee of the Trust. 16. GOVERNING LAW. This Agreement shall be interpreted under, and the performance of the Manager under this Agreement shall be consistent with, the provisions of the Agreement and Declaration of Trust and By-Laws of the Trust, the terms of the Investment Company Act, applicable rules and regulations thereunder, the Code and regulations thereunder, and the Trust's Prospectus and Statement of Additional Information, in each case as from time to time in effect. The provisions of this Agreement shall be construed and interpreted in accordance with the domestic substantive laws of The Commonwealth of Massachusetts without giving effect to any choice or conflict of laws rules or provisions that would result in the application of the domestic substantive laws of any other jurisdiction; provided, however, that if such law or any of the provisions of this Agreement conflict with the applicable provisions of the Investment Company Act, the latter shall control. B1-11 70 17. USE OF MANAGER'S NAME. The Trust may use the name "Keyport" or any other name derived from the name "Keyport" only for so long as this Agreement (or another similar management agreement pertaining to other series funds of the Trust) or any extension, renewal, or amendment hereof (or thereof) remains in effect, including any similar agreement with any organization that shall have succeeded to the business of the Manager. At such time as this Agreement (and each other similar agreement pertaining to such other series funds) or any extension, renewal or amendment hereof (or thereof), or each such other similar successor organization agreement shall no longer be in effect, the Trust will cease to use any name derived from the name "Keyport," any name similar thereto, or any other name indicating that it is managed by or otherwise connected with the Manager, or with any organization which shall have succeeded to Manager's business as investment advisor or manager. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. B1-12 71 IN WITNESS WHEREOF, the parties hereto have duly executed this agreement on the date first above written. ATTEST: -------------------------------- Title: Secretary ATTEST: -------------------------------- Title: Secretary LIBERTY VARIABLE INVESTMENT TRUST, on its own behalf and on behalf of [ ] Fund, Variable Series and [ ] Fund, Variable Series By: ----------------------------------- Title: LIBERTY ADVISORY SERVICES CORP. By: ----------------------------------- Title: B1-13 72 FORM OF INVESTMENT ADVISORY AGREEMENT [FORM 2 OF 3 - FUND WITH NON-AFFILIATED PORTFOLIO MANAGER] LIBERTY VARIABLE INVESTMENT TRUST [ ] FUND, VARIABLE SERIES MANAGEMENT AND SUB-ADVISORY AGREEMENT MANAGEMENT AND SUB-ADVISORY AGREEMENT ("Agreement"), made this [ ] day of [ ] 2001, between LIBERTY VARIABLE INVESTMENT TRUST, a business trust organized under the laws of The Commonwealth of Massachusetts (the "Trust"), on its own behalf and on behalf of the [ ] Fund, Variable Series (the "Fund"), LIBERTY ADVISORY SERVICES CORP., a corporation organized under the laws of The Commonwealth of Massachusetts ("LASC"), and [ ], a corporation organized under the laws of the State of [ ] (the "Sub-Advisor"). WHEREAS, the Trust has been organized as an open-end management investment company registered as such under the Investment Company Act of 1940, as amended ("Investment Company Act"), and is authorized to issue shares of beneficial interest in one or more separate series (each representing interests in a separate portfolio of securities and other assets), including the Fund, which shares are to be issued and sold to and held by various separate accounts of insurance companies ("Participating Insurance Companies"); WHEREAS, the Trust heretofore has created various other separate funds which are covered by other Management Agreement dated among the Trust, on its own behalf and on behalf of such other series funds, and LASC, and the Trust may in the future create additional fund(s) that may be covered by other separate agreements; WHEREAS, the Trust desires LASC to render certain investment management and administrative services to the Trust and the Fund, all in the manner and on the terms and conditions hereinafter set forth; WHEREAS, the Trust and LASC desire that the Sub-Advisor, as sub-adviser to LASC, provide investment management services to the Fund based on the Sub-Advisor's multi-manager concept, under which the Sub-Advisor recommends, over-sees and coordinates, and allocates the Fund's portfolio assets among, several portfolio managers ("Portfolio B1-14 73 Managers"), each having a different investment style, each of which manages a different portion of the Fund's investment portfolio; and WHEREAS, each of LASC and the Sub-Advisor is registered as an investment adviser under the Investment Adviser's Act of 1940, as amended (the "Investment Adviser's Act"), and desires to provide services to the Trust and the Fund, in the manner contemplated above, in consideration of and on the terms and conditions hereinafter set forth; NOW, THEREFORE, the Trust, on its own behalf and on behalf of the Fund, LASC and the Sub-Advisor hereby agree as follows: 1. EMPLOYMENT OF THE INVESTMENT ADVISER. The Trust hereby employs LASC (i) to provide certain administrative and limited oversight services and (ii) to provide certain investment management and related services to the Trust and the Fund, all in the manner set forth in Section 2 of this Agreement, subject to the direction of the Trustees, and for the period, in the manner, and on the terms set forth hereinafter. LASC hereby accepts such employment and agrees during such period to render the services and to assume the obligations herein set forth. LASC shall for all purposes herein be deemed to be an independent contractor and, except as expressly provided or authorized (whether herein or otherwise), shall have no authority to act for or represent the Trust in any way or otherwise be deemed an agent of the Trust. 2. OBLIGATIONS OF, AND SERVICES TO BE PROVIDED BY, THE MANAGER. LASC undertakes to provide the services hereinafter set forth and to assume the following obligations: A. Administrative Services. (a) LASC will provide general administrative services as hereinafter set forth ("Administrative Services"), all subject to the overall direction and control of the Board of Trustees of the Trust (the "Board"). (b) Such Administrative Services shall not include investment advisory, custodian, underwriting and distribution, transfer agency or pricing and bookkeeping services, but shall include: (i) provision of office space, equipment and facilities necessary in connection with the services to be performed hereunder and the maintenance of the headquarters of the Trust; (ii) maintenance of the corporate books and records of the Trust (other than those of its records maintained by the Sub-Advisor or the Portfolio Managers, the transfer agent, the custodian and the pricing and bookkeeping agent); (iii) administration of all dealings and relationships B1-15 74 with the Trustees for meetings of the Board, the scheduling of such meetings and the conduct thereof; (iv) preparation and filing of proxy materials and administration of arrangements for meetings of shareholders or beneficial owners of the Funds; (v) preparation and filing of all required reports and all updating and other amendments to the Trust's Registration Statement under the Investment Company Act, the Securities Act of 1933, as amended (the "Securities Act"), and the rules and regulations thereunder; (vi) calculation of distributions required or advisable under the Investment Company Act and the Internal Revenue Code of 1986, as amended (the "Code"); (vii) periodic computation and reporting to the Trustees of each Fund's compliance with diversification and other portfolio requirements of the Investment Company Act and the Code; (viii) development and implementation of general shareholder and beneficial owner correspondence and communications relating to the Funds, including the preparation and filing of shareholder and beneficial owner reports as are required or deemed advisable; and (ix) general oversight of the custodial, net asset value computation, portfolio accounting, financial statement preparation, legal, tax and accounting services performed for the Trust or the Fund by others. It is understood that LASC may, in its discretion and at its expense, delegate some or all of its administrative duties and responsibilities under this subsection 2A to any of its affiliates. B. Investment Advisory Services. (a) LASC shall have overall supervisory responsibility for the management and investment of the assets of the Fund, subject to and in accordance with the investment objectives, policies and limitations of the Fund, as provided in the Trust's Prospectus and Statement of Additional Information and governing instruments, as amended from time to time, and any directions and policies which the Trustees may issue to LASC from time to time (collectively, "Investment Policies"). (b) With the consent of the Trust, on behalf of the Fund, LASC hereby delegates to the Sub-Advisor the obligation to provide the Fund, as sub-advisor to LASC, an overall investment program and strategy, in accordance with the Sub-Advisor's multi-manager concept. LASC shall be solely responsible for paying the fees of the Sub-Advisor from the fees it collects from the Trust as provided in paragraph 5 below. (c) In accordance with the Sub-Advisor's multi-manager concept, the Sub-Advisor will recommend to the Trustees one or more persons or B1-16 75 companies registered as investment advisers under the Investment Adviser's Act or qualifying as a "bank" within the meaning of the Investment Adviser's Act and thereby exempted from the requirement to be so registered ("Portfolio Managers"), pursuant to a portfolio management agreement among the Trust, on behalf of the Fund, each Portfolio Manager and the Sub-Advisor. Each Portfolio Manager shall have full investment discretion and authority to make all determinations with respect to the investment and reinvestment of the portion of the Fund's assets assigned to that Portfolio Manager by the Sub-Advisor from time to time and the purchase and sale of portfolio securities with those assets, all within the Fund's Investment Policies. Subject to Section 6, the Sub-Advisor shall not be responsible or liable for the investment merits of any decision by a Portfolio Manager to purchase hold or sell a security for the Fund's portfolio. The Sub-Advisor shall advise the Trustees as to which persons or companies the Sub-Advisor believes are best suited for appointment as Portfolio Managers; shall monitor and evaluate the investment performance of each Portfolio Manager, shall allocate and reallocate from time to time, in its sole discretion, the respective portions of the Fund's assets to be managed by the Portfolio Managers; shall recommend to the Trustees changes of, additions to or terminations of Portfolio Managers when it believes such changes, additions or terminations are appropriate; and shall coordinate the investment activities of the Portfolio Managers with a view to ensuring their compliance with the Fund's Investment Policies and applicable laws. (d) The Sub-Advisor shall be solely responsible for paying the fees of each Portfolio Manager from the fees it collects from LASC as provided in paragraph 5 below. (e) LASC and/or the Sub-Advisor shall render regular reports to the Board relating to the performance of their duties specified in paragraphs 2B(a), (b) and (c). C. Expenses Borne By Manager. To the extent necessary to perform its obligations under this Agreement, LASC and/or the Sub-Advisor, at their own expense, shall furnish executive and other personnel and office space, equipment and facilities, and shall pay any other expenses incurred by them, in connection with the performance of their duties hereunder, except that the Trust or the Fund, as appropriate, shall reimburse LASC and/or the Sub-Advisor (as appropriate) for its out-of-pocket costs, including telephone, postage and supplies, incurred by it in B1-17 76 connection with communications with shareholders and beneficial owners of the Fund. LASC and/or the Sub-Advisor shall pay all salaries, fees and expenses of Trustees or officers of the Trust who are their employees. LASC and the Sub-Advisor shall not be obligated to bear any other expenses incidental to the operations and business of the Trust. LASC and the Sub-Advisor shall not be required to pay or provide any credit for services provided by the Trust's custodian, transfer agent or other agents. D. Provision of Information Necessary for Preparation of Registration Statement Amendments and Other Materials. LASC will make available and provide such information as the Trust may reasonably request for use in the preparation of its Registration Statement, reports and other documents required by federal laws and any securities and insurance laws of the other states and other jurisdictions in which the Trust's shares are sold. E. Code of Ethics. Each of LASC and the Sub-Advisor has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the Investment Company Act and has provided the Trust with a copy of such code of ethics and evidence of its adoption. On or before June 1 in each year, an executive officer of each of LASC and the Sub-Advisor shall verify to the Trustees that it has complied with the requirements of Rule 17j-1 during the previous year and that there has been no material violation of its code of ethics or, if such a violation has occurred, that appropriate action was taken in response to such violation. Upon the written request of the Trust, each of LASC and the Sub- Advisor shall permit the Trust to examine the reports required to be made to it by Rule 17j-1(c)(1). F. Disqualification. Each of LASC and the Sub-Advisor shall immediately notify the Trustees of the occurrence of any event which would disqualify it from serving as an investment adviser of an investment company pursuant to Section 9(a) of the Investment Company Act or any other applicable statute or regulation. G. Other Obligations and Service. Each of LASC and the Sub-Advisor shall make its officers and employees available to the Trustees and officers of the Trust for consulting and discussions regarding the management of the Trust and its investment activities. 3. EXPENSES OF THE TRUST. It is understood that the Trust (or each of its funds (including the Fund), where applicable) will pay, or will enter B1-18 77 into arrangements that require third parties to pay, all of the expenses of the Trust or such funds, other than those expressly assumed by LASC and the Sub-Advisor herein, including without limitation: A. Advisory, sub-advisory and administrative fees; B. Fees for services of independent public accountants; C. Legal and consulting fees; D. Transfer agent, custodian and portfolio pricing, recordkeeping and tax information services; E. Expenses of periodic calculations of the funds' net asset values and of equipment for communication among the funds' custodian, transfer agent and others; F. Taxes and the preparation of the funds' tax returns; G. Brokerage fees and commissions; H. Interest; I. Costs of Board of Trustees and shareholder meetings; J. Updates and printing of prospectuses, proxy statements and reports to shareholders; K. Fees for filing reports with regulatory bodies and the maintenance of the Trust's existence; L. Membership dues for industry trade associations; M. Fees to federal authorities for the registration of the shares of the funds; N. Fees and expenses of Trustees who are not directors, officers, employees or stockholders of LASC, the Sub-Advisor or any of their respective affiliates; O. Insurance and fidelity bond premiums; and P. Litigation and other extraordinary expenses of a non-recurring nature. 4. ACTIVITIES AND AFFILIATES OF THE MANAGER. A. The Trust acknowledges that each of LASC and the Sub-Advisor or one or more of its affiliates may have investment or administrative B1-19 78 responsibilities or render investment advice to or perform other investment advisory services for other individuals or entities, and that each of LASC and the Sub-Advisor, its affiliates or any of its or their directors, officers, agents or employees may buy, sell or trade in securities for its or their respective accounts ("Affiliated Accounts"). The Trust agrees that each of LASC and the Sub-Advisor or its affiliates may give advice or exercise investment responsibility and take such other action with respect to Affiliated Accounts which may differ from the advice given or the timing or nature of action with respect to the Fund, provided that it acts in good faith. The Trust acknowledges that one or more of the Affiliated Accounts may at any time hold, acquire, increase, decrease, dispose of or otherwise deal with positions in investments in which the Fund may have an interest. B. Subject to and in accordance with the Declaration of Trust and By-Laws of the Trust as currently in effect and the Investment Company Act and the rules thereunder, it is understood that Trustees, officers and agents of the Trust and shareholders of the Trust are or may be interested persons as defined by the Investment Company Act of LASC and/or the Sub-Advisor or of their respective affiliates as directors, officers, agents and shareholders thereof; that directors, officers, agents and shareholders of LASC and/or the Sub-Advisor or of their respective affiliates are or may be interested persons of the Trust as Trustees, officers, agents, shareholders or otherwise; that LASC and/or the Sub- Advisor or their respective affiliates may be interested persons of the Trust as shareholders or otherwise; and that the effect of any such interests shall be governed by said Declaration of Trust and By-Laws and the Investment Company Act and the rules thereunder. 5. COMPENSATION OF LASC AND THE SUB-ADVISOR. For all services to be rendered and payments made pursuant to this Agreement, (a) the Trust, on its own behalf and on behalf of Fund, will pay LASC monthly in arrears a fee at an annual rate equal to [ ]% of the net asset value of the Fund, and (b) LASC, on its own behalf, will pay the Sub-Advisor monthly in arrears a fee at an annual rate equal to [ ]% of such net asset value. The Sub-Advisor acknowledges and agrees that the Trust shall have no obligation to the Sub-Advisor to pay any portion of such fee, which shall be solely the responsibility of LASC. Each such fee shall be accrued for each calendar day and the sum of the daily fee accruals shall be paid monthly on or before the tenth day of the following calendar month. The daily accruals of the fee will be computed B1-20 79 by (i) multiplying the annual percentage rate referred to above by the fraction the numerator of which is one and the denominator of which is the number of calendar days in the year, and (ii) multiplying the product obtained pursuant to clause (i) above by the net asset value of the Fund as determined in accordance with the Trust's Prospectus as of the previous business day on which the Fund was open for business. The foregoing fee shall be prorated for any month during which this Agreement is in effect for only a portion of the month. 6. LIABILITIES OF LASC AND THE SUB-ADVISOR. A. Except as provided below, in the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of obligations or duties hereunder on the part of LASC or the Sub-Advisor, as the case may be, LASC or the Sub-Advisor shall not be subject to liability to the Trust or to any shareholder of the Trust for any act or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security. B. The Sub-Advisor shall indemnify and hold harmless the Trust from any loss, cost, expense or damage resulting from the failure of any Portfolio Manager to comply with (i) any statement included in the Prospectus and Statement of Additional Information of the Trust, or (ii) instructions given by the Sub-Advisor to any Portfolio Manager for the purpose of ensuring the Trust's compliance with securities, tax and other requirements applicable to the Trust's business and the investment activities of its Funds; provided, however, that the indemnification provided in this paragraph 6B shall apply only to the extent that a Portfolio Manager is liable to the Trust and, after demand by the Trust, is unable or refuses to discharge its obligations to the Trust. C. No provision of this Agreement shall be construed to protect any Trustee or officer of the Trust, or the LASC or the Sub-Advisor, as the case may be, from liability in violation of Sections 17(h) and (i) of the Investment Company Act. 7. EFFECTIVE DATE: TERM. This Agreement shall become effective on the later of (i) the date first written above or (ii) the date on which the offer and sale of shares of the Fund has been registered under the Securities Act and the Investment Company Act pursuant to an effective Registration Statement of the Trust on Form N-1A and shall continue until the second anniversary of the date hereof, and from year to year thereafter, but only so long as such continuance is specifically approved B1-21 80 at least annually by a vote of the Trustees, including the vote of a majority of the Trustees who are not interested persons of the Trust, cast in person at a meeting called for the purpose of voting on such approval, or by vote of a majority of the outstanding voting securities. The aforesaid provision shall be construed in a manner consistent with the Investment Company Act and the rules and regulations thereunder. 8. ASSIGNMENT. No assignment of this Agreement shall be made by LASC or the Sub-Advisor, and this Agreement shall terminate automatically in the event of any such assignment. Each of LASC and the Sub-Advisor shall notify the Trust in writing in advance of any proposed change of control with respect to it to enable the Trust to take the steps necessary to enter into a new advisory contract. 9. AMENDMENT. This Agreement may be amended at any time, but only by written agreement between LASC, the Sub-Advisor and the Trust, which is subject to the approval of the Trustees of the Trust and the shareholders of any affected Fund in the manner required by the Investment Company Act and the rules thereunder. 10. TERMINATION. This Agreement: (a) may at any time be terminated without payment of any penalty, by the Trust (by the Board of Trustees of the Trust or by the vote of a majority of the outstanding voting securities of the Fund) on sixty (60) days' written notice to LASC and the Sub-Advisor; (b) shall immediately terminate in the event of its assignment; and (c) may be terminated by LASC or the Sub-Advisor on sixty (60) days written notice to the other parties hereto. 11. DEFINITIONS. As used in this Agreement, the terms "affiliated person," "assignment," "control," "interested person" and "vote of a majority of the outstanding voting securities" shall have the meanings set forth in the Investment Company Act and the rules and regulations thereunder, subject to any applicable orders of exemption issued by the Securities and Exchange Commission. 12. NOTICE. Any notice under this Agreement shall be given in writing addressed and delivered or mailed postpaid to the other party to this Agreement at its principal place of business. B1-22 81 13. SEVERABILITY. If any provision of this Agreement shall be held or made invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. 14. SHAREHOLDER LIABILITY. Each of LASC and the Sub-Advisor is hereby expressly put on notice of the limitation of shareholder liability as set forth in the Declaration of Trust of the Trust and agrees that obligations assumed by the Trust pursuant to this Agreement shall be limited in all cases to the Trust and its assets, and if the liability relates to one or more Funds, the obligations thereunder shall be limited to the respective assets of such Funds. Each of LASC and the Sub-Advisor further agrees that it shall not seek satisfaction of any such obligation from the shareholders of the Funds, nor from the Trustees or any individual Trustee of the Trust. 15. GOVERNING LAW. This Agreement shall be interpreted under, and the performance of each of LASC and the Sub-Advisor under this Agreement shall be consistent with, the provisions of the Agreement and Declaration of Trust and By-Laws of the Trust, the terms of the Investment Company Act, applicable rules and regulations thereunder, the Code and regulations thereunder, and the Trust's Prospectus and Statement of Additional Information, in each case as from time to time in effect. The provisions of this Agreement shall be construed and interpreted in accordance with the domestic substantive laws of The Commonwealth of Massachusetts without giving effect to any choice or conflict of laws rules or provisions that would result in the application of the domestic substantive laws of any other jurisdiction; provided, however, that if such law or any of the provisions of this Agreement conflict with the applicable provisions of the Investment Company Act, the latter shall control. 16. USE OF MANAGER'S NAME. The Trust may use the names "Liberty" and "All-Star" or any other name derived from such names only for so long as this Agreement (or another similar management agreement with LFC or a majority or greater owned subsidiary thereof pertaining to other series funds of the Trust) or any extension, renewal, or amendment hereof (or thereof) remains in effect. At such time as this Agreement (and each such other similar agreement pertaining to such other series funds) or any extension, renewal or amendment hereof (or thereof), or each such other similar successor organization agreement shall no longer be in effect, the Trust will cease to use any name derived from any such names similar thereto, or any other name indicating that it is managed B1-23 82 by or otherwise connected with the Manager, or with any organization which shall have succeeded to Manager's business as investment advisor or manager. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. IN WITNESS WHEREOF, the parties hereto have duly executed this agreement on the date first above written. LIBERTY VARIABLE INVESTMENT TRUST, on its own behalf and on behalf of [ ], Variable Series. By: ------------------------------------ Title: LIBERTY ADVISORY SERVICES CORP. By: ------------------------------------ Title: [ ] By: ------------------------------------ Title: B1-24 83 FORM OF INVESTMENT ADVISORY AGREEMENT [FORM 3 OF 3 - SRVIT] STEINROE VARIABLE INVESTMENT TRUST [ ] FUND FUND ADVISORY AGREEMENT FUND ADVISORY AGREEMENT dated [ ], 2001 between STEINROE VARIABLE INVESTMENT TRUST, a business trust organized under the laws of the Commonwealth of Massachusetts (the "Trust"), on behalf of the [ ] Fund, Variable Series (the "Fund"), and STEIN ROE & FARNHAM INCORPORATED, a corporation organized under the laws of the State of Delaware (the "Investment Adviser"). WHEREAS, the Trust has been organized as an open-end management investment company registered as such under the Investment Company Act of 1940 ("Investment Company Act") and is authorized to issue shares of beneficial interest in one or more separate series each representing interests in a separate portfolio of securities and other assets, including the Fund, which shares are to be issued and sold to and held by various separate accounts of insurance companies ("Participating Insurance Company"); WHEREAS, the Trust desires the Investment Adviser to render investment management services to the Fund in the manner and on the terms and conditions hereinafter set forth; WHEREAS, the Trust is entering into a Fund Administration Agreement (the "Administration Agreement") of even date herewith with Stein Roe & Farnham Incorporated (the "Administrator") providing for certain administrative services to the Trust other than investment management services; WHEREAS, the Investment Adviser is registered as an investment adviser under the Investment Advisers Act of 1940 and as a commodities trading advisor under the Commodity Exchange Act, and desires to provide services to the Fund in consideration of and on the terms and conditions hereinafter set forth; B1-25 84 NOW, THEREFORE, the Trust, on behalf of the Fund, and the Investment Adviser agree as follows: 1. Employment of the Investment Adviser. The Trust hereby engages the Investment Adviser to manage the investment and reinvestment of the Trust's assets represented by Fund shares ("Fund assets" or "assets of the Fund") and to advise with respect thereto for the period, in the manner, and on the terms hereinafter set forth. The Investment Adviser hereby accepts such engagement and agrees during such period to render the services and to assume the obligations herein set forth. The Investment Adviser shall for all purposes herein be deemed to be an independent contractor and shall, except as expressly provided or authorized (whether herein or otherwise), have no authority to act for or represent the Trust or the Fund in any way or otherwise be deemed an agent of the Trust or the Fund. 2. Management Services. (a) The Investment Adviser will manage and supervise the investment and reinvestment of the assets of the Fund and advise with respect thereto, subject to the direction and overall control of the Board of Trustees of the Trust and giving due consideration to the investment objective of the Fund and the investment policies and investment restrictions of and the other statements concerning the Fund set forth from time to time in the Trust's then current prospectus and statement of additional information and other governing documents, and to the provisions of the Internal Revenue Code and regulations thereunder applicable to the Fund as a regulated investment company and as the designated investment vehicle for variable annuity, endowment, or life insurance contracts. In furtherance of its duties set forth above, the Investment Adviser is authorized on behalf of the Fund (i) to buy, sell, exchange, convert, lend and otherwise trade in the Fund's portfolio securities and assets, and (ii) to place orders for the execution of transactions in the Fund's portfolio securities with or through such brokers, dealers, underwriters or issuers as the Investment Adviser may select, and to negotiate the terms of such transactions, including brokerage commissions on brokerage transactions, all in accordance with the Trust's policies concerning allocation of its portfolio brokerage, as permitted by law including but not limited to Section 28(e) of the Securities Exchange Act of 1934, and with the statements concerning the allocation of orders for the purchase and sale of securities among the Fund and other accounts of the Investment Adviser set forth from time to time in the Trust's then current B1-26 85 prospectus and statement of additional information, and in doing so the Investment Adviser shall not be required to make any reduction of its investment advisory fee hereunder. (b) The Investment Adviser shall provide to the Trust and the Administrator such information, records and reports concerning the Investment Adviser and its investment management of the Fund's portfolio securities pursuant hereto as the Trust and the Administrator may reasonably request. (c) The Investment Adviser will preserve for the Trust all records it maintains for the Trust as prescribed by the rules and regulations of the Securities and Exchange Commission in the manner and for the time periods prescribed by such rules. The Investment Adviser agrees that all such records shall be the property and under the control of the Trust and shall be made available, within seven business days of request therefor, to the Trust's Board of Trustees or auditors during regular business hours at the Investment Adviser's offices. In the event of termination of this Agreement for any reason, all such records shall be returned, without charge, promptly to the Trust, free from any claim or retention of rights by the Investment Adviser, except that the Investment Adviser may retain copies of such records. (d) The Investment Adviser will report to the Trustees of the Trust any potential or existing material irreconcilable conflict among the interests of shareholders (the separate accounts of insurance companies investing in the Trust) of which it is aware. The Investment Adviser will assist the Trustees in carrying out their responsibilities under an Order from the SEC, dated July 1, 1988, granting insurance companies and variable annuity and variable life insurance separate accounts exemptions from the provisions of Sections 9(a), 13(a), l5(a), and l5(b) of the Investment Company Act and Rules 6e-2(b)(15) and 6e-3(T)(b)(15) thereunder, to the extent necessary to permit shares of the Trust to be sold to and held by variable annuity and variable life insurance separate accounts of insurance companies affiliated and unaffiliated with each other. The Investment Adviser shall provide the Trustees with all information reasonably necessary for the Trustees to consider any issues raised. (e) The Investment Adviser will not disclose or use any records or information obtained pursuant to this Agreement in any manner whatsoever except as expressly authorized herein, and will keep B1-27 86 confidential any information obtained pursuant to this Agreement, and disclose such information only if the Trust has authorized such disclosure, or if such disclosure is expressly required by applicable federal or state regulatory authorities. 3. Expenses Borne by Investment Adviser. To the extent necessary to perform its obligations under this Agreement, the Investment Adviser, at its own expense, shall furnish executive and other personnel and office space, equipment and facilities, and shall pay any other expenses incurred by it, in connection with the performance of its duties hereunder. The Investment Adviser shall pay all salaries, fees and expenses of Trustees or officers of the Trust who are employees of the Investment Adviser. The Investment Adviser shall not be obligated to bear any other expenses incidental to the operations and business of the Trust. The Investment Adviser shall not be required to pay or provide any credit for services provided by the Trust's custodian, transfer agent or other agents, including the Administrator. 4. Expenses Borne by the Trust and Fund. The Trust or the Fund, as appropriate, shall pay all expenses incidental to the operations and business of the Trust and the Fund not specifically assumed or agreed to be paid by the Investment Adviser or the Administrator pursuant to this Agreement or the Administration Agreement, or by any Participating Insurance Company, including, without limitation: (a) the fees of the Investment Adviser as provided in Section 5 below, and of the Administrator; (b) fees payable pursuant to any plan adopted by the Trust pursuant to Rule 12b-1 under the Investment Company Act; (c) all fees and charges of depositories, custodians, and other agencies for the safekeeping and servicing of the cash, securities, and other property of the Trust; (d) all fees and charges of transfer, shareholder servicing, shareholder record keeping and dividend disbursing agents and all other expenses relating to the issuance and redemption of shares of the Trust (including the shares of the Fund) and the maintenance and servicing of shareholder accounts; (e) all charges for equipment or services used for obtaining price quotations or for communication among the Investment Adviser, any sub-adviser appointed by the Trust, the Administrator, the Trust or any B1-28 87 Participating Insurance Company, the custodian or any sub-custodian, transfer agent or any other agent selected by the Trust or the Fund; (f) all expenses incurred in periodic calculations of the net asset value of the shares of the Trust (including the shares of the Fund); (g) all charges for bookkeeping, accounting and tax information services provided to the Trust by the custodian or any subcustodian; (h) all charges for services of the Trust's independent auditors; (i) all charges and expenses of legal counsel for the Trust and for the Trustees of the Trust in connection with legal matters relating to the Trust or the Fund; (j) all compensation of the Trustees of the Trust other than those Trustees who are interested persons of the Trust including, without limitation, Trustees who are interested persons of the Investment Adviser, the Administrator or any Participating Insurance Company, or the principal underwriter of the Trust, and all expenses (including expenses incident to Trustees' meetings) incurred in connection with their services to the Trust; (k) all expenses of preparation, printing and mailing of notices and proxy solicitation material and of reports and other communications to the shareholders and beneficial owners of the Trust, and all other expenses (including proxy solicitation expenses) incidental to meetings of the shareholders or beneficial owners of the Trust; (1) all expenses of preparation (including type setting) and printing of annual or more frequent revisions of the Trust's prospectuses and statements of additional information and supplements thereto, of supplying each then-existing shareholder or beneficial owner of shares of the Fund or purchaser thereof with a copy of such revised prospectus or SAI supplements, and of supplying copies of such statements of additional information to persons requesting the same; (m) all expenses, if any, related to preparing, printing and engraving and transmitting certificates representing shares of the Trust; (n) all expenses of bond and insurance coverage required by law or deemed advisable by the Board of Trustees; (o) all brokers' commissions and other normal charges incident to the purchase and sale of portfolio securities; B1-29 88 (p) costs, including interest expense, of borrowing money; (q) all taxes and corporate fees payable to federal, state or other governmental agencies, domestic or foreign, and all costs and expenses incident to the maintenance of the Trust's legal existence; (r) all expenses of registering and maintaining the registration of the Trust under the Investment Company Act and the shares of the Trust under the Securities Act of 1933, and all expenses, if any, of qualifying and maintaining the qualification of the shares of the Trust for sale under securities laws of various states or other jurisdictions and of registration and qualification of the Trust under all other laws applicable to the Trust or its business activities; (s) all fees, dues, and other expenses incurred by the Trust in connection with its membership in any trade association or other investment organization; and (t) all miscellaneous business expenses. The Trust or the Fund, as appropriate, shall also bear all extraordinary non-recurring expenses as may arise, including but not limited to expenses incurred in connection with litigation, proceedings and claims and expenses incurred in connection with any obligation of the Trust or the Fund to indemnify any person. Expenses which are directly charged to or attributable to the Fund or any other Fund of the Trust shall be borne by that Fund, and expenses which are not solely attributable to any one Fund of the Trust shall be allocated among the Funds of the Trust on a basis that the Trustees of the Trust deem fair and equitable. 5. Investment Advisory Fee. For the services to be rendered by the Investment Adviser hereunder, the Trust, for the benefit of the Fund, shall pay the Investment Adviser out of Fund assets an annual fee in the amount shown in Schedule A attached hereto and made a part hereof. 6. Non-Exclusivity. The services of the Investment Adviser to the Fund hereunder are not to be deemed exclusive and the Investment Adviser shall be free to render similar services to others. 7. Standard of Care. Neither the Investment Adviser, nor any of its directors, officers or stockholders (or partners of stockholders), agents or employees shall be liable or responsible to the Trust or the Fund or their shareholders (or the beneficial owners of their shares) for any error of B1-30 89 judgment, mistake of law or any loss arising out of any investment, or for any other act or omission in the performance by the Investment Adviser of its duties under this Agreement, except for liability resulting from willful misfeasance, bad faith or gross negligence on the Investment Adviser's part or from reckless disregard by the Investment Adviser of its obligations and duties under this Agreement. 8. Amendment. This Agreement may be amended at any time by a written agreement executed by both parties hereto, provided that with respect to amendments of substance such execution on behalf of the Fund shall have been approved by the vote of a majority of the outstanding voting securities of the Fund and by the vote of a majority of those Trustees who are not interested persons of the Trust, the Investment Adviser, the Administrator or a Participating Insurance Company cast in person at a meeting called for the purpose of voting on such approval. 9. Term and Termination. This Agreement shall begin on the date first written above, and may be terminated at any time, without payment of any penalty, by the Board of Trustees of the Trust, or by the vote of a majority of the outstanding voting securities of the Fund, upon sixty (60) days' written notice to the Investment Adviser. This Agreement may be terminated by the Investment Adviser at any time upon sixty 60 days' written notice to the Trust. This Agreement shall terminate automatically in the event of its assignment. Unless terminated as hereinabove provided, this Agreement shall continue in effect until [ ] and thereafter from year to year only so long as such continuance is specifically approved at least annually in conformity with the requirements of the Investment Company Act and the rules and regulations thereunder (a) by the vote of a majority of those Trustees who are not parties to this Agreement or interested persons of the Trust, the Investment Adviser, the Administrator or a Participating Insurance Company, cast in person at a meeting called for the purpose of voting on such approval, and (b) by either the Board of Trustees of the Trust or by the vote of a majority of the outstanding voting securities of the Fund. 10. Non-Liability of Trustees and Shareholders. As provided in the Declaration of Trust of the Trust, a copy of which is on file with the Secretary of the Commonwealth of Massachusetts, any obligation of the Trust or the Fund hereunder shall be binding only upon the assets and property of the Trust or the Fund, as the case may be, and shall not be B1-31 90 binding upon any Trustee, officer, employee, agent or shareholder (or beneficial owner of shares) of the Trust, including, without limitation, the officer of the Trust executing this Agreement on its behalf. Neither the authorization of any action by the Trustees or shareholders (or beneficial owners of shares) of the Trust nor the execution of this Agreement on behalf of the Trust shall impose any liability upon any Trustee or any shareholder (or beneficial owner of shares). 11. Use of Investment Adviser's Name. The Trust may use the name "SteinRoe Variable Investment Trust" or any other name derived from the name "Stein Roe & Farnham" only for so long as this Agreement or any extension, renewal, or amendment hereof remains in effect, including any similar agreement with any organization which shall have succeeded to the business of the Investment Adviser. At such time as this Agreement or any extension, renewal or amendment hereof, or such other similar agreement shall no longer be in effect, the Trust will cease to use any name derived from the name "Stein Roe & Farnham," any name similar thereto, or any other name indicating that it is advised by or otherwise connected with Investment Adviser, or with any organization which shall have succeeded to Investment Adviser's business as investment adviser. 12. Definitions, References and Headings. As used in this Agreement, the terms "vote of a majority of the outstanding voting securities", "interested person", "principal underwriter" and "assignment" shall have the respective meanings provided in the Investment Company Act and the rules thereunder, subject, however, to such exemptions or no-action responses as may be granted by the Securities and Exchange Commission under said Act. Headings are placed herein for convenience of reference only and shall not be taken as a part hereof or control or affect the meaning, construction or effect of this Agreement. 13. Interpretation; Governing Law. This Agreement shall be interpreted under, and the performance of the Investment Adviser under this Agreement shall be consistent with, the provisions of the Agreement and Declaration of Trust and By-Laws of the Trust, as in effect from time to time, the terms of the Investment Company Act, other applicable laws and regulations thereunder (including any amendments hereafter adopted), the Internal Revenue Code of 1986, and regulations thereunder, and the Trust's prospectus and statement of additional information. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of Illinois (except Section 10 hereof which B1-32 91 shall be construed and interpreted in accordance with the laws of Massachusetts), without giving effect to the conflict of laws provisions thereof, provided, however, that if such law or any of the provisions of this Agreement conflict with the applicable provisions of the Investment Company Act, the latter shall control. 14. Severability. If any provision of this Agreement shall be held or made invalid by a court decision, a statute, a rule, or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. IN WITNESS WHEREOF, the parties hereto have duly executed this agreement on the date first above written. [ ] FUND STEINROE VARIABLE INVESTMENT TRUST, VARIABLE SERIES By: --------------------------------- STEIN ROE & FARNHAM INCORPORATED By: --------------------------------- B1-33 92 SCHEDULE A Fund Advisory Agreement [ ] Fund, Variable Series The annual investment advisory fee referred to in paragraph 5 of this Agreement shall be [ ]% of the net asset value of the Fund, computed as hereinafter provided. The fee shall be accrued for each calendar day and the sum of the daily fee accruals shall be paid monthly on or before the tenth day of the following calendar month. The daily accruals of the fee will be computed by multiplying the annual rate referred to above by the fraction the numerator of which is one and the denominator of which is the number of calendar days in the year, and multiplying such product by the net asset value of the Fund as determined in accordance with the Fund's prospectus as of the previous business day on which the Fund was open for business. The foregoing fee shall be prorated for any month during which this Agreement is in effect for only a portion of the month. B1-34 93 APPENDIX B2 FORM OF SUB-ADVISORY AGREEMENT [SRVIT SUB-ADV - NORDEA] SUB-ADVISORY AGREEMENT SUB-ADVISORY AGREEMENT, dated this [ ] day of [ ], 2001, among STEIN ROE & FARNHAM INCORPORATED, a Delaware corporation (the "Adviser"), NORDEA SECURITIES, INC. (formerly UNIBANK SECURITIES, INC.), d/b/a "NORDEA INVESTMENT MANAGEMENT," a company incorporated under the laws of the State of Delaware (the "Sub-Adviser") and STEINROE VARIABLE INVESTMENT TRUST (the "Trust"), on behalf of Stein Roe Balanced Fund, Variable Series (the "Fund"). WITNESSETH: WHEREAS, the Adviser provides the Fund, a series of the Trust, an open-end investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"), business services pursuant to the terms and conditions of an investment advisory agreement dated [ ], 2001 as amended (the "Advisory Agreement"), between the Adviser and the Trust, on behalf of the Fund; and WHEREAS, the Sub-Adviser is willing to provide services to the Adviser on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the mutual covenants and agreements of the parties hereto as herein set forth, the parties covenant and agree as follows: 1. DUTIES OF THE SUB-ADVISER. Subject to the supervision of the Trustees of the Trust and the Adviser, the Sub-Adviser will: (a) manage the investment of a portion of the assets of the Fund, as determined by the Adviser, in accordance with the Fund's investment objectives, policies and limitations as stated in the Fund's then current Prospectus (the "Prospectus") and Statement of Additional Information (the "Statement"), and in compliance with the 1940 Act and the rules, regulations and orders thereunder; (b) place purchase and sale orders for portfolio transactions for the Fund; (c) evaluate such economic, statistical and financial information and undertake such investment research as it shall believe advisable; (d) employ professional portfolio managers to provide research services to the Fund; and (e) report results B2-1 94 to the Board of Trustees of the Trust. The Adviser agrees to provide the Sub-Adviser with such assistance as may be reasonably requested by the Sub-Adviser in connection with its activities under this Agreement, including, without limitation, information concerning the Portfolio, its funds available, or to become available, for investment and generally as to the conditions of the Fund's affairs. Should the Trustees of the Trust or the Adviser at any time make any determination as to investment policy and notify the Sub-Adviser thereof in writing, the Sub-Adviser shall be bound by such determination for the period, if any, specified in such notice or until notified that such determination has been revoked. Further, the Adviser or the Trustees of the Trust may at any time, upon written notice to the Sub-Adviser, suspend or restrict the right of the Sub-Adviser to determine what assets of the Fund shall be purchased or sold and what portion, if any, of the Fund's assets shall be held uninvested. It is understood that the Adviser undertakes to discuss with the Sub-Adviser any such determinations of investment policy and any such suspension or restrictions on the right of the Sub-Adviser to determine what assets of the Fund shall be purchased or sold or held uninvested, prior to the implementation thereof. 2. CERTAIN INFORMATION TO THE SUB-ADVISER. Copies of the Prospectus and the Statement have been delivered to the Sub-Adviser. The Adviser agrees to notify the Sub-Adviser of each change in the investment policies of the Fund and to provide to the Sub-Adviser as promptly as practicable copies of all amendments and supplements to the Prospectus and the Statement. In addition, the Adviser will promptly provide the Sub-Adviser with any procedures applicable to the Sub-Adviser adopted from time to time by the Trustees of the Trust and agrees to provide promptly to the Sub-Adviser copies of all amendments thereto. 3. EXECUTION OF CERTAIN DOCUMENTS. Subject to any other written instructions of the Adviser and the Trustees of the Trust, the Sub-Adviser is hereby appointed the Adviser's and the Trust's agent and attorney-in-fact to execute account documentation, agreements, contracts and other documents as the Sub-Adviser shall be requested by brokers, dealers, counterparties and other persons in connection with its management of the assets of the Fund. 4. REPORTS. The Sub-Adviser shall furnish to the Trustees of the Trust or the Adviser, or both, as may be appropriate, quarterly reports of its activities on behalf of the Fund, as required by applicable law or as B2-2 95 otherwise requested from time to time by the Trustees of the Trust or the Adviser, and such additional information, reports, evaluations, analyses and opinions as the Trustees of the Trust or the Adviser, as appropriate, may request from time to time. 5. COMPENSATION OF THE SUB-ADVISER. For the services to be rendered by the Sub-Adviser under this Agreement, the Adviser shall pay to the Sub-Adviser compensation, computed and paid monthly in arrears in U.S. dollars, at an annual rate of 0.40% of the average daily net asset value of the portion of the Fund's assets under management by the Sub-Adviser. If the Sub-Adviser shall serve for less than the whole of any month, the compensation payable to the Sub-Adviser with respect to the Fund will be prorated. The Sub-Adviser will pay its expenses incurred in performing its duties under this Agreement. Neither the Trust nor the Fund shall be liable to the Sub-Adviser for the compensation of the Sub-Adviser. For the purpose of determining fees payable to the Sub-Adviser, the value of the Fund's net assets shall be computed at the times and in the manner specified in the Prospectus and/or Statement. 6. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be liable for any error of judgment or mistake of law or for any loss arising out of any investment or for any act or omission in the execution and management of the Fund, except for willful misfeasance, bad faith or gross negligence in the performance of its duties and obligations hereunder. The Trust, on behalf of the Fund, may enforce any obligations of the Sub-Adviser under this Agreement and may recover directly from the Sub-Adviser for any liability it may have to the Fund. 7. ACTIVITIES OF THE SUB-ADVISER. The services of the Sub-Adviser to the Fund are not deemed to be exclusive, the Sub-Adviser being free to render investment advisory and/or other services to others. 8. COVENANTS OF THE SUB-ADVISER. The Sub-Adviser agrees that it (a) will not deal with itself, "affiliated persons" of the Sub-Adviser, the Trustees of the Trust or the Fund's distributor, as principals, agents, brokers or dealers in making purchases or sales of securities or other property for the account of the Fund, except as permitted by the 1940 Act and the rules, regulations and orders thereunder and subject to the prior written approval of the Adviser, and except in accordance with Rule 17e-1 procedures as approved by the Trustees from time to time and (b) will comply with all other provisions of the then-current B2-3 96 Prospectus and Statement relative to the Sub-Adviser and its trustees, officers, employees and affiliates. 9. REPRESENTATIONS, WARRANTIES AND ADDITIONAL AGREEMENTS OF THE SUB- ADVISER. The Sub-Adviser represents, warrants and agrees that: (a) It (i) is registered as an investment adviser under the U.S. Investment Advisers Act of 1940 (the "Advisers Act"), is authorized to undertake investment business in the U.S. and is registered under the laws of any jurisdiction in which the Sub-Adviser is required to be registered as an investment adviser in order to perform its obligations under this Agreement, and will continue to be so registered for so long as this Agreement remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act from performing the services contemplated by this Agreement; (iii) has met, and will continue to meet for so long as this Agreement remains in effect, any other applicable Federal or State requirements, or the applicable requirements of any regulatory or industry self-regulatory agency, necessary to be met in order to perform the services contemplated by this Agreement; (iv) has the authority to enter into and perform the services contemplated by this Agreement; (v) will immediately notify the Adviser in writing of the occurrence of any event that would disqualify the Sub-Adviser from serving as an investment adviser of an investment company pursuant to Section 9(a) of the 1940 Act or otherwise; and (vi) will immediately notify the Adviser in writing of any change of control of the Sub-Adviser or any parent of the Sub-Adviser resulting in an "assignment" of this Agreement. (b) It will maintain, keep current and preserve on behalf of the Fund, in the manner and for the periods of time required or permitted by the 1940 Act and the rules, regulations and orders thereunder and the Advisers Act and the rules, regulations and orders thereunder, records relating to investment transactions made by the Sub-Adviser for the Fund as may be reasonably requested by the Adviser or the Fund from time to time. The Sub-Adviser agrees that such records are the property of the Fund, and will be surrendered to the Fund promptly upon request. (c) The Sub-Adviser has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act and, if it has not already done so, will provide the Adviser and the Trust with a copy of such code of ethics, and upon any amendment to such code of ethics, promptly provide such amendment. At least annually the Sub-Adviser B2-4 97 will provide the Trust and the Adviser with a certificate signed by the chief compliance officer (or the person performing such function) of the Sub-Adviser certifying, to the best of his or her knowledge, compliance with the code of ethics during the immediately preceding twelve (12) month period, including any material violations of or amendments to the code of ethics or the administration thereof. (d) It has provided the Adviser and the Trust with a copy of its Form ADV as most recently filed with the Securities and Exchange Commission (the "SEC") and will, promptly after filing any amendment to its Form ADV with the SEC, furnish a copy of such amendment to the Adviser and the Trust. 10. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall become effective on the date first above written and shall govern the relations between the parties hereto thereafter, and shall remain in force until [ ] and from year to year thereafter but only so long as its continuance is "specifically approved at least annually" by the Board of Trustees of the Trust or by "vote of a majority of the outstanding voting securities" of the Fund. This Agreement may be terminated at any time without penalty on sixty days' written notice to the Sub-Adviser by vote of the Board of Trustees of the Trust, by "vote of a majority of the outstanding voting securities" of the Fund, or by the Adviser. This Agreement also may be terminated at any time without penalty by the Sub-Advisor on ninety days' written notice to the Adviser and Trust. This Agreement shall automatically terminate in the event of its "assignment" or in the event that the Advisory Agreement shall have terminated for any reason. 11. AMENDMENTS TO THIS AGREEMENT. This Agreement may be amended in accordance with the 1940 Act. 12. CERTAIN DEFINITIONS. The terms "specifically approved at least annually", "vote of a majority of the outstanding voting securities", "assignment", "control", "affiliated persons" and "interested person", when used in this Agreement, shall have the respective meanings specified, and shall be construed in a manner consistent with, the 1940 Act and the rules, regulations and orders thereunder, subject, however, to such exemptions as may be granted by the SEC under the 1940 Act. 13. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; DUTY TO UPDATE INFORMATION. All representations and warranties made by the Sub-Adviser pursuant to Section 9 hereof shall survive for the duration of this B2-5 98 Agreement and the Sub-Adviser shall immediately notify, but in no event later than five (5) business days, the Adviser in writing upon becoming aware that any of the foregoing representations and warranties are no longer true. 14. MISCELLANEOUS. This Agreement shall be governed by and construed in accordance with the internal laws of The Commonwealth of Massachusetts. All notices provided for by this Agreement shall be in writing and shall be deemed given when received, against appropriate receipt, by the Sub-Adviser's Secretary in the case of the Sub-Adviser, the Adviser's General Counsel in the case of the Adviser, and the Trust's Secretary in the case of the Fund, or such other person as a party shall designate by notice to the other parties. This Agreement constitutes the entire agreement among the parties hereto and supersedes any prior agreement among the parties relating to the subject matter hereof. The section headings of this Agreement are for convenience of reference and do not constitute a part hereof. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered in their names and on their behalf by the undersigned, thereunto duly authorized, and their respective seals to be hereto affixed, all as of the day and year first written above. STEIN ROE & FARNHAM INCORPORATED By: ------------------------------------ Name: Title: B2-6 99 NORDEA SECURITIES, INC. By: ------------------------------------ Name: Title: By: ------------------------------------ Name: Title: STEINROE VARIABLE INVESTMENT TRUST, on behalf of Stein Roe Balanced Fund, Variable Series By: ------------------------------------ Name: Title: A copy of the document establishing the Trust is filed with the Secretary of The Commonwealth of Massachusetts. This Agreement is executed by officers not as individuals and is not binding upon any of the Trustees, officers or shareholders of the Trust individually but only upon the assets of the Fund. B2-7 100 FORM OF SUB-ADVISORY AGREEMENT [SUB-ADVISORY VARIATION 1] [ ] FUND, VARIABLE SERIES [ ] SUB-ADVISORY AGREEMENT AGREEMENT dated [ ], 2001 among LIBERTY VARIABLE INVESTMENT TRUST a Massachusetts business trust (the "Trust"), with respect to [ ] FUND, VARIABLE SERIES (the "Fund"), LIBERTY ADVISORY SERVICES CORP, a Massachusetts corporation ("Advisor"), and [ ], a [ ] corporation (the "Sub-Advisor"). In consideration of the promises and covenants herein, the parties agree as follows: 1. The Sub-Advisor will manage the investment of the assets of the Fund in accordance with its investment objective, policies and limitations set forth in the Trust's prospectus and statement of additional information as amended from time to time, and will perform the other services herein set forth, subject to the supervision of the Advisor and the Board of Trustees of the Trust. 2. In carrying out its investment management obligations, the Sub-Advisor shall: (a) evaluate such economic, statistical and financial information and undertake such investment research as it shall believe advisable; (b) purchase and sell securities and other investments for the Fund in accordance with the procedures described in the Trust's prospectus and statement of additional information; and (c) report results to the Advisor and to the Board of Trustees. 3. The Sub-Advisor shall be free to render similar services to others so long as its services hereunder are not impaired thereby 4. The Advisor shall pay the Sub-Advisor a monthly fee at the annual rate of [ ]% of the average daily net assets of the Fund for managing the investment of the assets of the Fund provided in paragraph 1 above. Such fee shall be paid in arrears on or before the 10th day of the next following calendar month. B2-8 101 5. This Agreement shall become effective on the date first written above, and (a) unless otherwise terminated, shall continue until the second anniversary of the date hereof, and from year to year thereafter so long as approved annually in accordance with the 1940 Act; (b) may be terminated without penalty on sixty days' written notice to the Sub-Advisor either by vote of the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities of the Fund; (c) shall automatically terminate in the event of its assignment; and (d) may be terminated without penalty by the Sub-Advisor on sixty days' written notice to the Trust. 6. This Agreement may be amended in accordance with the 1940 Act. 7. For the purpose of the Agreement, the terms "vote of a majority of the outstanding shares," and "assignment" shall have their respective meanings defined in the 1940 Act and exemptions and interpretations issued by the Securities and Exchange Commission under the 1940 Act. 8. In the absence of willful misfeasance, bad faith or gross negligence on the part of the Sub-Advisor, or reckless disregard of its obligations and duties hereunder, the Sub-Advisor shall not be subject to any liability to the Trust or the Fund, to any shareholder of the Trust or the Fund or to any person, firm or organization, for any act or omission in the course of or connection with rendering services hereunder. 9. The Fund may use the name "[ ]," or any other name derived from the name "[ ]" only for so long as this Agreement or any extension, renewal, or amendment hereof remains in effect, including any similar agreement with any organization that shall have succeeded to the business of the Sub-Advisor. At such time as this Agreement or any extension, renewal or amendment hereof or each such other similar successor organization agreement shall no longer be in effect, the Fund will cease to use any name derived from the name "[ ]," any name similar thereto, or any other name indicating that it is advised by or otherwise connected with the Sub-Advisor, or with any organization which shall have succeeded to the Sub-Advisor's business as an investment advisor. 10. The Sub-Advisor is hereby expressly put on notice of the limitation of shareholder liability as set forth in the Declaration of Trust of the Trust and agrees that obligations assumed by the Trust pursuant to this Agreement shall be limited in all cases to the assets of the Fund. The Sub-Advisor further agrees that it shall not seek satisfaction of any such B2-9 102 obligation from the shareholders of the Fund, nor from the Trustees or any individual Trustee of the Trust. [ ] FUND, VARIABLE SERIES By: LIBERTY VARIABLE INVESTMENT TRUST By: ------------------------------------- [Name], [Title] [ ] By: ------------------------------------- [Name], [Title] LIBERTY ADVISORY SERVICES CORP. By: ------------------------------------- [Name], [Title] B2-10 103 FORM OF SUB-ADVISORY AGREEMENT [SUB-ADVISORY VARIATION 2] [ ] FUND, VARIABLE SERIES [ ] SUB-ADVISORY AGREEMENT AGREEMENT dated [ ], 2001 among LIBERTY VARIABLE INVESTMENT TRUST, a Massachusetts business trust (the "Trust"), with respect to [ ] FUND, VARIABLE SERIES (the "Fund"), LIBERTY ADVISORY SERVICES, a Massachusetts corporation ("'Advisor"), and [ ], a [ ] corporation (the "Sub-Advisor"). In consideration of the promises and covenants herein, the parties agree as follows: 1. The Sub-Advisor will manage the investment of the assets of the Fund in accordance with its investment objective, policies and limitations set forth in the Trust's prospectus and statement of additional information. as amended from time to time, and will perform the other services herein set forth, subject to the supervision of the Advisor and the Board of Trustees of the Trust 2. In carrying out its investment management obligations, the Sub-Advisor shall: (a) evaluate such economic, statistical and financial information and undertake such investment research as it shall believe advisable: (b) purchase and sell securities and other investments for the Fund in accordance with the procedures described in the Trust's prospectus and statement of additional information: and (c) report results to the Advisor and to the Board of Trustees. 3. The Sub-Advisor may delegate its investment responsibilities under paragraph 2(b) with respect to the Fund to one or more Persons or companies registered as investment advisors under the Investment Adviser's Act of 1940, as amended, or qualifying as a "bank" within the meaning of such Act and thereby exempted from the requirement to be so registered ("Second-Tier Sub-Advisors"), pursuant to an agreement among the Trust, such Fund, the Advisor, the Sub-Advisor and such B2-11 104 Second-Tier Sub-Advisor ("Second-Tier Sub-Advisory Agreement") Each Second-Tier Sub-Advisory Agreement may provide that the Second-Tier Sub-Advisor. subject to the control and supervision of the Trustees, the Advisor and the Sub-Advisor. shall have full investment discretion for the Fund and the Fund's assets or any portion thereof specified by the Sub-Advisor. Any selection of duties pursuant to this paragraph shall comply with any applicable provisions of Section 15 of the Investment Company Act of 1940, as amended (the "1940 Act"), except to the extent permitted by any applicable exemptive order of the Securities and Exchange Commission or similar relief, The Sub-Advisor shall be solely responsible for paying the fees of each Second-Tier Sub-Advisor from the fees it collects as provided in paragraph 5 below. 4. The Sub-Advisor shall be free to render similar services to others so long as its services hereunder are not impaired thereby. 5. The Advisor shall pay the Sub-Advisor a monthly fee at the annual rate of [ ]% of the average daily net assets of the Fund for managing the investment of the assets of the Fund as provided in paragraph 1 above. Such fee shall be paid in arrears on or before the 10th day of the next following calendar month. 6. This Agreement shall become effective on the date first written above and (a) unless otherwise terminated, shall continue until [ ] and from year to year thereafter so long as approved annually in accordance with the 1940 Act: (b) may be terminated without penalty on sixty days' written notice to the Sub-Advisor either by vote of the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities of the Fund: (c) shall automatically terminate in the event of its assignment; and (d) may be terminated without penalty by the Sub-Advisor on sixty days' written notice to the Trust. 7. This Agreement may be amended in accordance with the 1940 Act. 8. For the purpose of the Agreement, the terms "vote of a majority of the outstanding shares, "affiliated person" and "assignment" shall have their respective meanings defined in the 1940 Act and exemptions and interpretations issued by the Securities and Exchange Commission under the 1940 Act. 9. In the absence of willful misfeasance, bad faith or gross negligence on the part of the Sub-Advisor, or reckless disregard of its obligations B2-12 105 and duties hereunder, the Sub-Advisor shall not be subject to any liability to the Trust or the Fund, to any shareholder of the Trust or the Fund or to any other person. firm or organization, for any act or omission in the course or connection with rendering services hereunder. 10. The Fund may use the name "[ ]," or any other name derived from the name "[ ]," only for so long as this Agreement or any extension, renewal, or amendment hereof remains in effect, including any similar agreement with any organization that shall have succeeded to the business of the Sub-Advisor. At such time as this Agreement or any extension, renewal or amendment hereof, or each such other similar successor organization agreement shall no longer be in effect, the Fund will cease to use any name derived from the name "[ ]," any name similar thereto, or any other name indicating that it is advised by or otherwise connected with the Sub- Advisor, or with any organization which shall have succeeded to the Sub-Advisor's business as an investment advisor. 11. The Sub-Advisor is hereby expressly put on notice of the limitation of shareholder liability as set forth in the Declaration of Trust of the Trust and agrees that obligations assumed by the Trust pursuant to this Agreement shall be limited in all cases to the assets of the Fund. The Sub-Advisor further agrees that it shall not seek satisfaction of any such obligation from the shareholders of the Fund, nor from the Trustees or any individual Trustee of the Trust. [ ] FUND, VARIABLE SERIES By: LIBERTY VARIABLE INVESTMENT TRUST By: ------------------------------------ [ ] By: ------------------------------------ B2-13 106 LIBERTY ADVISORY SERVICES CORP. By: ------------------------------------ B2-14 107 FORM OF SUB-ADVISORY AGREEMENT [SUB-ADVISORY VARIATION 3] [ ] FUND, VARIABLE SERIES NEWPORT MANAGEMENT SUB-ADVISORY AGREEMENT AGREEMENT dated as of [ ], 2001 among LIBERTY VARIABLE INVESTMENT TRUST, a Massachusetts business trust (the "Trust"), with respect to [ ] FUND, VARIABLE SERIES (the "Fund"), LIBERTY ADVISORY SERVICES CORP., a Massachusetts corporation ("Advisor"), and NEWPORT FUND MANAGEMENT, INC., a California corporation (the "Sub-Advisor"). In consideration of the promises and covenants herein, the parties agree as follows: 1. The Sub-Advisor will manage the investment of the assets of the Fund in accordance with its investment objective, policies and limitations set forth in the Trust's prospectus and statement of additional information, as amended from time to time, and will perform the other services herein set forth, subject to the supervision of the Advisor and the Board of Trustees of the Trust. 2. In carrying out its investment management obligations, the Sub-Advisor shall: (a) evaluate such economic, statistical and financial information and undertake such investment research as it shall believe advisable; (b) purchase and sell securities and other investments for the Fund in accordance with the procedures described in the Trust's prospectus and statement of additional information; and (c) report results to the Advisor and to the Board of Trustees. 3. The Sub-Advisor shall be free to render similar services to others so long as its services hereunder are not impaired thereby. 4. The Advisor shall pay the Sub-Advisor a monthly fee at the annual rate of [ ]% of the average daily net assets of the Fund for managing the investment of the assets of the Fund as provided in paragraph I above. Such fee shall be paid in arrears on or before the 10th day of the next following calendar month. B2-15 108 5. This Agreement shall become effective on the date first written above, and (a) unless otherwise terminated, shall continue until [ ] and from year to year thereafter so long as approved annually in accordance with the 1940 Act; (b) may be terminated without penalty on sixty-days' written notice to the Sub-Advisor either by vote of the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities of the Fund; (c) shall automatically terminate in the event of its assignment; and (d) may be terminated without penalty by the Sub-Advisor on sixty-day's written notice to the Trust. 6. This Agreement may be amended in accordance with the 1940 Act. 7. For the purpose of the Agreement, the terms "vote of a majority of the outstanding shares," "affiliated person" and "assignment" shall have their respective meanings defined in the 1940 Act and exemptions and interpretations issued by the Securities and Exchange Commission under the 1940 Act. 8. In the absence of willful misfeasance, bad faith or gross negligence on the part of the Sub-Advisor, or reckless disregard of its obligations and duties hereunder, the Sub-Advisor shall not be subject to any liability to the Trust or the Fund, to any shareholder of the Trust or the Fund or to any other person, firm or organization, for any act or omission in the course of or connection with rendering services hereunder. 9. The Fund may use the name "Newport," or any other name derived from the name "Newport Fund Management, Inc.," only for so long as this Agreement or any extension, renewal, or amendment hereof remains in effect, including any similar agreement with any organization that shall have succeeded to the business of the Sub-Advisor. At such time as this Agreement or any extension, renewal or amendment hereof, or each such other similar successor organization agreement shall no longer be in effect, the Fund will cease to use any name derived from the name "Newport Fund Management, Inc.," any name similar thereto, or any other name indicating that it is advised by or otherwise connected with the Sub-Advisor, or with any organization which shall have succeeded to the Sub-Advisor's business as an investment adviser. 10. The Sub-Advisor is hereby expressly put on notice of the limitation of shareholder liability as set forth in the Declaration of Trust of the B2-16 109 Trust and agrees that obligations assumed by the Trust pursuant to this Agreement shall be limited in all cases to the assets of the Fund. The Sub-Advisor further agrees that it shall not seek satisfaction of any such obligation from the shareholders of the Fund, nor from the Trustees or any individual Trustee of the Trust. IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. [ ] FUND, VARIABLE SERIES By: LIBERTY VARIABLE INVESTMENT TRUST By: ------------------------------------------------------ Title: NEWPORT FUND MANAGEMENT, INC. By: ------------------------------------------------------ Title: LIBERTY ADVISORY SERVICES CORP. By: ------------------------------------------------------ Title: B2-17 110 FORM OF SUB-ADVISORY AGREEMENT [SUB-ADVISORY VARIATION 4] STEIN ROE GLOBAL UTILITIES FUND, VARIABLE SERIES STEIN ROE & FARNHAM INCORPORATED MANAGEMENT SUB-ADVISORY AGREEMENT AGREEMENT date [ ], 2001 among LIBERTY VARIABLE INVESTMENT TRUST, a Massachusetts business trust (the "Trust"), with respect to STEIN ROE GLOBAL UTILITIES FUND, VARIABLE SERIES (the "Fund"), LIBERTY ADVISORY SERVICES CORP., a Massachusetts corporation ("Adviser"), and STEIN ROE & FARNHAM INCORPORATED, a Delaware corporation (the "Sub-Adviser"). In consideration of the promises and covenants herein, the parties agree as follows: 1. The Sub-Adviser will manage the investment of the assets of the Fund in accordance with its investment objective, policies and limitations set forth in the Trust's prospectus and statement of additional information, as amended from time to time, and will perform the other services herein set forth, subject to the supervision of the Adviser and the Board of Trustees of the Trust. 2. In carrying out its investment management obligations, the Sub-Adviser shall: (a) evaluate such economic, statistical and financial information and undertake such investment research as it shall believe advisable; (b) purchase and sell securities and other investments for the Fund in accordance with the procedures described in the Trust's prospectus and statement of additional information; and (c) report results to the Adviser and to the Board of Trustees. 3. The Sub-Adviser shall be free to render similar services to others so long as its services hereunder are not impaired thereby. 4. The Advisor shall pay the Sub-Adviser a monthly fee at the annual rate of 0.45% of the average daily net assets of the Fund for managing the investment of the assets of the Fund as provided in paragraph 1 above. B2-18 111 5. This Agreement shall become effective on the date first written above, and (a) unless otherwise terminated, shall continue until [ ], and from year to year thereafter so long as approved annually in accordance with the Investment Company Act of 1940 (the "1940 Act"); (b) may be terminated without penalty on sixty days' written notice to the Sub-Adviser either by vote of the Board of Trustees of the Trust or by vote of a majority of the outstanding voting securities of the Fund; (c) shall automatically terminate in the event of its assignment; and (d) may be terminated without penalty by the Sub-Adviser on sixty day's written notice to the Trust. 6. This Agreement may be amended in accordance with the 1940 Act. 7. For the purpose of the Agreement, the terms "vote of a majority of the outstanding shares," "affiliated person" and "assignment" shall have their respective meanings defined in the 1940 Act and exemptions and interpretations issued by the Securities and Exchange Commission under the 1940 Act. 8. In the absence of willful misfeasance, bad faith or gross negligence on the part of the Sub-Adviser, or reckless disregard of its obligations and duties hereunder, the Sub-Adviser shall not be subject to any liability to the Trust or the Fund, to any shareholder of the Trust or the Fund or to any other person, firm or organization, for any act or omission in the course of or connection with rendering services hereunder. 9. The Fund may use the name "Stein Roe," or any other name derived from the name "Stein Roe & Farnham," only for so long as this Agreement or any extension, renewal, or amendment hereof remains in effect, including any similar agreement with any organization that shall have succeeded to the business of the Sub-Adviser. At such time as this Agreement or any extension, renewal or amendment hereof, or such other similar agreement shall no longer be in effect, the Fund will cease to use any name derived from the name "Stein Roe & Farnham," any name similar thereto, or any other name indicating that it is advised by or otherwise connected with the Sub-Adviser, or with any organization B2-19 112 which shall have succeeded to the Sub-Adviser's business as an investment adviser. STEIN ROE GLOBAL UTILITIES FUND, VARIABLE SERIES By: LIBERTY VARIABLE INVESTMENT TRUST By: ------------------------------------------------------ STEIN ROE & FARNHAM INCORPORATED By: ------------------------------------------------------ LIBERTY ADVISORY SERVICES CORP. By: ------------------------------------------------------ B2-20 113 APPENDIX B3 FORM OF PORTFOLIO MANAGEMENT AGREEMENT [PORTFOLIO MANAGEMENT AGREEMENT STANDARD FORM] PORTFOLIO MANAGEMENT AGREEMENT WITH [ ] PORTFOLIO MANAGER[S] as of [ ], 2001 [PORTFOLIO MANAGER] [ADDRESS] Re Portfolio Management Agreement Ladies and Gentlemen: [ ] Fund, Variable Series (the "Fund") is a series of the Liberty Variable Investment Trust (the "Trust"), a diversified open-end investment company registered under the Investment Company Act of 1940 (the "Act"), and is subject to the rules and regulations promulgated thereunder. Liberty Advisory Services Corp. ("LASC") is the manager of the Fund. Pursuant to the Management and Sub-Advisory Agreement of even date herewith (the "Management and Sub-Advisory Agreement") among the Trust, on behalf of the Fund, LASC and [ ] (the "Fund Manager"), LASC delegates to the Fund Manager responsibility for investment management of the Fund. In furtherance thereof, the Fund Manager evaluates and recommends portfolio managers for the Fund and is responsible for certain administrative matters relating to the Fund. l. Employment as a Portfolio Manager. The Trust being duly authorized hereby employs [ ] (the "Portfolio Manager") as a discretionary portfolio manager, on the terms and conditions set forth herein, of those assets of the Fund which the Fund Manager determines to assign to the Portfolio Manager (those assets being referred to as the "Fund Account"). The Fund Manager may, from time to time, allocate and reallocate the Fund's assets among the Portfolio Manager and the other portfolio managers of the Fund's assets. B3-1 114 2. Acceptance of Employment; Standard of Performance. The Portfolio Manager accepts its employment as a discretionary portfolio manager and agrees to use its best professional judgment to make timely investment decisions for the Fund Account in accordance with the provisions of this Agreement. 3. Portfolio Management Services of Portfolio Manager. In providing portfolio management services to the Fund Account, the Portfolio Manager shall be subject to the investment objectives, policies and restrictions of the Fund as set forth in the Trust's current registration statement under the Act (as the same may be modified from time to time), and the investment restrictions set forth in the Act and the Rules thereunder (as and to the extent set forth in such registration statement or in other documentation furnished to the Portfolio Manager by the Fund or the Fund Manager), to the supervision and control of the Trustees of the Trust (the "Trustees"), and to instructions from the Fund Manager. The Portfolio Manager shall not, without the prior approval of the Fund or the Fund Manager, effect any transactions which would cause the Fund Account, treated as a separate fund, to be out of compliance with any of such restrictions or policies. 4. Transaction Procedures. All portfolio transactions for the Fund Account will be consummated by payment to or delivery by the custodian of the assets of the Fund (the "Custodian"), or such depositories or agents as may be designated by the Custodian in writing, as custodian for the Fund, of all cash and/or securities due to or from the Fund Account, and the Portfolio Manager shall not have possession or custody thereof or any responsibility or liability with respect to such custody. The Portfolio Manager shall advise and confirm in writing to the Custodian all investment orders for the Fund Account placed by it with brokers and dealers at the time and in the manner set forth in Schedule A hereto (as Schedule A may be amended from time to time). The Fund shall issue to the Custodian such instructions as may be appropriate in connection with the settlement of any transaction initiated by the Portfolio Manager. The Fund shall be responsible for all custodial arrangements and the payment of all custodial charges and fees, and, upon giving proper instructions to the Custodian, the Portfolio Manager shall have no responsibility or liability with respect to custodial arrangements or the acts, omissions or other conduct of the Custodian. 5. Allocation of Brokerage. The Portfolio Manager shall have authority and discretion to select brokers and dealers to execute portfolio B3-2 115 transactions initiated by the Portfolio Manager, and to select the markets on or in which the transaction will be executed. A. In doing so, the Portfolio Manager's primary responsibility shall be to seek to obtain best net price and execution for the Fund. However, this responsibility shall not obligate the Portfolio Manager to solicit competitive bids for each transaction or to seek the lowest available commission cost to the Fund, so long as the Portfolio Manager reasonably believes that the broker or dealer selected by it can be expected to obtain a "best execution" market price on the particular transaction and determines in good faith that the commission cost is reasonable in relation to the value of the brokerage and research services (as defined in Section 28(e)(3) of the Securities Exchange Act of 1934) provided by such broker or dealer to the Portfolio Manager viewed in terms of either that particular transaction or of the Portfolio Manager's overall responsibilities with respect to its clients, including the Fund, as to which the Portfolio Manager exercises investment discretion, notwithstanding that the Fund may not be the direct or exclusive beneficiary of any such services or that another broker may be willing to charge the Fund a lower commission on the particular transaction. B. Subject to the requirements of paragraph A above, the Fund Manager shall have the right to request that transactions giving rise to brokerage commissions shall be executed by brokers and dealers (and in amounts), to be agreed upon from time to time between the Fund Manager and the Portfolio Manager, that provide brokerage or research services to the Fund or the Fund Manager, or as to which an on-going relationship will be of value to the Fund in the management of its assets, which services and relationship may, but need not, be of direct benefit to the Fund Account. Notwithstanding any other provision of this Agreement, the Portfolio Manager shall not be responsible under paragraph A above with respect to transactions executed through any such broker or dealer. C. The Portfolio Manager shall not execute any portfolio transactions for the Fund Account with itself or any broker or dealer which is an "affiliated person" (as defined in the Act) of the Fund, the Portfolio Manager or any other Portfolio Manager of the Fund without the prior written approval of the Fund except in accordance with SEC Exemptive Order No. 24288 dated February 15, 2000, a copy of which has been furnished to the Portfolio Manager, and Rule 17e-1 B3-3 116 procedures as approved by the Fund's Trustees from time to time. The Fund will provide the Portfolio Manager with a list of brokers and dealers which are "affiliated persons" of the Fund or its Portfolio Managers. 6. Proxies. The Portfolio Manager will vote all proxies solicited by or with respect to the issuers of securities in which assets of the Fund Account may be invested in accordance with authorization provided by the Fund Manager from time to time. 7. Fees for Services. As its compensation for its services under this Agreement, the Fund Manager will pay the Portfolio Manager monthly in arrears a fee at an annual rate equal to [ ]% of the net asset value of the Fund Account. The fee shall be accrued for each calendar day and the sum of the daily fee accruals shall be paid monthly on or before the fifteenth day of the following calendar month. The daily accruals of the fee will be computed by (i) multiplying the annual percentage rate referred to above by the fraction the numerator of which is one and the denominator of which is the number of days in the year, and (ii) multiplying the product obtained pursuant to clause (i) above by the net asset value of the Fund Account as determined in accordance with the Trust's Prospectus as of the previous day on which the Fund was open for business. The foregoing fee shall be prorated for any month during which this Agreement is in effect for only a portion of the month. Pursuant to the Management and Sub-Advisory Agreement, the Fund Manager is solely responsible for the payment of fees to the Portfolio Manager, and the Portfolio Manager agrees to seek payment of its fees solely from the Fund Manager. 8. Other Investment Activities of Portfolio Manager. The Trust on behalf of the Fund acknowledges that the Portfolio Manager or one or more of its affiliates has investment responsibilities, renders investment advice to and performs other investment advisory services for other individuals or entities ("Client Accounts"), and that the Portfolio Manager, its affiliates or any of its or their directors, officers, agents or employees may buy, sell or trade in any securities for its or their respective accounts ("Affiliated Accounts"). Subject to the provisions of paragraph 2 hereof, the Trust on behalf of the Fund agrees that the Portfolio Manager or its affiliates may give advice or exercise investment responsibility and take such other action with respect to other Client Accounts and Affiliated Accounts which may differ from the advice given or the timing or nature of action taken with respect to the Fund B3-4 117 Account, provided that the Portfolio Manager acts in good faith, and provided further, that it is the Portfolio Manager's policy to allocate, within its reasonable discretion, investment opportunities to the Fund Account over a period of time on a fair and equitable basis relative to the Client Accounts and the Affiliated Accounts, taking into account the cash position and the investment objectives and policies of the Fund and any specific investment restrictions applicable thereto. The Trust on behalf of the Fund acknowledges that one or more Client Accounts and Affiliated Accounts may at any time hold, acquire, increase, decrease, dispose of or otherwise deal with positions in investments in which the Fund Account may have an interest from time to time, whether in transactions which involve the Fund Account or otherwise. The Portfolio Manager shall have no obligation to acquire for the Fund Account a position in any investment which any Client Account or Affiliated Account may acquire, and the Fund shall have no first refusal, co-investment or other rights in respect of any such investment, either for the Fund Account or otherwise. 9. Limitation of Liability. The Portfolio Manager shall not be liable for any action taken, omitted or suffered to be taken by it in its reasonable judgment, in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Agreement, or in accordance with (or in the absence of) specific directions or instructions from the Fund or the Fund Manager, provided, however, that such acts or omissions shall not have resulted from the Portfolio Manager's willful misfeasance, bad faith or gross negligence, a violation of the standard of care established by and applicable to the Portfolio Manager in its actions under paragraph 2 hereof or breach of its duty or of its obligations hereunder (provided, however, that the foregoing shall not be construed to protect the Portfolio Manager from liability in violation of Section 17 of the Act). 10. Confidentiality. Subject to the duty of the Portfolio Manager and the Fund to comply with applicable law, including any demand of any regulatory or taxing authority having jurisdiction, the parties hereto shall treat as confidential all information pertaining to the Fund Account and the actions of the Portfolio Manager and the Fund in respect thereof. 11. Assignment. This Agreement shall terminate automatically in the event of its assignment, as that term is defined in Section 2(a)(4) of the Act. The Portfolio Manager shall notify the Fund in writing sufficiently in advance of any proposed change of control, as defined in Sec- B3-5 118 tion 2(a)(9) of the Act, as will enable the Fund to consider whether an assignment as defined in Section 2(a)(4) of the Act will occur, and whether to take the steps necessary to enter into a new contract with the Portfolio Manager. 12. Representations, Warranties and Agreements of the Fund. The Trust on behalf of the Fund represents, warrants and agrees that: A. The Portfolio Manager has been duly appointed to provide investment services to the Fund Account as contemplated hereby. B. The Trust on behalf of the Fund will deliver to the Portfolio Manager a true and complete copy of its then current registration statement as effective from time to time and such other documents governing the investment of the Fund Account, or such other information as is necessary for the Portfolio Manager to carry out its obligations under this Agreement. C. Upon certification by the Portfolio Manager that it has adopted a written code of ethics and procedures reasonably necessary to prevent access persons, as defined by said code of ethics, from violating the anti-fraud provisions of Rule 17j-1 under the Act, the Fund will not unreasonably withhold its approval of the code of ethics adopted by the Portfolio Manager provided that the Portfolio Manager certifies to the Fund that in all other material respects the Portfolio Manager's code of ethics complies with Rule 17j-1. 13. Representations, Warranties and Agreements of the Portfolio Manager. The Portfolio Manager represents, warrants and agrees that: A. It is registered as an "Investment Adviser" under the Investment Advisers Act of 1940 ("Advisers Act"). B. It will maintain, keep current and preserve on behalf of the Fund, in the manner required or permitted by the Act and the Rules thereunder, the records identified in Schedule B (as Schedule B may be amended from time to time). The Portfolio Manager agrees that such records are the property of the Fund, and will be surrendered to the Fund promptly upon request. C. It will adopt and maintain a written code of ethics complying with the requirements of Rule 17j-1 and submit same and any amendments thereto promptly to the Fund, but not less often than annually. The Portfolio Manager agrees that it will notify the Fund within 15 days of B3-6 119 adopting material changes to its code of ethics. While this Agreement is in effect, an officer or general partner of the Portfolio Manager shall certify annually to the Fund that the Portfolio Manager has complied with the requirements of Rule l7j-1 during the previous year and has procedures reasonably necessary to prevent access persons from violating the Portfolio Manager's code of ethics. On an annual basis, the Portfolio Manager shall provide a written report to the Fund describing any issues arising under its code of ethics or procedures since the last report was so submitted, including information about material violations of the code or procedures and any action taken in response to such violations. Upon the written request of the Fund, the Portfolio Manager shall permit the Fund to examine the reports required to be maintained by the Portfolio Manager under Rule l7j-l(c)(l). D. Upon request, the Portfolio Manager will promptly supply the Trust with any information concerning the Portfolio Manager and its stockholders, employees and affiliates which the Trust may reasonably require in connection with the preparation of its registration statement, proxy material, reports and other documents relating to the Fund required to be filed under the Act, the Securities Act of 1933, or other applicable securities laws. E. Reference is hereby made to the Declaration of Trust dated March 4, 1993, as amended, establishing the Trust, a copy of which has been filed with the Secretary of the Commonwealth of Massachusetts and elsewhere as required by law, and to any and all amendments thereto so filed or hereafter filed. The name Liberty Variable Investment Trust refers to the Trustees under said Declaration of Trust, as Trustees and not personally, and no Trustee, shareholder, officer, agent or employee of the Trust shall be held to any personal liability hereunder or in connection with the affairs of the Trust or the Fund, but only the assets of the Fund are liable under this Agreement. Without limiting the generality of the foregoing, neither the Portfolio Manager nor any of its officers, directors, partners, shareholders or employees shall, under any circumstances, have recourse or cause or willingly permit recourse to be had directly or indirectly to any personal, statutory, or other liability of any shareholder, Trustee, officer, agent or employee of the Trust or of any successor of the Trust or the Fund, whether such liability now exists or is hereafter incurred, for claims against the Trust estate, but shall look for payment solely to the assets of the Fund or any successor thereto. B3-7 120 14. Amendment. This Agreement may be amended at any time, but only by written agreement among the Portfolio Manager, the Fund Manager and the Trust, on behalf of the Fund, which amendment, other than amendments to Schedules A and B (which may be amended by the Fund Manager acting alone), is subject to the approval of the Trustees and the Shareholders of the Fund as and to the extent required by the Act. 15. Effective Date; Term. This Agreement shall continue in effect for two years from the date hereof and shall continue in effect thereafter provided such continuance is specifically approved at least annually by (i) the Trust's Board of Trustees or (ii) a vote of a "majority" (as defined in the Act) of the Fund's outstanding voting securities, provided that in either event the continuance is also approved by a majority of the Board of Trustees who are not "interested persons" (as defined in the Act) of any party to this Agreement, by vote cast in person at a meeting called for the purpose of voting on such approval. The aforesaid requirement that continuance of this Agreement be "specifically approved at least annually" shall be construed in a manner consistent with the Act and the Rules and Regulations thereunder. 16. Termination. This Agreement may be terminated by any party, without penalty, immediately upon written notice to the other parties in the event of a breach of any provision thereof by a party so notified, or otherwise upon not less than thirty (30) days' written notice to the Portfolio Manager in the case of termination by the Trust on behalf of the Fund or the Fund Manager, or ninety (90) days' written notice to the Trust and the Fund Manager in the case of termination by the Portfolio Manager, but any such termination shall not affect the status, obligations or liabilities of any party hereto to the other parties. 17. Applicable Law. To the extent that state law is not preempted by the provisions of any law of the United States heretofore or hereafter enacted, as the same may be amended from time to time, this Agreement shall be administered, construed and enforced according to the laws of the Commonwealth of Massachusetts. 18. Severability. If any term or condition of this Agreement shall be invalid or unenforceable to any extent or in any application, then the remainder of this Agreement, and such term or condition except to such B3-8 121 extent or in such application, shall not be affected thereby, and each and every term and condition of this Agreement shall be valid and enforced to the fullest extent and in the broadest application permitted by law. IN WITNESS WHEREOF, the parties have hereunto set their hands as of the date first written above. LIBERTY VARIABLE INVESTMENT TRUST on its own behalf and on behalf of the [ ] Fund, Variable Series By: ------------------------------------ [ ] Title: [ ] By: ------------------------------------ [ ] Title: ACCEPTED AND AGREED TO: [PORTFOLIO MANAGER] By: ------------------------------------ Name: ------------------------------------ Title: ------------------------------------ B3-9 122 SCHEDULES:* A. Operational Procedures [omitted] B. Record Keeping Requirements * The Schedules relate to day-to-day operational logistics and to technical compliance matters. B3-10 123 [ ] FUND, VARIABLE SERIES RECORD KEEPING REQUIREMENTS PORTFOLIO MANAGEMENT AGREEMENT SCHEDULE B RECORDS TO BE MAINTAINED BY THE PORTFOLIO MANAGER 1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other portfolio purchases and sales, given by the Portfolio Manager on behalf of the Fund for, or in connection with, the purchase or sale of securities, whether executed or unexecuted. Such records shall include: A. The name of the broker; B. The terms and conditions of the order and of any modifications or cancellation thereof; C. The time of entry or cancellation; D. The price at which executed; E. The time of receipt of a report of execution; and F. The name of the person who placed the order on behalf of the Fund. 2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten (10) days after the end of the quarter, showing specifically the basis or bases upon which the allocation of orders for the purchase and sale of portfolio securities to named brokers or dealers was effected, and the division of brokerage commissions or other compensation on such purchase and sale orders. Such record: A. Shall include the consideration given to: (i) The sale of shares of the Fund by brokers or dealers. (ii) The supplying of services or benefits by brokers or dealers to: (a) The Fund; (b) The Manager ([ ]); (c) The Portfolio Manager; and (d) Any person other than the foregoing. B3-11 124 (iii) Any other consideration other than the technical qualifications of the brokers and dealers as such. B. Shall show the nature of the services or benefits made available. C. Shall describe in detail the application of any general or specific formula or other determinant used in arriving at such allocation of purchase and sale orders and such division of brokerage commissions or other compensation. D. The name of the person responsible for making the determination of such allocation and such division of brokerage commissions or other compensation. 3. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum identifying the person or persons, committees or groups authorizing the purchase or sale of portfolio securities. Where an authorization is made by a committee or group, a record shall be kept of the names of its members who participate in the authorization. There shall be retained as part of this record: any memorandum, recommendation or instruction supporting or authorizing the purchase or sale of portfolio securities and such other information as is appropriate to support the authorization.(1) 4. (Rule 31a-1(f)) Such accounts, books and other documents as are required to be maintained by registered investment advisers by rule adopted Under Section 204 of the Investment Advisers Act of 1940, to the extent such records are necessary or appropriate to record the Portfolio Manager's transactions with the Fund. (1) Such information might include: the current Form 10-K, annual and quarterly reports, press releases, reports by analysts and from brokerage firms (including their recommendation: i.e., buy, sell, hold) or any internal reports or portfolio manager reviews. B3-12 125 APPENDIX C CERTAIN OTHER MUTUAL FUNDS ADVISED BY THE ADVISOR The Advisor acts as investment advisor or sub-advisor to the following other mutual funds that have investment objectives similar to the Funds', for compensation at the annual percentage rates of the corresponding average net asset levels of those funds set forth below. COLONIAL INTERNATIONAL FUND FOR GROWTH, VARIABLE SERIES
--------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE SUB-ADVISOR) --------------------------------------------------------------------------------------- Colonial Colonial $10 million 0.75% Sub-Advisor International Horizons Fund, Variable Series ---------------------------------------------------------------------------------------
COLONIAL U.S. GROWTH AND INCOME FUND, VARIABLE SERIES
------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE SUB-ADVISOR) ------------------------------------------------------------------------------------- Colonial Liberty Growth & $1.7 billion 0.80%; Advisor Income Fund 0.70% on assets over $1 billion -------------------------------------------------------------------------------------
C-1 126 COLONIAL STRATEGIC INCOME FUND, VARIABLE SERIES
---------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE(1) SUB-ADVISOR) ---------------------------------------------------------------------------------------- Colonial Liberty $1.7 billion 0.65%; Advisor Strategic Income 0.60% in Fund excess of $1 billion; 0.55% in excess of $2 billion ----------------------------------------------------------------------------------------
NEWPORT TIGER FUND, VARIABLE SERIES
---------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE SUB-ADVISOR) ---------------------------------------------------------------------------------------- Newport Liberty Newport $676.7 million 1.00%; Advisor Tiger Fund 0.75% over $100 million; 0.70% over $1.5 billion; 0.65% over $2.5 billion ----------------------------------------------------------------------------------------
C-2 127 LIBERTY ALL-STAR EQUITY FUND, VARIABLE SERIES
------------------------------------------------------------------------------- OTHER ADVISOR'S FUND(S) NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR WITH OTHER FUNDS AT OTHER FUND OR SIMILAR MAY 31, FEE (ADVISOR OR SUB-ADVISOR OBJECTIVES 2001 RATE SUB-ADVISOR) ------------------------------------------------------------------------------- LAMCO Liberty $1.2 billion 0.80% per Advisor All-Star annum of the Equity Fund's Fund average weekly net asset value up to $400 million, 0.72% per annum of such average weekly net asset value exceeding $400 million up to $800 million, 0.648% of such average weekly net asset value exceeding $800 million up to $1.2 billion, and 0.584% of such average weekly net asset value in excess of $1.2 billion. -------------------------------------------------------------------------------
C-3 128 COLONIAL SMALL CAP VALUE FUND, VARIABLE SERIES
---------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE SUB-ADVISOR) ---------------------------------------------------------------------------------------- Colonial Liberty Small $404.5 million 0.80%; Advisor Cap Value Fund 0.75% in excess of $1 billion ----------------------------------------------------------------------------------------
COLONIAL HIGH YIELD SECURITIES FUND, VARIABLE SERIES
------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE SUB-ADVISOR) ------------------------------------------------------------------------------------- Colonial Liberty High $897.1 million 0.60%; Advisor Yield Securities 0.55% Fund in excess of $1.5 billion -------------------------------------------------------------------------------------
COLONIAL GLOBAL EQUITY FUND, VARIABLE SERIES
--------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE SUB-ADVISOR) --------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------
C-4 129 COLONIAL INTERNATIONAL HORIZONS FUND, VARIABLE SERIES
------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE SUB-ADVISOR) ------------------------------------------------------------------------------------- Colonial Colonial $49.1 million 0.70% Sub-Advisor International Fund for Growth, Variable Series -------------------------------------------------------------------------------------
LIBERTY SELECT VALUE FUND, VARIABLE SERIES
---------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE SUB-ADVISOR) ---------------------------------------------------------------------------------------- Colonial Liberty Select $1.3 billion 0.70% Advisor Value Fund ----------------------------------------------------------------------------------------
LIBERTY NEWPORT JAPAN OPPORTUNITIES FUND, VARIABLE SERIES
------------------------------------------------------------------------------------------ ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE(2) SUB-ADVISOR) ------------------------------------------------------------------------------------------ Newport Liberty Newport Japan $49.5 million 0.90% Advisor Opportunities Fund ------------------------------------------------------------------------------------------
C-5 130 STEIN ROE MONEY MARKET FUND, VARIABLE SERIES
----------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE SUB-ADVISOR) ----------------------------------------------------------------------------------------- Stein Roe Stein Roe Cash $424.9 million 0.25% up to Advisor Reserves Fund $500 million; 0.225% on next $500 million; 0.200% thereafter [as a feeder fund of SR&F Cash Reserves Fund] ----------------------------------------------------------------------------------------- Liberty Money $264.4 million 0.25% up to Advisor Market Fund $500 million; 0.225% on next $500 million; 0.200% thereafter [as a feeder fund of SR&F Cash Reserves Fund] -----------------------------------------------------------------------------------------
C-6 131 STEIN ROE BALANCED FUND, VARIABLE SERIES
--------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE SUB-ADVISOR) --------------------------------------------------------------------------------------- Stein Roe Stein Roe Balanced $194.7 million 0.55% Advisor Fund [as a feeder fund of SR&F Balanced Portfolio] ---------------------------------------------------------------------------------------
STEIN ROE GROWTH STOCK FUND, VARIABLE SERIES
------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE SUB-ADVISOR) ------------------------------------------------------------------------------------- Stein Roe Liberty Growth Stock $946.0 million 0.54% Advisor Fund ------------------------------------------------------------------------------------- Stein Roe Growth $749.2 million 0.54% Advisor Stock Fund -------------------------------------------------------------------------------------
STEIN ROE SMALL COMPANY GROWTH FUND, VARIABLE SERIES
------------------------------------------------------------------------------------- ADVISOR'S NET ASSETS OF RELATIONSHIP TO FUND/ADVISOR OTHER FUND(S) OTHER FUNDS AT OTHER FUND OR WITH MAY 31, FEE (ADVISOR OR SUB-ADVISOR SIMILAR OBJECTIVES 2001 RATE(3) SUB-ADVISOR) ------------------------------------------------------------------------------------- Stein Roe Stein Roe Small $26.2 million 0.85% Advisor Company Growth Fund -------------------------------------------------------------------------------------
(1) Effective November 1, 1998, voluntary reduction from 0.70% to 0.60% on assets over $1 billion. (2) The Liberty Newport Japan Opportunities Fund, Variable Series' investment advisor and administrator have voluntarily agreed to reimburse the Fund for certain expenses so that the total annual fund operating expenses (exclusive of interest, taxes and extraordinary expenses, if any) will not exceed 1.75% C-7 132 (3) The Stein Roe Small Company Growth Fund's advisor has voluntarily agreed to reimburse the Fund for certain expenses so that the total annual fund operating expenses (exclusive of, brokerage commissions, interest, taxes and extraordinary expenses, if any) will not exceed 1.50%. C-8 133 APPENDIX D BROKERAGE PRACTICES The following is a summary of the brokerage practices of the Advisors and Sub-Advisors: LIBERTY VARIABLE INVESTMENT TRUST LIBERTY ADVISORY SERVICES CORP. PORTFOLIO TRANSACTIONS The Trust has no obligation to do business with any broker-dealer or group of broker-dealers in executing transactions in securities with respect to the Funds, and the Funds have no intention to deal exclusively with any particular broker-dealer or group of broker-dealers. Each of Colonial, Stein Roe, Newport, Crabbe Huson, Rydex, State Street and each of LAMCO's Portfolio Managers, (each an "Advisor") places the transactions of the Funds with broker-dealers selected by it and, if applicable, negotiates commissions. Broker-dealers may receive brokerage commissions on portfolio transactions, including the purchase and writing of options, the effecting of closing purchase and sale transactions, and the purchase and sale of underlying securities upon the exercise of options and the purchase or sale of other instruments. The Funds from time to time may also execute portfolio transactions with such broker-dealers acting as principals. Except as described below in connection with commissions paid to a clearing agent on sales of securities, it is each Fund's policy and the policy of its Advisor always to seek best execution, which is to place the Fund's transactions where the Fund can obtain the most favorable combination of price and execution services in particular transactions or provided on a continuing basis by a broker-dealer, and to deal directly with a principal market maker in connection with over-the-counter transactions, except when the Advisor believes that best execution is obtainable elsewhere. In evaluating the execution services of, including the overall reasonableness of brokerage commissions paid to, a broker- dealer, consideration is given to, among other things, the firm's general execution and operational capabilities, and to its reliability, integrity and financial condition. D-1 134 Subject to such policy of always seeking best execution, and subject to the additional matters described below regarding each of International Fund, International Horizons Fund, Global Equity Fund, Japan Opportunities Fund, Tiger Fund and All-Star Equity Fund, securities transactions of the Funds may be executed by broker-dealers who also provide research services (as defined below) to an Advisor, the Funds or other accounts as to which such Advisor exercises investment discretion. Such advisor may use all, some or none of such research services in providing investment advisory services to each of its clients, including the Fund(s) it advises. To the extent that such services are used by the Advisors, they tend to reduce their expenses. It is not possible to assign an exact dollar value for such services. Subject to such policies as the Board of Trustees may determine, each of the Advisors may cause a Fund to pay a broker-dealer that provides brokerage and research services to it an amount of commission for effecting a securities transaction, including the sale of an option or a closing purchase transaction, for a Fund in excess of the amount of commission that another broker-dealer would have charged for effecting that transaction. As provided in Section 28(e) of the Securities Exchange Act of 1934, "brokerage and research services" include advice as to the value of securities, the advisability of investing in, purchasing or selling securities and the availability of securities or purchasers or sellers of securities; furnishing analyses and reports concerning issuers, industries, securities, economic factors and trends and portfolio strategy and performance of accounts; and effecting securities transactions and performing functions incidental thereto (such as clearance and settlement). An Advisor placing a brokerage transaction must determine in good faith that such greater commission is reasonable in relation to the value of the brokerage and research services provided to it by the executing broker-dealer viewed in terms of that particular transaction or its overall responsibilities to the applicable Fund and all its other clients. Certain of the other accounts of any of the Advisors may have investment objectives and programs that are similar to those of the Funds. Accordingly, occasions may arise when each of the Advisors engages in simultaneous purchase and sale transactions of securities that are consistent with the investment objectives and programs of a Fund and such other accounts. On those occasions, the Advisor will allocate purchase and sale transactions in an equitable manner according to written procedures as approved by the Board of Trustees. Such D-2 135 procedures may, in particular instances, be either advantageous or disadvantageous to a Fund. Consistent with applicable rules of the National Association of Securities Dealers, Inc., and subject to seeking best execution and such other policies as the Board of Trustees may determine, each of the Advisors may consider sales of VA contracts and VLI policies as a factor in the selection of broker-dealers to execute securities transactions for the Funds. ADDITIONAL MATTERS PERTAINING TO HEALTH CARE FUND. The Health Care Fund may invest in companies that are involved in the health care industry including companies engaged in the design, manufacture, or sale of products or services used for or in connection with health care or medicine. Companies in the health care sector may include pharmaceutical companies; firms that design, manufacture, sell or supply medical, dental, and optical products, hardware or services; companies involved in biotechnology, medical diagnostic, and biochemical research and development, as well as companies involved in the operation of health care facilities. ADDITIONAL MATTERS PERTAINING TO INTERNATIONAL FUND, INTERNATIONAL HORIZONS FUND, GLOBAL EQUITY FUND AND GLOBAL UTILITIES FUND. The portfolio managers for the International Fund and the International Horizons Fund are Charles R. Roberts, Michael Ellis and Deborah Snee and for the Global Equity Fund are Charles R. Roberts and Erik P. Gustafson and Global Utilities Fund are Charles R. Roberts and Scott Schermerhorn, all of whom are jointly employed by Newport, Colonial and Stein Roe (each of which is an indirect wholly owned subsidiary of LFC). The Funds and the other accounts advised by these managers sometimes invest in the same securities and sometimes enter into similar transactions utilizing futures contracts and foreign currencies. In certain cases, purchases and sales on behalf of the Funds and such other accounts will be bunched and executed on an aggregate basis. In such cases, each participating account (including the International Fund, International Horizons Fund, Global Equity Fund and Global Utilities Fund) will receive the average price at which the trade is executed. Where less than the desired aggregate amount is able to be purchased or sold, the actual amount purchased or sold will be allocated among the participating accounts (including the International Fund, International Horizons Fund, Global Equity Fund and Global Utilities Fund) in proportion to the amounts desired to be purchased or sold by each. D-3 136 Although in some cases these practices could have a detrimental effect on the price or volume of the securities, futures or currencies as far as the International Fund, International Horizons Fund, Global Equity Fund and Global Utilities Fund are concerned, Colonial and Stein Roe believe that in most cases these practices should produce better executions. It is the opinion of Colonial and Stein Roe that the advantages of these practices outweigh the disadvantages, if any, which might result from them. Portfolio transactions on behalf of the International Fund, International Horizons Fund, Global Equity Fund and Global Utilities Fund may be executed by broker-dealers who provide research services to Colonial or Stein Roe which are used in the investment management of such Funds or other accounts over which Colonial or Stein Roe exercise investment discretion. Such transactions will be effected in accordance with the policies described above. No portfolio transactions on behalf of the Funds will be directed to a broker-dealer in consideration of the broker-dealer's provision of research services to Colonial and Stein Roe, unless a determination is made that such research assists Colonial in its investment management of the International Fund, International Horizons Fund, Global Equity Fund, Stein Roe in its management of Global Utilities Fund or other accounts over which Colonial or Stein Roe exercises investment discretion. ADDITIONAL MATTERS PERTAINING TO ALL-STAR EQUITY FUND. The Portfolio Management Agreements with LAMCO's Portfolio Managers provide that LAMCO has the right to request that transactions giving rise to brokerage commissions, in amounts to be agreed upon from time to time between LAMCO and the Portfolio Manager, be executed by brokers and dealers (to be agreed upon from time to time between LAMCO and the Portfolio Manager) which provide research products and services to LAMCO or to All-Star Equity Fund or other accounts managed by LAMCO (collectively with All-Star Equity Fund, "LAMCO Clients") or as to which an ongoing relationship will be a value to the Fund in managing its assets. The commissions paid on such transactions may exceed the amount of commissions another broker would have charged for effecting that transaction. Research products and services made available to LAMCO through brokers and dealers executing transactions for LAMCO Clients involving brokerage commissions include performance and other qualitative and quantitative data relating to investment managers in general and the Portfolio Managers in particular; data D-4 137 relating to the historic performance of categories of securities associated with particular investment styles; mutual fund portfolio and performance data; data relating to portfolio manager changes by pension plan fiduciaries; quotation equipment; and related computer hardware and software, all of which research products and services are used by LAMCO in connection with its selection and monitoring of portfolio managers (including the Portfolio Managers) for LAMCO Clients, the assembly of a mix of investment styles appropriate to LAMCO's Clients' investment objectives, and the determination of overall portfolio strategies. LAMCO from time to time reaches understandings with each of the Portfolio Managers as to the amount of the All-Star Equity Fund portfolio transactions initiated by such Portfolio Manager that are to be directed to brokers and dealers which provide research products and services to LAMCO. These amounts may differ among the Portfolio Managers based on the nature of the markets for the types of securities managed by them and other factors. These research products and services are used by LAMCO in connection with its management of LAMCO Clients' portfolios, regardless of the source of the brokerage commissions. In instances where LAMCO receives from broker-dealers products or services which are used both for research purposes and for administrative or other non-research purposes, LAMCO makes a good faith effort to determine the relative proportions of such products or services which may be considered as investment research, based primarily on anticipated usage, and pays for the costs attributable to the non-research usage in cash. CRABBE HUSON GROUP, INC. BROKERAGE AND RESEARCH SERVICES. Consistent with the Conduct Rules of the National Association of Securities Dealers, Inc., and subject to seeking "best execution" (as defined below) and such other policies as the Trustees may determine, the Advisor may consider sales of shares of the funds as a factor in the selection of broker-dealers to execute securities transactions for a fund. The Advisor places the transactions of the funds with broker-dealers selected by the Advisor and, if applicable, negotiates commissions. Broker-dealers may receive brokerage commissions on portfolio transactions, including the purchase and writing of options, the effecting of D-5 138 closing purchase and sale transactions, and the purchase and sale of underlying securities upon the exercise of options and the purchase or sale of other instruments. The funds from time to time also execute portfolio transactions with such broker-dealers acting as principals. The funds do not intend to deal exclusively with any particular broker-dealer or group of broker-dealers. It is the Advisor's policy generally to seek best execution, which is to place the funds' transactions where the funds can obtain the most favorable combination of price and execution services in particular transactions or provided on a continuing basis by a broker-dealer, and to deal directly with a principal market maker in connection with over-the-counter transactions, except when it is believed that best execution is obtainable elsewhere. In evaluating the execution services of, including the overall reasonableness of brokerage commissions paid to, a broker-dealer, consideration is given to, among other things, the firm's general execution and operational capabilities, and to its reliability, integrity and financial condition. Securities transactions of the funds may be executed by broker-dealers who also provide research services (as defined below) to the Advisor and the funds. The Advisor may use all, some or none of such research services in providing investment advisory services to each of its investment company and other clients, including the fund. To the extent that such services are used by the Advisor, they tend to reduce the Advisor's expenses. In the Advisor's opinion, it is impossible to assign an exact dollar value for such services. The Trustees have authorized the Advisor to cause the funds to pay a broker-dealer which provides brokerage and research services to the Advisor an amount of commission for effecting a securities transaction, including the sale of an option or a closing purchase transaction, for the funds in excess of the amount of commission which another broker-dealer would have charged for effecting that transaction. As provided in Section 28(e) of the Securities Exchange Act of 1934, "brokerage and research services" include advice as to the value of securities, the advisability of investing in, purchasing or selling securities and the availability of securities or purchasers or sellers of securities; furnishing analyses and reports concerning issues, industries, securities, economic factors and trends and portfolio strategy and performance of accounts; and effecting securities transactions and performing functions incidental thereto (such as clearance and settlement). The Advisor must determine D-6 139 in good faith that such greater commission is reasonable in relation to the value of the brokerage and research services provided by the executing broker-dealer viewed in terms of that particular transaction or the Advisor's overall responsibilities to the funds and all its other clients. The Trustees have authorized the Advisor to utilize the services of a clearing agent with respect to all call options written by funds that write options and to pay such clearing agent commissions of a fixed amount per share (currently 1.25 cents) on the sale of the underlying security upon the exercise of an option written by a fund. D-7 140 APPENDIX E COMPENSATION PAYABLE BY A FUND TO THE ADVISOR AND AFFILIATES FOR EACH FUND'S LAST FISCAL YEAR
----------------------------------------------------------------------------------------------------------------- TRANSFER AGENCY AND SHAREHOLDER FEES FOR PRICING SERVICING AND ADVISORY ADMINISTRATIVE FEES BOOKKEEPING FEE PAID FEES PAID TO PAID TO PAID TO TO ADVISORS' ADVISORS' ADVISORS' NAME OF FUND ADVISOR(1) AFFILIATES AFFILIATES AFFILIATES ----------------------------------------------------------------------------------------------------------------- Colonial International Fund for Growth, Variable Series 642,065 0 7,500 34,377 ----------------------------------------------------------------------------------------------------------------- Colonial U.S. Growth and Income Fund, Variable Series 1,645,625 0 7,500 86,096 ----------------------------------------------------------------------------------------------------------------- Colonial Strategic Income Fund, Variable Series 1,028,637 0 7,500 64,709 ----------------------------------------------------------------------------------------------------------------- Stein Roe Global Utilities Fund, Variable Series 720,174 0 7,500 50,009 ----------------------------------------------------------------------------------------------------------------- Liberty Value Fund, Variable Series 1,217,773 0 7,500 74,890 ----------------------------------------------------------------------------------------------------------------- Newport Tiger Fund, Variable Series 446,975 0 7,500 27,000 ----------------------------------------------------------------------------------------------------------------- Liberty All-Star Equity Fund, Variable Series 525,572 0 7,500 33,902 ----------------------------------------------------------------------------------------------------------------- Colonial Small Cap Value Fund, Variable Series 0 0 7,500 27,000 ----------------------------------------------------------------------------------------------------------------- Colonial High Yield Securities Fund, Variable Series 100,988 0 7,500 27,000 ----------------------------------------------------------------------------------------------------------------- Crabbe Huson Real Estate Investment Fund, Variable Series 0 0 7,500 27,000 ----------------------------------------------------------------------------------------------------------------- Colonial Global Equity Fund, Variable Series 40,690 0 7,500 27,000 ----------------------------------------------------------------------------------------------------------------- Colonial International Horizons Fund, Variable Series 58,977 0 7,500 27,000 ----------------------------------------------------------------------------------------------------------------- Liberty S&P 500 Index Fund, Variable Series 1,168 0 4,508 16,229 ----------------------------------------------------------------------------------------------------------------- Rydex Health Care Fund, Variable Series 0 0 4,375 16,229 ----------------------------------------------------------------------------------------------------------------- Rydex Financial Services Fund, Variable Series 0 0 4,375 15,750 ----------------------------------------------------------------------------------------------------------------- ------------------------------------------------- ----------------------------------------------------- BROKERAGE PERCENTAGE OF DISTRIBUTION AND COMMISSIONS ON FUND'S TOTAL SHAREHOLDER FUND'S PORTFOLIO BROKERAGE SERVICING TRANSACTIONS COMMISSIONS (12b-1) PAID TO PAID TO FEES PAID TO ADVISORS' ADVISORS' ADVISORS' BROKERAGE BROKERAGE NAME OF FUND AFFILIATES(2) AFFILIATES AFFILIATES ------------------------------------------------- ----------------------------------------------------- Colonial International Fund for Growth, Variable Series 982 0 0 ----------------------------------------------------------------------------------------------------------------- Colonial U.S. Growth and Income Fund, Variable Series 2,124 35 8 ----------------------------------------------------------------------------------------------------------------- Colonial Strategic Income Fund, Variable Series 1,777 0 0 ----------------------------------------------------------------------------------------------------------------- Stein Roe Global Utilities Fund, Variable Series 2 2 1 ----------------------------------------------------------------------------------------------------------------- Liberty Value Fund, Variable Series 250 111 24 ----------------------------------------------------------------------------------------------------------------- Newport Tiger Fund, Variable Series 658 0 0 ----------------------------------------------------------------------------------------------------------------- Liberty All-Star Equity Fund, Variable Series 0 0 0 ----------------------------------------------------------------------------------------------------------------- Colonial Small Cap Value Fund, Variable Series 0 3 13 ----------------------------------------------------------------------------------------------------------------- Colonial High Yield Securities Fund, Variable Series 0 0 0 ----------------------------------------------------------------------------------------------------------------- Crabbe Huson Real Estate Investment Fund, Variable Series 7,607 0 0 ----------------------------------------------------------------------------------------------------------------- Colonial Global Equity Fund, Variable Series 23,603 0 0 ----------------------------------------------------------------------------------------------------------------- Colonial International Horizons Fund, Variable Series 27,493 0 0 ----------------------------------------------------------------------------------------------------------------- Liberty S&P 500 Index Fund, Variable Series 0 0 0 ----------------------------------------------------------------------------------------------------------------- Rydex Health Care Fund, Variable Series 0 0 0 ----------------------------------------------------------------------------------------------------------------- Rydex Financial Services Fund, Variable Series 0 0 0 -----------------------------------------------------------------------------------------------------------------
E-1 141
----------------------------------------------------------------------------------------------------------------- TRANSFER AGENCY AND SHAREHOLDER FEES FOR PRICING SERVICING AND ADVISORY ADMINISTRATIVE FEES BOOKKEEPING FEE PAID FEES PAID TO PAID TO PAID TO TO ADVISORS' ADVISORS' ADVISORS' NAME OF FUND ADVISOR(1) AFFILIATES AFFILIATES AFFILIATES ----------------------------------------------------------------------------------------------------------------- Liberty Select Value Fund, Variable Series 0 0 4,508 16,229 ----------------------------------------------------------------------------------------------------------------- Liberty Newport Japan Opportunities Fund, Variable Series 0 0 4,508 16,229 ----------------------------------------------------------------------------------------------------------------- Stein Roe Money Market Fund, Variable Series 626,629 268,555 7,500 28,291 ----------------------------------------------------------------------------------------------------------------- Liberty Federal Securities Fund, Variable Series 421,467 158,050 7,500 26,318 ----------------------------------------------------------------------------------------------------------------- Stein Roe Balanced Fund, Variable Series 1,856,618 618,873 7,500 34,130 ----------------------------------------------------------------------------------------------------------------- Stein Roe Growth Stock Fund, Variable Series 2,264,063 679,219 7,500 35,135 ----------------------------------------------------------------------------------------------------------------- Stein Roe Small Company Growth Fund, Variable Series 697,628 209,289 7,500 27,303 ----------------------------------------------------------------------------------------------------------------- ------------------------------------------------- ----------------------------------------------------- BROKERAGE PERCENTAGE OF DISTRIBUTION AND COMMISSIONS ON FUND'S TOTAL SHAREHOLDER FUND'S PORTFOLIO BROKERAGE SERVICING TRANSACTIONS COMMISSIONS (12b-1) PAID TO PAID TO FEES PAID TO ADVISORS' ADVISORS' ADVISORS' BROKERAGE BROKERAGE NAME OF FUND AFFILIATES(2) AFFILIATES AFFILIATES ------------------------------------------------- ----------------------------------------------------- Liberty Select Value Fund, Variable Series 0 1 17 ----------------------------------------------------------------------------------------------------------------- Liberty Newport Japan Opportunities Fund, Variable Series 0 0 0 ----------------------------------------------------------------------------------------------------------------- Stein Roe Money Market Fund, Variable Series 0 0 0 ----------------------------------------------------------------------------------------------------------------- Liberty Federal Securities Fund, Variable Series 3,720 0 0 ----------------------------------------------------------------------------------------------------------------- Stein Roe Balanced Fund, Variable Series 7,248 8 3 ----------------------------------------------------------------------------------------------------------------- Stein Roe Growth Stock Fund, Variable Series 12,970 11 2 ----------------------------------------------------------------------------------------------------------------- Stein Roe Small Company Growth Fund, Variable Series 2 1 0 -----------------------------------------------------------------------------------------------------------------
(1) For the fiscal year ended December 31, 2000, LASC reimbursed $15,896 of its advisory fee for Liberty All-Star Equity Fund, Variable Series; $53,931 of its advisory fee and assumed additional expenses of $1,498 for Colonial Small Cap Value Fund, Variable Series; $11,685 of its advisory fee for Colonial High Yield Securities Fund, Variable Series; $30,938 of its advisory fee and assumed additional expenses of $20,295 for Crabbe Huson Real Estate Investment Fund, Variable Series; $48,980 of its advisory fee for Colonial Global Equity Fund, Variable Series; $42,341 of its advisory fee for Colonial International Horizons Fund, Variable Series; $17,830 of its advisory fee for Liberty S&P 500 Index Fund, Variable Series; $10,940 of its advisory fee and assumed additional expenses of $17,476 for Rydex Health Care Fund, Variable Series; $8,024 of its advisory fee and assumed additional expenses of $19,923 for Rydex Financial Services Fund, Variable Series; $11,300 of its advisory fee and assumed additional expenses of $10,229 for Liberty Select Value Fund, Variable Series; $17,254 of its advisory fee and assumed additional expenses of $21,118 for Liberty Newport Japan Opportunities Fund, Variable Series. E-2 142 (2) For the fiscal year ended December 31, 2000, Liberty Funds Distributor, Inc. waived $1,142 of its distribution fee for Colonial International Fund for Growth, Variable Series; $229 of its distribution fee for Colonial Strategic Income Fund, Variable Series; $45 of its distribution fee for Liberty Value Fund, Variable Series; $1,496 of its distribution fee for Liberty All-Star Equity Fund, Variable Series; $1,641 of its distribution fee for Colonial Small Cap Value Fund, Variable Series; $797 of its distribution fee for Colonial High Yield Securities Fund, Variable Series; $11,552 of its distribution fee for Liberty S&P 500 Index Fund, Variable Series; $2,518 of its distribution fee for Rydex Health Care Fund, Variable Series; $2,157 of its distribution fee for Rydex Financial Services Fund, Variable Series; $3,798 of its distribution fee for Liberty Select Value Fund, Variable Series; $3,222 of its distribution fee for Liberty Newport Japan Opportunities Fund, Variable Series and $1,228 of its distribution fee for Stein Roe Balanced Fund, Variable Series. E-3 143 APPENDIX F SHARES OUTSTANDING AND ENTITLED TO VOTE For each class of the Fund's shares entitled to vote at the Meeting, the number of shares outstanding as of July 16, 2001 was as follows:
NUMBER OF SHARES OUTSTANDING AND NAME OF FUND ENTITLED TO VOTE PER CLASS ------------ -------------------------------- LIBERTY VARIABLE INVESTMENT TRUST Colonial International Fund for Growth, Variable Series Colonial U.S. Growth and Income Fund, Variable Series Colonial Strategic Income Fund, Variable Series Stein Roe Global Utilities Fund, Variable Series Liberty Value Fund, Variable Series Newport Tiger Fund, Variable Series Liberty All-Star Equity Fund, Variable Series Colonial Small Cap Value Fund, Variable Series Colonial High Yield Securities Fund, Variable Series Crabbe Huson Real Estate Investment Fund, Variable Series Colonial Global Equity Fund, Variable Series Colonial International Horizons Fund, Variable Series Liberty S&P 500 Index Fund, Variable Series Rydex Health Care Fund, Variable Series Rydex Financial Services Fund, Variable Series Liberty Select Value Fund, Variable Series Liberty Newport Japan Opportunities, Variable Series
F-1 144
NUMBER OF SHARES OUTSTANDING AND NAME OF FUND ENTITLED TO VOTE PER CLASS ------------ -------------------------------- STEINROE VARIABLE INVESTMENT TRUST Stein Roe Money Market Fund, Variable Series Liberty Federal Securities Fund, Variable Series Stein Roe Balanced Fund, Variable Series Stein Roe Growth Stock Fund, Variable Series Stein Roe Small Company Growth Fund, Variable Series
OWNERSHIP OF SHARES All of the shares of the Funds are held of record by sub-accounts of separate accounts of Participating Insurance Companies on behalf of the owners of VA contracts and VLI policies or by the general account of Keyport. At all meetings of shareholders of the Funds, each Participating Insurance Company will vote the shares held of record by sub-accounts of its separate accounts as to which instructions are received from the VA contract and VLI policy owners on behalf of whom such shares are held only in accordance with such instructions. All such shares as to which no instructions are received (as well as, in the case of Keyport, all shares held by its general account) will be voted in the same proportion as shares as to which instructions are received (with Keyport's general account shares being voted in the proportions determined by instructing owners of Keyport VA contracts and VLI policies). There is no requirement as to the minimum level of instructions which must be received from policy and contract owners. Accordingly, each Participating Insurance Company and Keyport disclaims beneficial ownership of the shares of the Funds held of record by the sub-accounts of their respective separate accounts (or, in the case of Keyport, its general account). As of July 16, 2001, the Trust believes that the Trustees and officers of the Trust, as a group, owned less than one percent of each class of shares of the Fund and of the Trust as a whole. As of record on July 16, 2001, the following Participating Insurance Companies owned of record F-2 145 5% or more of one or more of each class of the following Funds' then outstanding shares:
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- LIBERTY VALUE FUND, VARIABLE SERIES CLASS A Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) KMA Variable Account 125 High Street Boston, Massachusetts 02110 CLASS B Keyport Life Insurance Company............... % Variable Account A 125 High Street Boston, Massachusetts 02110 STEIN ROE GLOBAL UTILITIES FUND, VARIABLE SERIES CLASS A Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110
F-3 146
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- Keyport Life Insurance Company............... %(*) KMA Variable Account 125 High Street Boston, Massachusetts 02110 CLASS B Colonial Management Associates, Inc....... % One Financial Center Boston, Massachusetts 02111 COLONIAL INTERNATIONAL FUND FOR GROWTH, VARIABLE SERIES CLASS A Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... % KMA Variable Account 125 High Street Boston, Massachusetts 02110 CLASS B Colonial Management Associates, Inc....... % One Financial Center Boston, Massachusetts 02111 COLONIAL U.S. GROWTH & INCOME FUND, VARIABLE SERIES CLASS A Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110
F-4 147
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- Keyport Life Insurance Company............... % KMA Variable Account 125 High Street Boston, Massachusetts 02110 CLASS B Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... % Variable Account A 125 High Street Boston, Massachusetts 02110 COLONIAL STRATEGIC INCOME FUND, VARIABLE SERIES CLASS A Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... % KMA Variable Account 125 High Street Boston, Massachusetts 02110 CLASS B Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110
F-5 148
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- Keyport Life Insurance Company............... % Variable Account A 125 High Street Boston, Massachusetts 02110 NEWPORT TIGER FUND, VARIABLE SERIES CLASS A Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... % KMA Variable Account 125 High Street Boston, Massachusetts 02110 Lincoln National Life... % P.O. Box 1110 Fort Wayne, Indiana 46801-1110 Keyport Life Insurance Company............... %(*) 125 High Street Boston, Massachusetts 02110 CLASS B Keyport Life Insurance Company............... % Variable Account A 125 High Street Boston, Massachusetts 02110 LIBERTY ALL-STAR EQUITY FUND, VARIABLE SERIES CLASS A Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110
F-6 149
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 CLASS B Keyport Life Insurance Company............... % Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... % KMA Variable Account 125 High Street Boston, Massachusetts 02110 COLONIAL SMALL CAP VALUE FUND, VARIABLE SERIES CLASS A Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... % 125 High Street Boston, Massachusetts 02110 CLASS B Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110
F-7 150
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 COLONIAL HIGH YIELD SECURITIES FUND, VARIABLE SERIES CLASS A Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... % 125 High Street Boston, Massachusetts 02110 CLASS B Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... % Variable Account A 125 High Street Boston, Massachusetts 02110 COLONIAL INTERNATIONAL HORIZONS FUND, VARIABLE SERIES CLASS A Colonial Management Associates, Inc....... % One Financial Center Boston, Massachusetts 02111
F-8 151
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- CLASS B Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) 125 High Street Boston, Massachusetts 02110 COLONIAL GLOBAL EQUITY FUND, VARIABLE SERIES CLASS A Colonial Management Associates, Inc....... % One Financial Center Boston, Massachusetts 02111 CLASS B Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) 125 High Street Boston, Massachusetts 02110
F-9 152
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- CRABBE HUSON REAL ESTATE INVESTMENT FUND, VARIABLE SERIES CLASS A Colonial Management Associates, Inc....... % One Financial Center Boston, Massachusetts 02111 CLASS B Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) 125 High Street Boston, Massachusetts 02110 LIBERTY NEWPORT JAPAN OPPORTUNITIES FUND, VARIABLE SERIES CLASS A Keyport Life Insurance Company............... % 125 High Street Boston, Massachusetts 02110 CLASS B Keyport Life Insurance Company............... %(*) 125 High Street Boston, Massachusetts 02110 LIBERTY SELECT VALUE FUND, VARIABLE SERVICES CLASS A Keyport Life Insurance Company............... % 125 High Street Boston, Massachusetts 02110
F-10 153
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- CLASS B Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) 125 High Street Boston, Massachusetts 02110 RYDEX FINANCIAL SERVICES FUND, VARIABLE SERIES CLASS A Keyport Life Insurance Company............... % 125 High Street Boston, Massachusetts 02110 CLASS B Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) 125 High Street Boston, Massachusetts 02110 RYDEX HEALTH CARE FUND, VARIABLE SERIES CLASS A Keyport Life Insurance Company............... % 125 High Street Boston, Massachusetts 02110
F-11 154
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- CLASS B Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... % 125 High Street Boston, Massachusetts 02110 LIBERTY S&P 500 INDEX FUND, VARIABLE SERIES CLASS A Keyport Life Insurance Company............... % 125 High Street Boston, Massachusetts 02110 CLASS B Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) 125 High Street Boston, Massachusetts 02110
F-12 155
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- STEIN ROE SMALL COMPANY GROWTH FUND, VARIABLE SERIES CLASS A Keyport Life Insurance Company............... % Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) KMA Variable Account 125 High Street Boston, Massachusetts 02110 CLASS B Colonial Management Associates, Inc....... % One Financial Center Boston, Massachusetts 02111 STEIN ROE GROWTH STOCK FUND, VARIABLE SERIES CLASS A Independence Life and Annuity Company....... % 695 George Washington Highway Lincoln, Rhode Island 02865-4257 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) KMA Variable Account 125 High Street Boston, Massachusetts 02110
F-13 156
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- CLASS B Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 STEIN ROE BALANCED FUND, VARIABLE SERIES CLASS A Independence Life and Annuity Company....... % 695 George Washington Highway Lincoln, Rhode Island 02865-4257 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) KMA Variable Account 125 High Street Boston, Massachusetts 02110 CLASS B Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110
F-14 157
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- LIBERTY FEDERAL SECURITIES FUND, VARIABLE SERIES CLASS A Independence Life and Annuity Company....... % 695 George Washington Highway Lincoln, Rhode Island 02865-4257 Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... % KMA Variable Account 125 High Street Boston, Massachusetts 02110 CLASS B Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110 STEIN ROE MONEY MARKET FUND, VARIABLE SERIES CLASS A Independence Life and Annuity Company....... % 695 George Washington Highway Lincoln, Rhode Island 02865-4257
F-15 158
SHARES BENEFICIALLY PERCENTAGE OF OUTSTANDING FUND AND CLASS OWNED SHARES OF CLASS OWNED -------------- ------------------- ------------------------- Keyport Life Insurance Company............... %(*) Variable Account A 125 High Street Boston, Massachusetts 02110 Keyport Life Insurance Company............... %(*) KMA Variable Account 125 High Street Boston, Massachusetts 02110 Keyport Benefit Life Insurance Company..... % 125 High Street Boston, Massachusetts 02110
(*) As of record on July 16, 2001, this Participating Insurance Company owned 25% or more of the then outstanding shares of the Fund indicated and, therefore, may be deemed to "control" the Fund F-16 159 APPENDIX G TRUSTEES COMPENSATION For the calendar year ended December 31, 2000, the Trustees received the following compensation for serving as Trustees(1): LVIT FUNDS
--------------------------------------------------------------------------------------------- TRUSTEE CIFG CUSGIF CSIF SRGUF LVF NTF LASEF --------------------------------------------------------------------------------------------- Douglas A. Hacker Janet Langford Kelly Richard W. Lowry Salvatore Macera William E. Mayer John J. Neuhauser Joseph R. Palombo Thomas E. Stitzel Robert L. Sullivan Thomas C. Theobald Anne-Lee Verville ---------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------- TRUSTEE CSCVF CHYSF CHREIF CGEF CIHF LS&PIF RHCF ---------------------------------------------------------------------------------------------- Douglas A. Hacker Janet Langford Kelly Richard W. Lowry Salvatore Macera William E. Mayer John J. Neuhauser Joseph R. Palombo Thomas E. Stitzel Robert L. Sullivan Thomas C. Theobald Anne-Lee Verville ----------------------------------------------------------------------------------------------
G-1 160
----------------------------------------------------------------------------- TRUSTEE RFSF LSVF LNJOF ----------------------------------------------------------------------------- Douglas A. Hacker Janet Langford Kelly Richard W. Lowry Salvatore Macera William E. Mayer John J. Neuhauser Joseph R. Palombo Thomas E. Stitzel Robert L. Sullivan Thomas C. Theobald Anne-Lee Verville -----------------------------------------------------------------------------
SRVIT FUNDS
------------------------------------------------------------------------------- TRUSTEE SRMMF LFSF SRBF SRGSF SRSCGF ------------------------------------------------------------------------------- Douglas A. Hacker Janet Langford Kelly Richard W. Lowry Salvatore Macera William E. Mayer John J. Neuhauser Joseph R. Palombo Thomas E. Stitzel Robert L. Sullivan Thomas C. Theobald Anne-Lee Verville -------------------------------------------------------------------------------
(1) The Funds do not currently provide pension or retirement plan benefits to the Trustees. G-2 161 STEINROE VARIABLE INVESTMENT TRUST INSTRUCTIONS OF VARIABLE CONTRACT PARTICIPANTS FOR VOTING SHARES OF STEINROE VARIABLE INVESTMENT TRUST. * Please fold and detach card at perforation before mailing * FUND NAME PRINTS HERE VOTING INSTRUCTIONS INSURANCE COMPANY NAME PRINTS HERE STEINROE VARIABLE INVESTMENT TRUST The undersigned, being a Participant under a variable annuity contract or variable life insurance policy issued by the above-referenced Insurance Company (the "Insurance Company"), hereby instructs the Insurance Company to cause the shares of each of the above-referenced fund (the "Fund") allocable to Participant's contract or policy to be voted in the manner specified on the reverse side with respect to the matter described in the accompanying proxy statement. THE INSURANCE COMPANY WILL FOLLOW VOTING INSTRUCTIONS ONLY IF THEY ARE RECEIVED AT LEAST ONE DAY PRIOR TO THE DATE OF THE MEETING. IF NO INSTRUCTIONS ARE SPECIFIED, THE INSURANCE COMPANY WILL VOTE THE SHARES IN FAVOR OF THE NEW SUB-ADVISORY AGREEMENT. DATE ------------ [PLEASE MARK, SIGN, DATE AND RETURN THE ] [VOTING INSTRUCTIONS CARD PROMPTLY USING] [THE ENCLOSED ENVELOPE. ] [ ] Signature(s) of joint participant Please date and sign the name or names as printed hereon. Where there are Joint Participants, all Joint Participants should sign. Corporate Instructions should be signed by an authorized officer. Executors, administrators, trustees, etc. should so indicate when signing. 162 - Please fold and detach card at perforation before mailing - Please fill in box(es) as shown using black or blue ink or number 2 pencil. /X/ * PLEASE DO NOT USE FINE POINT PENS. * BY SIGNING AND DATING THIS CARD, YOU INSTRUCT THE INSURANCE COMPANY TO VOTE EACH PROPOSAL AS MARKED, OR, IF NOT MARKED, TO VOTE "FOR" EACH PROPOSAL AND TO USE THEIR DISCRETION TO VOTE ON ANY OTHER MATTER THAN MAY COME BEFORE THE SPECIAL MEETING. IF YOU DO NOT INTEND PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE.
FOR AGAINST ABSTAIN 1. TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. / / / / / / 2. BALANCED FUND ONLY: TO APPROVE A NEW SUB-ADVISORY AGREEMENT WITH NORDEA / / / / / / SECURITIES, INC. 3. TO CONSIDER AND ACT UPON ANY OTHER MATTERS THAT PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNED SESSION OF THE MEETING.
* SRVIT-VIC * 163 STEINROE VARIABLE INVESTMENT TRUST * Please fold and detach card at perforation before mailing * FUND NAME PRINTS HERE PROXY SOLICITED BY THE BOARD OF TRUSTEES FOR A MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 26, 2001 STEINROE VARIABLE INVESTMENT TRUST THE UNDERSIGNED HEREBY APPOINTS WILLIAM J. BALLOU, KEVIN M. CAROME, ELLEN HARRINGTON, RUSSELL L. KANE, ROBERT R. LEVEILLE, JOSEPH R. PALOMBO AND VINCENT F. PIETROPAOLO, AND EACH OF THEM, PROXIES OF THE UNDERSIGNED, WITH POWER OF SUBSTITUTION, TO VOTE AT THE SPECIAL MEETING OF SHAREHOLDERS OF THE STEINROE VARIABLE SERIES FUND LISTED ABOVE, TO BE HELD AT 2:00 P.M. ON WEDNESDAY, SEPTEMBER 26, 2001, AT ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS, AND AT ANY ADJOURNMENTS THEREOF. DATE: ------------------- [ ] ---------------------------------- SIGNATURE(S) (IF JOINT PARTICIPANT) PLEASE SIGN YOUR NAME OR NAMES EXACTLY AS PRINTED TO THE LEFT TO AUTHORIZE THE VOTING OF YOUR SHARES AS INDICATED ABOVE. WHERE SHARES ARE REGISTERED WITH JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD SO INDICATE CORPORATE PROXIES SHOULD BE SIGNED BY AN AUTHORIZED OFFICER. 164 * Please fold and detach card at perforation before mailing * \/ Please fill in box(es) as shown using black or blue ink or number 2 pencil.\/ PLEASE DO NOT USE FINE POINT PENS. [X] BY SIGNING AND DATING THIS CARD, YOU AUTHORIZE THE PROXIES TO VOTE EACH PROPOSAL, AS MARKED, OR, IF NOT MARKED, TO VOTE "FOR" EACH PROPOSAL AND TO USE THEIR DISCRETION TO VOTE ON ANY OTHER MATTER THAT MAY COME BEFORE THE SPECIAL MEETING. IF YOU DO NOT INTEND PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE. FOR AGAINST ABSTAIN 1. TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. [ ] [ ] [ ] 2. BALANCED FUND ONLY: TO APPROVE A NEW SUB-ADVISORY [ ] [ ] [ ] AGREEMENT WITH NORDEA SECURITIES, INC. 3. TO CONSIDER AND ACT UPON ANY OTHER MATTERS THAT PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNED SESSION OF THE MEETING. 165 LIBERTY VARIABLE INVESTMENT TRUST INSTRUCTIONS OF VARIABLE CONTRACT PARTICIPANTS FOR VOTING SHARES OF LIBERTY VARIABLE INVESTMENT TRUST. FUND NAME PRINTS HERE VOTING INSTRUCTIONS INSURANCE COMPANY NAME PRINTS HERE LIBERTY VARIABLE INVESTMENT TRUST The undersigned, being a Participant under a variable annuity contract or variable life insurance policy issued by the above-referenced Insurance Company (the "Insurance Company"), hereby instructs the Insurance Company to cause the shares of each of the above-referenced fund (the "Fund") allocable to Participant's contract or policy to be voted in the manner specified on the reverse side with respect to the matter described in the accompanying proxy statement. THE INSURANCE COMPANY WILL FOLLOW VOTING INSTRUCTIONS ONLY IF THEY ARE RECEIVED AT LEAST ONE DAY PRIOR TO THE DATE OF THE MEETING. IF NO INSTRUCTIONS ARE SPECIFIED, THE INSURANCE COMPANY WILL VOTE THE SHARES IN FAVOR OF THE NEW ADVISORY AND SUB-ADVISORY AGREEMENTS. \/ DATE ___________________ PLEASE MARK, SIGN, DATE AND RETURN THE VOTING INSTRUCTIONS CARD PROMPTLY USING THE ENCLOSED ENVELOPE. --------------------------------------- Signature(s) of joint participant Please date and sign the name or names as printed hereon. Where there are Joint Participants, all Joint Participants should sign. Corporate Instructions should be signed by an authorized officer. Executors, administrators, trustees, etc. should so indicate when signing. 166 BY SIGNING AND DATING THIS CARD, YOU INSTRUCT THE INSURANCE COMPANY TO VOTE EACH PROPOSAL AS MARKED, OR, IF NOT MARKED, TO VOTE "FOR" EACH PROPOSAL AND TO USE THEIR DISCRETION TO VOTE ON ANY OTHER MATTER THAT MAY COME BEFORE THE SPECIAL MEETING. IF YOU DO NOT INTEND PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE. [DOWN ARROW] Please fill in box(es) as shown using black or blue [DOWN ARROW] ink or number 2 pencil. PLEASE DO NOT USE FINE POINT PENS. [X] FOR AGAINST ABSTAIN 1. TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. [ ] [ ] [ ] 2. TO APPROVE A NEW SUB-ADVISORY AGREEMENT. [ ] [ ] [ ]
3. TO ELECT A BOARD OF TRUSTEES. FOR ALL WITHHOLD NOMINEES FOR ALL FROM ALL EXCEPT NOMINEES NOMINEES AS NOTED [ ] [ ] [ ] (01) Douglas A. Hacker, (02) Janet Langford Kelly, (03) Richard W. Lowry, (04) Salvatore Macera, (05) William E. Mayer, (06) Charles R. Nelson, (07) John J. Neuhauser, (08) Joseph R. Palombo, (09) Thomas E. Stilzel, (10) Thomas C. Theobald, (11) Anne-Lee Verville
TO WITHHOLD AUTHORITY TO VOTE, PLEASE WRITE NUMBER(S) ON THE LINE BELOW. ___________________________________________________________________________ 4. TO CONSIDER AND ACT UPON ANY OTHER MATTERS THAT PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNED SESSION OF THE MEETING. 167 LIBERTY VARIABLE INVESTMENT TRUST * Please fold and detach card at perforation before mailing * FUND NAME PRINTS HERE PROXY SOLICITED BY THE BOARD OF TRUSTEES FOR A MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 26, 2001 LIBERTY VARIABLE INVESTMENT TRUST THE UNDERSIGNED HEREBY APPOINTS WILLIAM J. BALLOU, KEVIN M. CAROME, ELLEN HARRINGTON, RUSSELL L. KANE, ROBERT R. LEVEILLE, JOSEPH R. PALOMBO AND VINCENT P. PIETROPAOLO, AND EACH OF THEM, PROXIES OF THE UNDERSIGNED, WITH POWER OF SUBSTITUTION, TO VOTE AT THE SPECIAL MEETING OF SHAREHOLDERS OF THE LIBERTY VARIABLE SERIES FUND LISTED ABOVE, TO BE HELD AT 2:00 P.M. ON WEDNESDAY, SEPTEMBER 26, 2001, AT ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS, AND AT ANY ADJOURNMENTS THEREOF. * DATE ---------- [ ] [ ] [ ] SIGNATURE(S) (IF JOINT OWNERS) PLEASE SIGN YOUR NAME OR NAMES EXACTLY AS PRINTED TO THE LEFT TO AUTHORIZE THE VOTING OF YOUR SHARES AS INDICATED ABOVE. WHERE SHARES ARE REGISTERED WITH JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD SO INDICATE. CORPORATE PROXIES SHOULD BE SIGNED BY AN AUTHORIZED OFFICER. 168 BY SIGNING AND DATING THIS CARD, YOU AUTHORIZE THE PROXIES TO VOTE EACH PROPOSAL, AS MARKED, OR, IF NOT MARKED, TO VOTE "FOR" EACH PROPOSAL AND TO USE THEIR DISCRETION TO VOTE ON ANY OTHER MATTER THAT MAY COME BEFORE THE SPECIAL MEETING. IF YOU DO NOT INTEND PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE. [DOWN ARROW] Please fill in box(es) as shown using black or blue [DOWN ARROW] ink or number 2 pencil. PLEASE DO NOT USE FINE POINT PENS. [X] FOR AGAINST ABSTAIN 1. TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. [ ] [ ] [ ] 2. TO APPROVE A NEW SUB-ADVISORY AGREEMENT. [ ] [ ] [ ] 3. TO ELECT A BOARD OF TRUSTEES.
FOR ALL WITHHOLD NOMINEES FOR ALL FROM ALL EXCEPT NOMINEES NOMINEES AS NOTED [ ] [ ] [ ] (01) Douglas A. Hacker, (02) Janet Langford Kelly, (03) Richard W. Lowry, (04) Salvatore Macera, (05) William E. Mayer, (06) Charles R. Nelson, (07) John J. Neuhauser, (08) Joseph R. Palombo, (09) Thomas B. Stilzel, (10) Thomas C. Theobald, (11) Anne-Lee Verville
TO WITHHOLD AUTHORITY TO VOTE, PLEASE WRITE NUMBER(S) ON THE LINE BELOW. ___________________________________________________________________________ 4. TO CONSIDER AND ACT UPON ANY OTHER MATTERS THAT PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNED SESSION OF THE MEETING. 169 LIBERTY VARIABLE INVESTMENT TRUST INSTRUCTIONS OF VARIABLE CONTRACT PARTICIPANTS FOR VOTING SHARES OF LIBERTY VARIABLE INVESTMENT TRUST. FUND NAME PRINTS HERE VOTING INSTRUCTIONS INSURANCE COMPANY NAME PRINTS HERE LIBERTY VARIABLE INVESTMENT TRUST The undersigned, being a Participant under a variable annuity contract or variable life insurance policy issued by the above-referenced Insurance Company (the "Insurance Company"), hereby instructs the Insurance Company to cause the shares of each of the above-referenced fund (the "Fund") allocable to Participant's contract or policy to be voted in the manner specified on the reverse side with respect to the matter described in the accompanying proxy statement. THE INSURANCE COMPANY WILL FOLLOW VOTING INSTRUCTIONS ONLY IF THEY ARE RECEIVED AT LEAST ONE DAY PRIOR TO THE DATE OF THE MEETING. IF NO INSTRUCTIONS ARE SPECIFIED, THE INSURANCE COMPANY WILL VOTE THE SHARES IN FAVOR OF THE NEW ADVISORY AND SUB-ADVISORY AGREEMENTS. * DATE: _______________ PLEASE MARK, SIGN, DATE AND RETURN THE VOTING INSTRUCTIONS CARD PROMPTLY USING THE ENCLOSED ENVELOPE. ____________________________________________ Signature(s) of joint participant Please date and sign the name or names as printed hereon. Where these are Joint Participants, all Joint Participants should sign. Corporate Instructions should be signed by an authorized officer. Executives, administrators, trustees, etc. should so indicate when signing. 170 BY SIGNING AND DATING THIS CARD, YOU INSTRUCT THE INSURANCE COMPANY TO VOTE EACH PROPOSAL AS MARKED, OR, IF NOT MARKED, TO VOTE "FOR" EACH PROPOSAL AND TO USE THEIR DISCRETION TO VOTE ON ANY OTHER MATTER THAT MAY COME BEFORE THE SPECIAL MEETING. IF YOU DO NOT INTEND PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE. [DOWN ARROW] [DOWN ARROW] Please fill in box(es) as shown using black or blue ink or number 2 pencil. PLEASE DO NOT USE FINE POINT PENS. /X/
FOR AGAINST ABSTAIN 1. TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. / / / / / / 2. TO APPROVE A NEW SUB-ADVISORY AGREEMENT. / / / / / / 3. TO APPROVE A NEW PORTFOLIO MANAGEMENT AGREEMENT. / / / / / / WITHHOLD FOR ALL FOR ALL FROM ALL NOMINEES NOMINEES NOMINEES EXCEPT AS NOTED 4. TO ELECT A BOARD OF TRUSTEES. (01) Douglas A. Hecker, (02) Janet Langford Kelly, (03) Richard W. Lowry, / / / / / / (04) Salvatore Macera, (05) William E. Mayer, (06) Charles R. Nelson, (07) John J. Neuhauser, (08) Joseph R. Palombo, (09) Thomas E. Stilzel, (10) Thomas C. Theobald, (11) Anne-Lee Verville TO WITHHOLD AUTHORITY TO VOTE, PLEASE WRITE NUMBER(S) ON THE LINE BELOW. __________________________________________________________________________ 5. TO CONSIDER AND ACT UPON ANY OTHER MATTERS THAT PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNED SESSION OF THE MEETING.
171 LIBERTY VARIABLE INVESTMENT TRUST FUND NAME PRINTS HERE PROXY SOLICITED BY THE BOARD OF TRUSTEES FOR A MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 26, 2001 LIBERTY VARIABLE INVESTMENT TRUST THE UNDERSIGNED HEREBY APPOINTS WILLIAM J. BALLOU, KEVIN M. CAROME, ELLEN HARRINGTON, RUSSELL L. KANE, ROBERT R. LEVEILLE, JOSEPH R. PALOMBO AND VINCENT P. PIETROPAOLO, AND EACH OF THEM, PROXIES OF THE UNDERSIGNED, WITH POWER OF SUBSTITUTION, TO VOTE AT THE SPECIAL MEETING OF SHAREHOLDERS OF THE LIBERTY VARIABLE SERIES FUND LISTED ABOVE, TO BE HELD AT 2:00 P.M. ON WEDNESDAY, SEPTEMBER 26, 2001, AT ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS, AND AT ANY ADJOURNMENTS THEREOF. DATE ____________________ _________________________________________ _________________________________________ Signature(s) of joint participant PLEASE SIGN YOUR NAME OR NAMES EXACTLY AS PRINTED TO THE LEFT TO AUTHORIZE THE VOTING OF YOUR SHARES AS INDICATED ABOVE. WHERE SHARES ARE REGISTERED WITH JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD SO INDICATE. CORPORATE PROXIES SHOULD BE SIGNED BY AN AUTHORIZED OFFICER. 172 BY SIGNING AND DATING THIS CARD, YOU AUTHORIZE THE PROXIES TO VOTE EACH PROPOSAL AS MARKED, OR, IF NOT MARKED, TO VOTE "FOR" EACH PROPOSAL AND TO USE THEIR DISCRETION TO VOTE ON ANY OTHER MATTER THAT MAY COME BEFORE THE SPECIAL MEETING. IF YOU DO NOT INTEND PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE. Please fill in box(es) as shown using black or blue ink or number 2 pencil. [X] PLEASE DO NOT USE FINE POINT PENS.
FOR AGAINST ABSTAIN 1. TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. [ ] [ ] [ ] 2. TO APPROVE A NEW SUB-ADVISORY AGREEMENT. [ ] [ ] [ ] 3. TO APPROVE A NEW PORTFOLIO MANAGEMENT AGREEMENT. [ ] [ ] [ ] FOR ALL WITHHOLD NOMINEES FOR ALL FROM ALL EXCEPT AS NOMINEES NOMINEES NOTED 4. TO ELECT A BOARD OF TRUSTEES. (01) Douglas A. Hacker, (02) Janet Langford Kelly, (03) Richard W. Lowry, [ ] [ ] [ ] (04) Salvatone Macera, (05) William E. Mayer, (06) Charles R. Nelson, (07) John J. Neuhauser, (08) Joseph R. Palombo, (09) Thomas B. Stilzel, (10) Thomas C. Theobald, (11) Anne-Lee Verville TO WITHHOLD AUTHORITY TO VOTE, PLEASE WRITE NUMBER(S) ON THE LINE BELOW. ___________________________________________________________________________ 5. TO CONSIDER AND ACT UPON ANY OTHER MATTERS THAT PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNED SESSION OF THE MEETING.
173 LIBERTY VARIABLE INVESTMENT TRUST INSTRUCTIONS OF VARIABLE CONTRACT PARTICIPANTS FOR VOTING SHARES OF LIBERTY VARIABLE INVESTMENT TRUST. FUND NAME PRINTS HERE VOTING INSTRUCTIONS INSURANCE COMPANY NAME PRINTS HERE LIBERTY VARIABLE INVESTMENT TRUST The undersigned, being a Participant under a variable annuity contract or variable life insurance policy issued by the above-referenced Insurance Company (the "Insurance Company"), hereby instructs the Insurance Company to cause the shares of each of the above-referenced fund (the "Fund") allocable to Participant's contract or policy to be voted in the manner specified on the reverse side with respect to the matter described in the accompanying proxy statement. THE INSURANCE COMPANY WILL FOLLOW VOTING INSTRUCTIONS ONLY IF THEY ARE RECEIVED AT LEAST ONE DAY PRIOR TO THE DATE OF THE MEETING. IF NO INSTRUCTIONS ARE SPECIFIED, THE INSURANCE COMPANY WILL VOTE THE SHARES IN FAVOR OF THE NEW ADVISORY AND SUB-ADVISORY AGREEMENTS. DATE --------------------------- PLEASE MARK, SIGN, DATE AND RETURN THE VOTING INSTRUCTIONS CARD PROMPTLY USING THE ENCLOSED ENVELOPE. --------------------------------------- Signature(s) of joint participant Please date and sign the name or names as printed hereon. Where there are Joint Participants, all Joint Participants should sign. Corporate Instructions should be signed by an authorized officer. Executors, administrators, trustees, etc. should so indicate when signing. 174 BY SIGNING AND DATING THIS CARD, YOU INSTRUCT THE INSURANCE COMPANY TO VOTE EACH PROPOSAL AS MARKED, OR, IF NOT MARKED, TO VOTE "FOR" EACH PROPOSAL AND TO USE THEIR DISCRETION TO VOTE ON ANY OTHER MATTER THAT MAY COME BEFORE THE SPECIAL MEETING. IF YOU DO NOT INTEND PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE. [DOWN ARROW] [DOWN ARROW] PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. PLEASE DO NOT USE FINE POINT PENS. [X] FOR AGAINST ABSTAIN 1. TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. [ ] [ ] [ ] 2. TO APPROVE A NEW SUB-ADVISORY AGREEMENT. [ ] [ ] [ ] 3. TO APPROVE A NEW PORTFOLIO MANAGEMENT AGREEMENT WITH MASTRAPASQUA & ASSOCIATES [ ] [ ] [ ] 4. TO APPROVE A NEW PORTFOLIO MANAGEMENT AGREEMENT WITH OPPENHEIMER CAPITAL. [ ] [ ] [ ] 5. TO APPROVE A NEW PORTFOLIO MANAGEMENT AGREEMENT WITH BOSTON PARTNERS ASSET MANAGEMENT, L.P. [ ] [ ] [ ] 6. TO APPROVE A NEW PORTFOLIO MANAGEMENT AGREEMENT WITH WESTWOOD MANAGEMENT CORPORATION. [ ] [ ] [ ] 7. TO APPROVE A NEW PORTFOLIO MANAGEMENT AGREEMENT WITH TCW INVESTMENT MANAGEMENT COMPANY. [ ] [ ] [ ] WITHHOLD FOR ALL FOR ALL FROM ALL NOMINEES NOMINEES NOMINEES EXCEPT AS NOTED 8. TO ELECT A BOARD OF TRUSTEES. [ ] [ ] [ ] (01) Douglas A. Hacker, (02) Janet Langford Kelly, (03) Richard W. Lowry, (04) Salvatore Macera, (05) William E. Mayer, (06) Charles R. Nelson, (07) John J. Neuhauser, (08) Joseph R. Palombo, (09) Thomas E. Stilzel, (10) Thomas C. Theobald, (11) Anne-Lee Verville TO WITHHOLD AUTHORITY TO VOTE, PLEASE WRITE NUMBER(S) ON THE LINE BELOW. ----------------------------------------------------------------------- 9. TO CONSIDER AND ACT UPON ANY OTHER MATTERS THAT PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNED SESSION OF THE MEETING. 175 LIBERTY VARIABLE INVESTMENT TRUST PROXY SOLICITED BY THE BOARD OF TRUSTEES FOR A MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 26, 2001. FUND NAME PRINTS HERE LIBERTY VARIABLE INVESTMENT TRUST THE UNDERSIGNED HEREBY APPOINTS WILLIAM J. BALLOU, KEVIN M. CAROME, ELLEN HARRINGTON, RUSSELL L. KANE, ROBERT R. LEVEILLE, JOSEPH R. PALOMBO AND VINCENT P. PIETROPAOLO, AND EACH OF THEM, PROXIES OF THE UNDERSIGNED, WITH POWER OF SUBSTITUTION, TO VOTE AT THE SPECIAL MEETING OF SHAREHOLDERS OF THE LIBERTY VARIABLE SERIES FUND LISTED ABOVE, TO BE HELD AT 2:00 P.M. ON WEDNESDAY, SEPTEMBER 26, 2001, AT ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS, AND AT ANY ADJOURNMENTS THEREOF. ** DATE _______________ [ ] [ ] [ ] Signature(s) of joint participant PLEASE SIGN YOUR NAME OR NAMES EXACTLY AS PRINTED TO THE LEFT TO AUTHORIZE THE VOTING OF YOUR SHARES AS INDICATED ABOVE. WHERE SHARES ARE REGISTERED WITH JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS EXECUTORS, ADMINISTRATORS, TRUSTEES, ETC. SHOULD SO INDICATE. CORPORATE PROXIES SHOULD BE SIGNED BY AN AUTHORIZED OFFICER. 176 BY SIGNING AND DATING THIS CARD, YOU AUTHORIZE THE PROXIES TO VOTE EACH PROPOSAL AS MARKED, OR, IF NOT MARKED, TO VOTE "FOR" EACH PROPOSAL AND TO USE THEIR DISCRETION TO VOTE ON ANY OTHER MATTER THAT MAY COME BEFORE THE SPECIAL MEETING. IF YOU DO NOT INTEND PERSONALLY TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE AND MAIL THIS CARD AT ONCE IN THE ENCLOSED ENVELOPE. [DOWN ARROW] [DOWN ARROW] PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X] PLEASE DO NOT USE FINE POINT PENS. FOR AGAINST ABSTAIN 1. TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT. [ ] [ ] [ ] 2. TO APPROVE A NEW SUB-ADVISORY AGREEMENT. [ ] [ ] [ ] 3. TO APPROVE A NEW PORTFOLIO MANAGEMENT AGREEMENT WITH MASTRAPASQUA & ASSOCIATES. [ ] [ ] [ ] 4. TO APPROVE A NEW PORTFOLIO MANAGEMENT AGREEMENT WITH OPPENHEIMER CAPITAL. [ ] [ ] [ ] 5. TO APPROVE A NEW PORTFOLIO MANAGEMENT AGREEMENT WITH BOSTON PARTNERS ASSET MANAGEMENT, L.P. [ ] [ ] [ ] 6. TO APPROVE A NEW PORTFOLIO MANAGEMENT AGREEMENT WITH WESTWOOD MANAGEMENT CORPORATION. [ ] [ ] [ ] 7. TO APPROVE A NEW PORTFOLIO MANAGEMENT AGREEMENT WITH TCW INVESTMENT MANAGEMENT COMPANY. [ ] [ ] [ ] WITHHOLD FOR ALL FOR ALL FROM ALL NOMINEES NOMINEES NOMINEES EXCEPT AS NOTED 8. TO ELECT A BOARD OF TRUSTEES. [ ] [ ] [ ] (01) Douglas A. Hacker, (02) Janet Langford Kelly, (03) Richard W. Lowry, (04) Salvatore Macera, (05) William E. Mayer, (06) Charles R. Nelson, (07) John J. Neuhauser, (08) Joseph R. Palombo, (09) Thomas E. Stitzel, (10) Thomas C. Theobald, (11) Anne-Lee Verville TO WITHHOLD AUTHORITY TO VOTE, PLEASE WRITE NUMBER(S) ON THE LINE BELOW. ----------------------------------------------------------------------- 9. TO CONSIDER AND ACT UPON ANY OTHER MATTERS THAT PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNED SESSION OF THE MEETING.