DEF 14A 1 d13386.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14A (RULE 14a-101) SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant [X] Filed by a Party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission [X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2)) [ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to ss. 240.14a-11(c) of ss. 240.14a-12. ---------- WANGER ADVISORS TRUST (Name of Registrant as Specified in its Charter) ---------- Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) Title of each class of securities to which transaction applies: (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: WANGER ADVISORS TRUST 227 West Monroe Street, Suite 3000 Chicago, Illinois 60606-5016 October 15, 2003 Dear Shareholder: You are cordially invited to attend a special meeting of shareholders of Wanger Advisors Trust which will be held on Monday, November 24, 2003 at 9:00 a.m. Central time at 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606. Among the matters scheduled for consideration at the meeting are the election of the trustees named in the attached proxy statement. Your vote is important. Please take the time to familiarize yourself with the Proposal. Then, please complete, sign and date the enclosed proxy card and return it in the enclosed envelope. This will ensure that your vote is counted, even if you can't attend the meeting in person. If you have any questions about voting, please call 1-800-4-WANGER. Sincerely, Charles P. McQuaid President WANGER ADVISORS TRUST 227 West Monroe Street, Suite 3000 Chicago, Illinois 60606-5016 1-800-492-6437 (1-800-4-WANGER) NOTICE OF SPECIAL MEETING OF SHAREHOLDERS Monday, November 24, 2003 A special meeting of shareholders of Wanger Advisors Trust ("WAT" or the "Trust") will be held at 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606, at 9:00 a.m., Central time on Monday, November 24, 2003. At the meeting, shareholders will be asked to vote on the following proposals: 1. To elect five trustees; and 2. To transact any other business that properly comes before the meeting. Shareholders of record as of the close of business on October 1, 2003 are entitled to vote at the meeting (or any adjournments of the meeting). This proxy statement and proxy card are being mailed to shareholders on or about October 15, 2003. By Order of the Board of Trustees, Bruce H. Lauer Secretary October 15, 2003 Chicago, Illinois WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND RETURN THE ENCLOSED PROXY CARD. YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. WANGER ADVISORS TRUST 227 West Monroe Street, Suite 3000 Chicago, Illinois 60606-5016 1-800-492-6437 (1-800-4-WANGER) PROXY STATEMENT Special Meeting of Shareholders November 24, 2003 This proxy statement is being sent to you by the board of trustees of Wanger Advisors Trust. The board is asking you to complete and return the enclosed proxy card, permitting your shares of Wanger U.S. Smaller Companies, Wanger International Small Cap, Wanger Twenty or Wanger Foreign Forty to be voted at the meeting, even if you cannot attend the meeting in person. The meeting will be held at 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606, at 9:00 a.m. Central time, on Monday, November 24, 2003 (called the "Meeting"). Shareholders of record at the close of business on October 1, 2003 (called the "record date") are entitled to vote at the meeting. You should also have received WAT's annual report to shareholders for the fiscal year ended December 31, 2002 and the semi-annual report to shareholders dated June 30, 2003. If you would like another copy of the annual or semi-annual reports, please write to WAT at the address shown at the top of this page or call WAT at 800-492-6437. The reports will be sent to you without charge. For convenience, Wanger Advisors Trust is referred to in this proxy statement as "WAT" or "the Trust." Wanger U.S. Smaller Companies, Wanger International Small Cap, Wanger Twenty and Wanger Foreign Forty are referred to individually as a "Fund" and together as the "Funds." This proxy statement and enclosed proxy are being mailed to shareholders on or about October 15, 2003. SUMMARY OF PROPOSAL This proxy statement covers one Proposal -- the election of trustees. The shareholders of all Funds will vote on the election of trustees. PROPOSAL 1 ELECTION OF TRUSTEES The persons named on the accompanying proxy card intend to vote at the Meeting (unless otherwise directed) FOR the election of the five nominees named below as trustees of the Trust. Three of the nominees currently serve as trustees. Each nominee has been recommended by the governance committee of the board of trustees and each nomination was unanimously approved by the board of trustees. The governance committee will also consider nominees recommended by shareholders to serve as trustees provided that shareholders submitting such recommendations comply with all applicable provisions of Rule 14a-8 under the Securities Exchange Act of 1934 (the "Exchange Act"). Of the nominees listed below, Messrs. Hasselbring and Wanger and Ms. Werhane are currently members of the board of trustees of WAT and have served in that capacity continuously since originally elected or appointed. Messrs. Hasselbring and Wanger have been previously elected by the shareholders of WAT. Each trustee will be elected to hold office until the next meeting of shareholders or until his or her successor is elected and qualified. Each nominee has consented to being named herein and indicated his or her willingness to serve if elected. If any such nominee is unable to serve because of an event not now anticipated or for good reason becomes unwilling to serve, the persons named as proxies may vote for another person designated by the board of trustees. The following table sets forth each nominee's position(s) with the Trust, date of birth, principal occupation or employment during the past five years, directorships and trusteeships and the date on which he or she first became a trustee of WAT.
Number of Name, Position(s) Portfolios in with Wanger Year First Fund Complex Advisors Trust Elected or Overseen by and Age at Appointed Principal Occupation(s) during Trustee/ Other January 1, 2003 to Office Past Five Years Nominee Directorships ---------------------- ------------ ----------------------------------------- -------------- -------------- Trustees/Nominees who are not interested persons of Wanger Advisors Trust: Jerome L. Duffy, 66, N/A Retired since December 31, 1997; prior 4 None. Nominee thereto, senior vice president, Kemper Financial Services and treasurer, Kemper Funds.
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Number of Name, Position(s) Portfolios in with Wanger Year First Fund Complex Advisors Trust Elected or Overseen by and Age at Appointed Principal Occupation(s) during Trustee/ Other January 1, 2003 to Office Past Five Years Nominee Directorships -------------------------- ------------ ------------------------------------------- -------------- -------------- Fred D. Hasselbring, 61, Retail industry, general project 4 None. Trustee 1994 development and business computer Lead Independent Trustee 2003 systems consultant; voice over specialist for industrial and institutional applications. Dr. Kathryn A. Krueger, N/A Medical Advisor, Cardiovascular 4 None. M.D., 45 Therapeutic Area, Lilly Research Nominee Laboratories (January 2003 to present); Medical Director, Cardiovascular Therapeutic Area, Lilly Research Laboratories (October 2002 to December 2002); Medical Director, Neptune Product Team, Lilly Research Laboratories (October 2001 to October 2002); Acting Director and Senior Clinical Research Physician, Lilly Research Laboratories (April 2001 to September 2001); Senior Clinical Research Physician, Lilly Research Laboratories (January 2000 to March 2001); Clinical Research Physician, Lilly Research Laboratories (June 1996 to December 1999). Patricia H. Werhane, 67, 1998 Ruffin Professor of Business Ethics, 4 None. Trustee Darden Graduate School of Business Administration, University of Virginia, since 1993; Darden Graduate School of Business Administration, University of Virginia, since September 2001; and Wicklander Chair of Business Ethics and Director of the Institute for Business and Professional Ethics, DePaul University (since September 2003).
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Number of Name, Position(s) Portfolios in with Wanger Year First Fund Complex Advisors Trust Elected or Overseen by and Age at Appointed Principal Occupation(s) during Trustee/ Other January 1, 2003 to Office Past Five Years Nominee Directorships ----------------------- ------------ ----------------------------------------- -------------- -------------- Trustees/Nominees who are an interested person of Wanger Advisors Trust: Ralph Wanger, 68, 1994 President, chief investment officer and 10 Columbia Chairman and Trustee* portfolio manager, Columbia Wanger Acorn Trust. Asset Management, L.P. ("Columbia WAM") (July 1992 through September 2003); president, Columbia Acorn Trust (April 1992 through September 30, 2003); president, Wanger Advisors Trust (1994 through September 30, 2003); principal, Wanger Asset Management, L.P. ("WAM") from July 1992 until September 29, 2000; president, WAM Ltd. from July 1992 to September 29, 2000; president and director, WAM Acquisition GP, Inc. since September 29, 2000; director, Wanger Investment Company plc.
---------------- * Trustee who is an "interested person" of the Trust and of Columbia WAM, as defined in the Investment Company Act of 1940, because he is an officer of the Trust and an employee of Columbia WAM. Effective September 30, 2003, Mr. Wanger stepped down as President of the Trust and president, chief investment officer and portfolio manager of Columbia WAM. As of that date, Charles P. McQuaid became chief investment officer of Columbia WAM. Mr. P. Michael Phelps, 69 and retired since 1998, is not standing for re-election as trustee. The address for each of the trustees and nominees is c/o Columbia Wanger Asset Management, L.P., 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606. The following table shows the dollar range of equity securities of the Funds "beneficially" owned (within the meaning of that term as defined in rule 16a-1(a)(2) under the Securities Exchange Act of 1934) by each trustee or nominee as of August 31, 2003: 4
------------------------------------------------------------------------------------- Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Trustee or Nominee Dollar Range of in Family of Name of Trustee Equity Securities Investment or Nominee Name of Fund in each Fund Companies ------------------------------------------------------------------------------------- Trustees/Nominees who are not interested persons of Wanger Advisors Trust: ------------------------------------------------------------------------------------- Jerome L. Duffy Wanger U.S. Smaller None None Companies Wanger International None Small Cap Wanger Twenty None Wanger Foreign Forty None ------------------------------------------------------------------------------------- Fred D. Hasselbring Wanger U.S. Smaller None None Companies Wanger International None Small Cap Wanger Twenty None Wanger Foreign Forty None ------------------------------------------------------------------------------------- Dr. Kathryn A. Wanger U.S. Smaller None None Krueger Companies Wanger International None Small Cap Wanger Twenty None Wanger Foreign Forty None ------------------------------------------------------------------------------------- Patricia H. Werhane Wanger U.S. Smaller None None Companies Wanger International None Small Cap Wanger Twenty None Wanger Foreign Forty None ------------------------------------------------------------------------------------- Trustees/Nominees who are interested persons of Wanger Advisors Trust: ------------------------------------------------------------------------------------- Ralph Wanger Wanger U.S. Smaller over $100,000 over $100,000 Companies Wanger International over $100,000 Small Cap Wanger Twenty over $100,000 Wanger Foreign Forty over $100,000 -------------------------------------------------------------------------------------
As of August 31, 2003, no trustee or nominee who is not an interested person of WAT beneficially owned shares of the Funds. The table below shows the number of Fund shares beneficially owned by each interested trustee and nominee, as well as the trustees and officers of the Trust as a group, as of August 31, 2003. 5
---------------------------------------------------------------------------------------------------------- Name of Trustee or Nominee Name of Fund Number of Shares Owned Percentage ---------------------------------------------------------------------------------------------------------- Trustees/Nominees who are interested persons of Wanger Advisors Trust: ---------------------------------------------------------------------------------------------------------- Ralph Wanger Wanger U.S. Smaller 52,082.06 0.18% Companies Wanger International 113,322.29 0.66% Small Cap Wanger Twenty 64,624.06 2.64% Wanger Foreign Forty 70,825.95 4.70% ---------------------------------------------------------------------------------------------------------- Trustees/Nominees Wanger U.S. Smaller 64,528.60 0.22% and officers as a group Companies Wanger International 120,458.23 0.70% Small Cap Wanger Twenty 74,505.13 3.04% Wanger Foreign Forty 81,670.21 5.41% ----------------------------------------------------------------------------------------------------------
As of August 31, 2003, none of the independent trustees owned beneficially or of record any shares of Columbia WAM, Columbia Funds Distributor, Inc. ("CFD"), any participating insurance company or of any person directly or indirectly controlling, controlled by, or under common control with Columbia WAM, CFD or any participating insurance company. Committees of the Board of Trustees. WAT's board of trustees currently has three standing committees: o Executive Committee. Messrs. Phelps and Wanger are members, and Mr. Hasselbring and Ms. Werhane are alternate members, of the executive committee, which has authority during intervals between meetings of the board of trustees to exercise the powers of the board, with certain statutory exceptions. o Audit Committee. Mr. Hasselbring serves as the chairman of the audit committee, and Mr. Phelps and Ms. Werhane are members of the audit committee of the board of trustees. The audit committee identifies the independent accountants to be recommended to the board; meets with the independent accountants and management to review the scope and the results of the audits of the Funds' financial statements; confirms the independence of the independent accountants; reviews with the independent accountants and management the effectiveness and adequacy of the Funds' internal controls; and reviews legal and regulatory matters. Although the board of trustees has determined that WAT does not have an "audit committee financial expert" currently serving on its audit committee, the trustees believe that the current members of the audit committee are qualified to serve on that committee given their experience and background. However, the trustees determined that they would like to have an audit committee financial expert as a member of the 6 audit committee. As a result, the board nominated for election Jerome Duffy whom the board believes will qualify as an audit committee financial expert. o Governance Committee. Messrs. Hasselbring and Phelps and Ms. Werhane serve on the governance committee of the board of trustees, which makes recommendations to the trustees regarding committees of the board of trustees and committee assignments, makes recommendations to the trustees regarding the composition of the board of trustees and candidates for election as non-interested trustees, oversees the process for evaluating the functioning of the board of trustees, and makes recommendations to the board of trustees regarding the compensation of trustees who are not affiliated with any investment adviser, administrator or distributor of the Funds. The governance committee will not consider shareholder recommendations regarding candidates for election as trustees; however, such recommendations may be made in the form of a shareholder proposal to be presented at any future meeting of shareholders of the Funds. Committees of the Trust. The Trust currently has one standing committee described below: o Valuation Committee. Messrs. Wanger, Hasselbring and McQuaid are members, and Mr. Phelps and Ms. Werhane are alternate members, of the valuation committee of the Trust. The valuation committee determines valuations of portfolio securities held in any Fund in instances as required by the valuation procedures adopted by the board of trustees. During the fiscal year ended December 31, 2002, the board of trustees held four meetings, the audit committee held two meetings, the valuation committee held nine meetings and the executive committee held six meetings. The governance committee did not meet during 2002. All of the trustees and committee members then serving attended at least 75% of the meetings of the board of trustees or applicable committee, if any, held during the fiscal year ended December 31, 2002. Officers. The following table lists the name, date of birth, position(s) with the Trust and business history for the past five years of each of the Trust's officers. Each officer serves until his successor is chosen and qualified or until his resignation or removal by the board of trustees. The business address of all officers of the Trust is 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606. 7
Number of Portfolios in Fund Complex Name, Position(s) Year First For Which with Wanger Advisors Elected or Officer Acts Trust and Age at Appointed Principal Occupation(s) during in Same Other January 1, 2003 to Office Past Five Years Capacity Directorships --------------------------- ------------ ----------------------------------------- -------------- -------------- Officers of Wanger Advisors Trust: J. Kevin Connaughton, 2000 Treasurer of the Columbia Funds and of 10 None. 39, Assistant Treasurer the Liberty All-Star Funds since December 2000; Vice President of Columbia WAM since April 2003 (formerly Controller of the Columbia Funds and of the Liberty All-Star Funds from February 1998 to October 2000); Treasurer of the Galaxy Funds since September 2002; Treasurer, Columbia Management Multi-Strategy Hedge Fund, LLC since December, 2002 (formerly Vice President of Colonial from February 1998 to October 2000 and Senior Tax Manager, Coopers & Lybrand, LLP from April 1996 to January 1998). Kenneth A. Kalina, 43, 1995 Chief financial officer, Columbia WAM 10 None. Assistant Treasurer since April 2000; assistant treasurer, Columbia Acorn Trust; fund controller, Columbia WAM since September 1995; director, New Americas Small Cap Fund. Bruce H. Lauer, 45, 1995 Chief operating officer, Columbia WAM 10 None. Vice President, Secretary since April 1995; principal, WAM from and Treasurer January 2000 to September 29, 2000; vice president, treasurer and secretary, Columbia Acorn Trust; director, Wanger Investment Company plc and New Americas Small Cap Fund. Charles P. McQuaid, 49, 1994+ Senior vice president of the Trust from 10 Columbia President 1994 through September 2003; portfolio Acorn Trust. manager and director of research, Columbia WAM since July 1992; principal, WAM from July 1995 to September 29, 2000; senior vice president, Columbia Acorn Trust.
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Number of Portfolios in Fund Complex Name, Position(s) Year First For Which with Wanger Advisors Elected or Officer Acts Trust and Age at Appointed Principal Occupation(s) during in Same Other January 1, 2003 to Office Past Five Years Capacity Directorships ------------------------- ------------ -------------------------------------- -------------- -------------- Robert A. Mohn, 41, 1997 Analyst and portfolio manager, 10 None. Vice President Columbia WAM since August 1992; principal, WAM from 1995 to September 29, 2000; vice president, Columbia Acorn Trust. Todd Narter, 38, 2001 Analyst and portfolio manager, 10 None. Vice President Columbia WAM since June 1997; vice president, Columbia Acorn Trust. Christopher Olson, 38, 2001 Analyst and portfolio manager, 10 None. Vice President Columbia WAM since January 2001; vice president, Columbia Acorn Trust; prior thereto, director and portfolio strategy analyst with UBS Asset Management /Brinson Partners. John H. Park, 35, 1998 Analyst and portfolio manager, 10 None. Vice President Columbia WAM since July 1993; principal, WAM from 1998 to September 29, 2000; vice president, Columbia Acorn Trust. Vincent P. Pietropaolo, 2001 Vice president and Senior Counsel, 10 None. 38, Assistant Secretary Liberty Funds Group since December 1999; Associate, Morgan Lewis & Bockius, October 1998 to December 1999.
---------------- + Mr. McQuaid became President of the Trust in October 2003. Compensation of Trustees and Officers. Mr. Wanger and the other officers of the Trust do not receive any compensation from the Trust. During 2002 the Funds paid fees aggregating $106,000 to board members who were not affiliated with WAM. The trustees do not receive any pension or retirement benefits from the Funds. The following table sets forth the total compensation, (including any amounts deferred, as described below) paid by the Trust during the fiscal year ended December 31, 2002 to each of the trustees of the Trust: 9
Aggregate Total Compensation Compensation from Name of Trustee from Funds Fund Complex -------------------------------- -------------- ------------------ Jerome L. Duffy $ 0 $ 0 Fred D. Hasselbring $40,500 $40,500 Dr. Kathryn A. Krueger $ 0 $ 0 P. Michael Phelps* $34,500 $34,500 Patricia H. Werhane $31,000 $31,000 Ralph Wanger $ 0 $ 0
---------------- * Mr. Phelps is not standing for re-election and will retire following the election of the trustees. The officers and trustees affiliated with WAM serve without any compensation from the Trust. Required Vote. In accordance with the Trust's Agreement and Declaration of Trust, the vote of a plurality of all of the shares of the Funds voted at the Meeting is required to elect the nominees. Since the number of trustees has been fixed at five, this means that the five persons receiving the highest number of votes will be elected. Each share is entitled to one vote. MORE INFORMATION ABOUT WAT Organization and Management of the Trust The Trust is a Massachusetts business trust organized on August 30, 1994. The Trust is an open-end management investment company, currently with four series: Wanger U.S. Smaller Companies, Wanger International Small Cap, Wanger Twenty and Wanger Foreign Forty. Wanger U.S. Smaller Companies and Wanger International Small Cap began operations on May 3, 1995. Wanger Twenty and Wanger Foreign Forty each began operations on February 1, 1999. The Trust is governed by a board of trustees, which is responsible for protecting the interests of the shareholders of the Funds. The trustees are experienced executives and professionals who meet at regular intervals to oversee the activities of the Trust and the Funds. A majority of the trustees are not otherwise affiliated with WAT or WAM. Investment Adviser Columbia Wanger Asset Management, L.P. ("Columbia WAM") serves as the investment adviser for the Funds and for other institutional accounts. As of August 31, 2003, Columbia WAM had approximately $13.77 billion under management, including the Funds. Columbia WAM changed its name from Liberty Wanger Asset Management, L.P. to its current name on October 13, 2003, and was formerly known as Wanger Asset Management, L.P. ("WAM") until September 29, 10 2000. Columbia WAM is a wholly owned subsidiary of Columbia Management Group, Inc., which in turn is a wholly owned subsidiary of Fleet National Bank, which in turn is a wholly owned subsidiary of FleetBoston Financial Corporation. Columbia WAM has advised and managed mutual funds, including the Funds, since 1992. Columbia WAM is located at 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606. Distributor Columbia Funds Distributor, Inc. ("CFD"), One Financial Center, Boston, MA 02111, serves as the principal underwriter of the Trust. CFD is a subsidiary of Columbia Management Group, Inc., which is a wholly owned subsidiary of Fleet National Bank, which in turn is a wholly owned subsidiary of FleetBoston Financial Corporation. Like CFD, the address for Columbia Management Group, Inc., Fleet National Bank and FleetBoston Financial Corporation is One Financial Center, Boston, MA 02111. The Underwriting Agreement continues in effect from year to year, provided such continuance is approved annually (i) by a majority of the trustees or by a majority of the outstanding voting securities of the Trust, and (ii) by a majority of the trustees who are not parties to the Underwriting Agreement or interested persons of any such party. Shares of the Funds are offered for sale on a continuous basis through CFD on a best efforts basis without any sales commission or charges to the Funds or participating insurance companies or retirement plans purchasing Fund shares. However, each variable annuity contract and variable life insurance policy imposes its own charges and fees on owners of variable annuity contracts and variable life insurance policies, and retirement plans and may impose such charges on participants in a retirement plan. Independent Accountants The independent trustees of WAT have selected Ernst & Young LLP ("E&Y") as independent accountants to audit and certify the Funds' financial statements for the fiscal year ended December 31, 2003. Shareholder approval or ratification of E&Y's selection is not required under the Investment Company Act. Representatives of E&Y will be present at the Meeting, will be given the opportunity to make a statement if they so choose, and are expected to be available to respond to appropriate questions. In addition to serving as independent accountants, E&Y has provided limited nonaudit services (primarily tax and business advisory services) to the Funds. The independent trustees carefully considered these nonaudit services when evaluating E&Y's independence for purposes of its selection as the Funds' independent accountants. In a letter to the Funds' audit committee dated February 7, 2003, E&Y confirmed its status as independent accountants with respect to the Funds within the meaning of the federal securities laws. 11 E&Y's audit report for each Fund's most recently completed fiscal year did not contain any adverse opinions or disclaimers of opinion, nor did E&Y qualify or modify such reports as to uncertainty, audit scope, or accounting principles. Further, there were no disagreements between any of the Funds and E&Y in three key areas: (i) accounting principles and practices, (ii) financial statement disclosures, or (iii) audit scope and procedures -- which, if not resolved to E&Y's satisfaction, would have caused the accountants to reference the matter in their audit reports. The audit committee identifies the independent auditors to be recommended for selection by the board of trustees to audit the financial statements of the respective Funds, and reviews the auditor's fees to determine they are appropriate for the services rendered. In addition, with respect to any non-audit services, the audit committee pre-approves all non-audit services to be provided by the independent auditors of WAT to the Funds; provided that pre-approval is not required for non-audit services that (i) were not identified as such at the time the pre-approval was required and (ii) do not aggregate more than 5% of total revenues paid to the independent auditors of WAT by the Funds during the fiscal year in which the services are provided, if the audit committee approves the provision of such non-audit services prior to the completion of the audit (referred to hereafter as "non-audit services for the Funds approved prior to completion"). Under the audit committee charter, the audit committee may delegate the authority to pre-approve non-audit services to a member of the audit committee. The table below shows the fees paid by the Trust to E&Y during the fiscal years ended December 31, 2001 and December 31, 2002. "Audit Fees" reflect the aggregate fees billed for professional services rendered by E&Y for the audit of the Trust's annual financial statements and services normally provided by E&Y in connection with statutory and regulatory filings. "Audit-Related Fees" reflect the aggregate fees billed for assurance and related services by E&Y that are reasonably related to the performance of the audit or review of the Trust's financial statements and are not included under the heading Audit Fees. "Tax Fees" reflect the aggregate fees billed by E&Y for professional services for tax compliance, tax advice and tax planning. "All Other Fees" reflect the aggregate fees billed for products and services provided by E&Y other than those included under the other captions in the table.
2001 2002 ---------------------------------------------------------------------------------------------------- % of non-audit % of non-audit services for the services for the Funds approved Funds approved Fees Paid prior to completion Fees Paid prior to completion ---------------------------------------------------------------------------------------------------- Audit Fees $69,000 N/A $72,600 N/A ---------------------------------------------------------------------------------------------------- Audit-Related Fees -- N/A -- N/A ---------------------------------------------------------------------------------------------------- Tax Fees $10,000 100% $10,500 100% ---------------------------------------------------------------------------------------------------- All Other Fees -- N/A -- N/A ---------------------------------------------------------------------------------------------------- Total Fees $79,000 -- $83,100 -- ----------------------------------------------------------------------------------------------------
12 Under the audit committee charter, with respect to any non-audit services, the audit committee is required to pre-approve all non-audit services to be provided by the independent auditors of WAT to the Columbia Management Group Complex (including Columbia WAM and any entity controlling, controlled by or under common control with Columbia WAM that provides ongoing services to the Funds) where the nature of the services provided has a direct impact on the operations or financial reporting of the Funds (such services, "Columbia Complex Services"); provided that this pre-approval requirement does not apply to Columbia Complex Services that (i) were not identified as such at the time of the pre-approval required and (ii) do not aggregate more than 5% of total revenue paid to the independent auditors of WAT by the Funds for all services and by the Columbia Management Group Complex for Columbia Complex Services during the fiscal year in which those services are provided, if the audit committee approves the provision of such Columbia Complex Services prior to the completion of the audit. MORE INFORMATION ABOUT THE MEETING Shareholders. At the record date, the Funds had the following numbers of shares outstanding: Fund # Shares ---- -------- Wanger U.S. Smaller Companies 28,764,581.221 Wanger International Small Cap 17,734,379.641 Wanger Twenty 2,516,933.843 Wanger Foreign Forty 1,578,321.547 Of those shares, the only persons known to own of record or beneficially more than 5% of the outstanding shares of any Fund as of the record date were:
Percentage of Amount and Nature Outstanding Name and Address Fund of Ownership Shares Held ------------------------------- --------------------- ------------------- -------------- Phoenix Home Life Wanger U.S. Smaller 7,114,180.281* 24.73% Accumulation Account Companies 10 Krey Blvd. Rensselaer, NY 12144-9681 Phoenix Home Life Variable Wanger U.S. Smaller 5,184,896.580* 18.03% 10 Krey Blvd. Companies Rensselaer, NY 12144-9681 Keyport Wanger U.S. Smaller 2,182,605.460* 7.59% c/o Sun Life Financial Companies P.O. Box 9133 Wellesley Hills, MA 02481-9133
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Percentage of Amount and Nature Outstanding Name and Address Fund of Ownership Shares Held -------------------------------- ---------------------- ------------------- -------------- American Express -- Managed Wanger U.S. Smaller 12,995,336.630* 45.18% Assets Companies Trust: IDS Life Insurance Corp. 222 AXP Financial Center Minneapolis, MN 55474-0002 Phoenix Home Life Wanger International 4,849,494.011* 27.35% Accumulation Account Small Cap 10 Krey Blvd. Rensselaer, NY 12144-9681 Phoenix Home Life Variable Wanger International 4,058,358.508* 22.88% 10 Krey Blvd. Small Cap Rensselaer, NY 12144-9681 Keyport Wanger International 923,761.055* 5.21% c/o Sun Life Financial Small Cap P.O. Box 9133 Wellesley Hills, MA 02481-9133 American Express -- Managed Wanger International 7,158,379.818* 40.36% Assets Small Cap Trust: IDS Life Insurance Corp. 222 AXP Financial Center Minneapolis, MN 55474-0002 Phoenix Home Life Wanger Twenty 664,542.280* 26.40% Accumulation Account 10 Krey Blvd. Rensselaer, NY 12144-9681 Phoenix Home Life Variable Wanger Twenty 633,571.719* 25.17% 10 Krey Blvd. Rensselaer, NY 12144-9681 Keyport Wanger Twenty 1,152,576.996* 45.79% c/o Sun Life Financial P.O. Box 9133 Wellesley Hills, MA 02481-9133 Phoenix Home Life Wanger Foreign 613,535.147* 38.87% Accumulation Account Forty 10 Krey Blvd. Rensselaer, NY 12144-9681 Phoenix Home Life Variable Wanger Foreign 591,139.479* 37.45% 10 Krey Blvd. Forty Rensselaer, NY 12144-9681 Keyport Wanger Foreign 306,054.099* 19.39% c/o Sun Life Financial Forty P.O. Box 9133 Wellesley Hills, MA 02481-9133
---------------- * Shares held of record, all of which are beneficially owned by variable contract owners. 14 How Proxies Will Be Voted. All proxies solicited by the board of trustees that are properly executed and received prior to the Meeting, and which are not revoked, will be voted at the Meeting. Shares represented by those proxies will be voted in accordance with the instructions marked on the proxy. If no instructions are specified, shares will be voted FOR each proposal. Revoking a Proxy. At any time before it has been voted, you may revoke your proxy by: (1) sending a letter saying that you are revoking your proxy to the Secretary of Wanger Advisors Trust at the Trust's offices located at 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606; (2) properly executing a later-dated proxy; or (3) attending the Meeting, requesting return of any previously delivered proxy and voting in person. How You May Vote. You may vote your shares by mail (by signing and returning the enclosed proxy card) or in person at the Meeting. The trustees have been advised by counsel that Massachusetts law and WAT's Agreement and Declaration of Trust and Bylaws permit voting by shareholders in accordance with these procedures. You can revoke any proxy in accordance with the procedures outlined above under "Revoking a Proxy." More Information About How Proxies Will Be Solicited. Solicitation of proxies by personal interview, mail and electronic mail may be made by officers and trustees of WAT and employees of Columbia WAM, none of whom will receive any additional compensation for such service, and a third-party solicitation agent. All costs incurred in connection with the Meeting (including the cost of solicitation of proxies) will be paid by WAT. WAT has engaged Management Information Services Corp. ("MIS") to assist in the solicitation of proxies. MIS will assist in the following areas: data processing, proxy production and laser printing, mailing the proxy statement and proxy cards, vote processing and account management. It is anticipated that the cost of the proxy solicitation services provided by MIS will be approximately $10,000, plus reimbursement of reasonable out of pocket expenses. Quorum, Voting at the Meeting and Adjournment. Thirty percent of the shares entitled to vote present in person or represented by proxy constitutes a quorum for the transaction of business at the Meeting. For purposes of determining the presence or absence of a quorum and for determining whether sufficient votes have been received for approval of any matter to be acted upon at the Meeting, abstentions and broker non-votes will be treated as shares that are present at the Meeting but have not been voted. Approval of Proposal 1 will require the affirmative vote of a plurality of the shares of the Funds, voting together, represented at the Meeting in person or by proxy, if a quorum is present. Abstentions and broker non-votes will have the practical effect of a "No" vote on Proposal 1. 15 If a quorum is not present in person or by proxy at the Meeting, or if a quorum is present at the Meeting but not enough votes to approve a proposal are received, the persons named as proxies may propose one or more adjournments of the Meeting to permit further solicitation of proxies. Any proposal for adjournment for a Fund will require the vote of a majority of the shares of that Fund represented at the Meeting in person or by proxy. The persons named as proxies intend to vote all proxies in favor of any proposal to adjourn the Meeting. A vote may be taken on one of the proposals in this proxy statement before adjournment if a quorum is present and sufficient votes have been received for approval. OTHER MATTERS The board of trustees of WAT knows of no other matters that are intended to be brought before the meeting. If other matters are presented for action, the proxies named in the enclosed form of proxy will vote on those matters in their sole discretion. SHAREHOLDER PROPOSALS WAT is not required, and does not intend, to hold annual meetings of shareholders. Therefore, no date can be given by which a proposal by a shareholder for consideration at such a meeting must be submitted. Any such proposal should be submitted in writing to the Secretary of the Trust at its principal offices at 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606-5016. Upon submitting a proposal, the shareholder shall provide the Trust with a written notice which includes the shareholder's name and address, the number of shares of each Fund that such shareholder holds of record or beneficially, the dates upon which such shares were acquired, and documentary support for a claim of beneficial ownership. By order of the Board of Trustees, Bruce H. Lauer Secretary October 15, 2003 16 APPENDIX WANGER ADVISORS TRUST P.O. BOX 9132 HINGHAM, MA 02043-9132 FUND NAME PRINTS HERE Special Meeting of Shareholders - November 24, 2003 This Proxy Is Solicited on Behalf of the Board of Trustees The undersigned hereby appoints RALPH WANGER, CHARLES P. McQUAID and BRUCE H. LAUER and each or any of them, as proxies, with full power of substitution, to vote all shares of the above-referenced fund represented by this proxy which the undersigned is entitled to vote at the Special Meeting of Shareholders to be held on November 24, 2003, and at any adjournments thereof, with all powers the undersigned would possess if personally present at such meeting. Dated_______________________, 2003 ------------------------------------------------ ------------------------------------------------ Signature(s), (if held jointly) IMPORTANT: Please date and sign exactly as your name appears hereon. When signing as executor, administrator, trustee, agent, attorney, guardian, or corporate officer, please set forth your full title. Joint owners must each sign. WAT APPENDIX Please fill in box(es) as shown using black or blue ink or number 2 pencil. (X) PLEASE DO NOT USE FINE POINT PENS. VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL SAVE THE EXPENSE OF ADDITIONAL MAILINGS This proxy when properly executed will be voted in the manner directed herein by the undersigned shareholder. If no direction is made, this proxy will be voted FOR Proposal 1, and in the sole discretion of the Proxies upon such other business as may properly come before the meeting or any adjournment or adjournments thereof. The board of trustees recommends a Vote FOR Proposal 1. FOR ALL WITHHOLD (except as 1. Election of Trustees: marked to the (01) Jerome L. Duffy, (02) Fred D. Hasselbring, contrary at (03) Dr. Kathryn A. Krueger, (04) Ralph Wanger, left) (05) Patricia H. Werhane ( ) ( ) To withhold authority to vote for any individual nominee, write that nominee(s) name on the line below. -------------------------------------------------- FOR AGAINST ABSTAIN 2. In their sole discretion on any other matters ( ) ( ) ( ) properly coming before the meeting or any adjournment or adjournments thereof. PLEASE SIGN ON REVERSE SIDE WAT