UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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
Filed by a Party other than the Registrant
Check the appropriate box:
Preliminary Proxy Statement.
CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14a-6(e)(2)).
Definitive Proxy Statement.
Definitive Additional Materials.
Soliciting Material Pursuant to Section 240.14a-12.
COLONIAL CALIFORNIA INSURED MUNICIPAL FUND
COLONIAL HIGH INCOME MUNICIPAL TRUST
COLONIAL INTERMARKET INCOME TRUST I
COLONIAL INTERMEDIATE HIGH INCOME FUND
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST
COLONIAL MUNICIPAL INCOME TRUST
(Name of Registrant as Specified in its Charter)
(Name of Person(s) filing Proxy Statement, if other than the Registrant)
Payment of filing fee (check the approximate box):
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:
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:
COLONIAL CALIFORNIA INSURED MUNICIPAL FUND
COLONIAL HIGH INCOME MUNICIPAL TRUST
COLONIAL INTERMARKET INCOME TRUST I
COLONIAL INTERMEDIATE HIGH INCOME FUND
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST
COLONIAL MUNICIPAL INCOME TRUST
May [[2]], 2007
Dear Shareholder:
The annual meeting of shareholders of each of Colonial California Insured
Municipal Fund, Colonial High Income Municipal Trust, Colonial InterMarket
Income Trust I, Colonial Intermediate High Income Fund, Colonial Investment
Grade Municipal Trust and Colonial Municipal Income Trust (collectively, the
"Funds") has been called to be held on June 22, 2007 at 2:00 p.m. Eastern time
at One Financial Center, 12th floor, in Boston, Massachusetts.
Columbia Management Advisors, LLC, the investment adviser and administrator of
the Funds, has agreed to sell certain assets used in its business of managing
the Funds and Colonial Insured Municipal Fund to Massachusetts Financial
Services Company, Inc. ("MFS"). Upon the closing of the sale, each Fund's
current investment advisory agreement with Columbia would terminate and each
Fund would enter into a new investment advisory agreement with MFS pursuant to
which MFS would serve as investment adviser to the Fund. Therefore, the meeting
will be held for the following purposes:
(1) to vote on a proposed new investment advisory agreement for each Fund
between such Fund and MFS;
(2) to vote on an amended and restated declaration of trust for each Fund,
contingent upon shareholder approval of (1) above;
(3) to elect trustees to the Board of Trustees of each Fund to replace all
of the current trustees of each Fund, contingent upon shareholder approval of
(1) above;
(4) to elect trustees to the Board of Trustees of each Fund so that those
current trustees whose terms will expire this year will continue to hold office
until the trustees elected pursuant to (3) above take office or until the end of
their stated terms, whichever is earlier;
and to transact any other business that may properly come before the meeting, or
any adjournments or postponements thereof.
THE BOARD OF TRUSTEES OF EACH FUND UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
ALL PROPOSALS.
The enclosed proxy statement explains the proposals to be considered in greater
detail. Please read it carefully. Although we hope that you can attend the
annual meeting in person, we urge you in any event to vote your shares at your
earliest convenience in order to make sure that you are represented at the
meeting.
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. YOU CAN VOTE
EASILY AND QUICKLY BY MAIL, BY TELEPHONE, VIA THE INTERNET OR IN PERSON. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE HAS BEEN ENCLOSED FOR YOUR CONVENIENCE.
PLEASE HELP AVOID THE EXPENSE OF A FOLLOW-UP MAILING BY VOTING TODAY.
Letter 1
We appreciate your participation and prompt response in these matters and thank
you for your continued support.
Sincerely,
[[Insert Signature Graphic]]
Christopher L. Wilson
President
[[Job Code]]
Letter 2
COLONIAL CALIFORNIA INSURED MUNICIPAL FUND
COLONIAL HIGH INCOME MUNICIPAL TRUST
COLONIAL INTERMARKET INCOME TRUST I
COLONIAL INTERMEDIATE HIGH INCOME FUND
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST
COLONIAL MUNICIPAL INCOME TRUST
One Financial Center
Boston, Massachusetts 02111-2621
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 22, 2007
To the Shareholders:
NOTICE IS HEREBY GIVEN that the annual meeting of shareholders (the "Meeting")
of each of Colonial California Insured Municipal Fund, Colonial High Income
Municipal Trust, Colonial InterMarket Income Trust I, Colonial Intermediate High
Income Fund, Colonial Investment Grade Municipal Trust and Colonial Municipal
Income Trust (each a "Fund" and collectively, the "Funds") will be held at the
offices of the Funds at One Financial Center, 12th floor, Boston, Massachusetts,
on June 22, 2007, at 2:00 p.m. Eastern time. The purpose of the Meeting is to
consider and to act upon the following matters:
(1) to approve a new investment advisory agreement for each Fund between such
Fund and Massachusetts Financial Services Company, Inc.;
(2) to approve an amended and restated declaration of trust for each Fund,
contingent upon shareholder approval of (1) above;
(3) to elect trustees to the Board of Trustees of each Fund, to replace the
current trustees of each Fund, contingent upon shareholder approval of (1)
above, as outlined below:
a. for each of Colonial California Insured Municipal Fund, Colonial High
Income Municipal Trust, Colonial Investment Grade Municipal Trust and
Colonial Municipal Income Trust:
i. ten trustees to be elected by the holders of common shares of
beneficial interest (the "Common Shares") and municipal auction
rate cumulative preferred shares (the "Preferred Shares") of the
Fund, voting together as a single class, and
ii. two trustees to be elected by the holders of Preferred Shares
only, voting as a single class; and
b. for each of Colonial InterMarket Income Trust I and Colonial
Intermediate High Income Fund:
i. twelve trustees to be elected by the holders of shares of
beneficial interest; and
(4) to elect trustees to the Board of Trustees of each Fund so that those
current trustees whose terms will expire this year will continue to hold
office until the trustees elected pursuant to (3) above take office or
until the end of their stated terms, whichever is earlier, as outlined
below:
a. Colonial California Insured Municipal Fund:
i. three trustees to be elected by the holders of Common Shares and
Preferred Shares of the Fund, voting together as a single class,
and
ii. two trustees to be elected by the holders of Preferred Shares
only, voting as a single class;
b. Colonial High Income Municipal Trust:
Notice 1
i. three trustees to be elected by the holders of Common Shares and
Preferred Shares of the Fund, voting together as a single class,
and
ii. two trustees to be elected by the holders of Preferred Shares
only, voting as a single class;
c. Colonial InterMarket Income Trust I:
i. three trustees to be elected by the holders of shares of
beneficial interest of the Fund;
d. Colonial Intermediate High Income Fund:
i. four trustees to be elected by the holders of shares of
beneficial interest of the Fund;
e. Colonial Investment Grade Municipal Trust:
i. three trustees to be elected by the holders of Common Shares and
Preferred Shares of the Fund, voting together as a single class,
and
ii. two trustees to be elected by the holders of Preferred Shares
only, voting as a single class; and
f. Colonial Municipal Income Trust:
i. three trustees to be elected by the holders of Common Shares and
Preferred Shares of the Fund, voting together as a single class,
and
ii. two trustees to be elected by the holders of Preferred Shares
only, voting as a single class;
and to transact any other business as may properly come before the Meeting,
or any adjournments or postponements thereof.
The Board of Trustees has fixed the close of business on April 10, 2007 as the
record date for the determination of the shareholders of the Funds entitled to
notice of, and to vote at, the Meeting and any adjournments or postponements
thereof.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" ALL PROPOSALS.
By the Order of the Trustees
[[Insert Signature Graphic]]
James R. Bordewick, Jr.
Secretary
YOUR VOTE IS IMPORTANT--PLEASE RETURN YOUR PROXY PROMPTLY.
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. WE URGE YOU, WHETHER OR NOT YOU
EXPECT TO ATTEND THE MEETING IN PERSON, TO INDICATE YOUR VOTING INSTRUCTIONS ON
THE ENCLOSED PROXY, DATE AND SIGN IT, AND RETURN IT IN THE ENVELOPE PROVIDED,
WHICH NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. ALTERNATIVELY, YOU MAY
VOTE BY TELEPHONE OR VIA THE INTERNET, PURSUANT TO THE INSTRUCTIONS ON THE
ENCLOSED PROXY. WE ASK YOUR COOPERATION IN MAILING YOUR PROXY, OR VOTING BY
TELEPHONE OR VIA THE INTERNET, PROMPTLY.
Dated: May [[2]], 2007
Notice 2
IMPORTANT INFORMATION TO HELP YOU UNDERSTAND AND VOTE ON THE PROPOSALS
The following questions and answers provide an overview of the matters on which
you are being asked to vote. The enclosed proxy statement contains more detailed
information about each proposal, and we encourage you to read it in its entirety
before voting. Your vote is important.
QUESTIONS AND ANSWERS
Q. WHAT IS HAPPENING?
A. Columbia Management Advisors, LLC ("Columbia") recently entered into an
asset purchase agreement with Massachusetts Financial Services Company,
Inc. ("MFS") pursuant to which Columbia will sell certain assets used in
its business of managing your Fund and certain other closed-end funds, to
MFS (the "Sale"), subject to certain conditions (as set forth in the asset
purchase agreement and outlined in the enclosed proxy statement). Columbia
and MFS anticipate that, if those conditions are met, the Sale will close
in the third quarter of 2007.
MFS, headquartered in Boston, Massachusetts, is a registered investment
adviser and a subsidiary of Sun Life Financial, a Canadian financial
services company headquartered in Toronto, Ontario, Canada. MFS offers a
full spectrum of investment products to domestic and international retail,
business, and institutional investors.
If and when the Sale closes, your Fund's investment advisory agreement with
Columbia would terminate, and your Fund would enter into a new investment
advisory agreement with MFS. The enclosed proxy statement provides
additional information about MFS, the proposed investment advisory
agreement for your Fund, and other proposals on which the board of trustees
of your Fund is soliciting your vote. As explained in the enclosed proxy
statement, if approved by shareholders, the effectiveness of certain
proposals is contingent upon the closing of the Sale. The asset purchase
agreement contemplates that the Sale will close only if all Funds approve a
new advisory agreement and elect nominees to the boards of trustees as
described more fully in Proposal 3 in the enclosed proxy statement. If the
Sale does not close, only the reelection of trustees will become effective.
YOUR FUND'S BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR EACH
PROPOSAL AND NOMINEE DESCRIBED IN THE ENCLOSED PROXY STATEMENT.
Q. WHY ARE YOU SENDING ME THIS INFORMATION?
A. You are receiving the enclosed proxy statement and proxy card because you
own shares of one or more of Colonial California Insured Municipal Fund,
Colonial High Income Municipal Trust, Colonial InterMarket Income Trust I,
Colonial Intermediate High Income Fund, Colonial Investment Grade Municipal
Trust and Colonial Municipal Income Trust and have the right to vote on
these important proposals concerning your investment.
Q. WHY AM I BEING ASKED TO VOTE ON A NEW INVESTMENT ADVISORY AGREEMENT?
A. If the Sale closes, Columbia would no longer serve as the investment
adviser to your Fund and your Fund's current investment advisory agreement
would terminate. In order for MFS to serve as the investment adviser to
your Fund, it must have an investment advisory agreement with your Fund
that has been approved by the Fund's shareholders. Under applicable law, as
a shareholder of your Fund, you have a right to vote on your Fund's new
investment advisory agreement with MFS.
Q. WHY AM I BEING ASKED TO VOTE ON A NEW DECLARATION OF TRUST?
A. Each Fund operates under an agreement and declaration of trust, which is
the Fund's organizational and governing document under Massachusetts law.
As noted above, if the Sale closes, MFS would serve as the investment
adviser to your Fund. MFS currently serves as investment adviser to six
closed-end funds. The declarations of trust of such funds vary in certain
ways (as described in the enclosed proxy statement) from your Fund's
agreement and declaration of trust. MFS has advised your Fund's board of
trustees that the adoption of a
Q&A 1
new declaration of trust that conforms to the form of declaration of trust
currently in place for closed-end funds managed by MFS would make the
administration of your Fund more efficient.
Q. WHY AM I BEING ASKED TO ELECT NEW TRUSTEES?
A. In connection with the Sale, your Fund's trustees have recommended that
shareholders elect a new slate of trustees who are more familiar with MFS
and with the management and operation of funds managed by MFS. The proposed
nominees currently serve as trustees of other funds managed by MFS. Two of
the proposed nominees, if elected, would be "interested persons" (as
defined in the Investment Company Act of 1940) of your Fund by reason of
their affiliation with MFS. The other proposed nominees, if elected, would
not be "interested persons" of your Fund. If all of the proposed nominees
are elected, your Fund's board of trustees will consist of twelve trustees.
Your Fund's trustees have also recommended that shareholders re-elect those
current trustees of your Fund whose terms expire at the shareholder
meeting. These persons have consented to serve as trustees of your Fund
during the period from the shareholder meeting through the closing of the
Sale, and, in the event that the Sale does not close, to serve as trustees
of your Fund for the terms set forth in the enclosed proxy statement.
Q. HOW WILL THE SALE AFFECT ME AS A SHAREHOLDER?
A. Neither your Fund's investment objectives and principal investment
strategies nor the number of shares you hold will change as a result of the
closing of the Sale. The terms of the proposed investment advisory
agreement for your Fund are similar to those of the Fund's current
investment advisory agreement. The contractual investment advisory fee
rates currently payable by your Fund will not change, but the calculation
methodology will change and may cause the amount of investment advisory
fees payable by your Fund to increase. MFS has advised the trustees of your
Fund that the current portfolio management personnel for your Fund will be
replaced by portfolio management personnel employed by MFS.
Q. WILL MY FUND'S NAME CHANGE?
A. Yes, MFS has advised the trustees of your Fund that your Fund's name will
change as a result of the Sale. The table below sets forth the current name
of each Fund and its corresponding new name.
CURRENT FUND NAME NEW FUND NAME
------------------------------------------ -------------------------------------
Colonial California Insured Municipal Fund MFS California Insured Municipal Fund
Colonial High Income Municipal Trust MFS High Income Municipal Trust
Colonial InterMarket Income Trust I MFS InterMarket Income Trust I
Colonial Intermediate High Income Fund MFS Intermediate High Income Fund
Colonial Investment Grade Municipal Trust MFS Investment Grade Municipal Trust
Colonial Municipal Income Trust MFS High Yield Municipal Trust
Q. HOW DO THE TRUSTEES OF MY FUND RECOMMEND THAT I VOTE?
A. The trustees of your Fund recommend that you vote FOR each proposal.
Q. WILL MY FUND PAY FOR THIS PROXY SOLICITATION?
A. No. Columbia has agreed to bear these costs.
Q. HOW DO I VOTE MY SHARES?
A. For your convenience, there are several ways you can vote:
By Mail: Vote, sign and return the enclosed proxy card(s) in the enclosed
self-addressed, postage-paid envelope.
By Telephone: Call the toll-free number printed on the enclosed proxy
card(s).
Q&A 2
By Internet: Access the website address printed on the enclosed proxy
card(s).
In Person: Attend the shareholder meeting as described in the enclosed
proxy statement. If you wish to attend the meeting, we would appreciate
your notifying us by calling [[__________]].
Q. WHY MIGHT I RECEIVE MORE THAN ONE PROXY CARD?
A. If you own shares of more than one Fund, you will receive a separate proxy
card for each such Fund.
Q. WHOM SHOULD I CALL FOR ADDITIONAL INFORMATION ABOUT THE ENCLOSED PROXY
STATEMENT?
A. If you need any assistance, or have any questions regarding the proposals
or how to vote your shares, please call your Fund's proxy solicitor, The
Altman Group, at [[__________]].
Q&A 3
PROXY STATEMENT
COLONIAL CALIFORNIA INSURED MUNICIPAL FUND
COLONIAL HIGH INCOME MUNICIPAL TRUST
COLONIAL INTERMARKET INCOME TRUST I
COLONIAL INTERMEDIATE HIGH INCOME FUND
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST
COLONIAL MUNICIPAL INCOME TRUST
One Financial Center
Boston, Massachusetts 02111-2621
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 22, 2007
The annual meeting of shareholders (together with any adjournments or
postponements thereof, the "Meeting"), of each of Colonial California Insured
Municipal Fund, Colonial High Income Municipal Trust, Colonial InterMarket
Income Trust I, Colonial Intermediate High Income Fund, Colonial Investment
Grade Municipal Trust and Colonial Municipal Income Trust (each a "Fund" and
collectively, the "Funds") has been called to be held on June 22, 2007 at 2:00
p.m., Eastern time, at One Financial Center, 12th floor, Boston, Massachusetts
02111-2621, for the following purposes (each a "Proposal" and collectively, the
"Proposals"), each of which is described more fully herein:
(1) To vote on a proposed new investment advisory agreement for each Fund
between such Fund and Massachusetts Financial Services Company, Inc.
("MFS").
(2) To vote on an amended and restated declaration of trust for each Fund,
contingent upon shareholder approval of Proposal 1 above.
(3) To elect trustees to the Board of Trustees of each Fund to replace all of
the current trustees of each Fund, contingent upon shareholder approval of
Proposal 1 above.
(4) To elect trustees to the Board of Trustees of each Fund so that those
current trustees whose terms will expire this year will continue to hold
office until the trustees elected pursuant to Proposal 3 above take office
or until the end of their stated terms, whichever is earlier.
SOLICITATION OF PROXIES
This solicitation of proxies is being made by the Board of Trustees (the
"Board") of each Fund in connection with the Meeting and in connection with the
proposed sale by Columbia Management Advisors, LLC ("Columbia"), the Funds'
investment adviser, of certain assets used in its business of managing the Funds
and Colonial Insured Municipal Fund (collectively, the "Colonial Closed-End
Funds") to MFS. Solicitation of proxies for use at the Meeting is being made by
the mailing of this notice and proxy statement with its enclosures on or about
May [[2]], 2007. Shareholders of record at the close of business on April 10,
2007 (the "Record Date") are entitled to notice of and to vote at the Meeting.
Shareholders of the Funds whose shares are held by nominees, such as brokers,
can vote their proxies by contacting their respective nominees. In addition to
the solicitation of proxies by mail, officers and agents of the Funds and their
affiliates may, without additional compensation, solicit proxies by telephone,
telegraph, facsimile, or oral communication. Solicitation may also be made by
The Altman Group, a proxy solicitation firm. The costs of soliciting proxies for
the Colonial Closed-End Funds, estimated to be approximately thirty-five
thousand U.S. dollars (US$35,000), plus reasonable out-of-pocket expenses, will
be borne by Columbia pursuant to the terms of the Asset Purchase Agreement (as
defined herein), and not by the Funds.
A shareholder may revoke a valid proxy at any time prior to its use by filing
with the secretary of the appropriate Fund a written revocation or duly executed
proxy bearing a later date. In addition, any shareholder who attends the Meeting
in person may vote by ballot at the Meeting, thereby canceling any proxy
previously given. (Note that merely attending the Meeting without voting will
not cancel a previously given proxy.) The persons named in the accompanying
proxy will vote as directed by the proxy, but in the absence of voting
directions in any proxy that is
1
signed and returned, they intend to vote "FOR" each Proposal and may vote in
their discretion with respect to other matters not now known to the Board that
may be presented at the Meeting.
If you have questions regarding the Meeting agenda or the execution of the
proxy, call a representative toll-free at [[__________]].
GENERAL OVERVIEW
THE TRANSACTION
On April 10, 2007, Columbia entered into an asset purchase agreement with
MFS (the "Asset Purchase Agreement") to sell certain assets used in Columbia's
business of managing the Colonial Closed-End Funds to MFS (such transaction, the
"Sale"). Upon the closing of the Sale (the "Closing"), MFS will serve as
investment adviser to each Fund.
The Closing is subject to certain terms and conditions, including, among others:
(a) the approval by shareholders of each Colonial Closed-End Fund of a new
investment advisory agreement with MFS, as set forth in Proposal 1; (b) the
resignation of the current trustees of the Colonial Closed-End Funds and the
election by shareholders of the Colonial Closed-End Funds of such of the
nominees set forth in Proposal 3 as will create a new board of trustees for the
Colonial Closed-End Funds at least 75% of whom are not "interested persons" (as
such term is defined in the Investment Company Act of 1940, as amended (the
"1940 Act")) of the Colonial Closed-End Funds; (c) the obtaining of any
necessary regulatory approvals by Columbia and MFS; and (d) certain other
conditions. Although there can be no assurance that the Sale will close, if each
of the terms and conditions is satisfied or waived, Columbia and MFS anticipate
that the Closing will occur in the third quarter of 2007.
Proposals relating to Colonial Insured Municipal Fund are discussed in a
separate proxy statement.
POST-TRANSACTION STRUCTURE AND OPERATIONS
As noted above, upon the Closing, MFS will become the investment adviser to each
Colonial Closed-End Fund. MFS currently does not anticipate any significant
changes to the organization or structure of the Funds other than: (a) a new name
for each Fund, as set forth above in the section of the enclosed materials
captioned "Questions and Answers"; (b) the election of new trustees, as set
forth in Proposal 3, and the appointment of new officers; (c) a change in
portfolio management personnel; (d) a change in independent registered public
accounting firm from PricewaterhouseCoopers LLP to Ernst & Young LLP, which is
the independent registered public accounting firm for other registered
investment companies managed by MFS; (e) the approval of an amended and restated
declaration of trust for each Fund, as set forth in Proposal 2; (f) a new
administrative services agreement with MFS pursuant to which MFS will provide
administrative services to the Funds; (g) the negotiation of new agreements with
existing service providers; and (h) a change in the expense reimbursement
arrangements for Colonial California Insured Municipal Fund and Colonial
Intermediate High Income Fund.
NEW INVESTMENT ADVISORY AGREEMENTS (PROPOSAL 1)
Columbia currently serves as investment adviser to each Colonial Closed-End
Fund. Upon the Closing, MFS will become the investment adviser to each Colonial
Closed-End Fund pursuant to a new investment advisory agreement. The proposed
investment advisory agreement with MFS for each Fund has similar terms and the
same contractual fee rates as the corresponding investment advisory agreement
for such Fund with Columbia, although MFS has advised the Board that it intends
to change the expense reimbursement arrangements for Colonial California Insured
Municipal Fund and Colonial Intermediate High Income Fund, as described more
fully below in the section captioned "Expense Reimbursement Arrangements".
Although the contractual fee rates will not change, the calculation methodology
will change and may cause the amount of investment advisory fees payable by the
Funds to increase. If approved by shareholders, each new investment advisory
agreement with MFS will become effective, and each existing investment advisory
agreement with Columbia will terminate, upon the Closing. If some but not all
Colonial Closed-End Funds approve the new investment advisory agreements, then
the Closing may or may not occur with respect to the Funds, at the option of
MFS and Columbia.
2
NEW DECLARATIONS OF TRUST (PROPOSAL 2)
In connection with the Sale, MFS has proposed, and the Board has agreed, to
recommend to shareholders an amended and restated declaration of trust for each
Fund that will conform to the form of declaration of trust generally in effect
for the other registered closed-end investment companies managed by MFS. If the
Sale does not close for any reason, each Fund's existing agreement and
declaration of trust will remain in effect.
ELECTION OF TRUSTEES (PROPOSALS 3 AND 4)
In connection with the Sale, the Board has recommended that shareholders elect
new trustees to take office upon the Closing. The proposed nominees set forth in
Proposal 3 are trustees of other registered investment companies managed by MFS.
If the Sale closes, the existing trustees and officers have indicated that they
will resign effective upon the Closing.
If the Sale does not close for any reason, the current trustees of the Funds
have indicated that they would not resign. The Board has recommended that
shareholders re-elect those current trustees whose terms expire at the Meeting.
The current trustees (including the trustees proposed for re-election) have
consented to serve as currently constituted during the period between the
Meeting and the Closing, and to serve as currently constituted in the event the
Sale does not close.
SHAREHOLDER VOTING SUMMARY
The table on the following page summarizes the Proposals and the shareholders of
the Funds who may vote with respect thereto.
3
COLONIAL COLONIAL COLONIAL
CALIFORNIA HIGH COLONIAL INVESTMENT
INSURED INCOME COLONIAL INTERMEDIATE GRADE COLONIAL
MUNICIPAL MUNICIPAL INTERMARKET HIGH INCOME MUNICIPAL MUNICIPAL
FUND TRUST INCOME TRUST I FUND TRUST INCOME TRUST
---------- --------- -------------- ------------ ---------- ------------
PROPOSAL 1: TO VOTE ON A PROPOSED NEW INVESTMENT ADVISORY AGREEMENT WITH MFS
New Advisory Agreement for Colonial California
Insured Municipal Fund [X]
New Advisory Agreement for Colonial High
Income Municipal Trust [X]
New Advisory Agreement for Colonial
InterMarket Income Trust I [X]
New Advisory Agreement for Colonial
Intermediate High Income Fund [X]
New Advisory Agreement for Colonial Investment
Grade Municipal Trust [X]
New Advisory Agreement for Colonial Municipal
Income Trust [X]
PROPOSAL 2: TO VOTE ON AN AMENDED AND RESTATED DECLARATION OF TRUST
Approval of Amended and Restated Declaration
of Trust for Colonial California Insured
Municipal Fund(1) [X]
Approval of Amended and Restated Declaration
of Trust for Colonial High Income Municipal
Trust(1) [X]
Approval of Amended and Restated Declaration
of Trust for Colonial InterMarket Income
Trust I [X]
Approval of Amended and Restated Declaration
of Trust for Colonial Intermediate High
Income Fund [X]
Approval of Amended and Restated Declaration
of Trust for Colonial Investment Grade
Municipal Trust(1) [X]
Approval of Amended and Restated Declaration
of Trust for Colonial Municipal Income
Trust(1) [X]
PROPOSAL 3: TO ELECT TRUSTEES TO THE BOARD TO REPLACE ALL OF THE CURRENT TRUSTEES
Election of Trustees for Colonial California
Insured Municipal Fund(2) [X]
Election of Trustees for Colonial High Income
Municipal Trust(2) [X]
Election of Trustees for Colonial InterMarket
Income Trust I [X]
Election of Trustees for Colonial Intermediate
High Income Fund [X]
Election of Trustees for Colonial Investment
Grade Municipal Trust(2) [X]
Election of Trustees for Colonial Municipal
Income Trust(2) [X]
PROPOSAL 4: TO ELECT TRUSTEES TO THE BOARD TO REPLACE THOSE TRUSTEES WHOSE TERMS WILL EXPIRE THIS YEAR(2)
Election of Trustees for Colonial California
Insured Municipal Fund [X]
Election of Trustees for Colonial High Income
Municipal Trust [X]
Election of Trustees for Colonial InterMarket
Income Trust I [X]
Election of Trustees for Colonial Intermediate
High Income Fund [X]
Election of Trustees for Colonial Investment
Grade Municipal Trust [X]
Election of Trustees for Colonial Municipal
Income Trust [X]
----------
1. To be voted on (i) by the holders of common shares of beneficial interest
and the holders of municipal auction rate cumulative preferred shares
voting together as a single class and (ii) by the holders of municipal
auction rate cumulative preferred shares voting separately.
2. The nominees are to be elected (i) by the holders of common shares of
beneficial interest and the holders of municipal auction rate cumulative
preferred shares voting together as a single class and (ii) by the holders
of municipal auction rate cumulative preferred shares voting separately
4
VOTING RIGHTS
Shareholders of each Fund at the close of business on the Record Date will be
entitled to be present and to give voting instructions at the Meeting with
respect to their shares owned as of the Record Date. Shareholders of each Fund
will be entitled to cast one vote on each Proposal and on each other matter on
which they are entitled to vote at the Meeting for each share owned on the
Record Date. Shareholders of common shares of each Fund will also be entitled to
cast a proportionate fractional vote on each Proposal and on each other matter
on which they are entitled to vote at the Meeting for each fractional common
share owned on the Record Date. As of the Record Date, each Fund had the
following number of shares of the following classes outstanding, which in each
case equals the number of votes to which the shareholders of such class of such
Fund are entitled:
SHARES OUTSTANDING
FUND COMMON PREFERRED TOTAL
---- ------------------- ------------------- -------------------
Colonial California Insured Municipal Fund 2,780,771.1183 978 2,781,749.1183
Colonial High Income Municipal Trust 31,243,761.0000 4,800 31,248,561.0000
Colonial InterMarket Income Trust I 11,009,000.0000 N/A 11,009,000.0000
Colonial Intermediate High Income Fund 21,003,495.6760 N/A 21,003,495.6760
Colonial Investment Grade Municipal Trust 11,509,000.0000 2,400 11,511,400.0000
Colonial Municipal Income Trust 27,781,747.5973 3,600 27,785,347.5973
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"). For each of
Colonial California Insured Municipal Fund and Colonial Municipal Income Trust,
thirty percent (30%), and for each of Colonial High Income Municipal Trust,
Colonial Investment Grade Municipal Trust, Colonial Intermediate High Income
Fund and Colonial InterMarket Income Trust I, a majority, of the shares of the
Fund outstanding on the Record Date and entitled to vote, present at the Meeting
in person or represented by proxy, constitutes a quorum for the transaction of
business by the shareholders of the Fund.
If a quorum for any Fund is not present at the Meeting, or if a quorum is
present but sufficient votes to approve a Proposal on which that Fund's
shareholders are voting have not been received, or for any other reason deemed
appropriate by the persons named as proxies, the persons named as proxies may
propose one or more adjournments of the Meeting as to that Fund to permit
further solicitation of proxies. Any adjournment will require the affirmative
vote of a majority of the shares of that Fund present at the Meeting in person
or represented by proxy. If an adjournment is proposed with respect to one or
more Proposals for one or more Funds, the persons named as proxies will vote all
proxies that they are entitled to vote for each such Proposal FOR such
adjournment and will vote any proxies that they are required to vote against
each such Proposal AGAINST such adjournment. The Meeting also may be postponed
by the Board.
The Funds expect that, before the Meeting, broker-dealer firms holding shares of
the Funds in "street name" for their customers will request voting instructions
from their customers and beneficial owners. If those instructions are not
received by the date specified by the broker-dealer firm, the Funds understand
that the broker-dealers that are members of the New York Stock Exchange may not
be able to vote on certain items to be considered at the Meeting on behalf of
their customers and beneficial owners under the rules of the New York Stock
Exchange. 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. Because these shares will be
counted as present, but not as voting in favor of any Proposal, for purposes
other than adjournment, 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.
BENEFICIAL OWNERS
Appendix A to this proxy statement lists the persons that, to the knowledge of
the Funds, owned beneficially 5% or more of the outstanding shares of any class
of any Fund as of the Record Date. A shareholder who owns beneficially, directly
or indirectly, more than 25% of any Fund's voting securities may be deemed a
"control person" (as defined in the 1940 Act) of such Fund. The trustees and
officers of each Fund, in the aggregate, owned less than
5
1% of each Fund's outstanding shares as of the Record Date. The Funds are aware
of no arrangements other than those disclosed herein the operation of which at a
subsequent date may result in a change in control of any Fund.
EXPENSES
The expenses incurred in connection with the solicitation of proxies for the
Meeting, including preparation, filing, printing, mailing and solicitation
expenses, legal fees, out-of-pocket expenses and expenses of any proxy
solicitation firm, will be paid by Columbia pursuant to the terms of the Asset
Purchase Agreement, and not by the Funds.
SHAREHOLDER REPORTS
EACH FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF ITS MOST RECENT ANNUAL REPORT
AND, IF APPLICABLE, ITS MOST RECENT SEMIANNUAL REPORT SUBSEQUENT TO SUCH ANNUAL
REPORT, TO ITS SHAREHOLDERS ON REQUEST. REQUESTS FOR A REPORT SHOULD BE DIRECTED
TO THE RELEVANT FUND BY MAIL TO ONE FINANCIAL CENTER, BOSTON, MASSACHUSETTS
02111-2621, BY CALLING 1-800-730-6001 OR BY VISITING
WWW.COLUMBIAMANAGEMENT.COM/COLONIALFUNDS/HOME.HTM.
6
PROPOSAL 1
TO APPROVE A NEW INVESTMENT ADVISORY AGREEMENT WITH MFS
BACKGROUND
As discussed above, Columbia and MFS have entered into an Asset Purchase
Agreement pursuant to which Columbia will sell certain assets used in its
business of managing the Colonial Closed-End Funds to MFS. Accordingly,
shareholders of each Fund are being asked to approve a new investment advisory
agreement (a "New Advisory Agreement") between MFS and that Fund. If this
Proposal 1 is approved by shareholders of all Colonial Closed-End Funds, and if
certain other conditions to the Closing are satisfied or waived, it is
anticipated that the Closing will occur in [[July]] 2007. If this Proposal 1 is
approved by some, but not all, Colonial Closed-End Funds, or other closing
conditions are not satisfied, then the Closing may or may not occur with respect
to a Fund, at the option of MFS and/or Columbia. Upon the Closing, the
investment advisory agreements currently in place between Columbia and each Fund
(each a "Current Advisory Agreement") will terminate, and the relevant New
Advisory Agreement between MFS and that Fund will take effect.
At a meeting held on April 10, 2007, the Board, including the trustees who are
not "interested persons" (as defined in Section 2(a)(19) of the 1940 Act) of the
Funds (collectively, the "Independent Trustees"), approved each New Advisory
Agreement by unanimous vote, subject to shareholder approval. A description of
the New Advisory Agreements is provided below under the caption "The New
Advisory Agreements." In addition, a summary of the considerations of the Board
with respect to the New Advisory Agreements is provided below under the caption
"Board Considerations."
THE CURRENT ADVISORY AGREEMENTS
As stated above, each Fund currently is party to an investment advisory
agreement with Columbia which was continued most recently at the Board's October
2006 meeting. The table below sets forth the date of each Current Advisory
Agreement, the date on which it was last submitted to a vote of shareholders of
the applicable Fund and the purpose of such submission.
FUND DATE OF AGREEMENT DATE OF SHAREHOLDER VOTE PURPOSE
---- ----------------- ------------------------ --------------------
Colonial California Insured Municipal Fund November 1, 2001 September 26, 2001 Change of control of adviser
Colonial High Income Municipal Trust November 1, 2001 September 26, 2001 Change of control of adviser
Colonial InterMarket Income Trust I November 1, 2001 September 26, 2001 Change of control of adviser
Colonial Intermediate High Income Fund November 1, 2001 September 26, 2001 Change of control of adviser
Colonial Investment Grade Municipal Trust November 1, 2001 September 26, 2001 Change of control of adviser
Colonial Municipal Income Trust November 1, 2001 September 26, 2001 Change of control of adviser
The table below sets forth the aggregate amount of the investment advisory fees
paid by each Fund to Columbia, the aggregate amount of any other material
payments by each Fund to Columbia and/or its affiliates and the purpose of any
such payments for the fiscal year ended November 30, 2006.
INVESTMENT OTHER MATERIAL PURPOSE OF
FUND ADVISORY FEES PAYMENTS OTHER PAYMENTS
---- ------------- -------------- --------------------------
Colonial California Insured Municipal Fund $ 427,705 $ 85,499 Pricing & bookkeeping fees
Colonial High Income Municipal Trust $2,437,948 $ 94,187 Pricing & bookkeeping fees
Colonial InterMarket Income Trust I $ 749,269 $111,071 Pricing & bookkeeping fees
Colonial Intermediate High Income Fund $ 643,520 $ 93,120 Pricing & bookkeeping fees
Colonial Investment Grade Municipal Trust $1,230,988 $ 85,749 Pricing & bookkeeping fees
Colonial Municipal Income Trust $1,639,559 $ 85,740 Pricing & bookkeeping fees
THE NEW ADVISORY AGREEMENTS
Under the New Advisory Agreement for each Fund, MFS will, among other things:
(i) continuously furnish an investment program for the Fund; (ii) exercise
voting rights, rights to consent to corporate actions and other similar rights
with regard to the Fund's portfolio securities; (iii) place orders for the
purchase, sale and exchange of securities for the accounts of the Fund; and (iv)
enter into subadvisory contracts, if appropriate.
7
Under the New Advisory Agreement for each Fund, MFS will furnish at its own
expense investment advisory and administrative services, office space, certain
necessary equipment and clerical personnel, investment advisory facilities and
executive and supervisory personnel. The Fund will be responsible for all
expenses not specifically borne by MFS under the New Advisory Agreement,
including: expenses relating to the issuance of shares of the Fund; compensation
of trustees not affiliated with MFS; Investment Company Institute membership
dues allocable to the Fund; governmental fees, interest charges and taxes; fees
and expenses of independent auditors, legal counsel, and transfer, registrar or
dividend disbursing agents of the Fund; expenses of repurchasing and redeeming
shares and servicing shareholder accounts; expenses of preparing, printing and
mailing stock certificates, shareholder reports, notices, proxy statements, and
reports to government officers and commissions; brokerage and other execution,
recording and settlement expenses; insurance premiums; custodian fees and
expenses; expenses of calculating the net asset value of shares of the Fund;
organizational and start up costs; non-recurring and extraordinary expenses,
including those relating to actions involving the Fund and indemnification of
the Fund's trustees and officers with respect thereto; and expenses relating to
the issuance, registration and qualification of shares of the Fund and,
generally, the preparation, printing and mailing of prospectuses for such
purposes.
The form of the New Advisory Agreement for each Fund is attached to this proxy
statement in Appendix B, and the description set forth in this proxy statement
of the form of the New Advisory Agreement is qualified in its entirety by
reference to Appendix B.
Under each New Advisory Agreement, MFS will be entitled to compensation at the
same contractual rates as under each corresponding Current Advisory Agreement.
Each New Advisory Agreement provides that compensation is calculated as a
percentage of average daily net assets, rather than as a percentage of average
weekly net assets, as in the Current Advisory Agreements. This change in
calculation methodology is meant to conform the New Advisory Agreements to
advisory agreements for other funds managed by MFS. This change may cause the
amount of investment advisory fees payable by the Funds to increase. Except as
noted below with respect to the Colonial Intermediate High Income Fund, MFS also
has advised the Board that it will continue the management fee waiver
arrangements currently in place for the Funds. The table below sets forth for
each Fund the annual contractual investment advisory fee rate as a percentage of
average weekly net assets(1) and the annual rate of such fee after Columbia's
waiver of investment advisory fees, if any, for the fiscal year ended
November 30, 2006:
ADVISORY FEE
FUND CONTRACTUAL ADVISORY FEE (NET OF WAIVER)
---- ------------------------ ---------------
Colonial California Insured Municipal Fund 0.65% 0.45%(2)
Colonial High Income Municipal Trust 0.75 0.75
Colonial InterMarket Income Trust I 0.75 0.75
Colonial Intermediate High Income Fund 0.65(3) 0.65(3)
Colonial Investment Grade Municipal Trust 0.65 0.63(4)
Colonial Municipal Income Trust 0.65 0.65
----------
1. Average weekly net assets include assets attributable to municipal auction
rate cumulative preferred shares for Funds that have such shares
outstanding.
2. Columbia contractually agreed to waive a portion of its investment advisory
fee for the years ending November 30, 2006, 2007, 2008 and 2009 so that
Colonial California Insured Municipal Fund's investment advisory fee will
not exceed the annual rates of 0.45%, 0.50%, 0.55% and 0.60%, respectively.
MFS has advised the Board that it will continue this management fee waiver
arrangement.
3. In addition to the investment advisory fee set forth in the table, Colonial
Intermediate High Income Fund pays Columbia a monthly fee of 20% of its
monthly "leverage income" (as defined in its Current Advisory Agreement).
Columbia has voluntarily agreed to waive that fee. That waiver may be
terminated by Columbia at any time. MFS has advised the Board that it does
not intend to continue that waiver; however, MFS also has advised the Board
that it intends to institute a total operating expense cap, as discussed
more fully below.
4. Columbia has voluntarily agreed to reduce the investment advisory fee
payable by Colonial Investment Grade Municipal Trust by 0.02% of average
weekly net assets. That waiver may be terminated by Columbia at any time.
MFS has advised the Board that it will continue this management fee waiver
arrangement.
The table below sets forth the total advisory fees (net of waiver, if any) paid
by each Fund to Columbia pursuant to its Current Advisory Agreement during the
fiscal year ended November 30, 2006, the total advisory fees (net of waiver, if
any) that would have been paid by each Fund to MFS pursuant to the corresponding
New Advisory Agreement, and the percentage difference between the two.
8
TOTAL INVESTMENT ADVISORY FEES:
----------------------------------------
ACTUALLY PAID UNDER ESTIMATED PAYABLE
CURRENT ADVISORY UNDER NEW ADVISORY
FUND AGREEMENT AGREEMENT PERCENTAGE CHANGE
---- ------------------- ------------------ -----------------
Colonial California Insured Municipal Fund $ 427,705 $ 427,705 0%
Colonial High Income Municipal Trust $2,437,948 $2,437,948 0%
Colonial InterMarket Income Trust I $ 749,269 $ 749,269 0%
Colonial Intermediate High Income Fund $ 643,520 $ 799,518(1) 24%(1)
Colonial Investment Grade Municipal Trust $1,230,988 $1,230,988 0%
Colonial Municipal Income Trust $1,639,559 $1,639,559 0%
----------
1. The increase results from the elimination of the waiver of fees based on
"leverage income," discussed above. Although the investment advisory fee
will increase, the net operating expenses will not increase as a result of
an operating expense cap, described more fully below.
Each New Advisory Agreement will continue in effect for a period of two years
from its effective date, on which date it will terminate unless its continuance
is "specifically approved at least annually" (i) by the vote of a majority of
the Independent Trustees of the relevant Fund at a meeting specifically called
for the purpose of voting on such approval, and (ii) by the Board or by the
"vote of a majority of the outstanding voting securities" of the relevant Fund.
Each New Advisory Agreement generally provides that it may be terminated at any
time, without penalty, by the Board or by the "vote of a majority of the
outstanding voting securities" of the relevant Fund, or by MFS, in each case on
not more than 60 days' nor less than 30 days' written notice to the other party.
Each New Advisory Agreement also shall automatically terminate in the event of
its "assignment". Each New Advisory Agreement may be amended with respect to the
relevant Fund only if such amendment is in writing signed by or on behalf of the
relevant Fund and MFS and is approved by the "vote of a majority of the
outstanding voting securities" of the relevant Fund (if such shareholder
approval is required by the 1940 Act).
As used herein, the terms "specifically approved at least annually," "vote of a
majority of the outstanding securities" and "assignment" are used with the
meanings thereof contemplated by the 1940 Act.
Like each Current Advisory Agreement with respect to Columbia, each New Advisory
Agreement provides that in the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of duties and obligations on the part of MFS,
MFS shall not be liable for any error of judgment or mistake of law, for any
loss arising out of any investment or for any act or omission in the execution
and management of the relevant Fund.
EXPENSE REIMBURSEMENT ARRANGEMENTS
Columbia has agreed to reimburse Colonial California Insured Municipal Fund if
its operating expenses (excluding advisory fees, brokerage commissions,
interest, taxes and extraordinary expenses) exceed 0.20% annually of its average
weekly net assets, including assets attributable to municipal auction rate
cumulative preferred shares. If the Sale closes, MFS has advised the Board that
it will terminate that expense reimbursement arrangement and agree to reimburse
Colonial California Insured Municipal Fund if its total operating expenses
(excluding taxes, brokerage and transaction costs, currency conversion costs,
extraordinary expenses, expenses associated with the Fund's investing activities
and preferred shares remarketing fees) exceed 0.70% and 0.75% annually of its
average daily net assets, including assets attributable to municipal auction
rate cumulative preferred shares, for the years ending November 30, 2007 and
November 30, 2008, respectively. If the sale closes, MFS also has advised the
Board that it will agree to reimburse Colonial Intermediate High Income Fund if
its total operating expenses (excluding taxes, brokerage and transaction costs,
currency conversion costs, extraordinary expenses, expenses associated with the
Fund's investing activities and preferred shares remarketing fees) exceed 1.00%
annually of its average daily net assets. The current and estimated expense
ratios for Colonial California Insured Municipal Fund and Colonial Intermediate
High Income Fund are set forth in the tables below under the caption "New
Administrative Services Agreement."
NEW ADMINISTRATIVE SERVICES AGREEMENTS
If shareholders approve this Proposal 1 and the Closing occurs, each Fund also
will enter into a new administrative services agreement (the "Administrative
Services Agreement") with MFS. Pursuant to the Administrative Services
Agreement, MFS will provide administrative services to the Funds, including but
not limited to the preparation of financial information and related reports and
the facilitation of audits thereof; the negotiation of contracts with service
providers regarding the computation of net asset value, offering price,
dividends, yields and other values,
9
and the oversight thereof; the administration and oversight of portfolio
securities valuations; the arrangement of organizational and registration
matters; the preparation and filing of regulatory filings, reports and related
materials; the administration and maintenance of certain compliance polices,
procedures and programs, and the monitoring thereof; the administration of
shareholder meetings; the provision of legal guidance; the preparation of
materials for and the facilitation of board and committee meetings; the
printing, production and delivery of shareholder communications and other
documents; and various oversight functions. As compensation for the provisions
of such administrative services, each Fund will pay to MFS a fee calculated as
follows: (i) a fixed annual fee of $17,500 plus (ii) an annual fee calculated as
a percentage of the average daily net assets of the Fund, as follows: 0.0000% of
such assets up to $50,000,000, plus 0.0175% of such assets in excess of
$50,000,000 but less than or equal to $750,000,000, plus 0.0170% of such assets
in excess of $750,000,000 but less than or equal to $1,500,000,000 plus 0.0165%
of such assets in excess of $1,500,000,000 but less than or equal to
$2,500,000,000, plus 0.0120% of such assets in excess of $2,500,000,000 but less
than or equal to $4,000,000,000, plus 0.0000% of such assets in excess of
$4,000,000,000. Such fees are subject to a ceiling and a floor each year
calculated with respect to fees payable to MFS by all funds for which MFS
provides services pursuant to the Administrative Services Agreement (which
includes funds other than the Funds).
The tables below set forth the Funds' annual expense ratios for the year ended
November 30, 2006 (adjusted to reflect current fee waiver arrangements) and the
estimated pro forma annual expense ratios for the year ending November 30, 2007,
assuming the approval by shareholders of this Proposal 1 and assuming that the
Closing occurred at the beginning of such period.
Colonial California Insured Municipal Fund
EXISTING ESTIMATED
-------- ---------
Management Fee 0.65% 0.65%
Administrative Fee ____ 0.03%
Other Expenses 0.37% 0.16%(1)
----- -----
Total Operating Expenses 1.02% 0.84%
Less Waiver/Reimbursement (0.15)%(2) (0.15)%(3)
----- -----
Net Operating Expenses 0.87% 0.69%
----------
1. Estimated other expenses shown are based on contractual rates for services
provided to other funds advised by MFS. Actual other expenses may differ
from estimated other expenses.
2. Columbia agreed contractually to waive the management fee payable by the
Fund so that such management fee would not exceed 0.45%, 0.50%, 0.55% and
0.60% annually of average weekly net assets, including assets attributable
to municipal auction rate cumulative preferred shares, for the years ending
November 30, 2006, November 30, 2007, November 30, 2008 and November 30,
2009, respectively. The waiver shown in the table is the waiver applicable
for the year ending November 30, 2007. Columbia also agreed voluntarily to
reimburse the Fund for certain expenses so that total operating expenses
(exclusive of management fees, brokerage commissions, interest, taxes and
extraordinary expenses, if any) would not exceed 0.20% annually of average
weekly net assets, including assets applicable to preferred shares. If this
reimbursement arrangement were reflected in the table, net operating
expenses would be 0.70%. This reimbursement arrangement may be terminated
by Columbia at any time.
3. MFS has agreed contractually to waive the management fee payable by the
Fund so that such management fee does not exceed 0.50%, 0.55% and 0.60% of
average daily net assets, including assets attributable to municipal
auction rate cumulative preferred shares, for the years ending November 30,
2007, November 30, 2008 and November 30, 2009, respectively. MFS also has
agreed voluntarily to reimburse the Fund for certain expenses so that total
operating expenses (excluding taxes, brokerage and transaction costs,
currency conversion costs, extraordinary expenses, expenses associated with
the Fund's investing activities and preferred shares remarketing fees)
would not exceed 0.70% and 0.75% annually of average daily net assets,
including assets attributable to municipal auction rate cumulative
preferred shares, for the years ending November 30, 2007 and November 30,
2008, respectively. MFS may terminate this reimbursement arrangement only
with the approval of the Fund's board.
The example expenses below show the expenses a shareholder would bear, on both a
current and an estimated basis, given an investment in the Fund, assuming that a
shareholders has a $1,000 investment, that the Fund returns 5% each year, that
the operating expenses set forth above remain the same throughout the indicated
periods and that all dividends and distributions are reinvested at net asset
value. The example expenses should not be considered a representation of future
expenses of the Fund; actual expenses may be greater or lesser than those shown.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CURRENT $[[_____]] $[[_____]] $[[_____]] $[[_____]]
ESTIMATED $[[_____]] $[[_____]] $[[_____]] $[[_____]]
Colonial High Income Municipal Trust
EXISTING ESTIMATED
-------- ---------
Management Fee 0.75% 0.75%
Administrative Fee ____ 0.02%
Other Expenses 0.13% 0.09%(1)
---- ----
Total Operating Expenses 0.88% 0.86%
Less Waiver/Reimbursement ____ ____
---- ----
Net Operating Expenses 0.88% 0.86%
----------
1. Estimated other expenses shown are based on contractual rates for services
provided to other funds advised by MFS. Actual other expenses may differ
from estimated other expenses.
The example expenses below show the expenses a shareholder would bear, on both a
current and an estimated basis, given an investment in the Fund, assuming that a
shareholders has a $1,000 investment, that the Fund returns 5% each year, that
the operating expenses set forth above remain the same throughout the indicated
periods and that all dividends and distributions are reinvested at net asset
value. The example expenses should not be considered a representation of future
expenses of the Fund; actual expenses may be greater or lesser than those shown.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CURRENT $[[_____]] $[[_____]] $[[_____]] $[[_____]]
ESTIMATED $[[_____]] $[[_____]] $[[_____]] $[[_____]]
10
Colonial InterMarket Income Trust I
EXISTING ESTIMATED
-------- ---------
Management Fee 0.75% 0.75%
Administrative Fee ____ 0.03%
Other Expenses 0.36% 0.15%(1)
---- ----
Total Operating Expenses 1.11% 0.93%
Less Waiver/Reimbursement ____ ____
---- ----
Net Operating Expenses 1.11% 0.93%
----------
1. Estimated other expenses shown are based on contractual rates for services
provided to other funds advised by MFS. Actual other expenses may differ
from estimated other expenses.
The example expenses below show the expenses a shareholder would bear, on both a
current and an estimated basis, given an investment in the Fund, assuming that a
shareholders has a $1,000 investment, that the Fund returns 5% each year, that
the operating expenses set forth above remain the same throughout the indicated
periods and that all dividends and distributions are reinvested at net asset
value. The example expenses should not be considered a representation of future
expenses of the Fund; actual expenses may be greater or lesser than those shown.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CURRENT $[[_____]] $[[_____]] $[[_____]] $[[_____]]
ESTIMATED $[[_____]] $[[_____]] $[[_____]] $[[_____]]
Colonial Intermediate High Income Fund
EXISTING ESTIMATED
-------- ---------
Management Fee 0.86% 0.86%
Administrative Fee ____ 0.03%
Other Expenses 0.390% 0.17%(1)
----- -----
Total Operating Expenses 1.25% 1.06%
Less Waiver/Reimbursement ____(2) ____(3)
----- -----
Net Operating Expenses 1.25% 1.06%
----------
1. Estimated other expenses shown are based on contractual rates for services
provided to other funds advised by MFS. Actual other expenses may differ
from estimated other expenses.
2. Pursuant to the terms of its investment advisory agreement with Columbia,
the Fund pays a management fee to Columbia equal to 0.65% of its average
weekly net assets, plus 20% of its monthly "leverage income" (as defined in
its Current Advisory Agreement). Columbia agreed voluntarily to waive the
portion of its management fee attributable to "leverage income." If this
waiver were reflected in the table above, net operating expenses would be
1.04%. This waiver may be terminated by Columbia at any time.
3. MFS has agreed voluntarily to reimburse the Fund for certain expenses so
that total operating expenses (excluding taxes, brokerage and transaction
costs, currency conversion costs, extraordinary expenses, expenses
associated with the Fund's investing activities and preferred shares
remarketing fees) would not exceed 1.00% annually of average daily net
assets. If this reimbursement arrangement were reflected in the table
above, net operating expenses would be 1.00%. This reimbursement
arrangement may be terminated by MFS only with the approval of the Fund's
board.
The example expenses below show the expenses a shareholder would bear, on both a
current and an estimated basis, given an investment in the Fund, assuming that a
shareholders has a $1,000 investment, that the Fund returns 5% each year, that
the operating expenses set forth above remain the same throughout the indicated
periods and that all dividends and distributions are reinvested at net asset
value. The example expenses should not be considered a representation of future
expenses of the Fund; actual expenses may be greater or lesser than those shown.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CURRENT $[[_____]] $[[_____]] $[[_____]] $[[_____]]
ESTIMATED $[[_____]] $[[_____]] $[[_____]] $[[_____]]
Colonial Investment Grade Municipal Trust
EXISTING ESTIMATED
-------- ---------
Management Fee 0.65% 0.65%
Administrative Fee ____ 0.02%
Other Expenses 0.18% 0.10%(1)
---- ----
Total Operating Expenses 0.83% 0.77%
Less Waiver/Reimbursement ____(2) ____(3)
---- ----
Net Operating Expenses 0.83% 0.77%
----------
1. Estimated other expenses shown are based on contractual rates for services
provided to other funds advised by MFS. Actual other expenses may differ
from estimated other expenses.
2. Columbia agreed voluntarily to waive 0.02% of the management fee payable by
the Fund. If this waiver were reflected in the table, net operating
expenses would be 0.81%. This waiver may be terminated by Columbia at any
time.
3. MFS has agreed voluntarily to waive 0.02% of the management fee payable by
the Fund. If this waiver were reflected in the table, net operating
expenses would be 0.75%. This waiver may be terminated by MFS only with
the approval of the Fund's board.
The example expenses below show the expenses a shareholder would bear, on both a
current and an estimated basis, given an investment in the Fund, assuming that a
shareholders has a $1,000 investment, that the Fund returns 5% each year, that
the operating expenses set forth above remain the same throughout the indicated
periods and that all dividends and distributions are reinvested at net asset
value. The example expenses should not be considered a representation of future
expenses of the Fund; actual expenses may be greater or lesser than those shown.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CURRENT $[[_____]] $[[_____]] $[[_____]] $[[_____]]
ESTIMATED $[[_____]] $[[_____]] $[[_____]] $[[_____]]
Colonial Municipal Income Trust
EXISTING ESTIMATED
-------- ---------
Management Fee 0.65% 0.65%
Administrative Fee ____ 0.02%
Other Expenses 0.15% 0.11%(1)
---- ----
Total Operating Expenses 0.80% 0.78%
Less Waiver/Reimbursement ____ ____
---- ----
Net Operating Expenses 0.80% 0.78%
----------
1. Estimated other expenses shown are based on contractual rates for services
provided to other funds advised by MFS. Actual other expenses may differ
from estimated other expenses.
The example expenses below show the expenses a shareholder would bear, on both a
current and an estimated basis, given an investment in the Fund, assuming that a
shareholders has a $1,000 investment, that the Fund returns 5% each year, that
the operating expenses set forth above remain the same throughout the indicated
periods and that all dividends and distributions are reinvested at net asset
value. The example expenses should not be considered a representation of future
expenses of the Fund; actual expenses may be greater or lesser than those shown.
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
CURRENT $[[_____]] $[[_____]] $[[_____]] $[[_____]]
ESTIMATED $[[_____]] $[[_____]] $[[_____]] $[[_____]]
11
COVENANTS REGARDING CERTAIN LEGAL REQUIREMENTS UNDER THE 1940 ACT
MFS has made certain covenants regarding compliance with Section 15(f) of the
1940 Act, which provides in pertinent part that an investment adviser or any of
its affiliated persons may receive any amount or benefit in connection with
certain transactions, such as the Sale, involving an assignment of an investment
advisory agreement as long as two conditions are satisfied.
The first condition requires that no "unfair burden" may be imposed on the
investment company as a result of such transactions, or as a result of any
express or implied terms, conditions or understandings applicable to such
transactions. The term "unfair burden," as defined in the 1940 Act, includes any
arrangement during the two-year period after the change in control whereby the
investment adviser (or predecessor or successor investment adviser), or any
interested person of any such investment adviser, 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 person in connection with the purchase or sale of
securities or other property to, from or on behalf of such investment company
(other than bona fide ordinary fees for principal underwriting services). No
such compensation arrangements are contemplated in the Sale. MFS has agreed with
Columbia to use its reasonable best efforts to ensure that neither the Sale nor
any terms, conditions or understandings applicable thereto will cause the
imposition of an "unfair burden" on the Funds.
The second condition requires that, during the three-year period immediately
following the closing of such transactions, at least 75% of the investment
company's board of trustees must not be "interested persons" (as defined in
Section 2(a)(19) of the 1940 Act) of the investment adviser or predecessor
investment adviser. The Board currently satisfies, the Nominees (as hereinafter
defined), if elected, would satisfy, and MFS has agreed with Columbia to use its
reasonable best efforts to ensure continued satisfaction of, such 75%
requirement.
INFORMATION REGARDING MFS
MFS is registered as an investment adviser under the Investment Advisers Act of
1940, as amended. MFS offers a full spectrum of investment products to domestic
and international retail, business, and institutional investors. As of December
31, 2006, MFS had approximately $187 billion in assets under management. MFS
currently manages six closed-end funds. MFS' principal office address is 500
Boylston Street, Boston, MA 02116.
MFS currently manages one closed-end fund with investment objectives similar to
the Funds. The table below sets forth, for such fund, its net assets as of
October 31, 2006, its currently effective annual rate of management fee and any
currently effective management fee waivers.
FUND NAME NET ASSETS MANAGEMENT FEE MANAGEMENT FEE WAIVER
--------- ---------- -------------- ---------------------
MFS Municipal Income Trust $323,098,699 0.40% of average daily net None
assets plus 6.32% of gross
income
MFS's principal executive officers and directors and the principal occupation of
each are shown below. The address of each such principal executive officer and
director is c/o MFS Investment Management, 500 Boylston Street, Boston, MA
02116.
NAME PRINCIPAL OCCUPATION
---- --------------------
Donald Alexander Stewart Director, MFS; Chief Executive Officer, Sun Life
Financial, Inc.
Martin Eric Beaulieu Executive Vice President, MFS
Robert James Manning Director, President, Chief Executive Officer and
Chief Investment Officer, MFS
Robert Charles Pozen Director and Chairman, MFS
Maria Frances Dwyer Executive Vice President, Chief Regulatory Officer
and Chief Compliance Officer, MFS
Paul Thomas Kirwan Executive Vice President and Chief Financial Officer,
MFS
Robin Ann Stelmach Executive Vice President and Chief Operations
Officer, MFS
Thomas A. Bogart Director, MFS; Executive Vice President and Chief
Legal Officer, Sun Life Financial, Inc.
Mark Neil Polebaum Executive Vice President, General Counsel and
Secretary, MFS
MFS' Parents are shown below, along with their bases of control of MFS. For
purposes of this proxy statement, the term "Parent" has the meaning ascribed to
it in Item 22(a)(1)(ix) of Rule 14a-101 under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
12
PARENT BASIS OF CONTROL IMMEDIATE PARENT BASIS OF CONTROL
------ ---------------- ---------------- ----------------
Sun Life Financial Inc. Shareholder Sun Life Financial Corp. Shareholder
Sun Life Financial Corp. Indirect Owner Sun Life Assurance Company Shareholder
of Canada - U.S.
Operations Holdings, Inc.
Sun Life Assurance Company of Indirect Owner Sun Life Financial (U.S.) Shareholder
Canada - U.S. Operations Holdings, Inc.
Holdings, Inc.
Sun Life Financial (U.S.) Indirect Owner Sun Life Financial (U.S.) Shareholder
Holdings, Inc. Investments LLC
Sun Life Financial (U.S.) Indirect Owner Sun Life of Canada (U.S.) Holder of Membership
Investments LLC Financial Services Interests
Holdings, Inc.
Sun Life of Canada (U.S.) Indirect Owner N/A N/A
Financial Services Holdings,
Inc.
MFS has advised the Board that no person not listed in the table above holds 10%
or more of the securities of MFS.
[[No current officer or trustee of any Fund is an officer, employee, director or
shareholder of MFS. No current officer or trustee of any Fund has any material
interest in MFS. No current trustee of any Fund has any material interest in any
transaction with MFS or any Parent of MFS.]]
MFS has advised the Board that it has no financial condition that could impair
its ability to fulfill its obligations under the New Advisory Agreements.
Please see the section captioned "Arrangements for Selection as Nominee" in
Appendix E hereto for information regarding any arrangements or understandings
made in connection with the proposed New Advisory Agreements with respect to the
composition of the Board after the Closing.
BOARD CONSIDERATIONS
The Advisory Fees and Expenses Committee of the Board reviewed each of the New
Advisory Agreements and determined to recommend that the full Board approve
those agreements.
The Board received and reviewed all materials that they, their legal counsel or
MFS, the Funds' proposed investment adviser, believed to be reasonably necessary
for the Board to evaluate and to determine whether to approve the New Advisory
Agreements. Those materials included, among other items, (i) information on the
investment performance of funds advised by MFS relative to the performance of
peer groups and performance benchmarks, (ii) information on each Fund's
anticipated investment advisory fees and other expenses, including, for certain
of the Funds, information about anticipated expense caps and fee waivers, (iii)
information about the anticipated profitability of the New Advisory Agreements
to MFS, and potential "fall-out" or ancillary benefits that MFS and its
affiliates may receive as a result of their relationships with the Funds and
(iv) additional information provided by MFS in response to a request of
independent legal counsel to the Independent Trustees. The Board also considered
other information such as (v) MFS' financial condition, (vi) each Fund's
investment objective and strategies and the size, education and experience of
the portfolio management staff MFS proposes to manage the Funds, (vii) the
anticipated use by MFS of "soft" commission dollars to pay for research products
and services, and (viii) MFS' resources to be devoted to the Funds' investment
policies and restrictions, and MFS' policies on personal securities transactions
and other compliance policies. The Board had the opportunity to ask questions
of, and to request additional materials from, MFS and to consult in executive
session with independent legal counsel to the Independent Trustees.
In considering whether to approve the New Advisory Agreements, the Board,
including the Independent Trustees, did not identify any single factor as
determinative, and each trustee weighed various factors as he or she deemed
appropriate. The Board considered the following matters in connection with their
approval of the New Advisory Agreements:
13
The nature, extent and quality of the services to be provided to the Funds
under the New Advisory Agreements. The Board considered the nature, extent and
quality of the services to be provided by MFS and its affiliates to the Funds
and the resources to be dedicated to the Funds by MFS and its affiliates. Among
other things, the Board considered (i) MFS's ability, including its resources,
compensation programs for personnel involved in portfolio management, reputation
and other attributes, to attract and retain highly qualified research,
investment advisory and supervisory investment professionals; (ii) the portfolio
management services to be provided by those investment professionals; and (iii)
how those services compared to the services provided under the Current Advisory
Agreements. After reviewing the above and related factors, the Board concluded,
within the context of its overall conclusions regarding the New Advisory
Agreements, that the nature, extent and quality of services provided supported
the approval of each of the New Advisory Agreements.
Investment performance of funds advised by MFS. The Board reviewed information
about the performance of various funds advised by MFS over various time periods,
including information prepared by MFS that compared the performance of each Fund
to the performance of peer groups and performance benchmarks. The Board also
considered MFS' reputation generally and MFS' commitment to the business of
managing closed-end funds, including its experience managing the six closed-end
funds currently managed by MFS. After reviewing the above and related factors,
the Board concluded, within the context of its overall conclusions regarding
each New Advisory Agreement, that the performance of MFS was sufficient, in
light of other considerations, to warrant the approval of each of the New
Advisory Agreements.
The costs of the services to be provided and the profits to be realized by MFS
and its affiliates from their relationships with the Funds. The Board considered
the fees to be charged to the Funds for investment advisory services as well as
the anticipated total expense levels of the Funds. That information included
information about the investment advisory fees charged by MFS to comparable
accounts. In evaluating each Fund's anticipated investment advisory fees, the
Board took into account the fact that the investment advisory fees included in
the New Advisory Agreements were the same as those included in the Current
Advisory Agreements. The Board also took into account the demands and complexity
of the investment management of the Fund. The Board considered the expense
reductions that MFS anticipated would result from the shift to the group of
service providers currently employed for transfer agency, fund accounting and
custody services by funds advised by MFS.
The Board also considered the compensation to be received directly or indirectly
by MFS and its affiliates from their relationships with the Funds. The Board
reviewed information provided by MFS regarding the estimated profitability to
MFS and its affiliates of their relationships with the Funds, and information
about the allocation of expenses used to calculate profitability. When reviewing
profitability, the Board also considered court cases in which investment adviser
profitability was an issue in whole or in part, the performance of funds advised
by MFS, the anticipated expense levels of the Funds and the extent to which MFS
would implement expense caps for the Funds. After reviewing the foregoing and
related factors, the Board concluded, within the context of its overall
conclusions regarding each of the New Advisory Agreements, that the investment
advisory fees to be charged to each Fund were fair and reasonable, and that the
anticipated costs of the investment advisory services generally, and the related
anticipated profitability to MFS and its affiliates of their relationships with
the Funds, supported the approval of the New Advisory Agreements.
Economies of Scale. The Board considered the potential existence of economies of
scale in the provision of services by MFS to each Fund and whether those
economies would be shared with the Fund through breakpoints in the investment
advisory fees or other means, such as expense caps. The Board noted that several
of the Funds benefited from fee waivers, expense caps or both prior to the Sale,
and that those Funds were expected to continue to so benefit. In considering the
issues above, the Board also took note of the expected profitability to MFS and
its affiliates of their proposed relationships with the Funds, as discussed
above. After reviewing the above and related factors, the Board concluded,
within the context of its overall conclusions regarding each of the New Advisory
Agreements, that the extent to which economies of scale were expected to be
shared with the Funds supported the approval of each of the New Advisory
Agreements.
Other Factors. The Board also considered other factors, which included but were
not limited to the following:
14
- the compliance programs of MFS and the compliance-related resources
that MFS and its affiliates would provide to the Funds.
- the nature, quality, estimated cost and extent of administrative and
shareholder services to be performed by MFS and its affiliates, both
under the New Advisory Agreements and under separate agreements for
the provision of administrative services.
- so-called "fall-out benefits" to MFS, such as the engagement of its
affiliates to provide services to the Funds, as well as possible
conflicts of interest associated with those fall-out and other
benefits.
Based on its evaluation of all factors that it deemed to be material, including
those factors described above, and assisted by the advice of independent
counsel, the Board, including all of the Independent Trustees, approved each of
the New Advisory Agreements.
REQUIRED VOTE AND RECOMMENDATION
Approval of a New Advisory Agreement on behalf of each Fund requires the
affirmative vote of a "majority of the outstanding voting securities" of such
Fund, which for this purpose means the affirmative vote of the lesser of (i)
more than 50% of the outstanding shares of such Fund or (ii) 67% or more of the
shares of such Fund present at the Meeting if more than 50% of the outstanding
shares of such Fund are present at the Meeting in person or represented by
proxy. For each of Colonial California Insured Municipal Fund, Colonial High
Income Municipal Trust, Colonial Investment Grade Municipal Trust and Colonial
Municipal Income Trust, holders of municipal auction rate cumulative preferred
shares ("Preferred Shares") and holders of common shares of beneficial interest
("Common Shares") vote together as a single class on this Proposal 1.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, HAS CONCLUDED THAT PROPOSAL 1 IS
IN THE BEST INTERESTS OF SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" PROPOSAL 1.
15
PROPOSAL 2
TO APPROVE AN AMENDED AND RESTATED DECLARATION OF TRUST
Each Fund, like other investment companies, is subject to comprehensive federal
laws and regulations (in particular, to the 1940 Act) and to state laws. The
Funds are subject to Massachusetts law because each Fund is a Massachusetts
business trust. Under Massachusetts law, a business trust generally operates
under an organizational document, usually called a declaration of trust, which
sets forth various provisions relating primarily to the authority and governance
of the business trust. Each Fund currently operates under its own agreement and
declaration of trust (each a "Current Declaration").
The Board recommends that shareholders of each Fund vote to approve an Amended
and Restated Declaration of Trust for each Fund (each a "Revised Declaration")
if Proposal 1 is approved. The Board believes that, if the New Advisory
Agreement for each Fund referenced in Proposal 1 is approved and the Sale
closes, in order to increase the efficiency of administration of the Funds by
MFS, it is in the best interests of shareholders to conform the Current
Declaration of each Fund to the form of declaration of trust used for other
closed-end funds advised by MFS.
Adoption of a Revised Declaration for each Fund will not alter any Fund's
current investments or investment policies.
A description of the material differences between each Current Declaration and
the form of proposed Revised Declaration is set forth in Appendix C.
If Proposal 1 and this Proposal 2 are approved by the shareholders of a Fund,
the Revised Declaration will become effective when a majority of the trustees of
that Fund has signed the Revised Declaration. Each Fund currently anticipates
that, if the requisite shareholder approvals are obtained and if the Closing
occurs, the Revised Declaration for such Fund will become effective immediately
after the Closing.
The foregoing discussion and the summary set forth in Appendix C hereto are
qualified in their entireties by reference to the form of Revised Declaration,
which is attached hereto in Appendix D.
MFS has indicated that it intends, following the Closing, to propose to the
trustees of each Fund that the bylaws of the Fund be amended to conform them
more closely to the bylaws of the other closed-end funds advised by MFS. Unlike
the Current Declarations, the proposed form of Revised Declaration does not
address quorum requirements for shareholder meetings. MFS has advised the Board
that the amended bylaws of the Funds will address quorum requirements for
shareholder meetings. MFS has also advised the Board that each Fund's quorum for
shareholder meetings will not change upon Closing.
REQUIRED VOTE AND BOARD RECOMMENDATION
For each of Colonial California Insured Municipal Fund, Colonial High Income
Municipal Trust, Colonial Investment Grade Municipal Trust and Colonial
Municipal Income Trust, approval of a Revised Declaration for each Fund requires
(i) the affirmative vote of at least 66 2/3% of the Common Shares and Preferred
Shares of such Fund entitled to vote, voting together as a single class, and
(ii) the affirmative vote of at least a majority of the Preferred Shares
outstanding on the Record Date.
For each of Colonial InterMarket Income Trust I and Colonial Intermediate High
Income Fund, approval of a Revised Declaration for each Fund requires the
affirmative vote of at least 66 2/3% of the shares of beneficial interest of
such Fund entitled to vote.
If the shareholders of a Fund fail to approve a Revised Declaration for such
Fund, or if the Sale does not close, the Fund's Current Declaration will remain
in effect. The Sale may close even if the Revised Declaration is not approved by
shareholders of any Fund.
16
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, HAS CONCLUDED THAT PROPOSAL 2 IS
IN THE BEST INTERESTS OF SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE
"FOR" PROPOSAL 2.
17
PROPOSAL 3
TO ELECT TRUSTEES IF PROPOSAL 1 IS APPROVED
BACKGROUND
The current trustees of each Fund have indicated that, if the New Advisory
Agreements referenced in Proposal 1 are approved and the Closing occurs, they
will resign in order to facilitate the oversight of the Fund by the same board
of trustees that currently oversees other funds advised by MFS. The current
trustees of each Fund believe that the interests of shareholders would most
efficiently and effectively be represented by trustees who are more familiar
with MFS and with the management and operation of other funds advised by MFS.
Messrs. Robert E. Butler, David H. Gunning, William R. Gutow, Michael Hegarty,
J. Atwood Ives, Robert J. Manning, Lawrence T. Perera, Robert C. Pozen, J. Dale
Sherratt and Robert W. Uek, Dr. Lawrence H. Cohn and Ms. Laurie J. Thomsen (each
a "Nominee" and collectively, the "Nominees"), each of whom has agreed to serve,
have been nominated for election as trustees of each Fund. The Nominees would
serve in accordance with the Revised Declaration (or, if Proposal 2 is not
approved by shareholders, the Current Declaration) and the bylaws of each Fund.
At a meeting held on April 10, 2007, the Board, including the Independent
Trustees, nominated each Nominee for election by shareholders of each Fund if
Proposal 1 is approved by shareholders and the Closing occurs. If, prior to the
Meeting, any Nominee refuses or becomes unable to serve, or becomes unavailable
for election, the persons named as proxies may vote the enclosed proxy for a
substitute nominee in their discretion.
The Board of each Fund has fixed the number of trustees for that Fund at twelve,
contingent upon approval by the shareholders of that Fund of Proposal 1 and the
occurrence of the Closing.
NOMINEES
For each of Colonial California Insured Municipal Fund, Colonial High Income
Municipal Trust, Colonial Investment Grade Municipal Trust and Colonial
Municipal Income Trust, the following ten Nominees are proposed for election by
the holders of Common Shares and Preferred Shares, voting together as a single
class: Messrs. Butler, Gunning, Gutow, Hegarty, Manning, Perera, Pozen, Sherratt
and Uek and Dr. Cohn. The following two Nominees are proposed for election by
the holders of Preferred Shares: Mr. Ives and Ms. Thomsen.
For each of Colonial InterMarket Income Trust I and Colonial Intermediate High
Income Fund, the following twelve Nominees are proposed for election by the
holders of shares of beneficial interest: Messrs. Butler, Gunning, Gutow,
Hegarty, Ives, Manning, Perera, Pozen, Sherratt and Uek, Dr. Cohn and Ms.
Thomsen.
The Nominees, if elected, would be divided into three classes as follows, each
with a term expiring in the year indicated:
2008 2009 2010
---- ---- ----
Mr. Gutow Mr. Butler Dr. Cohn
Mr. Hegarty Mr. Gunning Mr. Manning
Mr. Ives Mr. Pozen Mr. Perera
Mr. Uek Mr. Sherratt Ms. Thomsen
The Nominees have advised the Board that, if elected, they would intend to
impose a mandatory retirement age of 73 years.
REQUIRED VOTE
For each of Colonial California Insured Municipal Fund, Colonial High Income
Municipal Trust, Colonial Investment Grade Municipal Trust and Colonial
Municipal Income Trust, the affirmative vote of a plurality of the holders of
Common Shares and Preferred Shares, voting together as a single class, present
at the Meeting in person or represented by proxy, is required for the election
of each of Messrs. Butler, Gunning, Gutow, Hegarty, Ives,
18
Manning, Perera, Pozen, Sherratt and Uek and Dr. Cohn, and the affirmative vote
of a plurality of the holders of Preferred Shares, present at the Meeting in
person or represented by proxy, is required for the election of each of Mr. Ives
and Ms. Thomsen.
For each of Colonial InterMarket Income Trust I and Colonial Intermediate High
Income Fund, the affirmative vote of a plurality of the holders of shares of
beneficial interest, present at the Meeting in person or represented by proxy,
is required for the election of each Nominee.
INFORMATION REGARDING NOMINEES
For information regarding the Nominees, please see Appendix E to this proxy
statement.
OWNERSHIP OF SHARES OF THE FUNDS BY NOMINEES
Appendix F to this proxy statement provides information, as of the Record Date,
regarding the beneficial ownership by the Nominees of equity securities in (a)
the Funds, (b) the Funds' "Family of Investment Companies" (as defined in Item
22(a)(1)(iv) of Rule 14a-101 under the Exchange Act), (c) an investment adviser
or principal underwriter of any Fund and (d) a person (other than a fund) in a
control relationship with an investment adviser or principal underwriter of any
Fund.
TRANSACTIONS IN SECURITIES OF MFS
None of the Nominees have purchased or sold any securities, in an amount
exceeding 1% of the outstanding securities, of MFS, its parent company or any
subsidiary of either.
LEGAL PROCEEDINGS
The Funds are aware of no material pending legal proceedings to which any
Nominee is a party adverse to any of the Funds or any affiliated person of any
of the Funds, or in which any Nominee has a material interest adverse to any of
the Funds or to any affiliated person of any of the Funds. The Funds further are
aware of no legal proceedings involving any Nominee that would be material to an
evaluation of the ability or integrity of any Nominee and that would require
disclosure under Item 401(f) of Regulation S-K under the Exchange Act.
PROPOSED COMMITTEES OF THE BOARD
The Nominees have indicated that if they are elected, they intend to organize
committees of the board as follows:
AUDIT COMMITTEE
The audit committee ("MFS Audit Committee") would oversee the accounting and
auditing procedures for the Funds and, among other things, would consider the
selection of independent accountants for the Funds and the scope of the audit,
and would consider the effect on the independence of those accountants of any
non-audit services such accountants provide to the Funds and any audit or
non-audit services such accountants provide to MFS and/or certain MFS
affiliates. The MFS Audit Committee also would be responsible for establishing
procedures for the receipt, retention and treatment of complaints received by
the Funds regarding accounting, internal accounting controls, or auditing
matters and the confidential, anonymous submission of concerns regarding
questionable Fund accounting matters by officers of the Funds and employees of
the Funds' investment advisers, administrators or any other providers of
accounting-related services to the Funds. If all of the Nominees are elected by
shareholders, the members of the MFS Audit Committee would be Ms. Thomsen and
Messrs. Butler, Gutow, Sherratt and Uek.
COMPLIANCE AND GOVERNANCE COMMITTEE
The compliance and governance committee ("MFS Compliance and Governance
Committee") would oversee the development and implementation of the Funds'
regulatory and fiduciary compliance policies, procedures and practices under the
1940 Act and other applicable laws and would oversee compliance policies of MFS
and certain other service providers as they relate to Fund activities. The chief
compliance officer would report directly to the
19
MFS Compliance and Governance Committee and would assist in carrying out its
responsibilities. In addition, the MFS Compliance and Governance Committee would
advise and make recommendations to the full board on matters concerning trustee
practices and recommendations concerning the functions and duties of the
committees of the board. If all of the Nominees are elected by shareholders, the
members of the MFS Compliance and Governance Committee would be Messrs. Butler,
Gunning, Gutow and Sherratt and Dr. Cohn.
CONTRACTS REVIEW COMMITTEE
The contracts review committee ("MFS Contracts Review Committee") would request,
review and consider the information deemed reasonably necessary to evaluate the
terms of the investment advisory agreements that the Funds propose to renew or
continue, and would make its recommendations to the full board on these matters.
If all of the Nominees are elected by shareholders, the members of the MFS
Contracts Review Committee would be Ms. Thomsen, Messrs. Butler, Gunning, Gutow,
Hegarty, Ives, Perera, Sherratt and Uek and Dr. Cohn.
NOMINATION AND COMPENSATION COMMITTEE
The nomination and compensation committee ("MFS Nomination and Compensation
Committee") would recommend qualified candidates to the full board in the event
that a position is vacated or created. The MFS Nomination and Compensation
Committee would consider recommendations by shareholders when a vacancy exists.
If Nominees are elected by shareholders and the Sale closes, shareholders
wishing to recommend candidates for trustee for consideration by the MFS
Nomination and Compensation Committee may do so by writing to the Funds'
secretary at the principal executive office of the Funds. Such recommendations
must be accompanied by biographical and occupational data on the candidate
(including whether the candidate would be an "interested person" of the Funds),
a written consent of the candidate to be named as a nominee and to serve as
trustee if elected, record and ownership information for the recommending
shareholder with respect to the Funds, and a description of any arrangements or
understandings regarding recommendation of the candidate for consideration. The
MFS Nomination and Compensation Committee also would be responsible for making
recommendations to the full board regarding any necessary standards or
qualifications for service on the board. The MFS Nomination and Compensation
Committee also would review and make recommendations to the full board regarding
compensation for the trustees who are not "interested persons" (as defined in
Section 2(a)(19) of the 1940 Act) of the Funds. If all of the Nominees are
elected by shareholders, the members of the MFS Nomination and Compensation
Committee would be Ms. Thomsen, Messrs. Butler, Gunning, Gutow, Hegarty, Ives,
Perera, Sherratt and Uek and Dr. Cohn.
PORTFOLIO TRADING AND MARKETING REVIEW COMMITTEE
The portfolio trading and marketing review committee ("MFS Portfolio Trading and
Marketing Review Committee") would oversee the policies, procedures and
practices of the Funds with respect to brokerage transactions involving
portfolio securities as those policies, procedures, and practices are carried
out by MFS and its affiliates. The MFS Portfolio Trading and Marketing Review
Committee also would oversee the administration of the Funds' proxy voting
policies and procedures by MFS. [[In addition, the committee would receive
reports from MFS regarding the policies, procedures and practices of MFS and its
affiliates in connection with their marketing of shares of the MFS funds.]] If
all of the Nominees are elected by shareholders, the members of the MFS
Portfolio Trading and Marketing Review Committee would be Messrs. Gunning,
Hegarty and Perera and Dr. Cohn.
PRICING COMMITTEE
The pricing committee ("MFS Pricing Committee") would oversee the determination
of the value of the portfolio securities and other assets held by the Funds and
would determine or cause to be determined the fair value of securities and
assets for which market quotations are not "readily available" in accordance
with the 1940 Act. The MFS Pricing Committee would delegate primary
responsibility for carrying out these functions to MFS and MFS' internal
valuation committee pursuant to pricing policies and procedures approved by the
committee and adopted by the full board, which would include methodologies to be
followed by MFS to determine the fair values of portfolio securities and other
assets held by the Funds for which market quotations are not readily available.
The MFS Pricing Committee would meet periodically with the members of MFS'
internal valuation committee to review and assess the quality of fair valuation
and other pricing determinations made pursuant to the Funds' pricing policies
and procedures, and to review and assess the policies and procedures themselves.
If all of the Nominees are elected by
20
shareholders, the members of the MFS Pricing Committee would be Ms. Thomsen and
Messrs. Hegarty, Perera and Uek.
SERVICES CONTRACTS COMMITTEE
The services contracts committee ("MFS Services Contracts Committee") would
review and evaluate the contractual arrangements of the Funds relating to
transfer agency, administrative, custody, pricing and bookkeeping services and
the lending of portfolio securities, and would make recommendations to the full
board on these matters. If all of the Nominees are elected by shareholders, the
members of the MFS Services Contracts Committee would be Ms. Thomsen and Messrs.
Gunning, Sherratt and Uek.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, HAS CONCLUDED THAT THE ELECTION
OF EACH NOMINEE AS A TRUSTEE OF THE FUNDS IF PROPOSAL 1 IS APPROVED BY
SHAREHOLDERS AND THE CLOSING OCCURS IS IN THE BEST INTERESTS OF SHAREHOLDERS AND
UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF ALL NOMINEES.
21
PROPOSAL 4
TO ELECT TRUSTEES
BACKGROUND
The Board of each Fund has fixed the number of trustees for that Fund at ten. As
noted above, the Board of each Fund has approved increasing the number of
trustees of that Fund to twelve, provided that Proposal 1 is approved by
shareholders and that the Closing occurs.
For each of Colonial California Insured Municipal Fund, Colonial High Income
Municipal Trust, Colonial Investment Grade Municipal Trust and Colonial
Municipal Income Trust, trustees are divided into three classes, each having a
term of three years, with the term of each class expiring in a different year.
Generally, trustees are elected by the holders of Common Shares and the holders
of Preferred Shares, voting together as a single class. However, for each Fund,
the holders of Preferred Shares, voting separately, are entitled to vote for two
trustees. The class to which you are electing trustees and the term of such
class are set forth below.
For each of Colonial InterMarket Income Trust I and Colonial Intermediate High
Income Fund, trustees are divided into three classes, each having a term of
three years, with the term of each class expiring in a different year. Trustees
are elected by the holders of shares of beneficial interest. The class to which
you are electing trustees and the term of such class are set forth below.
The Board, including all Independent Trustees, has nominated the nominees set
forth below for election by shareholders, each to serve for the term set forth
below, unless Proposal 1 is approved by shareholders and the Closing occurs.
Each nominee has agreed to serve as a trustee of the relevant Fund if elected.
If, prior to the Meeting, any nominee refuses or becomes unable to serve, or
becomes unavailable for election, the persons named as proxies may vote for a
substitute nominee in their discretion. Under the terms of each Fund's
retirement policy, the trustees have a mandatory retirement age of 72 years,
which might cause a trustee to retire before the end of his or her stated term.
In particular, Mr. Stitzel, Mr. Lowry and Mr. Theobald are expected to retire in
April 2008, June 2008 and June 2009, respectively. Each current trustee of each
Fund, including each nominee set forth in this Proposal 4, has indicated his or
her intention to resign, effective at the Closing, if Proposal 1 is approved by
shareholders and the Closing occurs.
COLONIAL CALIFORNIA INSURED MUNICIPAL FUND
Messrs. Neuhauser and Theobald and Ms. Verville are proposed for election as
trustees of the Fund and are to be elected by the holders of Common Shares and
Preferred Shares, voting together as a single class. If elected, Messrs.
Neuhauser and Theobald and Ms. Verville each will serve for three years or until
a successor is elected. Messrs. Hacker and Stitzel are proposed for election as
trustees of the Fund and are to be elected separately by the holders of
Preferred Shares. If elected, Messrs. Hacker and Stitzel each will serve for one
year or until his successor is elected.
If each of the nominees set forth in the immediately preceding paragraph is
elected by shareholders, the Board will be divided into the following three
classes, each with a term expiring in the year indicated:
2008 2009 2010
---- ---- ----
Mr. Hacker Mr. Lowry Mr. Neuhauser
Ms. Kelly Mr. Mayer Mr. Theobald
Mr. Simpson Mr. Nelson Ms. Verville
Mr. Stitzel
REQUIRED VOTE
With respect to the election of Messrs. Neuhauser and Theobald and Ms. Verville,
the affirmative vote of a plurality of the holders of Common Shares and
Preferred Shares, voting together as a single class, present at the Meeting in
person or represented by proxy, is required for the election of each such
nominee. With respect to the election of
22
Messrs. Hacker and Stitzel, the affirmative vote of a plurality of the holders
of Preferred Shares, present at the Meeting in person or represented by proxy,
is required for the election of each such nominee.
COLONIAL HIGH INCOME MUNICIPAL TRUST
Messrs. Mayer, Nelson and Theobald are proposed for election as trustees of the
Fund and are to be elected by the holders of Common Shares and Preferred Shares,
voting together as a single class. If elected, Messrs. Mayer, Nelson and
Theobald each will serve for three years or until a successor is elected.
Messrs. Hacker and Stitzel are proposed for election as trustees of the Fund and
are to be elected separately by the holders of Preferred Shares. If elected, Mr.
Stitzel will serve for one year or until his successor is elected, and Mr.
Hacker will serve for two years, or until his successor is elected.
If each of the nominees set forth in the immediately preceding paragraph is
elected by shareholders, the Board will be divided into the following three
classes, each with a term expiring in the year indicated:
2008 2009 2010
---- ---- ----
Mr. Lowry Mr. Hacker Mr. Mayer
Mr. Neuhauser Ms. Kelly Mr. Nelson
Mr. Simpson Ms. Verville Mr. Theobald
Mr. Stitzel
REQUIRED VOTE
With respect to the election of Messrs. Mayer, Nelson and Theobald, the
affirmative vote of a plurality of the holders of Common Shares and Preferred
Shares, voting together as a single class, present at the Meeting in person or
represented by proxy, is required for the election of each such nominee. With
respect to the election of Messrs. Hacker and Stitzel, the affirmative vote of a
plurality of the holders of Preferred Shares, present at the Meeting in person
or represented by proxy, is required for the election of each such nominee.
COLONIAL INTERMARKET INCOME TRUST I
Messrs. Neuhauser and Theobald and Ms. Verville are proposed for election as
trustees of the Fund. If elected, Messrs. Neuhauser and Theobald and Ms.
Verville each will serve for three years or until a successor is elected.
If each of the nominees set forth in the immediately preceding paragraph is
elected by shareholders, the Board will be divided into the following three
classes, each with a term expiring in the year indicated:
2008 2009 2010
---- ---- ----
Mr. Lowry Mr. Hacker Mr. Neuhauser
Mr. Mayer Ms. Kelly Mr. Theobald
Mr. Stitzel Mr. Nelson Ms. Verville
Mr. Simpson
REQUIRED VOTE
The affirmative vote of a plurality of the holders of share of beneficial
interest of the Fund, present at the Meeting in person or represented by proxy,
is required for the election of each such nominee.
COLONIAL INTERMEDIATE HIGH INCOME FUND
Messrs. Simpson, Stitzel and Theobald and Ms. Verville are proposed for election
as trustees of the Fund. If elected, Messrs. Simpson, Stitzel and Theobald and
Ms. Verville each will serve for three years or until a successor is elected.
If each of the nominees set forth in the immediately preceding paragraph is
elected by shareholders, the Board will be divided into the following three
classes, each with a term expiring in the year indicated:
23
2008 2009 2010
---- ---- ----
Mr. Lowry Mr. Hacker Mr. Simpson
Mr. Mayer Ms. Kelly Mr. Stitzel
Mr. Nelson Mr. Neuhauser Mr. Theobald
Ms. Verville
REQUIRED VOTE
The affirmative vote of a plurality of the holders of share of beneficial
interest of the Fund, present at the Meeting in person or represented by proxy,
is required for the election of each such nominee.
COLONIAL INVESTMENT GRADE MUNICIPAL TRUST
Messrs. Mayer, Neuhauser and Theobald are proposed for election as trustees of
the Fund and are to be elected by the holders of Common Shares and Preferred
Shares, voting together as a single class. If elected, Messrs. Mayer, Neuhauser
and Theobald each will serve for three years or until a successor is elected.
Messrs. Hacker and Stitzel are proposed for election as trustees of the Fund and
are to be elected separately by the holders of Preferred Shares. If elected, Mr.
Stitzel will serve for one year or until his successor is elected, and Mr.
Hacker will serve for two years, or until his successor is elected.
If each of the nominees set forth in the immediately preceding paragraph is
elected by shareholders, the Board will be divided into the following three
classes, each with a term expiring in the year indicated:
2008 2009 2010
---- ---- ----
Mr. Lowry Mr. Hacker Mr. Mayer
Mr. Nelson Ms. Kelly Mr. Neuhauser
Mr. Stitzel Mr. Simpson Mr. Theobald
Ms. Verville
REQUIRED VOTE
With respect to the election of Messrs. Mayer, Neuhauser and Theobald, the
affirmative vote of a plurality of the holders of Common Shares and Preferred
Shares, voting together as a single class, present at the Meeting in person or
represented by proxy, is required for the election of each such nominee. With
respect to the election of Messrs. Hacker and Stitzel, the affirmative vote of a
plurality of the holders of Preferred Shares, present at the Meeting in person
or represented by proxy, is required for the election of each such nominee.
COLONIAL MUNICIPAL INCOME TRUST
Messrs. Lowry, Neuhauser and Theobald are proposed for election as trustees of
the Fund and are to be elected by the holders of Common Shares and Preferred
Shares, voting together as a single class. If elected, Messrs. Lowry, Neuhauser
and Theobald each will serve for three years or until a successor is elected.
Messrs. Hacker and Stitzel are proposed for election as trustees of the Fund and
are to be elected separately by the holders of Preferred Shares. If elected,
Messrs. Hacker and Stitzel each will serve for one year or until his successor
is elected.
If each of the nominees set forth in the immediately preceding paragraph is
elected by shareholders, the Board will be divided into the following three
classes, each with a term expiring in the year indicated:
2008 2009 2010
---- ---- ----
Mr. Hacker Ms. Kelly Mr. Lowry
Mr. Mayer Mr. Nelson Mr. Neuhauser
Mr. Stitzel Mr. Simpson Mr. Theobald
Ms. Verville
24
REQUIRED VOTE
With respect to the election of Messrs. Lowry, Neuhauser and Theobald, the
affirmative vote of a plurality of the holders of Common Shares and Preferred
Shares, voting together as a single class, present at the Meeting in person or
represented by proxy, is required for the election of each such nominee. With
respect to the election of Messrs. Hacker and Stitzel, the affirmative vote of a
plurality of the holders of Preferred Shares, present at the Meeting in person
or represented by proxy, is required for the election of each such nominee.
INFORMATION REGARDING TRUSTEES, NOMINEES AND OFFICERS
For information regarding the trustees and officers of the Funds and the
nominees set forth above, please see Appendix G to this proxy statement.
TRUSTEE AND OFFICER COMPENSATION
The trustees of each Fund also serve as trustees for certain other funds advised
by Columbia or its affiliates (the "Fund Complex"). For information regarding
the compensation of the trustees of the Funds, see Appendix H to this proxy
statement.
OWNERSHIP OF SHARES OF THE FUNDS BY TRUSTEES AND NOMINEES
Appendix I to this proxy statement provides information, as of the Record Date,
regarding the beneficial ownership by the trustees of the Funds and by the
nominees set forth in this Proposal 4 of equity securities in (a) the Funds, (b)
the Funds' "Family of Investment Companies" (as defined in Item 22(a)(1)(iv) of
Rule 14a-101 under the Exchange Act), (c) an investment adviser or principal
underwriter of any Fund and (d) a person (other than a fund) in a control
relationship with an investment adviser or principal underwriter of any Fund.
TRANSACTIONS IN SECURITIES OF COLUMBIA
No trustee or officer of any Fund has purchased or sold any securities, in an
amount exceeding 1% of the outstanding securities, of Columbia, its parent
company or any subsidiary of either.
LEGAL PROCEEDINGS
The Funds are aware of no material pending legal proceedings to which any
nominee set forth in this Proposal 4 is a party adverse to any of the Funds or
any affiliated person of any of the Funds, or in which any such nominee has a
material interest adverse to any of the Funds or to any affiliated person of any
of the Funds. The Funds further are aware of no legal proceedings involving any
such nominee that would be material to an evaluation of the ability or integrity
of any such nominee and that would require disclosure under Item 401(f) of
Regulation S-K under the Exchange Act.
THE BOARD, INCLUDING THE INDEPENDENT TRUSTEES, HAS CONCLUDED THAT THE ELECTION
OF EACH NOMINEE SET FORTH IN PROPOSAL 4 AS A TRUSTEE OF THE FUNDS IS IN THE BEST
INTERESTS OF SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
ELECTION OF ALL SUCH NOMINEES.
25
INFORMATION REGARDING THE BOARD
COMMITTEES OF THE BOARD
The Board is responsible for the overall management and supervision of the
Funds' affairs and for protecting the interests of the Funds' shareholders. The
Board has created several committees to perform specific functions on behalf of
the Funds. The members of each committee, a description of each committee's
functions and a table setting forth the number of meetings held by the Board and
each committee during the last fiscal year appear below.
AUDIT COMMITTEE
Each Fund has an audit committee (the "Audit Committee") composed of only
Independent Trustees who meet the requirements for independence as set forth in
the listing standards of the New York Stock Exchange (the "NYSE") and the
American Stock Exchange (the "AMEX"). Each member of the Audit Committee must be
financially literate and at least one member must have prior accounting or
related financial management expertise. The Board has determined, in accordance
with applicable regulations of the NYSE and the AMEX, that each member of the
Audit Committee is financially literate and has prior accounting experience or
related financial management expertise. The current members of the Audit
Committee are Ms. Verville and Messrs. Hacker and Stitzel.
The Audit Committee adopted a revised written charter on February 10, 2004 which
sets forth the Audit Committee's structure, powers, duties and methods of
operation. A copy of the Audit Committee charter is available on the Funds'
website at www.columbiamanagement.com/ColonialFunds/Home.htm.
The Audit Committee serves as an independent and objective party to monitor the
Funds' accounting policies, financial reporting and internal control systems and
the work of the Funds' independent registered public accounting firm. The Audit
Committee also provides an open means of communication between the independent
registered public accounting firm, Columbia's internal accounting staff and the
Board. The principal functions of the Audit Committee are to assist Board
oversight of: (a) the integrity of each Fund's financial statements, (b) each
Fund's compliance with legal and regulatory requirements, (c) the independent
registered public accounting firm's qualifications and independence, (d) the
performance of Columbia's internal audit function and (e) the independent
registered public accounting firm. The Audit Committee has direct responsibility
for the appointment, compensation, retention and oversight of the work of the
independent registered public accounting firm (including resolution of financial
reporting disagreements between management and such independent registered
public accounting firm) for the purpose of preparing or issuing an audit report
or performing other review or attest services for the Funds.
GOVERNANCE COMMITTEE
Each Fund has a governance committee (the "Governance Committee"). Messrs.
Lowry, Mayer, Simpson and Theobald are members of the Governance Committee of
each Fund. Messrs. Lowry, Simpson and Theobald are Independent Trustees who meet
the requirements for independence as set forth in the listing standards of the
NYSE and the AMEX. The Governance Committee performs the functions typically
performed by nominating and compensation committees. Among other things, members
of the Governance Committee who are Independent Trustees recommend to the Board
nominees for trustee and the Governance Committee recommends to the Board
nominees for appointment to various committees, performs periodic evaluations of
the effectiveness of the Board, reviews and recommends to the Board policies and
practices to be followed in carrying out the trustees' duties and
responsibilities and reviews and makes recommendations to the Board regarding
the compensation of the Independent Trustees. Members of the Governance
Committee who are Independent Trustees consider candidates for trustees
identified by any reasonable source, including current Independent Trustees,
Fund management, Fund shareholders and other persons or entities. On October 12,
2005 the Governance Committee adopted a written charter that sets forth the
Governance Committee's structure, duties, powers and methods of operation. A
copy of the Governance Committee charter was attached as Appendix F to the proxy
statement delivered to shareholders of the Funds in connection with the Funds'
annual meeting of shareholders held on May 24, 2006.
26
ADVISORY FEES AND EXPENSES COMMITTEE
Each Fund has an advisory fees and expenses committee (the "Advisory Fees and
Expenses Committee"). The current members of the Advisory Fees and Expenses
Committee are Ms. Kelly and Messrs. Mayer, Nelson and Neuhauser. The Advisory
Fees and Expenses Committee's functions include reviewing and making
recommendations to the Board regarding contracts requiring the approval of a
majority of the Independent Trustees and regarding other contracts that may be
referred to it by the Board.
COMPLIANCE COMMITTEE
Each Fund has a compliance committee (the "Compliance Committee"). The current
members of the Compliance Committee are Mses. Kelly and Verville and Messrs.
Nelson, Simpson and Stitzel. The Compliance Committee's functions include
providing oversight of the monitoring processes and controls of the Fund. The
Compliance Committee supervises legal and regulatory matters and internal rules,
policies, procedures and standards (other than those relating to accounting
matters) and oversees compliance by the Funds' investment adviser, principal
underwriter and transfer agent.
RECORD OF BOARD AND COMMITTEE MEETINGS
The Board and its committees held the following numbers of meetings during the
fiscal year ended November 30, 2006:
Board: 7
Audit Committee: 9
Governance Committee: 3
Advisory Fees and Expenses Committee: 7
Compliance Committee: 9
During the fiscal year ended November 30, 2006, each of the trustees attended
more than 75% of the meetings of the Board and of each committee of which such
trustee was a member. The Funds do not have a formal policy on trustee
attendance at the annual meetings of shareholders.
AUDIT COMMITTEE REPORT
At a meeting of the Audit Committee on January 18, 2007, the Audit Committee:
(i) reviewed and discussed with management each Fund's audited financial
statements for the most recently completed fiscal year and (ii) discussed with
PricewaterhouseCoopers LLP ("PwC"), each Funds' independent registered public
accounting firm, the matters required to be discussed by the American Institute
of Certified Public Accountants ("AICPA") Auditing Standards Board Statement on
Auditing Standards No. 61 and other professional standards and regulatory
requirements. At a meeting of the Audit Committee on February 6, 2007, the Audit
Committee obtained from PwC a formal written statement consistent with AICPA
Independence Standards Board Standard No. 1, describing all relationships
between PwC and the Funds that might bear on PwC's independence, discussed with
PwC any relationships that may affect its objectivity and independence, and
based on such statement and discussions, satisfied itself as to PwC's
independence. Based on its review and discussion, the Audit Committee
recommended to the Board that the audited financial statements for each Fund be
included in that Fund's annual report to shareholders.
Based on the recommendation from the Audit Committee and on its own review, the
Board selected PwC as the independent registered public accounting firm for each
Fund for the fiscal year ending November 30, 2007. Representatives of PwC are
not expected to be at the Meeting, but have been given the opportunity to make a
statement if they so desire and will be available should any matter arise
requiring their presence.
AUDIT COMMITTEE PRE-APPROVAL OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
SERVICES
The Audit Committee is required to pre-approve the engagement of each Fund's
independent registered public accounting firm to provide audit and non-audit
services to that Fund and non-audit services to that Fund's
27
investment adviser or any entity controlling, controlled by or under common
control with that investment adviser that provides ongoing services to that Fund
(an "Adviser Affiliate") if the engagement relates directly to the operations
and financial reporting of that Fund. The engagement may be entered into
pursuant to pre-approval policies and procedures established by the Audit
Committee.
The Audit Committee has adopted a Policy for Engagement of Independent
Accountants for Audit and Non-Audit Services (the "Policy") for the pre-approval
of audit and non-audit services provided to each Fund and non-audit services
provided to each Fund's investment adviser and Adviser Affiliates if the
engagement relates directly to the operations or financial reporting of the
applicable Fund. The Policy sets forth the procedures and conditions pursuant to
which services to be performed by the Funds' independent registered public
accounting firm are to be pre-approved. Unless a type of service receives
general pre-approval under the Policy, it requires specific pre-approval by the
Audit Committee if it is to be provided by the independent registered public
accounting firm. The Audit Committee may amend the Policy from time to time and
must review and approve the Policy at least annually.
The Policy provides for general pre-approval by the Audit Committee of certain:
(i) audit services to the Funds; (ii) audit-related services to the Funds; (iii)
tax services to the Funds; (iv) other services to the Funds; and (v)
Fund-related services to the Funds' investment adviser and its Adviser
Affiliates. The Policy requires the Fund treasurer and/or the director of board
administration to submit to the Audit Committee, at least annually, a schedule
of the types of services that are subject to general pre-approval. The schedule
must provide a description of each type of service that is subject to general
pre-approval and, where possible, will provide estimated fee caps for each
instance of providing each service. The general pre-approval and related fees
relate to the fiscal year of the Funds. At least annually, the Audit Committee
will review and approve the types of services and review the projected fees for
the next fiscal year, and may add to or subtract from the list of pre-approved
services from time to time. In addition to the fees for each individual service,
the Audit Committee has the authority to implement a fee cap on the aggregate
amount of non-audit services provided to any Fund. The fee amounts listed on the
schedules will be updated to the extent necessary at each regularly scheduled
meeting of the Audit Committee.
When specific pre-approval is required, management must submit a written request
to the Audit Committee detailing the proposed engagement and explaining the
purpose of using the independent registered public accounting firm for such
engagement. The Audit Committee reviews the request at its next regularly
scheduled meeting. In cases when the timing of the management request is
critical, the chairperson of the Audit Committee has the authority to approve
the request or to call a special meeting of the Audit Committee to consider the
request.
FEES PAID TO THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The following table sets forth the aggregate fees billed by PwC to each Fund for
the last two fiscal years for professional services rendered for (i) audit
services, including the audit of each Fund's financial statements and services
normally provided in connection with statutory and regulatory filings or
engagements for those fiscal years; (ii) audit-related services associated with
the review of the Funds' semi-annual financial statements and, for all Funds
other than Colonial InterMarket Income Trust I and Colonial Intermediate High
Income Fund, procedures relating to reports required by rating agencies; (iii)
tax services and, primarily, reviews of Fund tax returns; and (iv) other
services.
AUDIT AUDIT-RELATED TAX ALL OTHER
YEAR FEES FEES FEES FEES
---- ------- ------------- ------ ---------
Colonial California Insured Municipal Fund 2006 $26,900 $13,730 $4,104 $0
2005 $24,148 $13,205 $3,612 $0
Colonial High Income Municipal Trust 2006 $32,000 $13,730 $3,800 $0
2005 $28,988 $13,205 $3,063 $0
Colonial InterMarket Income Trust I 2006 $33,900 $ 4,100 $2,805 $0
2005 $30,758 $ 3,890 $2,500 $0
Colonial Intermediate High Income Fund 2006 $39,000 $ 4,100 $2,805 $0
2005 $35,488 $ 3,890 $2,500 $0
Colonial Investment Grade Municipal Trust 2006 $27,800 $13,730 $3,800 $0
2005 $25,038 $13,205 $3,062 $0
Colonial Municipal Income Trust 2006 $32,000 $13,730 $3,904 $0
2005 $28,988 $13,205 $3,062 $0
28
All of the audit fees, audit-related fees, tax fees and other fees billed by PwC
for services provided to the Funds for the fiscal years ended November 30, 2006
and November 30, 2005 were pre-approved by the Audit Committee. There were no
amounts that were approved by the Audit Committee pursuant to the de minimis
exception.
The aggregate amount of fees paid for non-audit services billed to the Funds,
the Funds' investment adviser and the Adviser Affiliates was $589,838 for the
fiscal year ended November 30, 2006 and $333,899 for the fiscal year ended
November 30, 2005.
The amounts billed by PwC in the fiscal years ended November 30, 2006 and
November 30, 2005 for audit-related services, tax services or other services
provided to the Funds' investment adviser or the Adviser Affiliates for
engagements that related directly to the operations or financial reporting of
the Funds were $505,500 and $255,500, respectively.
The Audit Committee has determined that the provision of the services described
above to the Funds' investment adviser and the Adviser Affiliates is compatible
with maintaining the independence of PwC.
If Proposal 1 is approved by shareholders of the Funds and the Closing occurs,
it is anticipated that PwC will resign as the Funds' independent registered
public accounting firm due to independence issues. It is anticipated that the
Funds will engage Ernst & Young LLP as their independent registered public
accounting firm. Ernst & Young LLP currently is the independent registered
public accounting firm for other investment companies managed by MFS.
TRUSTEE NOMINATION PROCESS
The Board has adopted a policy relating to the consideration of candidates for
trustee proposed by shareholders. Under that policy as currently in effect,
members of the Governance Committee who are Independent Trustees consider, among
other things, whether prospective nominees have distinguished records in their
primary careers, personal and professional integrity and substantive knowledge
in areas important to the Board's operations, such as a background or education
in finance, auditing, securities law, the workings of the securities markets or
investment advice. For candidates to serve as Independent Trustees, independence
from the Funds' investment adviser, its affiliates and the Funds' other
principal service providers is critical, as is an independent and questioning
mind set. In each case, the members of the Governance Committee who are
Independent Trustees will evaluate whether a candidate is an "interested
person," as defined in Section 2(a)(19) of the 1940 Act, and "independent" under
the listing standards of the NYSE and the AMEX. Members of the Governance
Committee who are Independent Trustees also consider whether a prospective
candidate's workload would be consistent with regular attendance at Board
meetings and would allow him or her to be available for service on Board
committees and to devote the additional time and effort necessary to stay
apprised of Board matters and the rapidly changing regulatory environment in
which the Funds operate. Different substantive areas may assume greater or
lesser significance at particular times, in light of a Board's present
composition and its perceptions about future issues and needs.
Members of the Governance Committee who are Independent Trustees initially
evaluate prospective candidates on the basis of their resumes, considered in
light of the criteria discussed above. Those prospective candidates that appear
likely to be able to fill a significant need of the Board are contacted by a
member of the Governance Committee who is an Independent Trustee by telephone to
discuss the position. If there appears to be sufficient interest, an in-person
meeting with one or more of the members of the Governance Committee who are
Independent Trustees is arranged. If a member of the Governance Committee who is
an Independent Trustee, based on the results of such contacts, believes he or
she has identified a viable candidate, he or she airs the matter with the other
members of the Governance Committee who are Independent Trustees for input. Any
request by Fund management to meet with the prospective candidate is given
appropriate consideration. The Funds have not paid a fee to third parties to
assist in finding nominees.
Shareholders of a Fund who wish to nominate a candidate to the Board may send
information regarding prospective candidates to the Governance Committee, in
care of the relevant Fund, at One Financial Center, Boston, Massachusetts
02111-2621. The information should include evidence of the shareholders' Fund
ownership, a full listing of the proposed candidate's education, experience,
current employment and date of birth, the names and addresses of at least three
professional references, information as to whether the candidate is an
"interested person" under the 1940 Act and "independent" under the applicable
NYSE or AMEX listing standards and such other
29
information as may be helpful to the members of the Governance Committee who are
Independent Trustees in evaluating the candidate. All satisfactorily completed
information packages regarding a candidate will be forwarded to a member of the
Governance Committee for consideration. Recommendations for candidates will be
evaluated in light of anticipated vacancies and whether the number of trustees
of a Fund is expected to be increased. All nominations from Fund shareholders
will be considered. There may be times when the Governance Committee does not
recruit new trustees. In such case, shareholder recommendations are maintained
on file pending the active recruitment of trustees.
The foregoing policy is subject to change at any time by the Board.
CERTAIN RELATED TRANSACTIONS AND MANAGEMENT INDEBTEDNESS
[[There have been no transactions or series of similar transactions, since the
beginning of the Funds' last fiscal year, and there are no currently proposed
transactions, to which any Fund was or is to be a party, in which the amount
involved exceeded $120,000 and in which any officer of any Fund or any security
holder who is known by any Fund to own of record or beneficially more than 5% of
any class of such Fund's shares, or any member of the immediate family of any
such person, had or will have a direct or indirect material interest.]]
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
[[Section 16(a) of the Exchange Act requires the Funds' trustees and officers,
persons who own in excess of 10% of any Fund's outstanding shares and certain
officers and directors of any Fund's investment adviser (collectively, "Section
16 Reporting Persons") to file with the Securities and Exchange Commission (the
"Commission") initial reports of beneficial ownership and reports of changes in
beneficial ownership of shares of any of the Funds. Section 16 Reporting Persons
are required by Commission regulations to furnish the Funds with copies of all
Section 16(a) forms that they file. To the Funds' knowledge, based solely on a
review of the copies of such reports furnished to the Funds, and on
representations made, all Section 16 reporting persons complied with all Section
16(a) filing requirements applicable to them.]]
30
GENERAL INFORMATION
OTHER MATTERS TO COME BEFORE THE MEETING
Management of the Funds does not know of any matters to be presented at the
Meeting other than those described in this proxy statement. If other business
should properly come before the Meeting, the persons named as proxies will vote
thereon in accordance with their best judgment.
INVESTMENT ADVISER
The current investment adviser to the Funds is Columbia Management Advisors,
LLC. Its business address is One Financial Center, Boston, Massachusetts
02111-2621.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The current independent registered public accounting firm of the Funds is
PricewaterhouseCoopers LLP. Its business address is 125 High Street, Boston,
Massachusetts 02110. If Proposal 1 is approved by shareholders of the Funds and
the Closing occurs, it is anticipated that the Funds will engage Ernst & Young
LLP as their independent registered public accounting firm. Ernst & Young LLP's
business address is 200 Clarendon Street, Boston, Massachusetts 02116.
SHAREHOLDER PROPOSALS
Under the proxy rules of the Commission, shareholder proposals that meet tests
contained in those rules may, under certain conditions, be included in a Fund's
proxy materials for an annual shareholders' meeting. Under the proxy rules,
proposals submitted for inclusion in the proxy materials for the 2008 annual
meeting must be received by the relevant Fund on or before [[January 2, 2008]].
The fact that a Fund receives a shareholder proposal in a timely manner does not
ensure inclusion of the proposal in the proxy materials since there are other
requirements in the proxy rules relating to such inclusion.
Shareholders who wish to make a proposal at the 2008 annual meeting that will
not be included in the Funds' proxy materials must notify the relevant Fund on
or before [[_______________]]. If a shareholder who wishes to submit a proposal
fails to timely notify the relevant Fund, the persons named as proxies for the
meeting will have discretionary authority to vote on the shareholder's proposal
if it is properly brought before the meeting. If a shareholder makes a timely
notification, the persons named as proxies may still exercise discretionary
voting authority under circumstances consistent with the Commission's proxy
rules.
You may submit shareholder proposals to a Fund c/o the Secretary of the Fund,
One Financial Center, Mail Stop MA515-11-05, Boston, Massachusetts 02111-2621.
SHAREHOLDER COMMUNICATIONS
Shareholders may communicate with the trustees as a group or individually. Any
such communications should be sent to the Board of a Fund or to an individual
trustee in writing, c/o the Secretary of the relevant Fund, at One Financial
Center, Mail Stop MA515-11-05, Boston, MA 02111-2621. The Secretary may
determine not to forward to the Board or to a trustee any letter that does not
relate to the business of a Fund.
PROXY STATEMENT DELIVERY
"Householding" is the term used to describe the practice of delivering one copy
of a document to a household of shareholders instead of delivering one copy of a
document to each shareholder in the household. Shareholders of the Funds who
share a common address and who have not opted out of the householding process
should receive a single copy of the proxy statement together with one proxy card
for each account. If you received more than one copy of the proxy statement, you
may elect to household in the future; if you received a single copy of the proxy
statement, you may opt out of householding in the future; and you may, in any
event, obtain an additional copy of this proxy
31
statement by writing to the appropriate Fund at the following address: One
Financial Center, Boston, Massachusetts 02111-2621, or by calling the
appropriate Fund at the following number: [[1-800-426-3750]].
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY IS REQUESTED. A PRE-ADDRESSED,
POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE, AND TOUCH-TONE TELEPHONE
AND INTERNET VOTING IS AVAILABLE.
--------------------------------------
James R. Bordewick, Jr.
Secretary
May [[2]], 2007
32
APPENDIX A
BENEFICIAL OWNERS OF FUND SHARES IN EXCESS OF 5%
As of the Record Date, to the knowledge of management of the Funds, no person
owned beneficially (or of record) more than 5% of the outstanding shares of any
class of any Fund, except as set forth below:
COLONIAL CALIFORNIA INSURED MUNICIPAL FUND
SHARES BENEFICIALLY
OWNED
-------------------
NAME AND ADDRESS OF BENEFICIAL OWNER AND CLASS OF SHARES OWNED NUMBER PERCENT
-------------------------------------------------------------- --------- -------
First Trust Portfolios L.P.
1001 Warrenville Road
Lisle, Illinois 60532 143,138 5.2%
(Common Shares)
COLONIAL HIGH INCOME MUNICIPAL TRUST
SHARES BENEFICIALLY
OWNED
-------------------
NAME AND ADDRESS OF BENEFICIAL OWNER AND CLASS OF SHARES OWNED NUMBER PERCENT
-------------------------------------------------------------- --------- -------
First Trust Portfolios L.P.
1001 Warrenville Road
Lisle, Illinois 60532 1,882,467 6.0%
COLONIAL INTERMARKET INCOME TRUST I
SHARES BENEFICIALLY
OWNED
-------------------
NAME AND ADDRESS OF BENEFICIAL OWNER AND CLASS OF SHARES OWNED NUMBER PERCENT
-------------------------------------------------------------- --------- -------
Sit Investment Associates, Inc.
3300 IDS Center
80 South Eighth Street
Minneapolis, Minnesota 55402 633,300 5.75%
(Common Shares)
COLONIAL INTERMEDIATE HIGH INCOME FUND
SHARES BENEFICIALLY
OWNED
-------------------
NAME AND ADDRESS OF BENEFICIAL OWNER AND CLASS OF SHARES OWNED NUMBER PERCENT
-------------------------------------------------------------- --------- -------
First Trust Portfolios L.P.
1001 Warrenville Road
Lisle, Illinois 60532 2,146,345 10.2%
(Common Shares)
A-1
APPENDIX B
FORM OF NEW ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT
INVESTMENT ADVISORY AGREEMENT, dated this ____th day of ___________ 2007,
by and between ____________________, a Massachusetts business trust (the
"Trust") listed on Appendix A attached hereto, and MASSACHUSETTS FINANCIAL
SERVICES COMPANY, a Delaware corporation (the "Adviser").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an investment company
registered under the Investment Company Act of 1940; and
WHEREAS, the Adviser is willing to provide services to the Trust 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:
ARTICLE 1. DUTIES OF THE ADVISER. (a) The Adviser shall provide the Trust
with such investment advice and supervision as the latter may from time to time
consider necessary for the proper supervision of its assets. The Adviser shall
act as investment adviser to the Trust and as such shall furnish continuously an
investment program and shall determine from time to time what securities or
other instruments shall be purchased, sold or exchanged and what portion of the
assets of the Trust shall be held uninvested, subject always to the restrictions
of the Trust's Declaration of Trust, dated _____________, and By-Laws, each as
amended from time to time (respectively, the "Declaration" and the "By-Laws"),
to the provisions of the Investment Company Act of 1940 and the Rules,
Regulations and orders thereunder and to the Trust's then-current Prospectus and
Statement of Additional Information. The Adviser also shall exercise voting
rights, rights to consent to corporate actions and any other rights pertaining
to the Trust's portfolio securities in accordance with the Adviser's policies
and procedures as presented to the Trustees of the Trust from time to time.
Should the Trustees at any time, however, make any definite determination as to
the investment policy and notify the Adviser thereof in writing, the Adviser
shall be bound by such determination for the period, if any, specified in such
notice or until similarly notified that such determination shall be revoked.
(b) The Adviser shall take, on behalf of the Trust, all actions which it
deems necessary to implement the investment policies determined as provided
above, and in particular to place all orders for the purchase or sale of
portfolio securities or other instruments for the Trust's account with brokers
or dealers selected by it, and to that end, the Adviser is authorized as the
agent of the Trust to give instructions to the Custodian of the Trust as to the
deliveries of securities or other instruments and payments of cash for the
account of the Trust. In connection with the selection of such brokers or
dealers and the placing of such orders, the Adviser is directed to seek for the
Trust the best overall price and execution available from responsible brokerage
firms, taking account of all factors it deems relevant, including by way of
illustration: price; the size of the transaction; the nature of the market for
the security; the amount of the commission; the timing and impact of the
transaction taking into account market prices and trends; the reputation,
experience and financial stability of the broker or dealer involved; and the
quality of services rendered by the broker or dealer in other transactions. In
fulfilling this requirement, the Adviser shall not be deemed to have acted
unlawfully or to have breached any duty, created by this Agreement or otherwise,
solely by reason of its having caused the Trust to pay a broker or dealer an
amount of commission for effecting a securities transaction in excess of the
amount of commission another broker or dealer would have charged for effecting
that transaction, if the Adviser determined in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of either that
B-1
particular transaction or the Adviser's overall responsibilities with respect to
the Trust and to other clients of the Adviser as to which the Adviser exercises
investment discretion.
(c) Subject to the general supervision and control of the Trustees of the
Trust and under the terms and conditions set forth in this Agreement, the Trust
acknowledges and agrees that it is contemplated that Adviser may, at its own
expense, select and contract with one or more investment advisers
("Sub-Advisers") to manage the investment operations and composition of the
Trust and render investment advice for the Trust, including the purchase,
retention, and disposition of the investments, securities and cash contained in
the Trust, subject always to the restrictions of the Trust's Declaration and the
By-Laws, to the provisions of the Investment Company Act of 1940 and the Rules,
Regulations and orders thereunder and to the Trust's then-current Prospectus and
Statement of Additional Information; provided, that any contract with an
Sub-Adviser (a "Sub-Advisory Agreement") shall be in compliance with and
approved as required by the Investment Company Act of 1940 and the Rules,
Regulations and orders thereunder or in accordance with exemptive relief granted
by the Securities and Exchange Commission ("SEC") under the Investment Company
Act of 1940.
(d) Subject always to the direction and control of the Trustees of the
Trust, Adviser will have (i) overall supervisory responsibility for the general
management and investment of the Trust's assets; (ii) full discretion to select
new or additional Sub-Advisers for the Trust; (iii) full discretion to enter
into and materially modify existing Sub-Advisory Agreements with Sub-Advisers;
(iv) full discretion to terminate and replace any Sub-Adviser; and (v) full
investment discretion to make all determinations with respect to the investment
of the Trust's assets not then managed by an Sub-Adviser. In connection with
Adviser's responsibilities herein, Adviser will assess the Trust's investment
focus and will seek to implement decisions with respect to the allocation and
reallocation of the Trust's assets among one or more current or additional
Sub-Advisers from time to time, as Adviser deems appropriate, to implement the
Trust's investment policies determined as provided above. In addition, Adviser
(in conjunction with the Trust's Independent Chief Compliance Officer) will
oversee (or, in the event that the Adviser does not require a Sub-Advisor to
assume responsibility therefore under the Sub-Advisory Agreement, shall be
responsible for) compliance of each Sub-Adviser with the investment objectives,
policies and restrictions of the Trust (or portions of the Trust) under the
management of such Sub-Adviser, and review and report to the Trustees of the
Trust on the performance of each Sub-Adviser. Adviser will furnish, or cause the
appropriate Sub-Adviser(s) to furnish, to the Trust such statistical
information, with respect to the investments that the Trust (or portions of the
Trust) may hold or contemplate purchasing, as the Trust may reasonably request.
Further, Adviser (in conjunction with the Trust's Independent Chief Compliance
Officer) will oversee compliance of each Sub-Adviser with the compliance program
of the Trust (or portions of the Trust) under the management of such
Sub-Adviser, as well as the compliance program of the Sub-Adviser as such
program relates to the Sub-Adviser's management of the Trust. On Adviser's own
initiative, Adviser will apprise, or cause the appropriate Sub-Adviser(s) to
apprise, the Trust of important developments materially affecting the Trust (or
any portion of the Trust that they advise) and will furnish the Trust, from time
to time, with such information as may be appropriate for this purpose. Further,
Adviser agrees to furnish, or cause the appropriate Sub-Adviser(s) to furnish,
to the Trustees of the Trust such periodic and special reports as the Trustees
of the Trust may reasonably request. In addition, Adviser agrees to cause the
appropriate Sub-Adviser(s) to furnish to third-party data reporting services all
currently available standardized performance information and other customary
data as may be appropriate.
(e) Subject to the provisions of Article 6, the Adviser shall not be liable
for any error of judgment or mistake of law by any Sub-adviser or for any loss
arising out of any investment made by any Sub-adviser or for any act or omission
in the execution and management of the Trust by any Sub-adviser.
ARTICLE 2. ALLOCATION OF CHARGES AND EXPENSES. (a) The Adviser shall
furnish at its own expense investment advisory and administrative services,
office space, equipment and clerical personnel necessary for servicing the
investments of the Trust and maintaining its organization, and investment
advisory facilities and executive and supervisory personnel for managing the
investments and effecting the portfolio transactions of the Trust. The Adviser
shall arrange, if desired by the Trust, for directors, officers and employees of
the Adviser to serve as Trustees, officers or agents of the Trust if duly
elected or appointed to such positions and subject to their individual consent
and to any limitations imposed by law.
B-2
(b) It is understood that the Trust will pay all of its own expenses
incurred in its operations and the offering of the Trust's shares, unless
specifically provided otherwise in this Agreement or except to the extent that
the Adviser agrees in a written instrument executed by the Adviser (specifically
referring to this Article 2(b)) to assume or otherwise pay for specified
expenses of the Trust, including, without limitation: compensation of Trustees
"not affiliated" with the Adviser; governmental fees; interest charges; taxes;
membership dues in the Investment Company Institute allocable to the Trust; fees
and expenses of independent auditors, of legal counsel, and of any transfer
agent, registrar or dividend disbursing agent of the Trust; expenses of
repurchasing and redeeming shares and servicing shareholder accounts; expenses
of preparing, printing and mailing stock certificates, shareholder reports,
notices, proxy statements and reports to governmental officers and commissions;
brokerage and other expenses connected with the execution, recording and
settlement of portfolio security transactions; insurance premiums; fees and
expenses of the custodian for all services to the Trust, including safekeeping
of funds and securities and maintaining required books and accounts; expenses of
calculating the net asset value of shares of the Trust; organizational and start
up costs; such non-recurring or extraordinary expenses as may arise, including
those relating to actions, suits or proceedings to which the Trust is a party or
otherwise may have an exposure, and the legal obligation which the Trust may
have to indemnify the Trust's Trustees and officers with respect thereto; and
expenses relating to the issuance, registration and qualification of shares of
the Trust and the preparation, printing and mailing of prospectuses for such
purposes (except to the extent that any Distribution Agreement to which the
Trust is a party provides that another party is to pay some or all of such
expenses).
(c) The payment or assumption by the Adviser of any expenses of the Trust
that the Adviser is not obligated by this Agreement or otherwise to pay or
assume shall not obligate the Adviser to pay or assume the same or any similar
expenses of the Trust on any subsequent occasion.
ARTICLE 3. COMPENSATION OF THE ADVISER. For the services to be rendered and
the facilities provided, the Trust shall pay to the Adviser an investment
advisory fee computed and paid monthly as set forth in Appendix A attached
hereto. If the Adviser shall serve for less than the whole of any period
specified in this Article 3, the compensation paid to the Adviser will be
prorated.
ARTICLE 4. ADDITIONAL SERVICES. Should the Trust have occasion to request
the Adviser or its affiliates to perform administrative or other additional
services not herein contemplated or to request the Adviser or its affiliates to
arrange for the services of others, the Adviser or its affiliates will act for
the Trust upon request to the best of its ability, with compensation for the
services to be agreed upon with respect to each such occasion as it arises. No
such agreement for additional services shall expand, reduce or otherwise alter
the obligations of the Adviser, or the compensation that the Adviser is due,
under this Agreement.
ARTICLE 5. COVENANTS OF THE ADVISER. The Adviser agrees that it will not
deal with itself, or with the Trustees of the Trust or the Trust's distributor,
if any, as principals in making purchases or sales of securities or other
property for the account of the Trust, except as permitted by the Investment
Company Act of 1940 and any rules, regulations or orders of the Securities and
Exchange Commission thereunder, will not take a long or short position in the
shares of the Trust except as permitted by the applicable law, and will comply
with all other provisions of the Declaration and the By-Laws and the
then-current Prospectus and Statement of Additional Information of the Trust
relative to the Adviser and its directors and officers.
ARTICLE 6. LIMITATION OF LIABILITY OF THE ADVISER. The 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 Trust, except for willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties and obligations hereunder. As used in this
Article 6, the term "Adviser" shall include directors, officers and employees of
the Adviser as well as that corporation itself.
ARTICLE 7. ACTIVITIES OF THE ADVISER. (a) The Trust acknowledges that the
services of the Adviser to the Trust are not exclusive, the Adviser being free
to render investment advisory and/or other services to others. The Trust further
acknowledges that it is possible that, based on their investment objectives and
policies, certain funds or accounts managed by the Adviser or its affiliates may
at times take investment positions or engage in investment
B-3
techniques which are contrary to positions taken or techniques engaged in on
behalf of the Trust. Notwithstanding the foregoing, the Adviser will at all
times endeavor to treat all of its clients in a fair and equitable manner.
(b) The Trust acknowledges that whenever the Trust and one or more other
funds or accounts advised by the Adviser have available monies for investment,
investments suitable and appropriate for each shall be allocated in a manner
believed by the Adviser to be fair and equitable to each entity. Similarly,
opportunities to sell securities or other investments shall be allocated in a
manner believed by the Adviser to be fair and equitable to each entity. The
Trust acknowledges that in some instances this may adversely affect the size of
the position that may be acquired or disposed of for the Trust.
(c) It is understood that the Trustees, officers and shareholders of the
Trust are or may be or become interested in the Adviser, as directors, officers,
employees, or otherwise and that directors, officers and employees of the
Adviser are or may become similarly interested in the Trust, and that the
Adviser may be or become interested in the Trust as a shareholder or otherwise.
ARTICLE 8. MFS NAME. The Trust acknowledges that the names "Massachusetts
Financial Services," "MFS" or any derivatives thereof or logos associated with
those names (collectively, the "MFS Marks") are the valuable property of the
Adviser and its affiliates. The Adviser grants the Trust a non-exclusive and
non-transferable right and sub-license to use the MFS Marks only so long as the
Adviser serves as investment adviser to the Trust. The Trust agrees that if the
Adviser for any reason no longer serves as investment adviser to the Trust, and
the Adviser so requests, that the Trust promptly shall cease to use the MFS
Marks and promptly shall amend its registration statement to delete any
references to the MFS Marks. Likewise, the Trust agrees that if the Adviser for
any reason no longer serves as investment adviser to the Trust, and the Adviser
so requests, the Trust promptly shall cease to use the MFS Marks and promptly
shall amend its Declaration of Trust to delete any references to the MFS Marks.
The Trust acknowledges that the Adviser may permit other clients to use the MFS
Marks in their names or other material. For purposes of this Article, the Trust
shall be deemed to have taken the required action "promptly" if such action is
taken within 90 days of the Adviser no longer serving as the investment adviser
to the Trust, or from the date of the Adviser's request, as the case may be.
ARTICLE 9. DURATION, TERMINATION AND AMENDMENT OF THIS AGREEMENT. (a) This
Agreement shall become effective with respect to the Trust on the date first
written above if approved by the shareholders of the Trust, on the Effective
Date for the Trust, as set forth in Appendix A attached hereto. Thereafter, this
Agreement will remain in effect with respect to the Trust for a period of two
years from the Trust's Effective Date as set forth in Appendix A, on which date
it will terminate for the Trust unless its continuance is "specifically approved
at least annually" (i) by the vote of a majority of the Trustees of the Trust
who are not "interested persons" of the Trust or of the Adviser at a meeting
specifically called for the purpose of voting on such approval, and (ii) by the
Board of Trustees of the Trust, or by "vote of a majority of the outstanding
voting securities" of the applicable Trust.
(b) This Agreement may be terminated as to the Trust at any time without
the payment of any penalty by the Trustees or by "vote of a majority of the
outstanding voting securities" of the applicable Trust, or by the Adviser, in
each case on not more than sixty days' nor less than thirty days' written notice
to the other party. This Agreement shall automatically terminate in the event of
its "assignment".
(c) This Agreement may be amended with respect to the Trust only if such
amendment is in writing signed by or on behalf of the Trust and the Adviser and
is approved by "vote of a majority of the outstanding voting securities" of the
applicable Trust (if such shareholder approval is required by the Investment
Company Act of 1940).
ARTICLE 10. SCOPE OF TRUST'S OBLIGATIONS. A copy of the Trust's Declaration
of Trust is on file with the Secretary of State of The Commonwealth of
Massachusetts. The Adviser acknowledges that the obligations of or arising out
of this Agreement are not binding upon any of the Trust's Trustees, officers,
employees, agents or shareholders individually, but are binding solely upon the
assets and property of the Trust. If this Agreement is executed by the Trust,
the Adviser further acknowledges that the assets and liabilities of the Trust
are separate and
B-4
distinct and that the obligations of or arising out of this Agreement concerning
the Trust are binding solely upon the assets or property of the Trust and not
upon the assets or property of any other Trust.
ARTICLE 11. DEFINITIONS AND INTERPRETATIONS. The terms "specifically
approved at least annually," "vote of a majority of the outstanding voting
securities," "assignment," "affiliated person," and "interested person," when
used in this Agreement, shall have the respective meanings specified, and shall
be construed in a manner consistent with, the Investment Company Act of 1940 and
the rules and regulations promulgated thereunder. Any question of interpretation
of any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the Investment Company Act of 1940, the
Investment Advisers Act of 1940, the Securities Act of 1933, or the Securities
Exchange Act of 1934 (collectively, the "Federal Securities Acts") shall be
resolved by reference to such term or provision of the Federal Securities Acts
and to interpretations thereof, if any, by United States federal courts or, in
the absence of any controlling decisions of any such court, by rules or
regulations of the Securities and Exchange Commission. Where the effect of a
requirement of the Federal Securities Acts reflected in any provision of this
Agreement is revised by rule or regulation of the Securities and Exchange
Commission, such provisions shall be deemed to incorporate the effect of such
rule or regulation.
ARTICLE 12. RECORD KEEPING. The Adviser will maintain records in a form
acceptable to the Trust and in compliance with the rules and regulations of the
Securities and Exchange Commission, including but not limited to records
required to be maintained by Section 31(a) of the Investment Company Act of 1940
and the rules thereunder, which at all times will be the property of the Trust
and will be available for inspection and use by the Trust.
ARTICLE 13. MISCELLANEOUS. (a) This Agreement contains the entire
understanding and agreement of the parties with respect to the subject matter
hereof.
(b) Headings in this Agreement are for ease of reference only and shall not
constitute a part of the Agreement.
(c) Should any portion of this Agreement for any reason be held void in law
or equity, the remainder of the Agreement shall be construed to the extent
possible as if such voided portion had never been contained herein.
(d) This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts, without giving effect to the choice of laws provisions thereof,
except that questions of interpretation shall be resolved in accordance with the
provisions of Article 11 above.
B-5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in their names and on their behalf by the undersigned
officers thereunto duly authorized, all as of the day and year first above
written. The undersigned officer of the Trust has executed this Agreement not
individually, but as an officer under the Declaration and the obligations of
this Agreement are not binding upon any of the Trustees, officers or
shareholders of the Trust, individually, but bind only the trust estate.
---------------------------------------,
[Trust]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By:
------------------------------------
Name: Robert J. Manning
Title: Chief Executive Officer
B-6
APPENDIX A
COMPENSATION TO THE ADVISER
[FOR COLONIAL CALIFORNIA INSURED MUNICIPAL FUND ONLY:]
The investment advisory fee payable by the Trust shall be computed and paid
monthly in an amount equal to the sum of 0.65% of the Trust's average daily net
assets including assets applicable to the auction preferred shares (average
daily net assets being computed for this purpose without deducting any liability
for money borrowed for investment in accordance with the Trust's investment
objective and policies).
[FOR COLONIAL MUNICIPAL INCOME TRUST ONLY:]
The investment advisory fee payable by the Trust shall be computed and paid
monthly in an amount equal to the sum of 0.65% of the Trust's average daily net
assets including assets applicable to the auction preferred shares (average
daily net assets being computed for this purpose without deducting any liability
for money borrowed for investment in accordance with the Trust's investment
objective and policies).
[FOR COLONIAL INTERMARKET INCOME TRUST I ONLY:]
The investment advisory fee payable by the Trust shall be computed and paid
monthly in an amount equal to the sum of 0.75% of the Trust's average daily net
assets (average daily net assets being computed for this purpose without
deducting any liability for money borrowed for investment in accordance with the
Trust's investment objective and policies).
[FOR COLONIAL INTERMEDIATE HIGH INCOME FUND ONLY:]
The investment advisory fee payable by the Trust shall be computed and paid
monthly in an amount equal to the sum of 0.65% of the Trust's average daily net
assets (average daily net assets being computed for this purpose without
deducting any liability for money borrowed for investment in accordance with the
Trust's investment objective and policies) and in addition, the fund shall pay
the Advisor monthly a fee equal to 20% of the Fund's Leverage Income; provided,
however, if the Fund's Leverage Income is less than zero then the Advisor shall
pay the Fund 20% of the Funds Leverage Income.
"Leverage Income" shall mean:
(gross income of (% of Fund's average (interest and other
the Fund for such daily total assets borrowing expenses
month) X represented by ___ associated with leverage
leverage as of the for such month)
last day of such
month)
[FOR COLONIAL HIGH INCOME MUNICIPAL TRUST ONLY:]
The investment advisory fee payable by the Trust shall be computed and paid
monthly in an amount equal to the sum of 0.75% of the Trust's average daily net
assets including assets applicable to the auction preferred shares (average
daily net assets being computed for this purpose without deducting any liability
for money borrowed for investment in accordance with the Trust's investment
objective and policies).
[FOR COLONIAL INVESTMENT GRADE MUNICIPAL TRUST ONLY:]
The investment advisory fee payable by the Trust shall be computed and paid
monthly in an amount equal to the sum of 0.65% of the Trust's average daily net
assets including assets applicable to the auction preferred shares (average
daily net assets being computed for this purpose without deducting any liability
for money borrowed for investment in accordance with the Trust's investment
objective and policies).
B-7
APPENDIX C
DESCRIPTION OF MATERIAL DIFFERENCES BETWEEN CURRENT DECLARATION AND FORM OF
REVISED DECLARATION
CURRENT DECLARATIONS
--------------------------------------------------------------------------------------
COLONIAL HIGH INCOME
MUNICIPAL TRUST, COLONIAL
COLONIAL CALIFORNIA INSURED MUNICIPAL INCOME TRUST AND COLONIAL INTERMEDIATE HIGH
MUNICIPAL FUND AND COLONIAL COLONIAL INVESTMENT GRADE INCOME FUND AND COLONIAL
REVISED DECLARATION INSURED MUNICIPAL FUND MUNICIPAL TRUST INTERMARKET INCOME TRUST I
----------------------- --------------------------- -------------------------- --------------------------
SHAREHOLDER The Trust shall A shareholder or former A shareholder or former A shareholder or former
LIABILITY: indemnify and hold each shareholder held to be shareholder held to be shareholder held to be
shareholder or former personally liable solely by personally liable solely personally liable solely
shareholder harmless reason of his or her being by reason of his or her by reason of his or her
against all claims in or having been a being or having been a being or having been a
connection with Trust shareholder is entitled to shareholder is entitled to shareholder is entitled to
property or the acts, be held harmless from and be held harmless from and be held harmless from and
obligations or affairs indemnified against all indemnified against all indemnified against all
of the Trust to which loss and expense arising loss and expense arising loss and expense arising
such shareholder may from such liability. from such liability. from such liability.
become subject solely
by reason of his or her
being or having been a
shareholder.
Every written Every note, bond, contract, Every note, bond, Every note, bond,
obligation, contract, instrument, certificate or contract, instrument, contract, instrument,
instrument, undertaking made or issued certificate or undertaking certificate or undertaking
certificate, share, by the Trustees or by any made or issued by the made or issued by the
other security of the officers or officer must Trustees or by any Trustees or by any
Trust or undertaking recite that the same was officers or officer must officers or officer must
made or issued by the executed or made by or on recite that the same was recite that the same was
Trustees or officers behalf of the Trust or by executed or made by or on executed or made by or on
shall recite that the them as Trustees or as behalf of the Trust or by behalf of the Trust or by
same is executed or officers and that them as Trustees or as them as Trustees or as
made by or on behalf of obligations of such officers and that officers and that
Trustees and that the instrument are not binding obligations of such obligations of such
obligations of such upon any of them or instrument are not binding instrument are not binding
instrument are not shareholders individually. upon any of them or upon any of them or
binding on any of the shareholders individually. shareholders individually.
Trustees, officers or
shareholders
individually.
SHAREHOLDER Shareholders have the Subject to the voting Subject to the voting Shareholders have the
VOTING RIGHTS: power to vote only (i) powers of one or more powers of one or more power to vote only (i) for
for the election, when classes or series of shares classes or series of the election or removal of
submitted to as set forth in the bylaws, shares as set forth in the Trustees; (ii) with
shareholders, or shareholders have the power bylaws, shareholders have respect to any investment
removal of Trustees; to vote only (i) for the the power to vote only (i) advisory or management
(ii) with respect to election or removal of for the election or contract; (iii) with
any investment advisory Trustees; (ii) with respect removal of Trustees; (ii) respect to any
or management contract to any investment advisory with respect to any termination, by the
for which a shareholder or management contract; investment advisory or shareholders, of the
vote is required by the (iii) with respect to any management contract; (iii) Trust; (iv) with respect
1940 Act; (iii) with termination, by the with respect to any to any amendment of the
respect to termination, shareholders, of the Trust; termination, by the Declaration of Trust that
by the shareholders, of (iv) with respect to any shareholders, of the requires shareholder
the Trust; (iv) with amendment of the Trust; (iv) with respect authorization; (v) with
respect to any Declaration of Trust that to any amendment of the respect to derivative
amendment of the requires shareholder Declaration of Trust that actions similar to a
Declaration of Trust authorization; (v) with requires shareholder Massachusetts corporation;
that requires respect to derivative authorization; (v) with and (vi) with respect to
shareholder approval; actions similar to a respect to derivative any other matters required
(v) with respect to any Massachusetts corporation; actions similar to a by law, the organizational
merger, consolidation and (vi) with respect to Massachusetts corporation; documents, registration
or sale of assets where any other matters required and (vi) with respect to with the Commission or
shareholder by law, the organizational any other matters required other regulators or deemed
authorization is documents, registration by law, the organizational desirable by the Board.
required; (vi) with with the Commission or documents, registration
respect to derivative other regulators or deemed with the Commission or
actions similar desirable by the other regulators or deemed
desirable by the Board.
C-1
CURRENT DECLARATIONS
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COLONIAL HIGH INCOME
MUNICIPAL TRUST, COLONIAL
COLONIAL CALIFORNIA INSURED MUNICIPAL INCOME TRUST AND COLONIAL INTERMEDIATE HIGH
MUNICIPAL FUND AND COLONIAL COLONIAL INVESTMENT GRADE INCOME FUND AND COLONIAL
REVISED DECLARATION INSURED MUNICIPAL FUND MUNICIPAL TRUST INTERMARKET INCOME TRUST I
----------------------- --------------------------- -------------------------- --------------------------
to a Massachusetts Board.
corporation; (vii) with
respect to any
conversion of the Trust
to an "open-end
company"; and (viii)
with respect to certain
transactions with
principal shareholders;
and (ix) with respect
to any other matters
required by the
organizational
documents, registration
with the Commission or
other regulators or
deemed desirable by the
Board.
A shareholder is Except as provided in the Except as provided in the Each whole share or
entitled to one vote by-laws, each whole share by-laws, each whole share fractional share is
for each share owned by or fractional share is or fractional share is entitled to one vote or a
such shareholder on entitled to one vote or a entitled to one vote or a proportionate fractional
each matter on which proportionate fractional proportionate fractional vote, respectively.
such shareholder is vote, respectively. vote, respectively.
entitled to vote, and
each fractional share On any matter submitted to On any matter submitted to Except when a larger vote
is entitled to a a vote of shareholders, all a vote of shareholders, is required by the
proportionate shares of the Trust then all shares of the Trust provisions of the
fractional vote. entitled to vote shall, then entitled to vote Declaration of Trust or
except as otherwise shall, except as otherwise the bylaws, a majority of
Except as otherwise provided in the by-laws or provided in the by-laws or the shares voted shall
required by law or the required by law, be voted required by law, be voted decide any questions and a
organizational in the aggregate as a in the aggregate as a plurality shall elect a
documents, shares single class without regard single class without Trustee.
representing a majority to classes or series of regard to classes or
of the shares voted in shares. series of shares.
person or by proxy
shall decide any Except when a different Except when a larger vote
questions and a vote is required by the is required by the
plurality shall elect a provisions of the provisions of the
Trustee. Declaration of Trust or the Declaration of Trust or
by-laws, a majority of the the bylaws, a majority of
shares voted shall decide the shares voted shall
any questions and a decide any questions and a
plurality shall elect a plurality shall elect a
Trustee, provided that Trustee, provided that
where the bylaws require where the bylaws require
that the holders of any that the holders of any
class or series shall vote class or series shall vote
as an individual class or as an individual class or
series, a majority of the series, a majority of the
shares of that class or shares of that class or
series voted on the matter series voted on the matter
(or a plurality with (or a plurality with
respect to the election of respect to the election of
a Trustee) shall decide a Trustee) shall decide
that matter insofar as that that matter insofar as
class or series is that class or series is
concerned. concerned.
C-2
CURRENT DECLARATIONS
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COLONIAL HIGH INCOME
MUNICIPAL TRUST, COLONIAL
COLONIAL CALIFORNIA INSURED MUNICIPAL INCOME TRUST AND COLONIAL INTERMEDIATE HIGH
MUNICIPAL FUND AND COLONIAL COLONIAL INVESTMENT GRADE INCOME FUND AND COLONIAL
REVISED DECLARATION INSURED MUNICIPAL FUND MUNICIPAL TRUST INTERMARKET INCOME TRUST I
----------------------- --------------------------- -------------------------- --------------------------
SHAREHOLDERS Issue not addressed in If the Trustees shall fail If the Trustees shall fail If the Trustees shall fail
MEETINGS: the Declaration of to call or give notice of to call or give notice of to call or give notice of
Trust. any meeting of shareholders any meeting of any meeting of
for 30 days after written shareholders for 30 days shareholders for 30 days
application requesting a after written application after written application
meeting by shareholders requesting a meeting by requesting a meeting by
holding at least 10% of the shareholders holding at shareholders holding at
shares then outstanding of least 10% of the shares least 10% of the shares
all classes and series then outstanding of all then outstanding, then
entitled to vote at such classes and series shareholders holding at
meeting, then shareholders entitled to vote at such least 10% of the shares
holding at least 10% of the meeting, then shareholders then outstanding may call
shares then outstanding may holding at least 10% of and give notice of such
call and give notice of the shares then meeting.
such meeting. outstanding may call and
give notice of such
meeting.
SHAREHOLDER Issue not addressed in 30% of the shares entitled A majority* of the shares A majority of the shares
QUORUM: the Declaration of to vote on a particular entitled to vote on a entitled to vote shall be
Trust, but intended to matter shall be a quorum, particular matter shall be a quorum.
be addressed in the except where the by-laws a quorum, except where the
Bylaws as described in require that holders of any bylaws require that
Proposal 2. class or series shall vote holders of any class or
as an individual class or series shall vote as an
series, in which case 30% individual class or
of the aggregate number of series, in which case a
shares of that class or majority* of the aggregate
series is necessary to number of shares of that
constitute a quorum. class or series is
necessary to constitute a
quorum.
* Colonial Municipal
Income Trust provides
that 30% of the
shares entitled to
vote shall be a
quorum.
SHAREHOLDER Majority consent Majority consent (or such Majority consent (or such Majority consent (or such
CONSENT: required for larger proportion as larger proportion as larger proportion as
shareholder action required by any express required by any express required by any express
taken without a provision of the provision of the provision of the
meeting, as relates to Declaration of Trust or Declaration of Trust or Declaration of Trust or
approval of merger/ bylaws) required for bylaws) required for bylaws) required for
consolidation or shareholder action taken shareholder action taken shareholder action taken
amendments to the without a meeting. without a meeting. without a meeting.
Declaration of Trust.
NOTICE TO Any notices to which a Notice of shareholder Notice of shareholder Notice of shareholder
SHAREHOLDERS: shareholder may be meetings is to be mailed, meetings is to be mailed, meetings is to be mailed,
entitled and any and postage prepaid, not less postage prepaid, not less postage prepaid, not less
all communications than seven days in advance. than seven days in than seven days in
shall be deemed duly advance. advance.
served (i) if mailed, Notice must state the time,
postage prepaid, (ii) place and purpose of the Notice must state the Notice must state the
if sent by electronic meeting. time, place and purpose of time, place and purpose of
transmission to the meeting. the meeting.
shareholder, (iii) if
mailed or sent by
electronic delivery to
one or more members of
shareholder's
household, or (iv) if
otherwise sent in
accordance with
applicable law or
regulation.
Notice is not expressly
required for
shareholder meetings.
C-3
CURRENT DECLARATIONS
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COLONIAL HIGH INCOME
MUNICIPAL TRUST, COLONIAL
COLONIAL CALIFORNIA INSURED MUNICIPAL INCOME TRUST AND COLONIAL INTERMEDIATE HIGH
MUNICIPAL FUND AND COLONIAL COLONIAL INVESTMENT GRADE INCOME FUND AND COLONIAL
REVISED DECLARATION INSURED MUNICIPAL FUND MUNICIPAL TRUST INTERMARKET INCOME TRUST I
----------------------- --------------------------- -------------------------- --------------------------
POWER TO AMEND Except where Except to the extent the Except to the extent the The Declaration of Trust
DECLARATION OF shareholder bylaws or applicable law bylaws or applicable law may be amended at any time
TRUST: authorization is require a higher vote or a require a higher vote or a by an instrument in
required, the separate vote of one or separate vote of one or writing signed by a
Declaration of Trust more classes or series of more classes or series of majority of the then
may be amended by the shares, the Declaration of shares, the Declaration of Trustees when authorized
Trustees, to change the Trust may be amended at any Trust may be amended at so to do by vote of a
name or principal time by an instrument in any time by an instrument majority of the shares
office of the Trust, to writing signed by a in writing signed by a entitled to vote with
supply any omission, to majority of the then majority of the then respect to such amendment,
cure, correct or Trustees when authorized so Trustees when authorized except that shareholder
supplement any to do by vote of a majority so to do by vote of a authorization is not
ambiguous, defective or of the shares entitled to majority of the shares required for amendments to
inconsistent provision vote with respect to such entitled to vote with change the name of the
or if the Trustees deem amendment, except that respect to such amendment, Trust, supply any
it necessary or shareholder authorization except that shareholder omission, cure any
advisable, to conform is not required for authorization is not ambiguity or cure, correct
the Declaration of amendments to authorize one required for amendments to or supplement any
Trust to the or more classes or series authorize one or more defective or inconsistent
requirements of of shares, to change the classes or series of provision.
applicable law. name of the Trust, supply shares, to change the name
any omission, cure any of the Trust, supply any
Shareholders have the ambiguity or cure, correct omission, cure any
right to vote on any or supplement any defective ambiguity or cure, correct
amendment that would or inconsistent provision. or supplement any
affect their right to defective or inconsistent
vote, any amendment provision.
that requires a
shareholder approval
under law or the
trust's registration
statement, any
amendment to the
declaration of trust
provision regarding
amendment and any other
amendment submitted to
them by the trustees.
Except as provided
below, any amendment on
which the shareholders
have the right to vote
shall require a
majority shareholder
vote.
No amendment may be Except to the extent the Except to the extent the No amendment may be made
made which shall amend, bylaws or applicable law bylaws or applicable law which repeals certain
alter, change or repeal require a higher vote or a require a higher vote or a provisions relating to the
any of the provisions separate vote, no amendment separate vote, no number and term of
relating to term of may be made which repeals amendment may be made Trustees, the conversion
trustees, termination certain provisions relating which repeals certain to an open-end fund or
of the trust, to the number and term of provisions relating to the this provision*, unless
amendments to the Trustees, the conversion to number and term of such amendment shall
declaration of trust, an open-end fund or this Trustees, the conversion receive the affirmative
merger, consolidation provision, unless such to an open-end fund or vote of 66 2/3% of the
or sale of assets; amendment shall receive the this provision, unless shares entitled to vote.
conversion and certain affirmative vote of 66 2/3% such amendment shall
transactions unless the of the shares entitled to receive the affirmative * Colonial Intermarket
amendment effecting vote. vote of 66 2/3% of the Income Trust I also
such amendment, shares entitled to vote. requires a 66 2/3%
alteration, change or vote to amend the
repeal shall receive provision relating to
the affirmative vote or the duration and
consent of sixty-six termination of Trust.
and two-thirds percent
(66 2/3%) of the shares
outstanding and
entitled to vote.
C-4
CURRENT DECLARATIONS
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COLONIAL HIGH INCOME
MUNICIPAL TRUST, COLONIAL
COLONIAL CALIFORNIA INSURED MUNICIPAL INCOME TRUST AND COLONIAL INTERMEDIATE HIGH
MUNICIPAL FUND AND COLONIAL COLONIAL INVESTMENT GRADE INCOME FUND AND COLONIAL
REVISED DECLARATION INSURED MUNICIPAL FUND MUNICIPAL TRUST INTERMARKET INCOME TRUST I
----------------------- --------------------------- -------------------------- --------------------------
TERMINATION OF Shareholders have the Subject to the voting Subject to the voting The Trust may be
TRUST: right to terminate the powers of one or more powers of one or more terminated at any time by
Trust upon a two-thirds classes or series of shares classes or series of vote of shareholders
vote of outstanding as set forth in the bylaws, shares as set forth in the holding at least 66 2/3%
shares of the Trust. the Trust may be terminated bylaws, the Trust may be of the shares entitled to
at any time by vote of terminated at any time by vote.
shareholders holding at vote of shareholders
least 66 2/3% of the shares holding at least 66 2/3%
entitled to vote. of the shares entitled to
vote.
Trustees may terminate Trustees may terminate the Trustees may terminate the Trustees may terminate the
the Trust by written Trust by written notice to Trust by written notice to Trust by written notice to
notice to shareholders. the shareholders. the shareholders. the shareholders.
MERGER OR The Declaration of Issue not addressed in the Issue not addressed in the Issue not addressed in the
CONSOLIDATION Trust provides that a Declaration of Trust. Declaration of Trust. Declaration of Trust.
TRUST: consolidation, merger
or sale of assets may
be authorized by a
two-thirds shareholder
vote at a meeting
called for such
purpose, or by written
consent, without a
meeting, of the holders
of not less than
two-thirds of such
shares, provided,
however, that if such
merger, consolidation,
sale, lease or exchange
is recommended by the
Trustees, the vote or
written consent of the
holders of a majority
of shares outstanding
and entitled to vote,
shall be sufficient
authorization.
CONVERSION: Notwithstanding any The conversion of the Trust The conversion of the At the first annual
other provision of this from a "closed-end company" Trust from a "closed-end meeting or special meeting
Declaration, the to an "open-end company," company" to an "open-end held after November 1,
conversion of the Trust together with any necessary company", together with 1993*, the Trustees shall
from a "closed-end amendments to the any necessary amendments submit to shareholders a
company" to an Declaration of Trust to to the Declaration of proposal for conversion
"open-end company," as permit such a conversion, Trust to permit such a from a "closed-end
those terms are defined require the affirmative conversion, require the company" to an "open-end
in the 1940 Act, shall vote of 66 2/3% of shares affirmative vote of 66 company," if: (i) shares
require the affirmative of each class entitled to 2/3% of shares of each have traded on the
vote or consent of the vote. class entitled to vote. principal security
holders of sixty-six exchange where listed at
and two-thirds percent an average discount from
(66 2/3%) of the shares net asset value of more
outstanding and than 10%, determined on
entitled to vote. the basis of the discount
as of the end of the last
trading day in each week
during the period of 12
calendar weeks preceding
November 1, 1993*, and
(ii) during such year the
Trust receives at its
principal executive office
written requests from the
holders of 10% or more of
the outstanding shares
that such proposal be
submitted to shareholders.
The conversion of the
Trust from a "closed-
C-5
CURRENT DECLARATIONS
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COLONIAL HIGH INCOME
MUNICIPAL TRUST, COLONIAL
COLONIAL CALIFORNIA INSURED MUNICIPAL INCOME TRUST AND COLONIAL INTERMEDIATE HIGH
MUNICIPAL FUND AND COLONIAL COLONIAL INVESTMENT GRADE INCOME FUND AND COLONIAL
REVISED DECLARATION INSURED MUNICIPAL FUND MUNICIPAL TRUST INTERMARKET INCOME TRUST I
----------------------- --------------------------- -------------------------- --------------------------
end company" to an
"open-end company" require
the affirmative vote of 66
2/3% of shares entitled to
vote.
* December 1, 1994 for
Colonial Investment
Income Trust I.
REMOVAL OF A Trustee may be At any meeting called for At any meeting called for At any meeting called for
TRUSTEES: removed at any meeting such purpose and subject to such purpose and subject such purpose, a Trustee
of shareholders by a the voting powers of one or to the voting powers of may be removed, with or
vote of shares more classes or series of one or more classes or without cause, by vote of
representing two-thirds shares as set forth in the series of shares as set a majority of the
of the outstanding bylaws, a Trustee may be forth in the bylaws, a outstanding shares.
shares of the Trust removed, with or without Trustee may be removed,
entitled to vote for cause, by vote of 75% of with or without cause, by
the election of such the outstanding shares of vote of a majority of the
trustee. the classes or series outstanding shares of the
entitled to vote for the classes or series entitled
election of such Trustee. to vote for the election
of such Trustee.
A Trustee may be The Trustees may remove a The Trustees may remove a The Trustees may remove a
removed at any time, Trustee, with or without Trustee, with or without Trustee, with or without
with or without cause, cause, by vote of 75% of cause, by vote of a cause, by vote of a
by written instrument the Trustees then in majority of the Trustees majority of the Trustees
signed by at least office. then in office. then in office.
three-quarters of the
Trustees, specifying
the date when such
removal shall become
effective.
TRUSTEE No Trustee, advisory Trustees are not Trustees are not Trustees are not
LIABILITY: Trustee, officer or responsible or liable for responsible or liable for responsible or liable for
employee or agent will any neglect or wrongdoing any neglect or wrongdoing any neglect or wrongdoing
be liable whatsoever to of any officer, agent, of any officer, agent, of any officer, agent,
any person in employee, adviser, or employee, adviser, or employee, adviser, or
connection with Trust principal underwriter of principal underwriter of principal underwriter of
property or the affairs the Trust. No Trustee is the Trust. No Trustee is the Trust. No Trustee is
of the Trust, and no responsible for the act or responsible for the act or responsible for the act or
Trustee or advisory omission of any other omission of any other omission of any other
Trustee will be liable Trustee. Trustee is not Trustee. Trustee is not Trustee. Trustee is not
or responsible in any protected against any protected against any protected against any
event for any neglect liability to which he or liability to which he or liability to which he or
or wrongdoing of any she would otherwise be she would otherwise be she would otherwise be
officer, employee or subject by reason of subject by reason of subject by reason of
agent of the Trust or willful misfeasance, bad willful misfeasance, bad willful misfeasance, bad
for the act or omission faith, gross negligence or faith, gross negligence or faith, gross negligence or
of any other Trustee. reckless disregard of the reckless disregard of the reckless disregard of the
Trustees, advisory duties involved in the duties involved in the duties involved in the
Trustees, officers, conduct of his or her conduct of his or her conduct of his or her
employees and agents office. office. office.
are not protected
against any liability
to the Trust or its
shareholders to which
he or she would
otherwise be subject by
reason of willful
misfeasance, bad faith,
gross negligence or
reckless disregard of
the duties involved in
the conduct of his or
her office or position
with or on behalf of
the Trust.
C-6
CURRENT DECLARATIONS
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COLONIAL HIGH INCOME
MUNICIPAL TRUST, COLONIAL
COLONIAL CALIFORNIA INSURED MUNICIPAL INCOME TRUST AND COLONIAL INTERMEDIATE HIGH
MUNICIPAL FUND AND COLONIAL COLONIAL INVESTMENT GRADE INCOME FUND AND COLONIAL
REVISED DECLARATION INSURED MUNICIPAL FUND MUNICIPAL TRUST INTERMARKET INCOME TRUST I
----------------------- --------------------------- -------------------------- --------------------------
TRUSTEE The Trust will The Trust will indemnify The Trust will indemnify The Trust will indemnify
INDEMNIFICATION: indemnify each of its each of its Trustees and each of its Trustees and each of its Trustees and
Trustees, advisory officers (including persons officers (including officers (including
Trustees and officers who serve at the Trust's persons who serve at the persons who serve at the
against all liability request as trustees or Trust's request as Trust's request as
and all expenses officers of another trustees or officers of trustees or officers of
reasonably incurred by organization in which the another organization in another organization in
him or her in Trust has any interest as a which the Trust has any which the Trust has any
connection with any shareholder, creditor or interest as a shareholder, interest as a shareholder,
proceeding in which otherwise) against all creditor or otherwise) creditor or otherwise)
that individual becomes liabilities and expenses, against all liabilities against all liabilities
involved as a party or including amounts paid in and expenses, including and expenses, including
otherwise by virtue of satisfaction of judgments, amounts paid in amounts paid in
being or having been a in compromise, as fines and satisfaction of judgments, satisfaction of judgments,
Trustee, advisory penalties, and as counsel in compromise, as fines in compromise, as fines
Trustee or officer and fees, reasonably incurred and penalties, and as and penalties, and as
against amount paid or by such person while in counsel fees, reasonably counsel fees, reasonably
incurred by that office or thereafter, by incurred by such person incurred by such person
individual in reason of the indemnified while in office or while in office or
settlement thereof. No person's service as a thereafter, by reason of thereafter, by reason of
indemnification will be Trustee or officer. The the indemnified person's the indemnified person's
provided to a Trustee, Trust will not indemnify service as a Trustee or service as a Trustee or
advisory Trustee or its Trustees and officers officer. The Trust will officer. [The Trust will
officer of the Trust: with respect to any matter not indemnify its Trustees not indemnify its Trustees
(i) against any in which such person has and officers with respect and officers with respect
liability to the Trust been finally adjudicated in to any matter in which to any matter in which
or the shareholders by a decision on the merits such person has been such person has been
reason of a final not to have acted in good finally adjudicated in a finally adjudicated in a
adjudication by the faith in the reasonable decision on the merits not decision on the merits not
court that such person belief that such person's to have acted in good to have acted in good
engaged in willful action was in the best faith in the reasonable faith in the reasonable
misfeasance, bad faith, interests of the Trust. The belief that such person's belief that such person's
gross negligence or Trust will not indemnify action was in the best action was in the best
reckless disregard of its Trustees and officers interests of the Trust. interests of the Trust.]*
the duties involved in against any liability to The Trust will not The Trust will not
the conduct of that the Trust or to its indemnify its Trustees and indemnify its Trustees and
individual's office; or shareholders to which he or officers against any officers against any
(ii) with respect to she would otherwise be liability to the Trust or liability to the Trust or
any matter as to which subject by reason of to its shareholders to to its shareholders to
such person has been willful misfeasance, bad which he or she would which he or she would
finally adjudicated not faith, gross negligence or otherwise be subject by otherwise be subject by
to have acted in good reckless disregard of the reason of willful reason of willful
faith in the reasonable duties involved in the misfeasance, bad faith, misfeasance, bad faith,
belief that the conduct of such person's gross negligence or gross negligence or
individual's action was office. reckless disregard of the reckless disregard of the
in the best interest of duties involved in the duties involved in the
the Trust. conduct of such person's conduct of such person's
office. office.
No indemnification will In the absence of a final In the absence of a final In the absence of a final
be provided in the decision on the merits by adjudication on the merits adjudication on the merits
event of a settlement an adjudicating body that that such person is liable that such person is liable
or other disposition such person is liable by by reason of willful by reason of willful
not involving a final reason of willful misfeasance, bad faith, misfeasance, bad faith,
adjudication resulting misfeasance, bad faith, gross negligence or gross negligence or
in a payment by a gross negligence or reckless disregard of the reckless disregard of the
Trustee, advisory reckless disregard of the duties involved in the duties involved in the
Trustee or officer, duties involved in the conduct of their office or conduct of their office
unless there has been a conduct of their office or did not act in good faith [or did not act in good
determination that such did not act in good faith in the reasonable belief faith in the reasonable
person did not engage in the reasonable belief that his or her actions belief that his or her
in willful misfeasance, that his or her actions were in the best interests actions were in the best
bad faith, gross were in the best interests of the Trust, interests of the Trust]*,
negligence or reckless of the Trust, indemnification will be indemnification will be
disregard of duties indemnification will be provided if (a) approved provided if (a) approved
involved in the conduct provided if (a) approved as as in the best interests as in the best interests
of that individual's in the best interests of of the Trust, after notice of the Trust, after notice
office by the court or the Trust, after notice that it involves such that it involves such
other body approving that it involves such indemnification, by at indemnification, by at
the settlement or other indemnification, by at least a majority of the least a majority of the
disposition or by a least a majority of the disinterested, non-party disinterested, non-party
reasonable disinterested, non-Party Trustees acting on the Trustees acting on the
determination that the Trustees acting on the matter (provided that a matter (provided that a
individual did not matter (provided that a majority of the majority of the
engage in such conduct: majority of the disinterested Trustees disinterested Trustees
(i) by disinterested Trustees then then in office act on the then in office act on the
in office act on the matter) upon a matter) upon a
matter) upon a determination that such determination that such
person acted in
C-7
CURRENT DECLARATIONS
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COLONIAL HIGH INCOME
MUNICIPAL TRUST, COLONIAL
COLONIAL CALIFORNIA INSURED MUNICIPAL INCOME TRUST AND COLONIAL INTERMEDIATE HIGH
MUNICIPAL FUND AND COLONIAL COLONIAL INVESTMENT GRADE INCOME FUND AND COLONIAL
REVISED DECLARATION INSURED MUNICIPAL FUND MUNICIPAL TRUST INTERMARKET INCOME TRUST I
----------------------- --------------------------- -------------------------- --------------------------
vote of a majority of determination that such good faith in the person [acted in good
the disinterested, person acted in good faith reasonable belief that his faith in the reasonable
non-party Trustees; or in the reasonable belief or her actions were in the belief that his or her
(ii) by written opinion that his or her actions best interest of the Trust actions were in the best
of the then-current were in the best interest and is not liable to the interest of the Trust
legal counsel to the of the Trust and is not Trust or its shareholders and]* is not liable to the
disinterested Trustees liable to the Trust or its by reason of willful Trust or its shareholders
or other legal counsel shareholders by reason of misfeasance, bad faith, by reason of willful
chosen by the majority willful misfeasance, bad gross negligence or misfeasance, bad faith,
of the disinterested, faith, gross negligence or reckless disregard of the gross negligence or
non-party Trustees. reckless disregard of the duties involved in the reckless disregard of the
duties involved in the conduct of his or her duties involved in the
conduct of his or her office or (b) there has conduct of his or her
office or (b) there has been obtained an opinion office or (b) there has
been obtained an opinion in in writing of independent been obtained an opinion
writing of independent legal counsel to the in writing of independent
legal counsel to the effect effect that such person legal counsel to the
that such person acted in acted in good faith and effect that such person
good faith and such such indemnification would [acted in good faith]* and
indemnification would not not protect such person such indemnification would
protect such person against against any liability to not protect such person
any liability to the Trust the Trust to which such against any liability to
to which such person would person would otherwise be the Trust to which such
otherwise be subject by subject by reason of person would otherwise be
reason of willful willful misfeasance, bad subject by reason of
misfeasance, bad faith, faith, gross negligence or willful misfeasance, bad
gross negligence or reckless disregard of the faith, gross negligence or
reckless disregard of the duties involved in the reckless disregard of the
duties involved in the conduct of his or her duties involved in the
conduct of his or her office. conduct of his or her
office. office.
* Bracketed language
does not apply to
Colonial Intermediate
High Income Fund.
LEGAL EXPENSES: Legal expenses Legal expenses may be paid Legal expenses may be paid Legal expenses may be paid
associated with from time to time by the from time to time by the from time to time by the
authorized Trust in advance of the Trust in advance of the Trust in advance of the
indemnification shall final disposition of any final disposition of any final disposition of any
be advanced by the such proceeding if the such proceeding if the such proceeding if the
Trust prior to final Trust receives a written Trust receives a written Trust receives an
disposition thereof undertaking by the undertaking by the undertaking by the
upon receipt of an indemnified person to indemnified person to indemnified person to
undertaking by or on reimburse the Trust in the reimburse the Trust in the reimburse the Trust in the
behalf of the event it is ultimately event it is ultimately event it is ultimately
indemnified person to determined that the determined that the determined that the
repay such amount if it indemnified person is not indemnified person is not indemnified person is not
is ultimately entitled to such entitled to such entitled to such
determined that such indemnification and (a) the indemnification and (a) indemnification and (a)
person is not entitled indemnified person provides the indemnified person the indemnified person
to indemnification, security for his provides security for his provides security for his
provided that (a) the undertaking, or (b) the undertaking, or (b) the undertaking, or (b) the
indemnified person Trust is insured against Trust is insured against Trust is insured against
provides security for losses arising by reason of losses arising by reason losses arising by reason
his undertaking or the such indemnified person's of such indemnified of such indemnified
Trust is insured failure to fulfill his or person's failure to person's failure to
against such losses, or her undertaking, or (c) a fulfill his or her fulfill his or her
(b) a majority of the majority of the undertaking, or (c) a undertaking, or (c) a
disinterested, disinterested, non-party majority of the majority of the
non-party Trustees or Trustees (provided that a disinterested, non-party disinterested, non-party
independent legal majority of such Trustees Trustees (provided that a Trustees (provided that a
counsel, through a then in office act on the majority of such Trustees majority of such Trustees
written opinion, matter) or independent then in office act on the then in office act on the
determine that the legal counsel, as expressed matter) or independent matter) or independent
indemnified person in a written opinion, legal counsel, as legal counsel, as
ultimately will be determines that there is expressed in a written expressed in a written
found entitled to reason to believe that the opinion, determines that opinion, determines that
indemnification. indemnified person there is reason to believe there is reason to believe
ultimately will be found that the indemnified that the indemnified
entitled to person ultimately will be person ultimately will be
indemnification. found entitled to found entitled to
indemnification. indemnification.
DERIVATIVE No shareholder shall Issue not addressed. Issue not addressed. Issue not addressed.
ACTIONS: have the right to bring
or maintain any court
action, proceeding or
claim on behalf of the
C-8
CURRENT DECLARATIONS
-------------------------------------------------------------------------------------
COLONIAL HIGH INCOME
MUNICIPAL TRUST, COLONIAL
COLONIAL CALIFORNIA INSURED MUNICIPAL INCOME TRUST AND COLONIAL INTERMEDIATE HIGH
MUNICIPAL FUND AND COLONIAL COLONIAL INVESTMENT GRADE INCOME FUND AND COLONIAL
REVISED DECLARATION INSURED MUNICIPAL FUND MUNICIPAL TRUST INTERMARKET INCOME TRUST I
----------------------- --------------------------- -------------------------- --------------------------
Trust without first
making demand on the
Trustees requesting the
Trustees to bring or
maintain such action,
proceeding or claim.
Such demand shall be
excused only when the
plaintiff makes a
specific showing that
irreparable injury to
the Trust would
otherwise result, or if
a majority of the
Trustees or a majority
of any committee
established to consider
the merits of such
action, has a material
personal financial
interest in the action
at issue.
C-9
APPENDIX D
FORM OF REVISED DECLARATION
DECLARATION OF TRUST
OF
__________________
Dated as of _____________, 2007
D-1
TABLE OF CONTENTS
PAGE
----
ARTICLE I--Name and Definitions 1
Section 1.1 Name 1
Section 1.2 Definitions 1
ARTICLE II--Trustees 3
Section 2.1 Number of Trustees 3
Section 2.2 Term of Office of Trustees 3
Section 2.3 Resignation and Appointment of Trustees 5
Section 2.4 Vacancies 5
Section 2.5 Delegation of Power to Other Trustees 5
ARTICLE III--Powers of Trustees 6
Section 3.1 General 6
Section 3.2 Investments 6
Section 3.3 Legal Title 8
Section 3.4 Issuance and Repurchase of Securities 8
Section 3.5 Borrowing Money; Lending Trust Property 8
Section 3.6 Delegation 8
Section 3.7 Collection and Payment 8
Section 3.8 Expenses 9
Section 3.9 Manner of Acting; By-Laws 9
Section 3.10 Miscellaneous Powers 9
ARTICLE IV--Investment Adviser, Distributor, Custodian and Transfer Agent 10
Section 4.1 Investment Adviser 10
Section 4.2 Distributor 11
Section 4.3 Custodian 11
Section 4.4 Transfer Agent 11
Section 4.5 Parties to Contract 11
ARTICLE V--Limitations of Liability of Shareholders, Trustees and Others 12
Section 5.1 No Personal Liability of Shareholders 12
Section 5.2 Limitation of Liability of Trustees and Others 12
Section 5.3 Mandatory Indemnification 13
Section 5.4 No Bond Required 15
Section 5.5 No Duty of Investigation; Notice in Trust Instruments 15
Section 5.6 Good Faith Action; Reliance on Experts 16
Section 5.7 Derivative Actions 16
ARTICLE VI--Shares of Beneficial Interest 17
Section 6.1 Beneficial Interest 17
Section 6.2 Rights of Shareholders 17
Section 6.3 Trust Only 18
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Section 6.4 Issuance of Shares 18
Section 6.5 Register of Shares 18
Section 6.6 Transfer of Shares 19
Section 6.7 Notices 19
Section 6.8 Voting Powers 19
ARTICLE VII--Determination of Net Asset Value, Net Income and
Distributions 20
ARTICLE VIII--Duration; Termination of Trust; Amendment; Mergers, etc. 21
Section 8.1 Duration 21
Section 8.2 Termination of Trust 21
Section 8.3 Amendment Procedure 21
Section 8.4 Merger, Consolidation and Sale of Assets 23
Section 8.5 Incorporation, Reorganization 23
Section 8.6 Conversion 24
Section 8.7 Certain Transactions 24
ARTICLE IX--Miscellaneous 26
Section 9.1 Filing 26
Section 9.2 Governing Law 26
Section 9.3 Principal Office 26
Section 9.4 Counterparts 27
Section 9.5 Reliance by Third Parties 27
Section 9.6 Provisions in Conflict with Law or Regulations 27
Signature Page 28
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DECLARATION OF TRUST
OF
_______________
Dated as of _____________, 2007
This DECLARATION OF TRUST is made this __th day of ________, 2007 by the
Trustees;
WHEREAS, the Trustees desire to establish a trust for the investment and
reinvestment of funds contributed thereto; and
WHEREAS, the Trustees desire that the beneficial interest in the Trust
assets be divided into transferable Shares of Beneficial Interest (without par
value) issued in one or more series, as hereinafter provided;
NOW THEREFORE, the Trustees hereby confirm that all money and property
contributed to the Trust hereunder shall be held and managed in trust for the
benefit of holders, from time to time, of the Shares of Beneficial Interest
(without par value) issued hereunder and subject to the provisions hereof.
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the Trust is _________.
Section 1.2. Definitions. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "Advisory Trustee" means any person, which may include a former
Trustee, appointed by resolution of the Trustees to serve the Board in an
advisory capacity, for such period and in accordance with such terms and
conditions as are determined by the Trustees. An Advisory Trustee shall serve at
the pleasure of the Trustees and may be removed by the Trustees at any time and
for any reason, with or without cause, and may resign at any time by an
instrument in writing signed by that Advisory Trustee and delivered to the
Trust. Advisory Trustees, in their capacity as such, are not Trustees or
officers of the Trust for any purpose and shall have no legal, voting or other
powers or obligations of Trustees or officers hereunder, and shall not perform
the functions of the Trustees or officers in any manner.
(b) "By-Laws" means the By-laws referred to in Section 3.9 hereof, as from
time to time amended.
(c) "Commission" has the meaning given that term in the 1940 Act.
(d) "Declaration" means this Declaration of Trust, as amended from time to
time. Reference in this Declaration of Trust to "Declaration," "hereof,"
"herein" and "hereunder" shall be deemed to refer to this Declaration rather
than the article or section in which such words appear.
(e) "Distributor" means a party furnishing services to the Trust pursuant
to any contract described in Section 4.2 hereof.
(f) "Interested Person" has the meaning given that term in the 1940 Act.
(g) "Investment Adviser" means a party furnishing services to the Trust
pursuant to any contract described in Section 4.1 hereof.
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(h) "Majority Shareholder Vote" has the same meaning as the phrase "vote of
a majority of the outstanding voting securities" as defined in the 1940 Act.
(i) "1940 Act" means the Investment Company Act of 1940 and the Rules and
Regulations thereunder, as amended from time to time, and as such Act or the
Rules and Regulations thereunder may apply to the Trust pursuant to any
exemptive order or similar relief or interpretation issued by the Commission
under such Act.
(j) "Person" means and includes individuals, corporations, limited
liability companies, partnerships, trusts, associations, joint ventures and
other entities, whether or not legal entities, and governments and agencies and
political subdivisions thereof, whether domestic or foreign.
(k) "Shareholder" means a record owner of outstanding Shares.
(l) "Shares" means the Shares of Beneficial Interest into which the
beneficial interest in the Trust shall be divided from time to time. The term
"Shares" includes fractions of Shares as well as whole Shares.
(m) "Transfer Agent" means a party furnishing services to the Trust
pursuant to any transfer agency contract described in Section 4.4 hereof.
(n) "Trust" means the trust hereunder.
(o) "Trust Property" means any and all property, real or personal, tangible
or intangible, which is owned or held by or for the account of the Trust or the
Trustees.
(p) "Trustees" means the persons who have signed the Declaration, so long
as they shall continue in office in accordance with the terms hereof, and all
other persons who may from time to time be duly elected or appointed, qualified
and serving as Trustees in accordance with the provisions hereof, and reference
herein to a Trustee or the Trustees shall refer to such person or persons in
their capacity as trustees hereunder. For the avoidance of any doubt, an
"Advisory Trustee" as defined in Section 1.2(a) is not a Trustee for any purpose
hereunder.
ARTICLE II
TRUSTEES
Section 2.1. Number of Trustees. The number of Trustees shall be such
number as shall be fixed from time to time by a majority of the Trustees,
provided, however, that the number of Trustees shall in no event be less than
three (3) nor more than fifteen (15). No reduction in the number of Trustees
shall have the effect of removing any Trustee from office prior to the
expiration of his or her term unless the Trustee is specifically removed
pursuant to Section 2.2 hereof at the time of the decrease.
Section 2.2. Term of Office of Trustees. The Board of Trustees shall be
divided into three classes. Within the limits above specified, the number of
Trustees in each class shall be determined by resolution of the Board of
Trustees. The term of office of the first class shall expire on the date of the
first annual meeting of Shareholders or special meeting in lieu thereof
following January 1, 2008. The term of office of the second class shall expire
on the date of the second annual meeting of Shareholders or special meeting in
lieu thereof. The term of office of the third class shall expire on the date of
the third annual meeting of Shareholders or special meeting in lieu thereof.
Upon expiration of the term of office of each class as set forth above, the
number of Trustees in such class, as determined by the Board of Trustees, shall
be elected for a term expiring on the date of the third annual meeting of
Shareholders or special meeting in lieu thereof following such expiration to
succeed the Trustees whose terms of office expire. The Trustees shall be elected
at an annual meeting of the Shareholders or special meeting in lieu thereof
called for that purpose, except as provided in Section 2.3 hereof.
Each Trustee shall hold office until the earlier of his or her death or the
election and qualification of his or her successor; except that:
D-5
(a) any Trustee may resign his or her trust (without need for prior or
subsequent accounting) by an instrument in writing signed by that Trustee and
delivered to the Trust, which shall take effect upon such delivery or upon such
later date as is specified therein;
(b) any Trustee may be removed at any time, with or without cause, by
written instrument signed by at least three-quarters of the Trustees, specifying
the date when such removal shall become effective;
(c) any Trustee who has attained a mandatory retirement age established
pursuant to any written policy adopted from time to time by at least two-thirds
of the Trustees shall, automatically and without action of such Trustee or the
remaining Trustees, be deemed to have retired in accordance with the terms of
such policy, effective as of the date determined in accordance with such policy;
and
(d) a Trustee may be removed at any meeting of Shareholders by a vote of
Shares representing two-thirds of the outstanding Shares of the Trust entitled
to vote for the election of such Trustee.
Upon the resignation, retirement or removal of a Trustee, or his or her
otherwise ceasing to be a Trustee, that individual shall execute and deliver
such documents as the remaining Trustees shall require for the purpose of
conveying to the Trust or the remaining Trustees any Trust Property held in the
name of the resigning, retiring or removed Trustee. Upon the incapacity or death
of any Trustee, that Trustee's legal representative shall execute and deliver on
his or her behalf such documents as the remaining Trustees shall require as
provided in the preceding sentence.
Except to the extent expressly provided in a written agreement to which the
Trust is a party or in a written policy adopted by the Trustees, no resigning or
removed Trustee shall have any right to any compensation for any period
following his or her resignation or removal, or any right to damages on account
of such removal.
Section 2.3. Resignation and Appointment of Trustees. In case of the
declination, death, resignation, retirement or removal of any of the Trustees,
or in case a vacancy shall, by reason of an increase in number of Trustees, or
for any other reason, exist, a majority of the remaining Trustees may fill such
vacancy by appointing such other individual as they in their discretion shall
see fit. Any such appointment shall not become effective, however, until the
person appointed shall have accepted in writing such appointment and agreed in
writing to be bound by the terms of the Declaration. An appointment of a Trustee
may be made by the Trustees then in office in anticipation of a vacancy to occur
by reason of retirement, resignation, removal or increase in number of Trustees
effective at a later date, provided that said appointment shall become effective
only at or after the effective date of said retirement, resignation, removal or
increase in number of Trustees. The power of appointment is subject to all
applicable provisions of the 1940 Act.
Section 2.4. Vacancies. The death, declination, resignation, retirement,
removal or incapacity of the Trustees, or any of them, shall not operate to
annul the Trust or to revoke any existing agency created pursuant to the terms
of the Declaration. Whenever a vacancy in the number of Trustees shall occur,
until such vacancy is filled as provided in Section 2.3, or while any Trustee is
incapacitated, the other Trustees in office, regardless of their number, shall
have all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by the Declaration, and only such other Trustees shall
be counted for the purposes of the existence of a quorum or the taking of any
action to be taken by the Trustees. A written instrument certifying the
existence of such vacancy or incapacity signed by a majority of the Trustees
shall be conclusive evidence of the existence thereof.
Section 2.5. Delegation of Power to Other Trustees. Subject to requirements
imposed by the 1940 Act and other applicable law, any Trustee may, by power of
attorney, delegate his power for a period not exceeding six months at any one
time to any other Trustee or Trustees; provided that in no case shall fewer than
two Trustees personally exercise the powers granted to the Trustees under the
Declaration except as otherwise expressly provided herein.
D-6
ARTICLE III
POWERS OF TRUSTEES
Section 3.1. General. Subject to the provisions of the Declaration, the
Trustees shall have exclusive and absolute control over the Trust Property and
over the business of the Trust to the same extent as if the Trustees were the
sole owners of the Trust Property and business in their own right, but with such
powers of delegation as may be permitted by the Declaration. The Trustees shall
have power to conduct the business of the Trust and carry on its operations in
any and all of its branches and maintain offices both within and without The
Commonwealth of Massachusetts, in any and all states of the United States of
America, in the District of Columbia, and in any and all commonwealths,
territories, dependencies, colonies, possessions, agencies or instrumentalities
of the United States of America and of foreign governments, and to do all such
other things and execute all such instruments as the Trustees deem necessary,
proper or desirable in order to promote the interests of the Trust although such
things are not herein specifically mentioned. Any determination as to what is in
the interests of the Trust made by the Trustees in good faith shall be
conclusive. In construing the provisions of the Declaration, the presumption
shall be in favor of a grant of power to the Trustees.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid power or any other power of the Trustees hereunder. Such
powers of the Trustees may be exercised without order of or resort to any court.
Section 3.2. Investments. (a) The Trustees shall have the power:
(i) to conduct, operate and carry on the business of an investment company;
(ii)to subscribe for, invest in, reinvest in, purchase or otherwise
acquire, own, hold, pledge, sell, assign, transfer, exchange, distribute, lend
or otherwise deal in or dispose of securities of every nature and kind, U.S. and
foreign currencies, any form of gold or other precious metal, commodity
contracts, any form of option contract, contracts for the future acquisition or
delivery of fixed income or other securities, derivative instruments of every
kind, "when-issued" or standby contracts, and all types of obligations or
financial instruments, including, without limitation, all types of bonds,
debentures, stocks, negotiable or non-negotiable instruments, obligations,
evidences of indebtedness, certificates of deposit or indebtedness, commercial
paper, repurchase agreements, bankers' acceptances, and other securities of any
kind, issued, created, guaranteed or sponsored by any and all Persons,
including, without limitation,
(A) states, territories and possessions of the United States and the
District of Columbia and any political subdivision, agency or instrumentality of
any such Person,
(B) the U.S. Government, any foreign government, or any political
subdivision or any agency or instrumentality of the U.S. Government or any
foreign government,
(C) any international instrumentality,
(D) any bank or savings institution, or
(E) any corporation or organization organized under the laws of the United
States or of any state, territory or possession thereof, or under any foreign
law;
to retain Trust assets in cash and from time to time to change the investments
in which the assets of the Trust are invested; and to exercise any and all
rights, powers and privileges of ownership or interest in respect of any and all
such investments of every kind and description, including, without limitation,
the right to consent and otherwise act with respect thereto, with power to
designate one or more Persons to exercise any of said rights, powers and
privileges in respect of any of said investments; and
(iii) to carry on any other business in connection with or incidental to
any of the foregoing powers, to do everything necessary, proper or desirable for
the accomplishment of any purpose or the attainment of any object or
D-7
the furtherance of any power hereinbefore set forth, and to do every other act
or thing incidental or appurtenant to or connected with the aforesaid purposes,
objects or powers.
(b) The Trustees shall not be limited to investing in securities or
obligations maturing before the possible termination of the Trust, nor shall the
Trustees be limited by any law limiting the investments which may be made by
fiduciaries.
(c) Notwithstanding any other provision of the Declaration to the contrary,
the Trustees shall have the power in their discretion without any requirement of
approval by Shareholders to either invest all or a portion of the Trust
Property, or sell all or a portion of such Trust Property and invest the
proceeds of such sales, in one or more other investment companies to the extent
not prohibited by the 1940 Act.
Section 3.3. Legal Title. Legal title to all Trust Property shall be vested
in the Trustees as joint tenants except that the Trustees shall have power to
cause legal title to any Trust Property to be held by or in the name of one or
more of the Trustees, or in the name of the Trust, or in the name of any other
Person or nominee, on such terms as the Trustees may determine. The right, title
and interest of the Trustees in the Trust Property shall vest automatically in
each person who may hereafter become a Trustee. Upon the resignation,
retirement, removal or death of a Trustee, such Trustee shall automatically
cease to have any right, title or interest in any of the Trust Property, and the
right, title and interest of such Trustee in the Trust Property shall vest
automatically in the remaining Trustees. Such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered.
Section 3.4. Issuance and Repurchase of Securities. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in Shares and, subject
to the provisions set forth in Articles VII and VIII hereof, to apply to any
such repurchase, redemption, retirement, cancellation or acquisition of Shares
any funds of the Trust or other Trust Property, whether capital or surplus or
otherwise.
Section 3.5. Borrowing Money; Lending Trust Property. The Trustees shall
have power to borrow money or otherwise obtain credit and to secure the same by
mortgaging, pledging or otherwise subjecting as security the Trust Property, to
endorse, guarantee, or undertake the performance of any obligation, contract or
engagement of any other Person and to lend Trust Property.
Section 3.6. Delegation. The Trustees shall have power to delegate from
time to time to such of their number or to officers, employees, any Investment
Adviser, Distributor, custodian, agent or independent contractor of the Trust
the doing of such things and the execution of such instruments either in the
name of the Trust or the names of the Trustees or otherwise as the Trustees may
deem appropriate or expedient.
Section 3.7. Collection and Payment. The Trustees shall have power to
collect all property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
securing any obligations, by virtue of which any property is owed to the Trust;
and to enter into releases, agreements and other instruments.
Section 3.8. Expenses. The Trustees shall have the power to incur and pay
any expenses which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes of the Declaration, and to pay reasonable
compensation from the funds of the Trust to themselves as Trustees. The Trustees
shall fix the compensation of all officers, employees, Trustees and Advisory
Trustees.
Section 3.9. Manner of Acting; By-Laws. Except as otherwise provided
herein, in the 1940 Act or in the By-Laws, any action to be taken by the
Trustees may be taken by a majority of the Trustees present at a meeting of
Trustees at which a quorum is present, including any meeting held by means of a
conference telephone circuit or similar communications equipment by means of
which all persons participating in the meeting can hear each other, or by
written consents of two-thirds of the Trustees. The Trustees may adopt By-Laws
not inconsistent with the Declaration to provide for the conduct of the business
of the Trust and may amend or repeal such By-Laws to the extent permitted
therein at any time.
D-8
Section 3.10. Miscellaneous Powers. Without limiting the foregoing, the
Trustees shall have the power to:
(a) employ or contract with such Persons as the Trustees may deem desirable
for the transaction of the business of the Trust;
(b) enter into joint ventures, partnerships and any other combinations or
associations;
(c) elect and remove such officers and appoint and terminate such agents or
employees as they consider appropriate, in each case with or without cause, and
appoint and terminate any one or more committees which may exercise some or all
of the power and authority of the Trustees as the Trustees may determine;
(d) purchase, and pay for out of Trust Property, such insurance as they may
deem necessary or appropriate for the conduct of the business of the Trust,
including, without limitation, insurance policies insuring the assets of the
Trust and payment of distributions and principal on its portfolio investments,
and insurance policies insuring Shareholders, any administrator, Trustees,
Advisory Trustees, officers, employees, agents, any Investment Adviser, any
Distributor, selected dealers or independent contractors of the Trust against
all claims arising by reason of holding any such position or by reason of any
action taken or omitted by any such Person in such capacity, whether or not
constituting negligence, or whether or not the Trust would have the power to
indemnify such Person against such liability;
(e) establish pension, profit-sharing, Share purchase, deferred
compensation, and other retirement, incentive and benefit plans for any
Trustees, officers, employees or agents of the Trust;
(f) to the extent permitted by law, indemnify any person with whom the
Trust has dealings, including any Investment Adviser, administrator, custodian,
Distributor, Transfer Agent, shareholder servicing agent and any dealer, to such
extent as the Trustees shall determine;
(g) guarantee indebtedness or contractual obligations of others;
(h) determine and change the fiscal year of the Trust and the method by
which its accounts shall be kept; and
(i) adopt a seal for the Trust, provided that the absence of such seal
shall not impair the validity of any instrument executed on behalf of the Trust.
ARTICLE IV
INVESTMENT ADVISER, DISTRIBUTOR,
CUSTODIAN AND TRANSFER AGENT
Section 4.1. Investment Adviser. Subject to applicable requirements of the
1940 Act, the Trustees may in their discretion from time to time enter into one
or more investment advisory or management contracts whereby the other party to
each such contract shall undertake to furnish the Trust such management,
investment advisory, statistical and research facilities and services,
promotional activities, and such other facilities and services, if any, as the
Trustees shall from time to time consider desirable and all upon such terms and
conditions as the Trustees may in their discretion determine. Notwithstanding
any provision of the Declaration, the Trustees may delegate to the Investment
Adviser authority (subject to such general or specific instructions as the
Trustees may from time to time adopt) to effect purchases, sales, loans or
exchanges of assets of the Trust on behalf of the Trustees or may authorize any
officer, employee or Trustee to effect such purchases, sales, loans or exchanges
pursuant to recommendations of the Investment Adviser (and all without further
action by the Trustees). Any of such purchases, sales, loans or exchanges shall
be deemed to have been authorized by all the Trustees. Such services may be
provided by one or more Persons.
Section 4.2. Distributor. Subject to applicable requirements of the 1940
Act, the Trustees may in their discretion from time to time enter into one or
more exclusive or non-exclusive distribution contracts providing for the sale of
Shares, whereby the Trust may either agree to sell the Shares to the other party
to any such contract or appoint any such other party its sales agent for such
Shares. In either case, any such contract shall be on such terms
D-9
and conditions as the Trustees may in their discretion determine, provided that
such terms and conditions are not inconsistent with the provisions of the
Declaration or the By-Laws; and such contract may also provide for the
repurchase or sale of Shares by such other party as principal or as agent of the
Trust and may provide that such other party may enter into selected dealer
agreements or agency agreements with securities dealers or other Persons to
further the purpose of the distribution or repurchase of the Shares. Such
services may be provided by one or more Persons.
Section 4.3. Custodian. The Trustees may in their discretion from time to
time enter into one or more contracts whereby the other party to each such
contract shall undertake to furnish such custody services to the Trust as the
Trustees shall from time to time consider desirable and all upon such terms and
conditions as the Trustees may in their discretion determine, provided that such
terms and conditions are not inconsistent with the provisions of the 1940 Act,
the Declaration or the By-Laws. The Trustees may authorize any custodian to
employ one or more sub-custodians from time to time to perform such of the
services of the custodian as the Trustees shall from time to time consider
desirable. Services described in this Section may be provided by one or more
Persons.
Section 4.4. Transfer Agent. The Trustees may in their discretion from time
to time enter into one or more transfer agency or sub-transfer agency and
shareholder servicing contracts whereby the other party to each such contract
shall undertake to furnish such transfer agency and/or shareholder services to
the Trust as the Trustees shall from time to time consider desirable and all
upon such terms and conditions as the Trustees may in their discretion
determine, provided that such terms and conditions are not inconsistent with the
provisions of the Declaration or the By-Laws. Such services may be provided by
one or more Persons.
Section 4.5. Parties to Contract. Any contract of the character described
in any Section of this Article IV may be entered into with any Person, although
one or more of the Trustees or officers of the Trust may be an officer, partner,
director, trustee, shareholder, or member of such other party to the contract,
and no such contract shall be invalidated or rendered voidable by reason of the
existence of any such relationship; nor shall any Person holding such
relationship be liable merely by reason of such relationship for any loss or
expense to the Trust under or by reason of any such contract or accountable for
any profit realized directly or indirectly therefrom, provided that the contract
when entered into was not inconsistent with the provisions of this Article IV or
the By-Laws. The same Person may be the other party to contracts entered into
pursuant to Sections 4.1, 4.2, 4.3 and 4.4 above, and any individual may be
financially interested or otherwise affiliated with Persons who are parties to
any or all of the contracts mentioned in this Section 4.5.
ARTICLE V
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 5.1. No Personal Liability of Shareholders. No Shareholder or
former Shareholder shall be subject to any personal liability whatsoever to any
Person in connection with Trust Property or the acts, obligations or affairs of
the Trust solely by reason of being or having been a Shareholder. The Trust
shall indemnify and hold each Shareholder and former Shareholder harmless from
and against all claims and liabilities to which such Shareholder may become
subject solely by reason of his or her being or having been a Shareholder (other
than taxes payable by virtue of owning Shares), and shall reimburse such
Shareholder for all legal and other expenses reasonably incurred by him in
connection with any such claim or liability. The rights accruing to a
Shareholder or former Shareholder under this Section 5.1 shall not exclude any
other right to which such Shareholder may be lawfully entitled, nor shall
anything herein contained restrict the right of the Trust to indemnify or
reimburse a Shareholder or former Shareholder in any appropriate situation even
though not specifically provided herein. The Trust shall, upon request by a
Shareholder or former Shareholder, assume the defense of any claim made against
such Shareholder for any act or obligation of the Trust and satisfy any judgment
thereon from the assets of the Trust.
Section 5.2. Limitation of Liability of Trustees and Others. (a) No
Trustee, Advisory Trustee, officer or employee or agent of the Trust shall be
subject to any liability whatsoever to any Person in connection with Trust
Property or the affairs of the Trust, and no Trustee or Advisory Trustee shall
be responsible or liable in any event for any neglect or wrongdoing of any
officer, employee or agent of the Trust or for the act or omission of any other
Trustee or Advisory Trustee. For the sake of clarification and without limiting
the foregoing, the appointment,
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designation or identification of a Trustee as the Chair of the Trustees, the
lead or assistant lead independent Trustee, a member or Chair of a committee of
the Trustees, an expert on any topic or in any area (including an audit
committee financial expert) or any other special appointment, designation or
identification given to a Trustee, shall not (a) impose on that person any duty,
obligation or liability that is greater than the duties, obligations and
liabilities imposed on that person as a Trustee in the absence of the
appointment, designation or identification or (b) affect in any way such
Trustee's rights or entitlement to indemnification, and no Trustee who has
special skills or expertise, or is appointed, designated or identified as
aforesaid, shall (x) be held to a higher standard of care by virtue thereof or
(y) be limited with respect to any indemnification to which such Trustee would
otherwise be entitled. Notwithstanding anything to the contrary in this Section
5.2(a) or otherwise, nothing in the Declaration shall protect any Trustee,
Advisory Trustee, officer, employee or agent of the Trust against any liability
to the Trust or its Shareholders to which he, she or it would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his, her or its
office or position with or on behalf of the Trust.
(b) All persons extending credit to, contracting with or having claim
against the Trust shall look solely to the assets of the Trust for payment under
such credit, contract or claim; and neither any Trustee or Advisory Trustee, nor
any of the Trust's officers, employees or agents, whether past, present or
future, shall be personally liable therefor.
Section 5.3. Mandatory Indemnification. (a) Subject to the exceptions and
limitations contained in paragraph (b) below:
(i) every person who is or has been a Trustee, Advisory Trustee or officer
of the Trust (hereinafter referred to as a "Covered Person") shall be
indemnified by the Trust against all liability and against all expenses
reasonably incurred or paid by him or her in connection with any claim, action,
suit or proceeding in which that individual becomes involved as a party or
otherwise by virtue of being or having been a Trustee, Advisory Trustee or
officer and against amounts paid or incurred by that individual in the
settlement thereof;
(ii)the words "claim," "action," "suit" or "proceeding" shall apply to all
claims, actions, suits or proceedings (civil, criminal, administrative or other,
including appeals), actual or threatened; and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs, judgments,
amounts paid in settlement or compromise, fines, penalties and other
liabilities.
(b) No indemnification shall be provided hereunder to a Covered Person:
(i) against any liability to the Trust or the Shareholders by reason of a
final adjudication by the court or other body before which the proceeding was
brought that the Covered Person engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of that
individual's office;
(ii)with respect to any matter as to which the Covered Person shall have
been finally adjudicated not to have acted in good faith in the reasonable
belief that that individual's action was in the best interest of the Trust; or
(iii) in the event of a settlement involving a payment by a Trustee,
Advisory Trustee or officer or other disposition not involving a final
adjudication as provided in paragraph (b)(i) or (b)(ii) above resulting in a
payment by a Covered Person, unless there has been either a determination that
such Covered Person did not engage in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of that
individual's office by the court or other body approving the settlement or other
disposition or by a reasonable determination, based upon a review of readily
available facts (as opposed to a full trial-type inquiry) that that individual
did not engage in such conduct:
(A) by vote of a majority of the Disinterested Trustees (as defined below)
acting on the matter (provided that a majority of the Disinterested Trustees
then in office act on the matter); or
(B) by written opinion of (i) the then-current legal counsel to the
Trustees who are not Interested Persons of the Trust or (ii) other legal counsel
chosen by a majority of the Disinterested Trustees (or if there are no
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Disinterested Trustees with respect to the matter in question, by a majority of
the Trustees who are not Interested Persons of the Trust) and determined by them
in their reasonable judgment to be independent.
(c) The rights of indemnification herein provided may be insured against by
policies maintained by the Trust, shall be severable, shall not affect any other
rights to which any Covered Person may now or hereafter be entitled, shall
continue as to a person who has ceased to be a Covered Person and shall inure to
the benefit of the heirs, executors and administrators of such person. Nothing
contained herein shall limit the Trust from entering into other insurance
arrangements or affect any rights to indemnification to which Trust personnel,
including Covered Persons, may be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit, or proceeding of the character described in paragraph (a) of this
Section 5.3 shall be advanced by the Trust prior to final disposition thereof
upon receipt of an undertaking by or on behalf of the Covered Person to repay
such amount if it is ultimately determined that the Covered Person is not
entitled to indemnification under this Section 5.3, provided that either:
(i) such undertaking is secured by a surety bond or some other appropriate
security or the Trust shall be insured against losses arising out of any such
advances; or
(ii)a majority of the Disinterested Trustees acting on the matter (provided
that a majority of the Disinterested Trustees then in office act on the matter)
or legal counsel meeting the requirement in Section 5.3(b)(iii)(B) above in a
written opinion, shall determine, based upon a review of readily available facts
(as opposed to a full trial-type inquiry), that there is reason to believe that
the Covered Person ultimately will be found entitled to indemnification.
As used in this Section 5.3 a "Disinterested Trustee" is one (i) who is not
an "Interested Person" of the Trust (including anyone who has been exempted from
being an "Interested Person" by any rule, regulation or order of the
Commission), and (ii) against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the same or similar
grounds is then or had been pending.
(e) With respect to any such determination or opinion referred to in clause
(b)(iii) above or clause (d)(ii) above, a rebuttable presumption shall be
afforded that the Covered Person has not engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of such Covered Person's office in accordance with pronouncements of the
Commission.
Section 5.4. No Bond Required. No Trustee, Advisory Trustee or officer
shall be obligated to give any bond or other security for the performance of any
of his or her duties hereunder.
Section 5.5. No Duty of Investigation; Notice in Trust Instruments. No
purchaser, lender, shareholder servicing agent, Transfer Agent or other Person
dealing with the Trustees or any officer, employee or agent of the Trust shall
be bound to make any inquiry concerning the validity of any transaction
purporting to be made by the Trustees or by said officer, employee or agent or
be liable for the application of money or property paid, loaned, or delivered to
or on the order of the Trustees or of said officer, employee or agent. Every
obligation, contract, instrument, certificate, Share, other security of the
Trust or undertaking, and every other act or thing whatsoever executed in
connection with the Trust shall be conclusively presumed to have been executed
or done by the executors thereof only in their capacity as Trustees under the
Declaration or in their capacity as officers, employees or agents of the Trust.
Every written obligation, contract, instrument, certificate, Share, other
security of the Trust or undertaking made or issued by the Trustees or officers
shall recite that the same is executed or made by them not individually, but as
or on behalf of Trustees under the Declaration, and that the obligations of any
such instrument are not binding upon any of the Trustees, officers or
Shareholders individually, but bind only the Trust estate, and may contain any
further recital deemed appropriate, but the omission of such recital shall not
operate to bind any of the Trustees, officers or Shareholders individually. The
Trustees may maintain insurance for the protection of the Trust Property,
Shareholders, Trustees, Advisory Trustees, officers, employees and agents in
such amount as the Trustees shall deem adequate to cover possible tort
liability, and such other insurance as the Trustees in their sole judgment shall
deem advisable.
Section 5.6. Good Faith Action; Reliance on Experts. The exercise by the
Trustees or the officers of the Trust of their powers and discretions hereunder
in good faith and with reasonable care under the circumstances then
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prevailing shall be binding upon everyone interested. The Trustees or the
officers of the Trust shall not be liable for errors of judgment or mistakes of
fact or law. Each Trustee and officer or employee of the Trust shall, in the
performance of his or her duties, be under no liability and fully and completely
justified and protected with regard to any act or any failure to act resulting
from reliance in good faith upon the books of account or other records of the
Trust, upon advice of counsel, or upon reports made to the Trust by any of its
officers or employees or by the Investment Adviser, the Distributor, Transfer
Agent, custodian, any shareholder servicing agent, selected dealers,
accountants, appraisers or other experts or consultants selected with reasonable
care by the Trustees, officers or employees of the Trust, regardless of whether
such counsel or expert may also be a Trustee.
Section 5.7. Derivative Actions. No Shareholder shall have the right to
bring or maintain any court action, proceeding or claim on behalf of the Trust
without first making demand on the Trustees requesting the Trustees to bring or
maintain such action, proceeding or claim. Such demand shall be excused only
when the plaintiff makes a specific showing that irreparable injury to the Trust
would otherwise result, or if a majority of the Board of Trustees, or a majority
of any committee established to consider the merits of such action, has a
material personal financial interest in the action at issue. A Trustee shall not
be deemed to have a personal financial interest in an action or otherwise be
disqualified from ruling on a Shareholder demand by virtue of the fact that such
Trustee receives remuneration from his or her service on the Board of Trustees
of the Trust or on the boards of one or more investment companies with the same
or an affiliated investment adviser or underwriter, or the amount of such
remuneration.
Such demand shall be mailed to the Secretary or Clerk of the Trust at the
Trust's principal office and shall set forth in reasonable detail the nature of
the proposed court action, proceeding or claim and the essential facts relied
upon by the Shareholder to support the allegations made in the demand. The
Trustees shall consider such demand within 45 days of its receipt by the Trust.
In their sole discretion, the Trustees may submit the matter to a vote of
Shareholders of the Trust, as appropriate. Any decision by the Trustees to
bring, maintain or settle (or not to bring, maintain or settle) such court
action, proceeding or claim, or to submit the matter to a vote of Shareholders,
shall be made by the Trustees in their business judgment and shall be binding
upon the Shareholders. Any decision by the Trustees to bring or maintain a court
action, proceeding or suit on behalf of the Trust shall be subject to the right
of the Shareholders under Section 6.8 of the Declaration to vote on whether or
not such court action, proceeding or suit should or should not be brought or
maintained.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Section 6.1. Beneficial Interest. The interest of the beneficiaries
hereunder may be divided into transferable Shares of Beneficial Interest
(without par value). The number of Shares authorized hereunder is unlimited. All
Shares issued hereunder including, without limitation, Shares issued in
connection with a dividend in Shares or a split of Shares, shall be fully paid
and non-assessable.
Section 6.2. Rights of Shareholders. The ownership of the Trust Property of
every description and the right to conduct any business hereinbefore described
are vested exclusively in the Trustees, and the Shareholders shall have no
interest therein other than the beneficial interest conferred by their Shares,
and they shall have no right to call for any partition or division of any
property, profits, rights or interests of the Trust nor can they be called upon
to assume any losses of the Trust or suffer an assessment of any kind by virtue
of their ownership of Shares. The Shares shall be personal property giving only
the rights specifically set forth in the Declaration. The Shares shall not
entitle the holder to preference, preemptive, appraisal, conversion or exchange
rights. By becoming a Shareholder each Shareholder shall be held expressly to
have assented to and agreed to be bound by the provisions of the Declaration.
Section 6.3. Trust Only. It is the intention of the Trustees to create only
the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in the Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
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Section 6.4. Issuance of Shares. The Trustees, in their discretion may,
from time to time without vote of the Shareholders, issue Shares, in addition to
the then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times, and on such terms as the Trustees may deem
best, and may in such manner acquire other assets (including the acquisition of
assets subject to, and in connection with, the assumption of liabilities) and
businesses. In connection with any issuance of Shares, the Trustees may issue
fractional Shares. The Trustees may from time to time divide or combine the
Shares into a greater or lesser number without thereby changing their
proportionate beneficial interests in Trust Property. Contributions to the Trust
may be accepted for whole Shares and/or 1/1,000ths of a Share or integral
multiples thereof.
Section 6.5. Register of Shares. A register or registers shall be kept at
the principal office of the Trust or at an office of the Transfer Agent which
shall contain the names and addresses (which may be addresses for electronic
delivery) of the Shareholders and the number of Shares held by them respectively
and a record of all transfers thereof. Such register shall be conclusive as to
who are the holders of the Shares and who shall be entitled to receive dividends
or distributions or otherwise to exercise or enjoy the rights of Shareholders.
No Shareholder shall be entitled to receive payment of any dividend or
distribution, nor to have notice given to that Shareholder as provided herein or
in the By-Laws, until the Shareholder has given his or her address to the
Transfer Agent or such other officer or agent of the Trustees as shall keep the
said register for entry thereon. The Trustees, in their discretion, may
authorize the issuance of Share certificates and promulgate appropriate rules
and regulations as to their use.
Section 6.6. Transfer of Shares. Shares shall be transferable on the
records of the Trust only by the record holder thereof or by the record holder's
agent thereunto authorized in writing, upon delivery to the Trustees or, if
there is a Transfer Agent with respect to such Shares, the Transfer Agent of a
duly executed instrument of transfer together with any certificate or
certificates (if issued) for such Shares and such evidence of the genuineness of
each such execution and authorization and of other matters as may reasonably be
required. Upon such delivery the transfer shall be recorded on the register of
the Trust. Until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer, employee or agent
of the Trust shall be affected by any notice of the proposed transfer.
Any Person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent; but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 6.7. Notices. Any and all notices to which any Shareholder may be
entitled and any and all communications shall be deemed duly served or given (i)
if mailed, postage prepaid, addressed to any Shareholder of record at the
Shareholder's last known address as recorded on the register of the Trust, (ii)
if sent by electronic transmission to the Shareholder of record at the
Shareholder's last known address for electronic delivery as recorded on the
register of the Trust, (iii) if mailed or sent by electronic delivery to one or
more members of the Shareholder's household in accordance with applicable law or
regulation, or (iv) if otherwise sent in accordance with applicable law or
regulation.
Section 6.8. Voting Powers. The Shareholders shall have power to vote only
(i) for the election of Trustees when that issue is submitted to Shareholders,
and for the removal of Trustees as provided in Section 2.2 hereof, (ii) with
respect to any investment advisory or management contract on which a shareholder
vote is required by the 1940 Act, (iii) with respect to termination of the Trust
to the extent and as provided in Section 8.2 hereof, (iv) with respect to any
amendment of the Declaration to the extent and as provided in Section 8.3
hereof, (v) with respect to any merger, consolidation, or sale of assets to the
extent and as provided in Sections 8.4 and 8.7 hereof, (vi) with respect to any
conversion of the Trust to an "open-end company" to the extent and as provided
in Section 8.6 hereof, (vii) to the same extent as the stockholders of a
Massachusetts business corporation as to whether or not a court action,
proceeding or claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders, and (viii) with
respect to such additional matters relating to the Trust as may be required by
the Declaration, the By-Laws, or any registration of the Trust with the
Commission (or any successor
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agency) or any other regulator having jurisdiction over the Trust, or as the
Trustees may consider necessary or desirable.
A Shareholder shall be entitled to one vote for each Share owned by such
Shareholder on each matter on which such Shareholder is entitled to vote and
each fractional Share shall be entitled to a proportionate fractional vote.
Shares held in the treasury of the Trust shall not be voted.
Except when a larger vote is required by applicable law or by any provision
of the Declaration or the By-Laws, if any, Shares representing a majority of the
Shares voted in person or by proxy shall decide any questions and a plurality
shall elect a Trustee, provided that abstentions and broker non-votes shall not
be counted as votes cast but shall be counted as being present for purposes of
determining the existence of a quorum.
There shall be no cumulative voting in the election of Trustees. Until
Shares are issued and during any period when no Shares are outstanding, the
Trustees may exercise all rights of Shareholders and may take any action
required by law, the Declaration or the By-Laws to be taken by Shareholders. The
By-Laws may include further provisions for Shareholder votes and meetings and
related matters.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
The Trustees, in their absolute discretion, may prescribe and shall set
forth in the By-Laws or in a duly adopted vote of the Trustees such bases and
times for determining the per Share net asset value of the Shares or net income,
or the declaration and payment of dividends and distributions, as they may deem
necessary or desirable.
ARTICLE VIII
DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC.
Section 8.1. Duration. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII.
Section 8.2. Termination of Trust. (a) The Trust may be terminated at any
time (i) by the affirmative vote of the holders of not less than two-thirds of
the Shares outstanding and entitled to vote at any meeting of Shareholders, or
(ii) by the Trustees by written notice to the Shareholders. Upon the termination
of the Trust:
(i) The Trust shall carry on no business except for the purpose of winding
up its affairs;
(ii)The Trustees shall proceed to wind up the affairs of the Trust and all
the powers of the Trustees under the Declaration shall continue until the
affairs of the Trust shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust, collect its assets, sell, convey, assign,
exchange, transfer or otherwise dispose of all or any part of the remaining
Trust Property to one or more Persons at public or private sale for
consideration which may consist in whole or in part of cash, securities or other
property of any kind, discharge or pay its liabilities, and to do all other acts
appropriate to liquidate its business; and
(iii) After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property, in cash or in kind or partly in cash
and partly in kind, among the Shareholders of the Trust according to their
respective rights.
(b) After termination of the Trust and distribution to the Shareholders of
the Trust as herein provided, a majority of the Trustees shall execute and lodge
among the records of the Trust an instrument in writing setting forth the fact
of such termination, and the Trustees shall thereupon be discharged from all
further liabilities and duties
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hereunder with respect to the Trust, and the rights and interests of all
Shareholders of the Trust shall thereupon cease.
Section 8.3. Amendment Procedure. (a) Except as specifically provided
herein, the Trustees may, without any Shareholder vote, amend or otherwise
supplement the Declaration by making an amendment, a Declaration of Trust
supplemental hereto or an amended and restated Declaration. Without limiting the
foregoing power reserved to the Trustees, the Trustees may, without any
Shareholder vote, amend the Declaration to change the name or principal office
of the Trust, to supply any omission, to cure, correct or supplement any
ambiguous, defective or inconsistent provision hereof, or if they deem it
necessary or advisable, to conform the Declaration to the requirements of
applicable law, including the 1940 Act and the Internal Revenue Code of 1986, as
amended, but the Trustees shall not be liable for failing to do so. Shareholders
shall have the right to vote on (i) any amendment that would affect their right
to vote granted in Section 6.8; (ii) any amendment to Section 8.3(a) or (b);
(iii) any amendment as may be required by law or by the Trust's registration
statement to be approved by Shareholders; and (iv) any amendment submitted to
them by the Trustees. Except as otherwise provided in Section 8.3(c), any
amendment on which Shareholders have the right to vote shall require a Majority
Shareholder Vote of the Shareholders of the Trust, or the written consent,
without a meeting, of the holders of Shares representing not less than a
majority of the voting power of the Shares of the Trust.
(b) Nothing contained in the Declaration shall permit the amendment of the
Declaration to impair the exemption from personal liability of the Shareholders,
former Shareholders, Trustees, Advisory Trustees, officers, employees and agents
of the Trust or to permit assessments upon Shareholders or former Shareholders.
Notwithstanding anything else herein, any amendment to Section 5.3 shall not
limit the rights to indemnification or insurance provided therein with respect
to actions or omissions of persons entitled to indemnification under such
Section prior to such amendment.
(c) No amendment may be made which shall amend, alter, change or repeal any
of the provisions of Section 2.2, Section 8.2, this Section 8.3(c), Section 8.4,
Section 8.6 and Section 8.7 unless the amendment effecting such amendment,
alteration, change or repeal shall receive the affirmative vote or consent of
sixty-six and two-thirds percent (66 2/3%) of the Shares outstanding and
entitled to vote. Such affirmative vote or consent shall be in addition to the
vote or consent of the holders of Shares otherwise required by law or by the
terms of any class or series of preferred stock, whether now or hereafter
authorized, or any agreement between the Trust and any national securities
exchange.
(d) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Shareholders (if
applicable) or by the Trustees as aforesaid or a copy of the Declaration, as
amended, and executed by a majority of the Trustees, shall be conclusive
evidence of such amendment when lodged among the records of the Trust.
Section 8.4. Merger, Consolidation and Sale of Assets. Subject to
applicable law and except as otherwise provided in Section 8.5 hereof, the Trust
may merge or consolidate with any other corporation, association, trust or other
organization or may sell, lease or exchange all or substantially all of the
Trust Property including its good will, upon such terms and conditions and for
such consideration when and as authorized (a) at any meeting of Shareholders
called for the purpose by the affirmative vote of the holders of not less than
two-thirds of the Shares outstanding and entitled to vote, or (b) by the written
consent, without a meeting, of the holders of not less than two-thirds of such
Shares, provided, however, that if such merger, consolidation, sale, lease or
exchange is recommended by the Trustees, the vote or written consent of the
holders of a majority of Shares outstanding and entitled to vote, shall be
sufficient authorization. Any such merger, consolidation, sale, lease or
exchange shall be deemed for all purposes to have been accomplished under and
pursuant to the statutes of The Commonwealth of Massachusetts. Such transactions
may be effected through share-for-share exchanges, transfers or sales of assets,
in-kind redemptions and purchases, exchange offers, or any other method approved
by the Trustees. Nothing contained herein shall be construed as requiring
approval of Shareholders for any sale of assets in the ordinary course of the
business of the Trust, or for any transaction, whether deemed a merger,
consolidation, reorganization or exchange of shares or otherwise, whereby the
Trust issues shares in connection with the acquisition of assets (including
those subject to liabilities) from any other investment company or similar
entity.
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Section 8.5. Incorporation, Reorganization. The Trustees may, without the
vote or consent of Shareholders, cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction, or any other
trust (or series or class of a trust), unit investment trust, partnership,
limited liability company, association or other organization to acquire all or a
portion of the Trust Property or to carry on any business in which the Trust
shall directly or indirectly have any interest, and to sell, convey and transfer
such Trust Property to any such corporation, trust (or series or class of a
trust), partnership, limited liability company, association or organization in
exchange for the shares or securities thereof or otherwise, and to lend money
to, subscribe for the shares or securities of, and enter into any contracts with
any such corporation, trust, partnership, association or organization in which
the Trust holds or is about to acquire shares or any other interest. The
Trustees may also, without the vote or consent of Shareholders, cause a merger
or consolidation between the Trust or any successor thereto and any such
corporation, trust (or series or class of a trust), partnership, association or
other organization if and to the extent permitted by law. The Trustees shall
provide written notice to affected Shareholders of each transaction pursuant to
this Section 8.5. Such transactions may be effected through share-for-share
exchanges, transfers or sales of assets, in-kind redemptions and purchases,
exchange offers, or any other method approved by the Trustees.
Section 8.6. Conversion. Notwithstanding any other provision of this
Declaration, the conversion of the Trust from a "closed-end company" to an
"open-end company," as those terms are defined in the 1940 Act, shall require
the affirmative vote or consent of the holders of sixty-six and two-thirds
percent (66 2/3%) of the Shares outstanding and entitled to vote. Such
affirmative vote or consent shall be in addition to the vote or consent of the
holders of the Shares otherwise required by law or by the terms of any class or
series of preferred stock, whether now or hereafter authorized, or any agreement
between the Trust and any national securities exchange.
Section 8.7. Certain Transactions. (a) Notwithstanding any other provision
of this Declaration and subject to the exceptions provided in paragraph (d) of
this Section, the types of transactions described in paragraph (c) of this
Section shall require the affirmative vote or consent of the holders of
sixty-six and two-thirds percent (66 2/3%) of the Shares outstanding and
entitled to vote, when a Principal Shareholder (as defined in paragraph (b) of
this Section) is a party to the transaction. Such affirmative vote or consent
shall be in addition to the vote or consent of the Shareholders otherwise
required by law or by the terms of any class or series of preferred stock,
whether now or hereafter authorized, or any agreement between the Trust and any
national securities exchange.
(b) The term "Principal Shareholder" shall mean any corporation, person or
other entity which is the beneficial owner, directly or indirectly, of more than
five percent (5%) of the outstanding Shares and shall include any affiliate or
associate, as such terms are defined in clause (ii) below, of a Principal
Shareholder. For the purposes of this Section, in addition to the Shares which a
corporation, person or other entity beneficially owns directly, (a) any
corporation, person or other entity shall be deemed to be the beneficial owner
of any Shares (i) which it has the right to acquire pursuant to any agreement or
upon exercise of conversion rights or warrants, or otherwise (but excluding
share options granted by the Trust) or (ii) which are beneficially owned,
directly or indirectly (including Shares deemed owned through application of
clause (i) above), by any other corporation, person or entity with which its
"affiliate" or "associate" (as defined below) has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of
Shares, or which is its "affiliate" or "associate" as those terms are defined in
Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934 as in effect on December 1, 1986, and (b) the outstanding Shares
shall include Shares deemed owned through application of clauses (i) and (ii)
above but shall not include any other shares which may be issuable pursuant to
any agreement, or upon exercise of conversion rights or warrants, or otherwise.
(c) This Section shall apply to the following transactions:
(i) the merger or consolidation of the Trust or any subsidiary of the Trust
with or into any Principal Shareholder;
(ii)the issuance of any securities of the Trust to any Principal
Shareholder for cash;
(iii) the sale, lease or exchange of all or any substantial part of the
assets of the Trust to any Principal Shareholder (except assets having an
aggregate fair market value of less than $1,000,000, aggregating for the purpose
of such computation all assets sold, leased or exchanged in any series of
similar transactions within a twelve-month period);
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(iv) the sale, lease or exchange to the Trust or any subsidiary thereof, in
exchange for securities of the Trust of any assets of any Principal Shareholder
(except assets having an aggregate fair market value of less than $1,000,000,
aggregating for the purposes of such computation all assets sold, leased or
exchanged in any series of similar transactions within a twelve-month period).
(d) The provisions of this Section shall not be applicable to (i) any of
the transactions described in paragraph (c) of this Section if the Board of
Trustees of the Trust shall by resolution have approved a memorandum of
understanding with such Principal Shareholder with respect to and substantially
consistent with such transaction, or (ii) any such transaction with any
corporation of which a majority of the outstanding shares of all classes of
stock normally entitled to vote in elections of directors is owned of record or
beneficially by the Trust and its subsidiaries.
(e) The Board of Trustees shall have the power and duty to determine for
the purposes of this Section on the basis of information known to the Trust,
whether (i) a corporation, person or entity beneficially owns more than five
percent (5%) of the outstanding Shares, (ii) a corporation, person or entity is
an "affiliate" or "associate" (as defined above) of another, (iii) the assets
being acquired or leased to or by the Trust or any subsidiary thereof,
constitute a substantial part of the assets of the Trust and have an aggregate
fair market value of less than $1,000,000, and (iv) the memorandum of
understanding referred to in paragraph (d) hereof is substantially consistent
with the transaction covered thereby. Any such determination shall be conclusive
and binding for all purposes of this Section.
ARTICLE IX
MISCELLANEOUS
Section 9.1. Filing. The Declaration and any subsequent amendment hereto
shall be filed in the office of the Secretary of The Commonwealth of
Massachusetts and in such other place or places as may be required under the
laws of The Commonwealth of Massachusetts and may also be filed or recorded in
such other places as the Trustees deem appropriate, provided that the failure to
so file shall not invalidate this instrument or any properly authorized
amendment hereto. Each amendment so filed shall be accompanied by a certificate
signed and acknowledged by an officer or Trustee stating that such action was
duly taken in a manner provided herein, and unless such amendment or such
certificate sets forth some other time for the effectiveness of such amendment,
such amendment shall be effective upon its filing. A restated Declaration,
integrating into a single instrument all of the provisions of the Declaration
which are then in effect and operative, may be executed from time to time by a
majority of the Trustees and shall, upon filing with the Secretary of The
Commonwealth of Massachusetts, be conclusive evidence of all amendments
contained therein and may thereafter be referred to in lieu of the original
Declaration and the various amendments thereto.
Section 9.2. Governing Law. The Declaration is executed by the Trustees and
delivered in The Commonwealth of Massachusetts and with reference to the laws
thereof, and the rights of all parties and the validity and construction of
every provision hereof shall be subject to and construed according to the laws
of said Commonwealth. The Trust shall be of the type commonly called a
Massachusetts business trust, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by such a trust,
and the absence of a specific reference herein to any such power, privilege, or
action shall not imply that the Trust may not exercise such power or privilege
or take such action.
Section 9.3. Principal Office. The principal office of the Trust is 500
Boylston Street, Boston, Massachusetts. The Trustees, without a vote of
Shareholders, may change the principal office of the Trust.
Section 9.4. Counterparts. The Declaration may be simultaneously executed
in several counterparts, each of which shall be deemed to be an original, and
such counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
Section 9.5. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust, appears to be an officer
or Trustee hereunder, certifying to: (i) the number or identity of Trustees or
Shareholders, (ii) the due authorization of the execution of any instrument or
writing, (iii) the form of any vote
D-18
passed at a meeting of Trustees or Shareholders, (iv) the fact that the number
of Trustees or Shareholders present at any meeting or executing any written
instrument satisfies the requirements of the Declaration, (v) the form of any
By-Laws adopted by or the identity of any officers elected by the Trustees, or
(vi) the existence of any fact or facts which in any manner relates to the
affairs of the Trust, shall be conclusive evidence as to the matters so
certified in favor of any Person dealing with the Trustees and their successors.
Section 9.6. Provisions in Conflict with Law or Regulations.
(a) The provisions of the Declaration are severable, and if the Trustees
shall determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company or other provisions
of the Internal Revenue Code of 1986, as amended, or with other applicable laws
and regulations, the conflicting provision shall be deemed never to have
constituted a part of the Declaration; provided, however, that such
determination shall not affect any of the remaining provisions of the
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of the Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of the
Declaration in any jurisdiction.
D-19
IN WITNESS WHEREOF, the undersigned have executed this instrument as of the
day and year first written above.
-------------------------------------
Robert E. Butler
As Trustee and Not Individually
-------------------------------------
Lawrence H. Cohn
As Trustee and Not Individually
-------------------------------------
David H. Gunning
As Trustee and Not Individually
-------------------------------------
William R. Gutow
As Trustee and Not Individually
-------------------------------------
Michael Hegarty
As Trustee and Not Individually
-------------------------------------
J. Atwood Ives
As Trustee and Not Individually
-------------------------------------
Robert J. Manning
As Trustee and Not Individually
-------------------------------------
Lawrence T. Perera
As Trustee and Not Individually
-------------------------------------
Robert C. Pozen
As Trustee and Not Individually
-------------------------------------
J. Dale Sherrattt
As Trustee and Not Individually
-------------------------------------
Laurie J. Thomsen
As Trustee and Not Individually
-------------------------------------
Robert W. Uek
As Trustee and Not Individually
D-20
APPENDIX E
NOMINEE INFORMATION
1. BIOGRAPHICAL INFORMATION REGARDING NOMINEES.
Information regarding the Nominees, together with their principal business
occupations during the last five years (their titles may have varied during that
period), is shown below. The address of each Nominee is 500 Boylston Street,
Boston, Massachusetts 02116.
NUMBER OF
PORTFOLIOS
YEAR FIRST IN COLUMBIA
ELECTED OR FUND COMPLEX OTHER
POSITION APPOINTED TO PRINCIPAL OCCUPATION(S) DURING TO BE OVERSEEN DIRECTORSHIPS
NAME AND BIRTH YEAR WITH FUNDS OFFICE PAST FIVE YEARS BY NOMINEE HELD(1)
------------------- ---------- ------------ -------------------------------- -------------- --------------------
DISINTERESTED NOMINEES
Robert E. Butler N/A N/A Consultant - regulatory and 7 MFS Funds (99 funds)
(Born 1941) compliance matters (since July
2002); Pricewater-houseCoopers
LLP (professional services
firm), Partner (November 2000
until June 2002)
Lawrence H. Cohn, M.D. N/A N/A Chief of Cardiac Surgery (until 7 MFS Funds (99 funds)
(Born 1937) 2005), Brigham and Women's
Hospital; Harvard Medical
School, Professor of Cardiac
Surgery; Physician Director of
Medical Device Technology for
Partners Health Care
David H. Gunning N/A N/A Vice Chairman, Cleveland-Cliffs 7 MFS Funds (99
(Born 1942) Inc. (mining products and funds);
service provider); Portman Cleveland-Cliffs
Limited (Mining), Director Inc. (mining
(since 2005); Director, Lincoln products and service
Electric Holdings, Inc. (welding provider); Lincoln
equipment manufacturer). Electric Holdings,
Inc. (welding
equipment
manufacturer)
William R. Gutow N/A N/A Private investor and real estate 7 MFS Funds (99 funds)
(Born 1941) consultant; Capitol
Entertainment Management Company
(video franchise), Vice
Chairman; Atlantic Coast Tan
(Tanning salons), Vice Chairman.
E-1
NUMBER OF
PORTFOLIOS
YEAR FIRST IN COLUMBIA
ELECTED OR FUND COMPLEX OTHER
POSITION APPOINTED TO PRINCIPAL OCCUPATION(S) DURING TO BE OVERSEEN DIRECTORSHIPS
NAME AND BIRTH YEAR WITH FUNDS OFFICE PAST FIVE YEARS BY NOMINEE HELD(1)
------------------- ---------- ------------ -------------------------------- -------------- --------------------
Michael Hegarty N/A N/A Retired; formerly AXA Financial 7 MFS Funds (99 funds)
(Born 1944) (financial services and
insurance), and President and
Chief Operating Officer (until
May 2001), Vice Chairman and
Chief Operating Officer; The
Equitable Life Assurance Society
(insurance).
J. Atwood Ives N/A N/A Private investor; formerly 7 MFS Funds (99 funds)
(born 1936) Chairman, Trustee and Chief
Executive Officer, Eastern
Enterprises (diversified
services company).
Lawrence T. Perera N/A N/A Hemenway & Barnes (attorneys), 7 MFS Funds (99 funds)
(Born 1935) Partner
J. Dale Sherrattt N/A N/A Insight Resources, Inc. 7 MFS Funds (99 funds)
(Born 1938) (acquisition planning
specialists), President;
Wellfleet Investments (investor
in health care companies),
Managing General Partner (since
1993); formerly Chief Executive
Officer (until May 2001),
Cambridge Nutraceuticals
(professional nutritional
products),
Laurie J. Thomsen N/A N/A Private investor; Prism Venture 7 MFS Funds (99
(Born 1957) Partners (venture capital), funds); St. Paul
Co-founder and General Partner Travelers Companies
(until June 2004) (commercial property
liability insurance)
Robert W. Uek N/A N/A Retired; formerly Partner, 7 MFS Funds (99 funds)
(Born 1941) PricewaterhouseCoopers LLP
(professional services firm);
Consultant to investment company
industry.
INTERESTED TRUSTEES
Robert J. Manning N/A N/A Massachusetts Financial Services 7 MFS Funds (99
(born 1963)* Company, Chief Executive funds);
Officer, President, Chief Massachusetts
Investment Officer Financial Services
Company
E-2
NUMBER OF
PORTFOLIOS
YEAR FIRST IN COLUMBIA
ELECTED OR FUND COMPLEX OTHER
POSITION APPOINTED TO PRINCIPAL OCCUPATION(S) DURING TO BE OVERSEEN DIRECTORSHIPS
NAME AND BIRTH YEAR WITH FUNDS OFFICE PAST FIVE YEARS BY NOMINEE HELD(1)
------------------- ---------- ------------ -------------------------------- -------------- --------------------
Robert C. Pozen N/A N/A Massachusetts Financial Services 7 MFS Funds (99
(born 1946)* Company, Chairman (since funds);
February 2004); MIT Sloan School Massachusetts
(education), Senior Lecturer Financial Services
(since 2006); Secretary of Company; Bell Canada
Economic Affairs, The Enterprises
Commonwealth of Massachusetts (telecommunications);
(January 2002 to December 2002); Medtronic, Inc.
formerly Vice Chairman and (medical
President, Fidelity Investments, technology); Telesat
Fidelity Management & Research (satellite
Company (investment adviser). communications)
(1) Directorships or trusteeships of companies required to report to the
Securities and Exchange Commission (i.e., "public companies").
* This individual would be an "Interested person" within the meaning of the
Investment Company Act of 1940, which is the principal federal law
governing investment companies like the Funds, as a result of position with
MFS. The address of MFS is 500 Boylston Street, Boston, Massachusetts
02116.
E-3
2. POSITIONS HELD WITH AFFILIATED PERSONS
If Proposal 1 is approved by shareholders, each of Messrs. Manning and Pozen
would be an "interested person" (as that term is defined in Section 2(a)(19) of
the 1940 Act) of the Funds by reason of his affiliation with MFS. No other
Nominee would be an "interested person" of any Fund.
3. ARRANGEMENTS FOR SELECTION AS NOMINEE
In light of the Sale, the Board determined that nomination of persons who are
more familiar with MFS and with the management and operation of other funds
advised by MFS would facilitate the efficient and effective representation of
shareholder interests. All Nominees were reviewed by the Board based on the
criteria generally employed by the Governance Committee to review candidates for
nomination as trustee.
4. RELATED POSITIONS HELD BY DISINTERESTED NOMINEES
[[Except as disclosed in the table in Section 1 of this Appendix E, no
disinterested Nominee and no immediate family member of any Nominee holds, or
has held within the past five years, any position, as a director, general
partner, officer, employee or otherwise, with any of the Funds, any fund having
the same investment adviser or principal underwriter as any Fund, any fund
having an investment adviser or principal underwriter in a control relationship
with any investment adviser or principal underwriter of any Fund, any investment
adviser or principal underwriter of any Fund or any person in a control
relationship with any investment adviser or principal underwriter of any Fund.]]
5. INTERESTS OF DISINTERESTED NOMINEES IN AFFILIATED PERSONS
[[No disinterested Nominee and no immediate family member of any Nominee has,
and at no time in the past five years had, any direct or indirect interest, the
value of which exceeds $120,000, in any investment adviser or principal
underwriter of any Fund, or in any person (other than a fund) in a control
relationship with any investment adviser or principal underwriter of any Fund.]]
6. INTERESTS OF DISINTERESTED NOMINEES IN AFFILIATED TRANSACTIONS
[[No disinterested nominee and no immediate family member of any Nominee has,
and at no time since the beginning of the past two completed fiscal years of
each Fund had, any direct or indirect material interest in any transaction or
series of similar transactions involving amounts in excess of $120,000 to which
any of the following persons was or is a party: (a) any Fund; (b) any officer of
any Fund; (c) any fund having the same investment adviser or principal
underwriter as any Fund; (d) any fund having an investment adviser or principal
underwriter in a control relationship with any investment adviser or principal
underwriter of any Fund; (e) any officer of any fund having the same investment
adviser or principal underwriter as any Fund; (f) any officer of any fund having
an investment adviser or principal underwriter in a control relationship with
any investment adviser or principal underwriter of any Fund; (g) any investment
adviser or principal underwriter of any Fund; (h) any officer of any investment
adviser or principal underwriter of any Fund; (i) any person in a control
relationship with any investment adviser or principal underwriter of any Fund;
or (j) any officer of any person in a control relationship with any investment
adviser or principal underwriter of any Fund.]]
7. RELATIONSHIPS OF DISINTERESTED NOMINEES WITH AFFILIATED PERSONS
[[No disinterested Nominee and no immediate family member of any Nominee has,
and at no time since the beginning of the past two completed fiscal years of
each Fund had, any direct or indirect relationship involving amounts in excess
of $120,000 with any of the following persons: (a) any Fund; (b) any officer of
any Fund; (c) any fund having the same investment adviser or principal
underwriter as any Fund; (d) any fund having an investment adviser or principal
underwriter in a control relationship with any investment adviser or principal
underwriter of any Fund; (e) any officer of any fund having the same investment
adviser or principal underwriter as any Fund; (f) any officer of any fund having
an investment adviser or principal underwriter in a control relationship with
any investment adviser or principal underwriter of any Fund; (g) any investment
adviser or principal underwriter of any Fund; (h) any officer of any investment
adviser or principal underwriter of any Fund; (i) any person in a control
E-4
relationship with any investment adviser or principal underwriter of any Fund;
or (j) any officer of any person in a control relationship with any investment
adviser or principal underwriter of any Fund. For purposes of this Section 7 of
this Appendix E, "relationship" includes payments of property or services to or
from any person specified above; provision of legal services to any person
specified above; provision of investment banking services to any person
specified above, other than as a participating underwriter in a syndicate; and
any consulting or other relationship substantially similar in nature and scope
to any of the relationships listed in this sentence.]]
8. POTENTIAL CONFLICTS OF INTEREST OF THE NOMINEES
[[No officer of any investment adviser or principal underwriter of any Fund, and
no officer of any person in a control relationship with any investment adviser
or principal underwriter of any Fund, serves, and at no time since the beginning
of the past two completed fiscal years of each Fund served, as a director of any
company for which a disinterested Nominee or an immediate family member of any
Nominee is, or at any time since the beginning of the past two completed fiscal
years of each Fund was, an officer.]]
E-5
APPENDIX F
NOMINEE SHARE OWNERSHIP
1. BENEFICIAL OWNERSHIP OF EQUITY SECURITIES BY NOMINEES IN FUNDS AND IN
FAMILY OF INVESTMENT COMPANIES
The tables below show the dollar range of equity securities of each Fund and the
aggregate dollar range of equity securities of all funds in the Funds' "Family
of Investment Companies" (as defined in Item 22(a)(1)(iv) of Rule 14a-101 under
the Exchange Act) owned by each Nominee as of the Record Date. For purposes of
the tables below, the following symbols are applicable:
N None
A $1 - $10,000
B $10,001 - $50,000
C $50,001 - $100,000
D Over $100,000
AGGREGATE DOLLAR
DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND RANGE OF EQUITY
-------------------------------------------------------------------------------------- SECURITIES IN ALL
COLONIAL FUNDS OVERSEEN BY
CALIFORNIA COLONIAL HIGH COLONIAL COLONIAL COLONIAL TRUSTEE OR NOMINEE
INSURED INCOME INTERMARKET INTERMEDIATE INVESTMENT COLONIAL IN FAMILY OF
MUNICIPAL MUNICIPAL INCOME HIGH INCOME GRADE MUNICIPAL MUNICIPAL INVESTMENT
FUND TRUST TRUST I FUND TRUST INCOME TRUST COMPANIES
------------ ------------- ------------ ------------ --------------- ------------ ------------------
Mr. Robert E. Butler [[________]] [[________]] [[________]] [[________]] [[________]] [[________]] [[________]]
Dr. Lawrence H. Cohn [[________]] [[________]] [[________]] [[________]] [[________]] [[________]] [[________]]
Mr. David H. Gunning [[________]] [[________]] [[________]] [[________]] [[________]] [[________]] [[________]]
Mr. William R. Gutow [[________]] [[________]] [[________]] [[________]] [[________]] [[________]] [[________]]
Mr. Michael Hegarty [[________]] [[________]] [[________]] [[________]] [[________]] [[________]] [[________]]
Mr. J. Atwood Ives [[________]] [[________]] [[________]] [[________]] [[________]] [[________]] [[________]]
Mr. Robert J. Manning [[________]] [[________]] [[________]] [[________]] [[________]] [[________]] [[________]]
Mr. Lawrence T. Perera [[________]] [[________]] [[________]] [[________]] [[________]] [[________]] [[________]]
Mr. Robert C. Pozen [[________]] [[________]] [[________]] [[________]] [[________]] [[________]] [[________]]
Mr. J. Dale Sherratt [[________]] [[________]] [[________]] [[________]] [[________]] [[________]] [[________]]
Ms. Laurie J. Thomsen [[________]] [[________]] [[________]] [[________]] [[________]] [[________]] [[________]]
Mr. Robert W. Uek [[________]] [[________]] [[________]] [[________]] [[________]] [[________]] [[________]]
2. BENEFICIAL OWNERSHIP BY DISINTERESTED NOMINEES OF EQUITY SECURITIES IN FUND
AFFILIATES
[[No disinterested Nominees or family members of any disinterested Nominees have
any beneficial ownership of equity securities in the investment adviser or
principal underwriter of each Fund, or in any person in a control relationship
with the investment adviser or principal underwriter of each Fund.]]
F-1
APPENDIX G
TRUSTEE, NOMINEE AND OFFICER INFORMATION
1. BIOGRAPHICAL INFORMATION REGARDING TRUSTEES, NOMINEES AND EXECUTIVE
OFFICERS OF THE FUNDS.
Information regarding the current trustees and officers of each Fund (including
the nominees set forth in Proposal 4), together with their principal business
occupations during the last five years (their titles may have varied during that
period), is shown below. The address of each trustee, nominee and officer is One
Financial Center, Boston, Massachusetts 02111-2621. If the Closing occurs, each
current officer of the Funds has indicated his or her intention to resign
effective at the Closing.
NUMBER OF
PORTFOLIOS
IN COLUMBIA
YEAR FIRST FUND
ELECTED OR COMPLEX
POSITION APPOINTED TO PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
NAME AND BIRTH YEAR WITH FUNDS OFFICE(1) DURING PAST FIVE YEARS BY TRUSTEE HELD(2)
---------------------- --------------- ------------ ----------------------------------------- ----------- ---------------------
DISINTERESTED TRUSTEES
Thomas C. Theobald Trustee and 1996 Partner and Senior Advisor, Chicago 75 Anixter International
(Born 1937) Chairman of the Growth Partners (private equity (network support
Board investing) since September, 2004; equipment
Managing Director, William Blair Capital distributor); Ventas,
Partners (private equity investing) from Inc. (real estate
September, 1994 to September, 2004. investment trust);
Jones Lang LaSalle
(real estate
management services;
Ambac Financial Group
(financial guaranty
insurance)
Douglas A. Hacker Trustee 1996 Independent business executive since May, 75 Nash Finch Company
(Born 1955) 2006; Executive Vice President - Strategy (food distributor);
of United Airlines (airline) from Aircastle Limited
December, 2002 to May, 2006; President of (aircraft leasing)
UAL Loyalty Services (airline marketing
company) from September, 2001 to
December, 2002; Executive Vice President
and Chief Financial Officer of United
Airlines from July, 1999 to September,
2001.
Janet Langford Kelly Trustee 1996 Deputy General Counsel - Corporate Legal 75 None
(Born 1957) Services, ConocoPhillips (integrated
petroleum company) since August, 2006;
Partner, Zelle, Hofmann, Voelbel, Mason &
Gette LLP (law firm) from March, 2005 to
July, 2006; Adjunct Professor of Law,
Northwestern University, from September,
2004 to June, 2006; Director, UAL
Corporation (airline) from February, 2006
to July, 2006; Chief Administrative
Officer and Senior Vice President, Kmart
Holding Corporation (consumer goods),
from September, 2003 to March, 2004;
Executive Vice President - Corporate
Development and Administration, General
Counsel and Secretary, Kellogg Company
(food manufacturer), from
G-1
NUMBER OF
PORTFOLIOS
IN COLUMBIA
YEAR FIRST FUND
ELECTED OR COMPLEX
POSITION APPOINTED TO PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
NAME AND BIRTH YEAR WITH FUNDS OFFICE(1) DURING PAST FIVE YEARS BY TRUSTEE HELD(2)
---------------------- --------------- ------------ ----------------------------------------- ----------- ---------------------
September, 1999 to August, 2003.
Richard W. Lowry Trustee 1995 Private Investor since August, 1987; 75 None
(Born 1936) formerly Chairman and Chief Executive
Officer, U.S. Plywood Corporation
(building products manufacturer).
Charles R. Nelson Trustee 1981 Professor of Economics, University of 75 None
(Born 1943) Washington since January, 1976; Ford and
Louisa University of Washington Van
Voorhis Professor of Political Economy,
University of Washington, since
September, 1993; Director, Institute for
Economic Research, University of
Washington from September, 2001 to June,
2003; Adjunct Professor of Statistics,
University of Washington since September,
1980; Associate Editor, Journal of Money
Credit and Banking since September, 1993;
consultant on econometric and statistical
matters.
John J. Neuhauser Trustee 1985 University Professor, Boston College 75 None
(Born 1942) since November, 2005; Academic Vice
President and Dean of Faculties, Boston
College from August, prior thereto.
Patrick J. Simpson Trustee 2000 Partner, Perkins Coie L.L.P. (law firm). 75 None
(Born 1944)
Thomas E. Stitzel Trustee 1998 Business Consultant since 1999; Chartered 75 None
(Born 1936) Financial Analyst.
Anne-Lee Verville Trustee 1998 Retired since 1997; formerly General 75 None
(Born 1945) Manager, Global Education Industry, IBM
Corporation (computer and technology).
INTERESTED TRUSTEE
William E. Mayer(3) Trustee 1994 Partner, Park Avenue Equity Partners 75 Lee Enterprises
(Born 1940) (private equity) since February, 1999; (print media), WR
formerly Dean and Professor, College of Hambrecht & Co.
Business, University of Maryland. (financial service
provider); Reader's
Digest (publishing).
1. The date shown is the earliest date on which a trustee was elected or
appointed to the board of a fund in the Columbia Fund Complex.
2. Directorships or trusteeships of companies required to report to the
Commission (i.e., "public companies").
3. Mr. Mayer is an "interested person" (as defined in the 1940 Act) of the
Funds by reason of his affiliation with WR Hambrecht + Co., a registered
broker-dealer that may execute portfolio transactions for or engage in
principal transactions with the Funds or other funds or clients advised by
Columbia or its affiliates.
G-2
YEAR FIRST
ELECTED OR
APPOINTED TO
NAME AND BIRTH YEAR POSITION WITH FUNDS OFFICE PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
----------------------- -------------------------------- ------------ ---------------------- ------------------------------------
OFFICERS
Christopher L. Wilson President 2004 Head of Mutual Funds, Columbia, since August, 2004 and
(Born 1957) Managing Director, Columbia, since September, 2005;
President and Chief Executive Officer, DCD IXIS Asset
Management Services, Inc. (investment management), prior
thereto
James R. Bordewick, Jr. Senior Vice President, Secretary 2006 Associate General Counsel, Bank of America since April,
(Born 1959) and Chief Legal Officer 2005; Senior Vice President and Associate General Counsel,
MFS Investment management (investment management) prior
thereto
J. Kevin Connaughton Senior Vice President, Chief 2000 Managing director of the Advisor since February, 1998
(Born 1964) Financial Officer and Treasurer
Linda J. Wondrack Senior Vice President and Chief 2007 Director (Columbia Management Group LLC and Investment
(Born 1964) Compliance Officer Product Group Compliance), Bank of America, since June
2005; Director of Corporate Compliance and Conflicts
Officer, MFS Investment Management (investment management)
Michael G. Clarke Chief Accounting Officer and 2004 Director of Fund Administration, Columbia, since January
(Born 1969) Assistant Treasurer 2006; Managing Director of Columbia Management Advisors,
LLC September, 2004 to December, 2005; Vice President Fund
Administration, Columbia, June, 2002 to September, 2004.
Vice President Product Strategy and Development, Columbia,
prior thereto.
Stephen T. Welsh Vice President 1996 President, Columbia Management Services, Inc., since July,
(Born 1957) 2004; Senior Vice President and Controller, Columbia
Management Services, Inc. prior thereto.
Jeffrey R. Coleman Deputy Treasurer 2004 Director of Fund Administration, Columbia, since January,
(Born 1969) 2006; Fund Controller from October, 2004 to January, 2006;
Vice President of CDC IXIS Asset Management Services, inc.
(investment management) prior thereto.
Joseph F. DiMaria Deputy Treasurer 2004 Director of Fund Administration, Columbia, since January,
(Born 1968) 2006; Head of Tax/Compliance and Assistant Treasurer,
Columbia, from November, 2004 to December, 2005; Director
of Trustee Administration (Sarbanes-Oxley, Columbia) from
May, 2003 to October, 2004; Senior Audit Management,
PricewaterhouseCoopers (independent registered public
accounting firm) prior thereto.
Ty S. Edwards Deputy Treasurer 2004 Director of Fund Administration, Columbia, since January,
(Born 1966) 2006; Vice President of the Adviser from July, 2002 to
December, 2005; Assistant Vice President and Director,
State Street Corporation (financial services), prior
thereto.
Kathryn Dwyer-Thompson Assistant Treasurer 2006 Vice President, Mutual Fund Accounting Oversight of the
(Born 1967) Advisor since December 2004; Vice President, State Street
Corporation, prior thereto
Marybeth C. Pilat Assistant Treasurer 2006 Vice President, Mutual Fund Valuation of the Advisor since
(Born 1968) January 2006; Vice President, Mutual Fund Accounting
oversight of the Advisor prior to January 2006.
Philip N. Prefontaine Assistant Treasurer 2006 Vice President, Trustee Reporting of the Advisor since
(Born 1948) September 2003; Manager, Investors Bank & Trust Company
(financial services), from December 2002 to September 2003;
Audit Senior, Deloitte & Touche, LLP (independent
registered public accounting firm) prior thereto.
G-3
YEAR FIRST
ELECTED OR
APPOINTED TO
NAME AND BIRTH YEAR POSITION WITH FUNDS OFFICE PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
----------------------- -------------------------------- ------------ ---------------------- ------------------------------------
Barry S. Vallan Controller 2006 Vice President-Fund Treasury of the Advisor since October,
(Born 1969) 2004,; Vice President-Trustee Reporting, Columbia, from
April, 2002 to October, 2004; Management Consultant,
PricewaterhouseCoopers (independent registered public
account firm), prior thereto.
Peter T. Fariel Assistant Secretary 2006 Associate General Counsel, Bank of America since April,
(born 1957) 2005; Partner, Goodwin Procter LLP (law firm) prior to
April, 2005.
Julie B. Lyman Assistant Secretary 2007 Assistant General Counsel, Bank of America since October
(Born 1970) 2006; Associate, Kirkpatrick & Lockhart Nicholas Graham LLP
(law firm), from April 2004 to October 2006; Counsel &
Assistant Vice President, CDC IXIS Asset Management
Services, Inc. (investment management) prior thereto.
Ryan C. Larrenaga Assistant Secretary 2005 Assistant General Counsel, Bank of America since March,
(Born 1970) 2005; Associate, Ropes & Gray LLP (law firm), prior
thereto.
Julian Quero Assistant Treasurer 2003 Senior Compliance Manager, Columbia, since April, 2002;
(Born 1967) Assistant Vice President of Taxes and Distributions,
Columbia, prior thereto.
G-4
2. POSITIONS HELD WITH AFFILIATED PERSONS
With the exception of Mr. Mayer, no trustee of the Funds and no nominee set
forth in Proposal 4 is an "interested person" (as that term is defined in
Section 2(a)(19) of the 1940 Act) of any Fund. Officers of the Funds hold the
positions with affiliated persons of the Funds set forth in the preceding table.
3. ARRANGEMENTS FOR SELECTION AS TRUSTEE, NOMINEE OR OFFICER
[[All nominees set forth in Proposal 4 were reviewed by the Board based on the
criteria generally employed by the Governance Committee to review candidates for
nomination as trustee. There exist no arrangements or understandings between any
such nominee and any other person pursuant to which any such nominee was
selected as a nominee. There also exist no arrangements or understandings
between any trustee or officer of the Funds and any other person pursuant to
which any such trustee or officer was selected as a trustee or officer,
respectively.]]
4. RELATED POSITIONS HELD BY INDEPENDENT TRUSTEES OR DISINTERESTED NOMINEES
[[Except as disclosed in the table in Section 1 of this Appendix G, no
Independent Trustee, no disinterested nominee set forth in Proposal 4 and no
immediate family member of any of the foregoing holds, or has held within the
past five years, any position, as a director, general partner, officer, employee
or otherwise, with any of the Funds, any fund having the same investment adviser
or principal underwriter as any Fund, any fund having an investment adviser or
principal underwriter in a control relationship with any investment adviser or
principal underwriter of any Fund, any investment adviser or principal
underwriter of any Fund or any person in a control relationship with any
investment adviser or principal underwriter of any Fund.]]
5. INTERESTS OF INDEPENDENT TRUSTEES OR DISINTERESTED NOMINEES IN AFFILIATED
PERSONS
[[No Independent Trustee, no disinterested nominee set forth in Proposal 4 and
no immediate family member of any of the foregoing has, and at no time in the
past five years had, any direct or indirect interest, the value of which exceeds
$120,000, in any investment adviser or principal underwriter of any Fund, or in
any person (other than a fund) in a control relationship with any investment
adviser or principal underwriter of any Fund.]]
6. INTERESTS OF INDEPENDENT TRUSTEES OR DISINTERESTED NOMINEES IN AFFILIATED
TRANSACTIONS
[[No Independent Trustee, no disinterested nominee set forth in Proposal 4 and
no immediate family member of any of the foregoing has, and at no time since the
beginning of the past two completed fiscal years of each Fund had, any direct or
indirect material interest in any transaction or series of similar transactions
involving amounts in excess of $120,000 to which any of the following persons
was or is a party: (a) any Fund; (b) any officer of any Fund; (c) any fund
having the same investment adviser or principal underwriter as any Fund; (d) any
fund having an investment adviser or principal underwriter in a control
relationship with any investment adviser or principal underwriter of any Fund;
(e) any officer of any fund having the same investment adviser or principal
underwriter as any Fund; (f) any officer of any fund having an investment
adviser or principal underwriter in a control relationship with any investment
adviser or principal underwriter of any Fund; (g) any investment adviser or
principal underwriter of any Fund; (h) any officer of any investment adviser or
principal underwriter of any Fund; (i) any person in a control relationship with
any investment adviser or principal underwriter of any Fund; or (j) any officer
of any person in a control relationship with any investment adviser or principal
underwriter of any Fund.]]
7. RELATIONSHIPS OF INDEPENDENT TRUSTEES OR DISINTERESTED NOMINEES WITH
AFFILIATED PERSONS
[[No Independent Trustee, no disinterested nominee set forth in Proposal 4 and
no immediate family member of any of the foregoing has, and at no time since the
beginning of the past two completed fiscal years of each Fund had, any direct or
indirect relationship involving amounts in excess of $120,000 with any of the
following persons: (a) any Fund; (b) any officer of any Fund; (c) any fund
having the same investment adviser or principal underwriter as any Fund; (d) any
fund having an investment adviser or principal underwriter in a control
relationship with any investment adviser or principal underwriter of any Fund;
(e) any officer of any fund having the same investment adviser or principal
underwriter as any Fund; (f) any officer of any fund having an investment
adviser or principal underwriter in a control relationship with any investment
adviser or principal underwriter of any Fund; (g) any investment adviser or
principal underwriter of any Fund; (h) any officer of any investment adviser or
principal
G-5
underwriter of any Fund; (i) any person in a control relationship with any
investment adviser or principal underwriter of any Fund; or (j) any officer of
any person in a control relationship with any investment adviser or principal
underwriter of any Fund. For purposes of this Section 7 of this Appendix G,
"relationship" includes payments of property or services to or from any person
specified above; provision of legal services to any person specified above;
provision of investment banking services to any person specified above, other
than as a participating underwriter in a syndicate; and any consulting or other
relationship substantially similar in nature and scope to any of the
relationships listed in this sentence.]]
8. POTENTIAL CONFLICTS OF INTEREST OF THE TRUSTEES OR NOMINEES
[[No officer of any investment adviser or principal underwriter of any Fund, and
no officer of any person in a control relationship with any investment adviser
or principal underwriter of any Fund, serves, and at no time since the beginning
of the past two completed fiscal years of each Fund served, as a director of any
company for which an Independent Trustee, a disinterested nominee set forth in
Proposal 4 or an immediate family member of any of the foregoing is, or at any
time since the beginning of the past two completed fiscal years of each Fund
was, an officer.]]
G-6
APPENDIX H
TRUSTEE COMPENSATION
The table below sets forth the compensation during the fiscal year ended
November 30, 2006 of each trustee from each Fund for serving as trustee, and the
aggregate compensation during the calendar year ended December 31, 2006 of each
trustee from the Fund Complex for serving as trustee. Two-thirds of the
trustees' fees are allocated among the funds within the Fund Complex that are
supervised by the trustees of the Funds based on the relative net assets of each
fund. One-third of such fees is divided equally among the funds within the Fund
Complex that are supervised by the trustees of the Funds.
AGGREGATE COMPENSATION FROM:
-------------------------------------------------------------------------- PENSION OR TOTAL
COLONIAL COLONIAL COLONIAL RETIREMENT COMPENSATION
CALIFORNIA HIGH COLONIAL INVESTMENT COLONIAL BENEFITS FROM THE FUND
INSURED INCOME COLONIAL INTERMEDIATE GRADE MUNICIPAL ACCRUED AS COMPLEX PAID
MUNICIPAL MUNICIPAL INTERMARKET HIGH INCOME MUNICIPAL INCOME PART OF FUND TO THE
FUND TRUST INCOME TRUST I FUND TRUST TRUST EXPENSES(1) TRUSTEES
---------- --------- -------------- ------------ ---------- --------- -------------- ---------------
DISINTERESTED TRUSTEES
Douglas A. Hacker $1,055 $1,858 $1,283 $1,175 $1,471 $1,642 N/A $199,000
Janet Langford Kelly $ 857 $1,828 $1,265 $1,158 $1,448 $1,616 N/A $194,500
Richard W. Lowry(2) $ 882 $1,554 $1,072 $ 982 $1,229 $1,373 N/A $223,500
Charles R. Nelson $ 977 $1,719 $1,189 $1,088 $1,361 $1,520 N/A $183,000
John J. Neuhauser(2) $ 934 $1,641 $1,137 $1,041 $1,300 $1,451 N/A $193,500
Patrick J. Simpson(3) $ 994 $1,746 $1,209 $1,107 $1,384 $1,544 N/A $183,000
Thomas E. Stitzel(4) $1,009 $1,776 $1,227 $1,124 $1,406 $1,570 N/A $186,000
Thomas C. Theobald(5) $1,486 $2,614 $1,809 $1,656 $2,070 $2,311 N/A $274,500
Anne-Lee Verville(6) $1,009 $1,776 $1,227 $1,124 $1,406 $1,570 N/A $191,500
Richard L. Woolworth(7) $ 621 $1,122 $ 747 $ 683 $ 875 $ 985 N/A $103,250
INTERESTED TRUSTEE
William E. Mayer(2) $ 976 $1,725 $1,185 $1,085 $1,363 $1,523 N/A $193,500
(1) The Funds do not provide pension or retirement plan benefits to the
trustees.
(2) Total Compensation figures for Messrs. Lowry, Mayer and Neuhauser include
trustee fees paid to them by Liberty All-Star Equity Fund and Liberty
All-Star Growth Fund, Inc. prior to December 15, 2006, at which time those
funds ceased to be part of the Columbia Fund Complex.
(3) During the indicated periods, Mr. Simpson deferred all of his compensation
from funds in the Fund complex pursuant to the deferred compensation plan.
At December 31, 2006, the value of Mr. Simpson's account under that plan
was $511,995.
(4) During the indicated periods, Mr. Stitzel deferred $435, $760, $531, $486,
$604 and $673 from the California Insured Municipal Fund, High Income
Municipal Trust, Intermarket Income Trust, Intermediate High Income Fund,
Investment Grade Municipal Trust and Municipal Income Trust, respectively,
and in the calendar year ended December 31, 2006 $116,500 of his total
compensation from the Columbia Fund Complex, pursuant to the deferred
compensation plan. At December 31, 2006, the value of Mr. Stitzel's account
under that plan was $128,397.
(5) During the indicated periods, Mr. Theobald deferred 68% of his compensation
from the funds in the Fund Complex pursuant to the deferred compensation
plan. At December 31, 2006, the value of Mr. Theobald's account under that
plan was $584,565.
(6) At December 31, 2006, the value of Ms. Verville's account under the
deferred compensation plan was $792,952.
(7) Mr. Woolworth served as a trustee of the Funds until August 4, 2006.
H-1
APPENDIX I
TRUSTEE AND NOMINEE SHARE OWNERSHIP
1. BENEFICIAL OWNERSHIP OF EQUITY SECURITIES BY TRUSTEES AND NOMINEES IN FUNDS
AND IN FAMILY OF INVESTMENT COMPANIES
The tables below show the dollar range of equity securities of each Fund and the
aggregate dollar range of equity securities of all funds in the Funds' "Family
of Investment Companies" (as defined in Item 22(a)(1)(iv) of Rule 14a-101 under
the Exchange Act) owned by each trustee and each nominee set forth in Proposal 4
as of the Record Date. For purposes of the tables below, the following symbols
are applicable:
N None
A $1 - $10,000
B $10,001 - $50,000
C $50,001 - $100,000
D Over $100,000
AGGREGATE DOLLAR
DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND RANGE OF EQUITY
----------------------------------------------------------------------- SECURITIES IN ALL
COLONIAL COLONIAL COLONIAL FUNDS OVERSEEN BY
CALIFORNIA HIGH COLONIAL COLONIAL INVESTMENT COLONIAL TRUSTEE OR NOMINEE
INSURED INCOME INTERMARKET INTERMEDIATE GRADE MUNICIPAL IN FAMILY OF
MUNICIPAL MUNICIPAL INCOME HIGH MUNICIPAL INCOME INVESTMENT
FUND TRUST TRUST I INCOME FUND TRUST TRUST COMPANIES
---------- --------- ----------- ------------ ---------- --------- ------------------
DISINTERESTED TRUSTEES
Douglas A. Hacker N N N N N N D
Janet Langford Kelly N N N N N N D
Richard W. Lowry N N N N N N D
Charles R. Nelson N N N N N N D
John J. Neuhauser N N N N N N D
Patrick J. Simpson N N N N N N D
Thomas E. Stitzel N N N N N N D
Thomas C. Theobald N N N N N N D
Anne-Lee Verville N N N N N N D
INTERESTED TRUSTEE
William E. Mayer N N N N N N C
2. BENEFICIAL OWNERSHIP BY INDEPENDENT TRUSTEES OR DISINTERESTED NOMINEES OF
EQUITY SECURITIES IN FUND AFFILIATES
[[No Independent Trustees, disinterested nominee set forth in Proposal 4 or
family member of any of the foregoing persons has any beneficial ownership of
equity securities in the investment adviser or principal underwriter of each
Fund, or in any person in a control relationship with the investment adviser or
principal underwriter of each Fund.]]
I-1
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
VOTE THIS PROXY CARD TODAY!
THREE CONVENIENT WAYS TO VOTE YOUR PROXY.
YOU CAN VOTE YOUR PROXIES OVER THE INTERNET, BY
TOUCH-TONE TELEPHONE OR BY MAIL - IT'S EASY AND CONFIDENTIAL.
INTERNET AND TELEPHONE VOTING ARE AVAILABLE
24 HOURS A DAY, SEVEN DAYS A WEEK.
IF YOU ARE VOTING BY INTERNET OR TELEPHONE,
YOU SHOULD NOT MAIL YOUR PROXY CARD.
VOTE BY INTERNET:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
GO TO [[WEBSITE]] AND FOLLOW THE ON SCREEN DIRECTIONS.
VOTE BY TOUCH-TONE TELEPHONE:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
CALL TOLL FREE [[NUMBER]] AND FOLLOW THE RECORDED INSTRUCTIONS PROVIDED TO CAST
YOUR VOTE.
VOTE BY MAIL:
READ THE PROXY STATEMENT.
VOTE ON EACH PROPOSAL WHERE INDICATED ON THE ENCLOSED PROXY CARD, SIGN AND DATE
IT, AND RETURN IT IN THE ENCLOSED ENVELOPE.
IF YOU HAVE ANY QUESTIONS OR CONCERNS, PLEASE CALL [[NUMBER]] FROM [[TIME]] A.M.
TO [[TIME]] P.M. EASTERN TIME MONDAY THROUGH FRIDAY, OR FROM [[TIME]] P.M. TO
[[TIME]] P.M. EASTERN TIME ON SATURDAY.
YOU MAY RECEIVE ADDITIONAL PROXIES FOR OTHER ACCOUNTS.
THESE ARE NOT DUPLICATES.
YOU SHOULD SIGN AND RETURN EACH PROXY
IN ORDER FOR YOUR VOTES TO BE COUNTED.
PROXY COLONIAL MUNICIPAL INCOME TRUST PROXY
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder hereby appoints each of James R. Bordewick, Jr., Michael G. Clarke, Ryan
C. Larrenaga, J. Kevin Connaughton and Christopher L. Wilson as proxies of the undersigned, with
power of substitution to each, and hereby authorizes each of them to represent and to vote at the
Annual Meeting of Shareholders of Colonial Municipal Income Trust (the "Fund"), to be held in
Boston, Massachusetts on Friday, June 22, 2007, and at any adjournments and postponements thereof,
all of the shares of the Fund that the undersigned would be entitled to vote if personally present,
as follows below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN AND, ABSENT
DIRECTION, WILL BE VOTED FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW. THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE HOLDERS AS TO ANY OTHER MATTER.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW.
VOTE VIA THE INTERNET: [[WEBSITE]]
VOTE VIA TOUCH-TONE TELEPHONE: [[NUMBER]]
999 9999 9999 999
Please sign exactly as name(s) appear(s) hereon.
Joint owners should each sign personally. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in corporate
name by President or other authorized officer. If
a partnership, please sign in partnership name by
authorized person.
--------------------------------------------------
Signature
--------------------------------------------------
Signature (if held jointly)
--------------------------------------------------
Date
PLEASE VOTE, DATE AND SIGN ABOVE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. TO APPROVE A NEW ADVISORY AGREEMENT WITH [ ] [ ] [ ]
MASSACHUSETTS FINANCIAL SERVICES COMPANY.
FOR AGAINST ABSTAIN
2. TO APPROVE AN AMENDED AND RESTATED DECLARATION OF [ ] [ ] [ ]
TRUST.
FOR ALL AGAINST ALL FOR ALL EXCEPT
3A. TO ELECT TEN TRUSTEES: [ ] [ ] [ ]
01 Robert E. Butler 02 Lawrence H. Cohn 03 David H. Gunning 04 William R. Gutow
05 Michael Hegarty 06 Robert J. Manning 07 Lawrence T. Perera 08 Robert C. Pozen
09 J. Dale Sherratt 10 Robert W. Uek
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line: ___________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
3B. TO ELECT TWO TRUSTEES: [ ] [ ] [ ]
01 Laurie J. Thompsen 02 J. Atwood Ives
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
FOR ALL AGAINST ALL FOR ALL EXCEPT
4A. TO ELECT THREE TRUSTEES.: [ ] [ ] [ ]
01 Richard W. Lowry 02 John J. Neuhauser 03 Thomas C. Theobald
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line: ___________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
4B. TO ELECT TWO TRUSTEES.: [ ] [ ] [ ]
01 Douglas A. Hacker 02 Thomas E. Stitzel
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line: ___________________
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
VOTE THIS PROXY CARD TODAY!
THREE CONVENIENT WAYS TO VOTE YOUR PROXY.
YOU CAN VOTE YOUR PROXIES OVER THE INTERNET, BY
TOUCH-TONE TELEPHONE OR BY MAIL - IT'S EASY AND CONFIDENTIAL.
INTERNET AND TELEPHONE VOTING ARE AVAILABLE
24 HOURS A DAY, SEVEN DAYS A WEEK.
IF YOU ARE VOTING BY INTERNET OR TELEPHONE,
YOU SHOULD NOT MAIL YOUR PROXY CARD.
VOTE BY INTERNET:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
GO TO [[WEBSITE]] AND FOLLOW THE ON SCREEN DIRECTIONS.
VOTE BY TOUCH-TONE TELEPHONE:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
CALL TOLL FREE [[NUMBER]] AND FOLLOW THE RECORDED INSTRUCTIONS PROVIDED TO CAST
YOUR VOTE.
VOTE BY MAIL:
READ THE PROXY STATEMENT.
VOTE ON EACH PROPOSAL WHERE INDICATED ON THE ENCLOSED PROXY CARD, SIGN AND DATE
IT, AND RETURN IT IN THE ENCLOSED ENVELOPE.
IF YOU HAVE ANY QUESTIONS OR CONCERNS, PLEASE CALL [[NUMBER]] FROM [[TIME]] A.M.
TO [[TIME]] P.M. EASTERN TIME MONDAY THROUGH FRIDAY, OR FROM [[TIME]] P.M. TO
[[TIME]] P.M. EASTERN TIME ON SATURDAY.
YOU MAY RECEIVE ADDITIONAL PROXIES FOR OTHER ACCOUNTS.
THESE ARE NOT DUPLICATES.
YOU SHOULD SIGN AND RETURN EACH PROXY
IN ORDER FOR YOUR VOTES TO BE COUNTED.
PROXY COLONIAL HIGH INCOME MUNICIPAL TRUST PROXY
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder hereby appoints each of James R. Bordewick, Jr., Michael G. Clarke, Ryan
C. Larrenaga, J. Kevin Connaughton and Christopher L. Wilson as proxies of the undersigned, with
power of substitution to each, and hereby authorizes each of them to represent and to vote at the
Annual Meeting of Shareholders of Colonial High Income Municipal Trust (the "Fund"), to be held in
Boston, Massachusetts on Friday, June 22, 2007, and at any adjournments and postponements thereof,
all of the shares of the Fund that the undersigned would be entitled to vote if personally present,
as follows below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN AND, ABSENT
DIRECTION, WILL BE VOTED FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW. THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE HOLDERS AS TO ANY OTHER MATTER.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW.
VOTE VIA THE INTERNET: [[WEBSITE]]
VOTE VIA TOUCH-TONE TELEPHONE: [[NUMBER]]
999 9999 9999 999
Please sign exactly as name(s) appear(s) hereon.
Joint owners should each sign personally. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in corporate
name by President or other authorized officer. If
a partnership, please sign in partnership name by
authorized person.
--------------------------------------------------
Signature
--------------------------------------------------
Signature (if held jointly)
--------------------------------------------------
Date
PLEASE VOTE, DATE AND SIGN ABOVE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. TO APPROVE A NEW ADVISORY AGREEMENT WITH MASSACHUSETTS [ ] [ ] [ ]
FINANCIAL SERVICES COMPANY.
FOR AGAINST ABSTAIN
2. TO APPROVE AN AMENDED AND RESTATED DECLARATION OF [ ] [ ] [ ]
TRUST.
FOR ALL AGAINST ALL FOR ALL EXCEPT
3A. TO ELECT TEN TRUSTEES: [ ] [ ] [ ]
01 Robert E. Butler 02 Lawrence H. Cohn 03 David H. Gunning 04 William R. Gutow
05 Michael Hegarty 06 Robert J. Manning 07 Lawrence T. Perera 08 Robert C. Pozen
09 J. Dale Sherratt 10 Robert W. Uek
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
3B. TO ELECT TWO TRUSTEES: [ ] [ ] [ ]
01 Laurie J. Thompsen 02 J. Atwood Ives
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line: ___________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
4A. TO ELECT THREE TRUSTEES.: [ ] [ ] [ ]
01 William E. Mayer 02 Charles R. Nelson 03 Thomas C. Theobald
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
FOR ALL AGAINST ALL FOR ALL EXCEPT
4B. TO ELECT TWO TRUSTEES.: [ ] [ ] [ ]
01 Douglas A. Hacker 02 Thomas E. Stitzel
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
VOTE THIS PROXY CARD TODAY!
THREE CONVENIENT WAYS TO VOTE YOUR PROXY.
YOU CAN VOTE YOUR PROXIES OVER THE INTERNET, BY
TOUCH-TONE TELEPHONE OR BY MAIL - IT'S EASY AND CONFIDENTIAL.
INTERNET AND TELEPHONE VOTING ARE AVAILABLE
24 HOURS A DAY, SEVEN DAYS A WEEK.
IF YOU ARE VOTING BY INTERNET OR TELEPHONE,
YOU SHOULD NOT MAIL YOUR PROXY CARD.
VOTE BY INTERNET:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
GO TO [[WEBSITE]] AND FOLLOW THE ON SCREEN DIRECTIONS.
VOTE BY TOUCH-TONE TELEPHONE:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
CALL TOLL FREE [[NUMBER]] AND FOLLOW THE RECORDED INSTRUCTIONS PROVIDED TO CAST
YOUR VOTE.
VOTE BY MAIL:
READ THE PROXY STATEMENT.
VOTE ON EACH PROPOSAL WHERE INDICATED ON THE ENCLOSED PROXY CARD, SIGN AND DATE
IT, AND RETURN IT IN THE ENCLOSED ENVELOPE.
IF YOU HAVE ANY QUESTIONS OR CONCERNS, PLEASE CALL [[NUMBER]] FROM [[TIME]] A.M.
TO [[TIME]] P.M. EASTERN TIME MONDAY THROUGH FRIDAY, OR FROM [[TIME]] P.M. TO
[[TIME]] P.M. EASTERN TIME ON SATURDAY.
YOU MAY RECEIVE ADDITIONAL PROXIES FOR OTHER ACCOUNTS.
THESE ARE NOT DUPLICATES.
YOU SHOULD SIGN AND RETURN EACH PROXY
IN ORDER FOR YOUR VOTES TO BE COUNTED.
PROXY COLONIAL INVESTMENT GRADE MUNICIPAL TRUST PROXY
COMMON SHARES
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder hereby appoints each of James R. Bordewick, Jr., Michael G. Clarke, Ryan
C. Larrenaga, J. Kevin Connaughton and Christopher L. Wilson as proxies of the undersigned, with
power of substitution to each, and hereby authorizes each of them to represent and to vote at the
Annual Meeting of Shareholders of Colonial Investment Grade Municipal Trust (the "Fund"), to be held
in Boston, Massachusetts on Friday, June 22, 2007, and at any adjournments and postponements
thereof, all of the shares of the Fund that the undersigned would be entitled to vote if personally
present, as follows below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN AND, ABSENT
DIRECTION, WILL BE VOTED FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW. THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE HOLDERS AS TO ANY OTHER MATTER.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW.
VOTE VIA THE INTERNET: [[WEBSITE]]
VOTE VIA TOUCH-TONE TELEPHONE: [[NUMBER]]
999 9999 9999 999
Please sign exactly as name(s) appear(s) hereon.
Joint owners should each sign personally. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in corporate
name by President or other authorized officer. If
a partnership, please sign in partnership name by
authorized person.
--------------------------------------------------
Signature
--------------------------------------------------
Signature (if held jointly)
--------------------------------------------------
Date
PLEASE VOTE, DATE AND SIGN ABOVE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. TO APPROVE A NEW ADVISORY AGREEMENT WITH MASSACHUSETTS [ ] [ ] [ ]
FINANCIAL SERVICES COMPANY.
FOR AGAINST ABSTAIN
2. TO APPROVE AN AMENDED AND RESTATED DECLARATION OF [ ] [ ] [ ]
TRUST.
FOR ALL AGAINST ALL FOR ALL EXCEPT
3. TO ELECT TEN TRUSTEES: [ ] [ ] [ ]
01 Robert E. Butler 02 Lawrence H. Cohn 03 David H. Gunning 04 William R. Gutow
05 Michael Hegarty 06 Robert J. Manning 07 Lawrence T. Perera 08 Robert C. Pozen
09 J. Dale Sherratt 10 Robert W. Uek
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
4. TO ELECT THREE TRUSTEES.: [ ] [ ] [ ]
01 William E. Mayer 02 John J. Neuhauser 03 Thomas C. Theobald
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
VOTE THIS PROXY CARD TODAY!
THREE CONVENIENT WAYS TO VOTE YOUR PROXY.
YOU CAN VOTE YOUR PROXIES OVER THE INTERNET, BY
TOUCH-TONE TELEPHONE OR BY MAIL - IT'S EASY AND CONFIDENTIAL.
INTERNET AND TELEPHONE VOTING ARE AVAILABLE
24 HOURS A DAY, SEVEN DAYS A WEEK.
IF YOU ARE VOTING BY INTERNET OR TELEPHONE,
YOU SHOULD NOT MAIL YOUR PROXY CARD.
VOTE BY INTERNET:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
GO TO [[WEBSITE]] AND FOLLOW THE ON SCREEN DIRECTIONS.
VOTE BY TOUCH-TONE TELEPHONE:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
CALL TOLL FREE [[NUMBER]] AND FOLLOW THE RECORDED INSTRUCTIONS PROVIDED TO CAST
YOUR VOTE.
VOTE BY MAIL:
READ THE PROXY STATEMENT.
VOTE ON EACH PROPOSAL WHERE INDICATED ON THE ENCLOSED PROXY CARD, SIGN AND DATE
IT, AND RETURN IT IN THE ENCLOSED ENVELOPE.
IF YOU HAVE ANY QUESTIONS OR CONCERNS, PLEASE CALL [[NUMBER]] FROM
[[TIME]] A.M. TO [[TIME]] P.M. EASTERN TIME MONDAY THROUGH FRIDAY, OR FROM
[[TIME]] P.M. TO [[TIME]] P.M. EASTERN TIME ON SATURDAY.
YOU MAY RECEIVE ADDITIONAL PROXIES FOR OTHER ACCOUNTS.
THESE ARE NOT DUPLICATES.
YOU SHOULD SIGN AND RETURN EACH PROXY
IN ORDER FOR YOUR VOTES TO BE COUNTED.
PROXY COLONIAL INTERMARKET INCOME TRUST I PROXY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder hereby appoints each of James R. Bordewick, Jr., Michael G. Clarke, Ryan
C. Larrenaga, J. Kevin Connaughton and Christopher L. Wilson as proxies of the undersigned, with
power of substitution to each, and hereby authorizes each of them to represent and to vote at the
Annual Meeting of Shareholders of Colonial InterMarket Income Trust I (the "Fund"), to be held in
Boston, Massachusetts on Friday, June 22, 2007, and at any adjournments and postponements thereof,
all of the shares of the Fund that the undersigned would be entitled to vote if personally present,
as follows below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN AND, ABSENT
DIRECTION, WILL BE VOTED FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW. THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE HOLDERS AS TO ANY OTHER MATTER.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW.
VOTE VIA THE INTERNET: [[WEBSITE]]
VOTE VIA TOUCH-TONE TELEPHONE: [[NUMBER]]
999 9999 9999 999
Please sign exactly as name(s) appear(s) hereon.
Joint owners should each sign personally. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in corporate
name by President or other authorized officer. If
a partnership, please sign in partnership name by
authorized person.
--------------------------------------------------
Signature
--------------------------------------------------
Signature (if held jointly)
--------------------------------------------------
Date
PLEASE VOTE, DATE AND SIGN ABOVE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. TO APPROVE A NEW ADVISORY AGREEMENT WITH MASSACHUSETTS [ ] [ ] [ ]
FINANCIAL SERVICES COMPANY.
FOR AGAINST ABSTAIN
2. TO APPROVE AN AMENDED AND RESTATED DECLARATION OF [ ] [ ] [ ]
TRUST.
FOR ALL AGAINST ALL FOR ALL EXCEPT
3. TO ELECT TWELVE TRUSTEES: [ ] [ ] [ ]
01 Robert E. Butler 02 Lawrence H. Cohn 03 David H. Gunning 04 William R. Gutow
05 Michael Hegarty 06 J. Atwood Ives 07 Robert J. Manning 08 Lawrence T. Perera
09 Robert C. Pozen 10 J. Dale Sherratt 11 Laurie J. Thompsen 12 Robert W. Uek
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
4. TO ELECT THREE TRUSTEES.: [ ] [ ] [ ]
01 John J. Neuhauser 02 Thomas C. Theobald 03 Anne-Lee Verville
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
_______________________________________________________________
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
VOTE THIS PROXY CARD TODAY!
THREE CONVENIENT WAYS TO VOTE YOUR PROXY.
YOU CAN VOTE YOUR PROXIES OVER THE INTERNET, BY
TOUCH-TONE TELEPHONE OR BY MAIL - IT'S EASY AND CONFIDENTIAL.
INTERNET AND TELEPHONE VOTING ARE AVAILABLE
24 HOURS A DAY, SEVEN DAYS A WEEK.
IF YOU ARE VOTING BY INTERNET OR TELEPHONE,
YOU SHOULD NOT MAIL YOUR PROXY CARD.
VOTE BY INTERNET:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
GO TO [[WEBSITE]] AND FOLLOW THE ON SCREEN DIRECTIONS.
VOTE BY TOUCH-TONE TELEPHONE:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
CALL TOLL FREE [[NUMBER]] AND FOLLOW THE RECORDED INSTRUCTIONS PROVIDED TO CAST
YOUR VOTE.
VOTE BY MAIL:
READ THE PROXY STATEMENT.
VOTE ON EACH PROPOSAL WHERE INDICATED ON THE ENCLOSED PROXY CARD, SIGN AND DATE
IT, AND RETURN IT IN THE ENCLOSED ENVELOPE.
IF YOU HAVE ANY QUESTIONS OR CONCERNS, PLEASE CALL [[NUMBER]] FROM [[TIME]] A.M.
TO [[TIME]] P.M. EASTERN TIME MONDAY THROUGH FRIDAY, OR FROM [[TIME]] P.M. TO
[[TIME]] P.M. EASTERN TIME ON SATURDAY.
YOU MAY RECEIVE ADDITIONAL PROXIES FOR OTHER ACCOUNTS.
THESE ARE NOT DUPLICATES.
YOU SHOULD SIGN AND RETURN EACH PROXY
IN ORDER FOR YOUR VOTES TO BE COUNTED.
PROXY COLONIAL MUNICIPAL INCOME TRUST PROXY
COMMON SHARES
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder hereby appoints each of James R. Bordewick, Jr., Michael G. Clarke, Ryan
C. Larrenaga, J. Kevin Connaughton and Christopher L. Wilson as proxies of the undersigned, with
power of substitution to each, and hereby authorizes each of them to represent and to vote at the
Annual Meeting of Shareholders of Colonial Municipal Income Trust (the "Fund"), to be held in
Boston, Massachusetts on Friday, June 22, 2007, and at any adjournments and postponements thereof,
all of the shares of the Fund that the undersigned would be entitled to vote if personally present,
as follows below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN AND, ABSENT
DIRECTION, WILL BE VOTED FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW. THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE HOLDERS AS TO ANY OTHER MATTER.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW.
VOTE VIA THE INTERNET: [[WEBSITE]]
VOTE VIA TOUCH-TONE TELEPHONE: [[NUMBER]]
999 9999 9999 999
Please sign exactly as name(s) appear(s) hereon.
Joint owners should each sign personally. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in corporate
name by President or other authorized officer. If
a partnership, please sign in partnership name by
authorized person.
--------------------------------------------------
Signature
--------------------------------------------------
Signature (if held jointly)
--------------------------------------------------
Date
PLEASE VOTE, DATE AND SIGN ABOVE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. TO APPROVE A NEW ADVISORY AGREEMENT WITH MASSACHUSETTS [ ] [ ] [ ]
FINANCIAL SERVICES COMPANY.
FOR AGAINST ABSTAIN
2. TO APPROVE AN AMENDED AND RESTATED DECLARATION OF [ ] [ ] [ ]
TRUST.
FOR ALL AGAINST ALL FOR ALL EXCEPT
3. TO ELECT TEN TRUSTEES: [ ] [ ] [ ]
01 Robert E. Butler 02 Lawrence H. Cohn 03 David H. Gunning 04 William R. Gutow
05 Michael Hegarty 06 Robert J. Manning 07 Lawrence T. Perera 08 Robert C. Pozen
09 J. Dale Sherratt 10 Robert W. Uek
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
4. TO ELECT THREE TRUSTEES.: [ ] [ ] [ ]
01 Richard W. Lowry 02 John J. Neuhauser 03 Thomas C. Theobald
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
VOTE THIS PROXY CARD TODAY!
THREE CONVENIENT WAYS TO VOTE YOUR PROXY.
YOU CAN VOTE YOUR PROXIES OVER THE INTERNET, BY
TOUCH-TONE TELEPHONE OR BY MAIL - IT'S EASY AND CONFIDENTIAL.
INTERNET AND TELEPHONE VOTING ARE AVAILABLE
24 HOURS A DAY, SEVEN DAYS A WEEK.
IF YOU ARE VOTING BY INTERNET OR TELEPHONE,
YOU SHOULD NOT MAIL YOUR PROXY CARD.
VOTE BY INTERNET:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
GO TO [[WEBSITE]] AND FOLLOW THE ON SCREEN DIRECTIONS.
VOTE BY TOUCH-TONE TELEPHONE:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
CALL TOLL FREE [[NUMBER]] AND FOLLOW THE RECORDED INSTRUCTIONS PROVIDED TO CAST
YOUR VOTE.
VOTE BY MAIL:
READ THE PROXY STATEMENT.
VOTE ON EACH PROPOSAL WHERE INDICATED ON THE ENCLOSED PROXY CARD, SIGN AND DATE
IT, AND RETURN IT IN THE ENCLOSED ENVELOPE.
IF YOU HAVE ANY QUESTIONS OR CONCERNS, PLEASE CALL [[NUMBER]] FROM
[[TIME]] A.M. TO [[TIME]] P.M. EASTERN TIME MONDAY THROUGH FRIDAY, OR FROM
[[TIME]] P.M. TO [[TIME]] P.M. EASTERN TIME ON SATURDAY.
YOU MAY RECEIVE ADDITIONAL PROXIES FOR OTHER ACCOUNTS.
THESE ARE NOT DUPLICATES.
YOU SHOULD SIGN AND RETURN EACH PROXY
IN ORDER FOR YOUR VOTES TO BE COUNTED.
PROXY COLONIAL HIGH INCOME MUNICIPAL TRUST PROXY
COMMON SHARES
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder hereby appoints each of James R. Bordewick, Jr., Michael G. Clarke, Ryan
C. Larrenaga, J. Kevin Connaughton and Christopher L. Wilson as proxies of the undersigned, with
power of substitution to each, and hereby authorizes each of them to represent and to vote at the
Annual Meeting of Shareholders of Colonial High Income Municipal Trust (the "Fund"), to be held in
Boston, Massachusetts on Friday, June 22, 2007, and at any adjournments and postponements thereof,
all of the shares of the Fund that the undersigned would be entitled to vote if personally present,
as follows below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN AND, ABSENT
DIRECTION, WILL BE VOTED FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW. THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE HOLDERS AS TO ANY OTHER MATTER.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW.
VOTE VIA THE INTERNET: [[WEBSITE]]
VOTE VIA TOUCH-TONE TELEPHONE: [[NUMBER]]
999 9999 9999 999
Please sign exactly as name(s) appear(s) hereon.
Joint owners should each sign personally. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in corporate
name by President or other authorized officer. If
a partnership, please sign in partnership name by
authorized person.
--------------------------------------------------
Signature
--------------------------------------------------
Signature (if held jointly)
--------------------------------------------------
Date
PLEASE VOTE, DATE AND SIGN ABOVE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. TO APPROVE A NEW ADVISORY AGREEMENT WITH MASSACHUSETTS [ ] [ ] [ ]
FINANCIAL SERVICES COMPANY.
FOR AGAINST ABSTAIN
2. TO APPROVE AN AMENDED AND RESTATED DECLARATION OF [ ] [ ] [ ]
TRUST.
FOR ALL AGAINST ALL FOR ALL EXCEPT
3. TO ELECT TEN TRUSTEES: [ ] [ ] [ ]
01 Robert E. Butler 02 Lawrence H. Cohn 03 David H. Gunning 04 William R. Gutow
05 Michael Hegarty 06 Robert J. Manning 07 Lawrence T. Perera 08 Robert C. Pozen
09 J. Dale Sherratt 10 Robert W. Uek
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
4. TO ELECT THREE TRUSTEES.: [ ] [ ] [ ]
01 William E. Mayer 02 Charles R. Nelson 03 Thomas C. Theobald
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
VOTE THIS PROXY CARD TODAY!
THREE CONVENIENT WAYS TO VOTE YOUR PROXY.
YOU CAN VOTE YOUR PROXIES OVER THE INTERNET, BY
TOUCH-TONE TELEPHONE OR BY MAIL - IT'S EASY AND CONFIDENTIAL.
INTERNET AND TELEPHONE VOTING ARE AVAILABLE
24 HOURS A DAY, SEVEN DAYS A WEEK.
IF YOU ARE VOTING BY INTERNET OR TELEPHONE,
YOU SHOULD NOT MAIL YOUR PROXY CARD.
VOTE BY INTERNET:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
GO TO [[WEBSITE]] AND FOLLOW THE ON SCREEN DIRECTIONS.
VOTE BY TOUCH-TONE TELEPHONE:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
CALL TOLL FREE [[NUMBER]] AND FOLLOW THE RECORDED INSTRUCTIONS PROVIDED TO CAST
YOUR VOTE.
VOTE BY MAIL:
READ THE PROXY STATEMENT.
VOTE ON EACH PROPOSAL WHERE INDICATED ON THE ENCLOSED PROXY CARD, SIGN AND DATE
IT, AND RETURN IT IN THE ENCLOSED ENVELOPE.
IF YOU HAVE ANY QUESTIONS OR CONCERNS, PLEASE CALL [[NUMBER]] FROM [[TIME]] A.M.
TO [[TIME]] P.M. EASTERN TIME MONDAY THROUGH FRIDAY, OR FROM [[TIME]] P.M. TO
[[TIME]] P.M. EASTERN TIME ON SATURDAY.
YOU MAY RECEIVE ADDITIONAL PROXIES FOR OTHER ACCOUNTS.
THESE ARE NOT DUPLICATES.
YOU SHOULD SIGN AND RETURN EACH PROXY
IN ORDER FOR YOUR VOTES TO BE COUNTED.
PROXY COLONIAL CALIFORNIA INSURED MUNICIPAL FUND PROXY
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder hereby appoints each of James R. Bordewick, Jr., Michael G. Clarke, Ryan
C. Larrenaga, J. Kevin Connaughton and Christopher L. Wilson as proxies of the undersigned, with
power of substitution to each, and hereby authorizes each of them to represent and to vote at the
Annual Meeting of Shareholders of Colonial California Insured Municipal Fund (the "Fund"), to be
held in Boston, Massachusetts on Friday, June 22, 2007, and at any adjournments and postponements
thereof, all of the shares of the Fund that the undersigned would be entitled to vote if personally
present, as follows below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN AND, ABSENT
DIRECTION, WILL BE VOTED FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW. THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE HOLDERS AS TO ANY OTHER MATTER.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW.
VOTE VIA THE INTERNET: [[WEBSITE]]
VOTE VIA TOUCH-TONE TELEPHONE: [[NUMBER]]
999 9999 9999 999
Please sign exactly as name(s) appear(s) hereon.
Joint owners should each sign personally. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in corporate
name by President or other authorized officer. If
a partnership, please sign in partnership name by
authorized person.
--------------------------------------------------
Signature
--------------------------------------------------
Signature (if held jointly)
--------------------------------------------------
Date
PLEASE VOTE, DATE AND SIGN ABOVE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. TO APPROVE A NEW ADVISORY AGREEMENT WITH MASSACHUSETTS [ ] [ ] [ ]
FINANCIAL SERVICES COMPANY.
FOR AGAINST ABSTAIN
2. TO APPROVE AN AMENDED AND RESTATED DECLARATION OF [ ] [ ] [ ]
TRUST.
FOR ALL AGAINST ALL FOR ALL EXCEPT
3A. TO ELECT TEN TRUSTEES: [ ] [ ] [ ]
01 Robert E. Butler 02 Lawrence H. Cohn 03 David H. Gunning 04 William R. Gutow
05 Michael Hegarty 06 Robert J. Manning 07 Lawrence T. Perera 08 Robert C. Pozen
09 J. Dale Sherratt 10 Robert W. Uek
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
3B. TO ELECT TWO TRUSTEES: [ ] [ ] [ ]
01 Laurie J. Thompsen 02 J. Atwood Ives
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
4A. TO ELECT THREE TRUSTEES.: [ ] [ ] [ ]
01 John J. Neuhauser 02 Thomas C. Theobald 03 Anne-Lee Verville
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
4B. TO ELECT TWO TRUSTEES.: [ ] [ ] [ ]
01 Douglas A. Hacker 02 Thomas E. Stitzel
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
VOTE THIS PROXY CARD TODAY!
THREE CONVENIENT WAYS TO VOTE YOUR PROXY.
YOU CAN VOTE YOUR PROXIES OVER THE INTERNET, BY
TOUCH-TONE TELEPHONE OR BY MAIL - IT'S EASY AND CONFIDENTIAL.
INTERNET AND TELEPHONE VOTING ARE AVAILABLE
24 HOURS A DAY, SEVEN DAYS A WEEK.
IF YOU ARE VOTING BY INTERNET OR TELEPHONE,
YOU SHOULD NOT MAIL YOUR PROXY CARD.
VOTE BY INTERNET:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
GO TO [[WEBSITE]] AND FOLLOW THE ON SCREEN DIRECTIONS.
VOTE BY TOUCH-TONE TELEPHONE:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
CALL TOLL FREE [[NUMBER]] AND FOLLOW THE RECORDED INSTRUCTIONS PROVIDED TO CAST
YOUR VOTE.
VOTE BY MAIL:
READ THE PROXY STATEMENT.
VOTE ON EACH PROPOSAL WHERE INDICATED ON THE ENCLOSED PROXY CARD, SIGN AND DATE
IT, AND RETURN IT IN THE ENCLOSED ENVELOPE.
IF YOU HAVE ANY QUESTIONS OR CONCERNS, PLEASE CALL [[NUMBER]] FROM [[TIME]] A.M.
TO [[TIME]] P.M. EASTERN TIME MONDAY THROUGH FRIDAY, OR FROM [[TIME]] P.M. TO
[[TIME]] P.M. EASTERN TIME ON SATURDAY.
YOU MAY RECEIVE ADDITIONAL PROXIES FOR OTHER ACCOUNTS.
THESE ARE NOT DUPLICATES.
YOU SHOULD SIGN AND RETURN EACH PROXY
IN ORDER FOR YOUR VOTES TO BE COUNTED.
PROXY COLONIAL CALIFORNIA INSURED MUNICIPAL FUND PROXY
COMMON SHARES
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder hereby appoints each of James R. Bordewick, Jr., Michael G. Clarke, Ryan
C. Larrenaga, J. Kevin Connaughton and Christopher L. Wilson as proxies of the undersigned, with
power of substitution to each, and hereby authorizes each of them to represent and to vote at the
Annual Meeting of Shareholders of Colonial California Insured Municipal Fund (the "Fund"), to be
held in Boston, Massachusetts on Friday, June 22, 2007, and at any adjournments and postponements
thereof, all of the shares of the Fund that the undersigned would be entitled to vote if personally
present, as follows below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN AND, ABSENT
DIRECTION, WILL BE VOTED FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW. THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE HOLDERS AS TO ANY OTHER MATTER.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW.
VOTE VIA THE INTERNET: [[WEBSITE]]
VOTE VIA TOUCH-TONE TELEPHONE: [[NUMBER]]
999 9999 9999 999
Please sign exactly as name(s) appear(s) hereon.
Joint owners should each sign personally. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in corporate
name by President or other authorized officer. If
a partnership, please sign in partnership name by
authorized person.
--------------------------------------------------
Signature
--------------------------------------------------
Signature (if held jointly)
--------------------------------------------------
Date
PLEASE VOTE, DATE AND SIGN ABOVE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. TO APPROVE A NEW ADVISORY AGREEMENT WITH MASSACHUSETTS [ ] [ ] [ ]
FINANCIAL SERVICES COMPANY.
FOR AGAINST ABSTAIN
2. TO APPROVE AN AMENDED AND RESTATED DECLARATION OF [ ] [ ] [ ]
TRUST.
FOR ALL AGAINST ALL FOR ALL EXCEPT
3. TO ELECT TEN TRUSTEES: [ ] [ ] [ ]
01 Robert E. Butler 02 Lawrence H. Cohn 03 David H. Gunning 04 William R. Gutow
05 Michael Hegarty 06 Robert J. Manning 07 Lawrence T. Perera 08 Robert C. Pozen
09 J. Dale Sherratt 10 Robert W. Uek
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
4. TO ELECT THREE TRUSTEES.: [ ] [ ] [ ]
01 John J. Neuhauser 02 Thomas C. Theobald 03 Anne-Lee Verville
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
VOTE THIS PROXY CARD TODAY!
THREE CONVENIENT WAYS TO VOTE YOUR PROXY.
YOU CAN VOTE YOUR PROXIES OVER THE INTERNET, BY
TOUCH-TONE TELEPHONE OR BY MAIL - IT'S EASY AND CONFIDENTIAL.
INTERNET AND TELEPHONE VOTING ARE AVAILABLE
24 HOURS A DAY, SEVEN DAYS A WEEK.
IF YOU ARE VOTING BY INTERNET OR TELEPHONE,
YOU SHOULD NOT MAIL YOUR PROXY CARD.
VOTE BY INTERNET:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
GO TO [[WEBSITE]] AND FOLLOW THE ON SCREEN DIRECTIONS.
VOTE BY TOUCH-TONE TELEPHONE:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
CALL TOLL FREE [[NUMBER]] AND FOLLOW THE RECORDED INSTRUCTIONS PROVIDED TO CAST
YOUR VOTE.
VOTE BY MAIL:
READ THE PROXY STATEMENT.
VOTE ON EACH PROPOSAL WHERE INDICATED ON THE ENCLOSED PROXY CARD, SIGN AND DATE
IT, AND RETURN IT IN THE ENCLOSED ENVELOPE.
IF YOU HAVE ANY QUESTIONS OR CONCERNS, PLEASE CALL [[NUMBER]] FROM [[TIME]] A.M.
TO [[TIME]] P.M. EASTERN TIME MONDAY THROUGH FRIDAY, OR FROM [[TIME]] P.M. TO
[[TIME]] P.M. EASTERN TIME ON SATURDAY.
YOU MAY RECEIVE ADDITIONAL PROXIES FOR OTHER ACCOUNTS.
THESE ARE NOT DUPLICATES.
YOU SHOULD SIGN AND RETURN EACH PROXY
IN ORDER FOR YOUR VOTES TO BE COUNTED.
PROXY COLONIAL INVESTMENT GRADE MUNICIPAL TRUST PROXY
MUNICIPAL AUCTION RATE CUMULATIVE PREFERRED SHARES
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder hereby appoints each of James R. Bordewick, Jr., Michael G. Clarke, Ryan
C. Larrenaga, J. Kevin Connaughton and Christopher L. Wilson as proxies of the undersigned, with
power of substitution to each, and hereby authorizes each of them to represent and to vote at the
Annual Meeting of Shareholders of Colonial Investment Grade Municipal Trust (the "Fund"), to be held
in Boston, Massachusetts on Friday, June 22, 2007, and at any adjournments and postponements
thereof, all of the shares of the Fund that the undersigned would be entitled to vote if personally
present, as follows below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN AND, ABSENT
DIRECTION, WILL BE VOTED FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW. THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE HOLDERS AS TO ANY OTHER MATTER.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW.
VOTE VIA THE INTERNET: [[WEBSITE]]
VOTE VIA TOUCH-TONE TELEPHONE: [[NUMBER]]
999 9999 9999 999
Please sign exactly as name(s) appear(s) hereon.
Joint owners should each sign personally. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in corporate
name by President or other authorized officer. If
a partnership, please sign in partnership name by
authorized person.
--------------------------------------------------
Signature
--------------------------------------------------
Signature (if held jointly)
--------------------------------------------------
Date
PLEASE VOTE, DATE AND SIGN ABOVE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. TO APPROVE A NEW ADVISORY AGREEMENT WITH MASSACHUSETTS [ ] [ ] [ ]
FINANCIAL SERVICES COMPANY.
FOR AGAINST ABSTAIN
2. TO APPROVE AN AMENDED AND RESTATED DECLARATION OF [ ] [ ] [ ]
TRUST.
FOR ALL AGAINST ALL FOR ALL EXCEPT
3A. TO ELECT TEN TRUSTEES: [ ] [ ] [ ]
01 Robert E. Butler 02 Lawrence H. Cohn 03 David H. Gunning 04 William R. Gutow
05 Michael Hegarty 06 Robert J. Manning 07 Lawrence T. Perera 08 Robert C. Pozen
09 J. Dale Sherratt 10 Robert W. Uek
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
3B. TO ELECT TWO TRUSTEES: [ ] [ ] [ ]
01 Laurie J. Thompsen 02 J. Atwood Ives
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
4A. TO ELECT THREE TRUSTEES.: [ ] [ ] [ ]
01 William E. Mayer 02 John J. Neuhauser 03 Thomas C. Theobald
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
4B. TO ELECT TWO TRUSTEES.: [ ] [ ] [ ]
01 Douglas A. Hacker 02 Thomas E. Stitzel
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
VOTE THIS PROXY CARD TODAY!
THREE CONVENIENT WAYS TO VOTE YOUR PROXY.
YOU CAN VOTE YOUR PROXIES OVER THE INTERNET, BY
TOUCH-TONE TELEPHONE OR BY MAIL - IT'S EASY AND CONFIDENTIAL.
INTERNET AND TELEPHONE VOTING ARE AVAILABLE
24 HOURS A DAY, SEVEN DAYS A WEEK.
IF YOU ARE VOTING BY INTERNET OR TELEPHONE,
YOU SHOULD NOT MAIL YOUR PROXY CARD.
VOTE BY INTERNET:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
GO TO [[WEBSITE]] AND FOLLOW THE ON SCREEN DIRECTIONS.
VOTE BY TOUCH-TONE TELEPHONE:
READ THE PROXY STATEMENT AND HAVE YOUR PROXY CARD AVAILABLE.
CALL TOLL FREE [[NUMBER]] AND FOLLOW THE RECORDED INSTRUCTIONS PROVIDED TO CAST
YOUR VOTE.
VOTE BY MAIL:
READ THE PROXY STATEMENT.
VOTE ON EACH PROPOSAL WHERE INDICATED ON THE ENCLOSED PROXY CARD, SIGN AND DATE
IT, AND RETURN IT IN THE ENCLOSED ENVELOPE.
IF YOU HAVE ANY QUESTIONS OR CONCERNS, PLEASE CALL [[NUMBER]] FROM [[TIME]] A.M.
TO [[TIME]] P.M. EASTERN TIME MONDAY THROUGH FRIDAY, OR FROM [[TIME]] P.M. TO
[[TIME]] P.M. EASTERN TIME ON SATURDAY.
YOU MAY RECEIVE ADDITIONAL PROXIES FOR OTHER ACCOUNTS.
THESE ARE NOT DUPLICATES.
YOU SHOULD SIGN AND RETURN EACH PROXY
IN ORDER FOR YOUR VOTES TO BE COUNTED.
PROXY COLONIAL INTERMEDIATE HIGH INCOME FUND PROXY
THIS PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned shareholder hereby appoints each of James R. Bordewick, Jr., Michael G. Clarke, Ryan
C. Larrenaga, J. Kevin Connaughton and Christopher L. Wilson as proxies of the undersigned, with
power of substitution to each, and hereby authorizes each of them to represent and to vote at the
Annual Meeting of Shareholders of Colonial Intermediate High Income Fund (the "Fund"), to be held in
Boston, Massachusetts on Friday, June 22, 2007, and at any adjournments and postponements thereof,
all of the shares of the Fund that the undersigned would be entitled to vote if personally present,
as follows below.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN AND, ABSENT
DIRECTION, WILL BE VOTED FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW. THIS PROXY WILL BE
VOTED IN THE DISCRETION OF THE HOLDERS AS TO ANY OTHER MATTER.
THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR EACH OF THE NOMINEES AND PROPOSALS SET FORTH BELOW.
VOTE VIA THE INTERNET: [[WEBSITE]]
VOTE VIA TOUCH-TONE TELEPHONE: [[NUMBER]]
999 9999 9999 999
Please sign exactly as name(s) appear(s) hereon.
Joint owners should each sign personally. When
signing as attorney, executor, administrator,
trustee or guardian, please give full title as
such. If a corporation, please sign in corporate
name by President or other authorized officer. If
a partnership, please sign in partnership name by
authorized person.
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Signature
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Signature (if held jointly)
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Date
PLEASE VOTE, DATE AND SIGN ABOVE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
PLEASE MARK VOTES AS IN THIS EXAMPLE: [X]
FOR AGAINST ABSTAIN
1. TO APPROVE A NEW ADVISORY AGREEMENT WITH MASSACHUSETTS [ ] [ ] [ ]
FINANCIAL SERVICES COMPANY.
FOR AGAINST ABSTAIN
2. TO APPROVE AN AMENDED AND RESTATED DECLARATION OF [ ] [ ] [ ]
TRUST.
FOR ALL AGAINST ALL FOR ALL EXCEPT
3. TO ELECT TWELVE TRUSTEES: [ ] [ ] [ ]
01 Robert E. Butler 02 Lawrence H. Cohn 03 David H. Gunning 04 William R. Gutow
05 Michael Hegarty 06 J. Atwood Ives 07 Robert J. Manning 08 Lawrence T. Perera
09 Robert C. Pozen 10 J. Dale Sherratt 11 Laurie J. Thompsen 12 Robert W. Uek
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________
FOR ALL AGAINST ALL FOR ALL EXCEPT
4. TO ELECT FOUR TRUSTEES.: [ ] [ ] [ ]
01 Patrick J. Simpson 02 Thomas E. Stitzel 03 Thomas C. Theobald 04 Anne-Lee Verville
To withhold authority to elect one or more nominees, mark the "FOR ALL EXCEPT" box and write the
number(s) or the nominee(s) for whom you wish to withhold authority on the line:
___________________________________________________