-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, EapBxoUKRmk9DLoxqsvPnIlSEiTbeZr3jpWXE3OjN/idPKj9ILkclvYweKRe5keq BwAjtxOjrxnB5/Nw5yaLDQ== 0000773757-95-000003.txt : 19950505 0000773757-95-000003.hdr.sgml : 19950505 ACCESSION NUMBER: 0000773757-95-000003 CONFORMED SUBMISSION TYPE: DEFS14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950627 FILED AS OF DATE: 19950504 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STEINROE MUNICIPAL TRUST CENTRAL INDEX KEY: 0000773757 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: 1934 Act SEC FILE NUMBER: 811-04367 FILM NUMBER: 95534452 BUSINESS ADDRESS: STREET 1: 300 W ADAMS ST STREET 2: 11TH FLOOR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3123685612 MAIL ADDRESS: STREET 1: 300 WEST ADAMS STREET 2: 11TH FLOOR CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: STEINROE INTERMEDIATE MUNICIPALS INC DATE OF NAME CHANGE: 19880114 DEFS14A 1 SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by Registrant [X] 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)) [X] Definitive Proxy Statement [X] Definitive Additional Materials [ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 SteinRoe Municipal 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 appropriate box): [ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a- 6(i)(2), or Item 22(a)(2) of Schedule 14A. [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: _______________________________________________________________ (2) Aggregate number of securities to which transaction applies: _______________________________________________________________ (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined). ______________________________________________________________ (4) Proposed maximum aggregate value of transaction: ______________________________________________________________ (5) Total fee paid: _______________________________________________________________ [X] 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: ____________________________________________________ May 5, 1995 Dear Shareholder: Enclosed is a Notice of the Meeting of Shareholders and Proxy Statement for a special meeting of shareholders of SteinRoe Municipal Money Market Fund scheduled for June 27, 1995. At SteinRoe Mutual Funds, we are pleased to count you among the shareholders of our Municipal Money Market Fund. I'm writing to seek your support, and your vote, for two new agreements relating to the Fund. These new agreements essentially carry forward the services Stein Roe & Farnham already provides to shareholders of the Municipal Money Market Fund. The agreements have been approved by the Board of Trustees (including the independent trustees), and the trustees are recommending that you approve the new agreements: .The first agreement enables Stein Roe & Farnham to continue providing administrative services to the Fund. .The second enables Stein Roe & Farnham to provide investment management services for the Municipal Money Market Fund, as well as other funds with identical investment objectives. Under these agreements, you'll benefit from continuity of investment management and approach with Stein Roe & Farnham remaining your investment adviser. In addition, these new agreements involve no expense increase to the SteinRoe Municipal Money Market Fund, and actually would result in a decrease if the assets of the master fund (SR&F Municipal Money Market Portfolio) exceed $500 million, with a future decrease if assets exceed $1 billion. In sum, these agreements provide you continuity of the Fund's investment objective and management, with no additional expense to the Fund, and the potential for a decrease as the master fund grows. With these factors in mind, please support the new agreements. We encourage you to vote promptly by signing and returning the enclosed proxy in the business reply envelope provided. We appreciate your support. In the meantime, if you have any questions regarding the proposal, please call us at 1-800-338-2550. Sincerely, Timothy K. Armour President STEINROE MUNICIPAL MONEY MARKET FUND NOTICE OF MEETING OF SHAREHOLDERS--JUNE 27, 1995 . This tells you when and where the meeting will be held and what matters will be voted on. A meeting of the shareholders of SteinRoe Municipal Money Market Fund will be held on June 27, 1995 at 10:00 a.m. Chicago time at the office of the Fund, Suite 3300, One South Wacker Drive, Chicago, Illinois 60606, to consider the following: Approving an Administrative Agreement between the Fund and Stein Roe & Farnham Incorporated (the "Adviser") and a Management Agreement between SR&F Base Trust and the Adviser ("Proposed Agreements"), which would replace the present Investment Advisory Agreement between the Fund and the Adviser; and to transact such other business as may properly come before the meeting. THE BOARD OF TRUSTEES STRONGLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSED AGREEMENTS IN ORDER TO PERMIT THE FUND TO BENEFIT FROM THE POTENTIAL OPERATIONAL EFFICIENCIES AND ECONOMIES OF A MASTER FUND/FEEDER FUND STRUCTURE DESCRIBED IN THE ATTACHED PROXY STATEMENT. PLEASE MARK, DATE, SIGN AND MAIL THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED SO YOUR VOTE MAY BE CAST AT THE MEETING. BY THE ORDER OF THE BOARD OF TRUSTEES: Jilaine Hummel Bauer Secretary May 5, 1995 PROXY STATEMENT .THIS DOCUMENT GIVES YOU INFORMATION YOU NEED IN ORDER TO VOTE ON THE MATTER COMING BEFORE THE MEETING. IF YOU HAVE ANY QUESTIONS, PLEASE CALL US AT OUR TOLL-FREE NUMBER, 1-800-338-2550. .WHO IS ASKING FOR MY VOTE? The enclosed proxy is solicited by the Trustees of SteinRoe Municipal Trust (the "Trust") for use at the meeting of shareholders of SteinRoe Municipal Money Market Fund (the "Fund") to be held on June 27 and, if the meeting is adjourned, at any later meeting, for the purposes stated in the Notice of Meeting. .HOW DO THE TRUSTEES RECOMMEND THAT SHAREHOLDERS VOTE? The Trustees recommend that you vote for approval of the proposed Administrative Agreement and Management Agreement with Stein Roe & Farnham Incorporated. .WHO IS ELIGIBLE TO VOTE? Shareholders of record at the close of business on April 28, 1995 are entitled to vote at the meeting. Each share is entitled to a number of votes on any matter that comes before the meeting equal to the net asset value of the share as of the record date for the meeting. Shares represented by a duly executed proxy will be voted in accordance with the shareholder's instructions. If you sign the proxy, but do not fill in a vote, your shares will be voted in accordance with the Trustees' recommendation. APPROVAL OF ADMINISTRATIVE AGREEMENT AND MANAGEMENT AGREEMENT Currently the Trust, on behalf of the Fund, has an Investment Advisory Agreement (the "Present Agreement") with Stein Roe & Farnham Incorporated (the "Adviser"). Under the Present Agreement the Adviser furnishes to the Fund both portfolio management services and administrative services and related facilities required in connection with the Fund's operations. The Present Agreement is dated November 1, 1994 and was approved by the Board of Trustees on July 27, 1994 and by the shareholders on October 25, 1994. .WHY ARE THE PROPOSED AGREEMENTS BEING RECOMMENDED? On August 1, 1995 or as soon as practicable thereafter, the Trustees intend to convert the Fund into a "feeder" fund in "master/feeder fund structure," as permitted by certain changes in the Fund's investment restrictions that were approved by the shareholders in 1994. By converting to a master/feeder fund structure, instead of investing directly in a portfolio of securities, the Fund will invest substantially all of its assets in SR&F Municipal Money Market Portfolio (the "Master Fund"), a portfolio of SR&F Base Trust (the "Base Trust"). Although the Adviser will continue to manage the Fund's investment portfolio, the portfolio management function will be performed at the Master Fund level, where Fund assets are expected to be pooled with assets of other "feeder" mutual funds having common investment objectives and policies. The purpose of a master/feeder fund structure is to achieve certain operational efficiencies and economies, assuming that the assets of the Master Fund are greater than the assets of any one feeder fund. This structure permits the investment in the Master Fund by multiple feeder funds, which may be offered by different means of distribution. In connection with the conversion of the Fund to a feeder fund, it will be necessary (a) for the Trust to terminate the Present Agreement, (b) for the Trust to enter into a new Administrative Agreement approved by shareholders of the Fund under which the Adviser would continue to furnish to the Fund the administrative services and related facilities currently being furnished under the Present Agreement, and (c) for the Base Trust to enter into a Management Agreement approved by shareholders of the Fund under which the Adviser would furnish to the Master Fund portfolio management services and certain administrative services required by the Master Fund. On April 19, 1995, all of the Trustees, including all of the Trustees who are not "interested persons" of the Trust or the Adviser, voted unanimously to approve and to recommend approval by the shareholders of the Fund of (a) an administrative agreement relating to the Fund between the Trust and the Adviser (the "Administrative Agreement") and (b) a management agreement relating to the Master Fund between the Base Trust and the Adviser. The Trustees directed that the Administrative Agreement and the Management Agreement (collectively the "Proposed Agreements") be submitted to shareholders of the Fund for approval or disapproval with a recommendation that they be approved. Copies of those agreements are attached to this proxy statement as Exhibits A and B, respectively. .HOW ARE THE PROPOSED AGREEMENTS DIFFERENT FROM THE PRESENT AGREEMENT? The only material differences between the Present Agreement and the combined Proposed Agreements are that the latter (a) provide for the Adviser to furnish portfolio management services to the Master Fund in which the Fund would invest substantially all of its assets, instead of furnishing such services directly to the Fund, (b) provide for a reduction in the rate of total compensation payable to the Adviser if net assets of the Fund exceed $500 million and a further reduction if net assets exceed $1 billion, and (c) provide for the Adviser to furnish administrative services and facilities to the Fund under a separate contract and not under the Present Agreement. In addition, each Proposed Agreement reflects a new effective date and a new date stated for termination in the absence of annual approval of continuation after the initial term. .DO THE NEW AGREEMENTS REFLECT ANY FEE INCREASE? No. The total fees payable by the Fund to the Adviser under the Proposed Agreements, directly or as an investor in the Master Fund, will be no greater than the fees payable under the Present Agreement. As a result of the introduction of breakpoints in the administrative fee schedule at $500 million and $1 billion of net assets of the Fund, the total fees payable under the Proposed Agreements may be less than the fees payable by the Fund under the Present Agreement. Under the Present Agreement the Fund pays the Adviser, and under the Proposed Agreements the Fund and the Master Fund will pay the Adviser, monthly fees at the following annual rates as a percentage of average daily net assets:
Under Under Proposed Agreements Present Administrative Management Agreement Agreement Agreement Total On first $500 million .50 of 1% 25 of 1% .25 of 1% .50 of 1% On second $500 million .50 of 1% .20 of 1% .25 of 1% .45 of 1% On assets above $1 billion .50 of 1% .15 of 1% .25 of 1% .40 of 1%
For the fiscal year ended June 30, 1994, the Fund paid the Adviser fees totaling $998,500 under the Present Agreement. At March 31, 1995, the net assets of the Fund amounted to $151,379,000. The Fund also pays the Adviser for providing bookkeeping and recordkeeping services and pays an affiliate of the Adviser for transfer agency services and shareholder servicing as described below under "Further Information about the Trust and the Adviser-- Shareholder services, and Bookkeeping and accounting." .WHAT SERVICES DOES THE ADVISER PROVIDE? Both the Present Agreement and the Management Agreement provide that the Adviser shall manage the investment of the assets of the Fund or of the Master Fund, respectively, subject to the overall control of the Board of Trustees of the Trust or of the Base Trust. The Adviser is responsible for furnishing executive and other personnel, office space, and office facilities necessary in connection with the performance of its duties and obligations under both agreements. The Administrative Agreement provides that the Adviser shall furnish to the Fund administrative services, personnel, and facilities necessary for the operations of the Fund. The Present Agreement provides that the Adviser shall reimburse the Trust to the extent that the total Fund expenses (excluding taxes, interest, all commissions and other normal charges incident to the purchase and sale of portfolio securities, and extraordinary charges such as litigation costs, but including fees paid to the Adviser) for any fiscal year of the Fund exceed the applicable limits prescribed by any state in which shares of the Fund are being offered for sale; however, the reimbursement for any year shall not exceed the Adviser's fees under the agreement for that year. The Administrative Agreement (but not the Management Agreement) contains a similar provision. The Trust believes that at the present time, the most restrictive state limits are those imposed by California, which are 2 1/2% of the first $30 million of average net assets, 2% of the next $70 million, and 1 1/2% thereafter. In addition, in the interest of further limiting the expenses of the Fund, the Adviser has undertaken to reimburse the Fund to the extent that its annualized expenses exceed .70 of 1% of average net assets. The expense undertaking expires on October 31, 1995, subject to earlier termination by the Adviser on 30 days' notice. .HOW LONG DO THE AGREEMENTS LAST? The initial term of the Present Agreement expires on June 30, 1996 and the initial term of the Management Agreement will expire on June 30, 1997. The Administrative Agreement will continue until it is terminated by either or both parties. Each of the Present Agreement and the Management Agreement provides that it may be continued after its initial term from year to year only so long as its continuance is approved annually (a) by the vote of a majority of the non-interested Trustees of the Trust (or of the Base Trust in the case of the Management Agreement), cast in person at a meeting called for the purpose of voting on such approval, and (b) by the Board of Trustees of the Trust (or of the Base Trust) or by a vote of a "majority" of the outstanding shares of the Fund (or of the Master Fund), as defined below. In addition, each of those agreements would terminate in the event of its assignment and may be terminated without penalty by the Board of Trustees of the Trust (or of the Base Trust) or by a vote of a majority of the outstanding shares of the Fund (or of the Master Fund) on 60 days' written notice to the Adviser, or by the Adviser at any time on 60 days' written notice to the Trust (or the Base Trust). .WHAT FACTORS DID THE TRUSTEES CONSIDER? In considering the Proposed Agreements, the Trustees recognized the potential economic advantage to the Fund and its shareholders of converting the Fund into one of two or more feeder funds that would invest their respective assets in the SR&F Municipal Money Market Portfolio of SR&F Base Trust. In order to accomplish that conversion it will be necessary for the shareholders to approve the Proposed Agreements, which will take the place of the Present Agreement and allow the Adviser to provide portfolio management services to SR&F Municipal Money Market Portfolio and to continue providing administrative services to the Fund. In connection with their approval of the specific terms of the Management Agreement and the Administrative Agreement, the Trustees placed primary emphasis upon the nature and quality of the services to be provided by the Adviser under each agreement and a comparison with other funds of recent investment performance of the Fund and of management fees and other expenses that would be paid by the Fund directly or through SR&F Municipal Money Market Portfolio. The Trustees also considered, among other things, information provided by the Adviser regarding the profitability of its current and proposed fee arrangements with the Fund (without regard to costs incurred by the Adviser and its affiliates in connection with the marketing of shares). .WHAT PERCENTAGE OF SHAREHOLDERS' VOTES ARE NEEDED FOR APPROVAL? Approval of the Proposed Agreements requires the affirmative vote of a "majority" of the outstanding shares of the Fund as defined in the Investment Company Act of 1940, which is the lesser of (a) 67% of the shares of the Fund present at the meeting, in person or by proxy, if the holders of more than 50% of the outstanding shares of the Fund are present, or (b) more than 50% of the Fund's outstanding shares. The Trustees have determined that the proposal to approve the Proposed Agreements affects only the individual interests of the shareholders of the Fund and not the interests of shareholders of other series of the Trust and, therefore, that only shareholders of the Fund should vote on the proposal. If the shareholders do not approve the Proposed Agreements, the Present Agreement will continue in effect, but the Fund would not be able to benefit from the potential operational efficiencies and economies of a Master Fund/Feeder Fund structure. If the Proposed Agreements are approved, they will become effective on or about August 2, 1995. The Trustees believe that the Proposed Agreements are fair and reasonable and in the best interests of the shareholders of the Fund. Accordingly, the Trustees recommend that shareholders vote for approval of the Proposed Agreements. FURTHER INFORMATION ABOUT VOTING AND THE SHAREHOLDER MEETING QUORUM AND METHOD OF TABULATION. Although 30% of the shares entitled to vote, present in person or represented by proxy, constitutes a quorum for the transaction of business at the meeting, the affirmative vote of a "majority" of the shares entitled to vote, as defined above, is necessary to approve the Proposed Agreements. For purposes of determining the approval of the Proposed Agreements, abstentions will have the same effect as voting against the Proposed Agreements. "Broker non-votes" (shares held by brokers or nominees as to which (i) instructions have not been received from the beneficial owners or the persons entitled to vote and (ii) the broker or nominee does not have the discretionary voting power on a particular matter) will also have the same effect as voting against the Proposed Agreements. OTHER BUSINESS. The Trustees do not know of any other business to be brought before the meeting. However, if any other matters properly come before the meeting, it is their intention that proxies that do not contain specific restrictions to the contrary will be voted on such matters in accordance with the judgment of the persons named as proxies in the enclosed form of proxy. SOLICITATION OF PROXIES. In addition to soliciting proxies by mail, Trustees of the Fund and employees of the Adviser may solicit proxies in person or by telephone but will not be additionally compensated therefor. The Fund may also arrange to have votes recorded by telephone. The telephone voting procedure is designed to authenticate shareholders' identities, to allow shareholders to authorize the voting of their shares in accordance with their instructions and to confirm that their instructions have been properly recorded. Persons holding shares as nominees will upon request be reimbursed for their reasonable expenses in soliciting instructions from their principals. REVOCATION OF PROXIES. Proxies, including proxies given by telephone, may be revoked at any time before they are voted by a written revocation received by the Secretary of the Trust, by properly executing a later-dated proxy or by attending the meeting and voting in person. DATE FOR RECEIPT OF SHAREHOLDERS' PROPOSALS FOR SUBSEQUENT MEETINGS OF SHAREHOLDERS. The Trust's Agreement and Declaration of Trust does not provide for annual meetings of shareholders, and the Fund does not currently intend to hold such a meeting in 1996. Shareholder proposals for inclusion in the proxy statement for any subsequent meeting must be received by the Fund within a reasonable period of time prior to any such meeting. ADJOURNMENT. If sufficient votes in favor of the proposal set forth in the Notice of the Meeting are not received by the time scheduled for the meeting, the persons named as proxies may propose adjournments of the meeting for a period or periods of not more than 60 days in the aggregate to permit further solicitation of proxies with respect to the proposal. Any adjournment will require the affirmative vote of a majority of the votes cast on the question in person or by proxy at the session of the meeting to be adjourned. The persons named as proxies will vote in favor of such adjournment those proxies that they are entitled to vote in favor of the proposal. They will vote against any such adjournment those proxies required to be voted against the proposal. The Fund will pay the costs of any additional solicitation and of any adjourned session. FINANCIAL INFORMATION. Shareholders of the Fund may obtain copies of the Fund's most recent annual and semiannual reports by writing to the Fund at P.O. Box 804058, Chicago, IL 60680 or by calling 1-800-338- 2550. FURTHER INFORMATION ABOUT THE TRUST AND THE ADVISER THE ADVISER. Stein Roe & Farnham Incorporated (the "Adviser"), is a wholly-owned subsidiary of SteinRoe Services Inc. ("SSI"), the Fund's transfer agent, which in turn is a wholly-owned direct subsidiary of Liberty Financial Companies, Inc. ("Liberty Financial"). Liberty Financial is an indirect, majority-owned subsidiary of Liberty Mutual Insurance Company ("Liberty Mutual"), through an intervening wholly- owned subsidiary, Liberty Mutual Equity Corporation. Liberty Mutual is a mutual insurance company, principally in the property/casualty insurance field. The address of the Adviser and of SteinRoe Services, Inc. is One South Wacker Drive, Chicago, Illinois 60606; the address of Liberty Financial Companies and Liberty Mutual Equity Corporation is Federal Reserve Plaza, Boston, Massachusetts 02210; and the address of Liberty Mutual Insurance Company is 175 Berkeley Street, Boston, Massachusetts 02117. The directors of the Adviser are Gary L. Countryman, Kenneth R. Leibler, Timothy K. Armour, N. Bruce Callow and Hans P. Ziegler. Mr. Countryman is chairman of Liberty Mutual Insurance Company; Mr. Leibler is president and chief executive officer of Liberty Financial Companies; Mr. Armour is president of the Adviser's Mutual Funds division; Mr. Callow is president of the Adviser's Investment Counsel division; and Mr. Ziegler is chief executive officer of the Adviser. SHAREHOLDER SERVICES. SSI is the agent of the Trust for the transfer of shares, disbursement of dividends, maintenance of shareholder accounting records and shareholder servicing. For performing those services SSI receives from the Fund a monthly fee at an annual rate of .15 of 1% of the Fund's average net assets. Prior to May 1, 1995, the fee was calculated on the basis of the number of shareholder accounts and the number of various types of transactions in shareholder accounts. For services rendered during the fiscal year ended June 30, 1994, SSI received payments of $148,750 from the Fund. If the current fee schedule had been in effect during that year, SSI would instead have been entitled to receive $248,700, which is net of certain Fund out-of-pocket expenses now being assumed by SSI, for those services. BOOKKEEPING AND ACCOUNTING. Since November 1, 1994, the Adviser has performed certain bookkeeping and accounting services for the Fund pursuant to a separate agreement with the Trust. For those services the Adviser receives an annual fee of $25,000 plus .0025 of 1% of average net assets of the Fund over $50 million. DISTRIBUTOR. Shares of the Fund are offered for sale through Liberty Securities Corporation (the "Distributor"), without any sales commissions or charges to the Fund or its shareholders. The Distributor is a wholly-owned indirect subsidiary of Liberty Mutual whose address is 600 Atlantic Avenue, Boston, Massachusetts 02210. The Adviser bears all sales and promotional expenses, including payments to the Distributor for the sales of Fund shares. The Adviser also makes payments to other broker-dealers, banks and institutions for the sales of Fund shares held through those institutions. The Trust has agreed to pay all expenses in connection with registration of its shares with the Securities and Exchange Commission and auditing and filing fees in connection with registration of its shares under the various state blue sky laws and assumes the cost of preparation of prospectuses and other expenses. OFFICERS OF THE TRUST. The following persons are officers of the Trust: Position(s) Held Position Held Name with the Trust with the Adviser Gary A. Anetsberger Senior Vice-President; Vice President Controller Timothy K. Armour President; Trustee President of the Mutual Funds division Jilaine Hummel Bauer Executive Vice-President; Senior Vice President Secretary and Assistant Secretary Thomas W. Butch Vice-President Senior Vice President N. Bruce Callow Executive Vice-President President of the Investment Counsel division Joanne T. Costopoulos Vice-President Vice President Philip D. Hausken Vice-President Legal Counsel Kenneth A. Kalina Treasurer Associate Stephen P. Lautz Vice-President Vice President Lynn C. Maddox Vice-President Senior Vice President Anne E. Marcel Vice-President Manager, Mutual Fund Sales and Services M. Jane McCart Vice-President Senior Vice President Jill K. Netzel Vice-President Associate Nicolette D. Parrish Vice-President; Associate Assistant Secretary Janet B. Rysz Assistant Secretary Assistant Secretary Thomas P. Sorbo Vice-President Senior Vice President Hans P. Ziegler Executive Vice-President Chief Executive Officer SHAREHOLDINGS. As of March 31, 1995, no person was known by the Trust to own beneficially 5% or more of the outstanding shares of the Fund, as determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934. EXHIBIT A ADMINISTRATIVE AGREEMENT BETWEEN STEINROE MUNICIPAL TRUST AND STEIN ROE & FARNHAM INCORPORATED STEINROE MUNICIPAL TRUST, a Massachusetts business trust registered under the Securities Act of 1933 ("1933 Act") and the Investment Company Act of 1940 ("1940 Act") (the "Trust"), hereby appoints STEIN ROE & FARNHAM INCORPORATED, a Delaware corporation, of Chicago, Illinois ("Administrator"), to furnish certain administrative services with respect to the Trust and the series of the Trust listed in Schedule A hereto, as such schedule may be amended from time to time (each such series hereinafter referred to as "Fund"). The Trust and Administrator hereby agree that: 1. Administrative Services. Subject to the terms of this Agreement and the supervision and control of the Trust's Board of Trustees ("Trustees"), Administrator shall provide the following services with respect to the Trust: (a) Preparation and maintenance of the Trust's registration statement with the Securities and Exchange Commission ("SEC"); (b) Preparation and periodic updating of the prospectus and statement of additional information for the Fund ("Prospectus"); (c) Preparation, filing with appropriate regulatory authorities, and dissemination of various reports for the Fund, including but not limited to semiannual reports to shareholders under Section 30(d) of the 1940 Act, annual and semiannual reports on Form N-SAR, and notices pursuant to Rule 24f-2; (d) Arrangement for all meetings of shareholders, including the collection of all information required for preparation of proxy statements, the preparation and filing with appropriate regulatory agencies of such proxy statements, the supervision of solicitation of shareholders and shareholder nominees in connection therewith, tabulation (or supervision of the tabulation) of votes, response to all inquiries regarding such meetings from shareholders, the public and the media, and preparation and retention of all minutes and all other records required to be kept in connection with such meetings; (e) Maintenance and retention of all Trust charter documents and the filing of all documents required to maintain the Trust's status as a Massachusetts business trust and as a registered open-end investment company; (f) Arrangement and preparation and dissemination of all materials for meetings of the Board of Trustees and committees thereof and preparation and retention of all minutes and other records thereof; (g) Preparation and filing of the Trust's Federal, state, and local income tax returns and calculation of any tax required to be paid in connection therewith; (h) Calculation of all Trust and Fund expenses and arrangement for the payment thereof; (i) Calculation of and arrangement for payment of all income, capital gain, and other distributions to shareholders of each Fund; (j) Determination, after consultation with the officers of the Trust, of the jurisdictions in which shares of beneficial interest of each Fund ("Shares") shall be registered or qualified for sale, or may be sold pursuant to an exemption from such registration or qualification, and preparation and maintenance of the registration or qualification of the Shares for sale under the securities laws of each such jurisdiction; (k) Provision of the services of persons who may be appointed as officers of the Trust by the Board of Trustees (it is agreed that some person or persons may be officers of both the Trust and the Administrator, and that the existence of any such dual interest shall not affect the validity of this Agreement except as otherwise provided by specific provision of applicable law); (l) Preparation and, subject to approval of the Trust's Chief Financial Officer, dissemination of the Trust's and each Fund's quarterly financial information to the Board of Trustees and preparation of such other reports relating to the business and affairs of the Trust and each Fund as the officers and Board of Trustees may from time to time reasonably request; (m) Administration of the Trust's Code of Ethics and periodic reporting to the Board of Trustees of Trustee and officer compliance therewith; (n) Provision of internal legal, accounting, compliance, audit, and risk management services and periodic reporting to the Board of Trustees with respect to such services; (o) Negotiation, administration, and oversight of third party services to the Trust including, but not limited to, custody, tax, transfer agency, disaster recovery, audit, and legal services; (p) Negotiation and arrangement for insurance desired or required of the Trust and administering all claims thereunder; (q) Response to all inquiries by regulatory agencies, the press, and the general public concerning the business and affairs of the Trust, including the oversight of all periodic inspections of the operations of the Trust and its agents by regulatory authorities and responses to subpoenas and tax levies; (r) Handling and resolution of any complaints registered with the Trust by shareholders, regulatory authorities, and the general public; (s) Monitoring legal, tax, regulatory, and industry developments related to the business affairs of the Trust and communicating such developments to the officers and Board of Trustees as they may reasonably request or as the Administrator believes appropriate; (t) Administration of operating policies of the Trust and recommendation to the officers and the Board of Trustees of the Trust of modifications to such policies to facilitate the protection of shareholders or market competitiveness of the Trust and Fund and to the extent necessary to comply with new legal or regulatory requirements; (u) Responding to surveys conducted by third parties and reporting of Fund performance and other portfolio information; and (v) Filing of claims, class actions involving portfolio securities, and handling administrative matters in connection with the litigation or settlement of such claims. 2. Use of Affiliated Companies and Subcontractors. In connection with the services to be provided by Administrator under this Agreement, Administrator may, to the extent it deems appropriate, and subject to compliance with the requirements of applicable laws and regulations and upon receipt of approval of the Trustees, make use of (i) its affiliated companies and their directors, trustees, officers, and employees and (ii) subcontractors selected by Administrator, provided that Administrator shall supervise and remain fully responsible for the services of all such third parties in accordance with and to the extent provided by this Agreement. All costs and expenses associated with services provided by any such third parties shall be borne by Administrator or such parties. 3. Instructions, Opinions of Counsel, and Signatures. At any time Administrator may apply to a duly authorized agent of Trust for instructions regarding the Trust, and may consult counsel for the Trust or its own counsel, in respect of any matter arising in connection with this Agreement, and it shall not be liable for any action taken or omitted by it in good faith in accordance with such instructions or with the advice or opinion of such counsel. Administrator shall be protected in acting upon any such instruction, advice, or opinion and upon any other paper or document delivered by the Trust or such counsel believed by Administrator to be genuine and to have been signed by the proper person or persons and shall not be held to have notice of any change of authority of any officer or agent of the Trust, until receipt of written notice thereof from the Trust. 4. Expenses Borne by Trust. Except to the extent expressly assumed by Administrator herein or under a separate agreement between the Trust and Administrator and except to the extent required by law to be paid by Administrator, the Trust shall pay all costs and expenses incidental to its organization, operations and business. Without limitation, such costs and expenses shall include but not be limited to: (a) All charges of depositories, custodians and other agencies for the safekeeping and servicing of its cash, securities, and other property; (b) All charges for equipment or services used for obtaining price quotations or for communication between Administrator or the Trust and the custodian, transfer agent or any other agent selected by the Trust; (c) All charges for investment advisory, portfolio management, and accounting services provided to the Trust by the Administrator, or any other provider of such services; (d) All charges for services of the Trust's independent auditors and for services to the Trust by legal counsel; (e) All compensation of Trustees, other than those affiliated with Administrator, all expenses incurred in connection with their services to the Trust, and all expenses of meetings of the Trustees or committees thereof; (f) All expenses incidental to holding meetings of shareholders, including printing and of supplying each record-date shareholder with notice and proxy solicitation material, and all other proxy solicitation expenses; (g) All expenses of printing of annual or more frequent revisions of the Trust's prospectus(es) and of supplying each then-existing shareholder with a copy of a revised prospectus; (h) All expenses related to preparing and transmitting certificates representing the Trust's shares; (i) All expenses of bond and insurance coverage required by law or deemed advisable by the Board of Trustees; (j) All brokers' commissions and other normal charges incident to the purchase, sale, or lending of Fund securities; (k) All taxes and governmental fees payable to Federal, state or other governmental agencies, domestic or foreign, including all stamp or other transfer taxes; (l) All expenses of registering and maintaining the registration of the Trust under the 1940 Act and, to the extent no exemption is available, expenses of registering the Trust's shares under the 1933 Act, of qualifying and maintaining qualification of the Trust and of the Trust's shares for sale under securities laws of various states or other jurisdictions and of registration and qualification of the Trust under all other laws applicable to the Trust or its business activities; (m) All interest on indebtedness, if any, incurred by the Trust or a Fund; and (n) All fees, dues and other expenses incurred by the Trust in connection with membership of the Trust in any trade association or other investment company organization. 5. Allocation of Expenses Borne by Trust. Any expenses borne by the Trust that are attributable solely to the organization, operation or business of a Fund shall be paid solely out of Fund assets. Any expense borne by the Trust which is not solely attributable to a Fund, nor solely to any other series of shares of the Trust, shall be apportioned in such manner as Administrator determines is fair and appropriate, or as otherwise specified by the Board of Trustees. 6. Expenses Borne by Administrator. Administrator at its own expense shall furnish all executive and other personnel, office space, and office facilities required to render the services set forth in this Agreement. However, Administrator shall not be required to pay or provide any credit for services provided by the Trust's custodian or other agents without additional cost to the Trust. In the event that Administrator pays or assumes any expenses of the Trust or a Fund not required to be paid or assumed by Administrator under this Agreement, Administrator shall not be obligated hereby to pay or assume the same or similar expense in the future; provided that nothing contained herein shall be deemed to relieve Administrator of any obligation to the Trust or a Fund under any separate agreement or arrangement between the parties. 7. Administration Fee. For the services rendered, facilities provided, and charges assumed and paid by Administrator hereunder, the Trust shall pay to Administrator out of the assets of each Fund fees at the annual rate for such Fund as set forth in Schedule B to this Agreement. For each Fund, the administrative fee shall accrue on each calendar day, and shall be payable monthly on the first business day of the next succeeding calendar month. The daily fee accrual shall be computed by multiplying the fraction of one divided by the number of days in the calendar year by the applicable annual rate of fee, and multiplying this product by the net assets of the Fund, determined in the manner established by the Board of Trustees, as of the close of business on the last preceding business day on which the Fund's net asset value was determined. 8. State Expense Limitation. If for any fiscal year of a Fund, its aggregate operating expenses ("Aggregate Operating Expenses") exceed the applicable percentage expense limit imposed under the securities law and regulations of any state in which Shares of the Fund are qualified for sale (the "State Expense Limit"), the Administrator shall pay such Fund the amount of such excess. For purposes of this State Expense Limit, Aggregate Operating Expenses shall (a) include (i) any fees or expense reimbursements payable to Administrator pursuant to this Agreement and (ii) to the extent the Fund invests all or a portion of its assets in another investment company registered under the 1940 Act, the pro rata portion of that company's operating expenses allocated to the Fund, and (iii) any compensation payable to Administrator pursuant to any separate agreement relating to the Fund's investment operations and portfolio management, but (b) exclude any interest, taxes, brokerage commissions, and other normal charges incident to the purchase, sale or loan of securities, commodity interests or other investments held by the Fund, litigation and indemnification expense, and other extraordinary expenses not incurred in the ordinary course of business. Except as otherwise agreed to by the parties or unless otherwise required by the law or regulation of any state, any reimbursement by Administrator to a Fund under this section shall not exceed the administrative fee payable to Administrator by the Fund under this Agreement. Any payment to a Fund by Administrator hereunder shall be made monthly, by annualizing the Aggregate Operating Expenses for each month as of the last day of the month. An adjustment for payments made during any fiscal year of the Fund shall be made on or before the last day of the first month following such fiscal year of the Fund if the Annual Operating Expenses for such fiscal year (i) do not exceed the State Expense Limitation or (ii) for such fiscal year there is no applicable State Expense Limit. 9. Non-Exclusivity. The services of Administrator to the Trust hereunder are not to be deemed exclusive and Administrator shall be free to render similar services to others. 10. Standard of Care. Neither Administrator, nor any of its directors, officers or stockholders, agents or employees shall be liable to the Trust, any Fund, or its shareholders for any action taken or thing done by it or its subcontractors or agents on behalf of the Trust or the Fund in carrying out the terms and provisions of this Agreement if done in good faith and without negligence or misconduct on the part of Administrator, its subcontractors, or agents. 11. Indemnification. The Trust shall indemnify and hold Administrator and its controlling persons, if any, harmless from any and all claims, actions, suits, losses, costs, damages, and expenses, including reasonable expenses for counsel, incurred by it in connection with its acceptance of this Agreement, in connection with any action or omission by it or its agents or subcontractors in the performance of its duties hereunder to the Trust, or as a result of acting upon any instruction believed by it to have been executed by a duly authorized agent of the Trust or as a result of acting upon information provided by the Trust in form and under policies agreed to by Administrator and the Trust, provided that: (i) to the extent such claims, actions, suits, losses, costs, damages, or expenses relate solely to a particular Fund or group of Funds, such indemnification shall be only out of the assets of that Fund or group of Funds; (ii) this indemnification shall not apply to actions or omissions constituting negligence or misconduct of Administrator or its agents or subcontractors, including but not limited to willful misfeasance, bad faith, or gross negligence in the performance of their duties, or reckless disregard of their obligations and duties under this Agreement; and (iii) Administrator shall give the Trust prompt notice and reasonable opportunity to defend against any such claim or action in its own name or in the name of Administrator. Administrator shall indemnify and hold harmless the Trust from and against any and all claims, demands, expenses and liabilities which such Trust may sustain or incur arising out of, or incurred because of, the negligence or misconduct of Administrator or its agents or subcontractors, provided that such Trust shall give Administrator prompt notice and reasonable opportunity to defend against any such claim or action in its own name or in the name of such Trust. 12. Effective Date, Amendment, and Termination. This Agreement shall become effective as to any Fund as of the effective date for that Fund specified in Schedule A hereto and, unless terminated as hereinafter provided, shall remain in effect with respect to such Fund thereafter from year to year so long as such continuance is specifically approved with respect to that Fund at least annually by a majority of the Trustees who are not interested persons of Trust or Administrator. As to any Trust or Fund of that Trust, this Agreement may be modified or amended from time to time by mutual agreement between the Administrator and the Trust and may be terminated by Administrator or Trust by at least sixty (60) days' written notice given by the terminating party to the other party. Upon termination as to any Fund, the Trust shall pay to Administrator such compensation as may be due under this Agreement as of the date of such termination and shall reimburse Administrator for its costs, expenses, and disbursements payable under this Agreement to such date. In the event that, in connection with a termination, a successor to any of the duties or responsibilities of Administrator hereunder is designated by the Trust by written notice to Administrator, upon such termination Administrator shall promptly, and at the expense of the Trust or Fund with respect to which this Agreement is terminated, transfer to such successor all relevant books, records, and data established or maintained by Administrator under this Agreement and shall cooperate in the transfer of such duties and responsibilities, including provision, at the expense of such Fund, for assistance from Administrator personnel in the establishment of books, records, and other data by such successor. 13. Assignment. Any interest of Administrator under this Agreement shall not be assigned either voluntarily or involuntarily, by operation of law or otherwise, without the prior written consent of Trust. 14. Books and Records. Administrator shall maintain, or oversee the maintenance by such other persons as may from time to time be approved by the Board of Trustees to maintain, the books, documents, records, and data required to be kept by the Trust under the 1940 Act, the laws of the Commonwealth of Massachusetts or such other authorities having jurisdiction over the Trust or the Fund or as may otherwise be required for the proper operation of the business and affairs of the Trust or the Fund (other than those required to be maintained by any investment adviser retained by the Trust on behalf of a Fund in accordance with Section 15 of the 1940 Act). Administrator will periodically send to the Trust all books, documents, records, and data of the Trust and each of its Funds listed in Schedule A that are no longer needed for current purposes or required to be retained as set forth herein. Administrator shall have no liability for loss or destruction of said books, documents, records, or data after they are returned to such Trust. Administrator agrees that all such books, documents, records, and data which it maintains shall be maintained in accordance with Rule 31a- 3 of the 1940 Act and that any such items maintained by it shall be the property of the Trust. Administrator further agrees to surrender promptly to the Trust any such items it maintains upon request, provided that the Administrator shall be permitted to retain a copy of all such items. Administrator agrees to preserve all such items maintained under Rule 31a-1 for the period prescribed under Rule 31a-2 of the 1940 Act. Trust shall furnish or otherwise make available to Administrator such copies of the financial statements, proxy statements, reports, and other information relating to the business and affairs of each Fund of the Trust as Administrator may, at any time or from time to time, reasonably require in order to discharge its obligations under this Agreement. 15. Non-Liability of Trustees and Shareholders. Any obligation of Trust hereunder shall be binding only upon the assets of Trust (or the applicable Fund thereof) and shall not be binding upon any Trustee, officer, employee, agent or shareholder of Trust. Neither the authorization of any action by the Trustees or shareholders of Trust nor the execution of this Agreement on behalf of Trust shall impose any liability upon any Trustee or any shareholder. 16. Use of Administrator's Name. The Trust may use its name and the names of its Funds listed in Schedule A or any other name derived from the name "Stein Roe & Farnham" only for so long as this Agreement or any extension, renewal, or amendment hereof remains in effect, including any similar agreement with any organization which shall have succeeded to the business of Administrator as it relates to the services it has agreed to furnish under this Agreement. At such time as this Agreement or any extension, renewal or amendment hereof, or such other similar agreement shall no longer be in effect, Trust will cease to use any name derived from the name "Stein Roe & Farnham" or otherwise connected with Administrator, or with any organization which shall have succeeded to Administrator's business herein described. 17. References and Headings. In this Agreement and in any such amendment, references to this Agreement and all expressions such as "herein," "hereof," and "hereunder" shall be deemed to refer to this Agreement as amended or affected by any such amendments. Headings are placed herein for convenience of reference only and shall not be taken as a part hereof or control or affect the meaning, construction or effect of this Agreement. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. Dated: _______________, 1995 STEINROE MUNICIPAL TRUST Attest By: Timothy K. Armour, President Jilaine Hummel Bauer Secretary STEIN ROE & FARNHAM INCORPORATED Attest: By: Hans P. Ziegler Chief Executive Officer Keith J. Rudolf Secretary ADMINISTRATIVE AGREEMENT SCHEDULE A The Funds of the Trust currently subject to this Agreement are as follows: Effective Date SteinRoe Municipal Money Market Fund ________, 1995 Dated: ___________________ ADMINISTRATIVE AGREEMENT SCHEDULE B Compensation pursuant to Section 7 of the SteinRoe Funds Administrative Agreement shall be calculated with respect to each Fund in accordance with the following schedule applicable to average daily net assets of the Fund: Fund Administrative Fee Schedule B1 SteinRoe Municipal Money Market Fund 0.250% of first $500 million, 0.200% of next $500 million, 0.150% thereafter Dated: ________________ EXHIBIT B MANAGEMENT AGREEMENT BETWEEN SR&F BASE TRUST AND STEIN ROE & FARNHAM INCORPORATED SR&F BASE TRUST, a Massachusetts common law trust registered under the Investment Company Act of 1940 ("1940 Act") as an open-end diversified management investment company ("Trust"), hereby appoints STEIN ROE & FARNHAM INCORPORATED, a Delaware corporation registered under the Investment Advisers Act of 1940 as an investment adviser, of Chicago, Illinois ("Manager"), to furnish investment advisory and portfolio management services with respect to the portion of its assets represented by the shares of beneficial interest issued in each series listed in Schedule A hereto, as such schedule may be amended from time to time (each such series hereinafter referred to as "Portfolio"). Trust and Manager hereby agree that: 1. Investment Management Services. Manager shall manage the investment operations of Trust and each Portfolio, subject to the terms of this Agreement and to the supervision and control of Trust's Board of Trustees ("Trustees"). Manager agrees to perform, or arrange for the performance of, the following services with respect to each Portfolio: (a) to obtain and evaluate such information relating to economies, industries, businesses, securities and commodities markets, and individual securities, commodities and indices as it may deem necessary or useful in discharging its responsibilities hereunder; (b) to formulate and maintain a continuing investment program in a manner consistent with and subject to (i) Trust's agreement and declaration of trust and by-laws; (ii) the Portfolio's investment objectives, policies, and restrictions as set forth in written documents furnished by the Trust to Manager; (iii) all securities, commodities, and tax laws and regulations applicable to the Portfolio and Trust; and (iv) any other written limits or directions furnished by the Trustees to Manager; (c) unless otherwise directed by the Trustees, to determine from time to time securities, commodities, interests or other investments to be purchased, sold, retained or lent by the Portfolio, and to implement those decisions, including the selection of entities with or through which such purchases, sales or loans are to be effected; (d) to use reasonable efforts to manage the Portfolio so that it will qualify as a regulated investment company under subchapter M of the Internal Revenue Code of 1986, as amended; (e) to make recommendations as to the manner in which voting rights, rights to consent to Trust or Portfolio action, and any other rights pertaining to Trust or the Portfolio shall be exercised; (f) to make available to Trust promptly upon request all of the Portfolio's records and ledgers and any reports or information reasonably requested by the Trust; and (g) to the extent required by law, to furnish to regulatory authorities any information or reports relating to the services provided pursuant to this Agreement. Except as otherwise instructed from time to time by the Trustees, with respect to execution of transactions for Trust on behalf of a Portfolio, Manager shall place, or arrange for the placement of, all orders for purchases, sales, or loans with issuers, brokers, dealers or other counterparties or agents selected by Manager. In connection with the selection of all such parties for the placement of all such orders, Manager shall attempt to obtain most favorable execution and price, but may nevertheless in its sole discretion as a secondary factor, purchase and sell Portfolio securities from and to brokers and dealers who provide Manager with statistical, research and other information, analysis, advice, and similar services. In recognition of such services or brokerage services provided by a broker or dealer, Manager is hereby authorized to pay such broker or dealer a commission or spread in excess of that which might be charged by another broker or dealer for the same transaction if the Manager determines in good faith that the commission or spread is reasonable in relation to the value of the services so provided. Trust hereby authorizes any entity or person associated with Manager that is a member of a national securities exchange to effect any transaction on the exchange for the account of a Portfolio to the extent permitted by and in accordance with Section 11(a) of the Securities Exchange Act of 1934 and Rule 11a2-2(T) thereunder. Trust hereby consents to the retention by such entity or person of compensation for such transactions in accordance with Rule 11a-2-2(T)(a)(iv). Manager may, where it deems to be advisable, aggregate orders for its other customers together with any securities of the same type to be sold or purchased for Trust or one or more Portfolios in order to obtain best execution or lower brokerage commissions. In such event, Manager shall allocate the shares so purchased or sold, as well as the expenses incurred in the transaction, in a manner it considers to be equitable and fair and consistent with its fiduciary obligations to Trust, the Portfolios, and Manager's other customers. Manager shall for all purposes be deemed to be an independent contractor and not an agent of Trust and shall, unless otherwise expressly provided or authorized, have no authority to act for or represent Trust in any way. 2. Administrative Services. Manager shall supervise the business and affairs of Trust and each Portfolio and shall provide such services and facilities as may be required for effective administration of Trust and Portfolios as are not provided by employees or other agents engaged by Trust; provided that Manager shall not have any obligation to provide under this Agreement any such services which are the subject of a separate agreement or arrangement between Trust and Manager, any affiliate of Manager, or any third party administrator ("Administrative Agreements"). 3. Use of Affiliated Companies and Subcontractors. In connection with the services to be provided by Manager under this Agreement, Manager may, to the extent it deems appropriate, and subject to compliance with the requirements of applicable laws and regulations and upon receipt of written approval of the Trustees, make use of (i) its affiliated companies and their directors, trustees, officers, and employees and (ii) subcontractors selected by Manager, provided that Manager shall supervise and remain fully responsible for the services of all such third parties in accordance with and to the extent provided by this Agreement. All costs and expenses associated with services provided by any such third parties shall be borne by Manager or such parties. 4. Expenses Borne by Trust. Except to the extent expressly assumed by Manager herein or under a separate agreement between Trust and Manager and except to the extent required by law to be paid by Manager, Manager shall not be obligated to pay any costs or expenses incidental to the organization, operations or business of the Trust. Without limitation, such costs and expenses shall include but not be limited to: (a) all charges of depositories, custodians and other agencies for the safekeeping and servicing of its cash, securities, and other property; (b) all charges for equipment or services used for obtaining price quotations or for communication between Manager or Trust and the custodian, transfer agent or any other agent selected by Trust; (c) all charges for administrative and accounting services provided to Trust by Manager, or any other provider of such services; (d) all charges for services of Trust's independent auditors and for services to Trust by legal counsel; (e) all compensation of Trustees, other than those affiliated with Manager, all expenses incurred in connection with their services to Trust, and all expenses of meetings of the Trustees or committees thereof; (f) all expenses incidental to holding meetings of holders of units of interest in the Trust ("Unitholders"), including printing and of supplying each record-date Unitholder with notice and proxy solicitation material, and all other proxy solicitation expense; (g) all expenses of printing of annual or more frequent revisions of Trust prospectus(es) and of supplying each then-existing Unitholder with a copy of a revised prospectus; (h) all expenses related to preparing and transmitting certificates representing Trust shares; (i) all expenses of bond and insurance coverage required by law or deemed advisable by the Board of Trustees; (j) all brokers' commissions and other normal charges incident to the purchase, sale, or lending of portfolio securities; (k) all taxes and governmental fees payable to Federal, state or other governmental agencies, domestic or foreign, including all stamp or other transfer taxes; (l) all expenses of registering and maintaining the registration of Trust under the 1940 Act and, to the extent no exemption is available, expenses of registering Trust's shares under the 1933 Act, of qualifying and maintaining qualification of Trust and of Trust's shares for sale under securities laws of various states or other jurisdictions and of registration and qualification of Trust under all other laws applicable to Trust or its business activities; (m) all interest on indebtedness, if any, incurred by Trust or a Portfolio; and (n) all fees, dues and other expenses incurred by Trust in connection with membership of Trust in any trade association or other investment company organization. 5. Allocation of Expenses Borne by Trust. Any expenses borne by Trust that are attributable solely to the organization, operation or business of a Portfolio shall be paid solely out of Portfolio assets. Any expense borne by Trust which is not solely attributable to a Portfolio, nor solely to any other series of shares of Trust, shall be apportioned in such manner as Manager determines is fair and appropriate, or as otherwise specified by the Board of Trustees. 6. Expenses Borne by Manager. Manager at its own expense shall furnish all executive and other personnel, office space, and office facilities required to render the investment management and administrative services set forth in this Agreement. Manager shall pay all expenses of establishing, maintaining, and servicing the accounts of Unitholders in each Portfolio listed in Exhibit A. However, Manager shall not be required to pay or provide any credit for services provided by Trust's custodian or other agents without additional cost to Trust. In the event that Manager pays or assumes any expenses of Trust or a Portfolio not required to be paid or assumed by Manager under this Agreement, Manager shall not be obligated hereby to pay or assume the same or similar expense in the future; provided that nothing contained herein shall be deemed to relieve Manager of any obligation to Trust or a Portfolio under any separate agreement or arrangement between the parties. 7. Management Fee. For the services rendered, facilities provided, and charges assumed and paid by Manager hereunder, Trust shall pay to Manager out of the assets of each Portfolio fees at the annual rate for such Portfolio as set forth in Schedule B to this Agreement. For each Portfolio, the management fee shall accrue on each calendar day, and shall be payable monthly on the first business day of the next succeeding calendar month. The daily fee accrual shall be computed by multiplying the fraction of one divided by the number of days in the calendar year by the applicable annual rate of fee, and multiplying this product by the net assets of the Portfolio, determined in the manner established by the Board of Trustees, as of the close of business on the last preceding business day on which the Portfolio's net asset value was determined. 8. Retention of Sub-Adviser. Subject to obtaining the initial and periodic approvals required under Section 15 of the 1940 Act, Manager may retain one or more sub-advisers at Manager's own cost and expense for the purpose of furnishing one or more of the services described in Section 1 hereof with respect to Trust or one or more Portfolios. Retention of a sub-adviser shall in no way reduce the responsibilities or obligations of Manager under this Agreement, and Manager shall be responsible to Trust and its Portfolios for all acts or omissions of any sub-adviser in connection with the performance of Manager's duties hereunder. 9. Non-Exclusivity. The services of Manager to Trust hereunder are not to be deemed exclusive and Manager shall be free to render similar services to others. 10. Standard of Care. Neither Manager, nor any of its directors, officers, stockholders, agents or employees shall be liable to Trust or its Unitholders for any error of judgment, mistake of law, loss arising out of any investment, or any other act or omission in the performance by Manager of its duties under this Agreement, except for loss or liability resulting from willful misfeasance, bad faith or gross negligence on Manager's part or from reckless disregard by Manager of its obligations and duties under this Agreement. 11. Amendment. This Agreement may not be amended as to Trust or any Portfolio without the affirmative votes (a) of a majority of the Board of Trustees, including a majority of those Trustees who are not "interested persons" of Trust or of Manager, voting in person at a meeting called for the purpose of voting on such approval, and (b) of a "majority of the outstanding shares" of Trust or, with respect to an amendment affecting an individual Portfolio, a "majority of the outstanding shares" of that Portfolio. The terms "interested persons" and "vote of a majority of the outstanding shares" shall be construed in accordance with their respective definitions in the 1940 Act and, with respect to the latter term, in accordance with Rule 18f-2 under the 1940 Act. 12. Effective Date and Termination. This Agreement shall become effective as to any Portfolio as of the effective date for that Portfolio specified in Schedule A hereto. This Agreement may be terminated at any time, without payment of any penalty, as to any Portfolio by the Board of Trustees of Trust, or by a vote of a majority of the outstanding shares of that Portfolio, upon at least sixty (60) days' written notice to Manager. This Agreement may be terminated by Manager at any time upon at least sixty (60) days' written notice to Trust. This Agreement shall terminate automatically in the event of its "assignment" (as defined in the 1940 Act). Unless terminated as hereinbefore provided, this Agreement shall continue in effect with respect to any Portfolio until the end of the initial term applicable to that Portfolio specified in Schedule A and thereafter from year to year only so long as such continuance is specifically approved with respect to that Portfolio at least annually (a) by a majority of those Trustees who are not interested persons of Trust or of Manager, voting in person at a meeting called for the purpose of voting on such approval, and (b) by either the Board of Trustees of Trust or by a "vote of a majority of the outstanding shares" of the Portfolio. 13. Ownership of Records; Interparty Reporting. All records required to be maintained and preserved by Trust pursuant to the provisions of rules or regulations of the Securities and Exchange Commission under Section 31(a) of the 1940 Act or other applicable laws or regulations which are maintained and preserved by Manager on behalf of Trust and any other records the parties mutually agree shall be maintained by Manager on behalf of Trust are the property of Trust and shall be surrendered by Manager promptly on request by Trust; provided that Manager may at its own expense make and retain copies of any such records. Trust shall furnish or otherwise make available to Manager such copies of the financial statements, proxy statements, reports, and other information relating to the business and affairs of each Unitholder in a Portfolio as Manager may, at any time or from time to time, reasonably require in order to discharge its obligations under this Agreement. Manager shall prepare and furnish to Trust as to each Portfolio statistical data and other information in such form and at such intervals as Trust may reasonably request. 14. Non-Liability of Trustees and Unitholders. Any obligation of Trust hereunder shall be binding only upon the assets of Trust (or the applicable Portfolio thereof) and shall not be binding upon any Trustee, officer, employee, agent or Unitholder of Trust. Neither the authorization of any action by the Trustees or Unitholders of Trust nor the execution of this Agreement on behalf of Trust shall impose any liability upon any Trustee or any Unitholder. 15. Use of Manager's Name. Trust may use the name "SR&F Base Trust" and the Portfolio names listed in Schedule A or any other name derived from the name "Stein Roe & Farnham" only for so long as this Agreement or any extension, renewal, or amendment hereof remains in effect, including any similar agreement with any organization which shall have succeeded to the business of Manager as investment adviser. At such time as this Agreement or any extension, renewal or amendment hereof, or such other similar agreement shall no longer be in effect, Trust will cease to use any name derived from the name "Stein Roe & Farnham" or otherwise connected with Manager, or with any organization which shall have succeeded to Manager's business as investment adviser. 16. References and Headings. In this Agreement and in any such amendment, references to this Agreement and all expressions such as "herein," "hereof," and "hereunder" shall be deemed to refer to this Agreement as amended or affected by any such amendments. Headings are placed herein for convenience of reference only and shall not be taken as a part hereof or control or affect the meaning, construction or effect of this Agreement. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original. Dated: _______________, 1995 SR&F BASE TRUST Attest By: Timothy K. Armour, President Jilaine Hummel Bauer Secretary STEIN ROE & FARNHAM INCORPORATED Attest: By: Hans P. Ziegler Chief Executive Officer Keith J. Rudolf Secretary SR&F BASE TRUST MANAGEMENT AGREEMENT SCHEDULE A The Series of SR&F Base Trust currently subject to this Agreement are as follows: Effective Date End of Initial Term SteinRoe Municipal Money Market Fund Dated: _______________ SR&F BASE TRUST MANAGEMENT AGREEMENT SCHEDULE B Compensation pursuant to Section 7 of the SR&F Base Trust Management Agreement shall be calculated in accordance with the following schedule(s): Schedule B8 0.250% on first $500 million of average daily net assets 0.250% on next $500 million of average daily net assets 0.250% on average daily net assets in excess of $1 billion Dated: _______________ [FORM OF PROXY] IN ORDER TO VOTE YOUR SHARES, PLEASE DETACH THE LOWER PORTION OF THIS CARD, SIGN AND DATE THE CARD, AND RETURN IT IN THE ENVELOPE PROVIDED. BY SIGNING THE LOWER PORTION OF THIS CARD, YOU AUTHORIZE THE PROXIES TO VOTE ON THE PROPOSAL AS MARKED OR, IF NOT MARKED, SHARES WILL BE VOTED AS RECOMMENDED BY THE BOARD. STEINROE MUNICIPAL MONEY MARKET FUND SPECIAL MEETING OF SHAREHOLDERS OF JUNE 27, 1995 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF STEINROE MUNICIPAL TRUST BY SIGNING AND DATING BELOW, YOU AUTHORIZE GARY A. ANETSBERGER, TIMOTHY K. ARMOUR, AND JILAINE HUMMEL BAUER, OR ANY OF THEM, EACH WITH POWER OF SUBSTITUTION, TO VOTE YOUR SHARES OF THE FUND AT THE SCHEDULED MEETING OF SHAREHOLDERS OF THE FUND AND AT ANY ADJOURNMENT OF THE MEETING. THEY SHALL VOTE AS RECOMMENDED BY THE BOARD UNLESS OTHERWISE INDICATED BELOW, AND IN THEIR DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. THE BOARD OF TRUSTEES RECOMMENDS VOTING "FOR" THE PROPOSAL. TO VOTE, MARK AN X IN BLUE OR BLACK INK IN THE APPROPRIATE BOX ON THE PROXY CARD BELOW. KEEP THIS PORTION FOR YOUR RECORDS. (DETACH HERE AND RETURN THIS PORTION ONLY) STEINROE MUNICIPAL MONEY MARKET FUND VOTE ON PROPOSAL FOR AGAINST ABSTAIN To approve an Administrative Agreement between the Fund and Stein Roe & Farnham Incorporated and a Management Agreement between SR&F Base Trust and Stein Roe & Farnham Incorporated. SIGNATURE DATE SIGNATURE (JOINT OWNER) DATE PLEASE SIGN NAME OR NAMES AS PRINTED ABOVE TO AUTHORIZE THE VOTING OF YOUR SHARES AS INDICATED. WHERE SHARES ARE REGISTERED WITH JOINT OWNERS, ALL JOINT OWNERS SHOULD SIGN. PERSONS SIGNING AS EXECUTOR, ADMINISTRATOR, TRUSTEE, OR OTHER REPRESENTATIVE SHOULD GIVE FULL TITLE AS SUCH. -----END PRIVACY-ENHANCED MESSAGE-----