<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2)
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
Sierra Asset Management Portfolios
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement., if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: *
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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* Set forth the amount on which the filing fee is calculated and state how it
was determined.
[ ] 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:
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2) Form, Schedule or Registration Statement No.:
-------------------------
3) Filing Party:
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4) Date Filed:
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<PAGE> 2
IMPORTANT NEWS FOR
SIERRA ASSET MANAGEMENT
PORTFOLIO SHAREHOLDERS
While we encourage you to read the full text of the enclosed proxy statement,
here is a brief overview of major matters to be voted upon.
Q & A
- -------------------------------------------------------------------------------
Q. WHY AM I RECEIVING THIS PROXY STATEMENT?
A. Great Western Financial Corporation, the parent company of the investment
adviser, has merged with Washington Mutual, Inc. ("Washington Mutual"), the
corporate parent of Composite Research & Management Co. ("Composite"), which
is also an investment adviser. Washington Mutual has decided to consolidate
its investment advisory businesses into a single entity and has recommended
the consolidation of the Sierra Family of Funds and the mutual funds managed
by Composite (the "Composite Funds") into a single family of funds with a
common Board of Trustees and a common investment adviser. As a result, you
are being asked to (1) elect a Board of Trustees that includes five current
Trustees of Sierra Asset Management Portfolios (the "Trust") and the current
directors of the Composite Funds and (2) approve Composite as the new
investment adviser to each investment portfolio (each a "Portfolio" and,
together, the "Portfolios") of the Trust.
Q. HOW WILL THIS AFFECT MY ACCOUNT?
A. Generally, neither of the proposals will affect your account. You will
continue to be a shareholder of the same Portfolios and will continue to
receive the same shareholder services. Further, each Portfolio will continue
to seek its current investment objective, following the current investment
policies. The new investment advisory arrangement will not increase the
overall fees paid by the Portfolios.
Q. WHY DO I NEED TO VOTE?
A. Your vote is needed to ensure that the proposals can be acted upon. Your
immediate response on the enclosed proxy card(s) or by telephone will help
prevent the need for any further solicitations for a shareholder vote. We
encourage all shareholders to participate in the governance of the Trust.
Q. HOW DOES THE BOARD OF TRUSTEES SUGGEST THAT I VOTE?
A. After careful consideration, the Board of Trustees unanimously recommends
that you vote "FOR" each item proposed on the enclosed proxy card(s).
Q. WHO IS PAYING FOR EXPENSES RELATED TO THE SHAREHOLDER MEETING?
A. Composite, the Trust's proposed new investment adviser, or its affiliates
will pay for expenses relating to the shareholder meeting. The Trust will not
pay any expenses relating to the shareholder meeting.
Q. HOW DO I VOTE MY SHARES?
A. You may vote by mail, phone, fax or in person at the Special Meeting. To vote
by mail, sign and send us the enclosed proxy card(s) in the envelope
provided. You can fax your vote by signing the proxy card(s) and faxing both
sides of the card(s) to 1-212-269-2796. D.F. King & Co., the proxy solicitor,
can accept your vote over the phone anytime between 5:00 a.m. and 6:00 p.m.
Pacific Time (8:00 a.m. and 9:00 p.m. Eastern Time), Monday through
Friday -- simply call 1-800-848-3374. Finally, you can vote in person at the
Special Meeting on December 23, 1997.
Q. WHOM DO I CALL IF I HAVE QUESTIONS?
A. Please contact your investment representative or call 1-800-848-3374 between
5:00 a.m. and 6:00 p.m. Pacific Time (8:00 a.m. and 9:00 p.m. Eastern Time),
Monday through Friday.
S I E R R A
ASSET MANAGEMENT
The Diversification Solution
<PAGE> 3
------------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 23, 1997
------------------------------------------
TO THE SHAREHOLDERS OF SIERRA ASSET MANAGEMENT PORTFOLIOS:
You are cordially invited to attend a special meeting of shareholders of
Sierra Asset Management Portfolios (the "Trust"), a Massachusetts business
trust, on December 23, 1997, at 11:00 a.m. Pacific Time or at any adjournment
thereof (the "Special Meeting"), at the offices of Sierra Fund Administration
Corporation ("Sierra Administration"), 9301 Corbin Avenue, Suite 333,
Northridge, California 91324. Shareholders of the Income Portfolio, Value
Portfolio, Balanced Portfolio, Growth Portfolio and Capital Growth Portfolio
(each a "Portfolio," and collectively the "Portfolios"), will be asked to
consider the proposals set forth below and to transact such other business as
may be properly brought before the Special Meeting:
PROPOSAL 1: To consider and act upon a proposal to elect a Board of Trustees of
the Trust (voted on by the shareholders of the Trust as a whole).
PROPOSAL 2: To approve a new Investment Management Agreement between the Trust,
on behalf of each Portfolio, and Composite Research & Management
Co. ("Composite") [voted on separately by shareholders of each
Portfolio].
Only shareholders of the Trust at the close of business on October 29,
1997, are entitled to notice of, and to vote at, the Special Meeting.
Whether or not you expect to be present at the Special Meeting, please
either vote your proxy by calling 1-800-848-3374 or complete and promptly return
the enclosed Proxy Card(s). A postage-paid envelope is enclosed for your
convenience so that you may return your Proxy Card(s) as soon as possible. It is
most important and in your interest for you to sign and date your Proxy Card(s)
and return it so that a quorum will be present and a maximum number of shares
may be voted. The proxy is revocable at any time prior to its use.
By Order of the Board of Trustees
Keith B. Pipes
President
November 17, 1997
-----------------
THANK YOU
FOR
MAILING
YOUR
PROXY CARD
PROMPTLY!
-----------------
We appreciate
your continued
support and
look forward
to serving
your future
investment needs.
S I E R R A
ASSET MANAGEMENT
The Diversification Solution
<PAGE> 4
SIERRA ASSET MANAGEMENT PORTFOLIOS
9301 CORBIN AVENUE, SUITE 333
NORTHRIDGE, CALIFORNIA 91324
------------------------
PROXY STATEMENT
------------------------
This Proxy Statement is furnished by the Board of Trustees (the "Board") of
Sierra Asset Management Portfolios (the "Trust") on behalf of the Income
Portfolio, Value Portfolio, Balanced Portfolio, Growth Portfolio and Capital
Growth Portfolio (each a "Portfolio," and collectively the "Portfolios"), in
connection with the solicitation of proxies for use at the special meeting of
shareholders of the Trust to be held on December 23, 1997 at 11:00 a.m. Pacific
Time, or at any adjournment thereof (the "Special Meeting"), at the offices of
Sierra Fund Administration Corporation ("Sierra Administration"), 9301 Corbin
Avenue, Suite 333, Northridge, California 91324. It is expected that the Notice
of Special Meeting, the Proxy Statement and Proxy Cards will be mailed to
shareholders on or about November 20, 1997.
The primary purpose of the Special Meeting is to (1) ask shareholders to
elect a Board of Trustees, and (2) permit shareholders of each Portfolio to
consider a new Investment Management Agreement (the "New Management Agreement")
between the Trust and Composite Research & Management Co. ("Composite"). The
Trust's New Management Agreement is similar in substance to the Trust's current
Investment Advisory Agreement (the "Current Advisory Agreement").
If you do not expect to be present at the Special Meeting and wish your
shares to be voted, please date and sign the enclosed Proxy Card ("Proxy") and
mail it in the enclosed reply envelope, allowing sufficient time for the Proxy
to be received on or before 11:00 a.m. Pacific Time on December 23, 1997. No
postage is required if the Proxy is mailed in the United States. You can also
vote your shares by signing the Proxy and faxing both sides of the Proxy to
1-212-269-2796 or by calling D.F King & Co., the proxy solicitor, at 1-800-
848-3374 anytime between 5:00 a.m. and 6:00 p.m. Pacific Time (8:00 a.m. and
9:00 p.m. Eastern Time), Monday through Friday. If the accompanying Proxy is
executed properly and returned, shares represented by it will be voted at the
Special Meeting in accordance with the instructions on the Proxy. However, if no
instructions are specified, shares will be voted FOR each proposal described
above (each a "Proposal" and, together, the "Proposals"). All shareholders of
the Trust are entitled to vote on the Proposals. Shareholders may revoke their
Proxies at any time prior to the time they are voted by giving written notice to
the Secretary of the Trust, by delivering a subsequently dated Proxy or by
attending and voting at the Special Meeting.
The close of business on October 29, 1997 has been fixed as the record date
(the "Record Date") for the determination of shareholders entitled to notice of,
and to vote at, the Special Meeting and at any adjournment thereof. As of the
Record Date, there were 53,975,657 shares of the Trust outstanding, comprised of
the following number of shares of each Portfolio:
<TABLE>
<CAPTION>
PORTFOLIO SHARES OUTSTANDING
---------------------------------------------------- ------------------
<S> <C>
Income Portfolio.................................... 1,616,875
Value Portfolio..................................... 1,685,199
Balanced Portfolio.................................. 19,152,010
Growth Portfolio.................................... 26,570,061
Capital Growth Portfolio............................ 4,951,513
</TABLE>
Each full share will be entitled to one vote at the Special Meeting and each
fraction of a share will be entitled to the fraction of a vote equal to the
proportion of a full share represented by the fractional share.
The expenses of the Special Meeting will be borne by Composite and its
affiliates. The solicitation of Proxies will be largely by mail, but may include
telephonic, telegraphic or oral communication by employees
<PAGE> 5
and officers of Composite and Sierra Administration, their affiliates, or D.F.
King & Co., a proxy solicitor retained for that purpose.
THE TRUST WILL FURNISH TO SHAREHOLDERS, WITHOUT CHARGE, A COPY OF THE
ANNUAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 1997, UPON REQUEST. THE ANNUAL
REPORT OF THE TRUST MAY BE OBTAINED BY WRITTEN REQUEST TO THE TRUST, P.O. BOX
5118, WESTBORO, MA 01581-5118 OR BY CALLING 1-800-222-5852.
The Trust is registered as an open-end management investment company under
the Investment Company Act of 1940 (the "1940 Act") and its shares are
registered under the Securities Act of 1933.
INTRODUCTION
On July 1, 1997, Great Western Financial Corporation ("GWFC"), the indirect
parent of Sierra Investment Services Corporation ("Sierra Services"), the
Trust's current investment adviser, and Washington Mutual, Inc. ("Washington
Mutual"), a publicly held financial services company, consummated a previously
announced Agreement and Plan of Merger resulting in the merger of GWFC with and
into a wholly owned subsidiary of Washington Mutual (the "Merger"). As a result
of the Merger, Sierra Services and its affiliates are now indirect subsidiaries
of Washington Mutual.
The Special Meeting is being called in preparation for the planned
consolidation of the mutual funds managed by Sierra Services and its affiliates
("Sierra"), and those managed by Composite, which also is an indirect subsidiary
of Washington Mutual. The planned consolidation will result in the mutual funds
currently managed by Sierra and Composite having a common Board and a single
investment adviser. This Proxy Statement relates only to the Proposals and the
Portfolios of the Trust, none of which are being reorganized, and does not
address the proposed reorganizations of any underlying funds in which the
Portfolios may invest.
PROPOSAL 1: TO CONSIDER AND ACT UPON A PROPOSAL TO ELECT A BOARD OF TRUSTEES OF
THE TRUST.
At the Special Meeting, it is proposed that thirteen Trustees be elected to
hold office until their successors are duly elected and qualified. The persons
named in the accompanying Proxy intend, in the absence of contrary instructions,
to vote all Proxies on behalf of the shareholders for the election of David E.
Anderson, Wayne L. Attwood, M.D., Arthur H. Bernstein, Esq., Kristianne Blake,
Edmond R. Davis, Esq., John W. English, Anne V. Farrell, Michael K. Murphy,
Alfred E. Osborne, Jr., Ph.D., William G. Papesh, Daniel L. Pavelich, Jay Rockey
and Richard C. Yancey (each a "Nominee" and collectively, the "Nominees").
Messrs. Anderson, Bernstein, Davis, English and Osborne are currently members of
the Board of Trustees. Messrs. Attwood, Murphy, Papesh, Pavelich, Rockey and
Yancey and Mmes. Blake and Farrell currently serve on the Boards of Directors of
the mutual funds managed by Composite (the "Composite Funds"), but have not
previously served on the Board of Trustees. Approval of this Proposal will
provide a single Board combining the current disinterested Trustees of the Trust
and the current Directors of the Composite Funds. It is also currently
anticipated that, subject to shareholder approval, the various Composite Funds
will be reorganized into a single trust (the "Composite Trust") with a number of
funds and that, at that time, each of the current disinterested Trustees will be
nominated to serve on the board of trustees of the Composite Trust.
Each of the Nominees has consented to being named in this Proxy Statement
and to serving as a Trustee if elected. The Trust knows of no reason why any
Nominee would be unable or unwilling to serve if elected. If any or all of the
Nominees should become unavailable for election due to events not now known or
anticipated, the persons named as proxies will vote for such other nominee or
nominees as the Board of Trustees may recommend.
The Trust is organized as a business trust under the laws of The
Commonwealth of Massachusetts. Under Massachusetts law, the Trust is not
required to hold annual meetings. The Trust has availed itself of this provision
and achieves cost savings by eliminating printing costs, mailing charges and
other expenses involved in routine annual meetings. Because the Trust does not
hold regular annual shareholder meetings, each Nominee, if elected, will hold
office until his or her successor is elected and qualified.
2
<PAGE> 6
Even with the elimination of routine annual meetings, the Board may call
special meetings of shareholders for action by shareholder vote as may be
required by the 1940 Act, or as required or permitted by the Agreement and
Declaration of Trust. Shareholder meetings will be held, in compliance with the
1940 Act, to elect Trustees under certain circumstances. Shareholder meetings
may also be held by the Trust for other purposes, including to approve
investment policy changes, a new investment advisory agreement or other matters
requiring shareholder action under the 1940 Act.
A meeting also may be called by shareholders holding at least 10% of the
shares entitled to vote at the meeting for the purpose of voting upon the
removal of Trustees, in which case shareholders may receive assistance in
communicating with other shareholders as if the provisions contained in Section
16(c) of the 1940 Act applied.
INFORMATION REGARDING NOMINEES
The following information is provided for each Nominee. It includes his or
her name, position with the Trust, if any, tenure in office, age, principal
occupations or employment during the past five years, trusteeships/directorships
with other companies which file reports periodically with the Securities and
Exchange Commission ("SEC"), number of trustee positions with the registered
investment companies which hold themselves out to investors as related companies
for purposes of investment and investor services or to which Sierra Services or
an affiliated person of Sierra Services provides investment advisory or
administration services (the "Sierra Fund Complex," consisting of the Trust,
Sierra Trust Funds, The Sierra Variable Trust and Sierra Prime Income Fund, and
the "Composite Funds," consisting of Composite Bond & Stock Fund, Inc.,
Composite Growth & Income Fund, Inc., Composite Northwest Fund, Inc., Composite
U.S. Government Securities, Inc., Composite Income Fund, Inc., Composite
Tax-Exempt Bond Fund, Inc. and Composite Cash Management Company), and number of
shares of the Portfolios of the Trust beneficially owned. As of October 29,
1997, the Nominees as a group beneficially owned an aggregate of less than 1% of
the shares of each Portfolio of the Trust and the Trustees and officers of the
Trust as a group beneficially owned an aggregate of less than 1% of the shares
of each Portfolio of the Trust.
<TABLE>
<CAPTION>
NAME, AGE AND POSITION ADDRESS AND BUSINESS EXPERIENCE DURING THE PAST FIVE SHARES BENEFICIALLY OWNED AS OF
WITH THE TRUST YEARS (INCLUDING DIRECTORSHIPS) OCTOBER 29, 1997**
- ------------------------------------ ---------------------------------------------------- -----------------------------
<S> <C> <C>
ARTHUR H. BERNSTEIN, ESQ.(72) 11661 San Vicente Blvd., Suite 701, Balanced Portfolio -- 128,891
Chairman of the Board of Trustees Los Angeles, CA 90049.
and Trustee since 1996. President, Bancorp Capital Group, Inc., 1988
to present; President, Bancorp Venture Capital,
Inc., 1988 to present. Trustee of 4 trusts in the
Sierra Fund Complex.
DAVID E. ANDERSON(70) 17960 Seabreeze Drive, None
Trustee since 1996. Pacific Palisades, CA 90272.
Retired. Formerly, President and Chief Executive
Officer, GTE California, Inc., 1979 to 1988. Trustee
of 4 trusts in the Sierra Fund Complex.
EDMOND R. DAVIS, ESQ.(69) 550 South Hope Street, 21st Floor, None
Trustee since 1996. Los Angeles, CA 90071.
Partner, Brobeck, Phleger & Harrison (law firm) 1987
to present. Trustee of 4 trusts in the Sierra Fund
Complex.
JOHN W. ENGLISH(64) 50-H New England Ave., PO Box 640, Growth Portfolio -- 1,672
Trustee since 1996. Summit, NJ 07902-0640.
Retired. Formerly, Vice President and Chief
Investment Officer, Ford Foundation, 1981 to 1993.
Chairman of the Board and Director, The China Fund,
Inc. (a closed-end mutual fund), 1993 to present;
Director, The Northern Trust Company's Benchmark
Funds (open-end mutual funds), 1994 to present.
Trustee of 4 trusts in the Sierra Fund Complex.
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
NAME, AGE AND POSITION ADDRESS AND BUSINESS EXPERIENCE DURING THE PAST FIVE SHARES BENEFICIALLY OWNED AS OF
WITH THE TRUST YEARS (INCLUDING DIRECTORSHIPS) OCTOBER 29, 1997**
- ------------------------------------ ---------------------------------------------------- -----------------------------
<S> <C> <C>
ALFRED E. OSBORNE, JR. PH.D.(52) 110 Westwood Plaza, Suite C305, None
Trustee since 1996. Los Angeles, CA 90095- 1481.
Professor, The Anderson School and Director, The
Harold Price Center for Entrepreneurial Studies at
University of California at Los Angeles, 1972 to
present; Independent general partner, Technology
Funding Venture Partners V, 1990 to present.
Director, Times Mirror Company, 1980 to present;
Director, United States Filter Corporation, 1991 to
present; Director, Nordstrom, Inc., 1987 to present;
Director, Greyhound Lines, Inc., 1994 to present.
Trustee of 4 trusts in the Sierra Fund Complex, 1989
to 1993 and 1996 to present.
WAYNE L. ATTWOOD, M.D.(68) 2931 S. Howard, Spokane, WA 99203. None
Nominee Retired. Formerly, Doctor of internal medicine and
gastroenterology. Director of all of the Composite
Funds.
KRISTIANNE BLAKE(43) 705 W. 7th, Suite D, Spokane, WA 99203. None
Nominee President, Kristianne Gates Blake, PS. (accounting
services) Director of all of the Composite Funds.
ANNE V. FARRELL*(62) 425 Pike Street, Suite 510, Seattle, WA 98101. None
Nominee President and Chief Executive Officer, The Seattle
Foundation. Director, Washington Mutual, Inc.
Director of all of the Composite Funds.
MICHAEL K. MURPHY*(60) P.O. Box 3366, Spokane, WA 99220. None
Nominee Chairman and Chief Executive Officer,
CPM Development Corporation (holding company).
Director, Washington Mutual, Inc.
Director of all of the Composite Funds.
WILLIAM G. PAPESH*(54) 601 W. Main Avenue, Suite 801, Spokane, WA 99201. None
Nominee President and Director, Composite, 1995 to present;
President and Director, Composite Research &
Management Co., Funds Distributor, Inc., 1997 to
present; President and Director, Murphey Favre
Securities Services, Inc., 1987 to present;
President and Director of all of the Composite
Funds, 1989 to present.
DANIEL L. PAVELICH(53) Two Prudential Plaza, 180 North Stetson Ave., Suite None
Nominee 4300, Chicago, IL 60601. Chairman and Chief
Executive Officer, BDO Seidman (accounting and
consulting). Director of all of the Composite Funds.
JAY ROCKEY(69) 2121 Fifth Avenue, Seattle, WA 98121. None
Nominee Chairman and Chief Executive Officer,
The Rockey Company (public relations).
Director of all of the Composite Funds.
RICHARD C. YANCEY(71) 535 Madison Avenue, New York, NY 10022. Senior None
Nominee Advisor, Dillon, Read & Co., Inc. (broker/dealer and
investment bank). Director of all of the Composite
Funds.
</TABLE>
- ---------------
* Denotes an individual who is an "interested person" as defined in the 1940
Act.
** This information has been provided by each Nominee.
4
<PAGE> 8
COMPENSATION OF TRUSTEES
The Trust pays each Trustee who is not an "interested person" within the
meaning of the 1940 Act ("Disinterested Trustee") $250 per Board meeting
attended, $200 per Audit and/or Nominating Committee meeting attended and
reimbursement for travel and out-of-pocket expenses. The Chairman receives one
and a half times the normal Trustee compensation. Officers of the Trust who are
employees of Sierra Services or its affiliates may be considered to have
received remuneration indirectly.
The aggregate compensation payable by the Trust to each of the Trustees
serving during the fiscal year ended June 30, 1997, is set forth in the
compensation table below. The aggregate compensation payable to such Trustees
during the fiscal year ended June 30, 1997, by the Sierra Fund Complex is also
set forth in the compensation table below. The Trustees do not receive any
pension or retirement benefits from the Trust.
COMPENSATION TABLE
<TABLE>
<CAPTION>
TOTAL COMPENSATION FROM THE
AGGREGATE COMPENSATION SIERRA FUND COMPLEX PAYABLE TO
NAME AND POSITION PAYABLE FROM THE TRUST TRUSTEES*
----------------------------------- ---------------------- -------------------------------
<S> <C> <C>
Arthur H. Bernstein, Esq........... $1,500 $54,063 for service on 4 boards
Chairman of the Board and Trustee
David E. Anderson.................. $1,000 $42,000 for service on 4 boards
Trustee
Edmond R. Davis, Esq............... $1,000 $42,000 for service on 4 boards
Trustee
John W. English.................... $1,000 $42,000 for service on 4 boards
Trustee
Alfred E. Osborne, Jr., Ph.D....... $1,000 $42,000 for service on 4 boards
Trustee
</TABLE>
- ---------------
* Sierra Advisors reimbursed the Sierra Fund Complex for the cost, including
Trustees' fees, of all special meetings held with regard to contemplation of
the sale of Sierra Capital Management Corporation, as well as the Merger.
MEETINGS AND COMMITTEES OF THE BOARD OF TRUSTEES
There were fourteen meetings of the Board of Trustees held during the
fiscal year ended June 30, 1997. During that fiscal year, all Trustees attended
at least 75% of the meetings of the Board.
The Board has an Audit Committee. The Audit Committee makes recommendations
to the full Board with respect to the engagement of independent accountants and
reviews the results of the audit engagement and matters having a material effect
on the Portfolios' financial operations with the independent accountants. The
members of the Audit Committee during the fiscal year ended June 30, 1997, were
Messrs. Bernstein (Chairman), Anderson, Davis, English and Osborne, each of whom
is a Disinterested Trustee. The Audit Committee met once during the fiscal year
ended June 30, 1997 and all members attended the meeting.
BOARD APPROVAL OF THE ELECTION OF TRUSTEES
At a meeting of the Board held on October 27-28, 1997, the Board
recommended that shareholders vote FOR each of the Nominees for Trustee named
herein. In recommending that shareholders elect the Nominees as Trustees of the
Trust, the Board considered the Nominees' experience and qualifications. In
particular the Board took into account the fact that each of the Nominees who
has not previously served on the Board has previous experience serving on the
Board of Directors of the Composite Funds.
5
<PAGE> 9
SHAREHOLDER APPROVAL OF THE ELECTION OF TRUSTEES
The Election of each Nominee requires the affirmative vote of a plurality
of all votes cast at the Special Meeting, provided that a majority of the shares
entitled to vote are present in person or by Proxy at the Special Meeting. If
your shares are represented at the meeting but you give no voting instructions,
your shares will be voted FOR all Nominees named herein. If the Nominees are not
approved by shareholders of the Trust, the Board will consider alternative
nominations.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF THE
TRUST VOTE FOR THE ELECTION OF THE NOMINEES.
PROPOSAL 2: TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT BETWEEN THE TRUST,
ON BEHALF OF EACH PORTFOLIO, AND COMPOSITE RESEARCH & MANAGEMENT
CO.
The Board has approved, subject to shareholder approval, the appointment of
Composite as the investment adviser for each Portfolio and recommends that
shareholders of each Portfolio approve the New Management Agreement between the
Trust, on behalf of each Portfolio, and Composite, a form of which is attached
hereto as Exhibit A. The Trustees of the Trust, including all of the
Disinterested Trustees, approved the New Management Agreement with respect to
each Portfolio at a meeting held on October 27-28, 1997. The Trustees do not
anticipate, as a result of the change in investment advisers, any reduction in
the quality of services now provided to the Portfolios.
The Trustees are recommending that Composite replace the Portfolios'
current investment adviser, Sierra Services. Sierra Services, as the result of
the Merger, is an indirect subsidiary of Washington Mutual. Washington Mutual
has indicated that it intends to consolidate all of its investment advisory
businesses within Composite. As a result of such consolidation, which would
likely occur in early 1998, Sierra Services would cease to exist as a separate
entity.
SIERRA SERVICES
Sierra Services, the current investment advisor to each Portfolio of the
Trust, is registered as an investment advisor under the Investment Adviser's Act
of 1940, as amended (the "Adviser's Act"), and is both a registered
broker-dealer and a member of the National Association of Securities Dealers,
Inc. Sierra Services provides its proprietary asset allocation services to the
Portfolios, formulates the Portfolios' investment policies, analyzes economic
and market trends, exercises investment allocation over the assets of the
Portfolios and monitors the allocation of each Portfolio's assets and each
Portfolio's performance. Although it is expected that each Portfolio will
typically be fully invested in underlying funds as part of a "fund of funds"
arrangement, Sierra Services may, from time to time, direct the investment of
each Portfolio's cash balances in money market securities or in other
instruments, including stocks or bond index futures and options thereon. Sierra
Services is a wholly owned subsidiary of Sierra Capital Management Corporation,
which is an indirect wholly owned subsidiary of Washington Mutual.
COMPOSITE
Composite, a subsidiary of Washington Mutual, with principal offices
located at 1201 Third Avenue, Seattle, Washington 98101, is also registered
under the Advisers Act. Composite has been in the investment management business
since 1944 and currently manages more than $2.6 billion for mutual funds and
institutional accounts, including more than $1.7 billion within the Composite
Funds. It is anticipated that
6
<PAGE> 10
Composite would retain investment discretion for all of the Portfolios. The
name, addresses and principal occupations of the directors and principal
executive officers of Composite are as follows:
<TABLE>
<CAPTION>
NAME AND POSITION
WITH COMPOSITE ADDRESS PRINCIPAL OCCUPATION
- ------------------- ------------------ ---------------------------------------------
<S> <C> <C>
William G. Papesh 1201 Third Avenue Director and President, Composite Research &
Director and Seattle, WA 98101 Management Co.; Director and President,
President Murphey Favre Securities Services, Inc.;
Director and President, Composite Funds
Distributor, Inc.
Kerry K. Killinger 1201 Third Avenue Chairman, President, Chief Executive Officer
Director Seattle, WA 98101 and Director, Washington Mutual Inc.
Monte D. Calvin 1201 Third Avenue First Vice President and Director, Murphey
Director and Seattle, WA 98101 Favre Securities Services, Inc.; Director and
Treasurer Treasurer, Composite Research & Management
Co.; Director, Composite Funds Distributor,
Inc.
Craig S. Davis 1201 Third Avenue Executive Vice President, Washington Mutual
Director Seattle, WA 98101 Inc.; Director, Composite Research &
Management Co.; Director, Murphey Favre
Securities Services, Inc.; Director,
Composite Funds Distributor, Inc.; Director,
WM Financial Services, Inc.
J. Pamela Dawson 1201 Third Avenue Director and President, WM Financial
Director Seattle, WA 98101 Services, Inc.; Director, Composite Research
& Management Co.; Director, Murphey Favre
Securities Services, Inc.; Director,
Composite Funds Distributor, Inc.
</TABLE>
THE PROPOSED INVESTMENT MANAGEMENT AGREEMENT
In anticipation of the consolidation of Sierra Services with Composite as
described in the Introduction above, the Board of Trustees, including the
Disinterested Trustees, unanimously approved the New Management Agreement. The
New Management Agreement, unlike the Current Advisory Agreement, does not
attempt to restate the provisions of Section 36 of the 1940 Act that impose upon
Composite a fiduciary duty with respect to the receipt of compensation by
Composite and its affiliates for services. In addition, the New Management
Agreement differs from the Current Advisory Agreement as follows: (1) the
identity of the manager; (2) the dates of execution, effectiveness and initial
term; (3) the deletion of provisions relating to state expense limits that have
been preempted by federal law; (4) inclusion of a specific provision allowing
for amendment of the Agreement; (5) inclusion of a provision restricting the
Trust's use of the proprietary names "Sierra" and "Composite"; and (6) the
provision for termination of the New Management Agreement by the Adviser upon 60
days notice, rather than the 90 days notice required under the Current Advisory
Agreement. See "The New Management Agreement" below.
THE CURRENT ADVISORY AGREEMENT
The Current Advisory Agreement between Sierra Services and the Trust, most
recently renewed by the Trustees at a meeting of the Board held on September 9,
1997, is dated May 21, 1996 and was last approved by the sole shareholder at
commencement of operations.
The Current Advisory Agreement provides that, subject to the supervision
and direction of the Board of Trustees, Sierra Services, in return for its fee,
will (1) provide general oversight of investment advisory services for each
Portfolio in accordance with the Agreement and Declaration of Trust, the 1940
Act, the Advisers Act and with the investment objectives and policies as stated
in the Prospectus and Statement of Additional Information, as then in effect;
(2) participate in the formulation of each Portfolio's investment policies; (3)
analyze economic and market trends affecting each Portfolio; (4) monitor the
expenses incurred by each Portfolio; (5) monitor the brokerage and research
services (as those terms are defined in Section 28(e) of the Securities Exchange
Act of 1934) that are provided to each Portfolio and that may be considered by
each Portfolio's investment advisor or sub-advisor, if any, in selecting brokers
or dealers to execute particular transactions; and (6) monitor and evaluate the
services provided by each Portfolio's
7
<PAGE> 11
investment sub-advisor, if any, under its investment sub-advisory agreement,
including, without limitation, the sub-advisor's adherence to the Portfolio's
investment objective(s) and policies and the Portfolio's investment performance.
Subject to the approval of the Board and the shareholders of each Portfolio,
Sierra Services may delegate certain of its duties enumerated above to one or
more sub-advisers.
The Current Advisory Agreement provides for payment of compensation to
Sierra Services on the first business day of each month for the previous month
for each Portfolio at the annual rate of 0.15% of each Portfolio's average daily
net assets.
The Current Advisory Agreement provides that Sierra Services will bear all
expenses in connection with the performance of its services under the Current
Advisory Agreement. Each Portfolio assumes and shall pay or cause to be paid all
other expenses of such Portfolio.
The Current Advisory Agreement is terminable, without penalty, on 60 days
written notice, by the Board or by vote of holders of a majority of a
Portfolios' shares, or, upon 90 days written notice, by Sierra Services. The
Current Advisory Agreement will terminate automatically in the event of its
assignment.
The Current Advisory Agreement obligates Sierra Services, in the
performance of its duties, to exercise its best judgment in rendering its
services, but provides that Sierra Services shall not be liable for any act or
omission which does not constitute willful misfeasance, bad faith or gross
negligence on the part of Sierra Services or its officers, Trustees or
employees, or reckless disregard by Sierra Services of its obligations and
duties under the agreement. The Current Advisory Agreement also provides that
any claims by Sierra Services against a Portfolio may be satisfied only from the
assets of that Portfolio, and that no shareholder, Trustee or officer of a
Portfolio, or any other Portfolio may be held personally liable or responsible
for any obligations arising out of such agreement.
For the fiscal year ended June 30, 1997, the Trust paid management fees to
Sierra Services as follows:
<TABLE>
<CAPTION>
PORTFOLIO MANAGEMENT FEES*
---------------------------------------------------- ----------------
<S> <C>
Income Portfolio.................................... (19,517)
Value Portfolio..................................... (18,896)
Balanced Portfolio.................................. 65,712
Growth Portfolio.................................... 107,009
Capital Growth Portfolio............................ (10,970)
</TABLE>
- ---------------
*After fee waivers and expense reimbursements.
THE NEW MANAGEMENT AGREEMENT
The Board approved the proposed New Management Agreement between the
Portfolio and Composite on October 27-28, 1997, a form of which is attached as
Exhibit A hereto. The New Management Agreement provides for payment to Composite
of a monthly fee computed on the average daily net assets for each Portfolio at
the annual rate of 0.15%. The investment advisory fee as a percentage of net
assets payable by the Portfolios will be the same under the New Management
Agreement as under the Current Advisory Agreement. If the investment advisory
fee under the New Management Agreement had been in effect for the Portfolios'
most recently completed fiscal year, the advisory fee to which Composite would
have been entitled would have been identical to that to which it was entitled
under the Current Advisory Agreement.
A portion of the fee payable to Composite under the New Management
Agreement may be allocated to Murphey Favre Securities Services, Inc. for
administrative services, portfolio accounting and regulatory compliance systems,
and to Composite Funds Distributor, Inc. for facilitating the distribution of
each Portfolio.
The New Management Agreement would take effect upon the later to occur of
(1) the obtaining of shareholder approval or (2) January 1, 1998. The New
Management Agreement will continue in effect for an initial two-year term and
thereafter for successive annual periods as long as such continuance is approved
in accordance with the 1940 Act.
8
<PAGE> 12
The Board accepted a recommendation by Composite to consolidate the Sierra
Funds and the Composite Funds into a single family of funds with a common board
of trustees and with Composite as each fund's (including the Trust's) investment
adviser. In accepting this recommendation, the Board considered that, based on
Composite's projections and commitments, each Portfolio's overall level of
expenses would generally remain unchanged at least through the end of 1998, and
that Washington Mutual planned to consolidate Sierra Services with Composite
sometime in early 1998. Before reaching its conclusions, the Board conducted an
extensive "due diligence" review. Among other things, the Board received reports
from counsel and independent experts specifically hired to evaluate Composite's
ability to manage the Portfolios, reviewed Composite's overall business plan for
the Portfolios, including the ability of its affiliates to provide
administration and distribution services, met with portfolio managers at
Composite, and met with the directors of the Composite Funds. The Board also was
informed of the resources of Washington Mutual and its affiliates that could be
made available to Composite and the Portfolios. The Trustees also considered
Composite's experience as adviser and service provider to the Composite Funds.
Although the Merger did not result in an assigment of the Current Advisory
Agreement, in light of the upcoming consolidation of Sierra Services with
Composite, Sierra Services and Composite have indicated that they intend to
comply with the requirements of Section 15(f) of the 1940 Act. Section 15(f)
provides a non-exclusive safe harbor for an investment adviser to an investment
company or any of its affiliated persons to receive any amount or benefit in
connection with a change in control of the investment adviser that results in
the "assignment" of an advisory agreement, as that term is defined in the 1940
Act, so long as the following two conditions are met. First, for a period of
three years after the change of control, at least 75% of the board members of
the investment company must not be interested persons of the acquired adviser or
the acquiror (Sierra Services and Composite, respectively, in this case). If the
Nominees listed in Proposal 1 above are elected by shareholders, the Trust would
meet this condition of Section 15(f). Second, an "unfair burden" must not be
imposed upon the investment company as a result of such transaction or any
express or implied terms, conditions or understandings applicable thereto. The
term "unfair burden" is defined in Section 15(f) to include any arrangement
during the two-year period after the assignment whereby the investment adviser,
or any interested person of any such adviser, receives or is entitled to receive
any compensation, directly or indirectly, from the investment company or its
shareholders (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 the investment company
(other than bona fide ordinary compensation as principal underwriter for such
investment company). Sierra Services and Composite are not aware of any express
or implied term, condition, arrangement or understanding that would impose an
"unfair burden" on the Trust as a result of the recent Merger or the upcoming
consolidation of Sierra Services with Composite.
The Board also considered that the costs of the Special Meeting would be
borne by Composite and/or its affiliates.
After consideration of the above factors and such other factors and
information that the Board deemed relevant, the Board, including the
Disinterested Trustees, unanimously approved the New Management Agreement with
respect to each Portfolio and voted to recommend its approval to the
shareholders of each Portfolio.
In the event that shareholders of a Portfolio do not approve the New
Management Agreement, the Current Advisory Agreement will remain in effect and
the Board will take such action as it deems in the best interest of the
Portfolio and its shareholders, which may include proposing that shareholders
approve an agreement in lieu of the New Management Agreement.
SHAREHOLDER APPROVAL OF THE NEW MANAGEMENT AGREEMENT
Approval of the New Management Agreement with respect to each Portfolio
requires the affirmative vote of a majority of the outstanding shares of the
Portfolio. For purposes of this proposal, "majority of the outstanding shares"
means the vote of (1) 67% or more of a Portfolio's outstanding shares present at
the
9
<PAGE> 13
Special Meeting, if the holders of more than 50% of the outstanding shares of
the Portfolio are present in person or represented by Proxy, or (2) more than
50% of a Portfolio's outstanding shares, whichever is less.
THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS OF EACH PORTFOLIO VOTE
FOR APPROVAL OF THE NEW MANAGEMENT AGREEMENT.
ADDITIONAL INFORMATION
TRUSTEES AND EXECUTIVE OFFICERS
Information about the Trust's current Trustees who are also Nominees is set
forth under Proposal 1 above. Presently, no officer of the Trust is an officer,
employee, director or shareholder of Composite. Nonetheless, each of the
following individuals are officers or employees of an entity that is under
common control with Composite:
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
NAME, AGE AND POSITION ADDRESS AND BUSINESS EXPERIENCE DURING THE PAST OWNED AS OF
WITH THE TRUST FIVE YEARS (INCLUDING DIRECTORSHIPS)* OCTOBER 29, 1997
- --------------------------- ----------------------------------------------- -------------------
<S> <C> <C>
Keith B. Pipes (41) Senior Vice President, Chief Financial Officer **
Trustee, President and and Secretary, Sierra Capital Management
Chief Executive Officer Corporation, 1988 to 1997; Chief Financial
Officer, Secretary and Treasurer, Sierra Fund
Administration Corporation, 1988 to 1997;
Executive Vice President and Secretary, Sierra
Investment Advisors Corporation, 1988 to 1997;
Senior Vice President, Chief Financial Officer
and Secretary, Sierra Investment Services
Corporation, 1992 to 1997.
Michael D. Goth (52) Chief Operating Officer, Sierra Investment **
Senior Vice President Advisors Corporation, 1991 to present.
Stephen C. Scott (52) President and Chief Investment Officer, Sierra **
Senior Vice President Investment Advisors Corporation, 1988 to
present; Senior Vice President and Chief
Investment Officer, Sierra Investment Services
Corporation, 1996 to present.
Craig M. Miller (38) Vice President and Controller, Sierra Capital **
Treasurer and Chief Management Company, Sierra Fund Administration
Financial Officer Corporation and Sierra Investment Services
Corporation, 1993 to present; Audit Manager,
Coopers & Lybrand, L.L.P., 1987 to 1993.
Richard W. Grant (52) 2000 One Logan Square, Philadelphia, PA 19103 **
Secretary Partner, Morgan, Lewis & Bockius LLP, 1989 to
present.
Darren S. Kishimoto (31) Fund Administration Manager, Sierra Fund **
Assistant Secretary Administration Corporation, 1994 to present;
Senior Fund Administrator, 1992 to 1994.
Bradley F. Hersh (29) Finance Manager, Sierra Fund Administration **
Assistant Treasurer Corporation, 1996 to present; Senior Financial
Analyst, GW Securities, 1991 to 1995.
</TABLE>
- ---------------
* The address of each officer of the Trust, unless otherwise noted, is 9301
Corbin Avenue, Suite 333, Northridge, CA 91324.
** As of the Record Date, the Trustees and officers of the Trust as a group
beneficially owned an aggregate of less than 1% of the shares of each
Portfolio of the Trust.
Each officer of the Trust will hold such office until a successor has been
elected by the Board. It is the intention of the Nominees, if elected, to
replace certain of the Trust's officers with individuals familiar with
Composite's mutual fund organization.
10
<PAGE> 14
PRINCIPAL UNDERWRITER
Sierra Services, located at 9301 Corbin Avenue, Northridge, California
91324, acts as the Trust's investment adviser and principal underwriter or
distributor. For the fiscal year ended June 30, 1997, the Trust paid
distribution fees to Sierra Services as follows:.
<TABLE>
<CAPTION>
PORTFOLIO DISTRIBUTION FEES
------------------------------------------------------ -----------------
<S> <C>
Income Portfolio...................................... 53,316
Value Portfolio....................................... 67,146
Balanced Portfolio.................................... 735,397
Growth Portfolio...................................... 1,103,001
Capital Growth Portfolio.............................. 193,954
</TABLE>
Effective January 1, 1998, Composite Funds Distributor, Inc., located at
601 W. Main Avenue, Spokane, WA 99201, will become the Trust's distributor.
Composite Funds Distributor, Inc. is a wholly owned subsidiary of Washington
Mutual.
ADMINISTRATOR
Sierra Administration, located at 9301 Corbin Avenue, Northridge,
California 91324, acts as the Trust's administrator. Sierra Administration is a
wholly owned subsidiary of Sierra Capital Management Corporation which is
located at the same address. For the fiscal year ended June 30, 1997, the Trust
paid administration fees to Sierra Administration as follows:
<TABLE>
<CAPTION>
PORTFOLIO ADMINISTRATION FEES*
--------------------------------------------------- --------------------
<S> <C>
Income Portfolio................................... 11,762
Value Portfolio.................................... 7,547
Balanced Portfolio................................. 449,218
Growth Portfolio................................... 607,123
Capital Growth Portfolio........................... 38,905
</TABLE>
- ---------------
* After fee waivers.
Effective January 1, 1998, Murphey Favre Securities Services, Inc., located
at 6501 W. Main Avenue, Spokane, WA 99201, will become the Trust's
administrator. Murphey Favre Securities Services, Inc. is a wholly owned
subsidiary of Washington Mutual.
PORTFOLIO TRANSACTIONS
In the fiscal year ended June 30, 1997 the Trust paid no brokerage
commissions to affiliated brokers.
BENEFICIAL OWNERS
To the Trust's knowledge, as of October 1, 1997, the following were
beneficial owners of 5% or more of the outstanding shares of each Portfolio.
<TABLE>
<CAPTION>
AMOUNT OF BENEFICIAL PERCENT OF TOTAL SHARES
NAME AND ADDRESS OWNERSHIP OUTSTANDING
--------------------------------------------------- -------------------- -----------------------
<S> <C> <C>
INCOME PORTFOLIO:
Everen Clearing Corp. Cust. 86,936 5.22%
FBO John H. Ormond, IRA
133 Woodland Way
Piedmont, CA 94611-3839
</TABLE>
11
<PAGE> 15
SUBMISSION OF SHAREHOLDER PROPOSALS
As a Massachusetts business trust, the Trust and its Portfolios are not
required to hold annual shareholders' meetings. Shareholders wishing to submit
proposals for inclusion in a proxy statement for a subsequent meeting should
send their written proposals to Sierra Asset Management Portfolios, 9301 Corbin
Avenue, Northridge, California 91324, c/o Secretary, Sierra Asset Management
Portfolios, a reasonable period in advance of any such meeting.
REQUIRED VOTE
Approval of Proposal 1 requires the affirmative vote of a plurality of all
votes cast at the Special Meeting, provided that a majority of the outstanding
shares entitled to vote are present in person or by proxy. Approval of Proposal
2 requires the affirmative vote of a majority of the outstanding shares of a
Portfolio. As defined in the 1940 Act, the vote of a majority of the outstanding
shares means the vote of (1) 67% or more of a Portfolio's outstanding shares
present at a meeting, if the holders of more than 50% of the outstanding shares
of a Portfolio are present or represented by proxy, or (2) more than 50% of a
Portfolio's outstanding shares, whichever is less.
Abstentions and broker "non-votes" (that is, proxies from brokers or
nominees indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular matter
for which the brokers or nominees do not have discretionary power) will not be
counted for or against the Proposals but will be counted for purposes of
determining whether a quorum is present. Abstentions and broker non-votes will
be counted as votes present for purposes of determining a "majority of the
outstanding voting securities" present at the Special Meeting and will therefore
have the effect of counting against Proposal 2. Brokers who hold shares as
record owners for beneficial owners may have the authority under the rules of
the various stock exchanges to vote those shares with respect to the Proposals
when they have not received instructions from beneficial owners.
OTHER MATTERS
No business other than the matters described above is expected to come
before the Special Meeting, but should any matter incident to the conduct of the
Special Meeting or any question as to an adjournment of the Special Meeting
arise, the persons named in the enclosed Proxy will vote thereon according to
their best judgment in the interest of the Trust.
SHAREHOLDERS ARE REQUESTED TO COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY
CARD PROMPTLY. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
By Order of the Trustees,
Keith B. Pipes
President
Dated: November 20, 1997
12
<PAGE> 16
EXHIBIT A
SIERRA ASSET MANAGEMENT PORTFOLIOS
FORM OF
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT (the "Agreement"), dated ,
1997, between Sierra Asset Management Portfolios, a Massachusetts business
trust, (the "Trust"), on behalf of each of its investment portfolios which are
listed on the signature page of this Agreement (each referred to herein as a
"Portfolio") and Composite Research & Management Co., a Washington corporation
(the "Manager").
WITNESSETH
WHEREAS, the Trust is an open-end management investment company, registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Manager to render investment
management services to each Portfolio, and the Manager is willing to render such
services;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto agree as follows:
1. Appointment. The Trust hereby appoints the Manager to act as
investment manager to each Portfolio for the period and on the terms set forth
in this Agreement. The Manager accepts such appointment and agrees to render the
services herein described, for the compensation herein provided.
2. Management. Subject to the supervision of the Board of Trustees of the
Trust, the Manager shall manage the investment operations of each Portfolio and
the composition of each Portfolio's portfolio, including the purchase, retention
and disposition of securities therefor, in accordance with such Portfolio's
investment objectives, policies and restrictions as stated in the Prospectus and
Statement of Additional Information (as such terms are hereinafter defined) and
resolutions of the Trust's Board of Trustees and subject to the following
understandings:
(a) The Manager shall provide supervision of each Portfolio's
investments, furnish a continuous investment program for each Portfolio's
portfolio and determine from time to time what securities will be
purchased, retained, or sold by each Portfolio, and what portion of the
assets will be invested or held as cash.
(b) The Manager, in the performance of its duties and obligations
under this Agreement, shall act in conformity with the Agreement and
Declaration of Trust of the Trust and the investment policies of the
Portfolios as determined by the Board of Trustees of the Trust.
(c) The Manager shall determine the securities to be purchased or sold
by the Portfolios and shall place orders for the purchase and sale of
portfolio securities pursuant to its determinations with brokers or dealers
selected by the Manager. In executing portfolio transactions and selecting
brokers or dealers, the Manager shall use its best efforts to seek on
behalf of each Portfolio the best overall terms available. In assessing the
best overall terms available for any transaction, the Manager may consider
all factors it deems relevant, including the breadth of the market in the
security, the price of the security, the size of the transaction, the
timing of the transaction, the reputation, financial condition, experience,
and execution capability of a broker or dealer, the amount of commission,
and the value of any brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934, as
amended) provided by a broker or dealer. The Manager is authorized to pay
to a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for a Portfolio which is
in excess of the amount of commission another broker or dealer would have
charged for effecting the transaction if the Manager determines in good
faith that such commission was reasonable in
A-1
<PAGE> 17
relation to the value of the brokerage and research services provided by
such broker or dealer, viewed in terms of that particular transaction or in
terms of the overall responsibilities of the Manager to the Portfolio
and/or other accounts over which the Manager exercises investment
discretion.
(d) On occasions when the Manager deems the purchase or sale of a
security to be in the best interest of a Portfolio as well as other
fiduciary accounts for which it has investment responsibility, the Manager,
to the extent permitted by applicable laws and regulations, may aggregate
the securities to be so sold or purchased in order to obtain the best
execution, most favorable net price or lower brokerage commissions.
(e) Subject to the provisions of the Agreement and Declaration of
Trust of the Trust and the 1940 Act, the Manager, at its expense, may
select and contract with one or more investment advisers (the
"Sub-adviser") for a Portfolio to perform some or all of the services for
which it is responsible pursuant to this Section 2. The Manager shall be
solely responsible for the compensation of any Sub-adviser of a Portfolio
for its services to a Portfolio. The Manager may terminate the services of
any Sub-adviser at any time in its sole discretion, and shall at such time
assume the responsibilities of such Sub-adviser unless and until a
successor Sub-adviser is selected. To the extent that more than one
Sub-adviser is selected, the Manager shall, in its sole discretion,
determine the amount of the Portfolio's assets allocated to each such
Sub-adviser.
3. Services Not Exclusive. The investment management services rendered by
the Manager hereunder to each Portfolio are not to be deemed exclusive, and the
Manager shall have the right to render similar services to others, including,
without limitation, other investment companies.
4. Expenses. During the term of this Agreement, the Manager shall pay all
expenses incurred by it in connection with its activities under this Agreement
including the salaries and expenses of any of the officers or employees of the
Manager who act as officers, Trustees or employees of the Trust but excluding
the cost of securities purchased for a Portfolio and the amount of any brokerage
fees and commissions incurred in executing portfolio transactions for a
Portfolio, and shall provide the Portfolios with suitable office space. Other
expenses to be incurred in the operation of the Portfolios (other than those
borne by any third party), including without limitation, taxes, interest,
brokerage fees and commissions, fees of Trustees who are not officers,
directors, or employees of the Manager, federal registration fees and state Blue
Sky qualification fees, administration fees, bookkeeping, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance premiums,
industry association fees, outside auditing and legal expenses, costs of
maintaining the Fund's or the Trust's existence, costs of independent pricing
services, costs attributable to investor services (including, without
limitation, telephone and personnel expenses), costs of preparing, printing and
distributing prospectuses to existing shareholders, costs of stockholders'
reports and meetings of shareholders and Trustees, as applicable, and any
extraordinary expenses will be borne by the Portfolios.
5. Compensation. For the services provided pursuant to this Agreement,
each Portfolio shall pay to the Manager as full compensation therefor a monthly
fee computed on the average daily net assets at the annual rate for each
Portfolio as stated in Schedule A attached hereto. The Trust acknowledges that
the Manager, as agent for the Portfolios, will allocate a portion of the fee
equal to the sub-advisory fee payable to the sub-advisor, if any, under its
sub-advisory agreement to the sub-advisor for sub-advisory services. The Trust
acknowledges that the Manager, as agent for the Portfolios, may allocate a
portion of the fee to Murphey Favre Securities Services, Inc. for administrative
services, portfolio accounting and regulatory compliance systems. The Manager
also from time to time and in such amounts as it shall determine in its sole
discretion may allocate a portion of the fee to Composite Funds Distributor,
Inc. for facilitating distribution of the Portfolios. This payment would be made
from revenue which otherwise would be considered profit to the Manager for its
services. This disclosure is being made to the Trust solely for the purpose of
conforming with requirements of the Washington Department of Revenue for
exclusion of revenue from the Washington Business and Occupation Tax.
6. Limitation of Liability. The Manager shall not be liable for any error
of judgment or mistake of law or for any loss suffered by a Portfolio in
connection with the matters to which this Agreement relates, except a
A-2
<PAGE> 18
loss resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
7. Delivery of Documents. The Trust has heretofore delivered to the
Manager true and complete copies of each of the following documents and shall
promptly deliver to it all future amendments and supplements thereto, if any:
(a) Agreement and Declaration of Trust (as presently in effect and as
amended from time to time);
(b) Bylaws of the Trust;
(c) Registration Statement under the Securities Act of 1933 and under
the 1940 Act of the Trust on Form N-1A, and all amendments thereto, as
filed with the Securities and Exchange Commission (the "Registration
Statement") relating to the Portfolios and the shares of the Portfolios;
(d) Notification of Registration of the Trust under the 1940 Act on
Form N-8A;
(e) Prospectuses of the Portfolios (such prospectuses as presently in
effect and/or as amended or supplemented from time to time, the
"Prospectus"); and
(f) Statement of Additional Information of the Portfolios (such
statement as presently in effect and/or as amended or supplemented from
time to time, the "Statement of Additional Information").
8. Duration and Termination. This Agreement shall become effective as of
the date first above-written for an initial period of two years and shall
continue thereafter so long as such continuance is specifically approved at
least annually (a) by the vote of the Board of Trustees including a majority of
those members of the Trust's Board of Trustees who are not parties to this
Agreement or "interested persons" of any such party, cast in person at a meeting
called for that purpose, or by vote of a majority of the outstanding voting
securities of the Portfolios. Notwithstanding the foregoing, (a) this Agreement
may be terminated at any time, without the payment of any penalty, by either the
Trust (by vote of the Trust's Board of Trustees or by vote of a majority of the
outstanding voting securities of the Portfolio) or the Manager, on sixty (60)
days prior written notice to the other and (b) shall automatically terminate in
the event of its assignment. As used in this Agreement, the terms "majority of
the outstanding voting securities," "interested persons" and "assignment" shall
have the meanings assigned to such terms in the 1940 Act.
9. Amendments. No provision of this Agreement may be amended, modified,
waived or supplemented except by a written instrument signed by the party
against which enforcement is sought. No amendment of this Agreement shall be
effective until approved in accordance with any applicable provisions of the
1940 Act.
10. Use of Name and Logo. The Trust agrees that it shall furnish to the
Manager, prior to any use or distribution thereof, copies of all prospectuses,
statements of additional information, proxy statements, reports to stockholders,
sales literature, advertisements, and other material prepared for distribution
to stockholders of the Trust or to the public, which in any way refer to or
describe the Manager or which include any trade names, trademarks or logos of
the Manager or of any affiliate of the Manager. The Trust further agrees that it
shall not use or distribute any such material if the Manager reasonably objects
in writing to such use or distribution within five (5) business days after the
date such material is furnished to the Manager.
The Manager and/or its affiliates own the names "Sierra," "Composite" and
any other names which may be listed from time to time on a Schedule B to be
attached hereto that they may develop for use in connection with the Trust,
which names may be used by the Trust only with the consent of the Manager and/or
its affiliates. The Manager, on behalf of itself and/or its affiliates, consents
to the use by the Trust of such names or any other names embodying such names,
but only on condition and so long as (i) this Agreement shall remain in full
force, (ii) the Trust shall fully perform, fulfill and comply with all
provisions of this Agreement expressed herein to be performed, fulfilled or
complied with by it, and (iii) the Manager is the manager of the Portfolios and
the Trust. No such name shall be used by the Trust at any time or in any place
or for any purposes or under any conditions except as provided in this section.
The foregoing authorization by the Manager, on behalf of itself and/or its
affiliates, to the Trust to use such names as part of a business or name is not
exclusive of the right of the Manager and/or its affiliates themselves to use,
or to authorize others to use,
A-3
<PAGE> 19
the same; the Trust acknowledges and agrees that as between the Manager and/or
its affiliates and the Trust, the Manager and/or its affiliates have the
exclusive right so to use, or authorize others to use, such names, and the Trust
agrees to take such action as may reasonably be requested by the Manager, on
behalf of itself and/or its affiliates, to give full effect to the provisions of
this section (including, without limitation, consenting to such use of such
names). Without limiting the generality of the foregoing, the Trust agrees that,
upon (i) any violation of the provisions of this Agreement by the Trust or (ii)
any termination of this Agreement, by either party or otherwise, the Trust will,
at the request of the Manager, on behalf of itself and/or its affiliates, made
within six months after such violation or termination, use its best efforts to
change the name of the Trust and/or the Portfolios so as to eliminate all
reference, if any, to such names and will not thereafter transact any business
in a name containing such names in any form or combination whatsoever, or
designate itself as the same entity as or successor to an entity of such names,
or otherwise use such names or any other reference to the Manager and/or its
affiliates, except as may be required by law. Such covenants on the part of the
Trust shall be binding upon it, its Trustees, officers, shareholders, creditors
and all other persons claiming under or through it.
The provisions of this section shall survive termination of this Agreement.
11. Notices. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, if to the Trust: 601 W. Main Ave., Suite 300,
Spokane, Washington 99201; or if to the Manager: 1201 Third Avenue, Suite 1220,
Seattle, Washington 98101; or to either party at such other address as such
party shall designate to the other by a notice given in accordance with the
provisions of this section.
12. Miscellaneous.
(a) Except as otherwise expressly provided herein or authorized by the
Board of Trustees of the Trust from time to time, the Manager for all purposes
herein shall be deemed to be an independent contractor and shall have no
authority to act for or represent the Trust or the Portfolios in any way or
otherwise be deemed an agent of the Trust or the Portfolios.
(b) The Trust shall furnish or otherwise make available to the Manager such
information relating to the business affairs of the Portfolios as the Manager at
any time or from time to time reasonably requests in order to discharge its
obligations hereunder.
(c) This Agreement shall be governed by and construed in accordance with
the laws of The Commonwealth of Massachusetts and shall inure to the benefit of
the parties hereto and their respective successors.
(d) If any provision of this Agreement shall be held or made invalid or by
any court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
13. Declaration of Trust and Limitation of Liability. A copy of the
Agreement and Declaration of Trust of the Trust is on file with the Secretary of
State of The Commonwealth of Massachusetts, and notice is hereby given that this
Agreement is executed by an officer of the Trust on behalf of the Trustees of
the Trust, as trustees and not individually, on further behalf of each
Portfolio, and that the obligations of this Agreement shall be binding upon the
assets and properties of a Portfolio only and shall not be binding upon the
assets and properties of any other series of the Trust or upon any of the
Trustees, officers, employees, agents or shareholders of the Trust or the Trust
individually.
A-4
<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first above-written.
SIERRA ASSET MANAGEMENT PORTFOLIOS, on
behalf of its portfolios INCOME
PORTFOLIO, VALUE PORTFOLIO, BALANCED
PORTFOLIO, GROWTH PORTFOLIO and
CAPITAL GROWTH PORTFOLIO
By:
------------------------------------
Name:
Title:
Attest:
By:
--------------------------------
Name:
Title:
COMPOSITE RESEARCH & MANAGEMENT CO.
By:
------------------------------------
William G. Papesh
President
Attest:
By:
--------------------------------
Sharon L. Howells
Secretary
A-5
<PAGE> 21
SCHEDULE A
SIERRA ASSET MANAGEMENT PORTFOLIOS
The management fee to be charged for advisory services (including
sub-advisory fees, if any) for each Portfolio is based upon a percentage of the
average daily net assets of such Portfolio. The total management fee, to be paid
monthly, for each Portfolio is as follows:
<TABLE>
<CAPTION>
ANNUAL FEE
----------
<S> <C>
Income Portfolio................................ 0.15%
Value Portfolio................................. 0.15%
Balanced Portfolio.............................. 0.15%
Growth Portfolio................................ 0.15%
Capital Growth Portfolio........................ 0.15%
</TABLE>
A-6
<PAGE> 22
S I E R R A
ASSET MANAGEMENT
The Diversification Solution
<PAGE> 23
<TABLE>
<S> <C>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
----------------------------
SIERRA INCOME PORTFOLIO
----------------------------
1. Proposal to elect thirteen Trustees. The nominees for Trustees are:
Arthur H. Bernstein Anne V. Farrell FOR ALL FOR ALL
Wayne L. Attwood Jay Rockey NOMINEES WITHHOLD EXCEPT
William G. Papesh John W. English
David E. Anderson Michael K. Murphy [ ] [ ] [ ]
Kristianne Blake Richard C. Yancey
Daniel L. Pavelich Alfred E. Osborne, Jr.
Edmond R. Davis
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the name(s) of the nominee(s).
Your shares will be voted for the remaining nominee(s).
FOR AGAINST ABSTAIN
2. Proposal to approve a new Investment Management [ ] [ ] [ ]
Agreement between the Trust, on behalf of the
Composite, Research & Management Co.
To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
Please be sure to sign and date this Proxy.
- -------------------------------------------
Date
- -------------------------------------------
Shareholder sign here
- -------------------------------------------
Co-owner sign here
DETACH CARD SI6011 DETACH CARD
</TABLE>
<PAGE> 24
SIERRA INCOME PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
December 23, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
SIERRA ASSET MANAGEMENT PORTFOLIOS
The undersigned shareholder of the Income Portfolio (the "Portfolio") of Sierra
Asset Management Portfolios (the "Trust") hereby appoints Keith B. Pipes and
Michael D. Goth, and each of them separately, proxies with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated on
the reverse side, at the Special Meeting of Shareholders of the Trust on
December 23, 1997 at the office of Sierra Fund Administration Corporation at
9301 Corbin Avenue, Suite 333, Northridge, California 91324, at 11:00 a.m.
(Pacific Time), and at any adjournment thereof, all of the shares of the
Portfolio which the undersigned would be entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR EACH PROPOSAL.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting. The Trustees recommend a vote FOR the
Proposals.
TO VOTE BY TELEPHONE, PLEASE CALL TOLL FREE 1-800-848-3374
BETWEEN 8:00 A.M. AND 9:00 P.M. (EST).
TO VOTE BY MAIL, PLEASE DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
Please sign your name in the space provided to authorize the voting of your
shares as indicated and return promptly. When signing on behalf of a
corporation, partnership, estate, trust or in any other representative capacity
please sign your name and title. For joint accounts, each joint owner must sign.
Your signatures on this proxy should be exactly as your name or names appear on
this proxy.
SI6012
<PAGE> 25
<TABLE>
<S><C>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
----------------------
SIERRA VALUE PORTFOLIO
----------------------
1. Proposal to elect thirteen Trustees. The nominees for Trustees are:
Arthur H. Bernstein Anne V. Farrell FOR ALL FOR ALL
Wayne L. Attwood Jay Rockey NOMINEES WITHHOLD EXCEPT
William G. Papesh John W. English
David E. Anderson Michael K. Murphy [ ] [ ] [ ]
Kristianne Blake Richard C. Yancey
Daniel L. Pavelich Alfred E.Osborne, Jr.
Edmond R. Davis
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).
FOR AGAINST ABSTAIN
2. Proposal to approve a new Investment Management [ ] [ ] [ ]
Agreement between the Trust, on behalf of the
Portfolio, and Composite Research & Management Co.
To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
Please be sure to sign and date this Proxy.
- -------------------------------------------
Date
- -------------------------------------------
Shareholder sign here
- -------------------------------------------
Co-owner sign here
DETACH CARD SI6021 DETACH CARD
</TABLE>
<PAGE> 26
SIERRA VALUE PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
December 23, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
OF SIERRA ASSET MANAGEMENT PORTFOLIOS
The undersigned shareholder of the Value Portfolio (the "Portfolio") of
Sierra Asset Management Portfolios (the "Trust") hereby appoints Keith B. Pipes
and Michael D. Goth, and each of them separately, proxies with power of
substitution to each, and hereby authorizes them to represent and to vote, as
designated on the reverse side, at the Special Meeting of Shareholders of the
Trust on December 23, 1997 at the office of Sierra Fund Administration
Corporation at 9301 Corbin Avenue, Suite 333, Northridge, California 91324, at
11:00 a.m. (Pacific Time), and at any adjournment thereof, all of the shares of
the Portfolio which the undersigned would be entitled to vote if personally
present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR EACH PROPOSAL.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting. The Trustees recommend a vote FOR the
Proposals.
TO VOTE BY TELEPHONE, PLEASE CALL TOLL FREE 1-800-848-3374
BETWEEN 8:00 A.M. and 9:00 P.M. (EST).
TO VOTE BY MAIL, PLEASE DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
Please sign your name in the space provided to authorize the voting of your
shares as indicated and return promptly. When signing on behalf of a
corporation, partnership, estate, trust or in any other representative capacity
please sign your name and title. For joint accounts, each joint owner must sign.
Your signatures on this proxy should be exactly as your name or names appear on
this proxy.
SI6022
<PAGE> 27
<TABLE>
<S> <C>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
----------------------------
SIERRA BALANCED PORTFOLIO
----------------------------
1. Proposal to elect thirteen Trustees. The nominees for Trustees are:
Arthur H. Bernstein Anne V. Farrell FOR ALL FOR ALL
Wayne L. Attwood Jay Rockey NOMINEES WITHHOLD EXCEPT
William G. Papesh John W. English
David E. Anderson Michael K. Murphy [ ] [ ] [ ]
Kristianne Blake Richard C. Yancey
Daniel L. Pavelich Alfred E. Osborne, Jr.
Edmond R. Davis
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the name(s) of the nominee(s).
Your shares will be voted for the remaining nominee(s).
FOR AGAINST ABSTAIN
2. Proposal to approve a new Investment Management [ ] [ ] [ ]
Agreement between the Trust, on behalf of the
Portfolio, and Composite Research & Management Co.
To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
Please be sure to sign and date this Proxy.
- -------------------------------------------
Date
- -------------------------------------------
Shareholder sign here
- -------------------------------------------
Co-owner sign here
DETACH CARD SI6031 DETACH CARD
</TABLE>
<PAGE> 28
SIERRA BALANCED PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 23, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
SIERRA ASSET MANAGEMENT PORTFOLIOS
The undersigned shareholder of the Balanced Portfolio (the "Portfolio") of
Sierra Asset Management Portfolios (the "Trust") hereby appoints Keith B. Pipes
and Michael D. Goth, and each of them separately, proxies with power of
substitution to each, and hereby authorizes them to represent and to vote, as
designated on the reverse side, at the Special Meeting of Shareholders of the
Trust on December 23, 1997 at the office of Sierra Fund Administration
Corporation at 9301 Corbin Avenue, Suite 333, Northridge, California 91324, at
11:00 a.m. (Pacific Time), and at any adjournment thereof, all of the shares of
the Portfolio which the undersigned would be entitled to vote if personally
present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR EACH PROPOSAL.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting. The Trustees recommend a vote FOR the
Proposals.
TO VOTE BY TELEPHONE, PLEASE CALL TOLL FREE 1-800-848-3374
BETWEEN 8:00 A.M. AND 9:00 P.M. (EST).
TO VOTE BY MAIL, PLEASE DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
Please sign your name in the space provided to authorize the voting of your
shares as indicated and return promptly. When signing on behalf of a
corporation, partnership, estate, trust or in any other representative capacity
please sign your name and title. For joint accounts, each joint owner must sign.
Your signatures on this proxy should be exactly as your name or names appear on
this proxy.
SI6032
<PAGE> 29
<TABLE>
<S> <C>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
-----------------------
SIERRA GROWTH PORTFOLIO
-----------------------
1. Proposal to elect thirteen Trustees. The nominees for Trustees are:
Arthur H. Bernstein Anne V. Farrell FOR ALL WITH- FOR ALL
Wayne L. Attwood Jay Rockey NOMINEES HOLD EXCEPT
William G. Papesh John W. English
David E. Anderson Michael K. Murphy [ ] [ ] [ ]
Kristianne Blake Richard C. Yancey
Daniel L. Pavelich Alfred E. Osborne, Jr.
Edmond R. Davis
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).
2. Proposal to approve a new Investment Management FOR AGAINST ABSTAIN
Agreement between the Trust, on behalf of the
Portfolio, and Composite Research & Management Co. [ ] [ ] [ ]
To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
Please be sure to sign and date this Proxy.
- -------------------------------------------
Date
- -------------------------------------------
Shareholder sign here
- -------------------------------------------
Co-owner sign here
DETACH CARD SI6041 DETACH CARD
</TABLE>
<PAGE> 30
SIERRA GROWTH PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 23, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
SIERRA ASSET MANAGEMENT PORTFOLIOS
The undersigned shareholder of the Growth Portfolio (the "Portfolio") of Sierra
Asset Management Portfolios (the "Trust") hereby appoints Keith B. Pipes and
Michael D. Goth, and each of them separately, proxies with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated on
the reverse side, at the Special Meeting of Shareholders of the Trust on
December 23, 1997 at the office of Sierra Fund Administration Corporation at
9301 Corbin Avenue, Suite 333, Northridge, California 91324, at 11:00 a.m.
(Pacific Time), and at any adjournment thereof, all of the shares of the
Portfolio which the undersigned would be entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR EACH PROPOSAL.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting. The Trustees recommend a vote FOR the
Proposals.
TO VOTE BY TELEPHONE, PLEASE CALL TOLL FREE 1-800-848-3374
BETWEEN 8:00 A.M. and 9:00 P.M. (EST).
TO VOTE BY MAIL, PLEASE DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
Please sign your name in the space provided to authorize the voting of your
shares as indicated and return promptly. When signing on behalf of a
corporation, partnership, estate, trust or in any other representative capacity
please sign your name and title. For joint accounts, each joint owner must sign.
Your signatures on this proxy should be exactly as your name or names appear on
this proxy.
SI6042
<PAGE> 31
<TABLE>
<S><C>
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
-------------------------------
SIERRA CAPITAL GROWTH PORTFOLIO
-------------------------------
1. Proposal to elect thirteen Trustees. The nominees for Trustees are:
Arthur H. Bernstein Anne V. Farrell FOR ALL FOR ALL
Wayne L. Attwood Jay Rockey NOMINEES WITHHOLD EXCEPT
William G. Papesh John W. English
David E. Anderson Michael K. Murphy [ ] [ ] [ ]
Kristianne Blake Richard C. Yancey
Daniel L. Pavelich Alfred E. Osborne, Jr.
Edmond R. Davis
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through the name(s) of the
nominee(s). Your shares will be voted for the remaining nominee(s).
FOR AGAINST ABSTAIN
2. Proposal to approve a new Investment Management [ ] [ ] [ ]
Agreement between the Trust, on behalf of the
Portfolio, and Composite Research & Management Co.
To transact such other business as may properly come before the Special
Meeting or any adjournment thereof.
Please be sure to sign and date this Proxy.
- -------------------------------------------
Date
- -------------------------------------------
Shareholder sign here
- -------------------------------------------
Co-owner sign here
DETACH CARD SI6051 DETACH CARD
</TABLE>
<PAGE> 32
SIERRA CAPITAL GROWTH PORTFOLIO
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 23, 1997
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
SIERRA ASSET MANAGEMENT PORTFOLIOS
The undersigned shareholder of the Capital Growth Portfolio (the "Portfolio") of
Sierra Asset Management Portfolios (the "Trust") hereby appoints Keith B. Pipes
and Michael D. Goth, and each of them separately, proxies with power of
substitution to each, and hereby authorizes them to represent and to vote, as
designated on the reverse side, at the Special Meeting of Shareholders of the
Trust on December 23, 1997 at the office of Sierra Fund Administration
Corporation at 9301 Corbin Avenue, Suite 333, Northridge, California 91324, at
11:00 a.m. (Pacific Time), and at any adjournment thereof, all of the shares of
the Portfolio which the undersigned would be entitled to vote if personally
present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR EACH PROPOSAL.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting. The Trustees recommend a vote FOR the
Proposals.
TO VOTE BY TELEPHONE, PLEASE CALL TOLL FREE 1-800-848-3374 BETWEEN
8:00 A.M. AND 9:00 P.M. (EST).
TO VOTE BY MAIL, PLEASE DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF MAILED IN THE UNITED STATES.
Please sign your name in the space provided to authorize the voting of your
shares as indicated and return promptly. When signing on behalf of a
corporation, partnership, estate, trust or in any other representative capacity
please sign your name and title. For joint accounts, each joint owner must sign.
Your signatures on this proxy should be exactly as your name or names appear on
this proxy.
SI6052
<PAGE> 33
[SIERRA ASSET MANAGEMENT LETTERHEAD]
November 1997
Dear Sierra Asset Management Portfolios Shareholder:
As you know, Great Western Financial Corporation, Sierra's former parent
company, merged into Washington Mutual, Inc., parent of Composite Research &
Management Co. ("Composite"), on July 1, 1997. This marked the beginning of a
restructuring and integration process that offers the opportunity to consolidate
the Sierra Asset Management Portfolios with the mutual funds that are managed by
Composite. This letter describes some important changes proposed for the Sierra
Funds. Let me assure you, however, that our commitment to you remains unchanged.
Our dedication to assisting you achieve your financial goals is our highest
priority.
The Sierra Asset Management Portfolios is governed by a Board of Trustees that
is independent of Great Western and Washington Mutual. Members of the Board are
elected by the shareholders, and their charter is to protect your interests. The
changes discussed in this letter require approval of both the Board of Trustees
and shareholders.
On October 28, 1997, the Sierra Board of Trustees approved the terms of a
proposed consolidation of the Sierra Funds and the Composite Group of Funds
(the mutual funds managed by Composite). As a result, a special meeting for all
Sierra shareholders has been scheduled for December 23, 1997. This meeting
gives shareholders an opportunity to ask questions in person, further discuss
the proposed consolidation with the Composite Funds, and to vote on the
proposals discussed below. However, shareholders do not need to attend the
meeting to cast their vote.
YOUR VOTE IS IMPORTANT
THE BOARD OF TRUSTEES RECOMMENDS SHAREHOLDERS VOTE "FOR" ALL PROPOSALS. The
accompanying proxy materials outline in detail the various terms of the
consolidation so you may carefully consider how to vote. FOR YOUR CONVENIENCE,
WE HAVE INCLUDED A POSTAGE-PAID ENVELOPE THAT YOU MAY USE TO REGISTER YOUR
CHOICES BY MAIL. You may also register your choices by telephone, by calling
(800) 848-3374. Your vote is important, since a majority of shareholders must
respond in order for all the proposed changes to be approved. By simply
signing, dating, and returning your proxy card(s) or by calling (800) 848-3374,
you will help to ensure sufficient responses are received and allow the proxies
to vote favorably on your behalf.
The goals of consolidating the Sierra Funds and the Composite Funds into a
single Fund complex are to:
o Streamline the restructured/combined fund complex (representing $4.5
billion in assets)
o Maintain a well-diversified offering of funds
o Reduce operating costs and shareholder expenses
o Maintain a high level of service and operational efficiency
o Benefit from increased assets under management
<PAGE> 34
In summary, the result of the restructuring will be a single integrated mutual
fund complex. The consolidation includes the following proposals for the Sierra
Asset Management Portfolios:
o Electing a new Board of Trustees for the combined complex
o Appointing Composite as the investment advisor while retaining the same
fee levels
The Composite Group has enjoyed a long history of investment management and
growth, having opened its first mutual fund in 1939. Composite benefits from
the many years of experience and expertise of its portfolio management team.
The Composite Funds have successfully weathered the many market downturns and
economic events while producing competitive returns for their shareholders. As
a result, assets under management have exhibited steady growth and reflect the
Funds' stable and loyal base of shareholders. With the addition of the Sierra
Funds and their shareholders,the total assets and customer base of the combined
mutual fund family will increase significantly.
Thank you for the trust and confidence you have placed in us. Our commitment to
excellence in investment performance and in shareholder service is unchanged. I
encourage you to return your card(s) or call (800) 848-3374 promptly, so you
and your fellow shareholders may enjoy the many benefits of a larger mutual
fund family as soon as possible.
Sincerely,
/s/ KEITH B. PIPES
- ----------------------------
Keith B. Pipes
President
