SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
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WM VARIABLE TRUST
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[WM Group Letterhead]
January 10, 2005
Dear VT Growth Fund Shareholder:
The enclosed proxy statement solicits your vote as a shareholder of the VT
Growth Fund (the "Fund") for the purpose of approving a new sub-advisory
agreement among the Fund, WM Advisors, Inc. and a new sub-advisor, Salomon
Brothers Asset Management Inc. This proxy statement is designed to give you
complete and detailed information about the proposal. After you have reviewed
this material carefully, we encourage you to follow the Board of Trustees'
recommendation by voting is "FOR" the proposal. The Fund is managed by WM
Advisors, Inc. (the "Advisor") and currently sub-advised by Columbia Management
Advisors, Inc., Janus Capital Management LLC and OppenheimerFunds, Inc.
Portfolio diversification and strategic asset allocation have long been key
tenets of the Advisor's investment philosophy. Mindful of the relatively
volatile nature of growth equity investing, the Advisor believes the Fund could
benefit from terminating its sub-advisory agreement with Columbia Management
Advisors, Inc. and entering into a new sub-advisory agreement with Salomon
Brothers Asset Management Inc, a sub-advisor whose investment style the Advisor
believes will complement the investment styles of Janus and Oppenheimer.
These proposals will NOT change the total advisory fees paid by the Fund.
A special meeting of shareholders has been scheduled for February 3, 2005
at 10:00 a.m., Pacific Time, at the main office of the Fund at 1201 Third
Avenue, Seattle, Washington 98101. While you are invited to attend the meeting,
most shareholders cast their vote by completing the accompanying proxy card.
Your vote is important. Please cast your vote by completing and signing the
enclosed proxy card and mailing it back in the postage-paid reply envelope.
If you have questions, please contact your Investment Representative.
Your vote is important to us and is needed to ensure that the proposal in
the proxy statement can be acted upon. We look forward to receiving your vote
soon.
Sincerely,
/s/ William G. Papesh
William G. Papesh
President
Q & A
GROWTH FUND PROPOSED SUB-ADVISORY AGREEMENT
Q. WHY AM I RECEIVING THIS PROXY STATEMENT?
The Board of Trustees of WM Variable Trust, on behalf of its Growth Fund (the
"Fund"), has scheduled a special meeting of shareholders on February 3, 2005 at
10:00 a.m., Pacific Time for the purpose of approving a new sub-advisory
agreement among the Fund, WM Advisors, Inc. (the "Advisor") and Salomon Brothers
Asset Management Inc ("Salomon"), thereby adding Salomon as a new sub-advisor
for the Fund. The Board believes that the proposed agreement would be in the
best interests of shareholders and recommends that you vote "FOR" its approval.
Q. WHY IS THE BOARD PROPOSING A NEW SUB-ADVISOR FOR THE FUND?
As part of its ongoing evaluation of the Fund and its investment advisors, the
Advisor has determined that it would be in the best interests of the Fund's
shareholders to replace Columbia Management Advisors, Inc. with Salomon. Salomon
was chosen for its ability to invest in ways that the Advisor believes will
complement the other sub-advisors under varying market conditions.
Q. WILL THE PROPOSAL AFFECT THE TOTAL ADVISORY FEES PAID BY THE FUND?
No. This change will not affect the Fund's total advisory fees or expense ratio.
Q. HOW WILL THE ADVISOR ALLOCATE THE FUND'S ASSETS AMONG THE PROPOSED SUB-
ADVISORS?
The Advisor will continue to allocate the Fund's assets among the proposed sub-
advisors based on its analysis of current and expected market conditions and how
it expects each proposed sub-advisor to perform under such conditions.
Q. HOW DO I CAST MY VOTE?
Please cast your vote by completing and signing the enclosed proxy card and
mailing it back in the postage-paid reply envelope.
Your vote is important to us and will help ensure that the proposal in the proxy
statement can be acted upon.
Please take the time to read the proxy statement thoroughly. If you have any
questions, please contact your Investment Representative. Thank you for your
time, consideration and vote.
WM GROUP OF FUNDS
GROWTH FUND
WM VARIABLE TRUST
1201 THIRD AVENUE
SEATTLE, WASHINGTON 98101
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 3, 2005
To the Shareholders of the Growth Fund:
Notice is hereby given that a Special Meeting of Shareholders of the Growth
Fund (the "Fund"), a series of WM Variable Trust, will be held on Thursday,
February 3, 2005 at 10:00 a.m., Pacific Time, at the main office of the Fund at
1201 Third Avenue, Seattle, Washington 98101, for the following purposes:
1. To approve or disapprove a sub-advisory agreement for the Fund
among the Fund, WM Advisors, Inc. and Salomon Brothers Asset Management
Inc; and
2. To consider and act upon any other matters which may properly come
before the meeting or any adjournment thereof.
Shareholders of record at the close of business on December 6, 2004 are
entitled to notice of, and to vote at, the Meeting.
By order of the Board of Trustees,
John T. West, Secretary
January 10, 2005
YOUR VOTE IS IMPORTANT
PLEASE RESPOND -- YOUR VOTE IS IMPORTANT WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING. PLEASE COMPLETE, SIGN, DATE AND MAIL THE ENCLOSED PROXY IN THE ENCLOSED
POSTAGE PREPAID ENVELOPE SO THAT YOU WILL BE REPRESENTED AT THE MEETING.
WM GROUP OF FUNDS
GROWTH FUND
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Trustees (the "Trustees") of WM Variable Trust
(the "Trust") for use at the Special Meeting of Shareholders of the Growth Fund
(the "Fund"), a series of the Trust, to be held at 10:00 a.m., Pacific Time, on
Thursday, February 3, 2005, at 1201 Third Avenue, Seattle, Washington, and at
any adjournment or adjournments thereof (the "Meeting"). This Proxy Statement
and its enclosures are being mailed to shareholders beginning on or about
January 10, 2005.
A COPY OF THE TRUST'S MOST RECENT ANNUAL REPORT MAY BE OBTAINED WITHOUT
CHARGE BY WRITING TO WM FUNDS DISTRIBUTOR, INC., P.O. BOX 9757, PROVIDENCE,
RHODE ISLAND 02940-9757 OR BY CALLING (800) 222-5852.
I. GENERAL
All shareholders of record of the Fund as of the close of business on
December 6, 2004, the record date for determining shareholders entitled to vote
at the Meeting (the "Record Date"), are entitled to one vote for each share of
beneficial interest of the Fund held as of that date, and each fractional share
shall be entitled to a proportional fractional vote. The aggregate number of
shares of beneficial interest of the Fund for all classes issued and outstanding
as of the Record Date was 19,009,294.
Timely, properly executed proxies will be voted as you instruct. IF NO
SPECIFICATION IS MADE, SHARES WILL BE VOTED FOR THE APPROVAL OF THE SUB-ADVISORY
AGREEMENT. At any time before it has been voted, the enclosed proxy may be
revoked by the signer by a written revocation received by the Secretary of the
Trust, by properly executing a later-dated proxy or by attending the Meeting,
requesting the return of any previously delivered proxy and voting in person.
The holders of a majority of the shares of the Fund outstanding as of the
Record Date, present in person or represented by proxy, constitute a quorum for
the transaction of business by the shareholders of the Fund at the Meeting.
Votes
cast by proxy or in person at the Meeting will be counted by persons appointed
by the Trust as tellers for the Meeting. The tellers will count the total number
of votes cast "for" approval of Proposal 1 for purposes of determining whether
sufficient affirmative votes have been cast for the Proposal. The tellers will
count all shares represented by proxies that reflect abstentions and "broker
non-votes" (i.e., 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 discretionary
voting power on a particular matter) as shares that are present and entitled to
vote for purposes of determining the presence of a quorum. Abstentions and
broker non-votes will have the same effect as a negative vote on the Proposal.
Solicitation of proxies by personal interview, mail, telephone and
facsimile may be made by officers and Trustees of the Trust and employees of WM
Advisors, Inc., the Fund's investment advisor, and its affiliates. The Trust has
retained Management Information Services ("MIS"), P.O. Box 9107, Hingham, MA
02043, pursuant to its standard contract to aid in the tabulation of proxies.
The costs of retaining MIS and other expenses incurred in connection with
the solicitation of proxies, and the costs of holding the Meeting, will be borne
by the Fund. The anticipated cost associated with the solicitation of proxies by
MIS is approximately $12,000.
Portfolio diversification and strategic asset allocation have long been key
tenets of the investment philosophy of WM Advisors, Inc. (the "Advisor").
Mindful of the relatively volatile nature of growth equity investing, the
Advisor currently delegates day-to-day management responsibility for the Fund
assets to three sub-advisors -- Columbia Management Advisors, Inc.,
("Columbia"), Janus Capital Management ("Janus"), and OppenheimerFunds, Inc.
("Oppenheimer"). The Advisor believes the Fund could benefit from the Advisor's
terminating its sub-advisory agreement with Columbia and entering into a new
sub-advisory agreement with Salomon Brothers Asset Management Inc ("Salomon").
The Advisor believes that Salomon's investment style will be complementary to
the investment styles of Janus and Oppenheimer.
Each sub-advisor will continue to invest the portion of the Fund allocated
to it in equity securities of growth companies using its own distinct investment
philosophy and process. The Advisor will determine the proportion of the Fund's
assets, if any, to be managed by each sub-advisor. The Advisor currently intends
to allocate one-third of the Fund to each sub-advisor.
2
As described more fully below, the Advisor has proposed to replace Columbia
with Salomon and enter into a sub-advisory agreement with Salmon with respect to
the Fund (the "Proposed Agreement"). In order for Salomon to serve as
sub-advisor to the Fund, the Investment Company Act of 1940, as amended (the
"1940 Act"), requires approval of the Proposed Agreement by both the Trustees
and the Fund's shareholders.
The Proposed Agreement was unanimously approved by the Trustees, including
those Trustees who are not "interested persons" (as defined in the 1940 Act) of
any party to the Proposed Agreement (the "Independent Trustees"), on November 9,
2004. The Trustees, including a majority of the Independent Trustees, recommend
approval of the Proposed Agreement by shareholders. If shareholders of the Fund
do not approve the Proposed Agreement, the Trustees will consider what further
actions to take. Such actions could include considering another sub-advisor for
the Fund.
A description of the Proposed Agreement, the services to be provided
thereunder, and the procedures for termination and renewal thereof is set forth
below under "Description of the Proposed Agreement." Such description is
qualified in its entirety by reference to the form of Proposed Agreement set
forth in Appendix A to this Proxy Statement. Additional information about
Salomon is set forth below under "Additional Information."
DESCRIPTION OF THE PROPOSED AGREEMENT
In order to assist it in carrying out its responsibilities as manager of
the Fund, the Advisor has proposed to retain Salomon under the Proposed
Agreement to render sub-advisory services to the Fund under the supervision of
the Advisor and the Trustees.
The Proposed Agreement provides that, subject to the supervision of the
Trustees and the Advisor, Salomon will, with respect to the portion of the
Fund's assets allocated to it, make investment decisions for the Fund in
accordance with the Fund's investment objectives and policies as stated in the
Fund's Prospectus and Statement of Additional Information as in effect and as
amended from time to time and in conformity with the Trust's Master Trust
Agreement, the 1940 Act and the Investment Advisers Act of 1940, as amended (the
"Advisers Act"). For its portion of the Fund, Salomon will also place purchase
and sale orders for securities to effectuate the investment decisions made;
maintain books and records with respect to the securities transactions and
furnish to the Trust's
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Board of Trustees such quarterly, annual and special reports as the Board may
reasonably request; treat confidentially and as proprietary information of the
Fund all records and other information relative to the Fund and prior, present
or potential shareholders; and supervise investments and conduct a continuous
program of investment, evaluation and, if appropriate, sale and reinvestment.
The Proposed Agreement further provides that Salomon shall not use such records
and information for any purpose other than performance of its responsibilities
and duties thereunder. In addition, Salomon will furnish the Fund or the Advisor
with whatever statistical information the Fund or the Advisor may reasonably
request with respect to the investments that the Fund may hold or consider
purchasing.
The Proposed Agreement provides that it will continue in effect for an
initial term of two years from its date of execution and thereafter so long as
it is approved at least annually in accordance with the 1940 Act. The 1940 Act
requires that, after the initial two-year term, the Proposed Agreement be
approved at least annually by (i) the vote, cast in person at a meeting called
for the purpose, of a majority of the Independent Trustees and (ii) the majority
vote of the full Board of Trustees or the vote of a majority of the outstanding
voting securities (as defined in the 1940 Act) of the Fund. The Proposed
Agreement terminates automatically in the event of its assignment or upon any
termination of the advisory agreement between the Trust and the Advisor. The
Proposed Agreement may be terminated without penalty on thirty days' written
notice, by the Advisor, the Board of Trustees of the Trust or by a vote of
holders of a majority of the Funds' shares, and upon sixty days' written notice
by Salomon.
The Proposed Agreement provides that Salomon shall not be subject to any
liability to the Trust, the Fund or the Advisor, or to any shareholder, officer,
director or Trustee thereof, for any act or omission in the course of, or
connected with, rendering services thereunder, in the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties by Salomon.
The Proposed Agreement also provides that, for the period during which the
Proposed Agreement is in effect, the Trust, on behalf of the Fund, will pay the
Advisor a monthly fee equal to the excess, if any, of the fee otherwise payable
to the Advisor under the Advisory Agreement dated as of February 19, 2004
between the Advisor and the Fund (the "Advisory Agreement") over the total fees
paid by the Fund pursuant to the sub-advisory agreements with respect to the
Fund.
4
II. APPROVAL OF SUB-ADVISORY AGREEMENT WITH SALOMON BROTHERS ASSET MANAGEMENT
INC
TRUSTEES' CONSIDERATIONS
In determining whether to approve the Proposed Agreement, the Trustees met
with the relevant investment advisory personnel of the Advisor and the proposed
portfolio manager from Salomon and considered information provided by the
Advisor and Salomon relating to the education, experience and number of
investment professionals and other personnel providing services under the
Proposed Agreement for purposes of evaluating Salomon's fitness to serve as
investment advisor to the Fund. The Trustees also took into account the time and
attention that would be devoted by senior management of Salomon to the Fund. The
Trustees evaluated the level of skill required to manage the Fund and concluded
that the resources that would be devoted by Salomon to the Fund were appropriate
to fulfill effectively its duties under the Proposed Agreement. The Trustees
also considered the business reputation and financial resources of Salomon and
concluded that it would be able to meet any reasonably foreseeable obligations
under the Proposed Agreement.
The Trustees considered information concerning the investment philosophy
and investment processes proposed to be applied by Salomon in managing the Fund,
including consideration of Salomon's investment philosophy and investment
processes in light of the philosophies and processes of the other sub-advisors
of the Fund. In this connection, the Trustees considered the in-house research
capabilities of Salomon as well as other sources available to Salomon's
personnel, including research services available to Salomon that would result
from securities transactions effected for the Fund and other investment advisory
clients of Salomon. The Trustees concluded that the investment process, research
capabilities and investment philosophy of Salomon were well suited to the Fund,
given its investment objective and policies, as well as the investment processes
and philosophies of the Fund's other sub-advisors.
The Trustees considered the scope of the services to be provided by Salomon
to the Fund under the Proposed Agreement relative to services provided by the
Fund's other sub-advisors and by other third parties to other mutual funds and
services provided by Salomon currently to mutual funds and other clients. The
Trustees considered the services to be provided by the Advisor with respect to
the Fund, including oversight by the Advisor of the advisory services to be
provided by Salomon, and other non-advisory services provided by the Advisor.
5
The Trustees noted that the standard of care applicable to Salomon under the
Proposed Agreement was comparable to that found in most mutual fund investment
advisory agreements. The Trustees concluded that the scope of the services to be
provided to the Fund by Salomon was consistent with the Fund's operational
requirements, including, in addition to its investment objective, compliance
with the Fund's investment restrictions, tax and reporting requirements and
related shareholder services.
The Trustees evaluated the record of Salomon and certain of its affiliates
with respect to regulatory compliance. The Trustees also evaluated the
procedures of Salomon designed to fulfill its fiduciary duties to its advisory
clients with respect to possible conflicts of interest, including the codes of
ethics of Salomon (regulating the personal trading of its officers and
employees), the procedures by which Salomon allocates trades among its various
investment advisory clients, the integrity of the systems in place to ensure
compliance with the foregoing and the record of Salomon in these matters. The
Trustees also received and considered information concerning procedures of
Salomon with respect to the execution of portfolio transactions.
The Trustees considered information relating to the investment performance
of accounts managed by Salomon in a style similar to that Salomon would use with
respect to the Fund and relative to funds managed similarly by other advisors.
The Trustees reviewed performance over various periods, including one-, three-
and five-year periods, and considered information presented by the Advisor with
respect to its expectations regarding the relative performance of Salomon and
the Fund's other sub-advisors under different market conditions and during
different phases of a market cycle, the volatility of such returns, as well as
factors identified by Salomon as contributing to performance. The Trustees
concluded that the scope and quality of the services expected to be provided by
Salomon, as well as the investment performance of comparable investment advisory
clients of Salomon, were sufficient, in light of market conditions, performance
attribution, the resources dedicated by Salomon and its integrity, its personnel
and systems and its financial resources, to merit approval of the Proposed
Agreement.
In reaching that conclusion, the Trustees also gave substantial
consideration to the fees payable under the Proposed Agreement and fees payable
by the Fund to its other sub-advisors. The Trustees not only took into account
the actual dollar amount of fees to be paid by the Fund directly to Salomon, but
also took
6
into account so-called "fallout benefits" to Salomon, such as any incremental
increase to the value of its reputation derived from serving as investment
advisor to the Fund. The Trustees considered information concerning fees paid by
the Fund to its other sub-advisors, Oppenheimer and Janus. The Trustees also
considered fees paid to Salomon, and services provided by Salomon, under other
advisory contracts, concluding that, considering the relative complexity of the
investment management responsibilities under such contracts, the fees to be paid
to Salomon and the services to be provided by Salomon under the Proposed
Agreement bore a reasonable relationship to such fees and services.
The Trustees also considered the effective fees under the Proposed
Agreement as a percentage of assets at different asset levels and possible
economies of scale to Salomon and concluded that the fee levels reflect an
appropriate sharing of these economies of scale. The Trustees also considered
the fact that, under the Proposed Agreement, the fees payable to the Advisor by
the Fund are reduced by the total fees paid by the Fund to Salomon under the
Proposed Agreement and the possible impact of Salomon's fees on the
profitability of the Advisor. The Trustees noted that the structuring of
breakpoints for the Advisor's fees and the fees of Salomon and other
sub-advisors were such that, assuming relatively equal allocation of Fund assets
among all sub-advisors, the Advisor's fee would be reduced by breakpoints at
lower asset levels than those at which the Advisor might benefit from
breakpoints in the fees of Salomon and the other sub-advisors. The Trustees did
not evaluate the expected profitability of Salomon with respect to the Fund both
because of the lack of actual operating history and because the Trustees
concluded that the negotiations between the Advisor and Salomon regarding the
Proposed Agreement had been entirely at arms-length.
In evaluating the Fund's sub-advisory fees, the Trustees also took into
account the complexity of investment management for the Fund relative to other
types of funds. The Trustees concluded that generally greater research intensity
and trading acumen is required for equity funds such as the Fund, as compared to
funds investing in primarily debt obligations.
Based on the foregoing, the Trustees concluded that the fees to be paid
Salomon under the Proposed Agreement were fair and reasonable, given the scope
and quality of the services proposed to be rendered by Salomon. The Trustees
unanimously approved, and recommended that shareholders of the Fund approve, the
Proposed Agreement.
7
SUB-ADVISORY FEES
The Fund would pay the fees to Salomon under the Proposed Agreement
although the amount paid by the Fund to the Advisor is reduced by amounts paid
to Salomon.
Under the Proposed Agreement, Salomon would receive fees on a monthly basis
calculated at an annual rate of 0.40% of the average daily net assets of the
Fund and the Growth Fund series of WM Variable Trust (together, the "Combined
Assets") under management by Salomon on the first $250 million of such assets,
0.35% of the next $250 million of such Combined Assets and 0.30% of such
Combined Assets in excess of $500 million. Had the Proposed Agreement been in
effect for the fiscal year ended December 31, 2004, the Advisor estimates that
Salomon would have received fees equal to 0.40% of the Combined Assets managed
by Salomon, assuming Salomon had managed a portion of the Combined Assets equal
to the portion of the Combined Assets the Advisor expects to initially allocate
to Salomon.
To the extent that the Fund may pay lower fees to another sub-advisor or
Salomon for sub-advisory services provided to the Fund, the Advisor may have a
financial incentive to allocate more assets to that sub-advisor than the Fund's
other sub-advisors.
TRUSTEES' RECOMMENDATION
THE TRUSTEES OF THE TRUST RECOMMEND THAT SHAREHOLDERS OF THE FUND VOTE FOR
APPROVAL OF THE PROPOSED AGREEMENT.
Approval of the Proposed Agreement requires the vote of a majority of the
outstanding voting securities as defined in the 1940 Act. A "majority of the
outstanding voting securities," as defined in the 1940 Act, means the lesser of
(1) 67% of the shares of the Fund represented at the Meeting, if more than 50%
of the shares of the Fund are represented at the Meeting, or (2) more than 50%
of the outstanding shares of the Fund.
III. ADDITIONAL INFORMATION
The Trust is an open-end management investment company organized in 1989 as
a business trust under the laws of The Commonwealth of Massachusetts. The Trust
is a series investment company with seven investment portfolios. The Fund is one
of those portfolios and is diversified.
8
The Principal Executive Officer and Directors of the Advisor and their
principal occupations are listed below. The address for each is 1201 Third
Avenue, Seattle, WA 98101.
<Table>
<Caption>
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NAME PRINCIPAL OCCUPATION
- -----------------------------------------------------------------------------
William G. Papesh Director and President of the
Advisor; WM Funds Distributor,
Inc. and WM Shareholder Services,
Inc.
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Michael L. Amato Director of the Advisor, WM Funds
Distributor, Inc. and WM
Shareholder Services, Inc. and
Senior Vice President of
Washington Mutual Bank,
Washington Mutual Bank, FA and
Washington Mutual Bank fsb.
- -----------------------------------------------------------------------------
Mike E. Brandeberry Director of the Advisor and
Senior Vice President of
Washington Mutual Bank,
Washington Mutual Bank, FA and
Washington Mutual Bank fsb.
- -----------------------------------------------------------------------------
Melissa R. Martinez Director of the Advisor, WM Funds
Distributor, Inc. and WM
Shareholder Services, Inc. and
Senior Vice President of
Washington Mutual Bank.
- -----------------------------------------------------------------------------
Scott Pelkola Director of the Advisor, WM Funds
Distributor, Inc. and WM
Shareholder Services, Inc. and
Senior Vice President of
Washington Mutual Bank,
Washington Mutual Bank, FA and
Washington Mutual Bank fsb.
- -----------------------------------------------------------------------------
Gary J. Pokrzywinski Director and Senior Vice
President of the Advisor;
Director of WM Funds Distributor,
Inc. and WM Shareholder Services,
Inc.
- -----------------------------------------------------------------------------
Debra C. Ramsey Director and Senior Vice
President of the Advisor, WM
Funds Distributor, Inc. and WM
Shareholder Services, Inc.
- -----------------------------------------------------------------------------
</Table>
9
By virtue of their positions with the Advisor and its affiliates, each of
the foregoing may have an interest in shareholder approval of the sub-advisory
agreement.
INFORMATION ABOUT THE ADVISOR
The Advisor is registered under the Advisers Act and has been in the
investment management business since 1944. The Advisor is a subsidiary of
Washington Mutual, Inc. The principal address of Washington Mutual, Inc. is 1201
Third Avenue, Seattle, Washington 98101.
ADVISORY AGREEMENT
The Advisor currently acts as the Fund's investment advisor pursuant to the
Advisory Agreement, which was last approved by the Fund's shareholders on
December 23, 1997. The Advisory Agreement was submitted for shareholder approval
at such time in connection with the consolidation of the investment advisory
businesses of the Advisor and Sierra Investment Advisors Corporation, the
Trust's previous investment advisor.
The Advisor's responsibilities under the Advisory Agreement include
formulating the Fund's investment policies (subject to the terms of the
prospectus), analyzing economic trends, directing and evaluating the investment
services provided by any sub-advisors and monitoring the Fund's investment
performance and reporting to the Trustees, as well as providing certain
administrative services for the Fund. In connection with its service as
investment advisor to the Fund, the Advisor may engage one or more sub-advisors
to provide investment advisory services to the Fund and may change or eliminate
any such sub-advisor if it deems such action to be in the best interests of the
Fund and its shareholders. Where the Advisor has not delegated such duties to a
sub-advisor, it is responsible for managing the investment and reinvestment of
the Fund's assets.
The Advisory Agreement provides that it will, unless sooner terminated in
accordance with the Advisory Agreement, continue in effect with respect to the
Fund for a period of two years from its effective date and thereafter on an
annual basis with respect to the Fund, provided such continuance is approved at
least annually by the vote of a majority of the Independent Trustees and either:
(a) by the vote of a majority of the Trustees, or (b) by the vote of a majority
of the outstanding voting securities of the Fund. The Advisory Agreement
provides that it terminates automatically in the event of its assignment (as
defined by the 1940
10
Act) by the Advisor. The Advisory Agreement provides that it may be amended only
in accordance with the 1940 Act.
The Advisory Agreement may be terminated at any time without the payment of
any penalty, by the Trust by vote of a majority of the Trustees, including a
majority of the Independent Trustees, or by a vote of a majority of the
outstanding voting securities of the Fund upon 60 days' written notice to the
Advisor or by the Advisor at any time, without the payment of any penalty, upon
60 days' written notice to the Trust.
The Advisory Agreement provides that the Advisor shall not be subject to
any liability arising out of any services rendered by it under the Advisory
Agreement, except by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties under the Advisory Agreement.
The Advisory Agreement provides that the Advisor shall pay the expenses
incurred by it in connection with its activities under the Advisory Agreement.
Under the Advisory Agreement, the Fund pays the Advisor a monthly advisory
fee based on the excess, if any, of (i) 0.80% of the first $500 million, 0.75%
of the next $1.5 billion, 0.70% of the next $1 billion and 0.65% thereafter, of
the Fund's average daily net assets over the Fund's average daily net assets
over (ii) the fees paid by the Fund directly to its sub-advisor or sub-advisors.
FEES PAID
For the fiscal year ended December 31, 2004, the Fund paid advisory fees to
the Advisor and distribution fees to the WM Funds Distributor, Inc. (the
"Distributor") as follows: advisory fees: $1,152,229; distribution fees: $3,367.
If the fees in the Proposed Agreement had been in effect during such fiscal
year, and assuming Salomon had managed Columbia's allocation of the Fund's
assets, the net advisory fees paid to the Advisor would have been $1,166,693,
representing an increase of 1.3% from the net advisory fees actually paid to
Advisor.
INFORMATION ABOUT SALOMON
Salomon, located at 399 Park Avenue, New York, New York 10022, is an
indirect, wholly-owned subsidiary of Citigroup, Inc. ("Citigroup"). Salomon was
11
established in 1987 and together with its affiliates in London, Tokyo and Hong
Kong, provides a broad range of fixed income and equity investment services to
individuals and institutional clients throughout the world. Citigroup businesses
provide a broad range of financial services -- asset management, banking and
consumer finance, credit and charge cards, insurance, investments, investment
banking and securities trading -- and use diverse channels to make them
available to consumer and corporate customers around the world. As of September
30, 2004, Salomon had approximately $78.3 billion in assets under management.
Salomon has informed the Advisor that it has no financial condition that is
reasonably likely to impair its financial ability to fulfill its commitment to
the Fund under the Proposed Agreement.
12
The Principal Executive Officers and Directors of Salomon and their
principal occupations are listed below. The address for each is 399 Park Avenue,
New York, New York 10022.
<Table>
<Caption>
- -----------------------------------------------------------------------------
NAME PRINCIPAL OCCUPATION
- -----------------------------------------------------------------------------
Michael Even Managing Director, Salomon;
Global Chief Investment Officer,
Citigroup Asset Management; Chief
Investment Officer, Citigroup
Private Bank
- -----------------------------------------------------------------------------
Robert Feitler Senior Portfolio Manager and
Director, Salomon
- -----------------------------------------------------------------------------
Michael A. Kagan Senior Portfolio Manager and
Managing Director, Salomon; Vice
President, Salomon Brothers Inc.;
Managing Director, Citigroup
Global Markets Inc.
- -----------------------------------------------------------------------------
Kevin Kennedy Senior Portfolio Manager and
Managing Director, Salomon
- -----------------------------------------------------------------------------
Ross S. Margolies Senior Portfolio Manager and
Managing Director, Salomon
- -----------------------------------------------------------------------------
Mark J. McAllister Senior Portfolio Manager and
Managing Director, Salomon
- -----------------------------------------------------------------------------
Evan Merberg Managing Director, Salomon;
Managing Director, Citigroup
Global Markets Inc.; Chief
Administrative Officer, Citigroup
Asset Management
- -----------------------------------------------------------------------------
Michael Fred Rosenbaum Chief Legal Officer of Salomon;
General Counsel, Citigroup Asset
Management; Managing Director,
Citigroup Global Markets Inc.
- -----------------------------------------------------------------------------
Jeffrey Scott Chief Compliance Officer and
Director, Salomon; Chief
Compliance Officer, Travelers
Asset Management International
Company, LLC
- -----------------------------------------------------------------------------
</Table>
13
<Table>
<Caption>
- -----------------------------------------------------------------------------
NAME PRINCIPAL OCCUPATION
- -----------------------------------------------------------------------------
David A. Torchia Senior Portfolio Manager and
Managing Director, Salomon;
Managing Director, Citigroup
Global Markets Inc.; Managing
Director, Travelers Asset
Management International Company,
LLC
- -----------------------------------------------------------------------------
Peter J. Wilby Chief Investment Officer, North
American Fixed Income and
Managing Director, Salomon;
Managing Director, Citigroup
Global Markets Inc.; Managing
Director, Smith Barney Fund
Management LLC, Managing
Director, Travelers Asset
Management International Company,
LLC; Managing Director, Travelers
Investment Advisors, Inc.
- -----------------------------------------------------------------------------
</Table>
If the Proposed Agreement is approved by shareholders, Alan Blake, Managing
Director and Senior Portfolio Manager of Salomon, will be primarily responsible
for the day-to-day management of the portion of the Fund's portfolio managed by
Salomon. Mr. Blake has more than 24 years of securities business experience.
OTHER FUNDS ADVISED OR SUB-ADVISED BY SALOMON
Please see below information on similar funds sub-advised/advised by
Salomon or any of its affiliates.
Salomon serves as a sub-advisor for SunAmerica. Salomon manages a portion
of their Focused Large Cap Growth Portfolio. It is important to note that only
one-third of this portfolio is managed by Salomon and that the manager only
chooses for this fund his top ten picks. Salomon receives fees at the annual
rate of 0.40% of the average daily net assets of the SunAmerica Large Cap Growth
Portfolio. As of October 31, 2004, the approximate net assets of the SunAmerica
Large Cap Growth Portfolio were $22.7 million.
Salomon Brothers Variable Large Cap Growth Fund is managed by the same team
that would manage the Fund and is managed in a substantially similar
14
manner. There may be differences in holdings and other portfolio characteristics
between the Salomon Brothers Variable Large Cap Growth Fund and the Fund.
Salomon receives fees at the annual rates of 0.70% of the average daily net
assets of the Salomon Brothers Variable Large Cap Growth Fund. As of October 31,
2004, the approximate net assets of the Salomon Brothers Variable Large Cap
Growth Fund were $13.4 billion.
Smith Barney Large Capitalization Growth Fund is managed by the same team
that would manage the Fund and is managed in a substantially similar manner.
There may be differences in holdings and other portfolio characteristics between
the Smith Barney Large Capitalization Growth Fund and the Fund. Salomon receives
fees at the annual rates of 0.750% of the first $5 billion of the Smith Barney
Large Capitalization Growth Fund's average daily net assets, 0.725% of the next
$2.5 billion in assets, 0.700% of the next $2.5 billion and 0.650% of assets in
excess of $10 billion. As of October 31, 2004, the approximate net assets of the
Smith Barney Large Capitalization Growth Fund were $4.7 billion.
Smith Barney Fund Management LLC., manages the Smith Barney Large
Capitalization Growth Fund and is an affiliate of Salomon Brothers Asset
Management Inc.
PORTFOLIO TRANSACTIONS AND BROKERAGE
BROKERAGE AND RESEARCH SERVICES
Most of the purchases and sales of securities for the Fund, whether
transacted on a securities exchange or over-the-counter, will be effected in the
primary trading market for the securities. Decisions to buy and sell securities
for the Fund will be made by the Advisor, or by Salomon, each of which also is
responsible for placing these transactions, subject to the overall review of the
Trustees. Although investment decisions for the Fund will be made independently
from those of the other accounts managed by the Advisor or Salomon, investments
of the type the Fund may make may also be made by those other accounts. When the
Fund and one or more other accounts managed by the Advisor or Salomon are
prepared to invest in, or desire to dispose of, the same security, available
investments or opportunities for sales will be allocated in a manner believed by
the Advisor or Salomon to be equitable to each. In some cases, this procedure
may adversely affect the price paid or received by the Fund or the size of the
position obtained or disposed of by the Fund. In other cases,
15
however, it is believed that coordination and the ability to participate in
volume transactions will be to the benefit of the Fund.
There is frequently no stated commission in the case of securities traded
in the over-the-counter markets, but the prices of those securities include
undisclosed commissions or concessions, and the prices at which securities are
purchased from and sold to dealers include a dealer's mark-up or mark-down.
In selecting brokers or dealers to execute portfolio transactions on behalf
of the Fund, the Advisor or Salomon seeks to obtain execution of Fund
transactions at prices that are advantageous to the Fund and at commission rates
that are reasonable in relation to the benefits received. However, the Advisory
Agreement authorizes the Advisor, and the Proposed Agreement authorizes Salomon,
to select brokers or dealers on the basis that they provide brokerage, research,
or other services or products (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934, as amended) to the Fund and/or other
accounts serviced by Salomon or the Advisor. The Advisor or Salomon may cause
the Fund to pay a broker or dealer an amount of commission for effecting a
securities transaction in excess of the amount of commission or dealer spread
another broker or dealer would have charged for effecting that transaction if
the Advisor or Salomon determines in good faith that such amount of commission
was reasonable in relation to the value of the brokerage and research products
and/or services provided by such broker or dealer. This determination, with
respect to brokerage and research services or products, may be viewed in terms
of either that particular transaction or the overall responsibilities which the
Advisor, Salomon and their affiliates have with respect to the Fund and to
accounts over which they exercise investment discretion.
Consistent with applicable provisions of the 1940 Act, the rules and
exemptions adopted by the Securities and Exchange Commission (the "SEC")
thereunder, and relevant interpretive and "no-action" positions taken by the
SEC's staff, the Trustees have adopted procedures pursuant to Rule 17e-1 under
the 1940 Act to ensure that all portfolio transactions with affiliates will be
fair and reasonable. Under the procedures adopted, portfolio transactions for
the Fund may be executed through any affiliated broker (other than affiliated
persons of the Trust solely because the broker is an affiliated person of
another sub-advisor, who are generally not treated as affiliated brokers) if,
subject to other conditions in the Rule 17e-1 procedures, in the judgment of the
Advisor or the applicable sub-advisor, the use of an affiliated broker is likely
to result in price
16
and execution at least as favorable as those of other qualified broker-dealers,
and if, in the transaction an affiliated broker charges the Fund a rate
consistent with those charged for comparable transactions in comparable accounts
of the broker's most favored unaffiliated clients. Over-the-counter purchases
and sales are transacted directly with principal market makers except in those
cases in which better prices and executions may be obtained elsewhere.
BROKERAGE TRANSACTIONS WITH AFFILIATES
During the fiscal year ended December 31, 2003, the Fund did not pay any
brokerage commissions to any broker then affiliated with the Advisor or any sub-
advisor to the Fund.
CURRENT SUB-ADVISORY AGREEMENTS
Janus and Oppenheimer currently act as sub-advisors to the Fund pursuant to
advisory agreements among the Advisor, the relevant sub-advisor and the Fund.
The current advisory agreements with respect to Janus and Oppenheimer were
submitted for shareholder approval on February 1, 2002. The Trustees last
approved the Janus advisory agreements at a meeting held on November 9, 2004 and
the Oppenheimer advisory agreements at a meeting held on May 13, 2004. The
aggregate fee paid to Janus was $162,017 and the aggregate fee paid to
Oppenheimer was $350,946, each for the fiscal year ended December 31, 2003.
OWNERSHIP OF SHARES AND VOTING INFORMATION
As of the Record Date, to the knowledge of the Trust, the Trustees and
officers of the Trust, as a group, owned less than one percent of each class of
shares of the Fund and of the Fund as a whole. The following table shows each
Trustee's aggregate range of shares owned in the WM Group of Funds.
17
EQUITY SECURITIES OWNERSHIP TABLE
(DOLLAR RANGES)
(AS OF DECEMBER 6, 2004)
<Table>
<Caption>
AGGREGATE DOLLAR
RANGE OF SHARES
OWNED IN THE
WM GROUP OF FUNDS
- ------------------------------------------------------------------------
INDEPENDENT TRUSTEES*
Wayne L. Attwood, M.D. B
Kristianne Blake E
Edmond R. Davis, Esq. D
Carrol R. McGinnis E
Alfred E. Osborne, Jr. Ph.D. B
Daniel L. Pavelich E
Jay Rockey E
Richard C. Yancey E
- ------------------------------------------------------------------------
INTERESTED TRUSTEES*
Anne V. Farrell E
Michael K. Murphy C
William G. Papesh E
</Table>
- ---------------
* For purposes of this table, the term "Independent Trustee" means those
Trustees who are not "interested persons" as defined by the 1940 Act.
A = $1 to $10,000
B = $10,001 to $50,000
C = $50,001 to $100,000
D = $100,001 to $250,000
E = over $250,000
18
As of the Record Date, except as noted below, no persons owned of record or
beneficially 5% or more of the noted class of shares of the Fund:
<Table>
<Caption>
SHARES PERCENTAGE OF
BENEFICIALLY SHARES
OWNED OWNED
------------ -------------
CLASS 1
American General Life Insurance Co........... 3,608,433 19%
P.O. Box 1591
Houston, TX 77251-1591
WM VT Balanced Portfolio..................... 6,395,468 34%
1201 Third Avenue
Seattle, WA 98101
WM VT Conservative Growth Portfolio.......... 5,078,192 27%
1201 Third Avenue
Seattle, WA 98101
WM VT Strategic Growth Portfolio............. 2,324,178 12%
1201 Third Avenue
Seattle, WA 98101
CLASS 2
Anchor National Life Insurance Co............ 107,681 94%
P.O. Box 54299
Los Angeles, CA 90054-0299
</Table>
CERTAIN TRUSTEES AND OFFICERS OF THE TRUST
The following persons are both officers or Trustees of the Trust and
officers or directors of the Advisor: William G. Papesh, Director and President
of the Advisor, is the President and Chief Executive Officer of the Trust; Gary
J. Pokrzywinski, Director and Senior Vice President of the Advisor, is Senior
Vice President of the Trust; Debra C. Ramsey, Director and Senior Vice President
of the Advisor, is Senior Vice President of the Trust; Randall L. Yoakum, Senior
Vice President of the Advisor, is Senior Vice President of the Trust; Jeffrey L.
Lunzer, First Vice President of the Advisor, is First Vice President, Chief
Financial Officer and Treasurer of the Trust; John T. West, First Vice President
of the Advisor, is First Vice President, Chief Compliance Officer, Secretary and
Anti-Money Laundering Compliance Officer of the Trust; and Wendi B.
19
Bernard, Assistant Vice President of the Advisor, is Assistant Vice President
and Assistant Secretary of the Trust.
No persons act as both officers or Trustees of the Trust and officers or
directors of Salomon.
TRANSFER AGENT, ADMINISTRATOR AND PRINCIPAL UNDERWRITER
The Fund's transfer agent and administrator is WM Shareholder Services,
Inc., which has a principal business address of 1201 Third Avenue, Seattle,
Washington 98101. The Fund's principal underwriter is WM Funds Distributor,
Inc., which has a principal business address of 12009 Fountain Place, Suite 350,
Gold River, California 95670.
OTHER MATTERS
In the event that a quorum is not present for purposes of acting on the
Proposal or if sufficient votes in favor of the Proposal are not received by the
time of the Meeting, the persons named as proxies may propose one or more
adjournments of the Meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of a plurality of the shares
present in person or represented 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 which 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 and will not vote any proxies that direct them to abstain
from voting on the Proposal.
Although the Meeting is called to transact any other business that may
properly come before it, the only business that management intends to present or
knows that others will present is contained in the Proposal, as mentioned in the
Notice of Special Meeting. However, you are being asked on the enclosed proxy to
authorize the persons named therein to vote in accordance with their judgment
with respect to any additional matters which properly come before the Meeting,
and on all matters incidental to the conduct of the Meeting.
SHAREHOLDER PROPOSALS AT FUTURE MEETINGS
The Trust does not hold annual or other regular meetings of shareholders.
Shareholder proposals to be presented at any future meeting of shareholders of
20
the Trust must be received by the Trust at a reasonable time before the Trust's
solicitation of proxies for that meeting in order for such proposals to be
considered for inclusion in the proxy materials relating to that meeting.
January 10, 2005
VOTE TODAY BY MAIL
21
APPENDIX A
INVESTMENT SUB-ADVISORY AGREEMENT
THE GROWTH FUND OF WM ADVISORS, INC.
EFFECTIVE AS OF [MONTH] [DAY], [YEAR]
This Agreement is made and entered into as of this [day] day of [month],
[year], among WM Advisors, Inc. ("WM Advisors"), a corporation organized under
the laws of the state of Washington, WM Variable Trust, a business trust formed
under the laws of the Commonwealth of Massachusetts (the "Trust"), on behalf of
its Growth Fund series (the "Fund"), and Salomon Brothers Asset Management Inc,
(the "Sub-Advisor"), a corporation organized under the laws of the state of
Delaware.
Whereas, the Trust is engaged in business as an open-end, management
investment company and is so registered under the Investment Company Act of
1940, as amended (the "1940 Act");
Whereas, the Trust offers a number of investment portfolios, each with its
own investment objective and strategies, and of which one investment portfolio
is the Fund;
Whereas, WM Advisors is engaged in the business of rendering investment
advisory and management services, is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and is the
investment advisor of the Fund;
Whereas, the Sub-Advisor is engaged in the business of rendering investment
advisory and management services and is registered as an investment adviser
under the Advisers Act; and
Whereas, WM Advisors desires to retain the Sub-Advisor to furnish
investment advisory and management services to the Fund and the Sub-Advisor is
willing to furnish such services;
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
it is hereby agreed by and between the parties hereto as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
WM Advisors desires to employ such portion of the capital of the Fund as
may from time to time be determined by WM Advisors by investing and reinvesting
in investments of the kind and in accordance with the limitations specified in
the Trust's Master Trust Agreement, as amended, and in the Prospectus and
Statement of Additional Information relating to the Fund as in effect and which
may be amended from time to time, and in such manner and to such extent as may
from time to time be approved by the Board of Trustees of the Trust. Copies of
the Fund's Prospectus and Statement of Additional Information and the Trust's
Master Trust Agreement, as amended, have been or will be submitted to the
Sub-Advisor. WM Advisors agrees to provide copies of all amendments or
supplements to the Fund's Prospectus and Statement of Additional Information and
the Trust's Master Trust Agreement to the Sub-Advisor during the continuance of
this Agreement before or at the time such amendments or supplements become
effective. Until WM Advisors delivers any such amendment or supplement to the
Sub-Advisor, the Sub-Advisor shall be fully protected in relying on the
Prospectus and Statement of Additional information and any supplements thereto
previously furnished to the Sub-Advisor.
WM Advisors agrees to furnish the Sub-Advisor with minutes of meetings of
the Board of Trustees of the Trust to the extent they may affect the duties of
the Sub-Advisor, a certified copy of any financial statements or reports
prepared for the Fund by certified or independent public accountants, and with
copies of any financial statements or reports made by the Fund to its
shareholders or to any governmental body or securities exchange, and any further
materials or information which the Sub-Advisor may reasonably request to enable
it to perform its functions under this Agreement. WM Advisors desires to employ
and hereby appoints the Sub-Advisor to act as investment sub-advisor to the
Fund. The Sub-Advisor accepts the appointment and agrees to furnish the services
described herein for the compensation set forth below.
2
2. SERVICES AS INVESTMENT SUB-ADVISOR
Subject to the supervision of the Board of Trustees of the Trust and of WM
Advisors, the Fund's investment adviser, the Sub-Advisor will, with respect to
the portion of the Fund allocated to the Sub-Advisor by WM Advisors, (a)
maintain compliance procedures that the Sub-Advisor believes are adequate to
ensure its compliance with the applicable provisions of the 1940 Act, and the
Advisers Act, as the same may from time to time be amended; (b) comply with the
applicable provisions of the Trust's Master Trust Agreement; (c) make investment
decisions in accordance with the Fund's investment objectives and policies as
stated in the Fund's Prospectus and Statement of Additional Information as in
effect and, after notice to the Sub-Advisor, and which may be amended from time
to time; (d) place purchase and sale orders on behalf of the Fund to effectuate
the investment decisions made; (e) maintain books and records with respect to
the securities transactions of the Fund in accordance with the 1940 Act and the
Advisers Act and the rules adopted thereunder and will furnish to the Trust's
Board of Trustees or WM Advisors such quarterly, annual and special reports as
the Board or WM Advisors may reasonably request; and (f) treat confidentially
and as proprietary information of the Trust, all records and other information
relative to the Trust and prior, present or potential shareholders; and will not
knowingly use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Trust, which approval shall not
be unreasonably withheld and such records may not be withheld where the
Sub-Advisor may be exposed to civil or criminal contempt proceedings for failure
to comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Trust. In providing those services, the
Sub-Advisor will supervise the Fund's investments and conduct a continuous
program of investment, evaluation and, if appropriate, sale and reinvestment of
the Fund's assets. The Sub-Advisor has responsibility for providing investment
services and advice only with respect to such discrete portion of the Fund as
may from time to time be allocated to the Sub-Advisor by WM Advisors. Subject to
the supervision of WM Advisors and in accordance with the investment objectives
and policies as stated in the Fund's Prospectus and Statement of Additional
Information, the Sub-Advisor is authorized, in its discretion and without prior
consultation with WM Advisors, to buy, sell, lend and otherwise trade in any
stocks, bonds, and other securities and investment instruments on behalf of the
Fund, without regard to the length of time the securities have been held and the
3
resulting rate of portfolio turnover or any tax considerations, and so long as
consistent with the foregoing, the majority or the whole of the Fund may be
invested in such proportions of stocks, bonds, other securities or investment
instruments, or cash as the Sub-Advisor shall determine. In addition, the
Sub-Advisor will furnish the Fund or WM Advisors with whatever statistical
information the Fund or WM Advisors may reasonably request with respect to the
investments that the Fund may hold or contemplate purchasing. The Sub-Advisor
will not consult with any other sub-advisors of any other funds within the Trust
(or any sub-advisors with respect to any other portion of the Fund) concerning
the transactions in securities or other assets of the Fund or any other funds of
the Trust other than for purposes of complying with the conditions of paragraphs
(a) and (b) of Rule 12d3-1 under the 1940 Act.
3. BROKERAGE
Subject to (i) the over-riding objective of obtaining the best possible
execution of orders; and (ii) review and approval of WM Advisors and/or the
Board of Trustees of the Trust, which may be conducted as often as quarterly,
the Sub-Advisor shall place all orders for the purchase and sale of securities
for the Fund with brokers or dealers selected by the Sub-Advisor, which may
include brokers or dealers affiliated with the Sub-Advisor. All transactions
with any affiliated person of the Trust, or where any such affiliated person
acts as broker or agent in connection with any such transaction, shall be
accomplished in compliance with the 1940 Act, the Advisers Act, the Securities
Exchange Act of 1934, as amended, the rules adopted thereunder and the
procedures adopted thereunder by the Trust. Purchase or sell orders for the Fund
may be aggregated with contemporaneous purchase or sell orders of other clients
of the Sub-Advisor; provided that (i) no advisory account will be favored by the
Sub-Advisor over any other account; (ii) each client of the Sub-Advisor who
participates in such an aggregated order will participate at the average share
price, with all transaction costs shared on a pro rata basis; (iii) only
advisory clients' transactions will be aggregated for such an aggregated order;
and (iv) the accounts of clients whose orders are aggregated will be segregated
on the Sub-Advisor's books and records so as to identify the particular client
who has the beneficial interest therein. The Sub-Advisor shall use its best
efforts to obtain execution of Fund transactions at prices which are
advantageous to the Fund and at commission rates that are reasonable in relation
to the benefits received. However, the Sub-Advisor may select brokers or dealers
on the basis that they provide
4
brokerage, research, or other services or products to the Fund and/or other
accounts serviced by the Sub-Advisor. The Sub-Advisor may pay a broker or dealer
an amount of commission for effecting a securities transaction in excess of the
amount of commission or dealer spread another broker or dealer would have
charged for effecting that transaction if the Sub-Advisor determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research products and/or services provided by such broker or
dealer. This determination, with respect to brokerage and research services or
products, may be viewed in terms of either that particular transaction or the
overall responsibilities which the Sub-Advisor and its affiliates have with
respect to the Fund and to accounts over which they exercise investment
discretion, and not all such services or products may be used by the Sub-Advisor
in managing the Fund; provided that with respect to such transaction and such
determination the affiliates of the Sub-Advisor shall have the same
responsibilities to the Fund as the Sub-Advisor has under this Agreement.
4. INFORMATION PROVIDED TO WM ADVISORS AND THE TRUST
The Sub-Advisor will keep the Trust and WM Advisors informed of
developments materially affecting the Fund of which the Sub-Advisor becomes
aware and will, on its own initiative, furnish the Trust and WM Advisors on at
least a quarterly basis with whatever information the Sub-Advisor believes is
appropriate for this purpose.
5. STANDARD OF CARE
The Sub-Advisor shall exercise its best judgment in rendering the services
described in paragraphs 2 and 3 above. Except as may otherwise be provided by
federal securities laws, the Sub-Advisor shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in connection
with the matters to which this Agreement relates, except a 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 (the conduct excepted in this sentence shall be
referred to as "Disqualifying Conduct").
5
6. COMPENSATION
In consideration of the services rendered pursuant to this Agreement, the
Trust, on behalf of the Fund, will pay the Sub-Advisor on the first business day
of each month a fee for the previous month according to the schedule of fees
detailed in Annex A attached to this Agreement. Upon any termination of this
Agreement before the end of a month, the fee for such part of that month shall
be prorated according to the proportion that such period bears to the full
monthly period and shall be payable upon the date of termination of this
Agreement. For the purpose of determining fees payable to the Sub-Advisor, the
value of the Fund's net assets under management by the Sub-Advisor shall be
computed at the times and in the manner specified in the Fund's Prospectus or
Statement of Additional Information relating to the Fund as from time to time in
effect.
7. EXPENSES
The Sub-Advisor will bear all of its expenses in performing its services
under this Agreement, which expenses shall not include brokerage fees or
commissions in connection with the effectuation of securities transactions. The
Sub-Advisor shall not be required to bear any expenses of the Trust, the Fund or
WM Advisors. The Trust will bear certain other expenses to be incurred in its
operation, including but not limited to: organizational expenses, taxes,
interest, brokerage fees and commissions, if any; fees of trustees of the Trust
who are not officers, directors or employees of the Sub-Advisor, WM Advisors, or
any of their affiliates; Securities and Exchange Commission fees and state Blue
Sky qualification fees; all fees, including out-of-pocket expenses of
custodians, transfer and dividend disbursing agents and transaction charges of
custodians; insurance premiums; outside auditing and legal expenses; costs of
maintenance of the Trust's existence; costs attributable to investor services,
including without limitation, telephone and personnel expenses; costs of
preparing and printing prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders; costs of
shareholders' reports and meetings of the shareholders of the Fund and of the
officers or Board of Trustees of the Trust; and any extraordinary expenses. In
addition, the Fund pays a distribution fee pursuant to the terms of a
Distribution Plan adopted under Rule 12b-1 of the 1940 Act. Any reimbursement of
advisory fees required by any expense limitation provision shall be the sole
responsibility of WM Advisors.
6
8. SERVICES TO OTHER COMPANIES OR ACCOUNTS
WM Advisors understands that the Sub-Advisor now acts, will continue to act
and may act in the future as investment adviser to fiduciary and other managed
accounts and as investment adviser to one or more other investment companies or
series of investment companies, and WM Advisors has no objection to the
Sub-Advisor so acting, provided that whenever the Fund and one or more other
accounts or investment companies advised by the Sub-Advisor have available funds
for investment, investments suitable and appropriate for each will be allocated
in accordance with procedures reasonably believed to be equitable to each
entity. Similarly, opportunities to sell securities will be allocated in an
equitable manner. WM Advisors recognizes that in some cases this procedure may
limit the size of the position that may be acquired or disposed of for the Fund.
In addition, WM Advisors understands that the persons employed by the
Sub-Advisor to assist in the performance of the Sub-Advisor's duties hereunder
will not devote their full time to such service and nothing contained herein
shall be deemed to limit or restrict the right of the Sub-Advisor or any
affiliate of the Sub-Advisor to engage in and devote time and attention to other
business or to render services of whatever kind or nature. WM Advisors
recognizes and agrees that the Sub-Advisor may provide advice to other clients
which may differ from or be identical to advice given with respect to the Fund.
9. TERM OF AGREEMENT
Except as otherwise provided below, this Agreement shall become effective
as of the date first written above, shall continue for a period of two years
thereafter, and shall continue in effect for a period of more than two years
thereafter only so long as such continuance is specifically approved at least
annually by (a) the Board of Trustees of the Trust or (b) a vote of a "majority"
(as defined in the 1940 Act) of the Fund's outstanding voting securities,
provided that in either event the continuance is also approved by a majority of
the Board of Trustees who are not "interested persons" (as defined in the 1940
Act) of any party to this Agreement, by vote cast in person at a meeting called
for the purpose of voting on such approval. This Agreement is terminable,
without penalty, on 30 days' written notice, by WM Advisors, the Board of
Trustees for the Trust or by vote of holders of a majority of the Fund's shares,
or upon 60 days' written notice by the Sub-Advisor and will terminate
automatically upon any termination of the advisory agreement between the Trust
and WM Advisors. In addition, this Agreement will also terminate automatically
in the event of its
7
assignment (as defined in the 1940 Act). The Sub-Advisor agrees to notify the
Trust of any circumstances that, to its best knowledge and belief, might result
in this Agreement being deemed to be assigned.
10. REPRESENTATIONS OF THE TRUST, WM ADVISORS AND THE SUB-ADVISOR
The Trust represents that (a) a copy of the Trust's Master Trust Agreement,
dated February 22, 1989, together with all amendments thereto, is on file in the
office of the Secretary of the Commonwealth of Massachusetts, and (b) it has
acted and will continue to act in conformity with the 1940 Act and other
applicable laws.
WM Advisors represents that (a) the appointment of the Sub-Advisor has been
duly authorized; (b) it has acted and will continue to act in conformity with
the 1940 Act and other applicable laws, and (c) it is authorized to perform the
services herein.
The Sub-Advisor represents that (a) it is authorized to perform the
services described herein, and (b) it has acted and will continue to act in
conformity with the 1940 Act and other applicable laws.
11. INDEMNIFICATION
WM Advisors shall indemnify and hold harmless the Sub-Advisor from and
against any and all claims, losses, liabilities or damages (including reasonable
attorneys' fees and other related expenses), howsoever arising from or in
connection with this Agreement or the performance by the Sub-Advisor of its
duties hereunder; provided, however, that nothing contained herein shall require
that the Sub-Advisor be indemnified for Disqualifying Conduct.
Sub-Advisor shall indemnify and hold harmless WM Advisors and the Fund from
and against any and all claims, losses, liabilities or damages (including
reasonable attorneys' fees and other related expenses), howsoever arising from
or in connection with this Agreement attributable to Disqualifying Conduct.
12. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought.
8
13. USE OF NAMES
The parties agree and acknowledge that the Sub-Advisor is the sole owner of
the name and mark "Salomon Brothers Asset Management Inc" and that all use of
any designation comprised in whole or part of Salomon Brothers Asset Management
Inc and use of any logos, trademarks, service marks or trade names (a
"Sub-Advisor Mark") under this Agreement shall inure to the benefit of the
Sub-Advisor. The use by the Trust on its own behalf or on behalf of the Fund of
any Sub-Advisor Mark in any advertisement or sales literature or other materials
promoting the Fund shall be with the written consent of the Sub-Advisor. The
Trust and WM Advisors shall not, without the consent of the Sub-Advisor, make
representations regarding the Sub-Advisor intended to be disseminated to the
investing public in any disclosure document, advertisement or sales literature
or other materials promoting the Fund. Such consent shall not be required for
any documents or other materials intended for use by the Trust's trustees and
for internal use by the Trust and WM Advisors or its affiliates. WM Advisors
agrees that it will review with the Sub-Advisor any advertisement, sales
literature, or notice (collectively, "Sales Material") prepared by WM Advisors
or any affiliate prior to its use that makes reference to the Sub-Advisor or its
affiliates or any such name(s), derivatives, logos, trademarks, service marks or
trade names, it being understood that the Sub-Advisor shall have no
responsibility to ensure the adequacy of the form or content of such materials
for purposes of the 1940 Act or other applicable laws and regulations.
Notwithstanding the foregoing, Sub-Advisor shall be responsible for ensuring the
adequacy and accuracy of information about Sub-Advisor provided to WM Advisors
or its affiliates for use in Sales Material prepared by WM Advisors or its
affiliates. Consent by the Sub-Advisor to such use of any Sub-Advisor Mark and
any such representation shall not be unreasonably withheld and shall be deemed
to be given if no written objection is received by the Trust, the Fund or WM
Advisors within 5 business days after the request is made by the Trust, the Fund
or WM Advisors for such use of any Sub-Advisor Mark or any such representation.
Upon termination of this Agreement for any reason, the Trust and WM Advisors
shall cease all use of any Sub-Advisor Mark(s) as soon as reasonably
practicable. If WM Advisors or the Fund makes an unauthorized use of the
Sub-Advisor's names, derivatives, logos, trademarks, service marks or trade
names, the parties acknowledge that the Sub-Advisor shall suffer irreparable
hardship for which monetary damages are inadequate and thus, the Sub-Advisor
will be entitled to injunctive relief.
9
The Sub-Advisor agrees and acknowledges that (i) the Trust is the sole
owner of the corporate name, associated good will and other rights in various
jurisdictions of the name "WM Variable Trust" and (ii) WM Advisors is the sole
owner of the name, associated good will and other rights in various
jurisdictions of the name "WM Advisors, Inc." and that any and all use of any
designation comprised in whole or in part of "WM Variable Trust" or "WM
Advisors, Inc." (each a "WM Mark") under this Agreement shall inure to the
benefit of the Trust or WM Advisors, respectively. The use by the Sub-Advisor on
its own behalf of any WM Mark in any advertisement or sales literature or other
materials promoting the Sub-Advisor shall be with the written consent of the
Trust or WM Advisors, respectively. The Sub-Advisor shall not, without the
consent of the Trust or WM Advisors, as applicable, make representations
regarding the Trust, the Fund or WM Advisors in any disclosure document,
advertisement or sales literature or other materials promoting the Sub-Advisor.
Sub-Advisor agrees it will review with the Trust or WM Advisors, as applicable,
any advertisement, sales literature, or other material prior to its use that
makes reference to the Trust, WM Advisors, or any affiliates or any name(s),
derivatives, logos, trademarks, service marks or trade names thereof, it being
understood that neither the Trust nor WM Advisors shall have any responsibility
to ensure the adequacy of the form or content of such materials for purposes of
the 1940 Act or other applicable laws and regulations. Notwithstanding the
foregoing, WM Advisors shall be responsible for ensuring the adequacy and
accuracy of information about WM Advisors, its affiliates, the Trust or the
Funds provided to Sub-Advisor for use in Sales Material prepared by Sub-Advisor.
Consent by the Trust and WM Advisors to such use of any WM Mark and any such
representations shall not be unreasonably withheld and shall be deemed to be
given if no written objection is received by the Sub-Advisor within 5 business
days after the request by the Sub-Advisor is made for such use of any WM Mark or
any such representations. Upon termination of this Agreement for any reason, the
Sub-Advisor shall cease any and all use of any WM Mark as soon as reasonably
practicable.
If Sub-Advisor makes an unauthorized use of the Trust's or WM Advisor's
names, derivatives, logos, trademarks, service marks or trade names, the parties
acknowledge that the Trust or WM Advisors, as applicable, shall suffer
irreparable hardship for which monetary damages are inadequate and thus, the
Trust or WM Advisors, as applicable, will be entitled to injunctive relief.
10
14. DECLARATION OF TRUST AND LIMITATION OF LIABILITY
A copy of the Master Trust Agreement 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 the Fund, and that the obligations of this Agreement with respect to the Fund
shall be binding upon the assets and properties of the Fund 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
Fund or the Trust individually.
15. ENTIRE AGREEMENT; AMENDMENT OF MANAGEMENT AGREEMENT
This Agreement constitutes the entire agreement among the parties hereto,
except that WM Advisors and the Trust are also parties to an Investment
Management Agreement relating to the Fund dated March 20, 1998, as amended as of
January 1, 1999 (the "Management Agreement").
The Trust and WM Advisors hereby amend the Management Agreement, for so
long as this Agreement shall remain in effect, to provide that: (a) The Trust,
on behalf of the Fund, shall pay to WM Advisors a monthly fee equal to the
excess, if any, of (i) the fee set forth in Section 5 of the Management
Agreement (the "Management Fee") over (ii) the fee paid by the Fund under this
Agreement or any other sub-advisory agreement with respect to the Fund; (b) WM
Advisors shall not be entitled to any other fees under the Management Agreement
with respect to the Fund; (c) The Trust acknowledges and agrees that, for so
long as Sub-Advisor meets the standard of care set forth in this Agreement, WM
Advisors shall have no obligation to (i) furnish a continuous investment program
for the Fund, (ii) determine from time to time what securities will be
purchased, retained or sold by the Fund, and what portion of the Fund's assets
will be held as cash, or (iii) place orders for the purchase and sale of
portfolio securities for the Fund with brokers or dealers selected by WM
Advisors; (d) Notwithstanding this Agreement, WM Advisors remains authorized to
determine what securities or other property shall be purchased or sold by or for
the Fund; (e) In exchange for the fee paid by the Fund under the Management
Agreement and in recognition of its obligation to select and monitor the
Sub-Advisor, and not for the services provided by the Sub-Advisor pursuant to
the Sub-Advisory Agreement, WM Advisors shall indemnify and
11
hold the Trust harmless from and against any and all claims, costs, expenses
(including attorneys' fees), losses, damages, charges, payments and liabilities
of any sort or kind which may be asserted against the Trust or for which the
Trust may be held liable arising out of or attributable to any actual or alleged
failure of Sub-Advisor to meet the standard of care set forth in this Agreement.
16. GOVERNING LAW
This Agreement shall be governed in accordance with the laws of The
Commonwealth of Massachusetts.
17. MISCELLANEOUS
(a) Unless WM Advisors or the Trust gives the Sub-Advisor written
instructions to the contrary, the Sub-Advisor shall vote all proxies solicited
by or with respect to the issuers of securities in which assets of the Fund may
be invested in accordance with the Sub-Advisor's policies and procedures. The
Sub-Advisor shall use its best good faith judgment to vote such proxies in a
manner which best serves the interests of the Fund's shareholders.
(b) WM Advisors shall provide the Sub-Advisor with a copy of the Fund's
agreement (the "Custody Agreement") with the Custodian (the "Custodian")
designated to hold the assets of the Fund and any modification thereto in
advance. The Fund's assets shall be maintained in the custody of the Custodian
identified in, and in accordance with the terms and conditions of, the Custody
Agreement. The Sub-Advisor shall have no liability for the acts or omissions of
the Custodian. Any assets added to the portion of the Fund to be managed by the
Sub-Advisor shall be delivered directly to the Custodian.
(c) The Sub-Advisor may perform its services through any employee, officer
or agent of the Sub-Advisor, and the Trust and the Fund shall not be entitled to
the advice, recommendation, or judgment of any specific person.
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
<Table>
WM ADVISORS, INC WM VARIABLE TRUST, on behalf of its
Growth Fund series
By By
- ------------------------------------- -------------------------------------
Name: William G. Papesh Name: John T. West
Title: President Title: First Vice President
SALOMON BROTHERS ASSET MANAGEMENT INC
By Dated: [effective date]
- -------------------------------------
Name:
Title:
</Table>
13
ANNEX A
1. For purposes of calculating the fee to be paid to the Sub-Advisor under
this Agreement:
"Fund Assets" shall mean the net assets of the portion of the Fund managed
by the Sub-Advisor;
"Other Assets" shall mean the net assets of the portion of the Growth Fund
series of WM Trust II managed by the Sub-Advisor.
"Combined Assets" shall mean the sum of Fund Assets and Other Assets; and
"Average Daily Net Fund Assets," "Average Daily Net Other Assets" and
"Average Daily Net Combined Assets" shall mean the average of the value of
the Fund Assets, Other Assets or Combined Assets, as the case may be, on
each business day.
2. The Sub-Advisor fee shall be paid in arrears (within 10 days of receipt
by WM Advisors of an invoice from the Sub-Advisor) based upon the Average Daily
Net Combined Assets during the preceding month. The fee payable for the month
shall be calculated by applying the annual rate, as set forth in the fee
schedule below, to the Average Daily Net Combined Assets, and dividing by
twelve. The portion of the monthly fee to be paid by the Fund shall be prorated
based upon the Average Daily Net Fund Assets as compared to the Average Daily
Net Combined Assets. For a month in which this Agreement becomes effective or
terminates, the portion of the Sub-Advisor fee due hereunder shall be prorated
on the basis of the number of days that the Agreement is in effect during the
month.
3. The following fee schedule shall be used to calculate the fee to be paid
to the Sub-Advisor under this Agreement:
<Table>
<Caption>
FIRST NEXT OVER
$250 $250 $500
MILLION MILLION MILLION
- ------- ------- -------
0.400% 0.350% 0.300%
</Table>
A-1
-PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING-
WM VARIABLE TRUST
GROWTH FUND
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS ON FEBRUARY 3, 2005
The undersigned hereby revokes all previous proxies for his or her or its shares
and appoints William G. Papesh and John T. West, 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 Shares of the Growth Fund (the "Fund"), a series of WM Variable Trust, on
February 3, 2005 at 10:00 a.m. Pacific time (the "Meeting"), and any
adjournments(s) thereof, all of the shares of the Fund which the undersigned
would be entitled to vote if personally present.
IF THIS PROXY IS PROPERLY EXECUTED, THE VOTES ENTITLED TO BE CAST BY THE
UNDERSIGNED WILL BE CAST IN THE MANNER DIRECTED, AND WILL BE VOTED IN THE
DISCRETION OF THE PROXY HOLDER(S) ON ANY OTHER MATTERS THAT MY PROPERLY COME
BEFORE THE MEETING OR ANY ADJOURNMENT(S) THEREOF. IF THIS PROXY IS PROPERLY
EXECUTED BUT NO DIRECTION IS MADE, SUCH VOTES ENTITLED TO BE CAST BY THE
UNDERSIGNED WILL BE CAST "FOR" THE PROPOSAL.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
DATE
------------------------------------------------------
------------------------------------------------------
Signature(s) NOTE: Please sign exactly as your name appears on this proxy card.
All joint owners should sign. When signing as executor, administrator, attorney,
trustee or guardian or as custodian for a minor, please give full title as such.
If a corporation, please sign in full corporate name and indicate the signer's
office. If a partner, sign in the partnership name.
- --------------------------------------------------------------------------------
-PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING-
Please fill in box(es) as shown using black or blue ink or number 2 pencil [X]
PLEASE DO NOT USE FINE POINT PENS.
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 THE PROPOSAL.
In their discretion, the proxies are authorized to vote upon such other matters
that may properly come before the Meeting or any adjournment(s) thereof. The
Trustees recommend a vote FOR the Proposal.
<Table>
<Caption>
FOR AGAINST ABSTAIN
--- ------- -------
1. To approve Advisory Agreement relating to the Fund
among the Fund, WM Advisors, Inc. and Salomon
Brothers Asset Management............................ [ ] [ ] [ ]
</Table>
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
VOTE TODAY BY MAIL USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
VOTING INSTRUCTION CARD
INSURANCE COMPANY NAME PRINTS HERE FOR SPECIAL MEETING OF SHAREHOLDERS
WM VARIABLE TRUST GROWTH FUND FEBRUARY 3, 2005 AT 10:00 A.M. PACIFIC TIME
The undersigned hereby instructs the above-referenced Insurance Company to vote
at the Special Meeting of Shareholders on February 3, 2005, at 10:00 a.m.,
Pacific Time, and at any adjournments thereof, all shares of the Fund
attributable to his or her contract or interest therein as directed on the
reverse side of this Voting Instruction Card. IF THIS VOTING INSTRUCTION CARD IS
SIGNED AND RETURNED WITH NO CHOICES INDICATED, THE SHARES WILL BE VOTED FOR THE
APPROVAL OF THE PROPOSAL.
If you fail to return this Voting Instruction Card, the Insurance Company will
vote all shares attributable to your account value in proportion to all voting
instructions for the Fund actually received from contract owners in the Separate
Account.
PLEASE VOTE, DATE AND SIGN, AND PROMPTLY
RETURN THIS VOTING INSTRUCTION CARD IN THE
ENCLOSED ENVELOPE PROVIDED.
Dated: ___________________
________________________________________________
________________________________________________
(Signature) (SIGN IN THE BOX)
Please sign exactly as your name or names appear
to the left. When shares are held by joint
tenants, both should sign. When signing as
attorney, executor, administrator, trustee,
guardian or in any other representative capacity,
please give full title as such. If signing for a
corporation, please sign in full corporate name
by authorized person. If a partnership, please
sign in partnership name by authorized person.
WM GROWTH VIC - DH
Please fill in box as shown using black or blue ink or number 2 pencil. [X]
PLEASE DO NOT USE FINE POINT PENS.
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 THE PROPOSAL.
In their discretion, the proxies are authorized to vote upon such other matters
that may properly come before the Meeting or any adjournment(s) thereof. The
Trustees recommend a vote FOR the Proposal.
FOR AGAINST ABSTAIN
1. To approve an Advisory Agreement relating to [ ] [ ] [ ]
the Fund among the Fund, WM Advisors, Inc.
and Salomon Brothers Management, Inc.
PLEASE SIGN AND DATE ON THE REVERSE SIDE.
VOTE TODAY BY MAIL USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
WM GROWTH VIC - DH