Exhibit 5
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT (this "Agreement"), dated March 20, 1998,
between the WM Strategic 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, collectively, as the "Portfolios") and WM Advisors, Inc., a
Washington corporation (the "Manager").
W I T N E S S E T H
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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 each Portfolio 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 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 a 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
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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 WM Shareholder 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 WM 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 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.
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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 Portfolios) 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.
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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 "WM," "WM Group of Funds"
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 each Portfolio of
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, 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.
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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: 000 X. Xxxx Xxx., Xxxxx 000,
Xxxxxxx, Xxxxxxxxxx 00000; or if to the Manager: 0000 Xxxxx Xxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxxxxxxx 00000; 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 with respect to a
Portfolio shall be binding upon the assets and properties of that Portfolio only
and shall not be binding upon the assets and properties of any other Portfolio
or series of the Trust or upon any of the Trustees, officers, employees, agents
or shareholders of the Portfolios or the Trust individually.
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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.
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS,
on behalf of its portfolios
INCOME PORTFOLIO,
FLEXIBLE INCOME PORTFOLIO,
BALANCED PORTFOLIO,
CONSERVATIVE GROWTH PORTFOLIO, and
STRATEGIC GROWTH PORTFOLIO
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: President
Attest:
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
Title: Assistant Secretary
WM ADVISORS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
President
Attest:
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
Title: Secretary
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Schedule A
WM STRATEGIC 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:
Annual Fee
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Income Portfolio 0.15%
Flexible Income Portfolio 0.15%
Balanced Portfolio 0.15%
Conservative Growth Portfolio 0.15%
Strategic Growth Portfolio 0.15%
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