EXHIBIT 99.(D)(2)(C)
AMENDED AND RESTATED INVESTMENT SUB-ADVISORY AGREEMENT
Effective as of December 7, 2001
Xxx Xxxxxx Investment Advisory Corp.
Xxx Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
WM Advisors, Inc. ("WM Advisors"), a corporation organized under the
laws of the state of Washington, hereby agrees with Xxx Xxxxxx Investment
Advisory Corp. (the "Sub-Advisor"), a corporation organized under the laws of
the state of Delaware, as follows:
1. Investment Description; Appointment
WM Advisors desires to employ the capital of the investment funds of WM
Trust II (the "Company") listed on Annex A to this Agreement (individually, each
a "Fund" and collectively, the "Funds") by investing and reinvesting in
investments of the kind and in accordance with the limitations specified in the
Company's Master Trust Agreement, as amended, and in the Prospectus and
Statement of Additional Information relating to the Funds 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 Company. Copies of
the Funds' Prospectus and Statement of Additional Information and the Company'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 to the
Funds' Prospectus and Statement of Additional Information and the Company's
Master Trust Agreement to the Sub-Advisor on an on-going basis. WM Advisors
desires to employ and hereby appoints the Sub-Advisor to act as investment
sub-advisor to the Funds. The Sub-Advisor accepts the appointment and agrees to
furnish the services described in this Agreement for the compensation set forth
below.
2. Services as Investment Sub-Advisor
Subject to the supervision of the Board of Trustees of the Company and
of WM Advisors, the Funds' investment adviser, the Sub-Advisor will (a) act in
conformity with the Company's Master Trust Agreement, the Investment Company Act
of 1940 (the "1940 Act"), the Investment Advisers Act of 1940 and the Internal
Revenue Code of 1986, as the same may from time to time be amended; (b) make
investment decisions for the Funds in accordance with the Funds' investment
objectives and policies as stated in the Funds' 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; (c) place purchase and sale orders on
behalf of the Funds to effectuate the investment decisions made; (d) maintain
books and records with respect to the securities transactions of the Funds and
will furnish to the Company's Board of Trustees such periodic, regular and
special reports as the Board may request; and (e) treat confidentially, and as
proprietary information of the Company, all records and other information
relative to the Company and prior, present or potential shareholders, and
refrain from using such records and information for any purpose other than
performance of its responsibilities and duties under this Agreement, except
after prior notification to and approval in writing by the Company, which
approval shall not be unreasonably withheld, provided that the Sub-Advisor may
divulge the information contained in or provide such records if the
Sub-Advisor's withholding such information or records will expose the
Sub-Advisor to civil or criminal contempt proceedings for failure to comply with
a request to divulge such information from duly constituted authorities, or when
so requested by the Company. In providing services in accordance with this
paragraph 2, the Sub-Advisor will supervise the Funds' investments and conduct a
continual program of investment, evaluation and, if appropriate, sale and
reinvestment of the Funds' assets. In addition, the Sub-Advisor will furnish the
Funds or WM Advisors with whatever statistical information the Funds or WM
Advisors may reasonably request with respect to the instruments that the Funds
may hold or contemplate purchasing.
3. Brokerage
In executing transactions for the Funds and selecting brokers or
dealers, the Sub-Advisor will use its best efforts to seek the best overall
terms available and shall execute or direct the execution of all such
transactions in a manner permitted by law and in a manner that is in the best
interest of the Funds and their shareholders. In assessing the best overall
terms available for any Fund transactions, the Sub-Advisor will consider all
factors it deems relevant including, but not limited to, breadth of the market
in the security, the price of the security, the financial condition and
execution capability of the broker or dealer and the reasonableness of any
commission for the specific transaction and on a continuing basis. Pursuant to
its investment determinations for the Funds, in placing orders with brokers and
dealers, the Sub-Advisor will attempt to obtain the best net price and the most
favorable execution of its orders. Consistent with this obligation, when the
execution and price offered by two or more brokers or dealers are comparable,
the Sub-Advisor may, in its discretion, purchase and sell portfolio securities
to and from brokers and dealers who provide the Company with research advice and
other services.
4. Information Provided to the Company
The Sub-Advisor will keep the Company and WM Advisors informed of
developments the Sub-Advisor determines may materially affect the Funds, and
will on its own initiative, furnish the Company 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 through 4 above. The Sub-Advisor shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Funds in connection with the matters to which this Agreement relates, except
(a) a loss resulting from a breach of fiduciary duty with respect to the receipt
of compensation for services (in which case any award of damages shall be
limited to the period and the amount set forth in Section 36(b)(3) of the 1940
Act), or (b) a loss resulting from willful misfeasance, bad faith or negligence
on its part in the performance of its duties or from
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reckless disregard by it of its obligations and duties under this Agreement
(each such breach, act or omission described in (a) or (b) of this paragraph 5
shall be referred to as "Disqualifying Conduct").
6. Compensation
In consideration of the services rendered pursuant to this Agreement, WM
Advisors will pay the Sub-Advisor on the first business day of each month a fee
for the previous month according to the schedule of the fees detailed in Annex A
attached to this Agreement. The Sub-Advisor shall have no right to obtain
compensation directly from the Funds or the Company for services provided
hereunder and agrees to look solely to WM Advisors for payment of fees due. 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 Funds' net assets shall be computed at the
times and in the manner specified in the Funds' Prospectus or Statement of
Additional Information relating to the Funds as from time to time in effect.
7. Expenses
The Sub-Advisor will bear all expenses in connection with the
performance of its services under this Agreement, which expenses shall not
include brokerage fees or commissions in connection with the effectuation of
securities transactions. The Company 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 Company who are not officers, directors or employees of the
Sub-Advisor, WM Advisors, the Funds' sub-administrator or any of their
affiliates; Securities and Exchange Commission fees and state Blue Sky
qualification fees; out-of-pocket expenses of custodians, transfer and dividend
disbursing agents and the Company's sub-administrator and transaction charges of
custodians; insurance premiums; outside auditing and legal expenses; costs of
maintenance of the Company'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 Funds and of the
officers or Board of Trustees of the Trust; and any extraordinary expenses. In
addition, the Funds pay a distribution fee pursuant to the terms of a
Distribution Plan adopted under Rule 12b-1 of the 1940 Act.
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 investment companies, and WM Advisors has no objection to
the Sub-Advisor so acting, provided that whenever the Funds 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 believed to be equitable to each entity.
Similarly, opportunities to
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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 Funds. In addition, WM Advisors understands that
the persons employed by the Sub-Advisor to assist in the performance of the
Sub-Advisor's duties under this Agreement 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.
9. Term of Agreement
This Agreement shall become effective as of the date first written
above, shall continue for a period of one year thereafter, and shall continue in
effect for a period of more than one year thereafter with respect to a Fund only
so long as such continuance is specifically approved at least annually by (a)
the Board of Trustees of the Company or (b) a vote of a "Majority of the
outstanding voting securities" (as defined in the 1940 Act of the Fund),
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 0000
Xxx) 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 of the Trust or by vote of holders of a majority of the Funds' shares,
or upon 90 days' written notice, by the Sub-Advisor and will terminate
automatically upon any termination of the advisory agreement between the Company
and WM Advisors. In addition, this Agreement will also terminate automatically
in the event of its assignment (as defined in the 1940 Act). The Sub-Advisor
agrees to notify the Company of any circumstances that might result in this
Agreement being deemed to be assigned.
10. Representations of WM Advisors and the Sub-Advisor
WM Advisors represents that (a) a copy of the Company'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, (b)
the appointment of the Sub-Advisor has been duly authorized, (c) WM Advisors has
acted and will continue to act in conformity with the 1940 Act and other
applicable laws, and (d) WM Advisors is authorized to perform the services in
this Agreement.
The Sub-Advisor represents that it is authorized to perform the services
described in this Agreement.
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 under this Agreement; provided, however, that nothing contained in this
Agreement shall require that the Sub-Advisor be indemnified for Disqualifying
Conduct.
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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.
13. Entire Agreement
This Agreement constitutes the entire agreement between the parties to
this Agreement.
14. Governing Law
This Agreement shall be governed in accordance with the laws of The
Commonwealth of Massachusetts.
If the foregoing accurately sets forth our agreement, kindly indicate
your acceptance of the terms and conditions of this Agreement by signing and
returning the enclosed copy of this Agreement.
Very truly yours,
WM ADVISORS, INC.
Dated: 12/13/01 By /s/ XXXXXXX XXXXXX
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Name: Xxxxxxx Xxxxxx
Title: President
Accepted:
XXX XXXXXX INVESTMENT ADVISORY
CORP.
By /s/ XXXXXXX X. XXXXX Dated: 12/7/01
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Name: Xxxxxxx X. Xxxxx
Title: Managing Director and
Chief Operating Officer
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ANNEX A
For the services provided and expenses assumed pursuant to the
Agreement, the Sub-Advisor will be paid a monthly fee, absent fee waivers, based
upon each Fund's average daily net assets, at an annual rate as follows:
AMOUNT OF ASSETS ($ MILLIONS)
FIRST AFTER 75; AFTER 100; AFTER 125; AFTER 150; OVER
75 NEXT 25 NEXT 25 NEXT 25 NEXT 850 1000
----- --------- ---------- ---------- ---------- ----
California Municipal Fund .20% .20% .20% .20% .15% .125%
California Insured .20% .125% .125% .125% .125% .125%
Intermediate Municipal Fund
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