(h)(2)
WM TRUST I, WM TRUST II AND
WM STRATEGIC ASSET MANAGEMENT PORTFOLIOS, LLC
PLAN RECORDKEEPING/ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 14 day of February, 2006, by and between
WM Trust I and WM Trust II, each a Massachusetts business trust, and WM
Strategic Asset Management Portfolios, LLC, a Massachusetts limited liability
company (the "Trusts") and WM Shareholder Services, Inc. ("WMSS"), a Washington
corporation.
WHEREAS, each Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, each Trust desires that WMSS perform, or arrange for the
performance of, certain recordkeeping and administrative services for qualified
retirement plans investing in Class R-1 or Class R-2 shares of one or more
series of each Trust (individually referred to herein as the "Portfolio" and
collectively as the "Portfolios"); and
WHEREAS, WMSS is willing to perform such services on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. RETENTION OF WMSS.
Each Trust hereby retains WMSS to perform, or arrange for the
performance of, some or all of the recordkeeping and administrative
services for qualified retirement plans investing in Class R-1 or
Class R-2 shares of one or more Portfolios set forth on Schedule
hereto. WMSS represents, warrants and agrees, and will cause a senior
officer of WMSS to certify at least annually, that the value of the
non-distribution services (i.e., services that are not primarily
intended to result in the sale of shares of the Portfolios) provided
to each such retirement plan or its participants under this Agreement
is such that the compensation received by WMSS hereunder is in
accordance with WMSS's fiduciary duty with respect to the receipt of
such compensation under Section 36(b) of the 1940 Act.
2. SUBCONTRACTING.
WMSS may, at its expense, subcontract with any entity or person
concerning the provision of the services contemplated hereunder;
provided, however, that WMSS shall not be relieved of any of its
obligations under this Agreement by the appointment of such
subcontractor and provided further, that WMSS shall be responsible, to
the extent provided in Section 7 hereof,
for all acts and omissions of such subcontractor, including any acts
or omissions of a subcontractor that would result in liability of WMSS
under Section 7 hereof if taken or omitted by WMSS directly, as if
such acts or omissions were its own.
3. COMPENSATION.
WMSS shall be entitled to receive a fee from each Trust on the
first business day following the end of each month, or at such time(s)
as WMSS shall request and the parties hereto shall agree, a fee
computed with respect to Class R-1 and Class R-2 shares of each
Portfolio at an annual rate equal to 0.25% of the Trust's average
daily net assets attributable to such shares.
If this Agreement becomes effective subsequent to the first day
of a month or terminates before the last day of a month, WMSS's
compensation for that part of the month in which the Agreement is in
effect shall be prorated in a manner consistent with the calculation
of the fees as set forth above. Payment of WMSS's compensation for the
preceding month shall be made promptly.
4. EFFECTIVE DATE.
This Agreement shall become effective with respect to a Portfolio
as of the date first written above (or, if a particular Portfolio is
not in existence on that date, on the date such Portfolio commences
operation) (the "Effective Date").
5. TERM OF THIS AGREEMENT.
The term of this Agreement shall continue in effect, unless
earlier terminated by either party hereto as provided hereunder, for a
period of one year. Thereafter, unless otherwise terminated as
provided herein, this Agreement shall be renewed automatically for
successive one-year periods.
With respect to each Trust, this Agreement may be terminated
without the payment of any penalty by either party upon (180) days'
written notice thereof given by the Trust to WMSS and upon one hundred
eighty (180) days' written notice thereof given by WMSS to the Trust.
6. STANDARD OF CARE.
The duties of WMSS shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted
against WMSS hereunder. WMSS shall be obligated to exercise care and
diligence in the performance of its duties hereunder and to act in
good faith in performing the services provided for under this
Agreement. WMSS shall be liable for any
damages arising directly or indirectly out of WMSS's failure to
perform its duties under this Agreement to the extent such damages
arise directly or indirectly out of WMSS's willful misfeasance, bad
faith, negligence in the performance of its duties, or reckless
disregard of its obligations and duties hereunder. (As used in this
Article 7, the term "WMSS" shall include directors, officers,
employees and other agents of WMSS as well as WMSS itself.)
Without limiting the generality of the foregoing or any other
provision of this Agreement, WMSS shall not be liable for losses
beyond its reasonable control, provided that WMSS has acted in
accordance with the standard of care set forth above.
WMSS may apply to the Trusts at any time for instructions and may
consult with counsel for the Trusts or its own counsel and with
accountants and other experts with respect to any matter arising in
connection with WMSS's duties hereunder, and WMSS shall not be liable
or accountable for any action taken or omitted by it in good faith in
accordance with such instruction or with the reasonable opinion of
such counsel, accountants or other experts qualified to render such
opinion.
7. INDEMNIFICATION.
The Trusts agree to indemnify and hold harmless WMSS from and
against any and all actions, suits, claims, losses, damages, costs,
charges, reasonable counsel fees and disbursements, payments, expenses
and liabilities (including reasonable investigation expenses)
(collectively, "Losses") arising directly or indirectly out of any
action or omission to act which WMSS takes (i) at any request or on
the direction of or in reliance on the reasonable advice of the Trust,
(ii) upon any instruction, notice or other instrument that WMSS
reasonably believes to be genuine and to have been signed or presented
by a duly authorized representative of the Trust (other than an
employee or other affiliated person of WMSS who may otherwise be named
as an authorized representative of the Trust for certain purposes) or
(iii) on its own initiative, in good faith and in accordance with the
standard of care set forth herein, in connection with the performance
of its duties or obligations hereunder; provided, however that the
Trust shall have no obligation to indemnify or reimburse WMSS under
this Article 8 to the extent that WMSS is entitled to reimbursement or
indemnification for such Losses under any liability insurance policy
described in this Agreement or otherwise.
WMSS shall not be indemnified against or held harmless from any
Losses arising directly or indirectly out of WMSS's own willful
misfeasance, bad faith, negligence in the performance of its duties,
or reckless disregard of its obligations and duties hereunder. (As
used in this Article 8, the term "WMSS" shall include directors,
officers, employees, subcontractors and other agents of WMSS as well
as WMSS itself.)
WMSS further agrees to indemnify and hold harmless the Trusts
against any Losses arising directly or indirectly out of (i) WMSS's
own willful misfeasance, bad faith, negligence in the performance of
its duties, or reckless disregard of its obligations and duties
hereunder, (ii) any breach by
WMSS of any material provision of this Agreement, or (iii) any breach
by WMSS of a representation, warranty or covenant made in this
Agreement. This indemnity agreement shall be in addition to any
liability which WMSS may otherwise have. (As used in this Article 8,
the term "Trusts" shall include trustees, directors, officers,
employees and other agents of each Trust, respectively, as well as the
Trusts themselves.)
8. RECORD RETENTION AND CONFIDENTIALITY.
WMSS shall keep and maintain on behalf of the Trusts all books
and records which the Trusts and WMSS are, or may be, required to keep
and maintain in connection with this Agreement pursuant to any
applicable statutes, rules and regulations, including without
limitation Rules 31a-1 and 31a-2 under the 1940 Act, relating to the
maintenance of books and records in connection with the services to be
provided hereunder. WMSS further agrees that all such books and
records shall be the property of the Trusts and to make such books and
records available for inspection by the Trusts or by the SEC at
reasonable times and otherwise to keep confidential all books and
records and other information relative to the Trusts and its
shareholders.
Without limiting the foregoing, WMSS expressly agrees that:
(a) "nonpublic personal information" relating to "consumers" and
"customers" of the Trust (as those terms are defined in
Regulation S-P) provided by or at the direction of the
Trusts to WMSS, or collected or retained by WMSS in the
course of performing its duties as administrator will be
kept confidential. WMSS will not use, disclose, sell or in
any way transfer such nonpublic personal information to any
person or entity, except as necessary to perform its
obligations under this Agreement, at the direction of the
Trusts or otherwise as required or permitted by law;
(b) it will maintain physical, electronic and procedural
safeguards reasonably designed to protect the security,
confidentiality and integrity of, and to prevent
unauthorized access to or use of, records and information
relating to consumers and customers of the Trusts. WMSS will
adhere to the privacy policy and procedures of the Trust and
its respective policies and procedures governing information
security. The Trusts reserve the right to audit WMSS to
ensure compliance with such policies and procedures and
applicable privacy laws; and
(c) at the request of the Trusts, WMSS will provide the Trustees
with periodic reports outlining its policies and procedures
governing information security and the implementation of
such policies and procedures. WMSS will promptly report to
the Trusts any material changes to these policies and
procedures before, or promptly after, the adoption of such
changes.
9. FORCE MAJEURE.
WMSS shall not be liable for any damage, loss of data, delay or
any other loss caused by events beyond its reasonable control,
including any power failure or machine breakdown, acts of civil or
military authority, national emergencies, fire, flood, catastrophe,
acts of God, insurrection, war, riots or failure of the mails,
transportation, communication or power supply, except that in the
event of any such power failure or machine breakdown, WMSS shall be
liable for actual out-of-pocket costs caused by any such power failure
or machine breakdown, and shall use commercially reasonable best
efforts to recover the data in process that is assumed lost during any
power failure and to limit such damages, loss of data, delays or other
losses.
10. RIGHTS OF OWNERSHIP; RETURN OF RECORDS.
All records and other data except computer programs and
procedures developed to perform services required to be provided by
WMSS are the exclusive property of the Trusts and all such records and
data will be furnished to the Trusts in appropriate form as soon as
practicable after termination of this Agreement for any reason. WMSS
may at its option at any time, and shall promptly upon the Trusts'
demand, turn over to the Trusts and cease to retain the Trusts' files,
records and documents created and maintained by WMSS pursuant to this
Agreement which are no longer needed by WMSS in the performance of its
services or for its legal protection or as otherwise required by law.
If not so turned over to the Trusts, (1) such documents and records
will be copied and complete copies shall be delivered to the Trusts by
WMSS as soon as reasonably practical, and (2) the original documents
and records will be retained by WMSS for the period of time as
required by applicable law. At the end of such period, and upon
written request by the Trusts such records and documents will be
turned over to the Trusts.
11. REPRESENTATIONS OF THE TRUSTS.
Each Trust certifies to WMSS that: (1) as of the close of
business on the Effective Date, each Portfolio that is in existence as
of the Effective Date has authorized unlimited Class R-1 and Class R-2
shares, and (2) this Agreement has been duly authorized by the Trust,
respectively, and, when executed and delivered by each Trust, will
constitute a legal, valid and binding obligation of that Trust,
enforceable against the Trust in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting the rights and remedies of creditors and
secured parties.
12. REPRESENTATIONS OF WMSS.
WMSS represents and warrants that: (1) the various procedures and
systems which WMSS has implemented with regard to safeguarding from
loss or damage attributable to fire, theft, or any other cause the
records, and
other data of the Trusts and WMSS's records, data, equipment
facilities and other property used in the performance of its
obligations hereunder are adequate and that it will make such changes
therein from time to time as are required for the secure performance
of its obligations hereunder, (2) this Agreement has been duly
authorized by WMSS and, when executed and delivered by WMSS, will
constitute a legal, valid and binding obligation of WMSS, enforceable
against WMSS in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured
parties, (3) it is duly registered with the appropriate regulatory
agency as a transfer agent and such registration will remain in full
force and effect for the duration of this Agreement, and (4) it has
and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement.
13. INSURANCE.
WMSS shall furnish the Trusts with pertinent information
concerning the professional liability and fidelity bond insurance
coverage that it maintains. Such information shall include the
identity of the insurance carrier(s), coverage levels/limits and
deductible amounts. WMSS shall notify the Trust should any of its
insurance coverage be canceled or reduced. Such notification shall
include the date of change and the reasons therefor. WMSS shall notify
the Trusts of any material claims against it with respect to services
performed under this Agreement, whether or not they may be covered by
insurance, and shall notify the Trusts from time to time as may be
appropriate of the total outstanding claims made by WMSS under its
insurance coverage.
Further, WMSS shall furnish the Trusts with a Certificate of
Insurance or a copy of the policy evidencing such coverage, which
insurance shall name the Trust as an Insured Investment Company under
the policy, and shall contain a 60-day "cancellation" clause and a
"changes in exposure" clause. Such policy shall be primary coverage as
between WMSS and the Trusts and such insurance coverage shall not
limit the liability of WMSS to the Trusts for any damages. In the
event of any payment of damages to the Trusts, WMSS hereby waives any
right to be subrogated to the rights of the Trusts against any third
party.
14. INFORMATION TO BE FURNISHED BY THE TRUSTS.
The Trusts have furnished, or will furnish upon request, to WMSS the
following:
(a) Copies of the Declaration of Trust (in the case of WM
Strategic Asset Management Portfolios, LLC, a Certificate of
Organization) and of any amendments thereto, certified by
the proper official of the state in which such document has
been filed.
(b) Copies of the following documents:
(1) Each Trust's Bylaws and any amendments thereto; and
(2) Certified copies of resolutions of the Trustees
covering the approval of this Agreement, authorization
of a specified officer of the Trust to execute and
deliver this Agreement and authorization for specified
officers of the Trust to instruct WMSS thereunder.
(c) A list of all the officers of each Trust, together with
specimen signatures of those officers who are authorized to
instruct WMSS in all matters.
(d) Copies of the Prospectus and Statement of Additional
Information for each Portfolio.
15. AMENDMENTS TO AGREEMENT.
This Agreement, or any term thereof, may be changed or waived
only by written amendment signed by the party against whom enforcement
of such change or waiver is sought.
For special cases, the parties hereto may amend such procedures
set forth herein as may be appropriate or practical under the
circumstances, and WMSS may conclusively assume that any special
procedure which has been approved by the Trusts does not conflict with
or violate any requirements of its Declaration of Trust (or other
organizations documents) or then current prospectuses, or any rule,
regulation or requirement of any regulatory body.
16. COMPLIANCE WITH LAW.
Except for the obligations of WMSS otherwise set forth herein,
the Trusts assume full responsibility for the preparation, contents
and distribution of each prospectus of the Trusts as to compliance
with all applicable requirements of the Securities Act of 1933, as
amended (the "Securities Act"), the 1940 Act and any other laws, rules
and regulations of governmental authorities having jurisdiction. The
Trusts represent and warrants that no
shares of a Trust will be offered to the public until such Trust's
registration statement under the Securities Act and the 1940 Act has
been declared or becomes effective.
17. NOTICES.
Any notice provided hereunder shall be sufficiently given when
sent by registered or certified mail to the party required to be
served with such notice, at the following address: if to the Trusts,
at 0000 Xxxxx Xxx 00xx xxxxx Xxxxxxx, Xxxxxxxxxx 00000; and if to
WMSS, at 0000 Xxxxxxxxxx Xxxx., Xxxxx 000 Xx Xxxxxx Xxxxx, Xxxxxxxxxx
00000; or at such other address as such party may from time to time
specify in writing to the other party pursuant to this Section.
18. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be
assignable by either of the parties hereto except by the specific
written consent of the other party, and any assignment in violation of
this section will be void. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and permitted assigns.
19 GOVERNING LAW.
This Agreement shall be construed in accordance with the laws of
the Commonwealth of Massachusetts without giving effect to the
provisions thereof relating to conflicts of law. To the extent that
the applicable laws of the Commonwealth of Massachusetts, or any of
the provisions herein, conflict with the applicable provisions of the
1940 Act, the latter shall control.
20 LIMITATION OF LIABILITY.
A copy of the Declaration of Trust of each Trust (in the case of
WM Strategic Asset Management Portfolios, LLC, a Certificate of
Organization) is on file with the Secretary of the Commonwealth of
Massachusetts, and notice is hereby given that this instrument is
executed on behalf of the Board of Trustees of the Trusts,
respectively, and not individually and that the obligations of this
instrument are not binding upon any of the Trustees, officers or
shareholders individually but are binding only upon the assets and
property of the Trusts (or if the matter relates only to a particular
Portfolio, that Portfolio), and WMSS shall look only to the assets of
the Trusts, or the particular Portfolio, for the satisfaction of such
obligations.
21 MULTIPLE ORIGINALS.
This Agreement may be executed in two or more counterparts, each
of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
WM Trust I, on behalf of its WM Trust II, on behalf of its
constituent series constituent series
By: By:
--------------------------------- ------------------------------------
Xxxxxxx X. Xxxxxx, President Xxxxxxx X. Xxxxxx, President
WM STRATEGIC ASSET MANAGEMENT WM SHAREHOLDER SERVICES, INC.
PORTFOLIOS, LLC, on behalf of its
constituent series
By: By:
--------------------------------- ------------------------------------
Xxxxxxx X. Xxxxxx, President Xxxxx X. Xxxxxx, President
SCHEDULE A
LIST OF SERVICES
(i) Sub-accounting services with respect to both contributions and
distributions
(ii) Tracking contributions and distribution sources to ensure compliance
with applicable Employee Retirement Income Security Act (ERISA) and
Internal Revenue Code (IRC) regulations
(iii) Tracking participant activity to ensure compliance with plan
specifications
(iv) Tracking and processing of loan and repayment information
(v) Reviewing participant documentation to ensure accuracy
(vi) Issuance of periodic statements
(vii) Provide customer service and consulting support
